The opinion of the court was delivered by: MCLAUGHLIN
REPORT AND RECOMMENDATION OF UNITED STATES MAGISTRATE
This report incorporates the findings and recommendations made in the interim report ("Report") submitted by the undersigned on December 13, 1982, a copy of which is attached. Although findings and recommendations were made with respect to seven matters in the interim report, defendants still had pending various motions to dismiss this prosecution and to suppress evidence after the report was filed. Decision on those motions was reserved pending testimony by the parties at evidentiary hearings which were held on January 4, 19 and 20, 1983. Having reviewed all of the papers submitted to date and having heard argument of all counsel on January 4th and the testimony of various witnesses on January 19th and 20th, I make the following findings and recommendations:
1. Concerning defendants' motion to dismiss or suppress evidence on the ground that the government obtained evidence in bad faith, i.e., inspections were conducted to gather evidence for a pre-determined criminal prosecution,
I recommend that defendants' motion be denied. Initially this question was reserved pending findings to be made at an evidentiary hearing.
However, after consideration of the documents submitted by the government in late December of 1982,
the undersigned finds that since defendants have failed to make a substantial preliminary showing of bad faith, the defendants have not met their burden and, therefore, are not entitled to a hearing on the issue of the government's bad faith. See United States v. O'Henry's Film Works, 598 F.2d 313, 320 (2d Cir. 1979); United States v. Morgan Guaranty Trust Company, 572 F.2d 36, 43 n. 9 (2d Cir.), cert. denied sub nom. Keech v. United States, 439 U.S. 822, 58 L. Ed. 2d 114, 99 S. Ct. 89 (1978). The questions raised in the December, 1982 report at 13 were satisfactorily answered not only by subsequent papers
but also by argument of counsel for both sides on January 4, 1983 at which time I found that defendants were not entitled to a hearing.
Consideration was also given to defendants' January 13, 1983 letter which requested reconsideration of my January 4th determination but I am still unpersuaded that the defendants have advanced sufficient evidence of the government's bad faith so as to warrant an evidentiary hearing on the matter.
I find that the government conducted its investigations pursuant to a valid administrative scheme and not for the purpose of gathering evidence. Further, I find that the government made its decision to prosecute the defendants for violations of the Federal Food, Drug and Cosmetic Act of 1938 discovered at the July, 1976, March-April, 1977 and July, 1977 inspections on September 18, 1978.
I also find that the decision to prosecute the defendants for violations of the Federal Food, Drug and Cosmetic Act discovered at the January, 1979 inspection was made on November 21, 1979. Such findings undermine defendants' contention that the government had decided to prosecute the defendants prior to its inspections and had used the inspections as an evidence-gathering device.
2. Concerning defendants' motion that Counts 8, 9 and 10 of the Information be dismissed,
I recommend that defendants' motion to suppress the evidence gathered at the January, 1979 inspection and to dismiss Counts 8, 9 and 10 which stem therefrom be denied. I find that the January, 1979 inspection was conducted in good faith pursuant to a November, 1978 work plan although such plan was not completed until January, 1979. Further, I find that the inspection was not conducted by the government for the purpose of gathering evidence to buttress its September, 1978 prosecution recommendation but, rather, was part of a valid administrative scheme.
3. Concerning defendants' motion to suppress records regarding the shipment and importation of certain foods under 21 U.S.C. § 373 (1946) with regard to the defendants Barry Engel and Andre Engel,
I recommend that the defendants' motion on this issue be denied. I find that the FDA investigators did not invoke the authority of Section 373 to gain access to the shipping records so as to trigger the immunity provisions of the statute.
This finding that the documents were not requested pursuant to Section 373 incorporates the finding that the records were shown to FDA investigators voluntarily, thereby eliminating all grounds for defendants' motion to suppress the documents.
4. Concerning defendants' motion to quash the subpoena of Gel Spice corporate records regarding the shipment and importation of certain foods,
I recommend that defendants' motion be denied. In their April 16, 1982 motion to quash, defendants' sole objection to the production of the documents was based on the following grounds:
(a) The documents sought constitute records showing the movement in interstate commerce or the holding thereof during or after such movement of any food, drug, device, or cosmetic, within the meaning of 21 U.S.C. § 373, and thus cannot be used in a criminal prosecution of the person from whom obtained.
