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UNITED STATES v. BEN GRUNSTEIN & SONS CO.

December 19, 1955

UNITED STATES of America, Plaintiff,
v.
BEN GRUNSTEIN & SONS COMPANY et al., Defendants



The opinion of the court was delivered by: HARTSHORNE

Defendants move, under Fed.Rules Civ.Proc. 34, 28 U.S.C., to inspect and copy certain portions of the minutes of the Grand Jury which found Indictment No. 65-51 filed in this Court February 20, 1951, against several persons, including William Grunstein and Ben Grunstein & Sons Company, two of the defendants in this civil proceeding. Such indictment also refers to the other defendants in this proceeding, not making them defendants therein, and alleges that all of them were parties to the very conspiracy, which is now a part of the present civil proceedings brought by plaintiff, the United States, under the False Claims Act, 31 U.S.C.A. § 231 et seq., 12 Stat. 698. To Count 1 of this indictment, involving such conspiracy, the two above named defendants pleaded guilty, and have been sentenced. As to the others, the proceedings under such indictment have long since been terminated. Defendants ask, not for a disclosure of the entire minutes, including those as to the deliberations and other action of the Grand Jurors themselves, nor even as to all the testimony adduced before that body, but only as to the minutes covering the testimony, as to matters relevant to the case at bar, of either any of the nine defendants in these proceedings, or of any other witnesses who are to testify in these proceedings, on the part of either the plaintiff Government or the defendants.

Defendants allege, as the necessary 'good cause' for such application, the fact that plaintiff has present access to these entire minutes, thus giving plaintiff a great tactical advantage over defendants, who lack same. This is because, if any of the above individuals testified before the Grand Jury in a way which would be helpful to the Government, the Government knows it, and can use it to refresh their memory if necessary, and without any check thereon by defendants as to any qualifying interpretations of such testimony. Au contraire, if any of such individuals have testified before the Grand Jury in a way helpful to the defendants, the defendants will not know it, and therefore cannot use it to their equivalent advantage.

 Basically, therefore, the issue here is, as to how to coodinate justly the policy of the Federal Rules of Civil Procedure for free, full discovery before trial for both parties, with the traditional policy as to the secrecy of Grand Jury proceedings.

 Our highest court has already alluded to this necessary coordination, though without specific regard to Grand Juries. In Hickman v. Taylor, 1947, 329 U.S. 495, 501, 67 S. Ct. 385, 389, 91 L. Ed. 451, that Court said: 'The way is now clear, consistent with recognized privileges, for the parties to obtain the fullest possible knowledge of the issues and facts before trial. * * * Mutual knowledge of all the relevant facts gathered by both parties is essential to proper litigation * * * reducing the possibility of surprise.' This rule has been applied similarly in states which have adopted the Federal Rules in substance. Schwartz v. Public Service Coordinated Transport, N.J.Co.Ct.1949, 64 A.2d 477.

 But, as the United States Supreme Court, says, this discovery must be 'consistent with recognized privileges', and one of these privileges is that of the Grand Jury as a public institution, as well as of the witnesses that appear before it. Since there is no question as to the relevancy of the evidence which is sought to be discovered, the sole question thus is, as to the extent of this privilege of secrecy as to the Grand Jury minutes.

 Again our highest court has spoken. In United States v. Socony-Vacuum Oil Co., 1940, 310 U.S. 150, 234, 60 S. Ct. 811, 849, 84 L. Ed. 1129, that Court, after stating that 'Grand jury testimony is ordinarily confidential', adds 'But after the grand jury's functions are ended, disclosure is wholly proper where the ends of justice require it.' Since, as seen above, the Grand Jury's functions have here ended, as to the situation involved in the present civil proceedings, the specific question is, whether 'the ends of justice require' the disclosure asked. This necessitates a consideration not only of the situation of the parties to the present proceeding, but of the effect upon public policy generally, and upon the witnesses themselves, now and hereafter, of the disclosure asked.

 Looking at the parties themselves, the ends of justice would clearly call for a discovery of what plaintiff knows of this relevant testimony, to defendant, in order that the parties may be placed on a parity. So we turn to the question as to how far the above policy of secrecy, for the protection of both the public and the witnesses, countervails this unbalanced situation between the parties themselves.

 This traditional secrecy doctrine clearly makes basically secret the deliberations and other action of the Grand Jurors themselves, when acting as such. This doctrine has indeed been incorporated in the Federal Rules of Criminal Procedure, F.R.Cr.P. 6(e), 18 U.S.C., *fn1" which, while applicable primarily to criminal proceedings, sets forth in addition that a lawful disclosure may be had only by court order.

