The opinion of the court was delivered by: MCLAUGHLIN
McLAUGHLIN, District Judge.
In this proceeding the Estate of Henry Kluger, deceased, seeks an Order (a) vacating this Court's [Bramwell, J.] Order dated March 29, 1983, which authorized the release of grand jury materials to the Internal Revenue Service pursuant to Federal Rules of Criminal Procedure 6(e)(3)(C)(i); (b) requiring the return of all documents released under that Order; and (c) prohibiting further use of the fruits of that Order in pending civil litigation.
In 1981, a grand jury in this District was investigating whether Henry Kluger and others had violated the federal narcotics laws and the criminal tax laws. Kluger died on February 27, 1982. Hence, all criminal proceedings against him were terminated.
On March 29, 1983, in accordance with then-existing principles of law, the Honorable Henry Bramwell, United States District Judge of this District, granted the government's ex parte application under Rule 6(e) authorizing disclosure to the Internal Revenue Service ("IRS") of certain grand jury materials "for the purposes of determining, establishing, assessing and collecting the Federal civil tax liability of Henry Kluger and his heirs, and for use in any judicial proceeding related thereto."
Approximately three months later, however, the Supreme Court decided the cases of United States v. Baggot, 463 U.S. 476, 77 L. Ed. 2d 785, 103 S. Ct. 3164 (1983) and United States v. Sells Engineering, Inc., 463 U.S. 418, 77 L. Ed. 2d 743, 103 S. Ct. 3133 (1983). In Sells, the Court held that Rule 6(e) requires government attorneys other than prosecutors to make a showing of particularized need for grand jury materials before any disclosure will be permitted for use in civil litigation. Sells, supra, 463 U.S. at 446. In Baggot, the Court held that Rule 6(e) does not authorize disclosure of grand jury materials for use in civil tax audits, since an IRS audit is not preliminary to or in connection with a judicial proceeding. Baggot, supra, 463 U.S. at 480.
Petitioner argues that Baggot and Sells apply retroactively to invalidate Judge Bramwell's Rule 6(e) Order. Alternatively, petitioner contends that the Supreme Court's decisions proscribe future disclosures of the grand jury materials in the course of pending civil litigation in the Southern District of Florida and in the Tax Court. See United States v. Estate of Kluger, 84 CV 0071 (S.D. Fla); Estate of Kluger v. Commissioner, No. 83-26583 (U.S.T.C.).
The government concedes that Baggot and Sells now preclude it from obtaining the type of Rule 6(e) Order entered in this case. The government argues, however, that those decisions do not apply retroactively to invalidate this Court's Order, and thus, that the IRS's continued use of the materials is entirely proper.
Several courts, applying the factors set forth in Chevron Oil Co. v. Huson, 404 U.S. 97, 106-07, 30 L. Ed. 2d 296, 92 S. Ct. 349 (1971), have held that Baggot and Sells should not be applied retroactively to invalidate a prior Rule 6(e) Order. See United States v. (Under Seal), 783 F.2d 450, 453 (4th Cir. 1986); Kluger v. Comm. of Internal Revenue, 83 T.C. 309, 335 (1984). I agree.
The more difficult question remains, however, whether, in light of Baggot and Sells, this Court should enter a curative Order preventing the government's continued access and further disclosure of the grand jury materials. In addressing a mootness argument in Sells, the Supreme Court observed the following:
Each day this order remains effective the veil of secrecy is lifted higher by disclosure to additional personnel and by the continued access of those to whom the materials have already been disclosed. We cannot restore the secrecy that has already been lost but we can grant practial relief by preventing further disclosure.
Sells, supra, 463 U.S. at 422-23 n.6 (quoting In re Grand Jury Investigation No. 78-184 (Sells, Inc.), 642 F.2d 1184, 1188 (9th Cir. 1982)). The Court's observations appear equally applicable to this application wherein the Court is called upon to examine the effect of one of its ...