In Re Special Investigation No. 249

461 A.2d 1082, 296 Md. 201, 1983 Md. LEXIS 250

• Court: Court of Appeals of Maryland
• Decided: June 27, 1983
• Docket: [No. 133, September Term, 1982.]
• Status: Published

Opinions

Smith, J.,

delivered the opinion of the Court. Murphy, C. J., dissents and filed a dissenting opinion at page 209 infra.

As in In Re Special Investigation No. 244, 296 Md. 80, 459 A.2d 1111 (1983), decided a short time prior to this case, we have here a corporate entity landlord and a nursing home provider of medical assistance services caught up in the Attorney General’s ongoing investigation of Medicaid fraud in Maryland. A subpoena duces tecum relative to each was issued by the Grand Jury of Baltimore City. The provider filed what became Misc. No. 249 below. The landlord filed Misc. No. 250. Each sought to quash the subpoena pertaining to it. Neither is situate in Baltimore City. As part of its motion the landlord recited:

"Movant is not a provider of medicaid services; it has no medicaid provider status; it receives no medicaid funds; it is a landlord of [a nursing home] located in Prince George’s County; it does no business in Baltimore City; it seeks no payments or reimbursements in Baltimore City; and it is not located in Baltimore City.”

Each motion to quash was overruled. Each party appealed to the Court of Special Appeals. We granted the State’s motion for a writ of certiorari prior to consideration of the case by the Court of Special Appeals.

We are faced with the following questions: (1) whether the denial of the motion to quash is appealable; (2) whether the Attorney General has authority to act as prosecutor in this area; (3) whether the Grand Jury of Baltimore City has power to summon records of an entity located beyond the confines of Baltimore City; and (4) whether when a grand jury seeks to compel production of records from beyond its borders the procedures should be applied which were established in In Re Grand Jury Proceedings, 507 F.2d 963 (3d Cir.), cert. denied, 421 U.S. 1015 (1975), and In Re Grand Jury Proceedings, 486 F.2d 85 (3d Cir. 1973), commonly referred to as "Schofield II” and "Schofield I, ” respectively.

As in In Re Special Investigation No. 244, the term of the grand jury has expired. No effort was made to have the grand jury continued beyond its term. Similar subpoenas have been issued by a subsequent grand jury, whose term has been extended. However, there is now no one to whom the subpoenas originally issued in this proceeding are returnable. Accordingly, the subpoenas must be quashed. See In Re Special Investigation No. 229, 295 Md. 584, 458 A.2d 80 (1983), and In Re Special Investigation No. 195, 295 Md. 276, 454 A.2d 843 (1983). As in Special Investigation No. 244, there is likely to be a recurrence of the issues here presented and upon the recurrence the same difficulty which prevented these issues from being heard in time is likely to again prevent a resolution. Hence, as we did in No. 244 and upon the authority there stated, we shall discuss the questions presented.

For the reasons stated in Special Investigation No. 244 we hold that the denial of the motion to quash is appealable, that the Attorney General has the authority to act as prosecutor in this area, and that the Grand Jury of Baltimore City has power to summon records of an entity located beyond the confines of Baltimore City.

In Schofield I, 486 F.2d 85, Mrs. Schofield was served with a subpoena to appear before a federal grand jury. The subpoena did not indicate what would be required of her at that appearance. When she appeared she was not asked to testify but was directed by the United States Attorney to submit handwriting exemplars and to allow her fingerprints and photograph to be taken. After conferring with her attorney, she refused to comply with these requests. The United States Attorney then requested the district court to direct her to comply, which it did. Upon her continued refusal to do these things she was held in civil contempt. The court said:

"At all times during the proceedings in the district court Mrs. Schofield urged that before she be required to comply with the Government’s requests (1) the Government state the purpose and necessity for requesting of Mrs. Schofield handwriting exemplars, fingerprints and photographs, and (2) that if the Government has in its possession documents allegedly signed by her, she be permitted to examine them. At all times during the proceedings below, and on this appeal, the Government has taken the position that it need disclose, either to the court or to the witness, no more than appears on the face of the grand jury subpoena.” 486 F.2d at 88.

