The decision will be valuable to litigants in two situations: specifically, when a party seeks federal grand jury testimony for a state court proceeding; and generally, whenever an opposing party argues that a statute, as written, produces absurd results.
In the first scenario, the case provides persuasive authority for opposing the discovery demand in state court. Failing that, it provides authority to enjoin the discovery in federal court.
Once there, however, it will not be sufficient to merely cite this case to obtain the injunction. The court noted, sua sponte, two issues that could result in denial of the injunction, should the party seeking discovery not forfeit those issues, as Daniels did.
The Anti-Injunction Act, 28 U.S.C. 2283 provides, A court of the United States may not grant an injunction to stay proceedings in a State court except as expressly authorized by Act of Congress, or where necessary in aid of its jurisdiction, or to protect or effectuate its judgments.
Nationwide, the most similar case is from the Third Circuit, In re Grand Jury Proceedings, 654 F.2d 268, 269-270 (3d Cir. 1981), in which a federal district court ordered a state court judge to meet with the U.S. attorney to determine which, if any, U.S. grand jury materials could be relevant and be released to a criminal case pending in the state judges court. The Third Circuit affirmed the order, citing the All Writs Act, 28 U.S.C. 1651(a) for authority.
The issue is not precisely the same as in the case at bar, but it is the best discussion available in the case law on the conflict between federal grand jury secrecy and state court discovery demands.
A party seeking to avoid disclosure of federal grand jury materials to a state court will also have to contend with the doctrine of issue preclusion. The court in the case at bar noted that the state court had already decided the very issue presented to the federal district court, and pursuant to 28 U.S.C. 1738, the decision is entitled to the same preclusive effect in federal court that it would have in state court.
Wisconsin state law would govern whether the doctrine applies in a future case, notwithstanding federal jurisdiction. Marrese v. American Academy of Orthopaedic Surgeons, 470 U.S. 373 (1985).
One factor in determining whether to apply the doctrine under Wisconsin law is whether matters of public policy or individual circumstances would render the application of issue preclusion fundamentally unfair, Michelle T. v. Crozier, 173 Wis.2d 681, 688-689, 495 N.W.2d 327 (1993).
Because an order that federal grand jury materials be produced does not affect just the parties to the state court action, but the federal court itself and the U.S. attorney, a federal district court would seem to be well within its discretion in finding that public policy warrants not applying the doctrine.
Cases involving state courts seeking federal grand jury materials should be few and far between, however. Where this case will have a far greater impact is in statutory interpretation, regardless of the nature of the case.
The Seventh Circuits dichotomy between linguistic and substantive absurdity is a first, and not just for the Seventh Circuit. The U.S. Supreme Court has never employed such a classification either, at least not using those terms.
The rule of statutory construction that a statute not be interpreted to produce absurd results is invoked often, but is infrequently found applicable.
The Seventh Circuit provides a list of examples in which the U.S. Supreme Court has interpreted statutes to produce admittedly harsh results, but found no absurdity: Rowland v. California Mens Colony, 506 U.S. 194 (1993); Dodd v. U.S., 125 S.Ct. 2478 (2005); U.S. v. Locke, 471 U.S. 84 (1985); Exxon Mobil Corp. v. Allapattah Services, Inc., 125 S.Ct. 2611 (2005); Guidry v. Sheet Metal Workers National Pension Fund, 493 U.S. 365 (1990); and Lamie v. U.S. Trustee, 540 U.S. 526 (2004).
The case at bar, and the U.S. Supreme Court cases its cites, will provide a formidable bulwark in future cases against any argument that a particular statute should be interpreted contrary to its plain language in order to serve some value the statute was intended to promote.
Discussing Guidry, the Seventh Circuit wrote as follows: Whatever Congress might have done, it had not done. To the extent that the Justices referred to purposes at all, they conceived them concretely rather than abstractly. What is the purpose of an anti-alienation clause? It is to prevent appeals to the equities case by case. In other words the Justices did not ask, What is the value served by this particular rule? Instead they asked, What is the value served by rules in general? This led the Court to enforce the rule and to rebuff efforts at reconstruction. Guidry represents todays interpretive norm (emphases in original).
Against such language, any party seeking a particular statutory construction on the grounds that the alternative is absurd has a steep hill to climb. Unless he can employ the new linguistic/substantive dichotomy, and fit the purported absurdity into the linguistic category, he has little hope of preva
The courts decision does not change the standard for what is an absurd interpretation of a statute and what is not, but it does change the terminology.
– David Ziemer
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David Ziemer can be reached by email.