Court Opinion

ID: 8911264
Source: CourtListenerOpinion
Date Created: 2022-11-27 03:05:42.069752+00
Date Added: 2024-06-11T17:08:33.174673
License: Public Domain

ROSENN, Circuit Judge,
concurring and dissenting.
I agree and join with the majority that the six subpoenaed employees of C. Schmidt & Sons cannot appeal the district court’s denial of their motion to quash the subpoenas ad testificandum issued by the grand jury because the order appealed is interlocutory. I also concur with the majority’s holding that the denial of a motion to quash a subpoena on the ground of grand jury harassment is a final order for appealability purposes. Where I part company with the majority is on the issue of the intervening employer’s standing. The majority’s grant of standing in this case goes beyond any prior holding of this court and I believe it enunciates a rule of standing that will adversely affect the grand jury process and *1031unnecessarily expand the volume of appellate cases.
At the outset, it must be emphasized that the subpoenas issued in this case were ad testificandum. Most of the case law in this circuit has dealt with appealability and standing within the context of subpoenas duces tecum. See, e. g., In re Grand Jury Investigation (Sun Company), 599 F.2d 1224 (3d Cir.1979); In re Grand Jury Empaneled, Feb. 14, 1978 (Colucci), 597 F.2d 851 (3d Cir.1979). See cases Maj.Op., 1024-1025. As the majority correctly notes, in most of the cases dealing with standing to challenge grand jury subpoenas, the third-party intervenor has identified a claim of privilege which, because of the potential sacrifice of the privilege by the subpoenaed party, gives the intervenor standing to appeal. See Maj.Op. at 1026. I am willing to agree with the majority that a property interest may also serve as the basis for intervenor standing. Thus, in order to succeed in this case, I believe the employer, Schmidt, must show that it has some property interest or privilege in its employees’ testimony that gives it standing to appeal from the district court’s denial of the motion to quash the challenged subpoenas. I am unable to discover that such a property right or privilege exists in this case.
Schmidt has made no claim that the subpoenaed employees will give testimony which will breach any recognized privilege. Thus, if standing is present in this case, it must be in the form of some property interest or other cognizable right. The majority endeavors to develop two separate property interests to support Schmidt’s standing. The majority first suggests that Schmidt has a property interest in “the books and records which had previously been subpoenaed.” Maj.Op. at 1026. However, those subpoenas were issued over two years before the subpoenas presently being challenged. The majority admits in a footnote, id. n. 1, that the books and records to which it is referring are those sought by earlier grand jury subpoenas addressed to other Schmidt employees. The subpoenas presently before the court were ad testifican-dum and merely compelled the presence of the Schmidt employees. No subpoena duces tecum was issued either compelling Schmidt or its six subpoenaed employees to produce books and records in the appeal now before us. Thus, because the majority grants standing to Schmidt based on past subpoenas which are not now in controversy, I fail to see how any property interest in books and records is now before the court.
The second basis for standing advanced by the majority is a property interest in the “services of [its] employees presently under subpoena whose time and attention . . . will be diverted from its business for unnecessary and improper grand jury appearances.” Maj.Op. at 1026 (footnote omitted). The majority’s recognition of a property interest in employees’ services in the grand jury context is novel and may be injudicious; I have found no prior case which supports this result. The majority asserts that the property interest in services differs only in degree or value and not substance from the property interest in confidential documents found in the N.L. Industries case, United States v. RMI Co. (N.L. Industries), 599 F.2d 1183 (3d Cir. 1979). Maj.Op. at 1026. I cannot agree. Unlike N.L. Industries, which involved confidential documents obtained by the grand jury through subpoenas duces tecum, Schmidt does not assert that confidential communications will be breached if its employees are required to testify. Indeed, I would have no difficulty granting standing if such an assertion were made. My concern is that a recognition of a broad property interest in employee services will give standing to an employer in virtually every case when a grand jury issues subpoenas ad testificandum to the employees.
I would be willing to recognize a property interest in employees’ services only in very limited circumstances. I believe it may be possible for a grand jury to harass an employer by repetitive issuance of subpoenas ad testificandum to key operational employees over an extended period of time and thereby disrupt the employer’s operations. *1032I would require the employer to demonstrate that the challenged subpoenas harass, or are intended to harass, and deprive it of important employee services which are disruptive of its ongoing operations. See In re Grand Jury Investigation, 459 F.Supp. 1335, 1344 (E.D.Pa.1978) (corporation’s claim that fourth appearance of comptroller before grand jury insufficient to establish oppressiveness of subpoena). Under the expansive ruling of the majority, an employer would have standing to appeal even if its employees were called before the grand jury for an hour, a half-day or a day’s testimony. Schmidt has made no showing that the presence of its employees before the grand jury will significantly deprive it of any property rights and I would therefore decline to grant it standing in this case.
