Summary
In Matter of Heisler v Hynes (42 N.Y.2d 250, supra), the Court of Appeals held that a Grand Jury subpoena duces tecum may not be used to compel a witness to surrender possession of records to a prosecutor for independent examination outside the presence of the Grand Jury.
Summary of this case from Matter of Kuriansky v. PatelOpinion
Argued June 7, 1977
Decided July 7, 1977
Appeal from the Appellate Division of the Supreme Court in the Second Judicial Department, WILLIAM C. BRENNAN, J.
Robert A. Goldschlag and Jack S. Hoffinger for appellant. Charles J. Hynes, Deputy Attorney-General (T. James Bryan of counsel), for respondent.
The sole issue on this appeal is whether a Grand Jury subpoena duces tecum may be used to compel a witness to surrender possession of records or other property to a prosecutor for independent examination outside the presence of the Grand Jury.
Clara Heisler, the petitioner, is one of the operators of the Oceanview Nursing Home. The Special Prosecutor issued a subpoena directing her to "appear before the Grand Jury of the County of Queens * * * as a witness in a criminal prosecution" and "to bring with you and produce" numerous books and records of the nursing home covering a five-year period. On petitioner's motion to quash, she asserted that the prosecutor intended to use the subpoena as a device by which he would, in effect, "illegally seize" the home's books and records by removing them from the Grand Jury room and retaining them for examination by his assistants and auditors.
The prosecutor in this case is the deputy appointed by the Attorney-General to conduct an inquiry into the "management, control, operation or funding of nursing homes" which had been ordered by the Governor pursuant to subdivision 8 of section 63 of the Executive Law (Executive Order No. 4; 9 N.Y.CRR 3.4; see Matter of Sigety v Hynes, 38 N.Y.2d 260). His office is also denominated that of Special Prosecutor.
The subpoena also was originally attacked for overbreadth and lack of relevancy to the investigation, but those issues are not raised on this appeal.
Criminal Term denied the motion in a resettled order which provided, however, "that at all times, other than when the subpoenaed materials are being presented to the Grand Jury, a representative of the petitioner may be present when the Special Prosecutor inspects, audits or otherwise examines" them. Both parties appealed, the prosecutor from so much of the order as granted the petitioner the right to be present while the records are examined outside the presence of the Grand Jury and the petitioner from so much thereof as would have permitted the Grand Jury and the prosecutor to retain possession of them for his independent examination. It was her position that the subpoena duces tecum could only be used to require her to produce the books and records to enable her to answer questions concerning them. The Appellate Division modified the order by deleting the provision permitting the petitioner's representative to be present during audit. Petitioner now appeals as of right.
Under CPL 610.10 (subd 3), a subpoena duces tecum directs a "witness [to whom such process is addressed] to bring with him and produce specified physical evidence". Such a subpoena does not authorize the seizure, impoundment or other disruption in possession of records or property (Matter of Kelly, 19 FRD 269 [WEINFELD, J.]). Its function is to cause the physical evidence to which it is directed to be brought before the court. It is not intended to deprive its custodian of control which is compatible with its production. So "[o]bedience to the subpoena will be complete when the books called for are presented to the grand jury in an actual session, and are taken away again * * * as soon as the particular session adjourns" (Matter of American Sugar Refining Co., 178 F 109, 111, error dsmd 223 U.S. 743; see, also, United States v Birrell, 242 F. Supp. 191, 204; Matter of Amalgamated Union v Levine, 31 Misc.2d 416, 417 [MEYER, J.]; Matter of Atlas Lathing Corp. v Bennett, 176 Misc. 959; cf. Matter of Randall, 87 App. Div. 245; contra Robert Hawthorne, Inc. v Director of Internal Revenue, 406 F. Supp. 1098, 1131 , n 66).
We do not suggest that a naked presentation of the records is all that is required. They may serve to refresh a witness' recollection, to enable them to be identified, and for use as direct evidence on their own. These uses, of course, are ones to be employed within the framework of the procedural protections against abuse "which attach when appearance is before a Grand Jury" or other judicial body (cf. Matter of Sussman v New York State Organized Crime Task Force, 39 N.Y.2d 227, 232).
