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In re Subpoenas to Local 478

decided: May 19, 1983.


Union employer petitions for review of district court order denying motions to terminate a Special Grand Jury investigation of possible embezzlement and record-keeping violations; to quash subpoenas issued to sixteen of its clerical employees to testify; and for inventory and return of union documents. Held, the order denying the motion to terminate is not a final order and is not appealable. The union lacks standing as a third party to appeal the order denying the motion to quash. The order denying the motion of return of documents is final and appealable and is affirmed as a proper exercise of discretion.

Oakes, Van Graafeiland and Meskill, Circuit Judges. Meskill, Circuit Judge, concurring in part and dissenting in part.

Author: Oakes

OAKES, Circuit Judge:

This is ans appeal from denial of motions brought by a union challenging a Special Grand Jury investigation of it and its benefit funds. The Union alleges governmental harassment through the issuance and administration of multiple subpoenas. The Union sought to terminate the investigation, to quash subpoenas ad testificandum issued to sixteen clerical employees, and to order an inventory and return of original documents retained by the Special Grand Jury. The United States District Court for the District of Connecticut, Ellen Bree Burns, Judge, held that while the Union did have standing, it had failed to sustain its burden of overcoming the presumption of regularity attaching to grand jury proceedings. She found no reason to take the "unprecedented and extraordinary" action of terminating the grand jury proceedings even if the court had supervisory powers to do so. The court further held that it would decline to quash the subpoenas ad testificandum because there was a lack of showing that the investigation was undertaken in bad faith, that the subpoenas were intended to harass the Union, or that the information sought was wholly irrelevant to the investigation. She accepted the Union's inventory of documents in the Grand Jury's possession, but declined to order their return because the Government substantiated the Grand Jury's need to retain them. The Union appealed Judge Burns's order on each of its motions. We find that denial of the Union's motion for return of documents is appealable as a final order, and we affirm as to it. The district court's denial of the remaining motions to terminate the investigation and to quash subpoenas ad testificandum issued to clerical employees, however, does not constitute an appealable order. Because the Union has not alleged facts bringing it within the narrow group of exceptions to the final order rule, we dismiss the appeal from that denial.

1. The Investigation

Successive federal grand juries in Connecticut have been investigating possible embezzlement and record-keeping violations of Local 478 of the International Union of Operating Engineers (the Union), and its five welfare and benefit funds. A United States Department of Justice Strike Force (the Government) presented testimony and material for the Special Grand Jury's consideration. The district court had been required to mediate between the Union and the Government on several occasions prior to the filing of the motions involved in this appeal, taken during the ongoing grand jury investigation. Here, as in the district court, the Union and the Government present quite different pictures of what, why, and how the documents were sought.

Counsel for the Union describes thirty-five subpoenas issued over a two year period to the Union and its Welfare Fund, Pension Fund, Officers and Employees Pension Fund, Apprenticeship Skills Training Fund, and Supplemental Unemployment Benefit Fund, all located at the Union headquarters in Hamden, Connecticut. Nineteen subpoenas were issued to officers and custodians of records to produce cash receipt and disbursement journals, cancelled checks, and the like. The Union describes these subpoenas as abusive because they were overbroad, duplicative, and administratively burdensome. It complains, for example, that the Government demanded production of 120,000 checks in nine days without specifying month, year, and account, and unnecessarily retained original ledgers and business-keeping records without even providing the Union with receipts. When custodians claimed a privilege not to authenticate certain records, the Government served subpoenas on sixteen clerical personnel. Service on a Friday required appearance to testify the following Wednesday, and, the Union asserts, "frightened the clerical personnel. All work stopped." Cumulatively, "the Government's abuse of Grand Jury process impaired the function of the Local and the Funds by taking people away from work, scattering important documents, and destroying morale. " Union Brief at 17.

The Government, on the other hand, describes a good faith investigation of possible federal law violations -- embezzlement from union funds, 29 U.S.C. § 501(c), and violations of restrictions on payments and loans to labor organizations, 29 U.S.C. § 186 -- that involved precisely the subpoenaed records. In light of the custodian's assertion of a Fifth Amendment privilege not to authenticate fund records, the Government subpoenaed secretaries and file clerks who regularly worked with the records and presumably could authenticate them. Because the clerical employees would not have the same fiduciary relationship to the Union and its Funds as the subpoenaed officers, the Government believed there was little likelihood that they could incriminate themselves, and that the workers who did the actual posting could testify as to the nature of their work and their knowledge of the documents. Government's Omnibus Response to Union Motion at 9.

