In Re Grand Jury Investigation

545 F.3d 21, 2008 WL 4683024
CourtCourt of Appeals for the First Circuit
DecidedOctober 24, 2008
Docket07-2353
StatusPublished
Cited by21 cases

This text of 545 F.3d 21 (In Re Grand Jury Investigation) is published on Counsel Stack Legal Research, covering Court of Appeals for the First Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In Re Grand Jury Investigation, 545 F.3d 21, 2008 WL 4683024 (1st Cir. 2008).

Opinion

545 F.3d 21 (2008)

In re GRAND JURY INVESTIGATION (District Of Massachusetts).
Islamic Investment Company Of The Gulf (Bahamas) limited, Appellant,
v.
Geoffrey Harper, Esquire, and Fish & Richardson P.C., Appellees.

No. 07-2353.

United States Court of Appeals, First Circuit.

Heard September 9, 2008.
Decided October 10, 2008.

*22 James J. McGuire, with whom Timothy J. McCarthy, Sheppard, Mullin, Richter & Hampton LLP, Nicholas C. Theodorou, and Foley Hoag LLP were on brief, for appellant.

Richard M. Zielinski, with whom Barbara Van Gorder and Goulston & Storrs, P.C. were on brief, for appellees.

Before HOWARD, BALDOCK,[*] and SELYA, Circuit Judges.

SELYA, Circuit Judge.

This appeal requires us to explore the parameters of the district court's authority to hold in contempt those whose actions arguably interfere with judicial proceedings. The context is this: Islamic Investment Company of the Gulf (Bahamas) Limited challenges the district court's denial of its motion to hold in contempt an attorney (Geoffrey Harper) and the law firm of which Harper is a member (Fish & Richardson P.C.).[1] The appellant, whom we shall refer to by the acronym "IICG," chiefly asserts that the lower court failed to recognize that it had inherent power to hold Harper in contempt. Concluding, as *23 we do, that this assertion lacks merit, we affirm the refusal to hold Harper in contempt.

The present proceeding traces its roots to a Texas state court. In that venue Harper, representing a client named Laird Fairchild, brought a civil action against Fairchild's quondam employer, Overland Capital Group, Inc., and its corporate parent, IICG. That case culminated in a settlement agreement under which Fairchild received money in exchange for, among other things, his promise neither to disclose certain information nor to disparage the defendants. The settlement agreement included an arbitration clause.

In April of 2006 — approximately six months after the consummation of the settlement — IICG invoked the arbitration clause. It alleged that Fairchild had violated the terms of the settlement agreement by disclosing confidential information and making disparaging statements. Fairchild answered the arbitral complaint, counterclaimed against IICG, and filed third-party claims against Overland (which, in turn, asserted counterclaims against Fairchild).

In September of 2006, while the arbitration proceeding was still pending, the United States Attorney for the District of Massachusetts empaneled a grand jury. Wishing to learn more about IICG and Overland, the prosecutors tapped Fairchild as a potential witness.[2] Fairchild began discussions with the prosecutors. When IICG and Overland found out about these discussions, they concluded that Fairchild's narrative concerned matters covered by the settlement agreement's non-disclosure and non-disparagement provisions. Spurred by this suspicion, Overland moved for a discovery order in the pending arbitration; its goal was to compel Fairchild to reveal in haec verba what he had related to the government.

Fairchild objected to the discovery request on the ground that a grand jury witness may not be compelled to disclose his grand jury testimony or to provide information about pre-testimony interviews. The arbitrator overruled this objection and granted the discovery request.

Harper, representing Fairchild, then contacted Corey Smith, the Assistant United States Attorney in charge of the grand jury investigation. He alerted Smith to the issuance of the discovery order. Believing that compliance with the discovery order might compromise the grand jury investigation, Smith asked the district court to stay the order. The district court granted the motion and pretermitted production of the information.

Smith contemporaneously forwarded copies of his motion and the district court's stay order to Harper. By operation of a local rule of court, the documents were effectively under seal. See D. Mass. R. 106.1(b) (stipulating that "[a]ll subpoenas, motions, pleadings, and other documents filed with the clerk [of court] concerning... grand jury proceedings shall be sealed and impounded unless otherwise ordered by the court"). However, there was no transmittal letter indicating that fact, nor was the existence of a seal apparent from the face of the documents.

Shortly after receiving the federal court documents from Smith, Harper provided them to a reporter from the Wall Street Journal. He subsequently furnished the same paperwork to at least two other journalists. *24 These disclosures led to several news stories about the investigation.

On February 23, 2007, Harper sought to introduce the federal court documents at a hearing held in a Texas state court (ancillary to the subject matter of the ongoing arbitration case). IICG objected to their introduction on the ground that the motion and order had been filed under seal. The Texas court sustained the objection and refused to consider the documents.

Harper claims that this was the first he knew that the motion and order had been filed under seal. Subsequent to the date of that hearing, he eschewed any further disclosure of the federal court documents.

Stung by the negative press that they had received, IICG and Overland moved in the federal district court to adjudge Harper in contempt for disclosing the sealed documents and to enjoin any further dissemination of them. The district court granted immediate injunctive relief and ordered Harper to show cause why he should not be held in contempt.

The court convened a show-cause hearing on March 27, 2007. Harper claimed not to have known of the sealing order at the time the disclosures were made. Thus, to the extent that the disclosures violated an automatic sealing order, those violations were unwitting.

IICG and Overland refused to accept this explanation. They insisted that the court should hold Harper in contempt because the disclosures transgressed a local rule that required sealing of virtually all grand jury documents. See D. Mass. R. 106.1(b). In their view, even if Harper was not explicitly notified that the documents he received were filed under seal, he should have known that grand jury documents were confidential. Relatedly, the movants asseverated that Harper's conduct was not only in blatant disregard of the court's seal but also offended the spirit of Federal Rule of Criminal Procedure 6(e) and the letter of District of Massachusetts Local Rule 83.2A (both of which are discussed infra).

The district court took the matter under advisement and, roughly four months later, issued a thoughtful memorandum opinion denying the motions for contempt. See In re Grand Jury Investig., No. 07-MC-10019, slip op. (D.Mass. July 20, 2007) ("D.Ct.Op."). IICG filed a timely notice of appeal.

The denial of a motion to adjudge in contempt is reviewed for abuse of discretion. See Langton v. Johnston, 928 F.2d 1206, 1220 (1st Cir.1991).

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Cite This Page — Counsel Stack

Bluebook (online)
545 F.3d 21, 2008 WL 4683024, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-grand-jury-investigation-ca1-2008.