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National Land & Investment Co. v. Specter

decided: June 25, 1970.

NATIONAL LAND & INVESTMENT COMPANY, PROPERTIES INVESTMENT CORP., NATHAN ALEXANDER, MARTIN G. BERGMAN, SYLVAN M. COHEN, WENTWORTH P. JOHNSON, MORRIS A. KRAVITZ, MARVIN ORLEANS, RAYMOND G. PERELMAN, HERMAN E. ROBINSON, DAVID H. SOLMS, JACK L. WOLGIN, NORMAN WOLGIN AND WILLIAM WOLGIN, APPELLANTS IN NOS. 18320-18333,
v.
ARLEN SPECTER, RICHARD SPRAGUE AND GILBERT STEIN



Seitz, and Aldisert, Circuit Judges, and Latchum, District Judge. Seitz, Circuit Judge (concurring).

Author: Aldisert

Opinion OF THE COURT

ALDISERT, Circuit Judge.

In these appeals from the denial of a motion for a preliminary injunction, we are asked to decide whether the district court erred in refusing to enjoin state grand jury proceedings which allegedly impinged appellants' constitutional rights.

Appellants are National Land & Investment Company, the redeveloper of Centre Square Project in downtown Philadelphia, its principal owner, Properties Investment Corporation, and the named individuals who are both shareholders in Properties Investment and directors of National Land. They have been the subjects of an investigation undertaken by the district attorney of Philadelphia and, at his instance, conducted by a special grand jury. Charging the district attorney and members of his staff with "misuse" of the grand jury to brand them "as criminals and deprive them of their constitutional rights," appellants instituted an action under the Civil Rights Act of 1871, 42 U.S.C. § 1983, and its jurisdictional corollary, 28 U.S.C. § 1343(3), for injunctive and declaratory relief. This appeal followed immediately upon the district court's refusal to grant the request for a preliminary injunction, and that refusal is therefore, the exclusive issue now before us.

Early in 1969, District Attorney Specter began investigating appellants' Centre Square Project. On March 31, 1969, he filed a petition in the Court of Common Pleas for the convening of an Investigating Grand Jury, alleging that there was reason to believe the existence of "systematic criminal conduct involving public officials and agencies, not amenable to ordinary investigative techniques." Although the petition called for the investigation of various unrelated matters, it recited that, in connection with the Project, the district attorney had "reliable and trustworthy information" that certain officials had given away city property and assets, officials had relieved National Land of certain legal obligations in order to enrich appellants, and, according to charges by a member of the Philadelphia Planning Commission, members of the City Redevelopment Authority were guilty of conflicts of interest. The petition was granted on April 2 and the grand jury was convened and charged.

Certain of the individual appellants were subpoenaed to appear and testify before the grand jury. Consistent with rules promulgated by the presiding judge, they were not permitted to have counsel present during their testimony and were prohibited from leaving the grand jury room to consult with counsel concerning questions asked of them. If, however, a witness declined to answer any question and was summoned before the court for an order compelling a response, he was, at that time, permitted to consult with counsel. None of appellants refused to answer any questions.

The local news media accorded extensive coverage to the grand jury proceedings. Appellants insist that the district attorney's office intentionally generated adverse publicity by "'[leaking]' damaging information to the press in order to discredit and * * * intimidate [them] and any others who might contemplate political opposition to [District Attorney] Specter." Appellants Cohen and Wolgin are described in their brief as being "permanently identified as supporters of political opponents of * * * Specter in his unsuccessful campaign for Mayor of Philadelphia in 1967 and his successful campaign for re-election to the office of District Attorney in 1969." In retort, appellees contend that appellants themselves used the press as a forum for the presentation of "their views of the investigation, the Grand Jury and all related matters including the substance of their testimony."

After the grand jury was convened, the district attorney's office forwarded letters to thirteen banks and financial institutions which had agreed to provide financing for the Project, stating that the grand jury was investigating "alleged criminality" and indicating that their testimony might be required. Appellants assert that this correspondence, combined with the unfavorable publicity caused by the proceedings, resulted in the refusal of the prospective lenders to honor their financing commitments. In September, 1969, National Land was unable to go to closing on the financing.

