United States v. Sears, Roebuck and Company, Inc.

719 F.2d 1386 UNITED STATES of America, Plaintiff-Appellant, v. SEARS, ROEBUCK AND COMPANY, INC., Defendant-Appellee. No. 81-1420. United States Court of Appeals, Ninth Circuit. Argued and Submitted Dec. 11, 1981. Decided Sept. 19, 1983. Certiorari Denied March 5, 1984. See 104 S.Ct. 1441 . Herbert Hoffman, San Diego, Cal., for plaintiff-appellant. Stephen D. Miller, Inc., Stephen D. Miller, Thomas J. Nolan, Maryann R. Marzano, Beverly Hills, Cal., Latham, Watkins & Hills, Roderick M. Hills, Irwin Goldbloom, Maureen E. Mahoney, James F. Rogers, Washington, D.C., for defendant-appellee. Appeal from the United States District Court for the Central District of California. Before SCHROEDER, CANBY and NORRIS, Circuit Judges. NORRIS, Circuit Judge: 1 The district court dismissed an indictment charging Sears, Roebuck and Company, Inc. (Sears) with customs fraud because of prosecutorial misconduct in presenting the case to the grand jury. We reverse and remand. 2 * On February 26, 1980, a grand jury returned an indictment against Sears alleging that Sears had conspired to defraud the United States government by overstating to customs agents the price it had paid for television…

The district court dismissed an indictment charging Sears, Roebuck and Company, Inc. (Sears) with customs fraud because of prosecutorial misconduct in presenting the case to the grand jury. We reverse and remand.

I

On February 26, 1980, a grand jury returned an indictment against Sears alleging that Sears had conspired to defraud the United States government by overstating to customs agents the price it had paid for television receivers purchased from Japanese manufacturers. See 18 U.S.C. §§ 371 and 542 (1976). The indictment charged that customs documents filed by Sears failed to disclose rebates and credits that Sears had privately arranged with its Japanese suppliers, thus misrepresenting the net price Sears had paid for the merchandise. Evidence presented to the grand jury consisted primarily of testimony by Sears employees and documents from Sears’ files. The evidence indicated two possible motives for Sears’ alleged overstatement of the prices it had paid: first, to bring the declared prices into conformity with the floor or “check prices” established by Japan’s Ministry of International Trade and Industry (MITI); and second, to avoid dumping duties for selling imported…

dissenting in part from the judgment.

Although I agree that Judge Real’s dismissal of the Sears indictment ■ should be reversed, I write separately because I would, unlike the majority, expressly leave open on remand the question whether the district court may exercise its discretion to dismiss the indictment on supervisory power grounds. I believe the majority’s willingness to rely solely on a constitutional rationale in reviewing the dismissal of the indictment obscures the crucial analytical distinction between that rationale and an alternate ground for dismissing an indictment: a court’s exercise of its inherent supervisory power.

That distinction has been recognized in the case law, see, e.g., United States v. Chanen, 549 F.2d 1306, 1309 (9th Cir.), cert. denied, 434 U.S. 825 , 98 S.Ct. 72 , 54 L.Ed.2d 83 (1977) (“these dismissals have been based either on constitutional grounds or on the court’s inherent supervisory power”), but it has never, to my mind, been satisfactorily explained. In my view, while a constitutional analysis focuses on preserving fairness for the individual defendant and remedying any harm that has been done to his basic rights, the exercise of a…