But what the prosecutor has been granted by the order of the Appellate Division here goes far beyond that. It gives him unsupervised possession of the petitioner's books and records and it does so on the basis of the subpoena duces tecum alone.
This is not to say that circumstances may not arise which may be thought to warrant impoundment or other lawful interference with possession of records or property, but authorization for the imposition of such a condition must be grounded on powers and procedures not inherent in the subpoena duces tecum (Hagan, Impounding and the Subpoena Duces Tecum, 26 Bklyn L Rev 199, 213). Such additional powers do not reside in the Special Prosecutor and he may not assume them willy-nilly ex parte.
There are significant contrasts between the power of subpoena, on the one hand, and that of impoundment or inspection, on the other. Since prosecutors have no general right to discovery in criminal cases under our State law (but cf. CPL 250.20 [notice of alibi]; CPL 250.10 [notice of insanity defense]), the taking of unsupervised possession of the petitioner's records without more must be regarded as in the nature of an impoundment. This is particularly so in this case where the subpoena, not being an office subpoena, was one issued by the Special Prosecutor on behalf of the Grand Jury rather than on his own (cf. Matter of Windsor Park Nursing Home v Hynes, 42 N.Y.2d 243 [decided herewith]).
Impoundment is a measure so drastic that, when exercised, the taking and keeping that it brings about must be one by or solely on behalf of a court itself. By no means is it one which, as in this case, would put the prosecutor in sole possession of the petitioner's records. It may be granted only on a demonstration of special circumstances, as, for instance, when evidence is likely to disappear or be altered unless guarded and preserved (United States v Birrell, 242 F. Supp. 191, 202, supra), the burden of showing which rests with the one who seeks it (Hagan, op. cit., p 215). In the present case no such application was made and no such showing even attempted.
Even in the Federal courts, where authority to examine evidence subpoenaed before a Grand Jury is expressly conferred upon "attorneys for the government" by rule 6 (e) of the Federal Rules of Criminal Procedure (US Code, tit 18, Appendix; United States v Universal Mfg. Co., 525 F.2d 808, 811; United States v Zirpolo, 288 F. Supp. 993, 1015, revd on other grounds 450 F.2d 424), disclosure is subject to court supervision and authorization (United States v Universal Mfg. Co., supra, p 812; Matter of July 1973 Grand Jury, 374 F. Supp. 1334, esp p 1335, n 2; Matter of Pflaumer Sons, 53 FRD 464) and conditions which strike a "proper balance" between a Grand Jury's right to "temporary use of the books" and the right of the party whose records are involved to protection against disruption of his affairs (see Matter of Kelly, 19 FRD 269, 270, supra). While in some of the cases the records were directed to be left with the Grand Jury by court order, none of them permitted a Government attorney to take possession of them on his own (see Hagan, op. cit., 26 Bklyn L Rev 199, 225; but see Robert Hawthorne, Inc. v Director of Internal Revenue, 406 F. Supp. 1098, 1106 , supra).
There is no comparable statutory scheme in New York. If our Legislature had intended to authorize prosecutors to use a subpoena duces tecum to compel a witness to surrender possession of books and records for audit and examination, if that be constitutionally valid, it is to be assumed that it would have done so expressly (cf. Matter of Windsor Park Nursing Home v Hynes, 42 N.Y.2d 243, supra [decided herewith]).
Our decision today hardly leaves law enforcement officials powerless. The custodian is required to bring the books with him to the Grand Jury not only on its return dates, but on others to which it may be adjourned so that he or any other witness who is expected to give testimony from, about or with the aid of them may be called to the stand. Skilled questioning regarding the contents of the records produced will generally elicit all the information needed (see Evans v Evans, 98 Utah 189, esp p 199). And, of course, as indicated, where circumstances warrant, a prosecutor may apply for an order of impoundment or inspection, which is within the inherent power of a court to grant (8 Wigmore, Evidence [McNaughton rev], § 2200, subd [viii]). Moreover, experience teaches that counsel, in assisting the court or Grand Jury in the expedition of its business, most often stipulate to mutually convenient modus vivendi with regard to the scope, time, place and protections that relate to the particular inquiry at hand so as to alleviate burdens that achieve no substantive end.
