On Appeal from the United States District Court for the Eastern District of Pennsylvania, Before: Hunter and Higginbotham, Circuit Judges, and DeBevoise, District Judge*fn* , Argued January 14, 1985.
Aldisert, Chief Judge, Seitz, Adams, Gibbons, Hunter, Weis, Garth, Higginbotham, Sloviter, Becker and Mansmann, Circuit Judges.
Antoni Gronowicz, the author of a book called God's Broker, Appeals from an order of the district court holding him in civil contempt for refusing to comply with an order enforcing a grand jury subpoena duces tecum. The district court denied Gronowicz's motion to quash the subpoena insofar as he sought relief with respect to the production of documents, and Gronowicz was ordered to produce the subpoenaed documents within two weeks. Thereafter the order was modified to identify the documents more specifically. Gronowicz refused to obey the modified order, and was directed to show cause why he should not be held in civil contempt. In response Gronowicz asserted essentially the same objections to the subpoena as had been considered and rejected when the court denied the motion to quash. The district court held that Gronowicz was in civil contempt and ordered that he pay a five hundred dollar per day coercive civil fine for each day of further non-compliance. This Appeal followed. Payment of the coercive fine was stayed pending Appeal. We now affirm.
Gronowicz's motion, filed pursuant to Fed. R. Crim. P. 17(c), made four objections to enforcement of the subpoena: (1) that it sought information that was within the protection of the Pennsylvania Shield Law, 42 Pa. Cons. Stat. Ann. § 5942 (Purdon 1982); (2) that it was burdensome, oppressive and unreasonable; (3) that the information was sought for an improper purpose because the grand jury's investigation was prohibited by the first amendment; and (4) that the state of Gronowicz's health precluded his personal Appearance.*fn1 The district court ruled that Gronowicz did not have to Appear at that time. Thus only the production of documents is in issue. The court ruled, further, that the Pennsylvania Shield Law did not provide a basis for withholding the documents, and that in light of the scope of the grand jury investigation the subpoena duces tecum was not unduly burdensome or oppressive. On Appeal Gronowicz does not challenge these rulings. The district court also ruled, however, that the subpoena was for a proper purpose in that it sought information relevant to an investigation into possible violations of the mail and wire fraud statutes. 18 U.S.C. §§ 1341, 1343 (1982). Gronowicz challenges that ruling. He contends that this mail fraud investigation of him is outside the authority of the grand jury because it must of necessity inquire into the truth of assertions made by him in God's Broker. Such an inquiry, he contends, may not be made by a grand jury, because it would violate the press and religion clauses of the first amendment. Gronowicz also contends that, as the author of a book, he is protected by a federal common law privilege from grand jury subpoena of materials relating to the writing of a book.
God's Broker was published in New York by Richardson & Snyder. That firm has since withdrawn the book from the market for reasons which will Appear hereafter. The dust jacket states that the book portrays "the life of Pope John Paul II as told in his own words and in the reminiscences of cardinals, bishops, and friends." Much of the text purports to be direct quotations from the Pope and other Vatican officials. Gronowicz writes in the prologue that the text is derived "from private conversations in Europe and America with Pope John Paul II, Cardinals and other high officials of the Roman Catholic Church, as well as with the cultural and political personages of Poland." Gronowicz further asserts that Cardinal Wyszynski, Primate of Poland, "introduced me to the Pope, acquainted me with Vatican circles, and convinced the Holy Father that he should bypass the Vatican Department of State and grant the private interviews."
Before Richardson & Snyder decided to publish God's Broker, Gronowicz obtained a note to the publisher from John Cardinal Krol of Philadelphia commenting favorably on the manuscript. After the book was published and distributed, however, Cardinal Krol withdrew his endorsement, and information came to the publisher suggesting that Gronowicz never interviewed the Pope, and had met him only once or twice as a member of a general audience. Julian Snyder, a partner of Richardson & Snyder, concluded that the book is a fraud insofar as it purports to recount interviews which never took place, and has brought a civil fraud suit against Gronowicz. The publisher has withdrawn the book from distribution. Gronowicz also contracted with Thomas Leonard of Philadelphia for the motion picture rights to the book. The government asserted in its opposition to the motion to quash, and continues to assert on Appeal, that the grand jury is investigating whether Richardson & Snyder or Leonard was defrauded by Gronowicz in violation of 18 U.S.C. §§ 1341 and 1343.