(b) The Government is attempting to utilize a subpoena to circumvent the provisions of 21 U.S.C. § 373 to nullify the impact of any favorable ruling which this Court may render in defendants' motion to suppress the same documents which is presently pending before this Court.
Since I have already found that 21 U.S.C. § 373 was not invoked at the time the defendants first showed the interstate records to the FDA investigators,
the immunity it provides in a criminal prosecution to one who produces documents pursuant to Section 373 is not available to any of the defendants. Therefore, the issues raised above in subparagraphs (a) and (b) are now moot.
Furthermore, since the documents requested are corporate records and not the personal papers of either Barry Engel or Andre S. Engel, the protection of the fifth amendment against self-incrimination is not available to either the corporate defendant, Gel Spice, Inc., or the individual defendants, who also happen to be the custodians of those records as officers of Gel Spice. See report at 24; see also Curcio v. United States, 354 U.S. 118, 122, 1 L. Ed. 2d 1225, 77 S. Ct. 1145 (1957); United States v. O'Henry's Film Works, 598 F.2d at 316; cf. United States v. Guterma, 272 F.2d 344 (2d Cir. 1959) (court quashed to much of subpoena that requested personal books and records of the defendant). A corporate officer may not claim the personal privilege against compulsory self-incrimination with regard to corporate records even if those records might incriminate him personally. Bellis v. United States, 417 U.S. 85, 88-90, 40 L. Ed. 2d 678, 94 S. Ct. 2179 (1974); United States v. MacKey, 647 F.2d 898, 900 (9th Cir. 1981).
The preceding analysis should dispose of defendants' motion to quash. However, at the January 20th hearing the court sua sponte raised the issue of whether or not an individual defendant against whom there is an outstanding information or indictment can be compelled to deliver pursuant to a subpoena evidence that would establish the essential elements of the charges against him. The undersigned requested the parties to brief this issue at the close of the January 20th hearing.
After reviewing the correspondence from both sides,
I am persuaded that a defendant may be compelled to produce documents pursuant to a subpoena after an information has been filed even though the documents may be used as evidence against him. See United States v. MacKey, 647 F.2d at 901; United States v. Berrios, 501 F.2d 1207, 1212 (2d Cir. 1974) (material produced pursuant to a Rule 17(c) subpoena is that which would tend to establish the elements of a charge or defense); United States v. Woodner, 28 F.R.D. 22 (S.D.N.Y. 1961), aff'd, 317 F.2d 649 (1963); United States v. Eli Lilly, & Co., 24 F.R.D. 285 (D.N.J. 1959); United States v. Gross, 24 F.R.D. 138 (S.D.N.Y. 1959); In re Investigation of World Arrangements, etc., 13 F.R.D. 280, 283 (D.D.C. 1952). The fact that after an information has been filed evidence is requested pursuant to a subpoena that inculpates the defendant does not preclude its production and use as evidence. United States v. Authement, 607 F.2d 1129, 1131-32 (5th Cir. 1979).
One final issue must be resolved with regard to the defendants' motion to quash the government's subpoena, that of the validity of the subpoena itself. Defendants raised this issue for the very first time in their February 8, 1983 letter. Defendants claim that the subpoena was vague and overbroad and that the government has failed to demonstrate its need for the documents. Although the government did not have the opportunity to address these issues, I will examine them briefly in the interest of expediency.
The subpoena at issue here was originally returnable on the date first set for trial, August 3, 1981, which date was subsequently postponed. At a March 22, 1982 hearing before the Honorable Joseph M. McLaughlin the court instructed the defendants to produce the subpoenaed materials within two weeks.
Defendants' motion to quash was dated April 16, 1982; the government filed its response on May 5, 1982.
Rule 17(c) of the Federal Rules of Criminal Procedure governs the use of subpoenas in criminal cases. Subsection (c) of that rule covers subpoenas of documentary evidence and provides that:
A subpoena may also command the person to whom it is directed to produce the books, papers, documents or other objects designated therein.The court on motion made promptly may quash or modify the subpoena if compliance would be unreasonable or oppressive. The court may direct that books, papers, documents or objects designated in the subpoena be produced before the court at a time prior to the trial or prior to the time when they are to be offered in evidence and may upon their production permit [them] to be inspected by the parties and their attorneys.
