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463

Memorandum in Support of Motion for an Order Prohibiting Notification of the Service of Grand Jury Subpoena—Form Q-2

RFPA

Form Q-2 -- Memorandum in Support of Motion for an Order Prohibiting Notification of the Service of Grand Jury Subpoena

IN THE UNITED STATES DISTRICT COURT

FOR THE _______ DISTRICT OF _______

IN RE: GRAND JURY SUBPOENAS

DUCES TECUM, DATED

MISC. NO. _____________

(INSERT DATE OF SUBPOENA)

MEMORANDUM IN SUPPORT OF MOTION

FOR AN ORDER PROHIBITING NOTIFICATION

OF THE SERVICE OF GRAND JURY SUBPOENA

The United States has moved the Court to prohibit (insert name of bank) from disclosing to its customers, for a period of ninety days, that the bank has been served with a Grand Jury subpoena duces tecum. [FN1] The motion is filed under the terms of the Right to Financial Privacy Act, 12 U.S.C. Section 3401 et seq., pursuant to the Court's inherent powers, and under the provisions of the All Writs Act, 28 U.S. C. Section 1651. The Government's application is made for the soundest of reasons. [FN2] The Order whose entry is requested is framed in terms that parallel precisely the terms of the delayed-notice provisions of the Right to Financial Privacy Act, 12 U.S.C. Section 3409. And, the Order has been framed to be issued pursuant to the Court's inherent powers, and under the terms of the All Writs Act, 28 U.S.C. Section 1651. See United States v. New York Telephone Co., 434 U.S. 159, 172-178 (1977). The Order is drawn so that no one will be prohibited from relating "facts within their knowledge acquired beyond the grand jury room;" United States v. Central Supply Association, 34 F. Supp. 241, 245 (N.D. Ohio 1940). Rather, by the least restrictive available means, the Order will simply defer the time at which the (insert name of bank) will become free to disclose publicly what it stated to or learned from the Grand Jury; King v. Jones, 319 F. Supp. 653, 658-659 (N.D. Ohio 1940). In pertinent part, Rule 6(e) of the Federal Rules of Criminal Procedure provides that "No obligation of secrecy may be imposed upon any person except in accordance with this rule." [FN3] Although seemingly absolute on its face, those parts of Rule 6(e) were designed to ameliorate the "unnecessary hardship" of imposing an oath of secrecy upon the witness concerning testimony before the grand jury. See Fed. R. Crim. P., Rule 6(e), Advisory Committee Note 2 (emphasis supplied). [FN4] Both prior and subsequent to the enactment of Rule 6(e) of the Federal Rules of Criminal Procedure, the courts have recognized that some circumstances exist in which some appropriate limitation upon disclosure of matters may be imposed upon grand jury witnesses, despite the seemingly absolute language of the Rule. In Goodman v. United States, 108 F.2d 516 (9th Cir. 1939), the court found it "well within the descretionary power of the court to impose an obligation of secrecy not alone upon grand jurors, but upon the witnesses, if the court believes the precaution necessary in the investigation of crime." Id. at 520. And, in United States v. Central Supply Association, 34 F. Supp. 241, 245 (N.D. Ohio 1940), the court enumerated at least five circumstances in which such a precaution might be found "necessary in the investigation of crime." See King v. Jones, supra, 319 F. Supp., at 658. Following the enactment of Rule 6(e) of the Federal Rules of Criminal Procedure in 1946, 5 F.R.D. 573, 583 (1946), [FN5] the witness secrecy provision of Rule 6(e) of the Federal Rules of Criminal Procedure was not subjected to judicial scrutiny until the decision in United States v. Smyth, 104 F. Supp. 279 (N.D. Cal. 1952). Finding that the rule enunciated in Goodman survived the enactment of Rule 6(e) of the Federal Rules of Criminal Procedure, the Smyth court noted that: . . . the secrecy of grand jury proceedings is of substance and not of procedure. The power of the trial court to enforce secrecy is jurisdictional and a necessity if grand juries are to function. The Federal Constitution encysted the common law grand jury with all its incidents. The Rules could not change the Constitution nor prevent the court from imposing secrecy upon everyone in connection with such a proceeding in the public interest. See also United States v. Central Supply Association, 34 F. Supp. 241 (N.D. Ohio 1940). Symth, supra, 104 F. Supp. at 280-81, n.5.

    FN1. The requested Order would also prohibit the financial institution from notifying its customers of the matter of the documents subpoenaed, and of the nature and extent of compliance by the institutions with the subpoena's terms.

    FN2. The reasons advanced by the Government are explicated fully in an Affidavit filed ex parte and in camera together with this pleading. The government contends that the finon and its customers are not entitled to those reasons at this time, and requests the court to retain the Affidavit filed by the government under seal of court.

    FN3. Rule 6(e) of the Federal Rules of Criminal Procedure provides:

  1. General Rule -- A grand jury, an interpreter, a stenographer, an operator of a recording device, a typist who transcribes recorded testimony, an attorney for the Government, or any person to whom disclosure is made under paragraph (2)(A)(ii) of this subdivision shall not disclose matters occurring before the grand jury, except as otherwise provided for in these rules. No obligation of secrecy may be imposed on any person except in accordance with this rule. A knowing violation of Rule 6 may be punipt of court. (Emphasis added.)

    FN4. Whatever "hardship" may be imposed upon the witnesses served with the requested Orders is clearly not "unnecessary." To the contrary, the imposition of any such "hardship" is essential to preserve the legitimate functions of the grand jury and the integrity of the judicial process itself. And, whatever "hardship" may be imposed is, in any event, not overly burdensome on either those subject to the orders or the customers themselves.

