Court Opinion

ID: 8927846
Source: CourtListenerOpinion
Date Created: 2022-11-27 06:51:27.433854+00
Date Added: 2024-06-11T17:09:27.051446
License: Public Domain

SWYGERT, Senior Circuit Judge,
dissenting.
The majority holds that under the due process clause of the fifth amendment appellants should have been given notice and an opportunity to be heard before their records were turned over to the Illinois Department of Public Aid (“IDPA”). Notwithstanding the majority’s decision that appellants were entitled to a predeprivation hearing, the majority concludes that “in the unusual circumstances of this case,” ante at 580, appellants should be afforded no remedy. I agree with the majority that appellants’ due process rights were violated; but because I believe that the majority’s conclusion with , respect to the proper remedy is without precedent or support in the law, I respectfully dissent.
Although the Supreme Court has not always applied a consistent analytical approach in all due process cases, see Comment, Procedural Due Process in Tax Collection: An Opportunity for a Prompt Postdeprivation Hearing, 44 U.Chi.L.Rev. 594, 596-603 (1977), the Court has never wavered from its position that once a deprivation of protected property has occurred *582some form of due process is required, see Logan v. Zimmerman Brush Co., 455 U.S. 422, 433, 102 S.Ct. 1148, 1156, 71 L.Ed.2d 265 (1982), whether it be a predeprivation or prompt postdeprivation hearing, or a subsequent suit for redress. See Parratt v. Taylor, 451 U.S. 527, 101 S.Ct. 1908, 68 L.Ed.2d 420 (1981); Mathews v. Eldridge, 424 U.S. 319, 96 S.Ct. 893, 47 L.Ed.2d 18 (1976); Fuentes v. Shevin, 407 U.S. 67, 92 S.Ct. 1983, 32 L.Ed.2d 556 (1972). This position is grounded in the Court’s belief that the due process clauses of the fifth and fourteenth amendments protect each person from any arbitrary and unfair summary deprivations of protected property by the government. See Logan, 455 U.S. at 430, 102 S.Ct. at 1154. Thus in my judgment, the majority’s view that it may refuse to grant some form of remedy when there is deprivation of property directly conflicts with clear Supreme Court precedent and with the very meaning of procedural due process.
Even if the majority were correct that in certain circumstances valid due process claims can be dismissed without remedy, I do not believe, as does the majority, that an extreme departure from established due process precedent is warranted in this case. The facts are neither extraordinary nor unique, and the reasons that the majority gives for affording no remedy can be applied to almost any due process violation. Even if it is not necessarily true that the majority's reasoning could be applied in all due process cases, I am not persuaded by the reasoning that the appellants should be afforded no remedy.
First, I am not as convinced as the majority that the IDPA is probably entitled to all of the documents that were turned over to them. As the majority points out, the IDPA’s entitlement to the documents can only be determined by a resolution of state law. Without such a resolution, the majority’s findings in this regard are pure conjecture. Moreover, the actual percentage of those documents that IDPA may be entitled to under state law is irrelevant. Some of the documents that IDPA improperly obtained may be confidential business records or particularly damaging to appellants for other reasons. Thus, the harm that may arise from the improper disclosure of one or two documents may be more than insignificant, see Sniadach v. Family Finance Corp., 395 U.S. 337, 89 S.Ct. 1820, 23 L.Ed.2d 349 (1969) (debtor entitled to pre-garnishment hearing even though total garnishment is only $31.59), particularly when viewed in light of the government’s almost nonexistent need here for summary action. See Fuentes, 407 U.S. at 90-91, 92 S.Ct. at 1999-2000.
