In Re: Grand Jury v. ( 2011 )

  •                                            PRECEDENTIAL
                   FOR THE THIRD CIRCUIT
                            No. 10-3527
                           In Re: Grand Jury
            On Appeal from the United States District Court
                 for the Middle District of Pennsylvania
                    District Court No. 3-10-mc-00235
            District Judge: The Honorable A. Richard Caputo
                       Argued January 26, 2011
        Before: McKEE, Chief Judge, and SMITH, Circuit Judges
                   and STEARNS, District Judge*
                      (Filed: February 16, 2011 )
      The Honorable Richard G. Stearns, United States District Judge
    for the District of Massachusetts, sitting by designation.
    SMITH, Circuit Judge.
           The appellant is a target of a grand jury investigation.
    In connection with the investigation, federal agents executed
    a warrant to search the appellant‘s property and seized
    numerous documents. To accommodate the appellant, the
    agents agreed to furnish him with copies of all seized
    documents. Unsatisfied, the appellant moved for return of the
    documents, as well as any copies, on the ground that the
    search and seizure violated the Fourth Amendment. The
    District Court denied the motion, and this appeal followed.
    As explained below, we lack jurisdiction to review the denial
    and will dismiss the appeal.
           During an investigation by a grand jury sitting in
    Scranton, Pennsylvania, federal agents obtained a warrant to
    search the home and offices of the appellant. The warrant
    affidavit is sealed, but the government has indicated that the
    appellant is being investigated for federal-program theft,
    extortion, fraud, and money laundering. The warrant was
    executed on June 18, 2010; agents seized numerous
    documents and made copies of the appellant‘s hard drives
    (while leaving the computers undisturbed). To mitigate any
    inconvenience caused by the seizure, the agents agreed to
    provide the appellant with copies of the seized documents.
           Unappeased, the appellant filed a motion under
    Federal Rule of Criminal Procedure 41(g) in the Middle
    District of Pennsylvania.1 The motion challenged the validity
    of the search and seizure, and requested (1) that the warrant
    affidavit be unsealed, (2) that all seized evidence be returned
    to the appellant, (3) that any copies of the evidence be
    returned, and (4) that the government be ordered to cease
    inspection of the evidence pending a ruling on the motion.
    Importantly, the motion did not assert that the government‘s
    retention of the evidence was causing the appellant to
    experience hardship. It claimed, instead, that the search and
    seizure ran afoul of the Fourth Amendment, and that the
    government thus had no business using the seized evidence
    against the appellant in criminal proceedings.
          The government filed two responses to the motion: one
    was a regular response and the other a supplemental ex parte
    response. The regular response argued that the appellant‘s
    motion was not a motion for the equitable return of property
    (which is contemplated by Rule 41(g)), but was, instead, a
    premature motion to suppress evidence. The response also
       Rule 41(g) (formerly Rule 41(e)) provides that a ―person
    aggrieved by an unlawful search and seizure of property or by the
    deprivation of property may move for the property‘s return.‖ Fed.
    R. Crim. P. 41(g). ―If [the court] grants the motion, [it] must
    return the property to the movant, but may impose reasonable
    conditions to protect access to the property and its use in later
    proceedings.‖ Id.
    defended the search and seizure against constitutional attack,
    stressing that they were conducted pursuant to a duly issued
           The supplemental ex parte response, to which the
    sealed warrant affidavit was appended, explained that the
    government had a strong interest in maintaining the warrant
    affidavit under seal. According to the government, unsealing
    the affidavit would cause the identities of confidential
    informants to be revealed, expose individuals and businesses
    to public obloquy though charges against them may never be
    brought, cause the release of confidential grand jury and tax
    information, and ―result in disclosing to [the appellant], prior
    to the initiation of charges, the precise areas of inquiry into
    which the investigation was looking, thereby facilitating [the
    appellant‘s] and other subjects‘ obstruction of the
    investigation.‖ Gov‘t Br. at 16.
           By order dated August 17, 2010, the District Court
    denied the appellant‘s motion. It concluded that the appellant
    was not entitled to return of the seized property or unsealing
    of the warrant affidavit. This appeal followed.
            The appellant asserts that 28 U.S.C. § 1291 gives this
    Court jurisdiction to review the order denying the Rule 41(g)
    motion. Section 1291 vests the courts of appeals with
    jurisdiction over ―appeals from all final decisions of the
    district courts of the United States.‖ Both sides agree that the
    question whether the District Court‘s order is final and
    appealable is governed by the Supreme Court‘s decision in Di
    Bella v. United States, 
    369 U.S. 121
     (1962). Under Di Bella,
    denial of a pre-indictment Rule 41(g) motion is not final and
    appealable if the motion was in effect for the suppression of
    evidence. See id. at 131–32. ―Such a ruling is considered to
    be merely a step in the criminal process, and any rights
    involved are adequately protected in subsequent trial
    proceedings.‖ United States v. Premises Known as 608
    Taylor Ave., 
    584 F.2d 1297
    , 1300 (3d Cir. 1978) (citing Di
    Bella, 369 U.S. at 121). Di Bella carved out an exception for
    orders denying motions that are truly independent of
    anticipated criminal proceedings. Notably, however, ―[o]nly
    if the motion [1] is solely for return of property and [2] is in
    no way tied to a criminal prosecution in esse against the
    movant can the proceedings be regarded as independent.‖
    369 U.S. at 131–32. Failing to observe these limitations, the
    Court explained, would undermine the policies against
    piecemeal appellate review and disrupting ongoing criminal
    prosecutions that underlie § 1291‘s final-judgment
    requirement. See id. at 124, 126–29.
