Unpublished Disposition, 928 F.2d 408 (9th Cir. 1985)

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U.S. Court of Appeals for the Ninth Circuit - 928 F.2d 408 (9th Cir. 1985)

In re GRAND JURY PROCEEDINGS.Mark A. THIERMAN, Witness-Appellant,v.UNITED STATES of America, Appellee.

No. 91-10102.

United States Court of Appeals, Ninth Circuit.

Submitted March 11, 1991.* Decided March 14, 1991.

Appeal from the United States District Court for the District of Arizona, No. Misc 90-158-RMB; Richard M. Bilby, District Judge, Presiding.

D. Ariz.


Before PREGERSON, ALARCON and WIGGINS, Circuit Judges.


Mark A. Thierman appeals the district court's order denying his application for injunction and motion to intervene and the district court's judgment holding him in civil contempt for refusing to testify before the grand jury. We affirm.1 


This case arises out of a criminal investigation conducted by the Food and Drug Administration. A grand jury issued a subpoena to Amino Discounters, Inc. ("Amino") requesting corporate records in connection with an investigation into the receipt, manufacture and distribution of unapproved and prescription drugs. The subpoena required Amino to designate a custodian of documents who is an officer or employee of the corporation.

Mark Thierman filed an application for injunction and a motion to intervene in the grand jury proceedings. He alleged that production of the records would violate his personal Fifth Amendment privilege against self-incrimination. After the district court denied the motion to intervene, Thierman appeared before the grand jury as Amino's custodian of records, but refused to answer questions or produce the subpoenaed documents. He testified that he was essentially the only witness with sufficient knowledge of the corporation to produce the documents sought by the subpoena.

The government moved to enforce the subpoena. Thierman and Amino subsequently filed a notice of appeal of the district court's order denying the motion to intervene. They contended that this filing divested the court of jurisdiction to hear the government's motion to enforce the subpoena. They also moved for a stay pending appeal.

At a hearing on the motions, the court noted that the notice of appeal appeared to have been filed for purposes of delay. The court subsequently issued an order denying the motion for a stay and holding Thierman in civil contempt. The court ordered Thierman imprisoned, but stayed the order pending appeal.


Thierman contends that the filing of the notice of appeal from the order denying his application for injunction and motion to intervene divested the district court of jurisdiction to hold him in contempt. This contention lacks merit.

We find, and appellant does not argue otherwise, that the application for injunction and motion to intervene are properly characterized as a motion to quash the subpoena. An order denying a motion to quash a grand jury subpoena duces tecum is ordinarily not appealable. In re Grand Jury Subpoena Dated June 5, 1985 (Doe), 825 F.2d 231, 236 (9th Cir. 1987). The general rule is that a party not wishing to comply with a subpoena must risk contempt before it may appeal the issue. In re National Mortgage Equity Corporation Mortgage Pool Certificates Litigation, 821 F.2d 1422, 1423 (9th Cir. 1987).

Thierman argues that this case falls into the exception to the rule for "that limited class of cases where denial of immediate review would render impossible any review whatsoever of an individual's claim." United States v. Ryan, 402 U.S. 530, 533 (1971). Specifically, he relies on In re Grand Jury Proceedings (Manges), 745 F.2d 1250 (9th Cir. 1984), in which a subpoena was directed to the bookkeeper of the appellant's sole proprietorship. This court found that the usual route of refusing to obey the subpoena and litigating its validity in contempt proceedings was not open to Manges because the subpoena was not directed to him.

The instant situation is not analogous. Here, Thierman appeared before the grand jury as the custodian of corporate records. Moreover, he testified that he was essentially the only witness with sufficient knowledge of the corporation to produce the documents sought by the subpoena. Even though the subpoena was issued to Amino and not to Thierman personally, he can challenge the denial of the motion to quash in this appeal. Therefore, this case does not fall within the exception for cases where review is impossible.

Where it is clear to a district court that a notice of appeal is deficient because the order is not final and appealable, it may disregard the purported notice of appeal and proceed with the case, knowing that it has not been deprived of jurisdiction. United States v. Garner, 663 F.2d 834, 837 (9th Cir. 1981), cert. denied, 456 U.S. 905 (1982). Because the order denying Thierman's motion to quash is not a final, appealable order, the district court had jurisdiction to hold Thierman in contempt.

The district court's order holding Thierman in civil contempt under 28 U.S.C. § 1826 is reviewed for an abuse of discretion. See In re Grand Jury Proceedings (Doe), 801 F.2d 1164, 1167 (9th Cir. 1986) (per curiam).

Thierman contends that he should be entitled to invoke personally the Fifth Amendment privilege against self-incrimination as custodian of records for Amino. He argues that Braswell v. United States, 487 U.S. 99 (1988), does not apply to this case because the Food and Drug Act has been held to impose vicarious criminal liability on corporate officers or any other person who might exercise responsibility for the conduct of a business. See United States v. Park, 421 U.S. 658 (1975). He also suggests that he should be treated as a sole proprietor because of the possibility that he may be held responsible for the acts of the corporation. We disagree.

In Braswell, the Supreme Court unequivocally held that a custodian of corporate records may not resist a subpoena for such records on the ground that the act of production would personally incriminate him in violation of the Fifth Amendment. Thierman's assertion that Braswell does not control because he is being investigated for violations of the Food and Drug Act is unavailing. First, the mere fact that the corporate custodian produces the records does not expose him to criminal liability. Because the custodian acts as a representative, the act is deemed one of the corporation and not the individual. Braswell, 487 U.S. at 118. In Park, the defendant was convicted only upon a showing that, as president of the corporation, he was responsible for the acts of the corporation. Second, there is no basis for distinguishing between different types of investigations. To do so would create an unmanageable situation because until the grand jury has completed its investigation, the defendants and statutory violations to be charged are unknown.

The Supreme Court left open the question whether the agency rationale supports compelling a custodian to produce corporate records when the custodian is able to establish, by showing for example that he is the sole employee and officer of the corporation, that the jury would inevitably conclude that he produced the records. See 487 U.S. at 118 n. 11. Thierman contends that he falls within this exception and, therefore, Braswell does not apply. Thierman is not, however, the only employee of Amino. He relies on the fact that none of the other people had any familiarity with the corporate records. But Braswell contemplated this scenario when it recognized that "if the defendant held a prominent position within the corporation that produced the records, the jury may, just as it would had someone else produced the documents, reasonably infer that he had possession of the documents or knowledge of their contents." Id. at 118.

As the Supreme Court noted in Braswell, recognizing a Fifth Amendment privilege on behalf of the records custodians of collective entities would have a detrimental impact on the government's efforts to prosecute white-collar crime. We hold that Braswell controls the instant case and that the district court did not abuse its discretion in holding Thierman in civil contempt.


The district court judgment of contempt is AFFIRMED.


Appellant's request for oral argument is denied. The panel unanimously agrees that this case is appropriate for submission without oral argument pursuant to Fed. R. App. P. 34(a) and Ninth Cir.R. 34-4


This disposition is not appropriate for publication and may not be cited to or by the courts of this circuit except as provided by Ninth Cir.R. 36-3


There are a number of procedural matters pending. The court has reviewed appellant's response to the February 28, 1991 order to show cause and has determined that sanctions will not be imposed. Appellant's motion for leave to file a late opening brief is denied as unnecessary. Appellee's motion to seal is granted in part. The pleadings submitted under seal shall remain under seal