United States v. Sells Engineering, Inc.
77 L. Ed. 2d 743, 463 U.S. 418, 1983 U.S. LEXIS 97 (1983)
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Rule of Law:
Attorneys for the Civil Division of the Department of Justice may not obtain automatic disclosure of grand jury materials for use in a civil suit under Federal Rule of Criminal Procedure 6(e)(3)(A)(i). Instead, they must obtain a court order under Rule 6(e)(3)(C)(i) by making a strong showing of particularized need.
Facts:
- Sells Engineering, Inc., whose officers were Peter A. Sells and Fred R. Witte, held contracts with the United States Navy.
- In 1974, the Internal Revenue Service (IRS) began a combined criminal and civil investigation into the company and its officers.
- The IRS issued administrative summonses for corporate records, which Sells Engineering refused to comply with.
- While an appeal regarding the summons enforcement was pending, a federal grand jury was convened to investigate charges of criminal fraud and tax evasion against the company and its officers.
- The grand jury subpoenaed and obtained many of the same materials that were the subject of the IRS summonses.
- The individual respondents, Sells and Witte, ultimately reached a plea bargain, each pleading guilty to one count of conspiracy to defraud the government.
Procedural Posture:
- The government moved in U.S. District Court for an order granting its Civil Division attorneys access to grand jury materials for use in a potential civil suit against respondents.
- The District Court granted the disclosure order, ruling that the attorneys were entitled to the materials as a matter of right under Rule 6(e)(3)(A)(i) and, alternatively, had demonstrated a particularized need.
- Respondents (Sells, et al.) appealed to the U.S. Court of Appeals for the Ninth Circuit.
- The Court of Appeals, with Sells as the appellee and the United States as the appellant, vacated the District Court's order, holding that disclosure required a showing of particularized need under Rule 6(e)(3)(C)(i) and that the District Court had applied an incorrect standard.
- The United States (petitioner) was granted a writ of certiorari by the U.S. Supreme Court to review the judgment of the Court of Appeals.
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Issue:
Does Federal Rule of Criminal Procedure 6(e)(3)(A)(i) automatically permit disclosure of grand jury materials to Department of Justice attorneys for use in civil litigation, without a court order and a showing of particularized need?
Opinions:
Majority - Justice Brennan
No. Federal Rule of Criminal Procedure 6(e)(3)(A)(i) does not permit automatic disclosure to government attorneys for civil use; they must obtain a court order by demonstrating a particularized need. The strong historical policy of grand jury secrecy limits automatic access under (A)(i) to prosecutors for use in their criminal duties. The original rationale for this access was that prosecutors needed to be present in the grand jury room to assist in the criminal investigation, a justification that does not extend to attorneys pursuing a separate civil case. Allowing automatic access for civil use would threaten the integrity of the grand jury by creating an incentive to use its powerful investigative tools for civil discovery, subverting the more limited discovery rules applicable in civil cases and potentially chilling witness testimony. The legislative history of the 1977 amendments to Rule 6(e) confirms that Congress intended to require a court order for disclosure for civil purposes, making explicit in (A)(ii) for non-attorneys what was already implicit in (A)(i) for attorneys. Therefore, the government must meet the particularized-need standard established in cases like Douglas Oil, which requires balancing the need for disclosure against the interest in continued secrecy.
Dissenting - Chief Justice Burger
Yes. The plain language of Federal Rule of Criminal Procedure 6(e)(3)(A)(i) permits automatic disclosure to any 'attorney for the government,' which includes Civil Division attorneys, for the 'performance of such attorney’s duty,' which includes filing civil suits. The explicit limitation to 'criminal law' in the adjacent subparagraph (A)(ii) for non-attorney personnel demonstrates that Congress did not intend such a limitation to apply to attorneys under (A)(i). Historically, it was the consistent practice of the Department of Justice for over 30 years to use grand jury materials in subsequent civil litigation, a practice implicitly approved by this Court in United States v. Procter & Gamble Co. The majority’s policy concerns are overstated, as the remedy for grand jury abuse is sanctions, not a blanket prohibition on access. This ruling upsets longstanding practice and will severely hamper the government's ability to pursue meritorious civil fraud cases, contrary to the public interest.
Analysis:
This decision significantly reinforces the traditional secrecy of grand jury proceedings by creating a high barrier for intra-governmental information sharing. It rejects a 'plain language' interpretation of Rule 6(e) in favor of one based on policy and legislative history, extending the 'particularized need' standard from private litigants to government attorneys seeking disclosure for civil cases. The ruling curtails the government's ability to efficiently leverage evidence from a criminal investigation for a parallel civil enforcement action. Consequently, it forces the Department of Justice to either duplicate its investigative efforts through civil discovery or meet the rigorous demands of the particularized-need test, impacting resource allocation and potentially discouraging some civil actions.
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