           We have previously had occasion to apply Di Bella in
    circumstances similar to those presented here. In In re Grand
    Jury Proceedings (FMC Corp.), 
    604 F.2d 806
     (3d Cir. 1979),
    for example, a corporation produced documents in response
    to a subpoena duces tecum issued by a grand jury. After
    handing over the documents, the corporation moved for their
    return, alleging that they had been procured through fraud.
    See id. at 806–07 & n.1. The District Court denied the
    motion, and the corporation appealed. We concluded that the
    District Court‘s order was not appealable:
          In the grand jury context, nongovernment
          appeals of technically nonfinal decisions have
          been closely limited to orders denying motions
          for the return of property. But as we [have]
          observed . . . , the question whether a motion is
          for the return of property or whether it is for the
          suppression       of    evidence,    and      thus
          nonappealable, must be resolved by examining
          the essential character of the proceedings in the
          district court. [Here, i]t is not disputed that
          although the grand jury proceedings were at a
          standstill for a time, they have been resumed,
          and the conduct of [the corporation] is still the
          subject of inquiry. There is obviously the
          possibility of a criminal prosecution against the
          corporation and it cannot be said that the motion
          is in no way tied to a potential indictment. This
          is not an independent proceeding but merely a
          step in the criminal prosecution. Accordingly,
          the appeal will be dismissed for lack of
    Id. at 807 (internal citations and quotation marks omitted). In
    other words, Di Bella‘s second requirement—that the motion
    be unrelated to an existing criminal prosecution against the
    movant—was not met because the corporation was the
    subject of an ongoing grand jury investigation. See also
    United States v. Pantelidis, 
    335 F.3d 226
    , 232 (3d Cir. 2003)
    (noting that, ―[a]s a general principle, ‗an order denying
    return of property would not be final and appealable if the
    government were holding the property as evidence in a
    potential criminal prosecution‘‖) (quoting Gov’t of the V.I. v.
    903 F.2d 267
    , 272 (3d Cir. 1990)).
           Our decision in United States v. Furina, 
    707 F.2d 82
    (3d Cir. 1983), is also instructive. There, during a grand jury
    investigation, federal agents obtained and executed warrants
    to search the appellants‘ residences; the agents seized various
    documents for presentation to the grand jury. Claiming that
    the search and seizure were invalid, the appellants filed a
    motion for return of the documents. The District Court
    denied the motion, and an appeal followed.
            We dismissed the appeal. In doing so, we found it
    ―very clear‖ that the appellants‘ motion sought the
    suppression of evidence, not simply the return of property.
    Id. at 84. Indeed, the motion had been filed pursuant to what
    is now Rule 41(g), and, at the time, granting such a motion
    automatically resulted in suppression.2 That the appellants‘
    motion had sought not just the return of property but also the
    suppression of evidence was ―enough under Di Bella to
    require that . . . the appeal be dismissed.‖ Furina, 707 F.2d at
    84. We also stated that, ―even though the appellants [we]re
    not under arrest or indictment,‖ a prosecution against them
      Before 1989, the Rule provided: ―A person aggrieved by an
    unlawful search and seizure may move the district court . . . for the
    return of the property . . . . If the motion is granted the property
    shall be restored and it shall not be admissible in evidence at any
    hearing or trial.‖ Furina, 707 F.2d at 82 n.1 (quoting the Rule)
    (emphasis added). The automatic-suppression provision was
    deleted from the Rule in 1989. See Fed. R. Crim. P. 41 advisory
    committee‘s note.
    was nevertheless in esse for purposes of Di Bella, because
    they were subjects of an ongoing grand jury investigation. Id.
    (citing In re Grand Jury Proceedings, 604 F.2d at 806). We
    therefore held that the appellants did ―not satisfy the [second]
    requirement of Di Bella that the motion [be] in no way tied to
    a criminal prosecution in esse against the[m].‖ Id. at 84.
           Turning now to the case before us, we think it clear
    that the order denying the appellant‘s Rule 41(g) motion is
    not final and appealable. We arrive at this conclusion for two
    independent reasons. First, the motion plainly sought not just
    the equitable return of property, but also the suppression of
    evidence—i.e., to prevent the government from using the
    evidence in criminal proceedings. This is evidenced by the
    motion‘s requests for any copies of the seized documents and
    for an order directing the government to cease inspecting the
    evidence pending a ruling. See In re Search Warrant
    810 F.2d 67
    , 70 (3d Cir. 1987) (noting that where
    the government has retained copies of seized documents and
    returned the originals to the movant, a motion for return
    implicitly seeks the suppression of evidence, not just the
    return of property); Meister v. United States, 
    397 F.2d 268
    269 (3d Cir. 1968) (same). Similarly, if the appellant really
    sought just the return of property—and not also
    suppression—then the government‘s offer to furnish him with
    copies of the seized evidence should have sufficed (after all,
    the appellant has not explained why he needs the originals, as
    opposed to copies, of the seized evidence). See Matter of 949
    Erie St., 
    824 F.2d 538
    , 541 (7th Cir. 1987) (―[W]here the
    government has offered to provide copies and the movants
    have not even attempted to show that copies are inadequate . .