If, as Gronowicz contends, there is a federal common law privilege analogous to the journalists' privilege, that protects an author from compelled disclosure to a grand jury of information concerning the truth of representations of fact made about the contents of a book, that privilege would afford a basis for reversing the contempt order without addressing his first amendment claims. Gronowicz would not be protected by a privilege, such as is afforded by typical press shield laws, merely to conceal the confidential sources of published information when called to testify in proceedings directed against third parties. Compare Riley v. City of Chester, 612 F.2d 708 (3d Cir. 1979); United States v. Cuthbertson (Cuthbertson I), 630 F.2d 139 (3d Cir. 1980), cert. denied, 449 U.S. 1126, 101 S. Ct. 945, 67 L. Ed. 2d 113 (1981); United States v. Criden, 633 F.2d 346, 358-59 (3d Cir. 1980), cert. denied, 449 U.S. 1113, 101 S. Ct. 924, 66 L. Ed. 2d 842 (1981); United States v. Cuthbertson (Cuthbertson II), 651 F.2d 189, 195-96 (3d Cir.), cert. denied, 454 U.S. 1056, 70 L. Ed. 2d 594, 102 S. Ct. 604 (1981). Moreover even in investigations into third party conduct, the press privilege recognized in the cited cases is a qualified one, which yields, if the circumstances so require, to the compelling governmental interest in investigation of crime.
No case has been called to our attention in which this court or the Supreme Court has recognized a press privilege to be absolutely free from inquiry into the legality of the reporter's own activities, even those reflected in a publication. Indeed the Supreme Court has expressly rejected that position. It has held that authors may be held accountable for culpable falsehoods, both criminally, Garrison v. Louisiana, 379 U.S. 64, 75, 13 L. Ed. 2d 125, 85 S. Ct. 209 (1964); Chaplinsky v. New Hampshire, 315 U.S. 568, 86 L. Ed. 1031, 62 S. Ct. 766 (1942), and civilly, Time, Inc. v. Firestone, 424 U.S. 448, 47 L. Ed. 2d 154, 96 S. Ct. 958 (1976); Gertz v. Robert Welch, Inc., 418 U.S. 323, 41 L. Ed. 2d 789, 94 S. Ct. 2997 (1974); Curtis Publishing Co. v. Butts, 388 U.S. 130, 87 S. Ct. 1975, 18 L. Ed. 2d 1094 (1967); New York Times Co. v. Sullivan, 376 U.S. 254, 11 L. Ed. 2d 686, 84 S. Ct. 710 (1964). If the author of a culpable falsehood had a common law privilege such as Gronowicz contends for, simply because the alleged falsehood had been published, it would be extremely difficult to hold that author accountable. The Supreme Court has recognized as much, holding in Herbert v. Lando, 441 U.S. 153, 170, 60 L. Ed. 2d 115, 99 S. Ct. 1635 (1979), that a reporter's thoughts, opinions, and conclusions with respect to materials gathered by him were discoverable in a civil action for libel. The limits on civil discovery, according to the court, are to be found in Fed. R. Civ. P. 26(b)(1), not in any doctrine of absolute privilege. Id. at 177.
When a grand jury conducts an investigation into culpable falsehood, or any other subject, the limits of its inquiry in this Circuit are established by the Schofield rule. In re Grand Jury Proceedings (Schofield I), 486 F.2d 85, 93 (3d Cir. 1973); In re Grand Jury Proceedings (Schofield II), 507 F.2d 963, 966 (3d Cir.), cert. denied, 421 U.S. 1015, 95 S. Ct. 2424, 44 L. Ed. 2d 685 (1975). The Schofield rule requires the government to make a showing by affidavit that the subpoenaed items are: "(1) relevant to an investigation, (2) properly within the grand jury's jurisdiction, and (3) not sought primarily for another purpose." Schofield II, 507 F.2d at 966. Gronowicz does not challenge the grand jury's jurisdiction or the relevance of the subpoenaed items to the investigation. Gronowicz may prevail under the third prong of the Schofield test only if the subpoenaed items are not sought to further a proper grand jury investigation. In light of Herbert v. Lando, no reason occurs to us for establishing a privilege in the grand jury context for authors which is broader than the Schofield rule. If the grand jury can constitutionally inquire into culpable falsehood by an author, the Schofield requirements are met, and no federal common law privilege permits the author to withhold information.
We turn, therefore, to the contention on which Gronowicz places his principal reliance: that the first amendment prohibits a prosecution for fraud whenever the prosecutor must inquire into the truth or falsity of the contents of a book.*fn2 If Gronowicz's interpretation of the first amendment were correct, the subpoena would not be enforced because the information sought would not be relevant to a proper grand jury investigation. The grand jury's investigation Appears, so far as the record discloses, to be focused upon the truth or falsity of representations made by Gronowicz to Richardson & Snyder, the publisher, and Leonard, the motion picture producer. Since, however, those representations, particularly about the extent of Gronowicz's personal contact with Pope John Paul II, are repeated in the book, the inquiry will of necessity examine the accuracy of its contents.*fn3
Conceding that no reported case stands for the proposition that an author may not be prosecuted for misrepresenting the contents of a book, Gronowicz relies on repeated statements by the Supreme Court in other contexts extolling the social utility of free expression. He argues that because free expression holds such an honored place in our pantheon of values, only a compelling governmental interest can justify any limitation on such expression, and the means chosen for protection of that interest may be no more intrusive than is necessary.
