Opinion
MISCELLANEOUS BUSINESS DOCKET NO. 00-10357
November 1, 2000
MEMORANDUM
The government here moves for an order authorizing it to disclose grand jury proceedings to certain employees of the Massachusetts Insurance Fraud Bureau ("Bureau") pursuant to Federal Rule of Criminal Procedure 6(e)(3)(A) (ii), which states in pertinent part:
Disclosure . . . of matters occurring before the grand jury . . . may be made to . . . such government personnel (including personnel of a state or subdivision of a state) 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.
Fed.R.Crim.P. 6(e)(3)(A) (ii). As written, Rule 6(e)(3) (A) (ii) is self executing. It does not require the government to seek judicial approval in order to disclose grand jury proceedings to state government personnel. Nonetheless, the government says it brings this motion as a matter of "prudence" and this Court, therefore, examines issues that the government's disclosure raises.
The Massachusetts General Court has authorized two private voluntary associations of Massachusetts insurance carriers, the Automobile Insurance Bureau of Massachusetts and the Workers' Compensation Rating and Inspection Bureau of Massachusetts, to create an insurance fraud bureau in order to investigate charges of fraudulent insurance transactions and to refer any violations of law regarding insurance fraud to the appropriate prosecutor. St. 1996, ch. 427, § 13 (an emergency act, approved Dec. 5, 1996). The Bureau, which was created pursuant to this legislation, is governed by fifteen board members: five from each of the two private industry associations and five public officials. Id. § 13(a). Funding for the Bureau comes equally from the two private industry associations. Id. § 13(c). In addition, each of the associations is required to pay into a general fund for both the investigation and prosecution of insurance fraud and costs of the Office of the Massachusetts Attorney General related to the investigation and prosecution of insurance fraud. St. 1991, ch. 399, § 3, as amended by St. 1995, ch. 38, § 210.
This Court notes the decision of the Massachusetts Supreme Judicial Court in Commonwealth v. Ellis, 429 Mass. 362 (1999). There, the court considered whether the Bureau's involvement in assisting the Attorney General's office in the prosecution of insurance fraud cases violated a criminal defendant's due process rights by undermining the disinterestedness of the prosecutor.Id. at 363. The Supreme Judicial Court concluded that the Bureau's interactive involvement with the Attorney General's office did not infringe upon a criminal defendant's due process rights. Id. at 370.
In Ellis, the defendant argued that the fact that insurance companies funded the Bureau would provide them with leverage over the exercise of prosecutorial judgment. Id. at 373. The Supreme Judicial Court, however, rejected this argument. First, the court explained that insurance companies could not control prosecutors because their financial support was mandatory under the law for Bureau members and it was within the legislative power to mandate payment through some other mechanism. Ellis, 429 Mass. at 373 n. 16. Second, those assistant attorneys general who are devoted to insurance fraud prosecution are not controlled through threat of removal by the Bureau — the Bureau does not have the authority to remove attorneys. Id. at 374. Third, the prosecution of insurance fraud by the Attorney General was not designed to benefit the insurance companies financially. Id. Fourth, the Bureau does not affect the prosecutor's discretion in bringing a case; although the Attorney General's fraud division must review each Bureau report, the ultimate decision to prosecute lies with the prosecutor. Id. at 374-75.
The issue examined in Ellis raises an important question regarding the applicability of Rule 6(e)(3)(A) (ii) in this instance. By its terms, the exception to the secrecy of grand jury proceedings applies only to "government personnel (including personnel of a state or subdivision of a state)." Fed.R.Crim.P. 6(e)(3)(A) (ii). Private individuals and entities are not within this exception. United States v. Tager, 638 F.2d 167, 170 (10th Cir. 1980) ("[T]he drafters of [A] [ii] considered whether the assistance of private persons . . . should be included [and] decided against such inclusion by limiting [A] [ii] to 'government personnel.'" [citing Proposed Amendments to the Federal Rules of Criminal Procedure: Hearings on H.R. 5864 Before the Subcomm. on Criminal Justice of the House Comm. on the Judiciary, 95th Cong., 1st Sess. 92 (1977)]); In re the November 1992 Special Grand Jury for the N. Dist. of Ind., 836 F. Supp. 615, 617 (N.D. Ind. 1993).
It is unclear whether, in fact, the Bureau and its executive directors and employees are "government personnel" as defined in Rule 6(e)(3)(A) (ii). The Bureau has been described both as a "private investigative agency," In re Ellis, 425 Mass. 332, 340 (1997); Commonwealth v. Ellis, No. 97-192, 1998 WL 470551, at *2 (Mass.Super. 1998) (Bohn, J.), aff'd, Commonwealth v. Ellis, 429 Mass. 362 (1999), and as a "quasi-governmental entity," In re Justices of the Superior Court, 218 F.3d 11, 13 (1st Cir. 2000) The Supreme Judicial Court's stance on this issue does not seem entirely clear. It noted that other states have similar insurance divisions that have investigatory functions, which are public agencies and not private entities. Ellis, 429 Mass. at 367 n. 6 (citing N.J. Stat. Ann. § 17:33A-8 [West 1994 Supp. 1997]; R.I. Gen. Laws §§ 31-50-1 31-50-4 [1994 Supp. 1997] [repealed 2000]). The Supreme Judicial Court, however, also noted that, although the Bureau is supervised by public officials who serve on its board, the public officials represent a minority of board members. Id. If considered a private entity, arguably the Bureau would not qualify under the Rule 6(e)(3)(A) (ii) exception. See Tager, 638 F.2d at 168-69 (holding that employee of Insurance Crime Prevention Institute, which is a nonprofit organization funded by insurance companies to investigate possible frauds against insurance companies, was not "government personnel" under Rule 6).
Against this background, what the government seeks here is fairly clear. It's looking for a little "cover" as it pursues its investigatory responsibilities in conjunction with Bureau employees. See Sabin Willett, The Betrayal, 17 (Villard Books 1998) (discussing "cover" in governmental operations). This the Court cannot give, however, as there is presently no case or controversy before it and any potential dispute concerning disclosure to Bureau employees is not now ripe for adjudication.See Lea Brilmayer, The Jurisprudence of Article III: Perspectives on the "Case or Controversy" Requirement, 93 Harv. L. Rev. 297, 304-06, 320-21 (1979).
Specifically, this Court cannot rule whether Bureau employees qualify as "government personnel" as used in Rule 6(e)(3)(A) (ii) or rather whether the Bureau is a private investigative agency not encompassed under the exception. Nor can this Court presently determine the applicability of other exceptions to the secrecy of grand jury proceedings under Rule 6(e). See, e.g., Rule 6(e)(3)(C).