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In re Grand Jury Empanelled February 14

decided: April 27, 1979.

IN THE MATTER OF: GRAND JURY EMPANELLED FEBRUARY 14, 1978 UNITED STATES OF AMERICA, APPELLANT


APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW JERSEY -- NEWARK (D.C. Misc. No. 78-28)

Before Rosenn, Garth and Van Dusen, Circuit Judges.

Author: Garth

Opinion OF THE COURT

The issue on this appeal is whether the owner of a business may assert a Fifth Amendment privilege when a Subpoena duces tecum requiring the production of business records is served on both the owner himself and on his employee who prepared and maintained those records. The government served Subpoenas duces tecum on Dominick Colucci, the owner of Colucci Excavating and Trucking, and on Marion DeMato, his office manager. On Colucci's motion, the district court quashed both Subpoenas, concluding that the Fifth Amendment shielded Colucci from the compelled disclosure of his business records. However, the Fifth Amendment does not provide a shield for Colucci's business records when disclosure of those records results from a Subpoena served on DeMato. We hold, therefore, that the district court improperly denied to the government the business records which it sought from DeMato, and we reverse.

I

Colucci Excavating and Trucking ("CET") performs construction and demolition services under contract with public authorities, municipalities, and private concerns. The business has been operated under that name for some twenty years. The parties have stipulated that in 1976, CET had assets of approximately $642,000 and that its annual gross receipts averaged $337,000 in each of the years 1972 through 1975. During recent years, it has employed seven to fourteen persons, one of whom is Marion DeMato. The parties have stipulated that DeMato holds the position of "office manager". The record reveals that DeMato has also signed contracts as "Secretary-Treasurer" of CET. The petitioner, Dominick Colucci, owns CET*fn1 and is its chief executive. On June 27, 1978, Marion DeMato testified before a grand jury in the District of New Jersey. She stated that her responsibilities as office manager included the preparation of two types of records: "job folders" and billing records. She made up "job folders" which contained all of the documents which she had prepared or received pertaining to a particular project.*fn2

She also prepared bills which she mailed to customers, maintaining a file which contained records of all payments made on each project. The job files for projects which had been completed and the billing files for past years were kept in a closet in her office. During her grand jury testimony, she was ordered by the grand jury Foreman to produce the job folders for all work performed by CET for public authorities for the period from January 1, 1972 through December 31, 1977 and the billing files for the years 1972 through 1977.

On July 5, 1978, a Subpoena duces tecum was served on Colucci, directing him to appear before the grand jury on July 11, 1978 with the job files for all work performed by CET from January 1, 1971 through December 31, 1976, and the billings folders for the years 1972 through 1977.*fn3 A Subpoena duces tecum directed to "any responsible officer" of CET was served on DeMato on July 5, directing her to produce those same documents before the grand jury on July 11, 1978. The date for production of the records by Colucci and DeMato was extended to August 29, and on August 28 Colucci moved in the district court to quash the Subpoena. Colucci's motion pertained only to the Subpoena duces tecum served on him, but during oral argument on that motion, Colucci apparently moved to quash the June 27, 1978 Foreman's order to DeMato and the Subpoena duces tecum served on DeMato.

In response to Colucci's motion, the government filed an affidavit (with appended financial reports) describing the business of CET; Colucci stipulated to the accuracy of the affidavit. The government also filed a transcript of DeMato's testimony before the grand jury in which she described the documents demanded by the government as well as her responsibility for preparing and maintaining those documents. Colucci offered no testimony or evidence in support of his motion to quash.

Subsequent to oral argument, the district court on October 4, 1978 entered an order quashing both Subpoenas as well as the order of the grand jury Foreman directed to DeMato. The court also endorsed a consent order which required Colucci's attorney to collect and hold the documents sought in the Subpoenas until final disposition of the government's appeal, so that these records would be available in the event that we reached a conclusion different from the district court's.

The government has appealed from the order quashing the Subpoenas duces tecum and the Foreman's order.

II

Although neither the government nor Colucci questioned our jurisdiction to review an order quashing a grand jury Subpoena duces tecum, we asked that supplementary briefs be filed addressing the question of whether appellate jurisdiction exists. In its supplementary brief, the government contends that appellate jurisdiction exists under either 28 U.S.C. § 1291 (1976) or 18 U.S.C. § 3731 (1976).

Colucci, however, urges us to invoke the judicially created limitation on government appeals from orders entered in criminal cases. In DiBella v. United States, 369 U.S. 121, 82 S. Ct. 654, 7 L. Ed. 2d 614 (1962), the Supreme Court held that the government could not appeal from an order granting a motion to suppress evidence, where that motion was made after charges had been filed even though an indictment had not yet been returned. Recognizing that it was effectively precluding any opportunity for the government to secure appellate review of such orders, the Supreme Court declared:

What disadvantage there be springs from the historic policy, over and above the constitutional protection against double jeopardy, that denies the Government the right or appeal in criminal cases save as expressly authorized by statute. United States v. Sanges, 144 U.S. 310, 12 S. Ct. 609, 36 L. Ed. 445; United States v. Dickinson, 213 U.S. 92, 102-103, 29 S. Ct. 485, 53 L. Ed. 711; Carroll v. United States, 354 U.S. 394, 400-403 and n. 9-12, 77 S. Ct. 1332, 1 L. Ed. 2d 1442. No such expression appears in 28 U.S.C. § 1291, and the Government's only right of appeal, given by the Criminal Appeals Act of 1907, 34 Stat. 1246, now 18 U.S.C. § 3731, is confined to narrowly defined situations not relevant to our problem. Allowance of any further right must be sought from Congress and not this Court. Carroll v. United States, supra, 354 U.S., at 407-408, 77 S. Ct. 1332.*fn4

Colucci's argument, however, fails to consider the measures enacted by Congress in response to DiBella and other court decisions narrowly construing the government's right of appeal in criminal cases. In particular, the 1968 and 1971 amendments to the Criminal Appeals Act, 18 U.S.C. § 3731, permit the government to appeal from an "order . . . excluding evidence . . . in a criminal proceeding." We hold that 18 U.S.C. § 3731 provides the jurisdictional predicate for review of the district court's order in this case. Furthermore, we observe that if the Criminal Appeals Act was not applicable here, jurisdiction would nevertheless exist under 28 U.S.C. § 1291.

A

The 1971 amendment added the following provision to the Criminal Appeals Act, 18 U.S.C. § 3731:

An appeal by the United States shall lie to a court of appeals from a decision or order of a district courts (sic) suppressing or excluding evidence or requiring the return of seized property in a criminal proceeding, not made after the defendant has been put in jeopardy and before the verdict or finding on an indictment or information, if the United States attorney certifies to the district court that the appeal is not ...


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