Accordingly, since the prosecutor may not use the Grand Jury subpoena duces tecum to impound the records or conduct an inspection without specific court authorization, the order of the Appellate Division should be modified by the addition of a provision that, on petitioner's production of the books before the Grand Jury, as directed by the subpoena, she need not surrender custody of them to that body.
I dissent and vote to affirm the order of the Appellate Division. This case presents two distinct but important issues: whether the Grand Jury can compel a witness to temporarily relinquish custody of business records so that the records may be used to assist the Grand Jury in the conduct of a lawful investigation and whether the Grand Jury may obtain the assistance of financial experts in analyzing those records.
In my view, the Grand Jury may properly do both. The contrary result reached by the majority hamstrings the abilities of Grand Juries, throughout the State, to fulfill their constitutional and statutory obligation to ferret out criminal conduct and initiate the prosecution of those responsible for serious offenses. The court's decision is particularly unfortunate since the reasoning to support it overlooks the separate capacity of the Grand Jury which issued the judicial subpoena at issue and, instead, fuses together, and thus blurs, important distinction between the function of Grand Jury and prosecutor. Further, the issues presented raise matters of State law and, to resolve these issues, the majority relies upon dicta in unreasoned decisions of Federal lower courts construing the powers of Federal Grand Juries which are derived from a wholly different set of statutes and rules, upon gratuitous comments in State nisi prius cases never subjected to appellate review, and upon a single but ancient decision by the Appellate Division. I conclude that the majority's decision is unwarranted in law and, most important of all, frustrates an important investigation in the affairs of nursing homes, institutions which, when operated by the wrong people, have abused the old and the infirm.
The Grand Jury is a constitutional institution (NY Const, art I, § 6) responsible for investigating instances of criminal activity. (CPL 190.05.) The court and the District Attorney are its legal advisors. (CPL 190.25, subd 6.) The Grand Jury has full power to make an investigation or to conduct an inquiry on its own initiative and to accuse persons, by indictment, of criminal activity. (Matter of Manning v Valente, 272 App. Div. 358, 363, affd 297 N.Y. 681.) Grand Juries "are clothed by the common law with inquisitorial powers and, of their own motion, may make full investigation to see whether a crime has been committed, and, if so, who committed it. They may investigate on their own knowledge, or upon information of any kind derived from any source deemed reliable; may swear witnesses generally and may originate charges against those believed to have violated the criminal laws." (People ex rel. Livingston v Wyatt, 186 N.Y. 383, 391-392.) The Grand Jury has always been considered to be the arm of the community in maintaining peace and order. (People v Woodruff, 26 A.D.2d 236, 239, affd 21 N.Y.2d 848.)
Since the function of the Grand Jury is to inquire into the existence of possible criminal conduct and to return only well-founded indictments, the investigatory powers of the Grand Jury are very broad. Indeed, the courts have traditionally afforded Grand Juries the widest possible latitude in the exercise of its powers and have repeatedly held that, in the absence of a clear constitutional or legislative provision to the contrary, the powers of the Grand Jury may not be curtailed, nor its proper investigations frustrated. (E.g., People v Stern, 3 N.Y.2d 658, 661.) Included among the powers of the Grand Jury is the authority to compel the attendance of witnesses and the production of books and records. The Grand Jury, as the investigatory arm of the community and the courts, "has a right to every man's evidence", excepting only such persons as are entitled to a constitutional, statutory or common-law privilege. (Branzburg v Hayes, 408 U.S. 665, 688; 8 Wigmore, Evidence [McNaughton rev], § 2192, p 70.) "The community is entitled to the assistance and information of its members in seeking out and controlling the commission of crime." (People v Woodruff, 26 A.D.2d 236, 238, affd 21 N.Y.2d 848, supra.) Every person owes a duty to society to give evidence when called upon to do so. This rule is expecially applicable to a criminal prosecution. (Matter of Manning v Valente, 272 App. Div. 358, 364, affd 297 N.Y. 681, supra.)
