Consumer Credit Insurance Agency, Inc. v. United States

599 F.2d 770, 1979 U.S. App. LEXIS 14026

• Court: Court of Appeals for the Sixth Circuit
• Decided: June 13, 1979
• Docket: 76-2583
• Status: Published

Opinions

ENGEL, Circuit Judge.

Plaintiffs commenced an action in the district court pursuant to Rule 41(e), Fed.R. Crim.P., seeking return of certain corporate books, correspondence, memoranda, books of account and like corporate documents, which they alleged had been unlawfully seized pursuant to “forthwith” grand jury subpoenas duces tecum.

On the morning of September 10, 1976, Special Agent Terry A. Lyons of the FBI went to the office building at 514 Prospect Avenue, Cleveland, Ohio, wherein plaintiffs had their offices on the fifth floor. On the ground floor he identified and introduced himself to Allan M. Wachs, who worked for the plaintiffs in the building. Lyons and Wachs had known each other as the result of a previous investigation of the affairs of the Northern Ohio Bank. Upon Lyons’ representation that he wanted to discuss Wachs’ business activities with him, Lyons was invited to proceed to the company’s fifth floor offices for the purpose of continuing the discussion. At that time Lyons was joined by Special Agents Fetterman and Graessle.

Once access had been gained to the fifth floor, Lyons served two “forthwith” subpoenas duces tecum upon Wachs and Thomas D. Bosse, who arrived shortly after the agents. Bosse, like Wachs, was employed by the plaintiffs and, the trial court found, was in charge of the office. At that time Bosse was also served with a warrant for the search of “[t]he top right hand drawer of a brown wooden desk used by Gennaro J. Orrico” for a firearm which was believed to have been possessed by him there in violation of 18 U.S.C. App. § 1202(a)(1) (1976).¹ Upon service of the subpoena and of the search warrant, Bosse immediately advised the agents that he would consult with his attorney and thereupon put a call in to Robert H. Jackson, a partner in the law firm of Kohrman & Jackson Company, LPA, legal counsel for plaintiff corporations and Bosse. The government agents were then joined by Kenneth A. Bravo, Special Attorney for the Department of Justice assigned to the Strike Force, and two additional FBI agents.

After substantial discussion between Wachs, Bosse and one Stephen Kalette, an attorney with the law firm of Kohrman & Jackson who had meanwhile arrived pursuant to Bosse’s call, Robert H. Jackson appeared on the scene to consult with Wachs, Bosse and Kalette and to examine the subpoenas. Bosse, with Jackson’s concurrence, asked that Bravo and the FBI agents stay in order to determine whether certain records were covered by the subpoenas. Jackson then departed, leaving Kalette to render further counsel.

For the remainder of the morning and into mid-afternoon Bosse, Wachs and Ka-lette continued intermittently to express their desire to cooperate in satisfying the requirements of the subpoenas. None of these individuals nor anyone else, according to the district court’s findings, requested or directed the agents to leave the premises. Any examination of the records by the agents was found to have been upon the express consent of Bosse and Wachs, with no objection from Kalette. Immediately prior to the removal of the documents, Jackson was contacted by telephone for advice, yet thereafter Wachs, Bosse and Ka-lette continued to cooperate with the agents. After the review of plaintiffs’ files was completed, the documents whose return is now sought were produced and delivered to the grand jury for use in its then-pending investigations.

The plaintiffs’ motion made before the district court detailed a number of charges that the subpoenas were invalid and that the government conduct under the circumstances here was so tainted that they were in all events entitled to relief. Essentially they claimed that the subpoenas were over-broad, that the search warrant was but a ruse to enable the officers to gain entrance to the building, and that in the service of the subpoenas, the FBI agents were guilty of trespass and of threats and intimidation which coerced them into consenting to the delivery of the documents and which rendered their consent invalid.

An evidentiary hearing was held before United States District Judge Robert B. Krupansky, who thereafter filed extensive factual findings, concluding that the plaintiffs’ consent to the search had been voluntary and that the documents had been lawfully seized. The court made the following ruling:

[Pjlaintiffs’ Motion for Return of Seized Property, pursuant to Rule 41(e), Fed.R.Crim.P., must be and hereby is denied. It appearing to the Court, however, that the great volume of documents subpoenaed from petitioners could understandably impede the operation of their business for a protracted period, the Court hereby ORDERS the Government to return to petitioners the originals of all documents produced pursuant to the instant subpoenas duces tecum by October 18, 1976. This Order does not preclude the Government from copying any or all such records.²

Our review of the record convinces us that there is much in the conduct of the officers here which we cannot approve if plaintiffs’ version of the facts is to be believed. Nonetheless, after personally hearing the witnesses, Judge Krupansky elected to assign greater weight and credibility to the government’s witnesses than to the plaintiffs’ with respect to the issue of vol-untariness. In support of his finding is the fact that plaintiffs’ agents consented to the examination and delivery of documents only after advice of their counsel, Jackson, and his associate, Kalette, who was present at the scene during the entire episode and who oversaw and approved the final delivery of possession to the agents. It is also noteworthy that Jackson testified to having advised Bosse that he was not required to turn over the documents sought.

