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Court enjoins disclosure

Even if the government erroneously disclosed grand jury materials to nongovernmental personnel, Rule 6(e) forbids further disclosure to another party, the Seventh Circuit held on Oct. 21.

Joseph Jaskolski, a private investigator, assisted federal prosecutors in an investigation that led to the indictment of Rick Daniels and three of his relatives for insurance fraud. After the defendants were acquitted, they sued Jaskolski and his employer, the National Insurance Crime Bureau, in Indiana state court, charging them with the tort of malicious prosecution.

During discovery, Daniels sought grand jury materials disclosed to Jaskolski by the federal prosecutors. Jaskolski contended the materials were protected from disclosure by Fed. R. Crim. P. 6(e). The state judge sided with Daniels and ordered Jaskolski to hand over everything Daniels wanted.

Jaskolski filed suit in federal court seeking an injunction. District Judge Rudy Lozano enjoined Daniels from pursuing discovery in state court, holding that they must turn to District Judge James T. Moody, who supervised the federal grand jury.

Daniels appealed, but the Seventh Circuit affirmed in a decision by Judge Frank H. Easterbrook.

The parties disputed whether Jaskolski played the role of “government personnel” in the federal prosecution. If he did, then Rule 6(e)(2)(B) would prohibit disclosure to Daniels. “Government personnel” is defined to include a person “that an attorney for the government considers necessary to assist in performing that attorney’s duty to enforce federal criminal law.” The circuits are split on whether investigators from the Insurance Crime Bureau are governmental personnel.

Before addressing Jaskolski’s role in the prosecution, the court considered whether the action was properly filed in federal court. The parties disputed whether jurisdiction was supplied by 28 U.S.C. 1331, but the court held jurisdiction was supplied, instead, by 18 U.S.C. 3231, the statute providing jurisdiction over federal criminal prosecutions.

The court concluded, “Questions about the propriety of releasing grand jury materials for use in other litigation (such as the suit Daniels had filed) come within the federal criminal tribunal’s ancillary jurisdiction. So a dispute of this kind properly may come to federal court — but only because of the federal grand jury’s role, not (as the parties supposed) because federal courts resolve all disagreements about the application of federal law (cites omitted).”

Emphasizing the word, “may,” however, the court found that jurisdiction could be limited by other statutes, such as the Anti-Injunction Act, 28 U.S.C. 2283. Because Daniels did not address the statute, however, the court found any argument based on it to be forfeited. The court also found that Daniels forfeited any objections based on issue preclusion.

Turning to the issue framed by the parties — whether Jaskolski acted as “government personnel” — the court determined it need not decide the issue, because disclosure is barred by Rule 6(e), in any event.

What the court held

Case: Jaskolski v. Daniels, Nos. 04-3622 & 04-3623.

Issue: Can a federal court enjoin a state court order that a litigant disclose federal grand jury materials?

Holding: Yes. Even if the materials should not have been disclosed to the litigant, the court can enjoin further disclosure.

The court wrote, “A reader who expects us to turn at last to the question whether Jaskolski acted as ‘government personnel’ in the investigation will be disappointed, for that issue turns out to be non-dispositive An affirmative answer would resolve the dispute in Jaskolski’s favor — but a negative answer does not lead to victory for Daniels, so we leave the question for another case in which the resolution matters. Recall the language of Rule 6(e)(2)(B): ‘[T]he following persons must not disclose a matter occurring before the grand jury: . . . (vii) a person to whom disclosure is made under Rule 6(e)(3)(A)(ii)’. Disclosure was made to Jaskolski under Rule 6(e)(3)(A)(ii). Whether the disclosure was made ‘properly’ or ‘correctly’ is neither here nor there. Rule 6(e)(2)(B) asks whether disclosure has been ‘made under’ a particular subsection, not whether the subsection was applied correctly. This protects the prosecutor’s (and the witnesses’) reliance interests and prevents a blunder from opening the investigatory files.”

Daniels argued it was “absurd” to read Rule 6(e)(2)(B) to bypass the question whether a given person should have received the grand jury materials now in his possession.

Rejecting the argument, the court began, “[Daniels] invokes the doctrine that judges avoid giving statutes absurd readings, but he misunderstands its scope. This doctrine does not license courts to improve statutes (or rules) substantively, so that their outcomes accord more closely with judicial beliefs about how matters ought to be resolved.”

What Daniels called “absurd” results, the court called, “nothing but the rough cuts inevitable with decision by rule.” The court added, “To observe that error costs exist is not to justify use of a standard — first because the choice is for political actors, and second because we cannot be sure that Rule 6(e)(2)(B) as written produces more costs than would a judicial attempt to assess the prosecutor’s good faith and the assistant’s ‘government personnel’ status one case at a time.”

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Case Analysis

Before concluding, the court engaged in a lengthy discussion on the difference between “linguistic” absurdity and “substantive” absurdity, as follows: “the modern decisions draw a line between poor exposition and benighted substantive choice; the latter is left alone, because what judges deem a ‘correction’ or ‘fix’ is from another perspective a deliberate interference with the legislative power to choose what makes for a good rule. Admit the propriety of ‘fixing mistakes’ and you allow a general power to identify ‘mistakes,’ which means a privilege to make the real substantive decision. Even when the statute invites modification, as the ‘context clause’ in some definitions does, judges are limited to considering the linguistic context rather than trying to ‘improve’ the statute’s substantive effect.”

After reviewing a number of U.S. Supreme Court decisions that interpreted statutes as written, despite the harshness of the results, the court concluded, “Rule 6(e)(2)(B) makes sense as written. It parses without the assistance of a red pencil, and judges are not authorized to add words (such as ‘properly‘) that would change the Rule’s substantive effect.”

Accordingly, the court affirmed.

Click here for Case Analysis.

David Ziemer can be reached by email.

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