Page 16: of Maritime Reporter Magazine (June 15, 2000)

Legal Beat

The federal court of appeals is divided on this issue. The Third and Ninth Cir- cuits have held that former officers of a corporation have a Fifth Amendment

Right to refuse to produce corporate documents in their possession after they terminate their employment. The feder- al court of appeals for the Eleventh Cir- cuit and District of Columbia district court has held that they do not.

In the case of In Re Three Grand Jury

Subpoenas Duces Tecum Dated January 29, 1999 v. Doe, 191 F.3d 173 (2nd Cir. 1999), federal prosecutors sought to enforce subpoenas for documents issued by a grand jury in the Southern

District of New York in connection with a criminal investigation of a corporation and its employees. The government alleged that the targets of the investiga- tion falsified the corporation's books and records and misapplied funds in the corporation's custody. In connection with this investigation, in June, Septem- ber and October of 1996. the grand jury issued subpoenas to the corporation for records related to the investigation. The

September subpoena was broad in scope and covered virtually all of the conduct ultimately investigated. The

October subpoena supplemented the

September subpoena and set forth two additional document requests. Two indi- viduals, Doe One and Doe Two were corporate officers when all three grand jury subpoenas were served on the cor- poration and during the time in which the corporation responded to the sub- poenas. In connection with the corpora-

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Pilgrim Nut on Rudder Stock Pilgrim Nut locations on on the MA/ "Lopez" ^^ typical rudder assembly. tion's compliance with the subpoena, an attorney for the corporation met with

Doe One and Doe Two separately and requested that they produce responsive documents. Both individuals produced some documents, but were alleged to have retained others. By July of 1997, both individuals had left the corpora- tion's employment. A third individual,

Doe Three resigned from the company in mid-July 1996, after the June sub- poena was issued and served. The cor- poration's attorney attempted to contact

Doe Three to inquire whether she had responsive documents, but was unable to do so.

In January of 1999, the government discovered that a former company employee had in her possession incrim- inating corporate records that were responsive to the 1996 subpoena but were not produced by the corporation.

The government then served a fourth grand jury subpoena on twelve former employees, including Doe One, Doe

Two and Doe Three requesting that they produce documents relevant to the investigation.

Nine of the twelve former employees produced documents responsive to the subpoena. Doe One, Doe Two and Doe

Three refused to produce any docu- ments and asserted a Fifth Amendment privilege against requiring them to pro- duce the documents. The government argued that the documents requested were corporate documents and that the three individuals remained corporate custodians even though they had left the corporation. The government requested that the district court order these indi- viduals to produce the documents. The district court denied the government's motion and held that the act of produc- tion by an individual who is no longer employed by the corporation is self- incriminating and, thus, not permitted by the Constitution. The government appealed.

The court of appeals affirmed the dis- trict court and applied the act of produc-

Legal Beat is a monthly feature in

Maritime Reporter & Engineering News authored by the top legal minds of

Dyer, Ellis & Joseph and covering the pressing legal matters faced by the international maritime community.

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