The majority also cites the appellants’ ability to defend against the use of those documents by IDPA in state court proceedings as a justification for the failure to afford a remedy. I presume the majority is extrapolating from the reasoning of several Supreme Court decisions where the Court found that a party’s due process rights were not violated when the party had adequate postdeprivation remedies. See, e.g., Parratt, 451 U.S. 527, 101 S.Ct. 1908, 68 L.Ed.2d 420; Eldridge, 424 U.S. 319, 96 S.Ct. 893, 47 L.Ed.2d 18; Mitchell v. W.T. Grant Co., 416 U.S. 600, 94 S.Ct. 1895, 40 L.Ed.2d 406 (1974). An examination of those cases, however, shows that the majority’s implicit application of the reasoning of those eases to the facts here cannot be sustained. In those cases where the Supreme Court has upheld postdeprivation remedies against constitutional attack, special circumstances existed. In some cases the Court found the opportunity for a subsequent suit for redress sufficient due process because there was a wartime emergency, Stoehr v. Wallace, 255 U.S. 239, 41 S.Ct. 293, 65 L.Ed. 604 (1921); a public health hazard, Calero-Toledo v. Pearson Yacht Leasing Co., 416 U.S. 663, 679, 94 S.Ct. 2080, 2089, 40 L.Ed.2d 452 (1974); Ewing v. Mytinger & Casselberry, 339 U.S. 594, 70 S.Ct. 870, 94 L.Ed. 1088 (1950); North American Cold Storage Co. v. City of Chicago, 211 U.S. 306, 29 S.Ct. 101, 53 L.Ed. 195 (1908), or it was impracticable or impossible for the state to provide a prede-*583privation hearing, Parratt, 451 U.S. at 527, 101 S.Ct. at 1908.1
In other cases the Court found prompt postdeprivation hearings satisfied the party’s right to due process where a predepri-vation hearing would have inadequately protected the rights of third parties who might have a valid interest in the property, see, e.g., Mitchell, 416 U.S. at 608-09, 94 S.Ct. at 1900-01, or where a predeprivation hearing would have imposed a substantial burden on the particular administrative agency charged with taking the property and providing the hearing, see Eldridge, 424 U.S. at 347-49, 96 S.Ct. at 908-10; Phillips v. Commissioner, 283 U.S. 589, 596, 51 S.Ct. 608, 611, 75 L.Ed. 1289 (1931). And in those cases the complaining party was at least given notice and a minimal opportunity to present additional evidence prior to the deprivations. Thus, there were safeguards against arbitrary decisionmak-ing.
The facts of the instant case are not even remotely similar to the facts of any of those cases. Here it was not impracticable to provide a predeprivation hearing; indeed such a hearing — albeit minimal — took place. No exigent circumstances were shown to exist. There was no gross administrative burden in requiring notice or a hearing. In fact some form of hearing before disclosure is required to determine if the documents are “matters occurring before the grand jury” or if the documents can be disclosed pursuant to one of the exceptions to Fed.R.Crim.P. 6(e). Finally there is nothing in the procedures followed here that would deter a federal court from perfunctorily turning over to any state agency that files a request with the United States Attorney grand jury documents to which that state agency may or may not be entitled. That danger is clearly evidenced in this case where the orders to disclose were made the same day that the United States Attorney filed the ex parte motion for disclosure based upon the information provided to him by the IDPA.
In addition, in all of those cases the Supreme Court placed considerable emphasis on the fact that the complaining party could be made whole by the postdeprivation procedures. See, e.g., Logan, 455 U.S. at 422, 102 S.Ct. at 1148; Brown v. Brienen, 722 F.2d 360, 367 (7th Cir.1983) (Flaum, J., concurring). In the instant case it is not clear that appellants will be made whole by an ability to defend against the use of those documents against them. The IDPA has taken control of numerous business records, some of which may be irrelevant to its functions. It is possible that without appellants’ permission the IDPA could turn over copies of some of the documents to any other person or state agency — such as the state revenue service — who could start their own investigations or instigate other civil proceedings against the appellants. Although Fed.R.Crim.P. 6(e)(3)(B) imposes limitations on the use a party can make of documents obtained from the grand jury, IDPA is not subject to those limitations because it did not obtain the appellants’ records pursuant to a disclosure request under Fed.R.Crim.P. 6(e)(3)(A). Moreover, it may also be that the IDPA, or another agency privy to those records, may be able to successfully prosecute or harass appellants based on knowledge obtained from the records but without ever having to directly use those documents in litigation. Thus, although the situations I have posited will not necessarily occur, they show the real possibility of an irreparable harm which cannot be remedied by hypothetical state court procedures.
Furthermore, the Supreme Court in all of the cases cited clearly contemplated established plenary postdeprivation procedures *584which the injured party could invoke immediately after the deprivation has occurred. See Comment, supra, 44 U.Chi.L.Rev. at 601. In the instant case, there are no established state court procedures which would afford appellants immediate redress; in addition, the IDPA has sole control over when those procedures will be invoked. Although it is true that some proceedings are already in progress, the IDPA is not prohibited from bringing further investigations or civil proceedings based on the information in the documents. Thus appellants’ “remedy” for its due process claims is solely within the IDPA’s discretion.
Finally, the analysis in Parratt, Fuentes, and Paul v. Davis, 424 U.S. 693, 96 S.Ct. 1155, 47 L.Ed.2d 405 (1976), makes clear that the state’s taking of a party’s property does not violate the due process clause when the state provides adequate postde-privation remedies. In the instant case the majority is suggesting that a deprivation of property by the federal government may be remedied by adequate state court procedures. In my view this suggestion is illogical as a matter of remedies law and is untenable in our federalist system. Moreover, no court to my knowledge has extended the reasoning of Parratt that far.
