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United States v. Schwimmer

decided: August 1, 1989.


Appellant Martin J. Schwimmer appeals from a finding of contempt and a summary order of confinement entered on March 14, 1989 in the United States District Court for the Eastern District of New York (McLaughlin, J.) pursuant to 28 U.S.C. § 1826(a). Affirmed.

Newman, Cardamone and Winter, Circuit Judges.

Author: Cardamone

CARDAMONE, Circuit Judge:

The principal issue on this appeal is whether a defendant who has been tried, convicted, and whose appeal is pending may be granted use immunity and then be compelled to testify before a grand jury on matters that were the subject of his conviction, even though his appeal may result in a retrial of those offenses about which he gave compelled testimony. We believe the testimony of such a defendant may be compelled. Hence, we affirm.


Appellant Martin Schwimmer takes this expedited appeal from a March 14, 1989 order of confinement imposed pursuant to 28 U.S.C. § 1826(a) (1982) in the United States District Court for the Eastern District of New York (McLaughlin, J.). The order appealed from resulted from Schwimmer's refusal, after having been granted use immunity pursuant to the provisions of 18 U.S.C. § 6002 (1982), to testify before a grand jury.

On June 16, 1987 a grand jury sitting in the Eastern District of New York indicted Schwimmer for receiving illegal employee benefit plan payments, 18 U.S.C. § 1954 (1982), engaging in a racketeering conspiracy, 18 U.S.C. § 1962 (1982), and tax evasion, 26 U.S.C. § 7201 (1982). Appellant entered a plea of not guilty, elected not to testify at his jury trial, and was convicted of the charged offenses. The convictions derived from his management of $100 million of assets for the benefit plans of two New York unions -- Local 810 of the International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America and Local 38 of the Sheetmetal Workers International Association of the AFL-CIO -- from which he skimmed $14 million in concealed commissions. In addition to the receipt of illegal payments from the funds, appellant was convicted under the RICO count of making millions of dollars in payoffs to various Local 810 officials.

Following his conviction, Schwimmer was sentenced on February 14, 1989 to 10 years imprisonment, fined $1.6 million, and ordered to forfeit $4.5 million. At the close of the sentencing proceedings, he was served with a subpoena that demanded his appearance before a grand jury investigating the criminal activities of the union officials to whom Schwimmer had made illicit payments. The government has represented to us that the grand jury before which appellant's testimony is sought is not the same grand jury that indicted him, though the same Assistant United States Attorney who prosecuted him is handling the current grand jury matter.

On the adjourned return date of the subpoena, Schwimmer appeared and was served with a February 22, 1989 order of Chief Judge Platt of the Eastern District directing him to testify under grant of use immunity. The testimony sought to be elicited related primarily to the participation of various union officials in the kickback schemes that were the subject of appellant's conviction. Schwimmer's judgment of conviction is currently on appeal before this Court. See United States v. Schwimmer, No. 89-1106 (2d Cir. appeal docketed Mar. 9, 1989). Despite the grant of immunity, Schwimmer refused to testify. Instead, he invoked his rights under the Fifth and Sixth Amendments to the United States Constitution, and also asserted that it was ethically improper for the prosecutor to question him before the grand jury without his attorney being present.

A hearing regarding appellant's refusal to testify was scheduled for March 14, 1989 before Judge McLaughlin, who had presided over Schwimmer's trial. Prior to the hearing, appellant moved to quash the subpoena on constitutional grounds. The government, in turn, moved for a finding of contempt and for a summary order of confinement pursuant to 18 U.S.C. § 1826. After oral argument, Judge McLaughlin denied Schwimmer's constitutional claims, concluding that his Fifth Amendment right to be free from self-incrimination was fully protected by the terms of Chief Judge Platt's immunity order, and that the Sixth Amendment merely guaranteed appellant the right to have his attorney present for consultation outside the grand jury room -- a right of which he had availed himself. Further, with respect to the effect of the compelled testimony on Schwimmer's appeal, the district court ruled that there was no denial of the effective assistance of counsel because none of appellant's compelled testimony could be used by the government in any proceedings, including his appeal or subsequent retrial. Accordingly, it held appellant in contempt for his unjustified refusal to testify before the grand jury and entered the order of confinement. The district court also determined that an expedited appeal from its order would neither be frivolous nor taken for purposes of delay. It therefore granted bail pending our resolution of the issues raised by Schwimmer's appeal. See 28 U.S.C. § 1826(b) (1982).


Appellant raises three separate challenges to the order of confinement. He argues that questioning a convicted defendant before a grand jury about the events that are the subject of his conviction while his appeal is pending is an abuse of the grand jury process that violates (1) his Fifth Amendment right against self-incrimination, (2) his Sixth Amendment right to the effective assistance of counsel, and (3) the provisions of the Code of Professional Responsibility prohibiting lawyers from communicating directly with opposing parties known to be represented by counsel. In essence, Schwimmer asserts that granting him use immunity under 18 U.S.C. § 6002 will not cure the constitutional transgressions that will occur if he is required to testify. These arguments present a congeries of interrelated constitutional considerations For purposes of clarity, we address each contention in order.

A. Fifth Amendment

The Fifth Amendment states that no person "shall be compelled in any criminal case to be a witness against himself. . . ." U.S. Const. amend. V, cl. 3. Appellant's principal contention is that the grant of use immunity is insufficient to protect this right if he is compelled to testify while his appeal is pending. Speculating about the possibility of a retrial and about prospective non-evidentiary use by the government of his coerced, immunized testimony Schwimmer asserts that there is no means of ...

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