 Again we find that the specific bases for this doctrine of secrecy have already been laid down by authorities controling here. In U.S. v. Rose, 1954, 215 F.2d 617, 628, the Court of Appeals for the Third Circuit, in approving of United States v. Amazon Industrial Chemical Corp., D.C.Md.1931, 55 F.2d 254, 261, summarized these reasons for secrecy as follows:

 '(1) To prevent the escape of those whose indictment may be contemplated; (2) to insure the utmost freedom to the grand jury in its deliberations, an to prevent persons subject to indictment or their friends from importuning the grand jurors; (3) to prevent subornation of perjury or tampering with the witnesses who may testify before grand jury and later appear at the trial of those indicted by it; (4) to encourage free and untrammeled disclosures by persons who have information with respect to the commission of crimes; (5) to protect innocent accused who is exonerated from disclosure of the fact that he has been under investigation, and from the expense of standing trial where there was no probability of guilt.' 215 F.2d at page 628. *fn2"

 Since both the Grand Jury's deliberations and the trial of the indictment emanating therefrom have now terminated, and here in convictions, none of the above reasons for the rule of secrecy now apply to the present application, save '(3) to prevent subornation of perjury or tampering with the witnesses who may testify before grand jury and later appear at the trial of those indicted by it' and '(4) to encourage free and untrammeled disclosures by persons who have information with respect to the commission of crimes', not only at present, but perhaps more importantly, in the future. As to the first of such reasons for secrecy, it should be borne in mind that this same reason applies to every possible witness known to one party in a civil proceeding, whose name is desired by the other, a form of discovery clearly requisite. For the Federal Rules of Civil Procedure are based on the conclusion, that this possibility is not as great a danger as is the danger of surprise, which habitually resulted previously, when such discovery was generally refused. That this conclusion is sound, is fortified by the fact that the party who already knows of this witness can, by these very same discovery rules, see that this witness' story is not tampered with, by having his depositions taken and sworn to, before he is subjected to any such possible pressure from the other side. As to reason (4), supra, investigation by the Grand Jury into criminal activities is so important to the body politic, that witnesses as to such matters should not be discouraged, by fear of unnecessary pressures, if not violence, by others, from testifying before Grand Juries. On the other hand, the privilege attending such witnesses, both for their own benefit and that of the body politic should not go so far as to invite possible perjury. This would be the case, were any such witness, from that very fact, to be free from any possible later inquiry as to his testimony before the Grand Jury in that regard. Here these witnesses are, on the one hand, the defendants themselves, and on the other hand, other witnesses, who may possibly, not surely, be called, either for plaintiff or defendants.

 Considering the defendants themselves, their counsel have expressly represented to the Court that they will each and all take the witness stand on their own behalf in the present trial. Such being the case, that very action waives any possible claim of privilege on their own behalf, as to what they may have testified to in that regard before the Grand Jury. For no one can be permitted to testify only in part, as to what he has said or done, in regard to a particular transaction. He must not only tell the truth, but the whole truth, including prior possible admissions. Willard C. Beach Air Brush Co. v. General Motors Corp., D.C.N.J.1953, 118 F.Supp. 242, 247. Nor can public policy ask a broader privilege. For no witness before a Grand Jury can possibly expect, for similar reasons, that if he is later a witness in either a criminal or civil proceeding, based on the very transaction to which he has testified before the Grand Jury, that he will not be asked what he has previously admitted to be the fact concerning that transaction, whether on the street, in court, or before the Grand Jury. Thus such discovery will not unduly discourage 'free and untrammeled disclosures' by witnesses to Grand Juries. Thus there is no sound objection to such discovery, necessary as between the civil parties, on the ground of protection of the individual witness or of the public. To the extent the defendants desire their own testimony 'the sanctity of that which transpired before the Grand Jury is hardly in question. In addition, such disclosure would not subvert any of the reasons traditionally given for the inviolability of Grand Jury proceedings.' U.S. v. Rose, supra, 215 F.2d at page 630. In short, any defendant in these civil proceedings, or any other witness before the Grand Jury in this regard, who will definitely take the stand as a witness in the case at bar, should have disclosed to the defense his testimony before the grand Jury in that regard.

 Here it should be noted that the Grand Jury is an arm of the Court, not an arm of the plaintiff, the United States Government, which in the present civil case is acting through, not the Court, but its executive arm, the Department of Justice. 'The Constitution itself makes the grand jury a part of the judicial process * * *. The proceedings before a grand jury constitutes 'a judicial inquiry' * * *.' Cobbledick v. U.S., 1940, 309 U.S. 323, 327, 60 S. Ct. 540, 542, 84 L. Ed. 783. It therefore follows that, strictly speaking, defense is here seeking disclosure, not from plaintiff, but from the Court itself, which obviously should treat the parties alike in their rights to relevant testimony. It further follows that such testimony is not the 'work product' of the plaintiff, protected from disclosure, as a limited privilege, by Hickman, supra.

 We now turn to the witnesses before the Grnad Jury, other than the defendants in the present civil proceedings, as to whom it is not now known whether they will testify at the present trial. If not called as witnesses at the trial, and the disclosure requested has been compelled, then the traditional Grand Jury secrecy policy will have been violated, with the ill effects, above noted, to both the public and the witnesses; and all without any necessity, so far as defendants here are concerned. This is because, if they are not called, then plaintiff Government has not taken unfair advantage of its knowledge of the nature of their Grand Jury testimony, insofar as same may have been favorable to plaintiff, but only if same has been favorable to the defendant. But, if the latter is the case, defendants have long had another ready remedy. For while they cannot demand that plaintiff advise them of the civil witnesses it expects to use at the trial, they have the right to demand the list of witnesses, known to plaintiff, who know facts which are relevant to the case at bar. This list would of course in clude the names of all the witnesses in that regard before the Grand Jury. Then defendants, by examining these witnesses personally, or on deposition, can ascertain from them the very evidence they gave the Grand Jury. Indeed, after taking such ...


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