United States v. R. Enterprises, Inc.

498 U.S. 292, 111 S. Ct. 722, 112 L. Ed. 2d 795, 1991 U.S. LEXIS 489, 91 Daily Journal DAR 954, 59 U.S.L.W. 4077, 91 Cal. Daily Op. Serv. 650
Supreme Court of the United States·Decided January 22, 1991·No. 89-1436·Published·Cited by 299 cases

Opinions

Justice O’Connor

delivered the opinion of the Court.

This case requires the Court to decide what standards apply when a party seeks to avoid compliance with a subpoena duces tecum issued in connection with a grand jury investigation.

I

Since 1986, a federal grand jury sitting in the Eastern District of Virginia has been investigating allegations of interstate transportation of obscene materials. In early 1988, the grand jury issued a series of subpoenas to three companies — Model Magazine Distributors, Inc. (Model), R. Enterprises, Inc., and MFR Court Street Books, Inc. (MFR). Model is a New York distributor of sexually oriented paperback books, magazines, and videotapes. R. Enterprises, which distributes adult materials, and MFR, which sells books, magazines, and videotapes, are also based in New York. All three companies are wholly owned by Martin Rothstein. The grand jury subpoenas sought a variety of corporate [295] books and records and, in Model’s case, copies of 193 videotapes that Model had shipped to retailers in the Eastern District of Virginia. All three companies moved to quash the subpoenas, arguing that the subpoenas called for production of materials irrelevant to the grand jury’s investigation and that the enforcement of the subpoenas would likely infringe their First Amendment rights.

The District Court, after extensive hearings, denied the motions to quash. As to Model, the court found that the subpoenas for business records were sufficiently specific and that production of the videotapes would not constitute a prior restraint. App. to Pet. for Cert. 57a-58a. As to R. Enterprises, the court found a “sufficient connection with Virginia for further investigation by the grand jury.” Id., at 60a. The court relied in large part on the statement attributed to Rothstein that the three companies were “all the same thing, I’m president of all three.” Ibid. Additionally, the court explained in denying MFR’s motion to quash that it was “inclined to agree” with “the majority of the jurisdictions,” which do not require the Government to make a “threshold showing” before a grand jury subpoena will be enforced. Id., at 63a. Even assuming that a preliminary showing of relevance was required, the court determined that the Government had made such a showing. It found sufficient evidence that the companies were “related entities,” at least one of which “certainly did ship sexually explicit material into the Commonwealth of Virginia.” Ibid. The court concluded that the subpoenas in this case were “fairly standard business subpoenas” and “ought to be complied with.” Id., at 65a. Notwithstanding these findings, the companies refused to comply with the subpoenas. The District Court found each in contempt and fined them $500 per day, but stayed imposition of the fine pending appeal. Id., at 64a.

The Court of Appeals for the Fourth Circuit upheld the business records subpoenas issued to Model, but remanded the motion to quash the subpoena for Model’s videotapes. [296] In re Grand Jury 87-3 Subpoena Duces Tecum, 884 F. 2d 772 (1989). Of particular relevance here, the Court of Appeals quashed the business records subpoenas issued to R. Enterprises and MFR. In doing so, it applied the standards set out by this Court in United States v. Nixon, 418 U. S. 683, 699-700 (1974). The court recognized that Nixon dealt with a trial subpoena, not a grand jury subpoena, but determined that the rule was “equally applicable” in the grand jury context. 884 F. 2d, at 776, n. 2. Accordingly, it required the Government to clear the three hurdles that Nixon established in the trial context — relevancy, admissibility, and specificity — in order to enforce the grand jury subpoenas. Id., at 776. The court concluded that the challenged subpoenas did not satisfy the Nixon standards, finding no evidence in the record that either company had ever shipped materials into, or otherwise conducted business in, the Eastern District of Virginia. Ibid. The Court of Appeals specifically criticized the District Court for drawing an inference that, because Rothstein owned all three businesses and one of them had undoubtedly shipped sexually explicit materials into the Eastern District of Virginia, there might be some link between the Eastern District of Virginia and R. Enterprises or MFR. Id., at 777. It then noted that “any evidence concerning Mr. Rothstein’s alleged business activities outside of Virginia, or his ownership of companies which distribute allegedly obscene materials outside of Virginia, would most likely be inadmissible on relevancy grounds at any trial that might occur,” and that the subpoenas therefore failed “to meet the requirements [sic] that any documents subpoenaed under [Federal] Rule [of Criminal Procedure] 17(c) must be admissible as evidence at trial.” Ibid., citing Nixon, supra, at 700. The Court of Appeals did not consider whether enforcement of the subpoenas duces tecum issued to respondents implicated the First Amendment.

We granted certiorari to determine whether the Court of Appeals applied the proper standard in evaluating the [297] grand jury subpoenas issued to respondents. 496 U. S. 924 (1990). We now reverse.

II

The grand jury occupies a unique role in our criminal justice system. It is an investigatory body charged with the responsibility of determining whether or not a crime has been committed. Unlike this Court, whose jurisdiction is predicated on a specific case or controversy, the grand jury “can investigate merely on suspicion that the law is being violated, or even just because it wants assurance that it is not.” United States v. Morton Salt Co., 338 U. S. 632, 642-643 (1950). The function of the grand jury is to inquire into all information that might possibly bear on its investigation until it has identified an offense or has satisfied itself that none has occurred. As a necessary consequence of its investigatory function, the grand jury paints with a broad brush. “A grand jury investigation ‘is not fully carried out until every available clue has been run down and all witnesses examined in every proper way to find if a crime has been committed.’” Branzburg v. Hayes, 408 U. S. 665, 701 (1972), quoting United States v. Stone, 429 F. 2d 138, 140 (CA2 1970).

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United States v. R. Enterprises, Inc., 498 U.S. 292, 111 S. Ct. 722, 112 L. Ed. 2d 795, 1991 U.S. LEXIS 489, 91 Daily Journal DAR 954, 59 U.S.L.W. 4077, 91 Cal. Daily Op. Serv. 650 (1991).

498 U.S. 292 (United States v. R. Enterprises, Inc.) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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