We are not impressed with plaintiffs’ characterization that Kalette, the attorney sent from the firm of Kohrman & Jackson, was only a “law clerk” and somehow allowed himself to be intimidated by the aggressive behavior of the government agents. He was admitted to practice; he was sent by a responsible law firm; he was accepted by the clients for that purpose, and had been introduced to the agents by Bosse and Wachs as “their attorney.” He gave advice to them, and they followed that advice. Moreover, the evidence showed that Jackson, Kalette’s superior, also participated significantly in the rendering of advice. In the absence of other persuasive evidence, we do not think it is appropriate to assume, because of the attorney’s relative inexperience, that he was incompetent to give proper advice or that any consent based upon the advice he actually gave was involuntary under the circumstances. Judge Krupansky did not.

Appellants also rely upon a confrontation between Special Attorney Bravo and Orri-co, who arrived at 2:35 p. m. and who was then served with a subpoena identical to the two previously served upon Wachs and Bosse. While Orrico’s testimony stresses the coercive nature of the events in issue, Bravo’s testimony places the incident in a different light:

[The conversation occurred] just at the time we were getting ready to leave and we were located in the large open area of the office in the end, close to the elevators. Mr. Orrico began talking, I don’t believe at first directly to me, saying that he was not going to the Grand Jury and then he looked in the direction of Agent Lyons and myself and said, “If you want me to go you’re going to have to take me in handcuffs.”

I then explained to Mr. Orrico that he had been served with a subpoena, that until such time as a Court ruled to the contrary I expected that he would obey that subpoena and in the event he did not, we would have no alternative but to ask a Federal Judge in this district to rule on the question of whether or not a warrant should be issued.

It is clear from the foregoing that Orrico objected not so much to the collection of documents, at issue here, as to the subpoena insofar as it called for his personal presence. Moreover, the district court failed to find, as plaintiffs urged, that Bravo “threatened” Orrico.

Following Orrico’s recalcitrance Bravo talked to Bosse, informing him of the possible adverse publicity which would attend noncompliance. In fact, apparently unknown to Bravo, plaintiffs’ attorney Jackson had likewise earlier counselled Bosse that resistance could generate adverse publicity. Bosse then talked to Orrico and prevailed upon him to comply.

We cannot agree that Bravo’s statements to Bosse and Orrico were coercive and overbore their will. The agent’s observations were not shown to have been untrue, and they may have in fact been realistic arguments which a prudent businessman would have wished to consider in determining whether to comply. Moreover, Kalette was on the scene to provide advice, and Jackson was consulted by telephone. That compliance was obtained only after extensive consultation with counsel diminishes whatever coercive effect Bravo’s statements may have had.

The plaintiffs also claim that the officers, after having executed the search warrant and having served the subpoenas, should immediately have left the premises. We might agree if the trial judge had found that they had been asked to leave. They were not, however, but rather had been invited to stay by Bosse, found by the district court to be in charge of the office, in order that they might assist in compliance. We reject the claim that their presence on the premises amounted to so high a degree of coercion under the circumstances as to nullify the otherwise proper effect of the subpoenas in producing the documents desired, since, as the district court found, the agents “never entered into any physical space without the express permission of plaintiffs,” and in fact remained upon an express invitation to do so. It must be remembered that these were business offices, that the agents entered in the company of and with the permission of Wachs, that entry was in the daytime, and that there were other office employees present at the time, thus diminishing any impact of a show of force. While we do not condone the procedure employed by the government, we accept the district court’s finding that compliance was voluntary. We hold, in conclusion, that the plaintiffs were not “aggrieved by an unlawful search and seizure” and are thus not entitled to relief under Rule 41(e).³

Finally, we are bound to note that while in a technical sense, the motion was denied, the trial judge has in fact granted the plaintiffs the relief which they initially sought: return of the documents, subject, however, to the government’s right to make copies. To the extent that the motion for return stems irom plaintiffs’ concern for the privacy interests of themselves and their clients, we conceive that their remedy at this stage is to seek a protective order in the district court under Rule 6(e), Fed.R. Crim.P., which would effectively recognize those rights, limiting the disclosure and use of the copies to the grand jury proceedings and any criminal prosecutions which may follow in their wake. While the plaintiffs have not seen fit to do so, we have no doubt that the district judge, who carefully considered their interests in the first place, would be fully willing and able to consider such a protective order.

