Court Opinion

ID: 7216
Source: CourtListenerOpinion
Date Created: 2010-04-25 05:26:06+00
Date Added: 2024-06-11T09:38:08.003284
License: Public Domain

IN THE UNITED STATES COURT OF APPEALS

                              FOR THE FIFTH CIRCUIT

                              _____________________

                                   No. 95-10390
                              _____________________

            IN RE: GRAND JURY PROCEEDINGS

_________________________________________________________________

           Appeal from the United States District Court
                for the Northern District of Texas
_________________________________________________________________

                                 (June 9, 1995)

Before KING, JOLLY, and DeMOSS, Circuit Judges.

PER CURIAM:

      The district court below determined that certain "daytimers"

sought by the government in an ongoing grand jury investigation

were properly characterized as corporate documents and hence beyond

the   purview     of    the   Fifth   Amendment   privilege     against   self-

incrimination.         The appellants, John Doe I and John Doe II, are

executives in a company which is the subject of an ongoing grand

jury investigation into possible price fixing within a certain

industry.     The appellants filed a timely appeal to this court,

contending that the daytimers were personal documents and therefore

privileged by the Fifth Amendment.          We affirm.

                  I.    FACTUAL AND PROCEDURAL BACKGROUND

      We   have    previously      issued   two   unpublished    opinions    in

connection with this case, No. 94-11133 (Feb. 6, 1995) and No. 95-

10390 (May 8, 1995), both of which are to remain under seal until
such time as, in the discretion of the district court or this

court, is necessary to prevent disclosure of matters relating to

those proceedings. In our second opinion, rendered May 8, 1995, we

denied the appellants' request for a stay of the district court's

order holding them in contempt for their failure to turnover

certain daytimer calendars sought by the grand jury. Following our

denial of their motion for a stay, on May 11, 1995, appellants

turned over their daytimers to the grand jury and purged themselves

of their contempt.     Having now turned over the daytimers, the

appellants seek review on the merits of the district court's

turnover   order;   specifically,       the   appellants   challenge   the

determination that the daytimers were corporate, not personal,

documents and hence not privileged under the Fifth Amendment.          See

Braswell v. United States, 487 U.S. 99, 113 (1988); United States

v. White, 322 U.S. 694, 699 (1944).

                      II.   STANDARD OF REVIEW

     The question of whether the district court applied the correct

legal standard in determining whether a given document is corporate

or legal in nature is, of course, a question of law over which we

exercise plenary review.     However, the parties agree that the

determination of whether a particular document is corporate or

personal is, by its very nature, a factual inquiry.          Accordingly,

provided the district court has applied the correct legal standard,

we may reverse its determination as to the corporate or personal

nature of a given document only if it is clearly erroneous.             A

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finding is clearly erroneous only if, viewing the evidence in light

of the record as a whole, we are left with the "definite and firm

conviction that a mistake has been committed."             United States v.

United States Gypsum Co., 333 U.S. 364, 395 (1948).            Where there

are two permissible views of the evidence, the factfinder's choice

between them cannot be clearly erroneous.             Anderson v. City of

Bessemer City, 470 U.S. 564, 574 (1985); United States v. Yellow

Cab Co., 338 U.S. 338, 342 (1949).

                             III.   ANALYSIS

     The appellants argue that the district court clearly erred in

finding that the daytimers in question were corporate documents.

Specifically,   appellants     contend      that     the   district     court

impermissibly placed dispositive emphasis on the nature of the

documents rather than placing them in context of numerous relevant

factors,   including   ownership,       access,    preparation,   and   use.

Specifically, they argue that the district court should have used

a multi-factor approach similar to that articulated in In re Grand

Jury Subpoena Duces Tecum Dated Apr. 23, 1981, 522 F. Supp. 977

(S.D.N.Y. 1981), which they characterize as "the most cogent and

thoughtful implementation of these factors . . . . "

     It is apparent from the district court's opinion that it

adopted a multi-factor approach analogous to that used in In re

Grand Jury Subpoena Duces Tecum Dated Apr. 23, 1981, 657 F.2d 5 (2d

Cir. 1981), the opinion which established the multi-factor approach

used by the district court on remand in In re Grand Jury Subpoena

                                    3
Duces Tecum Dated Apr. 23, 1981, 522 F. Supp. 977 (S.D.N.Y. 1981)--

the case now contended by appellants to represent the correct legal

standard.      The district court concluded that, unlike the pocket

calendar deemed to be personal in In re Grand Jury Subpoena Duces

Tecum Dated Apr. 23, 1981, 522 F. Supp. 977, 982-84 (S.D.N.Y.

1981), the     appellants'   calendars     were    more   akin   to   the   desk

calendar and pocket diaries decreed to be corporate in United

States v. MacKey, 647 F.2d 898 (9th Cir. 1981).           While the district

court thought that the facts in MacKey were "more apposite" than

the facts in In re Grand Jury Subpoena Duces Tecum Dated Apr. 23,

1981, it is nonetheless clear that, in determining whether the

appellants' daytimers were corporate or personal in nature, the

district court used a multi-factor balancing approach similar to

that advocated by the appellants.

      The question now squarely presented before this court is one

of first impression in this circuit-- namely, whether the district

court's use of a multi-factor balancing approach in determining

whether a document is corporate or personal in nature is the

correct legal standard.      We think so.

