Bank of Nova Scotia v. United States
487 U.S. 250 (1988)
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Rule of Law:
A federal district court may not use its supervisory power to dismiss an indictment for prosecutorial misconduct in a grand jury proceeding unless the misconduct prejudiced the defendant. Prejudice exists only if the misconduct substantially influenced the grand jury's decision to indict or if there is grave doubt that the decision was free from such influence.
Facts:
- A 20-month grand jury investigation was conducted into the activities of The Bank of Nova Scotia, William A. Kilpatrick, and others related to alleged tax fraud schemes.
- During the investigation, prosecutors disclosed secret grand jury materials to Internal Revenue Service (IRS) employees who were involved in civil tax enforcement.
- Prosecutors allowed two IRS agents to appear simultaneously before the grand jury to read transcripts, a violation of grand jury rules.
- A prosecutor improperly argued with an expert witness, who was adverse to the government, in the presence of some grand jurors during a recess.
- Prosecutors granted informal, off-the-record 'pocket immunity' to 23 witnesses without obtaining formal court orders as required by statute.
- Prosecutors called several witnesses to testify who they knew would likely assert their Fifth Amendment privilege against self-incrimination.
- IRS agents were improperly sworn in as 'agents of the grand jury' and presented summaries of evidence to the jurors.
Procedural Posture:
- After a grand jury investigation, The Bank of Nova Scotia and other defendants were indicted in the U.S. District Court for the District of Colorado.
- The trial court initially dismissed 26 of 27 counts for improper pleading.
- The Government appealed, but the U.S. Court of Appeals for the Tenth Circuit remanded the case to the District Court for a hearing on prosecutorial misconduct.
- On remand, the District Court, exercising its supervisory power, dismissed all 27 counts of the indictment due to the 'totality of the circumstances' of the prosecutorial misconduct, without a specific finding of prejudice.
- The Government appealed the dismissal to the U.S. Court of Appeals for the Tenth Circuit.
- A divided panel of the Court of Appeals reversed the District Court's order, holding that dismissal was improper without a showing that the misconduct prejudiced the defendants by infringing on the grand jury's independent judgment.
- The defendants (petitioners) were granted a writ of certiorari by the U.S. Supreme Court.
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Issue:
Does a federal district court have the supervisory power to dismiss an indictment for prosecutorial misconduct in grand jury proceedings where the misconduct did not prejudice the defendants?
Opinions:
Majority - Justice Kennedy
No. A district court may not invoke its supervisory power to dismiss an indictment for prosecutorial misconduct where the misconduct amounts to harmless error. Federal Rule of Criminal Procedure 52(a), the harmless-error rule, is binding on federal courts and dictates that any error not affecting substantial rights must be disregarded. A court's supervisory power cannot be used to circumvent this rule. Dismissal of an indictment is only appropriate if the defendant establishes that the misconduct 'substantially influenced the grand jury's decision to indict,' or if there is 'grave doubt' that the decision was free from such influence. The Court found that the instances of misconduct in this case, viewed individually and cumulatively, were not prejudicial under this standard. Other remedies, such as contempt sanctions or disciplinary proceedings against the prosecutor, are more appropriate than granting a windfall to an unprejudiced defendant.
Dissenting - Justice Marshall
Yes. A district court should be permitted to dismiss an indictment for egregious prosecutorial misconduct to protect the integrity of the judicial process, even without a showing of prejudice. Applying a harmless-error analysis to grand jury misconduct renders the governing rules, such as Federal Rule of Criminal Procedure 6, 'toothless.' Because grand jury proceedings are secret, misconduct is rarely discovered, and failing to impose a strong remedy like dismissal removes any real deterrent for prosecutors to follow the rules. A per se rule of dismissal is the only effective way to deter such misconduct and vindicate the rights of all citizens.
Concurring - Justice Scalia
No. While a court has inherent supervisory authority over its own proceedings, which includes the power to decline to proceed on an indictment obtained unlawfully, that power is not a roving commission to discipline prosecutors. The supervisory power at issue is properly understood as concerning the court's own processes. In this case, the application of the harmless-error rule is appropriate, and therefore, I join the majority opinion.
Analysis:
This decision significantly curtails the supervisory power of federal courts to dismiss indictments as a means of deterring prosecutorial misconduct. By making the harmless-error standard from Rule 52(a) applicable to grand jury proceedings, the Court raised the bar for defendants seeking dismissal, requiring a specific showing of prejudice. This shifts the judicial focus from policing prosecutorial behavior to safeguarding the outcome of the proceeding, thereby making it much more difficult to challenge indictments based on procedural errors. The ruling prioritizes the finality of indictments over the prophylactic use of dismissal to enforce procedural rules.
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