The purpose of the rule is not to facilitate discovery but, rather, to enable one to obtain and inspect evidentiary material prior to trial. See United States v. Nixon, 418 U.S. 683, 698-99, 41 L. Ed. 2d 1039, 94 S. Ct. 3090 (1974); Bowman Dairy Co. v. United States, 341 U.S. 214, 219-20, 95 L. Ed. 879, 71 S. Ct. 675 (1951); United States v. Cuthbertson, 630 F.2d 139, 144 (3rd Cir. 1980), cert. denied, 449 U.S. 1126, 67 L. Ed. 2d 113, 101 S. Ct. 945 (1981); United States v. Marchisio, 344 F.2d 653, 669 (2d Cir. 1965). Rule 17(c) is available for use by either party. United States v. Woodner, 28 F.R.R. at 23; United States v. Gross, 24 F.R.D. at 141; 2 Wright, Federal Practice and Procedure § 274 (1982).
The court upon motion made promptly may quash or modify a subpoena if complaince would be either unreasonable or oppressive. Fed. R. Crim. P. 17(c); United States v. Nixon, 418 U.S. at 698; In re Special Grand Jury No. 81-1, 676 F.2d 1005, 1010 n. 5 (4th Cir. 1982). Defendants have made no claim that the government's request is either unreasonable or oppressive. The documents sought relate to the shipment, receipt and/or payment by Gel Spice for foods traveling in interstate commerce and received by the defendants on ten separate occasions. The government's request appears to encompass a minimal number of documents that have already been reviewed by the FDA since the government was given access to these records during the various inspections.
Materials produced pursuant to a subpoena may be provided at trial or prior to trial. A subpoena returnable on the day of trial may be issued without leave of court. United States v. Van Allen, 28 F.R.D. 329, 334 (S.D.N.Y. 1961). However, it is within the discretion of the trial court whether or not to order production of subpoenaed materials prior to trial. United States v. Nixon, 418 U.S. at 702; United States v. MacKey, 647 F.2d at 901; United States v. Lieberman, 608 F.2d 889, 904 (1st Cir. 1979), cert. denied, 444 U.S. 1019, 62 L. Ed. 2d 649, 100 S. Ct. 673 (1980); United States v. Berrios, 501 F.2d at 1212. Such decision will be disturbed on appeal only where the action was clearly arbitrary or without support in the record. United States v. Nixon, 418 U.S. at 702.
If the subpoena were still a trial subpoena, there would be no question that the defendants would be required to produce the documents requested on the day of trial. However, at the March 22, 1982 hearing before Judge McLaughlin, the government requested that the documents be produced prior to trial pursuant to Fed. R. Crim. P. 17(c).
In order to obtain documents prior to trial the party making the request must demonstrate the following:
(1) that the documents sought are evidentiary and relevant;
(2) that they are not othewise procurable in advance of trial by the exercise of due diligence;
(3) that the party cannot properly prepare for trial without such production and inspection in advance of trial and the failure to obtain such inspection may tend unreasonably to delay the trial; and
(4) that the application is made in good faith and is not intended as a general fishing expedition.
United States v. Nixon, 418 U.S. at 699-700 citing United States v. Iozia, 13 F.R.D. 335, 338 (S.D.N.Y. 1952); United States v. Witt, 542 F. Supp. 696, 697-98 (S.D.N.Y. 1982). The movant must establish the relevancy and admissibility of the records sought and specify the documents with reasonable particularity. United States v. Nixon, 418 U.S. at 700. The test for enforcement of a pretrial subpoena is whether the subpoena represents a good faith effort to obtain relevant evidence or a fishing expedition to expand discovery. Bowman Dairy Co. v. United States, 341 U.S. at 220-21; United States v. Cuthbertson, 630 F.2d at 144.
Although the government bears the burden with regard to pretrial production of the subpoenaed documents, it did not have the opportunity to address the various issues since the defendants raised the question of the subpoena's validity at such a late date. Accordingly, the undersigned will attempt to ascertain whether or not the government has already satisfied its burden from the record already developed.
There is no doubt that the documents in question are relevant since they relate to the charges in the Information. See United States v. Gross, 24 F.R.D. at 140.Through their use the government will attempt to establish the fact that the foods inspected at the Gel Spice premises traveled in interstate and/or foreign commerce, an essential element of the charge brought under 21 U.S.C. § 331(k) (Supp. II 1949) which prohibits any act that results in the adulteration of food that is being held for sale after shipment in interstate commerce.