    . , we cannot find that the motion is directed primarily toward
    the return of the seized property [under Di Bella].‖). Thus,
    the appellant‘s motion sought both the return of property and
    the suppression of evidence; its denial is therefore not
    appealable. See Di Bella, 369 U.S. at 131–32 (denial of
    motion appealable only when ―motion [wa]s solely for return
    of property‖) (emphasis added); Furina, 707 F.2d at 84.
           To be sure, the appellant points out that prior to 1989,
    granting a Rule 41(g) motion automatically resulted in
    suppression of the restored evidence. See Edwards, 903 F.2d
    at 272–73 & nn.1–3 (quoting and discussing the pre-1989
    version of the Rule). Because suppression no longer is an
    automatic consequence of granting a Rule 41(g) motion, the
    appellant reasons that his motion should not be construed as
    seeking to suppress evidence. The appellant misapprehends
    the effect of the 1989 amendment. While it is true that a Rule
    41(g) motion no longer necessarily seeks suppression, this
    hardly means that it is impossible for such a motion to seek
    suppression. Although the appellant‘s motion could have
    sought solely the return of property, in fact it did not: it
    sought both the return of property and the suppression of
    evidence. Accordingly, the order denying the motion is not
    final and appealable under Di Bella.3
      Even before 1989, parties could file non-Rule 41(g) motions for
    the equitable return of property, see Clifford A. Godiner, Note,
    Interlocutory Appeal of Preindictment Suppression Motions Under
    Rule 41(e), 
    84 Mich. L
    . Rev. 1755, 1768–69 (1986), but appeals of
    orders denying such motions would be dismissed if, upon
            Second, the property was seized in connection with an
    ongoing grand jury investigation of which the appellant is a
    target. Given the clear connection between the motion and a
    criminal prosecution (albeit an incipient one), the appellant
    ―do[es] not satisfy the [second] requirement of Di Bella that
    the motion [be] in no way tied to a criminal prosecution in
    esse against [him].‖ Furina, 707 F.2d at 84; see In re Grand
    Jury Proceedings, 604 F.2d at 806–07 (criminal prosecution
    is in esse when there is an ongoing grand jury investigation);
    Smith v. United States, 
    377 F.2d 739
    , 742 (3d Cir. 1967)
    (same); see also Di Bella, 369 U.S. at 131 (―Presentations
    before . . . a grand jury . . . are parts of the federal
    prosecutorial system leading to a criminal trial. Orders
    granting or denying suppression in the wake of such
    proceedings are truly interlocutory, for the criminal trial is
    then fairly in train.‖); cf. Premises Known as 608 Taylor Ave.,
    584 F.2d at 1300–01 (Di Bella‘s second requirement met
    where no criminal proceeding ―of any kind‖ was pending
    against the movant at the time the motion for return of
    property was filed). We conclude, then, that the order
    denying the appellant‘s Rule 41(g) motion is not final and
    examination, they sought not just the return of property but also
    suppression, see In re Grand Jury Proceedings, 604 F.2d at 806–
    07; Premises Known as 608 Taylor Ave., 584 F.2d at 1299–1301.
      An attorney representing associates of the appellant appeared at
    oral argument, and asserted that property belonging to his clients
    had been seized during the search of the appellant‘s offices. The
    attorney argued that, even if the order denying the Rule 41(g)
    motion is not final and appealable as to the appellant, it is
            One final point deserves mention. In addition to the
    return and suppression of evidence, the appellant‘s motion
    requested that the warrant affidavit be unsealed. But
    unsealing was requested merely to assist the appellant in
    arguing for return and suppression. Thus, the District Court‘s
    refusal to unseal the affidavit—like its decision denying the
    return and suppression of evidence—is not appealable. See
    Furina, 707 F.2d at 84 (―Appellants sought disclosure of the
    [sealed warrant] affidavit in order to secure evidence for the
    Rule 41[(g)] hearing. The lack of finality which attaches to
    the order denying return and suppression necessarily applies
    to preliminary matters as well.‖).
           For these reasons, we will dismiss the appeal.
    appealable as to his clients because—unlike the appellant—they
    are not under criminal investigation. Because this contention was
    raised for the first time at oral argument, we will not consider it.
    See United States v. Voigt, 
    89 F.3d 1050
    , 1064 n.4 (3d Cir. 1996)
    (an argument brought up for the first time at oral argument is
    waived). Of course, nothing prevents the individuals from seeking
    relief in the District Court in the first instance.