2. Appeal of Orders Relating to Ongoing Grand Jury Investigations

A properly taken appeal gives this court a power to review, not a power to intervene. Cohen v. Beneficial Industrial Loan Corp., 337 U.S. 541, 546, 93 L. Ed. 1528, 69 S. Ct. 1221 (1949). Our jurisdiction under 28 U.S.C. § 1291 encompasses only "final decisions of the district courts." The finality requirement of § 1291 "embodies a strong congressional policy against piecemeal reviews, and against obstructing or impeding an ongoing judicial proceeding by interlocutory appeals." United States v. Nixon, 418 U.S. 683, 690, 41 L. Ed. 2d 1039, 94 S. Ct. 3090 (1974). See also Firestone Tire & Rubber Co. v. Risjord, 449 U.S. 368, 374, 66 L. Ed. 2d 571, 101 S. Ct. 669 (1981) (permitting piecemeal appeals would undermine the independence of the district judge); Eisen v. Carlisle & Jacqueline, 417 U.S. 156, 170, 40 L. Ed. 2d 732, 94 S. Ct. 2140 (1974) (rule promotes efficient judicial administration); Cobbledick v. United States, 309 U.S. 323, 325, 84 L. Ed. 783, 60 S. Ct. 540 (1940) (rule accords with policy against obstruction, harassment and cost of successive appeals).

In applying the finality principle to orders relating to ongoing grand jury proceedings, courts have repeatedly held that orders denying motions to quash subpoenas are not final orders and therefore are not appealable. Cobbledick v. United States, 309 U.S. at 327-28. Balancing the public interest in safeguarding grand jury proceedings from undue interruption and a witness's interest in asserting a right not to comply with a grand jury request, the Supreme Court has concluded that the availability of court review of the claim in a contempt proceeding "'is adequate for [the witness's] protection without unduly impeding the progress of the case. '" Cobbledick v. United States, 309 U.S. at 327, quoting Alexander v. United States, 201 U.S. 117, 121, 50 L. Ed. 686, 26 S. Ct. 356 (1906).

But the underlying purposes of the finality rule in some cases require deviation from appellate review limited to the contempt scenario. United States v. Nixon, 418 U.S. at 691. Thus, the Supreme Court has given a practical rather than a technical construction to the final order rule. Cohen v. Beneficial Industrial Loan Corp., 337 U.S. at 546. Justice Frankfurter, writing for the Court in Cobbledick, supra, while stressing the historic character of finality as a condition of review,*fn1 acknowledged that it would be inappropriate to apply the rule "when observance of it would practically defeat the right to any review at all" of a constitutional claim. 309 U.S. at 324-25, 328-29 (footnote omitted).*fn2 Thus, when a person has been subpoenaed to produce documents that are the property of a third party who claims that the material is immune from production, the third party has been permitted to appeal because it is unlikely that the witness would risk a contempt citation in order to create an opportunity for review of the third party's claim of privilege. Perlman v. United States, 247 U.S. 7, 12-13, 62 L. Ed. 950, 38 S. Ct. 417 (1918) (documents implicating privilege against self-incrimination). Accord, In re Katz, 623 F.2d 122, 124 (2d Cir. 1980) (privilege against self-incrimination); In re Grand Jury Proceedings (FMC Corp.), 604 F.2d 798, 801 (3d Cir. 1979) (attorney-client privilege); In re Horowitz, 482 F.2d 72, 82 (2d Cir.) (privilege against self-incrimination, cert. denied, 414 U.S. 867, 38 L. Ed. 2d 86, 94 S. Ct. 64 (1973).

Analogously, in order to protect a testimonial privilege, a third party may also in some circumstances seek review of a subpoena directing another person to appear and testify. Gravel v. United States, 408 U.S. 606, 608, n.1, 33 L. Ed. 2d 583, 92 S. Ct. 2614 (1972) (Senator asserting Speech and Debate Clause privilege moved to quash subpoena directing aide's testimony, and then for appellate review). A final relevant category of appealable interlocutory orders involves motions for return of seized property where there is no pending criminal prosecution. DiBella v. United States, 369 U.S. 121, 131-32, 7 L. Ed. 2d 614, 82 S. Ct. 654 (1962).*fn3

Thus, the Supreme Court has drawn a narrow range of exceptions to the statutory finality rule. Merely asserting that compliance will create a substantial burden unless immediate review of a district court order is available will not justify departure from the finality-contempt requirement. United States v. Ryan, 402 U.S. 530, 532, 29 L. Ed. 2d 85, 91 S. Ct. 1580 (1971). Further, merely asserting that a ruling is or may be effectively unreviewable absent immediate appeal is not a sufficient concrete assertion of fundamental rights the legal and ...

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