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United States v. Shelley

United States District Court, W.D. Oklahoma

August 11, 2017

UNITED STATES OF AMERICA, Plaintiff,
v.
JOHN ARNOLD SHELLEY, Defendant.

          ORDER

          TIMOTHY D. DeGIUSTI, UNITED STATES DISTRICT JUDGE

         Before the Court is the United States' Motion to Quash Defendant's Rule 17(c) Subpoenas [Doc. No. 32] and Defendant's Motion to Compel Brady/Giglio Materials [Doc. No. 41]. The parties have filed their respective responses and replies in opposition to, and in support of, the aforementioned motions [Doc. Nos. 39, 44, 48, 49]. The matter is fully briefed and at issue.

         BACKGROUND[1]

         Defendant was charged with several counts of, inter alia, bank fraud, conspiracy to commit bank fraud, and money laundering. A dispute arose between the parties regarding whether certain sub-agencies of the Federal Deposit Insurance Corporation (“FDIC”) could be considered part of the government's “prosecution team” for purposes of determining the extent of its obligation to identify and produce exculpatory material under Brady v. Maryland, 373 U.S. 83 (1963) and Giglio v. United States, 405 U.S. 150 (1972). Specifically, at issue was whether the FDIC's Division of Risk Management (“FDIC-RMS”), the Office of Inspector General -Office of Investigations (“FDIC-OIG”), and the FDIC in its capacity as receiver (“FDIC-R”) could be considered part of the prosecution for their actions taken in response to the collapse of the Bank of Union, where Defendant was President and Chairman of the Board. See Order, July 26, 2017 at 3-5 [Doc. No. 51] (“Order”). After review of the parties' submissions and hearing oral argument, the Court concluded that, with the exception of the FDIC-OIG, the FDIC was not otherwise part of the “prosecution team” for Brady/Giglio purposes. See Order at 14.

         Additional discovery issues have arisen from the parties' “prosecution team” dispute. First, the government has moved to quash two subpoenas Defendant has served on the FDIC-R and FDIC-RMS on the grounds that Defendant has failed to make the requisite showing under Rule 17(c), Federal Rules of Criminal Procedure [Doc. No. 32]. In addition, Defendant has filed a Motion to Compel [Doc. No. 41], which asks the Court to compel the government “to identify and produce any and all documents subject to disclosure pursuant to Brady/Giglio or that are otherwise exculpatory.” Mot. to Compel at 1. The Court addresses Defendant's Motion first.

         DISCUSSION

         I. Defendant's Motion to Compel

         The Court has held the FDIC-RMS and FDIC-R are not part of the “prosecution team” for Brady/Giglio disclosure purposes. Accordingly, to the extent Defendant asks the Court to compel the government to identify and produce any potential Brady/Giglio material within these agencies' possession, [2] the Motion is denied. To the extent Defendant seeks a more general order compelling the government to identify and produce “any and all documents subject to disclosure pursuant to Brady/Giglio, ” Mot. at 1, that request is also denied. “The Brady rule is not a rule of pretrial discovery[.]” United States v. Gray, 648 F.3d 562, 567 (7th Cir. 2011); United States v. Weld, No. CR-08-83 PJH, 2009 WL 901871, at *2 (N.D. Cal. Apr. 1, 2009) (“[D]efendants cannot use Brady simply to search for Brady materials. Brady is not a pretrial discovery tool.”) (citations omitted).

         As previously noted by the Court, this is a complex, document-intensive case with document production expected to number in the millions of pages. To that end, Brady does not require the government to review all documents that have been produced to Defendant for purposes of locating and identifying Brady/Giglio material:

To charge prosecutors with knowledge of exculpatory evidence buried in the computer databases of institutions that collect and store vast amounts of digitized data would be an unreasonable extension of the Brady rule. The courts, rightly in our view, have refused to make it. The government is not “obliged to sift fastidiously” through millions of pages (whether paper or electronic). It is “under no duty to direct a defendant to exculpatory evidence [of which it is unaware] within a larger mass of disclosed evidence.”

Gray, 648 F.3d at 567 (citing United States v. Warshak, 631 F.3d 266, 297 (6th Cir. 2010); United States v. Skilling, 554 F.3d 529, 576 (5th Cir. 2009), vacated in part on other grounds, ___ U.S. ___, 130 S.Ct. 2896, 177 L.Ed.2d 619 (2010); United States v. Joseph, 996 F.2d 36, 37, 39-41 (3d Cir. 1993) (paraphrasing in original)).Of course, the government does have a duty to identify and disclose exculpatory evidence of which it becomes aware during its review of such documents.[3] Accordingly, the Court finds Defendant's Motion to Compel should be denied.

         II. The Government's Motion to Quash

         In the course of discovery, Defendant issued subpoenas to the FDIC-RMS and FDIC-R [Doc. Nos. 32-3, 32-4]. The subpoenas seek documents relating to, among other things, the investigations of Defendant, the Bank of Union's failure, and other defendants to this action. The government moves to quash or modify these subpoenas on the grounds they (1) significantly overlap with joint trial subpoenas agreed to by the parties or (2) exceed the bounds of Rule 17(c), Federal Rules of Criminal Procedure. Mot. to Quash at 4. Alternatively, the government argues that if the subpoenas are allowed to proceed in their current form, any responsive documents should be produced to the Court. Id.[4]

         A defendant seeking to enforce a subpoena duces tecum pursuant to Rule 17(c) must show that (1) the requested documents are evidentiary and relevant; (2) the defendant cannot, even with due diligence, procure them; (3) the defendant cannot adequately prepare for trial without obtaining their production in advance; and (4) the request was made in good faith and is not a fishing expedition. United States v. Nixon, 418 U.S. 683, 699-700 (1974); United States v. Morris, 287 F.3d 985, 991 (10th Cir. 2002). In order to meet this burden, the defendant must make a preliminary showing that the information sought is relevant, admissible, and specific. Nixon, 418 U.S. at 700; Morris, 287 F.3d at 991. Courts in this circuit have applied this standard[5] to subpoenas directed to third parties. See, e.g., United States v. Wittig, 250 F.R.D. 548, 551-52 (D. Kan. 2008) (“The Court agrees with the reasoning of other courts that have applied Nixon to assess the validity of Rule 17(c) subpoenas issued to third parties, and finds no compelling reason to employ a lesser standard in this case.”); United States v. Leavitt, No. 2:11-cr-501, 2016 WL 503060, at *2 (D. Utah Feb. 8, 2016) (holding Nixon standard applied to subpoena ...


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