The majority is also swayed by the fact that essentially only issues of state law are involved in a determination whether all or only some of the appellants’ records should be disclosed. But this is not a case in which we run the danger of a wholesale constitutionalization of state tort law, see Parratt, 451 U.S. at 544, 101 S.Ct. at 1917; Paul, 424 U.S. at 712, 96 S.Ct. at 1165; or state employment law, see Vail, 706 F.2d at 1449 (Posner, J., dissenting), or any other state law, thereby depriving state courts of their proper jurisdiction over these matters. The district judge here, once having made the determination that the documents were not matters occurring before the grand jury, could stay the request for disclosure until the parties repaired to the state court to resolve their differences over the state law questions. But, even if the district judge is required to decide issues of state law, this minor isolated encroachment on the principles of federalism is mandated by the due process clause.
Finally it is of no moment that the appellants may be attempting to “freeze” the documents in the grand jury. As Judge Posner admits, the business records remain the appellants’ property and “[i]t makes no difference that the appellants do not want the property back for its own sake but only in order to keep it out of the hands of an antagonist, ____” Ante at 580. Indeed, the instant case is very similar to those in which the Supreme Court suggested that a predeprivation hearing is.required notwithstanding the fact that the injured party may have been invoking the due process clause to delay a third party from ultimately taking property of the debtor to which the third party may be entitled. North Georgia Finishing Co. v. Di-Chem, Inc., 419 U.S. 601, 95 S.Ct. 719, 42 L.Ed.2d 751 (1975); Fuentes, 407 U.S. 67, 92 S.Ct. 1983, 32 L.Ed.2d 556; Sniadach, 395 U.S. 337, 89 S.Ct. 1820, 23 L.Ed.2d 349. But see Mitchell, 416 U.S. at 618-20, 94 S.Ct. at 1905-06. In all of those cases the Court invalidated summary ex parte proceedings and held that the complaining party was entitled to show that the other party should not be able to take possession of the property. Moreover, given that the majority here has determined that appellants’ documents are not matters occurring before the grand jury or subject to the rule for secrecy and the majority’s conviction that the IDPA is actually entitled to these documents, I am at a loss to see how permitting the appellants an opportunity to present their case would “freeze” these documents in the grand jury.
Even if the “clean hands” doctrine is applicable in the due process context (and I doubt that it is), I think there is a sense in which all parties were guilty of unclean hands. The IDPA could have tried to compel the appellants themselves to obtain the documents from the grand jury and then turn them over to that agency by threaten*585ing to cut or actually cutting off appellants’ participation in Medicaid. Or, as the majority notes, the state agency itself could have petitioned for disclosure of the grand jury documents in which case Fed.R.Crim.P. 6(e) would have required that notice be given the appellants; moreover, the state agency deliberately chose to invoke the unauthorized but more expedient and presumably less cumbersome ex parte powers of the United States Attorney. In my view, even if plaintiffs were guilty of flagrant and egregious Medicaid violations and intend to fight tooth and nail the imposition of any civil sanctions, this does not justify the state and federal government acting in concert to unconstitutionally deprive appellants of their property. At a minimum, some remedy is required to deter any further attempts to employ the clearly improper procedures followed here. As I have already stated, the facts here are not extraordinary, and the decision of the majority is likely to encourage state agencies or other parties to use the ex parte procedure employed in this case with the hope that the courts will once again relegate injured parties to hypothetical and inadequate state court procedures. The majority’s decision in effect grants these third parties summary seizure powers that they do not otherwise possess.
I admit that this is an unsympathetic case in which to impose the substantial burden on the state agency and the federal district court of prohibiting the use of the documents by the state agency during the pendency of a hearing in which appellants are entitled to participate. In addition, as the majority points out, it is extremely inefficient and perhaps futile to require the state agency to pretend as if they have never seen or reviewed the documents in their possession for almost a year. But “bad” facts should not lead to “bad law.” Fundamental rights to due process are involved here. Harmless error however disguised or seemingly justified ought not slacken the taut line linking proper procedure to the demands of due process.

. Although there is some debate over whether Parratt held that postdeprivation remedies are always adequate due process, see Vail v. Board of Education of Paris Union School Dist. No. 95, 706 F.2d 1435 (7th Cir.1983) (Eschbach, J., concurring, Posner, J., dissenting), aff’d, — U.S. —, 104 S.Ct. 2144, 80 L.Ed.2d 377 (1984), the Court in Logan v. Zimmerman Brush Co., 455 U.S. 422, 102 S.Ct. 1148, 71 L.Ed.2d 265 (1982), made clear that Parratt was confined to situations in which it was impracticable, if not impossible, for the state to provide predeprivation remedies. See also Schultz v. Baumgart, 738 F.2d 231, 237 n. 9 (7th Cir.1984). Cf. Hudson v. Palmer, — U.S.—, 104 S.Ct. 3194, 3202-03, 82 L.Ed.2d 393 (1984).