In Re Grand Jury Subpoena. United States of America v. Rockwell International Corporation, Rocketdyne Division, and John Doe
Docket: 97-55089
Court: Court of Appeals for the Ninth Circuit; July 10, 1997; Federal Appellate Court
The case involves an appeal by three potential targets of a grand jury investigation, specifically Rockwell International Corporation's Rocketdyne Division and associated appellants, challenging the district court's refusal to oversee the grand jury proceedings or conduct a pre-indictment hearing as permitted under Kastigar v. United States. The Ninth Circuit Court of Appeals found that it lacked jurisdiction to hear the appeal, leading to its dismissal.
The background includes a fatal explosion at Rocketdyne's facility in July 1994, prompting an internal investigation by the company which involved interviews with employees, including the appellants. Notably, an interview with one appellant, Doe 1, raised issues regarding the attorney-client privilege, as Rocketdyne's attorneys allegedly represented the company, not Doe 1, which Doe 1 disputed. Following the explosion, a federal search warrant was executed in July 1995 for hazardous waste violations, and Rocketdyne subsequently secured separate legal representation for the appellants.
In April 1996, Rocketdyne pleaded guilty to violations of the Resource Conservation and Recovery Act and agreed to cooperate with the ongoing investigation, which included turning over internal documents related to the explosion, such as the internal investigation report and the aforementioned interview memorandum. However, in May 1996, Doe 1's attorney objected to the release of the memorandum, asserting confidentiality concerns, which led to the government's issuance of a grand jury subpoena for its production.
On July 30, 1996, Doe 1 moved to quash a grand jury subpoena, claiming that a Memorandum from Rocketdyne's attorneys was protected by attorney-client privilege or the common interest privilege. During an October 10 hearing, the district court requested supplemental briefing on whether Fifth Amendment issues from Garrity v. New Jersey were pertinent. On October 24, the court denied the motion to quash, ruling the Memorandum was not privileged and deemed the Garrity issue "premature."
Subsequently, on November 1, Doe 1 submitted a second supplemental memorandum arguing that the Memorandum and an internal investigation report were compelled statements protected by the Fifth Amendment. Other appellants supported this motion and requested a Kastigar hearing to assess potential misuse of these statements by the Government in grand jury proceedings.
On December 19, the district court formally denied both the motion to quash and the request for a Kastigar hearing, stating that constitutional issues arise only if the grand jury uses the testimony for indictment, which had not occurred. The court found the appellants failed to demonstrate actual use of the statements sufficient to invoke Fifth Amendment protections, labeling their motion as premature.
In the following appeal, the court determined it lacked jurisdiction over the interlocutory appeal, clarifying that the denial of a motion to quash is generally nonappealable. While citing an exception for subpoenas directed at third parties unable to risk contempt, the court concluded that Doe 1's arguments regarding attorney-client and common interest privileges were rejected, resulting in the denial of the motion to quash.
The appellants did not appeal the district court's conclusion regarding the denial of their motion to quash the subpoena or the finding that the targeted documents were not privileged. Their appeal solely contests the district court's refusal to hold a pre-indictment Kastigar hearing to assess whether the Government was using the documents in the grand jury proceedings against them. The district court viewed this as a separate request, focusing on the supervisory powers rather than the motion to quash.
The appellants seek to reverse the district court's refusal and instruct it to prevent the Government from using compelled statements to pursue indictments. However, this aspect of the order is not final or appealable, leading to a lack of jurisdiction for review. This situation parallels the case of In re Federal Grand Jury Investigation of Fendler, where an appeal regarding a similar interlocutory order was dismissed due to jurisdictional issues and the policy against piecemeal appeals.
The court emphasized that if an indictment is eventually returned, the appellants can challenge it through a motion to dismiss, which would be reviewable on direct appeal post-conviction. The refusal to hold a Kastigar hearing is seen as premature for appeal since no indictment has been issued, and any claims can be addressed later. The appellants' references to three prior cases do not support immediate appeal rights for requests pertaining to ongoing grand jury investigations.
In Kinamon, a police officer contested the district court's denial to quash a grand jury subpoena for an internal investigation report from the Reno police department, asserting that his compelled statements within the report were protected against use in criminal proceedings. The district court denied the motion, doubting the Reno police department's authority to grant use immunity and asserting that grand jury proceedings were not criminal matters. On appeal, the court found the appeal procedurally valid under the Bailin exception and reversed the district court’s decision, clarifying that the Reno police department could treat Kinamon's statements as immunized and that such statements could be used in grand jury proceedings. The appellate court instructed the district court to determine the necessity of a Kastigar hearing to safeguard Kinamon's Fifth Amendment rights but did not mandate such a hearing nor reviewed the district court's supervisory powers over the grand jury.
In Huntington Beach, several police officers similarly appealed a district court's denial to quash a grand jury subpoena for an internal investigation report, claiming that this would infringe upon their Fifth Amendment rights. The appellate court rejected this argument, stating that the privilege must focus on the use of statements against the officers, asserting that the statements were not exempt from production. It noted that any protection of the officers' rights could be addressed in a later Kastigar hearing but did not require an immediate hearing or specify when one would be necessary.
In Anderson, following multiple wire fraud indictments based on his deposition testimony, Anderson sought a Kastigar hearing, which the district court denied, concluding his testimony was neither immunized nor compelled. The appellate court affirmed this denial, finding no abuse of discretion.