      A multi-factor balancing approach attempts to answer the key

question:      what is the essential nature of the document?                 It

attempts to answer this question in light of the entire context of

the ownership, preparation and use of the document.              We agree with

the   Second    Circuit   that   the   following    nonexhaustive     list   of

criteria is relevant in this inquiry:         who prepared the document;

the nature of its contents; its purpose or use; who possessed it;

                                       4
who   had   access    to    it;   whether     the   corporation   required   its

preparation; and whether its existence was necessary to or in

furtherance of corporate business. In re Grand Jury Subpoena Duces

Tecum Dated Apr. 23, 1981, 657 F.2d at 8; accord United States v.

Wujkowski, 929 F.2d 981, 984 (4th Cir. 1991).

      Having agreed with the appellants' that the multi-factor

approach is the correct legal standard to be applied in such cases

does not end our inquiry. The appellants contend that, in applying

the multi-factor standard, the district court clearly erred in its

conclusion     that        the    daytimers     were   corporate    documents.

Specifically, the appellants contend that the district court failed

to take into account the statements made by appellants in their

affidavits and relied upon evidence submitted by the government in

camera without providing the appellants' an opportunity to test the

veracity or credibility of such evidence.

      The affidavits submitted by the appellants asserts that the

appellants considered their daytimers to be personal documents,

prepared and maintained primarily for personal aspects of their

lives rather than for business purposes. Moreover, they argue that

"the ratio of personal to business entries does not determine a

document's essential nature," and that "an otherwise personal

document is not transformed into a corporate document merely

because it contains business-related entries . . . ."                 We agree

that the determination of the essential character of a document

does not hinge upon some magical percentage of personal versus

corporate entries.         However, this does not mean that the ratio of

                                         5
personal to corporate entries is irrelevant.                As a general rule,

the greater proportion of personal entries, the more likely it is

that the trier of fact could reasonably conclude that it was

prepared, used, and maintained as a personal document. Conversely,

the greater proportion of business-related entries, the more likely

it is that the trier of fact could reasonably conclude that the

document    was   prepared,     used,   and      maintained       as    a       corporate

document.     This is not to say, however, that other evidence

regarding the preparation, use, and maintenance of a given document

may not tilt the balance in the other direction.                  Indeed, a multi-

factor approach      to   the   determining      the     nature    of       a    document

requires a court to view all relevant factors in context, giving

greater or lesser weight to a given factor as the quality or

quantity of evidence demands.

     In this case, the district court implicitly determined that

the potentially self-serving affidavits of the appellants were not

credible in light of other, more objective evidence.                    For example,

the district      court   noted   that,     on   their    face,        the      daytimers

contained primarily business-related entries.                 Our review of the

daytimers confirms this impression as reasonable. The overwhelming

majority of entries in these daytimers concern such things as

employee bonuses      and   raises,     staff    meetings,        business-related

travel itineraries, car mileage, daily business "to do" lists, and

summaries of meetings.        In addition, we find it telling that John

Doe I's daytimers for 1988, 1990, and 1991 contained a sheet which

stated that, "if found," the daytimer should be returned to John

                                        6
Doe I at his company address.1

      The district court also noted that it was influenced by the

evidence submitted by the government in camera. Our review of this

evidence    indicates      that    it    supports     the    district    court's

conclusion. Because of the great need for continued secrecy in the

grand jury investigation, the district court decided to receive

this evidence in camera and we do not think that the district

court's    decision   to     proceed    in   this   manner   was   an   abuse    of

discretion.      Cf. United States v. Zolin, 491 U.S. 554, 572 (1989)

(stating that, in context of determining the applicability of the

crime-fraud    exception      to   an   assertion    of   the   attorney-client

privilege, "the decision whether to engage in in camera review

rests in the sound discretion of the district court.").                         The

appellants had ample opportunity to provide any information to the

district court which they believed supported their contention that

the daytimers were personal documents and indeed, they submitted

affidavits to that effect.         The appellants' essentially challenge

the   district     court's    credibility      determination       favoring     the

government's more objective evidence over their own affidavits.

The appellants have proffered no evidence which suggests that the

district court's credibility choice was an abuse of discretion and

we therefore find this argument to be without merit.

      In the totality of these circumstances, the district court's

conclusion that the daytimers were prepared, maintained, and used

      1
       This "if found" sheet was left blank in daytimers for the
other years in question.

                                         7
for business, not personal, purposes is not clearly erroneous.2

                         IV.   CONCLUSION

     For the foregoing reasons, the judgment of the district court

is AFFIRMED.

     2
       Appellee has moved this court to impose sanctions pursuant
to Rules 27(a) and 38 of the Federal Rules of Appellate Procedure,
as well as 28 U.S.C. § 1912, on grounds that the appeal is wholly
frivolous.
     While appellee's motion presents an arguably close call, we
decline to grant the motion as our opinion on the merits
necessitates the pronouncement of a legal standard for which there
was no prior precedent in this circuit.        Although the legal
standard we ultimately adopt was favorably mentioned in our prior
opinion denying the appellants' motion to stay the district court's
order of contempt, No. 95-10390 (May 8, 1995), the appeal on the
merits undoubtedly raised an issue of first impression and the
appeal should therefore not be characterized as frivolous.
     Accordingly, appellee's motion to impose sanctions is hereby
DENIED.

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