If need be, a person within the State may be required to attend a Grand Jury proceeding as a witness by the issuance and service of a subpoena. (CPL 610.10, subd 1.) A subpoena is a court process directing the person to whom it is addressed to attend and appear as a witness in a designated proceeding on a specified date. (CPL 610.10, subd 2.) The term subpoena includes a subpoena duces tecum which is a subpoena "requiring the witness to bring with him and produce specified physical evidence". (CPL 610.10, subd 3.) Any criminal court may issue a subpoena for the attendance of a witness in a criminal action or proceeding. (CPL 610.10, subd 1.) Similarly, a District Attorney, or other prosecutor where appropriate, may, as an officer of the court in which he is conducting the prosecution of a criminal action or proceeding, issue a subpoena of such court for the attendance of any witness whom the people are entitled to call in the action or proceeding. (CPL 610.20, subd 2.) Hence, under the pertinent statutory provisions, a witness, together with specified books and records, may be compelled to appear before the Grand Jury upon a service of subpoena issued by the court or by the prosecutor, as an officer of the court on behalf of the Grand Jury. It is reasonable to delegate to the prosecutor the duty of notifying a witness that the Grand Jury wishes to have his testimony.
It follows that the Grand Jury may compel the attendance of a witness for as long as is reasonably necessary for legitimate investigatory purposes. Likewise, it must logically be concluded that property, produced in accordance with a judicial subpoena duces tecum, may also be at the disposal of the Grand Jury for a reasonable period sufficient to permit orderly and intelligent evaluation and assessment. This is a matter of common sense. The requirement that detailed records be "produced" is scarcely meaningful if the Grand Jury, and its duly authorized legal advisor and assistants, did not have time to study and evaluate the material contained in the records. The majority notes that this deficiency could be cured by "skilled questioning" (p 254). However, especially when dealing with complex white-collar criminal activities, detailed study of financial records is necessary in order to conduct "skilled questioning".
More importantly, it has long been held that a Grand Jury may issue subpoenas for documentary evidence even if the party called upon to produce the documents is not called to testify. (See Wilson v United States, 221 U.S. 361, 373-375.) Phrased somewhat differently, it is quite possible, and in this case quite likely, that the Grand Jury is far more interested in the documents than in the personal testimony of the witness. In fact, where the witness is suspected of criminal activity, the Grand Jury may not wish to grant immunity and, hence, is compelled to forego the personal examination of the witness. However, few constitutional self incrimination problems are posed by documentary evidence. The court's decision, thus, forcloses an important avenue of investigation by eliminating a useful, and legitimate, investigatory technique.
The court's opinion also reflects a misunderstanding of the nature of the Grand Jury process. The subpoena issued by the prosecutor, on the behalf of the Grand Jury, is returnable before the Grand Jury. It is the Grand Jury, not the prosecutor, who would obtain possession of these records. To say that the order of the Appellate Division gives the prosecutor "unsupervised possession of the petitioner's books and records", as the majority puts it (p 253) is an inexplicable inaccuracy. The Grand Jury would be given possession of the records and the prosecutor's access to the records would be controlled by the members of the Grand Jury. The fact that prosecutors generally have no right to discovery in criminal cases (p 253) is also irrelevant. The Grand Jury has plenary investigatory power. Unlike the situation with office subpoenas issued by prosecutorial agencies of various kinds where issues of relevancy are carefully considered (see Matter of Sussman v New York State Organized Crime Task Force, 39 N.Y.2d 227, 231-232), it has been authoritatively stated that the Grand Jury may even act on rumor or suspicion. (Matter of Manning v Valente, 272 App. Div. 358, affd 297 N.Y. 681, supra; People ex rel. Travis v Knott, 204 App. Div. 379, 383.) The cases that hold that a subpoena duces tecum may not be used to ascertain the existence of evidence have no application to Grand Jury subpoenas. (Compare People v Coleman, 75 Misc.2d 1090; Matter of Saratoga Harness Racing Assn. v Monaghan, 9 Misc.2d 868; Matter of Atlas Lathing Corp. v Bennett, 176 Misc. 959 [none of which involved a Grand Jury subpoena].)