That salutary rule is well established as the test for measuring governmental activities having the effect of imposing prior restraints upon the dissemination of truthful information. E.g. Linmark Associates, Inc. v. Township of Willingboro, 431 U.S. 85, 52 L. Ed. 2d 155, 97 S. Ct. 1614 (1977); Beneficial Corp. v. F.T.C., 542 F.2d 611 (3d Cir. 1976), cert. denied, 430 U.S. 983, 52 L. Ed. 2d 377, 97 S. Ct. 1679 (1977); New Jersey State Lottery Commission v. United States, 491 F.2d 219 (3d Cir. 1974)(in banc), vacated and remanded for determination of mootness, 420 U.S. 371, 95 S. Ct. 941, 43 L. Ed. 2d 260 (1975); Veterans & Reservists for Peace in Vietnam v. Regional Commissioner of Customs, 459 F.2d 676 (3d Cir.), cert. denied, 409 U.S. 933, 93 S. Ct. 232, 34 L. Ed. 2d 188 (1972). But for commercial speech, at least, an ordinance that serves a valid purpose, but also works a prior restraint upon speech, has been upheld. Pittsburgh Press v. Pittsburgh Commission on Human Relations, 413 U.S. 376, 37 L. Ed. 2d 669, 93 S. Ct. 2553 (1973). This case does not involve a classic prior restraint, imposed before dissemination, such as the injunctions against publication considered by the Court in Near v. Minnesota, 283 U.S. 697, 75 L. Ed. 1357, 51 S. Ct. 625 (1931), and New York Times v. United States, 403 U.S. 713, 29 L. Ed. 2d 822, 91 S. Ct. 2140 (1971). Rather, we are dealing with the supposed chilling effect that the mail fraud statute would have upon authors if, after publication, they could be called to account for a conscious falsehood about the contents of a book. Thus the body of case law establishing that prior restraints on expression must be justified by a compelling state interest, and that the restraint can go no further than necessary for protection of that interest, provides at best limited enlightenment for present purposes.
There can be no doubt that post-publication punishment of the dissemination of conscious falsehood is intended to have and does have an inhibiting effect upon speech. The law of civil and criminal libel is intended to have just this effect. But while it is unlikely that the Supreme Court would uphold an injunction against publication of an allegedly libelous book, it has consistently refused to strike down libel laws imposing post-publication sanctions. E.g., Herbert v. Lando, 441 U.S. 153, 60 L. Ed. 2d 115, 99 S. Ct. 1635 (1979); Time, Inc. v. Firestone, 424 U.S. 448, 47 L. Ed. 2d 154, 96 S. Ct. 958 , (1976); Curtis Publishing Co. v. Butts, 388 U.S. 130, 87 S. Ct. 1975, 18 L. Ed. 2d 1094 (1967); New York Times Co. v. Sullivan, 376 U.S. 254, 11 L. Ed. 2d 686, 84 S. Ct. 710 (1964). These decisions demonstrate that serious first amendment interests are implicated in the post-publication context, but also recognize that those interests must be balanced against the societal interest in protecting others from the harm of defamation. In the post-publication setting, the accommodation to the first amendment protection of free expression is made by scienter requirements, which in libel cases vary depending on whether the victim is a public figure or the writing concerns issues of public importance. The scienter requirements forbid the enforcement of overbroad statutes that subject an author to sanctions arising from innocent errors of fact, because such sanctions may have a chilling effect on protected speech. But false statements made intentionally receive no first amendment protection in the post-publication sanctioning context.*fn4
No distinction having any first amendment significance can be made between libel, civil or criminal, and fraud, civil or criminal. In both libel and fraud, post-publication sanctioning occurs because of a falsehood made with the requisite state of mind. Judge Hunter's distinction, in this respect, between defamation and fraud is simply untenable. Fraud is false speech in the purest sense, an intentional lie made to induce reliance. The scienter requirement under the mail fraud and wire fraud statutes is at least as strict as that held to be the constitutional minimum for libel. See United States v. Boyer, 694 F.2d 58 (3d Cir. 1982) (specific intent to deceive requirement of 18 U.S.C. § 1341 may be inferred from reckless misstatement); United States v. Pearlstein, 576 F.2d 531, 537 (3d Cir. 1978) (in prosecution for mail fraud government must prove willful participation in fraudulent scheme with knowledge of its falsity); United States v. Klein, 515 F.2d 751, 754 (3d Cir. 1975) (mail fraud statute requires proof of specific intent to defraud). Since the quantum of proof for convicting Gronowicz of mail fraud is no less than that which would permit post-publication liability for criminal or civil libel, his contention that the first amendment forbids Application of the mail fraud statute to an author must be rejected.