Following the filing of the present action in federal district court, and the denial of the motion for a preliminary injunction, the Investigating Grand Jury filed a presentment summarizing its investigation of the Project and recommending indictment of National Land, appellant Cohen, and an officer of National Land. The regular October Grand Jury of Philadelphia County returned indictments against these parties, charging them with conspiracy and fraud. Since that time, the grand jury proceedings have halted, but although the investigation of appellants is not now ongoing, the proceedings presumably can be resumed at any time before the dissolution of the grand jury. This, together with the fact of the indictments and appellants' prayer that the prosecution of any such indictments be enjoined, convinces us that this appeal is not moot.

At the onset, we note that the district court correctly determined that it was possessed of equitable jurisdiction to issue the requested injunction, despite the provision of 28 U.S.C. § 2283:

A court of the United States may not grant an injunction to stay proceedings in a State court except as expressly authorized by Act of Congress, or where necessary in aid of its jurisdiction, or to protect or effectuate its judgments.

As this court recently declared in DeVita v. Sills, 422 F.2d 1172 (3 Cir. 1970), appellants' reliance on the Civil Rights Act, 42 U.S.C. § 1983, "as an instance of an injunction 'expressly authorized by Act of Congress'", and, therefore, as an exception to the anti-injunction provision of § 2283, "is, in this circuit at least, well-placed, for Cooper v. Hutchinson, 184 F.2d 119 (3 Cir. 1950) so holds." To be sure, other circuits have taken a contrary position, Baines v. City of Danville, 337 F.2d 579, 590 (4 Cir. 1964); Sexton v. Barry, 233 F.2d 220 (6 Cir. 1956); Smith v. Village of Lansing, 241 F.2d 856 (7 Cir. 1957), but the Supreme Court has not yet deemed it necessary to resolve this conflict among the circuits. Dombrowski v. Pfister, 380 U.S. 479, 484, 85 S. Ct. 1116, 14 L. Ed. 2d 22 n. 2 (1965). We therefore reiterate our statement in DeVita, supra: "We are satisfied that no opinion of the Supreme Court casts serious doubt upon the validity of the interpretation of 28 U.S.C. § 2283 adopted in Cooper v. Hutchinson, supra."

Recognizing that the district court had equity jurisdiction to grant the relief sought, we must decide whether that court properly refused to preliminarily intervene in the state proceedings. We begin with the proposition that disposition of the request for a preliminary injunction was peculiarly within the discretion of the district court. It is for us to determine only whether there has been an abuse of that discretion, whether there was an error of law or whether a clear mistake was made in the consideration of the proof. Stokes v. Williams, 226 F. 148 (3 Cir. 1915), cert. denied, 241 U.S. 681, 36 S. Ct. 728, 60 L. Ed. 1234 (1916). Whether appellants demonstrated the irreparable harm or reasonable probability of success on final hearing necessary to the issuance of a preliminary injunction is a question of law that does not have "an existence independent" of findings of fact. See United States v. Yellow Cab Co., 338 U.S. 338, 339, 70 S. Ct. 177, 94 L. Ed. 150 (1949). And it is fundamental that we, as an appellate tribunal, "must accept the findings of fact of the trial judge unless there was clear error in the fact finding process." Allis-Chalmers Mfg. Co. v. White Consolidated Indust., Inc., 414 F.2d 506, 528 (3 Cir. 1969) (dissenting opinion). Rule 52(a), Fed.R. Civ.Pro.

The court below appeared to rest its decision on two grounds: the preliminary injunction was denied because appellants had "not demonstrated irreparable harm," and because "abstention and comity require [the] use [of] extreme diligence in determining equitable relief" which would interrupt state proceedings. Because we agree that appellants failed to demonstrate irreparable harm, and thus did not establish a case for preliminary equitable relief, we do not directly reach the issue of abstention.

Appellants contend that the special grand jury was used by appellees "as an instrument of political revenge and unconstitutional repression of free speech and political opposition, expression and association." That the grand jury was convened to investigate appellants, so the argument runs, in itself effectively repressed those who were political foes -- that is, the convening represented a bad faith use of the state's legal machinery, resulting in an unconstitutional "chilling" of appellants' rights. Appellants assert that this alleged injury was continued, and ...


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