In re Grand Jury Proceedings

708 F. Supp. 492, 1988 U.S. Dist. LEXIS 17525, 1988 WL 150620
CourtDistrict Court, E.D. New York
DecidedDecember 8, 1988
DocketMisc. No. 88-522
StatusPublished

This text of 708 F. Supp. 492 (In re Grand Jury Proceedings) is published on Counsel Stack Legal Research, covering District Court, E.D. New York 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, 708 F. Supp. 492, 1988 U.S. Dist. LEXIS 17525, 1988 WL 150620 (E.D.N.Y. 1988).

Opinion

MISHLER, District Judge.

The government moves this court to hold the John Doe Corporation (the corporation) in civil contempt for failing to comply with subpoenas duces tecum dated November 18,1986, and June 15,1988, and with a July 15, 1988 order of this court (“the order”).

The subpoenas duces tecum required that the corporation produce the originals of all responsive documents and produce a custodian of the records who had knowledge of the search done for those documents. The order reflects the same request and asks the custodian to produce records reflecting off-the-book payments to employees and payroll records of any and all supervisors who signed “glazing sheets.” (Transcript of Motion dated July 15, 1988, pp. 22-24; 33-37).

Ms. L, in a declaration signed January 14, 1988, asserts that she is Assistant to the President of the corporation who works limited hours with the books and as a travel arranger. In this capacity she declares that searches were done in compliance with the subpoenas and all documents responsive to them have been either “provided ... or obtained during the course of a search warrant.” L testified as Custodian of the Records before the grand jury on January 21, 1988, March 17, 1988 and again on July 27, 1988.

L, according to the government, has produced copies instead of originals and has been unable to testify as to who searched for the responsive documents, if a search in fact had been carried out, or whether any documents had been knowingly withheld.

Documents have been produced pursuant to each subpoena. In addition the government seized documents pursuant to a search warrant executed on December 3 and 4, 1987.

The government questions the completeness of the documents produced and claims that the corporation by designating an incompetent custodian of the records failed to comply with the subpoena. L, who as[493]*493sumed the duties of custodian in January, 1988, testified that she had little knowledge about the search done for documents responsive to the subpoena.

The Duties of a Corporation’s Custodian of Records

In the leading case of United States v. Austin-Bagley Corp., 31 F.2d 229 (2d Cir.), cert. denied, 279 U.S. 863, 49 S.Ct. 479, 73 L.Ed. 1002 (1929), Judge Learned Hand held that a corporate officer could be compelled to identify and authenticate corporate records produced pursuant to a valid subpoena duces tecum, reasoning:

[W]e think that the greater includes the less, and that, since the production can be forced, it may be made effective by compelling the produced to declare that the documents are genuine____ [Testimony auxiliary to the production is as unprivileged as are the documents themselves. By accepting the office of custodian the holder not only exposes himself to producing the documents, but to making their use possible without requiring other proof than his own.

United States v. Austin-Bagley Corp., 31 F.2d at 234.

When a subpoena is addressed to a corporation, the corporation must find some means by which to comply because there is no Fifth Amendment defense available to it. Braswell v. United States, — U.S. -, 108 S.Ct. 2284, 2294, 101 L.Ed.2d 98 (1988) (citing In re Sealed Case, 266 U.S. App.D.C. 30, 44, n. 9, 832 F.2d 1268, 1282, n. 9 (1987)).

Obviously, an individual must act on the corporation’s behalf to produce the documents responsive to the subpoena. A corporation may appoint a custodian of records to act in this representative capacity. Braswell, 108 S.Ct. at 2294 [citations omitted].

Most of the case law developed in this area deals with the unavailability of a Fifth Amendment defense for the custodian of corporate records.1 We can determine the duties of the custodian from these cases.

In United States v. Barth, 745 F.2d 184 (2d Cir.1984), cert. denied, 470 U.S. 1004, 105 S.Ct. 1356, 84 L.Ed.2d 378 (1985), while courts were still struggling with the possibility of the corporate record-keeper invoking his own Fifth Amendment privilege, the Second Circuit made it clear that it was the basic obligation of the corporation to comply with the summons by producing someone — any knowledgeable employee, or even a new agent — to testify about the records. Id. at 1240.

The issue to be decided here, however, is what the custodian must do for the corporation to have properly complied with the requirements of the subpoena.

Clearly, the custodian must produce books or records responsive to the subpoena and can be required to identify or authenticate these documents. Curcio v. United States, 354 U.S. 118, 125, 77 S.Ct. 1145, 1150, 1 L.Ed.2d 1225 (1957) (dicta). The act of production itself is a representation that the documents produced are the ones demanded by the subpoena. Id.

The duty of the custodian of records, however, extends beyond mere production or non-production of documents. An agent who fails to produce documents to comply with a valid subpoena must, if called before a court, give sworn testimony that he does not possess them. This is part of his duty to comply with a lawful demand for them. United States v. O’Henry’s Film Works, Inc., 598 F.2d 313 (2d Cir. 1979).

The corporation has not fulfilled its obligation if it produces an agent that it has sent on an unguided search for records. In Braswell, the subpoena was issued to the petitioner in his capacity as corporate president. It ordered him to produce the corporation’s books and records. The petitioner was the president of the two corporations in question and sole shareholder of one of them. The Court rejected petitioner’s claim that he could invoke his Fifth Amendment privilege because his act of production would have independent testimonial significance which would incrimi[494]*494nate him individually. In reaching this conclusion the Court addressed and rejected two solutions suggested by the petitioner that would have enabled the documents to be produced without this asserted infringement of his rights.2 One proposed solution was to allow the corporation to choose an agent to produce the records who could do so without fear of self-incrimination. At the same time, petitioner insisted that he could not be required to help the appointed custodian in his search for the subpoenaed documents. The Court reasoned that this proposed “solution” was a chimera. “[Wjhere the corporate custodian is likely the only person with knowledge about the demanded documents — the appointment of a surrogate will simply not ensure that the documents sought will ever reach the grand jury room; the appointed custodian will essentially be sent on an unguided search.” 108 S.Ct. at 2294.

In the case before us, the government allowed the corporation to choose its own agent, directing the subpoena to the Custodian of Records. Section II, clauses 1 and 2 of the subpoena issued on November 18, 1986 provides:

1.

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Related

Curcio v. United States
354 U.S. 118 (Supreme Court, 1957)
Braswell v. United States
487 U.S. 99 (Supreme Court, 1988)
United States v. Barth
745 F.2d 184 (Second Circuit, 1984)
In Re Sealed Case
832 F.2d 1268 (D.C. Circuit, 1987)
United States v. Austin-Bagley Corporation
31 F.2d 229 (Second Circuit, 1929)
Tefft v. Grant
279 U.S. 824 (Supreme Court, 1929)

Cite This Page — Counsel Stack

Bluebook (online)
708 F. Supp. 492, 1988 U.S. Dist. LEXIS 17525, 1988 WL 150620, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-grand-jury-proceedings-nyed-1988.