United States v. Itt Blackburn Co., a Division of Itt

824 F.2d 628
CourtCourt of Appeals for the Eighth Circuit
DecidedSeptember 21, 1987
Docket86-2388
StatusPublished
Cited by15 cases

This text of 824 F.2d 628 (United States v. Itt Blackburn Co., a Division of Itt) is published on Counsel Stack Legal Research, covering Court of Appeals for the Eighth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
United States v. Itt Blackburn Co., a Division of Itt, 824 F.2d 628 (8th Cir. 1987).

Opinions

MAGILL, Circuit Judge.

This case, which arises out of shipments of materials to Iran in violation of President Carter’s 1980 trade embargo, raises questions concerning the intended target of a grand jury indictment. Specifically, we must decide whether ITT Corporation (ITT) was properly made a defendant pursuant to an indictment naming ITT Blackburn Company (Blackburn), an unincorporated division of ITT. We conclude that ITT was improperly brought into court under the terms of the indictment, and accordingly we reverse the judgment of the district court.

I. FACTS.

Appellant ITT1 is a multinational corporation incorporated in Delaware with its principal offices in New York. During 1979 to 1982, it had an unincorporated division, Blackburn, which was located in Overland, Missouri and manufactured electrical line hardware.

In the late 1970’s, the Shah of Iran, through his public utility entities, began large purchases of electrical line hardware in an effort to electrify a large number of villages. In 1979, Blackburn was awarded over $2,000,000 worth of contracts by these Iranian public utility entities for the sale and shipment of electrical line hardware to Iran.

On November 4, 1979, Iranian nationals invaded the United States Embassy in Teheran, Iran. In the civil strife, fifty-three American citizens were taken hostage. On April 7, 1980, in response to the hostage seizure, President Carter issued Executive Order # 12205, which imposed a trade embargo on Iran. On April 9, 1980, the United States Department of the Treasury issued regulations to implement the embargo. The Executive Order and the Treasury regulations remained in effect until the release of the hostages on January 19, 1981.

Individuals with a financial stake in the Blackburn contracts with Iran became concerned that they would lose potential profits as a result of the embargo. Starting in April or May of 1980, a series of meetings took place involving Blackburn executives, foreign selling agents, and others, with the result that on November 20, 1980, Blackburn began shipments of electrical goods out of St. Louis, through Finland, and to Iran. From November 20, 1980 through June 5, 1982, Blackburn sent fourteen shipments of electrical goods valued at $2,600,-000 from St. Louis through Finland and the Soviet Union to Iran. Four of the fourteen shipments occurred within the presidential trade embargo, taking place on November 20, 1980; December 19, 1980; December 31, 1980; and January 9, 1981.

The illegal shipments came to light when Bengt Beckmann, a Swedish national working abroad on a commission contract with Blackburn, demanded $2,000,000 from ITT to destroy documents relating to one of the transactions. ITT rejected the demand, began an investigation, and informed the government of what it learned.

II. PROCEDURAL HISTORY.

In the summer of 1985, the U.S. Attorney’s office in St. Louis advised ITT that it was the target of a grand jury investigation, and on December 5, 1985, the grand jury returned an indictment pertaining to one of the illegal transactions. The indictment, however, named “I.T.T. Blackburn Co., Inc.” and did not name ITT. The indicted organization was further described as “a Missouri corporation and subsidiary of International Telephone and Telegraph [630]*630Company located at 1525 Woodson Road, Overland, Missouri, engaged in the manufacture and sale of electrical line hardware.” Two Blackburn officers were also indicted.

Because the indictment did not on its face name ITT as a defendant, ITT filed a motion on January 3, 1986, suggesting that it lacked standing to defend the case and noting that the business entity named in the indictment did not then, nor had ever, existed.

On January 17, 1986, the prosecutor sought leave of court to amend the indictment. The proposed amendment again did not name ITT. Rather, the prosecutor sought to have the indictment name “ITT Blackburn Company, a Division of International Telephone and Telegraph Corporation.” The district court referred the government’s motion to amend to Magistrate David D. Noce. On February 5,1986, Magistrate Noce denied the motion.

After Magistrate Noce’s decision, the prosecutor obtained a second indictment from the grand jury on February 12, 1986. This indictment, upon which the case was eventually tried, named “ITT Blackburn Company, a Division of International Telephone and Telegraph Corporation.” The same two Blackburn officers were again indicted. ITT filed a motion to dismiss the second indictment because once again it was not charged as a defendant. On May

1, 1986, Magistrate Noce found that the second indictment “does not name ITT Corporation as a defendant,” yet declined to grant ITT’s motion to dismiss because in his view the corporate defendant's identity was a fact issue to be resolved by the jury at trial. ITT unsuccessfully appealed the Magistrate’s recommendations to the district court, which held that ITT had been charged by both the December 1985 and February 1986 indictments.

The case went to trial on the second indictment. At the outset of trial, counsel for ITT reasserted that ITT had not been indicted. This argument was rejected. After a nine-day trial, the jury was given a verdict form that called for it to determine whether Blackburn, rather than ITT, was guilty. The jury returned a verdict of guilty against Blackburn on all counts, and the district court sentenced Blackburn to pay fines totalling $78,000.

III. DISCUSSION.

ITT urges a number of issues on appeal, but because we find it dispositive, we need only reach the indictment issue. ITT argues that it was improperly forced to defend at a trial conducted on an indictment naming Blackburn rather than ITT. ITT argues that the grand jury did not intend to indict ITT and thus, by bringing ITT to trial despite the grand jury’s wishes, the prosecution sidestepped the basic constitutional protections that the grand jury was designed to provide.2 ITT argues further that it was substantially prejudiced as a result of its posture in these proceedings.

The government responds that the inclusion of both a division and a corporation in an indictment is sufficient to indict the corporation. The government argues that because a corporate division is not a separate legal entity and cannot be indicted in its own right, an indictment which named both ITT and one of its divisions was adequate to indict ITT. The government further argues that the grand jury clearly intended to indict ITT.

We must therefore decide whether ITT was ever indicted, for if not, ITT was improperly brought to trial. This requires a threshold examination of the grand jury proceedings.

The purpose of the grand jury is to remove from prosecutors the power to initiate prosecutions for felonies and instead to place that power with a group of citizens “acting independently of either prosecuting attorney or judge.” Russell v. United States, 369 U.S. 749, 771, 82 S.Ct. 1038, 1051, 8 L.Ed.2d 240 (1962), quoting Stirone v. United States, 361 U.S. 212, 218, 80 S.Ct. 270, 273, 4 L.Ed.2d 252 (1960). Part of this constitutional function is to protect [631]*631against “hasty, malicious and oppressive persecution.” Wood v.

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Bluebook (online)
824 F.2d 628, Counsel Stack Legal Research, https://law.counselstack.com/opinion/united-states-v-itt-blackburn-co-a-division-of-itt-ca8-1987.