The court pointed out that United States v. Mara, 410 U.S. 19, 93 S.Ct. 774, 35 L. Ed. 2d 99 (1973), and United States v. Dionisio, 410 U.S. 1, 93 S. Ct. 764, 35 L. Ed. 2d 67 (1973), "hold that the fourth amendment does not require any preliminary showing for the issuance of a grand jury subpoena, either to compel testimony, or to compel production of voice or handwriting exemplars. Neither [of those opinions], however, involves any question as to the propriety of the grand jury’s investigation, the legitimacy of the purpose for issuing the subpoena, or any nonconstitutional objection to its enforcement.” 486 F.2d at 89.

The court went on to say that federal grand juries "are for all practical purposes an investigative and prosecutorial arm of the executive branch of government.” Id. at 90. Additionally, "although like all federal court subpoenas grand jury subpoenas are issued in the name of the district court over the signature of the clerk, they are issued pro forma and in blank to anyone requesting them.” Id. It said that "although grand jury subpoenas are occasionally discussed as if they were the instrumentalities of the grand jury, they are in fact almost universally instrumentalities of the United States Attorney’s office or of some other investigative or prosecutorial department of the executive branch.” Id. Accordingly, the court said that "for all practical purposes [grand jury subpoenas] are exactly analogous to subpoenas issued by a federal administrative agency on the authority of a statute, without any prior judicial control.” Id. It pointed out, "[T]he federal courts have never lent their enforcement machinery to an executive branch investigative body in the manner of a rubber stamp.” Id.

The court recognized that a presumption of regularity attaches to grand jury proceedings and hence to a grand jury subpoena. Given that presumption, the party objecting to enforcement has the burden of making some showing of irregularity. Id. at 92. The court went on to say, "Certainly the fact of grand jury secrecy suggests that the party seeking enforcement of a grand jury subpoena be required to make some minimum showing of the existence of a proper purpose before it can trigger the enforcement machinery of the judicial branch.” Id.

The court said in conclusion:

"We need not in this case lay down inflexible procedures to govern all challenges to enforcement of any grand jury procedure, for the information here sought is both limited and unique. The Government wants only handwriting exemplars, fingerprints and a mug shot. It has no general right to any of these things. Authority for obtaining them exists, if at all, solely because they are somehow relevant to the grand jury’s investigation of an offense falling within its jurisdiction. In view of the fact that information which would justify obtaining the handwriting exemplars, fingerprints, and a mug shot, is in the Government’s sole possession, we think it reasonable that the Government be required to make some preliminary showing by affidavit that each item is at least relevant to an investigation being conducted by the grand jury and properly within its jurisdiction, and is not sought primarily for another purpose. We impose this requirement both pursuant to the federal courts’ supervisory power over grand juries and pursuant to our supervisory power over civil proceedings brought in the district court pursuant to 28 U.S.C. § 1826(a).” 486 F.2d at 93.

Chief Judge Seitz in his concurring opinion said he believed "the government’s disclosure, if the district court is satisfied as to its sufficiency, cannot be made the subject of an adversary hearing by the witness” which, he said, "would lead to the type of mini-hearing which the Supreme Court condemned in Dionisio. ” Id. at 94. He said he "emphasize[d] [his] position on this point because if [he] read the opinion of the court correctly, it does not negate the possibility that the minimal showing of proper purpose can be factually litigated by the witness.” Id.

In Schofield II, 507 F.2d 963, the court analyzed the holding in Schofield I:

"Our holding in Schoñeld I did not require a showing of reasonableness, it did not require any determination of probable cause and it clearly did not require a hearing in every case.

"What Schoñeld I did require, however, was a minimum showing by affidavit in every case that each item sought was (1) relevant to an investigation, (2) properly within the grand jury’s jurisdiction, and (3) not sought primarily for another purpose.” 507 F.2d at 966 (emphasis in original).

