In Re Grand Jury Proceedings, Gj-76-4 & Gj-75-3

800 F.2d 1293, 1986 U.S. App. LEXIS 30462
CourtCourt of Appeals for the Fourth Circuit
DecidedSeptember 12, 1986
Docket85-5289
StatusPublished
Cited by34 cases

This text of 800 F.2d 1293 (In Re Grand Jury Proceedings, Gj-76-4 & Gj-75-3) is published on Counsel Stack Legal Research, covering Court of Appeals for the Fourth 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 Proceedings, Gj-76-4 & Gj-75-3, 800 F.2d 1293, 1986 U.S. App. LEXIS 30462 (4th Cir. 1986).

Opinion

DONALD RUSSELL, Circuit Judge:

This is an appeal from an order of the district court refusing to vacate an ex parte order authorizing the disclosure to the Civil Division of the Department of Justice of the grand jury transcript and exhibits in connection with an investigation of charges made by the petitioner Litton Industries, Inc. (Litton), under a government contract. The district judge found that the government had met the test of “particularized need” required for such disclosure under Rule 6(e), Fed.R.Crim.P. for use in defending a civil proceeding by Litton to recover extra charges. See United States v. Sells Engineering, Inc., 463 U.S. 418, 443, 103 S.Ct. 3133, 3148, 77 L.Ed.2d 743 (1983). He accordingly granted disclosure to the Civil Division. Contending that the government had failed to establish “particularized need” under the standard established by the Supreme Court, Litton has appealed. We affirm.

I.

This is a judicial proceeding that seems to have no end. It arose out of a contract executed in 1968 between Litton Industries, Inc. and the United States Navy for the construction of three nuclear submarines at its Ingalls Division in Pascagoula, Mississippi. Two years later (in 1970), Litton filed a claim for extra costs. The Navy contracting officer denied such claim except for $3 million. Litton appealed to the Armed Services Board of Contract Appeals (Board). The Navy sought a stay of such appeal, in order to permit consideration of possible fraud in the assertion of the claim. Stay was denied. The matter proceeded to a hearing before the Board. After the Board hearings had been concluded but before decision, a grand jury was impaneled in March, 1975, to investigate any possible fraud in Litton’s claim. A month later the Board issued its decision, awarding Litton some $13 million beyond the $3 *1296 million allowed by the contracting officer. The initial investigatory grand jury’s term expired without any indictment being returned.

After the term of the initial grand jury expired, discussions of settlement were carried on by the parties for a month or two until, in November of 1976, Litton terminated consideration of the Navy’s proposal for settlement. The Department of Justice, to which the Navy’s claim of fraud had been referred, submitted the matter of possible fraud by Litton to another grand jury for the purpose of seeking an indictment in February, 1977. When advised of this development, Litton sought to work out a settlement with the Department along the lines of an earlier proposal of the Government. After a hearing before the Attorney General, the determination was made to continue with the prosecution and on April 6, 1977, the grand jury returned an indictment against Litton for filing a false claim in violation of § 287, 18 U.S.C. On the same day, Litton filed its action in the then Court of Claims to recover the award made in its favor by the Board. To that action the government responded by denying Litton’s claim and by asserting a counterclaim to recover for alleged fraudulent charges by Litton.

Litton moved in the district court where the criminal proceedings were pending to dismiss the indictment for prosecutorial misconduct and for collateral estoppel. 1 This motion was granted in May, 1977. Such dismissal was appealed and was reversed in April, 1978 by this Court, U.S. v. Litton Systems, Inc., 573 F.2d 195 (4th Cir.1978), with denial of certiorari in October, 1978, 439 U.S. 828, 99 S.Ct. 101, 58 L.Ed.2d 121. In the meantime, Litton was seeking discovery in its civil suit. Obviously, there was, as the Court of Claims observed, “a great deal of overlap of witnesses and other evidence” in the criminal and civil proceedings. 215 Ct.Cl. at 1056, 1057. For this reason the Government moved to stay discovery proceedings in the civil suit until after trial of the criminal proceedings. Among the reasons alleged for relief the government claimed “that Litton’s discovery in the civil proceeding attempts to depose witnesses and to compel them to produce documents in their personal possession in order to obtain evidence that would not be available to Litton in the criminal proceeding prior to trial____[and] that the depositions [in such discovery] will be one-sided in that Litton already has access to some grand jury evidence and will be able artfully to impeach government witnesses while the defendant, lacking such information will be unable to rehabilitate or refresh the recollections of the deponents.” 215 Ct.Cl. at 1058. The Court of Claims trial judge denied the motion but, on appeal, the motion was sustained unanimously by a panel of the Court of Claims. 215 Ct.Cl. at 1059. 2 An original trial date for the criminal prosecution was fixed for June, 1977. In advance of that date, the Government “supplied Litton [with] copies of all grand jury testimony and intended trial exhibits,” 722 F.2d at 264 (5th Cir. 1984), pursuant to an order of the district court made without any limitations on use.

Trial of the criminal case was delayed while Litton engaged in negotiation for settlement of the civil suit and dismissal of the criminal prosecution. On March 19, 1984, the Government moved ex parte for an order “authorizing the disclosure of evidence, both documentary and testimonial, presented to two Special Grand Juries convened ... from March 1975 to April 1977____” In support of that motion, the *1297 Government alleged it expected Litton to “seek to negotiate simultaneously a criminal plea and a civil settlement. In either event, government attorneys and personnel handling the civil litigation need to evaluate the grand jury materials, which are admittedly relevant and central to the issues in both the criminal and civil cases, and which Litton and its attorneys ... have had unfettered access [to] for seven years.” The district judge promptly granted the motion ex parte 3 Thereafter, following a two-months trial in the Mississippi district court, to which by a motion for change of venue the criminal prosecution had been transferred, Litton was acquitted of the criminal charge in December, 1984.

In August, 1985 — after the criminal prosecution had been concluded but while the civil suit was still proceeding — counsel for the Government advised counsel for Litton in August, 1985 of the district court’s earlier ex parte order releasing the grand jury records to the Government’s counsel conducting the defense of the civil action. More than three months later Litton moved the district court to reconsider its order releasing the grand jury materials to the Government’s counsel in the civil suit. By way of relief, Litton requested the entry of an order to reconsider and vacate the district court’s ex parte

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Bluebook (online)
800 F.2d 1293, 1986 U.S. App. LEXIS 30462, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-grand-jury-proceedings-gj-76-4-gj-75-3-ca4-1986.