Grand Jury Subpoena Exception
The Act does not apply to subpoenas issued by federal grand juries (12
U.S.C. § 3413(i)), except for section 3420 which contains restrictions
the handling and use of financial records subpoenaed by grand juries and
3415 which allows financial institutions to be reimbursed for costs
with providing the records.|
Section 3420 requires that financial records obtained by grand jury
subpoena must be actually "returned and presented to the grand jury and must
destroyed or returned to the financial institution if not used in connection
the return of an indictment, a criminal prosecution or a purpose permitted
Rule 6(e) of the Federal Rules of Criminal Procedure.
The broad wording of the grand jury exception is significant:
Nothing in this title (except §§ 3415 and 3420
Act) shall apply to any subpoena or court order issued in
with proceedings before a grand jury except that a court shall
have authority to order a financial institution on which a grand
subpoena for customer records has been served not to notify the customer
the existence of the subpoena or information that has been
furnished to the grand jury, under the circumstances and for the periods
specified and pursuant to the procedures established at § 3409. 12
§ 3413(i). [Emphasis added.]
By virtue of the wording of the exception, grand jury subpoenas are not
subject to the certification of compliance, customer notice, or civil
provisions of the Act. In fact, aside from the reimbursement and handling
provisions, the Act leaves federal grand jury subpoenas precisely where they
before the Act.
The Supreme Court has held that customers of financial institutions
no standing to challenge a federal grand jury subpoena directed to the
institution. United States v. Miller, 425 U.S. 435
The legislative history of the Act points out that grand jury subpoenas
were excepted from the Act because:
The grand jury is the single most important investigative tool
criminal law enforcement. In addition, grand jury procedures are already
to judicial scrutiny. Furthermore, the Supreme Court decisions indicate
constitutional status of the grand jury protects it from burdensome delays.
Finally, grand juries are protected by rules keeping their proceedings
Expanded notice and challenge rights might diminish grand jury secrecy and
threaten the privacy of individuals being investigated.
H.R. Rep. No. 95-1383 at 228, 7 U.S. Code Cong. & Ad. News, 95th Cong.,
Sess., at 9358. The five major purposes of the rule of grand jury secrecy
set out in United States v. Procter & Gamble
U.S. 677, 681-82 n.6 (1958).
The records do not have to be returned or actually presented to the
jury if the volume of such records makes it impractical. In such a case the
grand jury shall be provided with a description of the records.
The "actually returned and presented" language of 12 U.S.C. §
is not interpreted by the Department as requiring either return of the
by a representative of the subpoenaed financial institution or physical
production of the records before the grand jury in every case. Rather, it
view of the Department that Section 3420(l) should be interpreted in keeping
the realities of grand jury practice. For purposes of convenience and
therefore, the subpoenaed party may be permitted to surrender records to a
federal agent so long as a report is made in due course to the grand jury.
view has been supported by two courts, United States v.
Kington, 801 F.2d 733 (5th Cir. 1986) and United States
Residence Located at 218 Third Street, New Clarus, Wis., 805 F.2d
(7th Cir. 1986). But also see In re Castiglione, 587 F. Supp.
(C.D. Cal. 1984) (held that it was improper to allow financial institutions
deliver the records to an agent).
The question has arisen as to whether the "actually returned and
language of the Act prohibits agents of the grand jury from inspecting grand
jury-subpoenaed records at the financial institution or from searching
records of financial institutions to locate items covered by the subpoena.
U.S. Court of Appeals for the Fifth Circuit affirmed a district court
stating that the Act does not prohibit agents of a grand jury from searching
and copying bank records sought pursuant to a grand jury subpoena, In re
Grand Jury Proceedings, 636 F.2d 81, 84-85 (5th Cir.