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In re Special March 1974 Grand Jury Possible Violations of Title 18 and 26

decided: August 24, 1976.

IN RE: SPECIAL MARCH 1974 GRAND JURY POSSIBLE VIOLATIONS OF TITLE 18 AND 26, UNITED STATES CODE. APPEAL OF: INGRAM CORPORATION. INGRAM CORPORATION, PETITIONER,
v.
HON. JAMES B. PARSONS, UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS, RESPONDENT



On Appeal from the United States District Court for the Northern District of Illinois, Eastern Division - No. 74 GJ 1010.

Sprecher, Bauer, Circuit Judges, and William J. Campbell, Senior Judge.*fn*

Author: Bauer

Bauer, Circuit Judge.

The question presented on this appeal is whether an appellate court has jurisdiction to review an order denying Ingram Corporation's request for an evidentiary hearing to determine whether there were improper disclosures of grand jury materials in violation of Rule 6(e) of the Federal Rules of Criminal Procedure.*fn1

In March 1974 a special grand jury was summoned in the Northern District of Illinois to investigate possible violations of the criminal code. After the grand jury was convened the government obtained ex parte an order*fn2 which granted other government agents the right to review the evidence presented before the grand jury. The order authorized them to review the materials to determine whether any criminal or civil violations had occurred.

Attorneys for Ingram, upon discovering the order, objected because it allowed government agents to review the evidence before the grand jury to determine if civil violations occurred. As a general rule the grand jury investigates matters which are possible violations of the criminal laws. Counsel for Ingram appeared before the Chief Judge, who supervises the grand jury, and sought to have all the evidence relating to alleged civil violations ruled inadmissible for purposes of future litigation. In addition Ingram sought an evidentiary hearing to determine the extent and nature of the actions taken by government investigators under the order. The Chief Judge amended the order by striking out the reference to civil violations but refused to conduct an evidentiary hearing.

Subsequently, Ingram renewed its motion for an evidentiary hearing and submitted several affidavits showing: (1) that grand jury materials were allegedly being used by the IRS for the purposes of both civil and criminal investigations, and (2) that IRS agents allegedly were working simultaneously for their own agency and for the grand jury. Ingram argued that the evidence in these affidavits required a hearing on whether the grand jury process had been abused both by making grand jury materials available to unauthorized persons and by improperly using the grand jury's powers to aid a civil investigation.

In response to the renewed motion for an evidentiary hearing, the two Assistant United States Attorneys in charge of the grand jury investigation filed affidavits with the court asserting unequivocally that the only purpose of the grand jury inquiry was to determine whether there had been criminal violations and that disclosure had only been made to agents of the government in order to assist in making that determination. The Chief Judge denied Ingram's renewed motion. Ingram filed a notice of appeal and a petition for a writ of mandamus. Since oral argument, an indictment has been returned by the grand jury charging various officers of Ingram with criminal violations stemming from an alleged multi-million dollar bribery-fraud scheme.

I.

As a general rule an interlocutory decision in a criminal case stemming from action taken by a grand jury is not a proper subject for review by a court of appeals. The Supreme Court expressed this view in Cobbledick v. United States, 309 U.S. 323, 60 S. Ct. 540, 84 L. Ed. 783 (1940), when it held that an order compelling testimony or the production of documents before a grand jury was non-appealable. The Court stated:

"The proceeding before a grand jury constitutes 'judicial inquiry, ' Hale v. Henkel, 201 U.S. 43, 66, 50 L. Ed. 652, 26 S. Ct. 370, of the most ancient lineage . . . The duration of its life, frequently short, is limited by statute. It is no less important to safeguard against undue interruption the inquiry instituted by a grand jury than to protect from delay the progress of the trial after an indictment has been found. Opportunity for obstructing the 'orderly progress' of investigation should no more be encouraged in one case than in the other. That a grand jury proceeding has no defined litigants and that none may emerge from it, is irrelevant to the issue." 309 U.S. at 327-28.

Since Cobbledick the Supreme Court has consistently rejected attempts to expand appellate jurisdiction over on-going criminal investigations and trials. See United States v. Ryan, 402 U.S. 530, 91 S. Ct. 1580, 29 L. Ed. 2d 85 (1971); Di Bella v. United States, 369 U.S. 121, 82 S. Ct. 654, 7 L. Ed. 2d 614 (1962); Carroll v. United States, 354 U.S. 394, 77 S. Ct. 1332, 1 L. Ed. 2d 1442 (1957). In Ryan, supra, Justice Brennan stated at p. 533:

"Only in the limited class of cases where denial of immediate review would render impossible any review whatsoever of an individual's claims have we allowed exceptions to this principle."

One exceptional situation noted by the Court was presented in Perlman v. United States, 247 U.S. 7, 38 S. Ct. 417, 62 L. Ed. 950 (1918). There the Court allowed an immediate review of an order directing a third party to produce exhibits which were the property of appellant and, so he claimed, immune from production. To deny immediate interlocutory review, the ...


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