The majority, however, proffers a third basis for standing in cases of alleged grand jury abuse. It would hold that when “other valued rights” other than a privilege or property interest are implicated, the employer-intervenor will have standing. The majority speaks vaguely of “other valued rights” but does not specify what other right or privilege Schmidt has in this case. Rather, it illustrates a speculative concern over possible grand jury harassment by an example of subpoenas directed to a political candidate’s workers which would discourage them from engaging in political activity. In the example, however, it is clear that the grand jury is infringing on the fundamental rights of free speech and association protected under the first amendment. No such fundamental right is asserted by Schmidt. Indeed, the majority appears to believe that the right to be free from grand jury abuse is itself a protected right which is sufficient to confer standing upon an employer-inter-venor. But such a rule would mean that standing exists in every case of alleged grand jury abuse and is tantamount to abolishing a standing requirement for interve-nors in the grand jury context.
I believe the majority’s blanket grant of standing invites intervention and appeal by an employer in every case where its employees are subpoenaed to testify before a grand jury. With the holding today that denial of a motion to quash a grand jury subpoena on harassment grounds is appeal-able as a final order, I envision adverse delays in the grand jury investigative process and a substantial escalation of litigation in this area of criminal law. If standing is available to any intervenor in every case of alleged harassment, I foresee problems even exceeding those encountered in the administrative tax summons area in which a taxpayer may intervene and appeal a challenged tax summons on the ground of IRS bad faith.1 The stream of such appeals in this circuit alone, see, e. g., United States v. First National State Bank of New Jersey, 616 F.2d 668 (3d Cir.1980); United States v. Garden State Bank, 607 F.2d 61 (3d Cir. 1979), should make us chary of an expansive standing rule in the grand jury subpoena process.
I would therefore deny standing to Schmidt to prosecute the present appeal. I sense that the majority’s holding today is prompted in large part by a fear that to deny standing will leave employers powerless to challenge abuse of' the grand jury process. I do not believe that this is the case. If the subpoena is duces tecum, the employer-intervenor will have standing if it can demonstrate that the material sought is privileged or that it has a property interest in the documents themselves which is threatened. If, as in this case, the subpoenas are ad testificandum, the employer-in-tervenor will have standing if it can demonstrate that the employee will divulge privileged material or if the subpoena of employees is being used to harass or disrupt its operations. And, in those rare circumstanc*1033es where alleged grand jury abuse threatens a fundamental right such as free speech, I believe the employer may have a sufficient interest to warrant standing, but no such right has been demonstrated by Schmidt.2
I fear that today the majority has unnecessarily trespassed on the now-familiar proposition that courts should not interfere with grand jury process absent compelling reasons. As the Supreme Court stated in United States v. Dionisio, 410 U.S. 1, 17-18, 93 S.Ct. 764, 773, 35 L.Ed.2d 67 (1973):
The grand jury may not always serve its historic role as a protective bulwark standing solidly between the ordinary citizen and an overzealous prosecutor, but if it is even to approach the proper performance of its constitutional mission, it must be free to pursue its investigations unhindered by external influence or supervision so long as it does not trench upon the legitimate rights of any witness called before it.
Because I believe that Schmidt has no standing to bring the present appeal, I would not reach the merits of its claim of harassment. I would therefore dismiss the appeal brought by the six subpoenaed employees for lack of an appealable order and the appeal brought by Schmidt for lack of standing to appeal.

. The taxpayer’s right to intervene and appeal in the tax summons area is provided for by Congress. See 26 U.S.C. § 7609(b)(1) (1976). Congress has made no similar provision in the grand jury context and whatever rights Schmidt has in this case depend on a judicial recognition of its interest in the grand jury subpoenas.

. Alternatively, the employer may be free to petition this court for a writ of mandamus to compel the district court to quash the challenged subpoenas. See generally In re Grand Jury Subpoenas, April, 1978, 581 F.2d 1103, 1107-08 (4th Cir.1978), cert. denied, sub nom. Fairchild Industries, Inc. v. Harvey, 440 U.S. 971, 99 S.Ct. 1533, 59 L.Ed.2d 787 (1979) (allegations of purposeful abuse of grand jury process insufficient to warrant mandamus relief to compel district court to conduct hearing into grand jury abuse).