By: Christopher D. Carusone
While corporations and their officers/employees have long been the focus of federal grand jury investigations, Pennsylvania prosecutors targeting corporate crime using the powers of a county/multicounty investigating grand jury is of more recent origin. Because this effort appears to be picking up steam in Pennsylvania, below are five tips for representing corporations during Pennsylvania grand jury investigations.
1. Determine if the corporation is a target of the grand jury’s investigation.
Oftentimes, corporations that receive state grand jury subpoenas are not targets of the grand jury’s investigation but merely are in possession of records that are necessary to further the grand jury’s investigation of others. But there are those situations in which the opposite is true. Under the U.S. Justice Department policy, federal prosecutors are encouraged to notify grand jury targets of their status prior to the issuance of an Indictment to give them an opportunity to testify before the grand jury. This is not the case in Pennsylvania. However, in my experience, Pennsylvania prosecutors are typically willing to speak with corporate counsel about the corporation’s status, and counsel is encouraged to do so before expending large sums in defending against the subpoena, assuming that important privileges are not at issue.
2. Retain separate counsel for corporate officers/employees.
There is no issue that is more fraught with risk in Pennsylvania grand jury practice right now than representation of multiple clients by a single attorney/firm (multiple representation). Historically, representation of a corporation and its officers/employees by a single attorney/firm has been disfavored, even in the absence of a conflict of interest, on the grounds that multiple representation is likely to undermine grand jury secrecy and impede the grand jury’s investigation by giving counsel a global view of the investigation. However, this sensitivity has been greatly increased by the Disciplinary Board’s aggressive effort to discipline former Pennsylvania State University counsel Cynthia Baldwin for her representation of Penn State and several top officials in the Sandusky case. Corporate counsel would be wise to steer well clear of this danger zone and arrange for separate representation of corporate officers/employees who get called before the grand jury. While this approach tends to be more expensive for the company, it is possible (and advisable) to allow counsel for the company and its officers/employees to communicate under a joint-defense agreement, in the absence of a conflict of interest.
3. Obtain the notice of submission.
Under the Investigating Grand Jury Act, 42 Pa.C.S. Section 4541 et seq., grand jury investigations are initiated by the filing of a notice of submission with the grand jury supervising judge. Once the grand jury exercises its powers by issuing a subpoena, the recipient is entitled to obtain a copy of the notice in order to determine whether it is sufficient under 42 Pa.C.S. Section 4550. While the requirements for notices are minimal, obtaining a copy of the notice may contain valuable clues about the scope of the grand jury’s investigation when the corporation and/or its officers are in the crosshairs.
4. Don’t waste time challenging the empanelment of the grand jury.
When war breaks out between a corporation and Pennsylvania prosecutors, there is a tendency to take a scorched-earth approach, challenging not only the grand jury’s subpoena and the notice of submission but also the very existence of the grand jury. However, a Pennsylvania prosecutor’s right to petition for the empanelment of a county investigating grand jury is broad, requiring good faith allegations that the formation of the grand jury is necessary because of criminal activity that can best be investigated by using the resources of the grand jury. See 42 Pa.C.S. Section 4543 (county grand jury). The formation of a multicounty/statewide grand jury is slightly more onerous—requiring good faith allegations of organized crime or public corruption involving more than one county that cannot be adequately investigated by a county grand jury. See 42 Pa.C.S. Section 4543. However, the fact of the matter is that such challenges are difficult to mount because of grand jury secrecy restrictions, and therefore, usually cost much more than they are worth.
5. Beware of grand jury reports.
Even if the company and its officers/employees avoid prosecution, the grand jury has the power to issue a report that could have a devastating impact on the corporation’s/individual’s reputation. The Pennsylvania Supreme Court has recently vested those named in grand jury reports with the right to challenge adverse information in a proposed report that could negatively affect one’s reputation. However, this right has not been firmly established for artificial entities like corporations. While the court’s grand jury task force recently recommended that the General Assembly do away with grand jury reports, there is little political will to do so, particularly in the wake of the grand jury’s report on the Catholic Church. Therefore, counsel would be wise to keep this possibility in mind and act aggressively to preserve the right to challenge any report prior to its public issuance.
Christopher D. Carusone is a partner in the Harrisburg Office of Cohen Seglias Pallas Greenhall & Furman. He formerly served as the Chief Deputy Attorney General in charge of the statewide Investigating Grand Jury in the Pennsylvania Office of Attorney General.
Reprinted with permission from the December 17, 2019 edition of “The Legal Intelligencer” © 2019 ALM Media Properties, LLC. All rights reserved. Further duplication without permission is prohibited. For information, contact 877-257-3382, email@example.com or visit www.almreprints.com.