In Re April 1977 Grand Jury Subpoenas. General Motors Corporation v. United States

584 F.2d 1366, 42 A.F.T.R.2d (RIA) 5947, 1978 U.S. App. LEXIS 9182

Opinions

MERRITT, Circuit Judge.

General Motors appeals under the Interlocutory Appeals Act of 1958, 28 U.S.C. § 1292(b) (1970), from an interlocutory order of the District Court refusing to disqualify a government lawyer from participation in grand jury proceedings. We hold that the original certification of this appeal under § 1292(b) by a panel of this Court was improvidently granted, and we therefore dismiss the appeal.

I. STATEMENT OF THE CASE

In February, 1977, the Department of Justice approved the convening of a special federal grand jury in Detroit to investigate possible criminal tax violations by General Motors. On April 15, 1977, the Attorney General appointed an Internal Revenue Service lawyer to assist Justice Department lawyers in conducting the grand jury in quiry. General Motors moved to disqualify the IRS lawyer from participation in the grand jury proceedings on the grounds that public policy considerations and conflict-of-interest principles of the legal profession prohibit such participation by IRS lawyers who have previously participated in a civil tax investigation of the taxpayer.

Finding that the Attorney General’s action is specifically authorized by statute, 28 U.S.C. §§ 515, 543 (1970), the District Judge overruled General Motors’ motion to disqualify but certified the issue to us under the Interlocutory Appeals Act of 1958, as a “controlling question” — apparently on the ground that, if the District Court’s ruling were later found to be erroneous, he presence of an IRS lawyer in the grand jury room might void any indictment returned by the grand jury against General Motors or its officials. General Motors pursued its appeal to this Court under the Interlocutory Appeals Act, and it also appealed under 28 U.S.C. § 1291 (1970), treating the order as a “final decision” for the purposes of review.

The government then moved to dismiss both appeals, the § 1291 appeal on the grounds that the lower court order overruling General Motors’ motion to disqualify was interlocutory and not final, and the § 1292(b) interlocutory appeal on the grounds that such piecemeal appeals are not allowed in criminal cases. Without oral argument or conference consideration, an administrative panel of this Court, consisting of Judges Weick, Edwards and Cele-brezze, entered an order on October 3,1977, dismissing General Motors’ § 1291 appeal (No. 77-1508) but granting General Motors leave to proceed under § 1292(b). A different panel of this Court, consisting of Judges Weick, Celebrezze and Merritt, then heard the § 1292(b) appeal on the merits and filed an opinion dated April 5, 1978, reported at 573 F.2d 936, holding that this court has appellate jurisdiction and that the IRS lawyer should be barred from the grand jury proceedings. Judge Merritt dissented. On motion by the government, we vacated the panel opinion and ordered rehearing en banc under Rule 35 of the Federal Rules of Appellate Procedure and the Rules of this Court.¹

II. THE ISSUE OF APPELLATE JURISDICTION

The District Court’s order is not reviewable under the Interlocutory Appeals Act of 1958.² The Act authorizes an appeal from an interim or non-final decision “in a civil action” upon a certification by the District Judge that his decision raises a “controlling question of law as to which there is substantial ground for difference of opinion,” and that resolution of the issue “may materially advance the ultimate termination of the litigation.” The statute in question establishes the right of interlocutory appeal in civil cases, but it extinguishes that right in criminal cases and in other matters which may not be properly characterized as “civil actions.” From a simple reading of the statute itself, it seems self-evident that a grand jury investigation of possible criminal tax violations should not be characterized as a “civil action” under § 1292(b) and that we lack jurisdiction under the Interlocutory Appeals Act.