In response to SchoGeld I, the Government had provided an affidavit in support of its enforcement motion. The affidavit stated that the witness had been subpoenaed, that she had been fully advised that she was a potential defendant in the grand jury’s investigation, and that it was "essential and necessary to the ... Grand Jury investigation” that Schofield furnish "exemplars of her handwriting and/or handprinting, and ... permit that her photograph and fingerprints be taken” for the purpose of determining "whether or not the witness uttered any forged, falsely made, altered or counterfeited checks.” The court held that the district court had correctly determined that this affidavit met the three-pronged requirement of SchoGeld I.

We have found but two jurisdictions which appear to follow Schofield, the District of Columbia and Pennsylvania. See In Matter of Kelley, 433 A.2d 704 (D.C. 1981), and Robert Hawthorne, Inc. v. County Investigating, 488 Pa. 373, 412 A.2d 556 (1980).

Opinions rejecting the Schofield procedure include: In Re Slaughter, 694 F.2d 1258 (11th Cir. 1982); In Re Grand Jury Proceedings, 691 F.2d 1384, 1387 (11th Cir. 1982) ("We decline to impose any undue restrictions upon the grand jury investigative process pursuant to this court’s supervisory power.”); In Re Special Grand Jury No. 81-1, 676 F.2d 1005, 1011, vacated on other grounds, 697 F.2d 112 (4th Cir. 1982) ("[ W]e do not adopt the SchoGeld rule that a preliminary showing must be made for every grand jury subpoena.”); In Re Pantojas, 628 F.2d 701, 705 (1st Cir. 1980) ("Although we believe that the procedures mandated by the Third Circuit have much to recommend them, especially as glossed by Chief Judge Seitz in his concurrence in Schofield I, 486 F.2d at 94, we decline to impose them on district courts within the circuit at this time. The practical responsibility for controlling grand jury excesses lies with the district court, on which the grand jury must rely for subpoena and contempt procedures. We have seen little to convince us that prosecutors are regularly overreaching or that the district courts have been insensitive to irregularities that may occur. Without some convincing demonstration to us that these procedures are necessary to prevent systematic abuse, we are reluctant to give recalcitrant grand jury witnesses further opportunities for delay. District courts should, however, feel free to require such showings by the government as a means of assuring themselves that grand juries are not overreaching, or simply as a means of removing the issue of sufficiency of nexus from dispute.”); In Re Liberatore, 574 F.2d 78, 83 (2d Cir. 1978) ("[T]he government does not in each and every case bear the constant burden of initially showing the relevance of the particular evidence sought to be produced by way of subpoena... . [T]he weakness of Liberatore’s .argument that the government must make a preliminary showing of relevance is revealed by the fact that the sole authority upon which he relies is ... Schofíeld II... and, necessarily, also on its predecessor, ... Schofield I.... Those decisions are predicated entirely upon the Third Circuit’s supervisory powers over the conduct of civil proceedings within that circuit and upon the federal courts’ supervisory power over grand juries and they are in no way whatever based on constitutional grounds.... It is equally clear that the Schofield standards do not constitute the law in this circuit... .”); In Re Grand Jury Investigation, 565 F.2d 318, 320 (5th Cir. 1977) (The court quoted from United States v. Dionisio, 410 U.S. 1, 17, 93 S. Ct. 764, 35 L. Ed. 2d 67 (1973), and its admonition against saddling "a grand jury with mini-trials and preliminary showings....”); In Re Grand Jury Proceedings, Tom Hergenroeder, 555 F.2d 686 (9th Cir. 1977); and Universal Manufacturing Company v. United States, 508 F.2d 684, 686, n. 2 (8th Cir. 1975).

Records were sought here. Thus, the subpoenas here are factually different from that in Schofield I. Moreover, the courts which have followed the Schofield holdings are a distinct minority. We see no reason at this time to adopt a rule similar to that in Schofield I. In Dionisio, 410 U.S. 1, 17-18, the Supreme Court observed that if the grand jury "is even to approach the proper performance of its constitutional mission, it must be free to pursue its investigations unhindered by external influence or supervision so long as it does not trench upon the legitimate rights of any witness called before it.”

Remanded to the Circuit Court for Baltimore City with directions to quash the subpoenas duces tecum issued in this case; appellants to pay the costs.