# In Re April 1977 Grand Jury Subpoenas. General Motors Corporation v. United States

> Court of Appeals for the Sixth Circuit · April 5, 1978 · 573 F.2d 936

URL: https://www.frixlaw.com/law-library/cases/9464696

## Case

- **Full name:** In Re April 1977 GRAND JURY SUBPOENAS. GENERAL MOTORS CORPORATION, Appellant, v. UNITED STATES of America, Appellee
- **Court:** Court of Appeals for the Sixth Circuit
- **Decided:** April 5, 1978
- **Citations:** 573 F.2d 936; 41 A.F.T.R.2d (RIA) 1132; 1978 U.S. App. LEXIS 11845
- **Precedential status:** Published
- **Opinion:** Dissent by Merritt
- **Judges:** Weick, Celebrezze, Merritt
- **Cited by:** 24 later opinions in the Frix Law Library

## Citator (automated)

- **Red flag:** Vacated by In Re April 1977 Grand Jury Subpoenas. General Motors Corporation v. United States, 584 F.2d 1366 (1978).
- Negative treatments: 1
- Distinguished by: 0
- Full citator and citing cases: https://www.frixlaw.com/law-library/cases/9464696

## Opinion text

MERRITT, Judge,
dissenting.
The majority has concluded that this case is now ripe for review and, reaching the merits, that the Attorney General’s appointment of an IRS lawyer to conduct a Grand Jury investigation of General Motors in Detroit is unethical under the ABA Code of Professional Responsibility. I disagree with both conclusions.
I. STATEMENT OF THE CASE
In February, 1977, the Department of Justice approved the convening of a special federal grand jury in Detroit to investigate possible criminal tax violations by General Motors. On April 15, 1977, the Attorney General appointed an IRS lawyer to assist Justice Department lawyers in conducting the grand jury inquiry. General Motors moved to disqualify the IRS lawyer from participation in the grand jury proceedings on the grounds that public policy considerations and conflict-of-interest principles of the legal profession prohibit such participation by IRS lawyers who have previously participated in a civil tax investigation of the taxpayer.
Finding that the Attorney General’s action is specifically authorized by statute, 28 U.S.C. §§ 515 , 543 (1970), the District Judge overruled General Motors’ motion to disqualify but certified the issue to us under the Interlocutory Appeals Act of 1958, 28 U.S.C. § 1292 (b) (1970) as a “controlling question” — apparently on the ground that, if the District Court’s ruling were later found to be erroneous, the presence of an IRS lawyer in the grand jury room might void any indictment returned by the grand jury against General Motors or its officials. General Motors pursued its appeal to this Court under the Interlocutory Appeals Act, and it also appealed under 28 U.S.C. § 1291 , treating the order as a “final decision’.’ for purposes of review. General Motors did not file an application for mandamus against the District Judge.
The government then moved to dismiss both appeals, the § 1291 appeal on the grounds that the lower court order overruling General Motors’ motion to disqualify was interlocutory and not final, and the § 1292(b) interlocutory appeal on the grounds that such, piecemeal appeals are not allowed in criminal cases. A panel of this Court consisting of Judges Weick, Edwards and Celebrezze entered an order on October 3, 1977, dismissing General Motors’ § 1291 appeal but granting General Motors leave to proceed under § 1292(b). 1
II. THE QUESTION OF APPELLATE JURISDICTION
The District Court’s order is not reviewable under the Interlocutory Appeals Act, or as a final decision under § 1291 or on mandamus.
The Interlocutory Appeals Act of 1958 authorizes an appeal of an interim or non-final decision “in a civil action” upon a certification by the District Judge that his *946 decision raises a “controlling question of law as to which there is substantial grounds for difference of opinion,” the decision of which “may materially advance the ultimate termination of the litigation.” The statute in question establishes the right of interlocutory appeal in civil cases but it extinguishes that right in criminal cases. General Motors’ appeal in this case should be characterized as a criminal and not a civil appeal and, therefore, we lack jurisdiction under the Interlocutory Appeals Act.
Cobbledick v. United States, 309 U.S. 323 , 60 S.Ct. 540 , 84 L.Ed. 783 (1940) strongly supports the view that this case is a criminal rather than civil appeal and therefore is not reviewable under the Interlocutory Appeals Act or § 1291. There, the Supreme Court decided that a District Court order overruling a motion to quash a grand jury subpoena was not a final appealable order under § 1291. Holding that a grand jury proceeding is part of the criminal process, the Supreme Court based its ruling on the historic principle of judicial administration “forbidding piecemeal disposition” and “separate review of the component elements” of criminal cases. The principle is designed to conserve judicial time and prevent delaying tactics in criminal proceedings. Noting that the Fifth Amendment makes the grand jury a necessary part of the criminal process, Justice Frankfurter, writing for the Court, explained that “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.”
In U. S. v. Ryan, 402 U.S. 530 , 91 S.Ct. 1580 , 29 L.Ed.2d 85 (1971) the Supreme Court recently reaffirmed the holding of Cobbledick and the principles on which it is based, observing that non-compliance resulting in a contempt citation is the only way to obtain review of such a grand jury question in advance of indictment and trial:
[W]e have consistently held that the necessity for expedition in the administration of the criminal law justifies putting one who seeks to resist the production of desired information to a choice between compliance with a trial court’s order to produce prior to any review of that order, and resistance to that order with the concomitant possibility of- an adjudication of contempt if his claims are rejected on appeal. Id. at 532-33, 91 S.Ct. at 1582 , 29 L.Ed.2d at 88-89 .
General Motors as the target of the Grand Jury investigation has the same appellate remedies that were available in Ryan . It can raise the disqualification of counsel issue after indictment and conviction, the normal course of review in criminal cases, or it can refuse to obey grand jury subpoenas on this ground and appeal a contempt citation. These are the usual remedies, and they are adequate. 2
Justice Frankfurter in Cobbledick and Justice Brennan in Ryan apply these principles of appellate review in order to prevent piecemeal appeals from grand jury activity under § 1291, but the Interlocutory Appeals Act, passed eighteen years after the Cobbledick decision, is based on the same set of principles forbidding piecemeal consideration of criminal cases. The Act limits interim review of “a controlling question of law” to civil cases only and, therefore, should not be read to allow piecemeal review of grand jury activity.
It is true, as the majority opinion suggests, that the Supreme Court made an exception to the Cobbledick-Ryan principle in the Nixon Tapes case, characterizing as a “final, appealable order” Judge Sirica’s denial of the President’s motion to quash the subpoena duces tecum, an order that in other circumstances would not be considered “final” under § 1291. After reaffirming Cobbledick and Ryan , the Court states the reason for making an exception in that case:
*947 [T]he traditional contempt avenue to immediate appeal is peculiarly inappropriate due to the unique setting in which the question arises. To require a President of the United States to place himself in the posture of disobeying an order of a court merely to trigger the procedural mechanism for review of the ruling would be unseemly, and would present an unnecessary occasion for constitutional confrontation between two branches of the Government. Similarly, a federal judge should not be placed in the posture of issuing a citation to a President simply in order to invoke review.
U. S. v. Nixon, 418 U.S. 683, 691-92 [ 94 S.Ct. 3090, 3099 , 41 L.Ed.2d 1039 ] (1974).
The Nixon case is, therefore, distinguishable, unless we think that General Motors is in the same position as the President and cannot be investigated by a grand jury without causing a “constitutional confrontation.”
Nor should we review this case on mam damus. General Motors has not applied for a writ of mandamus against the District Judge, and the principles discussed in Cobbledick and Ryan apply in double measure to the use of the extraordinary remedy of mandamus as a means of piecemeal review in criminal cases. Reasoning that mandamus may only be used in “exceptional circumstances amounting to a judicial ‘usurpation of power,’ ” the Court in United States v. Will, 389 U.S. 90 , 88 S.Ct. 269 , 19 L.Ed.2d 305 (1967) rejected the government’s mandamus action to compel a district judge to limit pretrial discovery in a criminal ease, adding that “this general policy against piecemeal appeals [by mandamus] takes on added weight in criminal cases.” Id. at 95 , 88 S.Ct. at 274 .
The district judge below has handled General Motors’ claim with deliberation, patience and forbearance, in my opinion, and is not guilty of “judicial usurpation.”
III. THE CONFLICT-OF-INTEREST QUESTION
The Court holds that the IRS lawyer is disqualified under Canon 9 of the ABA Code of Professional Responsibility after conceding that the Attorney General appointed the lawyer in accordance with specific statutory authority, granting him the power to appoint a lawyer to represent the government for a particular case or grand jury investigation. Canon 9 provides that “a lawyer should avoid even the appearance of professional impropriety.”
In this case the lawyer has not accepted new employment that either creates a conflict of interest or creates the appearance of a conflict of interest. There is no conflict of interest between the Department of Justice and the Internal Revenue Service. If the lawyer had left General Motors to participate in the grand jury proceedings, General Motors would be entitled to have the lawyer disqualified on grounds of conflict of interest. In tax cases, however, the investigative arm of the government, the IRS, and the litigative arm, the Department of Justice, must exchange information; and they may also exchange the people in the departments who have the information.
In a civil tax investigation of General Motors, the IRS uncovered information which led it to suspect criminal tax fraud. It gave the information to the Justice Department which initiated a grand jury investigation and deputized an IRS lawyer familiar with the facts so that he could participate in the grand jury investigation — a natural, not a sinister, sequence of events.