Affirmed.

1 . The search of the drawer produced a handgun, as indicated, but it later turned out to be an imitation.

2 . We are troubled by the issue of jurisdiction over the appeal from the district court’s order, but in view of our conclusion that plaintiffs are not in any event entitled to relief under Rule 41(e), we find it unnecessary to resolve the question. We do not conceive that the issue of appellate jurisdiction is resolved solely by reference to whether a criminal proceeding has been initiated by indictment or information. As the Supreme Court held in DiBella v. United States, 369 U.S. 121, 82 S.Ct. 654, 7 L.Ed.2d 614 (1962): “the mere circumstance of a prein-dictment motion [under Rule 41(e)] does not transmute the ensuing evidentiary ruling into an independent proceeding begetting finality even for purposes of appealability." Id. at 131, 82 S.Ct. at 660 (emphasis added). Based upon the relationship between a Rule 41(e) proceeding and the ongoing grand jury process, and the importance of avoiding a bifurcation even where no indictment has been returned, see id. at 126-29, 82 S.Ct. 654, the Court concluded that a ruling upon a preindictment motion under Rule 41(e) is appealable in the following limited circumstance: “Only if the motion is solely for return of property and is in no way tied to a criminal prosecution in esse against the movant can the proceedings be regarded as independent.” Id. at 131-32, 82 S.Ct. at 660 (emphasis added). Both conditions must be satisfied. See Hill v. United States, 346 F.2d 175, 178 (9th Cir.), cert. denied, 382 U.S. 956, 86 S.Ct. 433, 15 L.Ed.2d 361 (1965). See generally C. Wright, Federal Practice & Procedure: Criminal § 678 at 139 (1969) (DiBella “sharply restricted” the notion that the denial of a preindictment motion under Rule 41(e) is final and appealable).

Bearing in mind that the burden is upon the appellants to satisfy the court that it has jurisdiction over the appeal, see Mansfield, Coldwater & Lake Michigan Ry. Co. v. Swan, 111 U.S. 379, 382, 4 S.Ct. 510, 28 L.Ed. 462 (1884); Chapman v. Houston Welfare Rights Organization, - U.S. -, -, n. 28, 99 S.Ct. 1905, 60 L.Ed.2d 508 (1979), we entertain doubts whether the instant appeal pertains “solely” to return of property, the district court having ordered the government to return the originals. In other words, any interest which plaintiffs have in receiving their business records has been fully met; the remaining relief sought on appeal is to deprive the government of any further evidence derived from the documents. While the plaintiffs represent that they “are not seeking suppression of [the] copies but only their return,” the necessary consequence of enlarging the relief granted by the district court is that the evidence will be unavailable for the grand jury’s further consideration. But see United States v. Calandra, 414 U.S. 338, 94 S.Ct. 613, 38 L.Ed.2d 561 (1974) (exclusionary rule inapplicable to grand jury proceedings). In this circumstance we conceive that an appeal aimed solely at the return of copies may lack the requisite independence from the extant grand jury probe, Meister v. United States, 397 F.2d 268 (3d Cir. 1968), even accepting arguen-do the proposition that, on the merits of the claim, Rule 41(e) applies to copies as well as originals. Goodman v. United States, 369 F.2d 166, 168 (9th Cir. 1966). We do not read G. M. Leasing Corp. v. United States, 429 U.S. 338, 97 S.Ct. 619, 50 L.Ed.2d 530 (1977), as addressing the issue, let alone settling it. To the extent that the case is relevant, G. M. Leasing supports the conclusion that the within appeal is premature, particularly in view of the Court’s favorable reference on this point to Meister, supra, 429 U.S. at 359, 97 S.Ct. 619.

3 . In view of our conclusion that the custodians consented to the delivery of plaintiffs’ records, we find it unnecessary to reach the claim that the documents were illegally seized because the subpoenas were too sweeping in their scope to be considered reasonable. See, e. g., Hale v. Henkel, 201 U.S. 43, 76, 26 S.Ct. 370, 50 L.Ed. 652 (1906). We note that the government has not claimed that there remain further documents and has not sought court enforcement of the subpoenas with respect to other evidence not voluntarily provided. Our holding is without prejudice to any right of plaintiffs to resist further disclosures.