As for Matter of Amalgamated Union v Levine ( 31 Misc.2d 416, 417), the statement that no right to retain subpoenaed records exists must be regarded as sheer dicta since the court concluded that it was without authority to consider the issue. It is true that, in Matter of American Sugar Refining Co. (178 F 109, 111, error dsmd 223 U.S. 743), a Federal Trial Judge concluded that subpoenaed records may be removed at the close of each Grand Jury session. However, the court, in its four-paragraph memorandum, cited no authority whatsoever for this position, nor did it express any reason for this conclusion. The holding of American Sugar was explicitly rejected, in a lengthy opinion, in the case of Robert Hawthorne, Inc. v Director of Internal Revenue ( 406 F. Supp. 1098, 1130-1131, n 66.) There, the Federal rule was stated to be that: "the grand jury and its executive agents * * * may retain the plaintiff's original documents while they are performing their lawful criminal investigatory functions, so long as the plaintiff's legitimate business need for the documents is at all times accommodated in some reasonable way. When the legitimate, good faith, criminal investigatory use of the documents has ended, however, or when the grand jury is discharged without the investigation's having been resubmitted or scheduled for resubmission to a new grand jury, then all original subpoenaed materials must be returned immediately to their owner, the plaintiff. Subpoenaed documents may only be retained after this time, for whatever purpose, on the authority of a judicial order of impoundment, duly applied for by the government." (406 F Supp, at p 1130.) This, I urge, is precisely what the rule should be in New York.
The Grand Jury should be permitted to retain custody of the documents for such time as is reasonably necessary to complete their lawful investigation. The interests of the owner of the documents may be accommodated by permitting access to the originals from time to time, or by returning a full set of photocopies. (406 F Supp, at p 1130, n 65.) Of course, where the Grand Jury is dissolved without returning an indictment, the papers subpoenaed should be promptly returned to their owner. (See Matter of Bendix Aviation Corp., 58 F. Supp. 953.) Where the documents are held for an unreasonable period of time and are not utilized by the Grand Jury, then continued retention by the Grand Jury is unwarranted. (See Matter of Gay Cottons v Hogan, 55 Misc.2d 126.)
The rule espoused here actually would work to the advantage of the witness whose documents were subpoenaed. The Grand Jury would have custody of the documents so that it may conduct an expeditious examination at the conclusion of which the documents would be returned. The majority adopts a laborious procedure requiring daily production and return. This procedure adds the inconvenience of having the witness appear daily and increases the likelihood that the investigation would be substantially delayed, a disadvantage to both the people and the witness.
Finally, the majority does not dispute the well-settled power of the Grand Jury to employ experts to assist it to understand and analyze books and records. (See, e.g., United States v Kleen Laundry Cleaners, 381 F. Supp. 519, 523.) Nevertheless, the court would require that the Grand Jury physically sit in session while such expert examination is undertaken. Such requirement is an impractical waste of time on behalf of all concerned. This extreme approach was explicitly rejected in Matter of Kelly ( 19 FRD 269), which the majority cites approvingly. In the Kelly case, the court stated that "no officer of petitioner-union would be entitled to be present while the grand jury was in actual session and then considering or examining the records and documents which had been produced pursuant to the subpoena." (19 FRD, at p 269.) Further, the court stated that "[i]t would involve an unnecessary and unwarranted waste of time were the grand jury required to sit in session while accountants engaged to assist it examined each item — separating the wheat from the chaff and isolating matters which bear on the subject matter of the Grand Jury investigation." (19 FRD, at pp 269-270.)
I conclude that the Grand Jury should be permitted to retain the subpoenaed records for a reasonable time in furtherance of its lawful investigatory purposes. Further, such retention would serve to permit the Grand Jury, as it deems fit, to arrange for experts to assist it in analyzing the information contained in the records. The majority's decision to the contrary frustrates an important investigation into matters of grave public interest — the care and treatment of the elderly and the infirm in nursing homes.
For these reasons, I dissent and vote to affirm the order of the Appellate Division.
Chief Judge BREITEL and Judges GABRIELLI, JONES and WACHTLER concur with Judge FUCHSBERG; Judge JASEN dissents in part and votes to affirm in a separate opinion in which Judge COOKE concurs.
Order modified, without costs, in accordance with the opinion herein and, as so modified, affirmed.