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United States of America v. Raj Rajaratnam

February 15, 2011


The opinion of the court was delivered by: Richard J. Holwell, District Judge:


Before the Court is a motion by third party Richard Choo-Beng Lee ("Lee") to quash a subpoena duces tecum served upon him by defendant Raj Rajaratnam pursuant to Rule 17 of the Federal Rules of Criminal Procedure. Lee argues that several of the requests in the subpoena are overbroad and/or call for certain tax records that are protected from disclosure pursuant to privileges under state law. For the reasons set forth below, the motion is denied.


A subpoena issued pursuant to Rule 17(c) of the Federal Rules of Criminal Procedure "may order the witness to produce any books, papers, documents, data, or other objects the subpoena designates." Fed. R. Crim. P. 17(c)(1). The Rule provides that "[t]he court may direct the witness to produce the designated items in court before trial or before they are to be offered in evidence." Id. The Rule further provides that, "[o]n motion made promptly, the court may quash or modify the subpoena if compliance would be unreasonable or oppressive." Fed. R. Crim. P. 17(c)(2).

Rule 17(c) "was not intended to provide a means of discovery for criminal cases." United States v. Nixon, 418 U.S. 683, 698 (1974). Rather, "its chief innovation was to expedite the trial by providing a time and place before trial for the inspection of subpoenaed materials." Id. at 698-99. Consistent with that limited purpose, "in order to require production prior to trial, the moving party must show: (1) that the documents are evidentiary and relevant; (2) that they are not otherwise procurable reasonably in advance of trial by exercise of due diligence; (3) that the party cannot properly prepare for trial without such production and inspection in advance of trial and that 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.'" Id. at 699-700. In other words, under the test adopted by the Supreme Court in Nixon, the proponent of a subpoena returnable before trial "must clear three hurdles: (1) relevancy; (2) admissibility; (3) specificity." Id. at 700.*fn1

In Tucker, in the course of ruling on a motion to quash a Rule 17 subpoena issued to the Bureau of Prisons, a third party, Judge Scheindlin noted that the Supreme Court in Nixon expressly reserved the question of whether the test adopted therein applied to subpoenas issued to third parties. See id. at 65 (citing Nixon, 418 U.S. at 699 n. 12 ("The Special Prosecutor suggests that the evidentiary requirement . . . does not apply in its full vigor when the subpoena duces tecum is issued to third parties rather than to government prosecutors. We need not decide whether a lower standard exists because we are satisfied that the relevance and evidentiary nature of the subpoenaed tapes were sufficiently shown as a preliminary matter to warrant the District Court's refusal to quash the subpoena.") (internal citation omitted)). Citing concerns about whether a restrictive test for a subpoena could impair a defendant's rights to compulsory process under the Sixth Amendment, Judge Scheindlin found that, in order to issue a Rule 17(c) subpoena duces tecum returnable prior to trial, a defendant "need only show that the request is (1) reasonable, construed as 'material to the defense,' and (2) not unduly oppressive for the producing party to respond." Id. at 66.

The Court is unaware of any other decision applying a test less restrictive than the Nixon test to a Rule 17(c) subpoena issued to a third party, and need not apply the test Judge Scheindlin applied in Tucker because it concludes that the subpoenas here satisfy the Nixon test. But the compulsory process rights at stake merit some discussion.

For the proposition that Rule 17(c) "was not intended to provide a means of discovery for criminal cases," Nixon, 418 U.S. at 698, that forms the rationale for the Nixon test, the Nixon court cited Bowman Dairy Co. v. United States, 341 U.S. 214 (1951). The Bowman court stated that "Rule 17(c) was not intended to provide an additional means of discovery. Its chief innovation was to expedite the trial by providing a time and place before trial for the inspection of the subpoenaed materials." Id. at 220. Yet Bowman was a case regarding a subpoena by the defendant to the government, and the court's chief concern appeared to be distinguishing Rule 17 from Rule 16, which requires reciprocal disclosure of, inter alia, documents "material to preparing the defense" and materials the government and a defendant intend to use in their cases in chief. Fed. R. Crim. P. 16(a)(1)(E). With respect to such materials, "Rule 16 provides the only way the defendant can reach such materials so as to inform himself." Bowman Dairy Co., 341 U.S. at 219.