    FN5. It is interest one of the framers of Rule 6(e) of the Federal Rules of Criminal Procedure suggested that the Rule itself contemplated the possible imposition of a limited oath of secrecy upon grand jury witnesses, and that the purpose of including the witness secrecy provision of the Rule was only to circumscribe the type of oath which might properly be imposed. After noting that the "Rule is specific that 'no obligation of secrecy may be imposed on any person except in accordance with this rule,'" George F. Longsdorf, a member of the Advisory Committee that drafted the original version of the Federal Rules of Criminal Procedure, suggested in 1951, that the "rules do not prescribe the forms of oaths to be taken by grand jurors or by witnesses called before the grand jury." That fact was mentioned, he added, "to make allusion to the practices sometimes formerly followed of exacting before Federal grand juries a form of oath to witnesses which exacted greater secrecy than Rule 6(e) requires." G.F. Longsdorf, The Beginnings and Background of Federal Criminal Procedure, in 4 W.W. Barron, Federal Practice and Procedure, at 24 (Rules ed. 1951).

The same conclusion has been reached by each of the other courts that have considered the courts' powers to impose some appropriate limitations upon the disclosures which federal grand jury witnesses are able to make. See In re Proceedings Before The Grand Jury Summoned October 12, 1970, 321 F. Supp. 238, 240 (N.D. Ohio 1970); King v. Jones, supra 319 F. Supp., at 657; In re Grand Jury Witnesses, 370 F. Supp. 1282, 1285 n.5 (S.D. Fla. 1974). Furthermore, the entry of an Or requested here is well within the powers of the Court. The grand jury is an arm of the court, which exercises jurisdiction of persons and subjects under the authority and supervision of the Court. In re Long Visitor, 523 F.2d 443, 446-47 (8th Cir. 1975), and In re Gompman, 531 F.2d 262, 266 (5th Cir. 1976). As the Supreme Court noted in Brown v. United States, 359 U.S. 41, 49 (1958): A grand jury is clothed with great independence in many areas, but it remains an appendage of the court, powerless to perform its investigative function without the court's aid, because powerless itself to compel the testimony of witnesses. It is the court's process which summons the witness to attend and give testimony, and it is the court which must compel a witness to testify if, after appearing, he refused to do so. [FN6] See also O'Bryan v. Chandler, 352 F.2d 987, 990 (10th Cir. 1965); In re A & H Transportation, Inc., 319 F.2d 69, 71 (4th Cir. 1963); and In re Seiffert, 446 F. Supp. 1153 (N.D. N.Y. 1978). The power of a district court to enforce secrecy is jurisdictional and an incident of the court's supervisory authority over grand juries "encysted" by the Constitution. See United States v. Smyth, supra, at 280-81, n.5.

    FN6. Since the grand jury is able to compel the attendance of witnesses only through the use of the district court's process, it might well be argued that the district court has the power in this case to issue the requested Orders as a logical derivative of its power to issue the subpoenas duces tecum to which the Order relates, under Rule 17 of the Federal Rules of Criminal Procedure. In such case the witness secrecy provision of Rule 6(e) of the Federal Rules of Criminal Procedure may not be called into play at all.

Federal courts are endowed by All Writs Act, Title 28, United States Code, Section 1651, with "the power to issue such commands . . . as mao effectuate and prevent the frustration of orders . . . previously issued in (the) exercise of jurisdiction otherwise obtained." United States v. New York Telephone Co., supra, at 172. While "the power of federal courts to impose duties upon third parties is not without limits," id., the district courts should be "trusted to exercise their powers under the All Writs Act only in cases of clear necessity and to balance the burden imposed upon the party required to render assistance against the necessity." Id. at 165, n.5. Though "unreasonable burdens may not be imposed," the power conferred by the All Writs Act is available "as a 'legislatively approved source of procedural instruments designed to achieve "the rational ends of law" ' " Id. at 172, citing Harris v. Nelson, 394 U.S. 286, 299 (1969); and Price v. Johnston, 334 U.S. 266, 282 (1948).

The requested Order is sought under the terms of the All Writs Act, to render effective the process of this grand jury. That process consists in the subpoena duces tecum to which the Order relates. The subpoena is no more than "orders . . . previously issued in (the) exercise of jurisdiction otherwise obtained" and properly exercised, either directly by the district court or through its investigative arm, the grand jury. The requested Order is simply a "command" issued by the court, in the exercise of its discretion, "necessary to effectuate and prevent the frustration" of the grand jury's process. Appropriately balancing "the burden imposed upon the party required to render assistance against the necessity" presented by the facts which compelled the government to seek issuance of the Order, the government contends that the Court should find the Order both permissible and necessary under these circumstances; essential to preserve the legitimate functions of the grand jury; rationally related to the reasons for which it is sought; and not overly burdensome on those subject to the Order or on the customers of (insert name of the bank). Compare United States v. New York Telephone Co., supra at 174.

Finally, the court should note that the entry of an Order such as that sought here is not without precedent. Indeed, in a recent decision, the Fourth Circuit implicitly approved the entry of such an Order under similar circumstances. See In re Swearingen Aviation Corporation, etc., 486 F. Supp. 9 (D. Md.), aff'd 605 F.2d 125 (4th Cir. 1979).

Respectfully submitted,

________________________

United States Attorney

By: ________________________

Assistant U.S. Attorney