This conclusion is based not simply on a mechanical application of the terms “civil” or “criminal” to the proceedings below but rests also on an established line of precedent disapproving appellate interruption of the grand jury’s investigation. In Cobbled-ick v. United States, 309 U.S. 323, 60 S.Ct. 540, 84 L.Ed. 783 (1940), the Supreme Court held that a district court’s refusal to quash a grand jury subpoena was not appealable as a final order under § 1291. In an opinion suggesting that a grand jury proceeding is part of the criminal process, Justice Frankfurter, writing for the Court, recognized the historic principle of judicial administration “forbidding piecemeal disposition” and “separate review of the component elements” of criminal cases. 309 U.S. at 325, 60 S.Ct. at 541. The principle is designed to conserve judicial time and prevent delaying tactics in criminal proceedings. Justice Frankfurter pointed out that the fifth amendment makes the grand jury a necessary part of the criminal process and explained that “[i]t is no less important to safeguard against undue interruption the inquiry instituted by a grand jury than to protect from delay the progress of the trial after an indictment has been found.” Id. at 327, 60 S.Ct. at 542.

In United States v. Ryan, 402 U.S. 530,91 S.Ct. 1580, 29 L.Ed.2d 85 (1971), the Supreme Court recently reaffirmed the holding of Cobbledick and the principles on which it is based, observing that a contempt citation for disobeying the subpoena is the only way to obtain review of such a grand jury question in advance of indictment and trial:

[W]e have consistently held that the necessity for expedition in the administration of the criminal law justifies putting one who seeks to resist the production of desired information to a choice between compliance with a trial court’s order to produce prior to any review of that order, and resistance to that order with the concomitant possibility of an adjudication of contempt if his claims are rejected on appeal. 402 U.S. at 532-33, 91 S.Ct. at 1582.

General Motors has available the same appellate remedies recognized in Ryan. It can raise the disqualification of counsel issue after indictment and conviction, the normal course of review in such cases, or it can refuse to obey grand jury subpoenas on this ground and appeal a contempt citation. These are the usual remedies, and they are adequate.

Justice Frankfurter in Cobbledick and Justice Brennan in Ryan applied these principles of appellate review in order to prevent interlocutory appeals from grand jury activity under § 1291. The Interlocutory Appeals Act, passed eighteen years after the Cobbledick decision, is based on these same principles forbidding piecemeal review of such cases. The Act limits interim review of “a controlling question of law” to civil cases only and, therefore, should not be read to allow interlocutory review of grand jury proceedings.

Even if this appeal could be characterized as an appeal in a “civil action” within the meaning of § 1292(b), we would exercise our statutory discretion by dismissing this appeal since we do not believe that resolution of this issue at this time would “materially advance the ultimate termination of the litigation.” The legislative history of the Interlocutory Appeals Act suggests that interlocutory appeals, even in civil cases, should be “sparingly granted.”³ To allow an appeal when the District Court has refused to disqualify a government lawyer from a grand jury investigation simply disrupts the investigation and creates the possibility that the target of the inquiry — by the threat' of delay and protracted legal maneuvering — will exert unwarranted influence in the government’s choice of its prosecuting attorney.

General Motors also argues in the alternative that the District Court’s order allowing the former IRS lawyer to partici pate in grand jury proceedings is a “final decision” within the meaning of 28 U.S.C. § 1291 and therefore is appealable as a matter of right. As previously noted, an administrative panel of this Court, consisting of Judges Weick, Edwards and Cele-brezze, dismissed General Motors’ § 1291 appeal in the same order that certified the § 1292(b) appeal. General Motors did not appeal that dismissal but, as a matter of fairness, we reach the question of appeala-bility under § 1291, since we have not accepted General Motors’ appeal under § 1292(b).

In the Cobbledick and Ryan cases, discussed above, both of which were brought under § 1291, the Supreme Court held that District Court orders controlling the issuance of grand jury subpoenas are not final decisions for the purposes of appeal. For the reasons we have already set forth, we believe that the holding and the principles applied in these two cases preclude General Motors’ appeal under § 1291 here. We note also that the Supreme Court recently reaffirmed these principles in Coopers & Lybrand v. Livesay,-U.S.-, 98 S.Ct. 2454, 57 L.Ed.2d 351 (1978), holding that a district court’s determination that a lawsuit may not be maintained as a class action is not appealable as a final decision under § 1291. The Court based its decision in part on the factors of “potential waste” and delay discussed in the Cobbledick decision, and quoted approvingly the following excerpt from Justice Frankfurter’s opinion in Cobbledick:

Since the right to a judgment from more than one court is a matter of grace and not a necessary ingredient of justice, Congress from the very beginning has, by forbidding piecemeal disposition on appeal of what for practical purposes is a single controversy, set itself against enfeebling judicial administration. Thereby is avoided the obstruction to just claims that would come from permitting the harassment and cost of a succession of separate appeals from the various rulings to which a litigation may give rise, from its. initiation to entry of judgment. To be effective, judicial administration must not be leadenfooted. Its momentum would be arrested by permitting separate review of the component elements in a unified cause. 309 U.S. at 325, 60 S.Ct. at 541.

The Supreme Court repeated the principle disfavoring interlocutory appeals in criminal cases under § 1291 in another decision last term, United States v. MacDonald, 435 U.S. 850, 98 S.Ct. 1547, 56 L.Ed.2d 18 (1978). In a unanimous opinion, the Court held that a criminal defendant may not appeal, before trial, an order denying his motion to dismiss on speedy trial grounds. Again quoting language from the Cobbled-ick opinion, the Court observed that “the rule of finality has particular force in criminal prosecutions because ‘encouragement of delay is fatal to the vindication of the criminal law.’ ” Id. at 1549, quoting 309 U.S. at 325, 60 S.Ct. 540. The Court noted that it had deviated from this settled principle in a limited category of criminal cases, such as bail review and double jeopardy cases, which “involve an asserted right the legal and practical value of which would be destroyed if it were not vindicated before trial.” 98 S.Ct. at 1552.

As previously discussed, General Motors can raise the disqualification of counsel issue after indictment and conviction or on appeal from a contempt citation. It is not an issue which is “destroyed” if not “vindicated before trial.” In addition, if no indictment is returned but General Motors believes that the government has improperly used the grand jury to obtain evidence for civil law enforcement purposes, it can raise that question by various motions in the civil action, including a motion to suppress the evidence or a motion to dismiss the complaint. These remedies are ade quate, and, unlike this appeal, they do not “arrest the momentum of judicial administration” or “encourage delay.”

Accordingly, the appeal is dismissed as improvidently granted under 28 U.S.C. § 1292(b).

Footnotes

1

. “The effect of the granting of a hearing en banc shall be to vacate the previous opinion and judgment of this court, to stay the mandate and to restore the case on the docket as a pending appeal." Rule 14(a), Rules of the United States Court of Appeals for the Sixth Circuit.

2

. General Motors argues in the alternative that we should assert appellate jurisdiction by treating this appeal as a petition for writ of mandamus under 28 U.S.C. § 1361 or § 1651 (1970). The Court does not reach or decide this question because General Motors has not applied for a writ of mandamus in this proceeding, and the District Judge has not received notice or had an opportunity to be heard and thus has not been made a litigant on this appeal. For discussion of appellate procedure in mandamus actions, see generally Rule 21, Federal Rules of Appellate Procedure; Will v. Calvert Fire Ins. Co., - U.S. -, 98 S.Ct. 2552, 57 L.Ed.2d 504 (1978); Schlagenhauf v. Holder, 379 U.S. 104, 85 S.Ct. 234, 13 L.Ed.2d 152 (1964); Note, Supervisory and Advisory Mandamus Under the All Writs Act, 86 Harv.L.Rev. 595 (1973).

3

. See Judge Maris’ discussion of the legislative history in Milbert v. Bison Laboratories, 260 F.2d 431, 433 (3rd Cir. 1958) (en banc). See also Kraus v. Bd. of County Comm’rs, 364 F.2d 919, 922 (6th Cir. 1966) (invoking “exceptional case” standard as criterion to be met under § 1292(b)); Note, Interlocutory Appeals in the Federal Courts Under 28 U.S.C. § 1292(b), 88 Harv.L.Rev. 607, 626-27 (1975). (“[B]ecause the Act is premised on a notion that there should be case-by-case evaluation of efficiency, any universal standard restricting certification seems out of place.”)