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BANK NOVA SCOTIA v. UNITED STATES

*fn* decided: June 22, 1988.

BANK OF NOVA SCOTIA
v.
UNITED STATES



CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE TENTH CIRCUIT.

Kennedy, J., delivered the opinion of the Court, in which Rehnquist, C. J., and Brennan, White, Blackmun, Stevens, O'Connor, and Scalia, JJ., joined. Scalia, J., filed a concurring opinion, post, p. 264. Marshall, J., filed a dissenting opinion, post, p. 264.

Author: Kennedy

[ 487 U.S. Page 252]

 JUSTICE KENNEDY delivered the opinion of the Court.

The issue presented is whether a district court may invoke its supervisory power to dismiss an indictment for prosecutorial misconduct in a grand jury investigation, where the misconduct does not prejudice the defendants.

I

In 1982, after a 20-month investigation conducted before two successive grand juries, eight defendants, including petitioners William A. Kilpatrick, Declan J. O'Donnell, Sheila C. Lerner, and The Bank of Nova Scotia, were indicted on 27 counts. The first 26 counts charged all defendants with conspiracy and some of them with mail and tax fraud. Count 27 charged Kilpatrick with obstruction of justice. The United States District Court for the District of Colorado initially dismissed the first 26 counts for failure to charge a crime, improper pleading, and, as to charges against the bank, for failure to allege that the bank or its agents had the requisite knowledge and criminal intent. Kilpatrick was tried and convicted on the obstruction of justice count.

The Government appealed the dismissal of the first 26 counts. Before oral argument, however, the Court of Appeals granted a defense motion to remand the case to the District Court for a hearing on whether prosecutorial misconduct and irregularities in the grand jury proceedings were additional grounds for dismissal. United States District Judge Fred M. Winner first presided over the post-trial motions and granted a new trial to Kilpatrick on the obstruction of justice count. The cases were later reassigned to United

[ 487 U.S. Page 253]

     States District Judge John L. Kane, Jr., to complete the post-trial proceedings. After 10 days of hearings, Judge Kane dismissed all 27 counts of the indictment. The District Court held that dismissal was required for various violations of Federal Rule of Criminal Procedure 6. 594 F. Supp. 1324, 1353 (1984). Further, it ruled dismissal was proper under the "totality of the circumstances," including the "numerous violations of Rule 6(d) and (e), Fed. R. Crim. P., violations of 18 U. S. C. ยงยง 6002 and 6003, violations of the Fifth and Sixth Amendments to the United States Constitution, knowing presentation of misinformation to the grand jury and mistreatment of witnesses." Ibid. We shall discuss these findings in more detail below.

The District Court determined that "[a]s a result of the conduct of the prosecutors and their entourage of agents, the indicting grand jury was not able to undertake its essential mission" to act independently of the prosecution. Ibid. In an apparent alternative holding, the District Court also ruled that

"[t]he supervisory authority of the court must be used in circumstances such as those presented in this case to declare with unmistakable intention that such conduct is neither 'silly' nor 'frivolous' and that it will not be tolerated." Ibid.

The Government appealed once again, and a divided panel of the Court of Appeals reversed the order of dismissal. 821 F.2d 1456 (CA10 1987). The Court of Appeals first rejected the District Court's conclusion that the violations of Federal Rule of Criminal Procedure 6 were an independent ground for dismissal of the indictment. It then held that "the totality of conduct before the grand jury did not warrant dismissal of the indictment," id., at 1473, because "the accumulation of misconduct by the Government attorneys did not significantly infringe on the grand jury's ability to exercise independent judgment." Id., at 1474. Without a showing of such an infringement, the court held, the District Court could

[ 487 U.S. Page 254]

     not exercise its supervisory authority to dismiss the indictment. Id., at 1474-1475.

The dissenting judge rejected the "view of the majority that prejudice to the defendant must be shown before a court can exercise its supervisory powers to dismiss an indictment on the basis of egregious prosecutorial misconduct." Id., at 1476. In her view, the instances of prosecutorial misconduct relied on by the District Court pervaded the grand jury proceedings, rendering the remedy of dismissal necessary to safeguard the integrity of the judicial process notwithstanding the absence of prejudice to the defendants. Id., at 1479-1480.

We hold that, as a general matter, a district court may not dismiss an indictment for errors in grand jury proceedings unless such errors prejudiced the defendants.

II

In the exercise of its supervisory authority, a federal court "may, within limits, formulate procedural rules not specifically required by the Constitution or the Congress." United States v. Hasting, 461 U.S. 499, 505 (1983). Nevertheless, it is well established that "[e]ven a sensible and efficient use of the supervisory power . . . is invalid if it conflicts with constitutional or statutory provisions." Thomas v. Arn, 474 U.S. 140, 148 (1985). To allow otherwise "would confer on the judiciary discretionary power to disregard the considered limitations of the law it is charged with enforcing." United States v. Payner, 447 U.S. 727, 737 (1980). Our previous cases have not addressed explicitly whether this rationale bars exercise of a supervisory authority where, as here, dismissal of the indictment would conflict with the harmless-error inquiry mandated by the Federal Rules of Criminal Procedure.

We now hold that a federal court may not invoke supervisory power to circumvent the harmless-error inquiry prescribed by Federal Rule ...


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