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In re Grand Jury Empaneled March 17

filed as amended january 21 1988.: December 29, 1987.

IN THE MATTER OF THE GRAND JURY EMPANELED MARCH 17, 1987, IMPOUNDED


On Appeal from the United States District Court for the District of New Jersey, Misc. No. 87-129.

Seitz, Greenberg, and Rosenn, Circuit Judges.

Author: Seitz

Opinion OF THE COURT

SEITZ, Circuit Judge:

Appellants are three closely related corporations ("the corporations") and an officer of the corporations ("the officer"). They appeal an order of the district court holding them in civil contempt and imposing fines for refusing to produce certain documents for a grand jury investigating their activities. This court has jurisdiction under 28 U.S.C. ยง 1291 (1982). See united States v. Ryan, 402 U.S. 530, 532, 29 L. Ed. 2d 85, 91 S. Ct. 158 (1971).

I.

In May, 1985, upon returning from a business trip abroad, the officer was detained at Kennedy Airport by agents of the United States Customs Service. The agents searched him and seized documents he had in his possession. After reviewing the documents and copying some, but not all, of them, the agents returned the documents to the officer the next day.

The officer subsequently conferred with counsel, who advised that the search and seizure at the airport were of dubious legality. Counsel recommended that the officer turn over to him the documents that the Customs Service agents had seized, so as to facilitate a suppression motion in the event of a future criminal prosecution implicating the documents. The officer turned over the documents to counsel, who currently retains them on behalf of the officer. Both the government and the appellants refer to these documents as the "airport documents."

The grand jury issued a subpoena to one of the corporations in June, 1985, and a second subpoena to another of the corporations in March, 1986. The two subpoenas are substantially identical; both request production of various categories of corporate documents. Neither subpoena is directed to any particular officer or employee of the corporations. The earlier subpoena is directed to the corporation itself, and the latter is directed to "any responsible officer."

[Text Deleted by Court Emendation]

The corporations produced numerous documents in response to the subpoenas but expressly withheld responsive airport documents. The government represents that the corporations subsequently produced altered copies of some of the airport documents, and the scope of the grand jury investigation has been expended to cover possible obstruction of justice by the corporations and their officers in fabricating and destroying documentary evidence, apparently including some of the airport documents.

The government moved to compel production of those airport documents falling within the scope of the subpoena. After a hearing, the district court entered an order requiring the corporations to comply in full with the outstanding subpoenas. The corporations moved for a stay of that order pending appeal. At a second hearing, the district court denied the stay. The corporations then stipulated that they would not comply with the order because the officer refused to relinquish possession of the airport documents to the corporations. The stated ground for this refusal was the officer's belief that his act of turning over the documents to the corporations would be self-incriminating. Faced with this stipulation, the court granted the officer's application to intervene in the proceedings nunc pro tunc. The court then issued an order holding the corporations and the officer in contempt for failure to comply with the enforcement order, levying separate fines against each. Accrual of the fines was stayed pending this appeal.

II.

We first consider the propriety of the contempt order as to the corporations. On appeal, the corporations argue, as they did before the district court, that they may not properly be held in contempt because it is impossible for them to comply with the enforcement order. Our standard of review is pleanary because the district court determined that the corporations' undisputed factual showing ...


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