The grand jury has not indicted any of the three appellants, and they may never be indicted. The district court rejected a motion to conduct a pre-indictment Kastigar hearing, which was separate from Doe 1's motion to quash a grand jury subpoena. The appellants did not appeal the denial of the motion to quash. Consequently, appellate jurisdiction under 28 U.S.C. § 1291 does not extend to the district court's denial of the supervisory powers motion related to the grand jury. Although the appellants believe they have no remedy, they can challenge any indictment in the future by moving to quash it, and if convicted, they can appeal the denial of a Kastigar hearing. The court emphasizes the policy against piecemeal appeals during ongoing grand jury investigations and concludes that it lacks jurisdiction over the current appeal, resulting in its dismissal. Additionally, it notes that the government cannot use compelled statements from grand jury proceedings against an individual without proving an independent source for its evidence. The appellants argue that their statements were compelled due to Rocketdyne's pressure, but the court does not address this argument's merits at this stage.
On December 19, 1996, the district court denied a motion to quash a subpoena and a request for a Kastigar hearing from the appellants. The court ruled that constitutional issues arise only if the grand jury uses testimony for an indictment, which had not occurred. The appellants failed to demonstrate that their statements were utilized against them in grand jury proceedings, rendering their Fifth Amendment claims premature.
The appeal was deemed interlocutory, lacking jurisdiction under 28 U.S.C. 1291, as established in In re Grand Jury Subpoena Issued to Bailin, where the denial of a motion to quash is generally nonappealable, except in specific circumstances involving third parties. The current appellants argued that they were similarly appealing a denial to quash a subpoena directed at Rocketdyne's documents, claiming attorney-client and common interest privileges, but did not contest the district court's rejection of these claims.
The jurisdictional issue arose because the appellants did not challenge the district court’s ruling on the motion to quash but only contested the refusal to hold a Kastigar hearing. The district court viewed the Kastigar request as a separate motion, indicating that the appellants did not seek to reverse the order quashing the subpoena.
Appellants seek to reverse the district court's order, aiming to prevent the Government from using compelled statements of the targets to secure an indictment. However, the district court's refusal to exercise supervisory powers over ongoing grand jury proceedings is deemed not to be a final appealable order, which limits the appellate court's jurisdiction for review. This situation parallels the case of In re Federal Grand Jury Investigation of Fendler, where an appeal was dismissed for lack of jurisdiction due to the interlocutory nature of the order concerning grand juror bias.
The court emphasizes its reluctance to intervene in grand jury proceedings and maintains the policy against piecemeal appeals. If an indictment is eventually returned against the appellants, they can challenge it through a motion to dismiss, which would then be reviewable on direct appeal from a criminal conviction. The refusal to hold a pre-indictment Kastigar hearing is seen as premature, as no indictment has yet been issued and may never be.
The appellants cited three cases to argue for jurisdiction over the district court's refusal, but the court clarified that such interpretations are incorrect. In particular, the Kinamon case involved a police officer appealing the denial of a motion to quash a grand jury subpoena, which was found to be procedurally sound under the Bailin exception, allowing appeals in specific circumstances related to third-party subpoenas.
The district court's decision was reversed, as it incorrectly determined that the Reno police department could not treat Kinamon's statements as immunized. It was established that a grand jury could utilize such immunized testimony for an indictment since grand jury proceedings are not classified as criminal proceedings. The court instructed the district court to decide when a Kastigar hearing was necessary to safeguard Kinamon's Fifth Amendment rights but did not mandate an immediate hearing or review the district court's supervisory powers over the ongoing grand jury process.
In Huntington Beach, police officers challenged a grand jury subpoena for an internal investigation report, asserting that producing their statements would infringe upon their Fifth Amendment rights. The court rejected this claim, concluding that the privilege pertains only to the use of statements against the officers and that a Kastigar hearing could address any misuse later. The court emphasized that it did not require an immediate Kastigar hearing or specify when it should occur, affirming that the Fifth Amendment did not obstruct document production under the case's circumstances.
In Anderson, after a grand jury indicted him based on his deposition testimony, Anderson sought a Kastigar hearing, which was denied by the district court on the grounds that his testimony was neither immunized nor compelled. The appellate court upheld this denial, finding no abuse of discretion. The current situation differs significantly, as no indictment has been issued against the three appellants, who may not be indicted at all. The district court declined to conduct a pre-indictment Kastigar hearing in response to a motion for supervisory power over ongoing grand jury proceedings, which was separate from a motion to quash the subpoena that was not appealed.
28 U.S.C. § 1291 does not provide appellate jurisdiction over a district court's denial of a motion to exercise supervisory powers concerning ongoing grand jury proceedings for a pre-indictment Kastigar hearing. Although the appellants claimed they were left without a remedy, they can challenge any indictment by moving to quash it in the district court after it is returned. If convicted, the denial of the Kastigar hearing motion is reviewable on direct appeal. However, during the grand jury investigation, the policy against piecemeal appeals remains intact. Consequently, the appeal is dismissed due to lack of jurisdiction. The Fifth Amendment protects against self-incrimination, requiring the Government to prove an independent source for evidence if compelled statements are used in grand jury proceedings. The appellants argued their statements were compelled by pressure from Rocketdyne linked to potential loss of contracts, but this argument's merits are not addressed in this appeal. As of now, no indictments have been issued against the appellants. The district court accurately interpreted the appellants' joinder memoranda regarding the Kastigar hearing request but did not join arguments for quashing the grand jury subpoena on privilege grounds.