Contrary to the defendants' claim that the "subpoena is overly broad and does not request specific documents,"
the government has tailored its request to records concerning ten discrete shipments of goods, thereby specifying its request with reasonable particularity. See In re Rabbinical Seminary, Etc., 450 F. Supp. 1078, 1084 (E.D.N.Y. 1978). Each set of documents is clearly identified so that their production will not be burdensome. Furthermore, it would appear that the documents are admissible as records kept in the ordinary course of doing business.Fed. R. Evid. 803(6); see also United States v. Gross, 24 F.R.D. at 141.
Although the government has not claimed that the materials are not available from any other source, the fact that they deal with shipments of goods from or through firms located outside the United States would make it impossible for the government to obtain the records since this court would have no jurisdiction over such companies. Additionally, although the government has not stated it must have the documents prior to trial, in view of the fact that the original trial was scheduled to start almost two years ago, production of the documents now would facilitate the trial once commenced, thereby fulfilling the purpose of Fed. R. Crim. P. 17(c), i.e., to expedite trials by requiring production of evidence beforehand. Bowman Dairy Co. v. United States, 214 U.S. at 220.
Finally, I find that the government's motion was made in good faith since it was made for the purpose of obtaining evidence for use at trial and not for the purpose of unearthing additional documentary evidence. See United States v. Gross, 24 F.R.D. at 141. The government has long been aware of the existence of the documents, having examined the records during the various inspections.
5.Concerning defendants' motion to suppress statements made by Barry Engel and Andre S. Engel during the various investigations on the ground that such statements were coerced,
I recommend that defendants' motion to suppress be denied since I find that defendants' statements were voluntarily made during lawful inspections. Since defendants were not in custody, Miranda warnings were not required. See United States v. Jamieson-McKames Pharmaceuticals, Inc., 651 F.2d 532, 543 (8th Cir. 1981), cert. denied, 455 U.S. 1016, 102 S. Ct. 1709, 72 L. Ed. 2d 133 (1982). Furthermore, the inspections were conducted pursuant to lawful authority and were consistent with the requirements of the Federal Food, Drug and Cosmetic Act, 21 U.S.C. § 375 (1976). Prior to each inspection FDA personnel produced credentials and presented a written notice of inspection to either Andre S. Engel or Barry Engel.
Defendants have submitted no evidence that FDA personnel coerced them into making statements or used threats of any kind. Rather, defendants consented to each of the inspections at issue. Additionally, the reports of those investigations indicate that the defendants were generally cooperative. It is hard to believe that the owners of a corporation which has been in business for approximately twenty-five years would be intimidated so easily by FDA personnel. In fact, Barry Engel testified at the January 19th hearing that he refused to sign a statement drafted by an FDA investigator because Mr. Engel did not agree with its contents.
6. Concerning defendants' motion to suppress statements made in the course of hearings conducted pursuant to 21 U.S.C. § 335 (1958) (also known as a "§ 305 hearing"), I recommend that defendants' motion to suppress be denied.
Three hearings were held on October 27, 1976, December 20, 1977 and May 30, 1979 in order to give defendants an opportunity to explain why criminal action should not be taken against them for violation of the Federal Food, Drug and Cosmetic Act. See 21 U.S.C. § 335; 21 C.F.R. § 7.84 (1982). Prior to each hearing defendants received a notice of hearing, an information sheet describing the purpose and format of the hearing and a list of the adulterated foods that were the subject of the hearing.
I find that defendants were aware of the possible consequences of the hearing (i.e., criminal prosecution) because the hearing notice advised them of that fact. Andre Engel appeared at the first § 305 hearing on October 27, 1976 and again at the second hearing at which time he requested an adjournment in order to return with counsel. Barry Engel, accompanied by counsel, represented Gel Spice and the individual defendants at the second hearing on December 20, 1977 and then again on May 30, 1979.
Since the defendants have failed to show that the government had already decided to prosecute them before the § 305 hearings were held,
I find that the statements made at the § 305 hearings were not taken in violation of the defendants' constitutional rights and, therefore, the evidence gathered therefrom should not be suppressed. See United States v. Andreadis, 234 F. Supp. 341, 347-49 (E.D.N.Y. 1964).
Objections to the findings and recommendations made herein and in the December 13, 1982 report shall be filed with the Honorable Joseph M. ...