However, the Bowman Dairy court also recognized that if such materials or any part of them are not put in evidence by the Government, the defendant may subpoena them under Rule 17(c) and use them himself. It would be strange indeed if the defendant discovered some evidence by the use of Rule 16 which the Government was not going to introduce and yet could not require its production by Rule 17(c). There may be documents and other materials in the possession of the Government not subject to Rule 16. No good reason appears to us why they may not be reached by subpoena under Rule 17(c) as long as they are evidentiary.

Id. And the court added: "That is not to say that the materials thus subpoenaed must actually be used in evidence. It is only required that a good-faith effort be made to obtain evidence." Id. at 219-20 (emphasis added). True, the Bowman Dairy court recognized that "[i]t was not intended by Rule 16 to give a limited right of discovery, and then by Rule 17 to give a right of discovery in the broadest terms," and "Rule 17(c) was not intended to provide an additional means of discovery." Id. at 220. But the court also noted that "the plain words of the Rule are not to be ignored" and "must be given their ordinary meaning to carry out the purpose of establishing a more liberal policy for the production, inspection and use of materials at the trial." Id. (emphasis added). The Bowman Dairy court added that "[t]here was no intention to exclude from the reach of process of the defendant any material that . . . could be used at the trial." Id. at 221.

Moreover, in a footnote to the above passage, the Bowman Dairy court quoted a statement of the Advisory Committee on the Federal Rules of Criminal Procedure describing the Rule as "a provision . . . that the court may, in the proper case, direct that [documents] be brought into court in advance of the time that they are offered in evidence, so that they may then be inspected in advance, for the purpose of course of enabling the party to see whether he can use it or whether he wants to use it.'" Id. at 220 n.5 (emphasis added); see also Nixon, 418 U.S. at 699 n.11 (quoting the same).

This context suggests that the Bowman Dairy court interpreted Rule 17 as neither a discovery device to examine documents for whatever might turn up, nor as a mechanism to obtain documents that a defendant can identify in advance, but rather a way for a defendant to examine documents he believes to exist that would be relevant to, and therefore presumptively admissible in, his defense. Cf. Fed. R. Evid. 402 ("All relevant evidence is admissible, except as otherwise provided . . . ."). The "admissibility" prong of the Nixon test seems consistent with that interpretation, since the Nixon court referred to "potential evidentiary uses" in applying the "admissibility" requirement. Id. But the "specificity" prong of the Nixon test is somewhat more complicated if Rule 17 is a way for a defendant to obtain documents relevant to his defense without knowing exactly what the documents are. In the context of a subpoena to the government, whom Rule 16 already requires to turn over any "item [that] is material to preparing the defense," Fed. R. Crim. P. 16(a)(1)(E)(i), the "specificity" prong makes sense because "its function is to prevent the 'exception' (i.e., the broad language of Rule 17(c)) from swallowing the 'rule' (i.e., the Rule 16 limitations on the discovery available to criminal defendants)." United State v. Stein, 488 F. Supp. 2d 350, 366 (S.D.N.Y. 2007) (Kaplan, J.) Indeed, the "Nixon standard exists to reconcile the broad language of Rule 17(c) with the limitations on pretrial discovery inherent in the far narrower language of Rule 16." Id.

But "it is vitally important never to let the frequent repetition of a familiar principle obscure its origins and thus lead to mindless application in circumstances to which the principle never was intended to apply." Id. at 365. So, too, "Nixon should not so readily be divorced from the concerns that produced it." Id. Yet in the context of a subpoena to a third party to whom Rule 16 does not apply, requiring the defendant to specify precisely the documents he wants without knowing what they are borders on rendering Rule 17 a nullity. Cf. Robert G. Morvillo et al., Motion Denied: Systematic Impediments to White Collar Criminal Defendants' Trial Preparation, 42 Am. Crim. L. Rev. 157, 160 n. 12 (2005) ("[C]courts have interpreted 17(c) so narrowly that it is rarely useful to criminal defendants, and instead serves as an additional tool for the prosecution."). "It is extraordinarily difficult for a defendant, who has limited ability to investigate, to know enough about the discovery he is seeking such that he can comply with the Nixon requirements." Id. Judge Schiendlin's "material to the defense" would insure that the defendant has a right to ...

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