Our rejection of Gronowicz's contention that the grand jury investigation is barred by the first amendment is consistent with the case law upholding mail fraud prosecutions against challenges grounded in the religion clauses of the first amendment. In United States v. Ballard, 322 U.S. 78, 88 L. Ed. 1148, 64 S. Ct. 882 (1944) the Court considered a challenge to a conviction of defendants for soliciting funds by mail for a religious organization by misrepresenting defendants' belief that some of them could cure persons with incurable diseases. The Court upheld an instruction that the jury could convict if it found that the defendants did not believe the representations about spiritual healing, but made them for the purpose of obtaining money. Id. at 84. In United States v. Rasheed, 663 F.2d 843 (9th Cir. 1981), cert. denied, 454 U.S. 1157, 71 L. Ed. 2d 315, 102 S. Ct. 1031 (1982), the court Applied the teaching of Ballard in upholding the mail fraud conviction of defendants who operated a Ponzi scheme in the guise of a church, knowing that their actions were deceitful. Id. at 847-48. The purpose of the grand jury's investigation in this case is to determine whether Gronowicz knowingly misstated the contents of his manuscript. If, as United States v. Ballard holds, one can be convicted of mail fraud for knowingly misstating a belief in spiritual healing, and as United States v. Rasheed holds, one can be convicted for knowingly misstating a belief in the spiritual multiplication of money, a knowing misstatement as to interviews with Pope John Paul II and other members of the hierarchy of the Roman Catholic Church must also be actionable. See also United States v. Margiotta, 688 F.2d 108 (2d Cir. 1982), cert. denied, 461 U.S. 913, 103 S. Ct. 1891, 77 L. Ed. 2d 282 (1983) (mail fraud indictment for political corruption will not chill legitimate political associational activities [sic] protected by first amendment).
Because Gronowicz could constitutionally be prosecuted for misrepresentations about the contents of God's Broker, the subpoena duces tecum was issued pursuant to a proper grand jury investigation, the order directing him to comply was valid, and the order finding him in civil contempt for disobeying that order will be affirmed.
GARTH, Circuit Judge, concurring:
The majority opinion concludes that neither a common law nor a first amendment privilege protects Antoni Gronowicz, the target of a grand jury investigation from complying with a valid subpoena duces tecum. I concur, especially because my understanding of the majority opinion is that its constitutional holding is limited to answering the precise question: does any first amendment privilege protect the target (Gronowicz) of a grand jury investigation from producing documents sought by a subpoena duces tecum ?
I write separately to emphasize the precise constitutional holding of the majority opinion because the arguments surrounding Gronowicz's claimed first amendment privilege do not distinguish, as I believe they should have, between the various stages of a potential criminal proceeding, from grand jury investigation to indictment and through prosecution. I have found no authority or reason which would permit, let alone require, granting a first amendment evidentiary privilege to a grand jury target. I would therefore restrict any grand jury privilege which Gronowicz might assert to that provided by the fifth amendment.
Stated simply, my position is that no first amendment privilege may be claimed by a target of the grand jury even when that target is the author of a writing or a book. On the other hand, once an indictment is returned as a result of a grand jury investigation (if one ever is) and once a prosecution is mounted based on such an indictment, then I am persuaded that a first amendment challenge may be asserted to the indictment, the statute on which it is based, and perhaps even to the prosecution of that indictment itself. I do not regard this as a rule of exhaustion, but rather as one of unavailability, since in the context of a grand jury investigation, satisfaction of the Schofield requirements ensures that a subpoena does not issue in bad faith. The Schofield rule, when met, thus supplies all the initial first amendment protections needed before a grand jury.
Here, of course, I emphasize that we are not called upon to address or consider the merits of a first amendment challenge attacking the validity of an as yet hypothetical indictment, or the statute on which it may be predicated. Nor in this case are we asked to consider the constitutional propriety of an equally hypothetical prosecution. We are merely asked to decide whether a privilege grounded in the first amendment must be honored in the context of a grand jury investigation. The majority opinion cogently explains why no claimed privilege Applies in the present case, where the subpoena itself comports with the Schofield rule. I need not repeat the majority's analysis. I would only add that when it is ...