Here the majority seems to have confused the demands of the canons of ethics of lawyers with the code of conduct of judges. In its opinion, the majority relies upon two cases, American Cyanamid Co. v. FTC, 363 F.2d 757 (6th Cir. 1966), and United States v. Braniff Airways, Inc., 428 F.Supp. 579 (W.D.Tex.1977). In American Cyanamid this Court on due process grounds overturned a decision of the FTC because one of the judges participating in the decision had conducted a legislative investigation of the same facts while serving as chief counsel of a Senate Subcommittee. We must recognize, however, that while litigants are entitled to an impartial tribu *948 nal, as in that case, they may not demand a neutral prosecutor, as in this case. A judge should disqualify himself from a case he participated in as a lawyer, but a prosecutor need not disqualify himself because he has previously conducted other investigations of the same suspect, whether for the same or a different governmental agency. The court in this case conflates these two separate principles which draw a distinction between judges and prosecutors; but the court is not alone in its confusion, for in the other case cited, the Braniff Airways case, the district judge there made the same mistake when he barred a Justice Department anti-trust lawyer, formerly employed by the Civil Aeronautics Board, from conducting a grand jury investigation of alleged antitrust violations by Braniff.
IV. CONCLUSION
In light of the above discussion, I would conclude that neither appellate jurisdiction nor a conflict of interest exists in this case. In addition, both conclusions are strongly supported by the most recent amendment to Rule 6(e) of the Federal Rules of Criminal Procedure 3 governing the use of evidence developed by a grand jury. The stated reasons for the amendment neatly tie together both of the issues presented by this case and prove to me that Congress did not think that this situation creates a conflict of interest or that the proceedings of the grand jury should be interrupted by interlocutory appeals.
1. Exchange of Grand Jury Information. Under the new Rule 6(e), most grand jury proceedings may be disclosed to “an attorney for the government" or “to such governmental personnel as are deemed necessary by an attorney for the government to assist an attorney for the government in the performance of such attorney’s duty to enforce Federal criminal law.” Under the old rule, disclosure could be made only to “attorneys for the government,” but not to other “government personnel.”
The Senate Report on the proposed amendment states that the purpose of the change is to facilitate the kind of intragovernment cooperation which occurred in this case and to enable federal prosecutors in grand jury proceedings to benefit from the expertise of agents from other departments and agencies of government:
Attorneys for the Government in the performance of their duties with a grand jury must possess the authority to utilize the services of other government employees. Federal crimes are “investigated” by the FBI, by the IRS, or by Treasury agents and not by government prosecutors or the citizens who sit on grand juries. Federal agents gather and present information relating to criminal behavior to prosecutors who analyze and evaluate it and present it to grand juries. Often the prosecutors need the assistance of the agents in evaluating evidence. Also, if further investigation is required during or after grand jury proceedings, or even during the course of criminal trials, the Federal agents must do it. There is no reason for a barrier of secrecy to exist between the facets of the criminal justice system upon which we all depend to enforce the criminal laws. Sen. Rep. No. 95-354, 95th Cong., 1st Sess., July 20, 1977, reprinted in U.S.Code Cong. & Admin.News 1977, pp. 527, 530 (emphasis added).
The Senate Report goes on to say that there is “no intent to preclude the use of grand-jury developed evidence for civil law enforcement purposes. On the contrary, there is no reason why such use is improper, assuming that the grand jury was utilized for the legitimate purpose of criminal investigation.” Id. at 532. There is no showing in this case, and no finding by the Court below, that the government is using the grand jury for impermissible purposes or that the exchange of information or employees between the IRS and the Justice Department is improper.
2. Interlocutory Review of Grand Jury Proceedings. The old Rule 6(e), according to the Senate Report, had created a “state *949 of uncertainty” and was “spawning some judicial decisions highly restrictive of the use of government experts” and other decisions “that make Rule 6(e) orders subject to interlocutory appeal.” Id. at 530. The Report suggests that such appeals should not be allowed for the reasons given by Justice Frankfurter in the Cobbledick decision and quotes the following language from that opinion: “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.” 309 U.S. at 327 , 60 S.Ct. at 542 , 84 L.Ed. at 786 . Thus, in amending Rule 6(e), Congress has once again adhered to the historic principle disallowing piecemeal review of criminal cases, just as it did when it passed the Interlocutory Appeals Act of 1958.
. The question arose on the Court’s weekly Administrative or Motion Docket and was decided without oral argument or regular conference consideration. We are not bound by the first panel’s decision. See Messenger v. Anderson, 225 U.S. 436, 444 , 32 S.Ct. 739 , 56 L.Ed. 1152 (1912); Petition of United States Steel Corporation, 479 F.2d 489 , 494 (6th Cir. 1973); Potomac Passengers Association v. Chesapeake & Ohio Ry. Co., 171 U.S.App.D.C. 359, 363 , 520 F.2d 91 , 95 n. 22 (1975); 1B Moore, Federal Practice § 0.404.
. Compare the civil cases on the subject of interlocutory appellate review of orders denying disqualification of counsel, discussed in a case note in 30 Vand.L.Rev. 259 (1977), written by Sara Porter Walsh.
. P.L. 95-78, 95th Cong., 1st Sess., 91 Stat. 391 (1977).

---

Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/9464696. Public record. Not legal advice.