From Gannett Media Corp. v. U.S., decided yesterday by the Second Circuit (Judges Reena Raggi, Joseph Bianco & Sarah Merriam):
This appeal arises out of a criminal case in which several defendants were indicted on various federal charges related to an alleged insurance fraud scheme and scheme to defraud certain U.S. government entities. In October 2020, the district court granted the defendants' motions to dismiss the indictment on speedy trial grounds and, in doing so, highlighted the "government's repeated missed deadlines resulting in the conditional interest of justice exclusion, the government's failure to produce by the July 31, 2019 deadline any material from several of the devices seized over a year earlier, and the government's failure to approach its electronic discovery obligations with the necessary vigor required to manage ESI of this volume." The district court, however, determined that the dismissal should be without prejudice given the lack of bad faith.
After a new indictment was filed, the defendants moved for reconsideration of the dismissal of the prior indictment without prejudice, arguing that dismissal with prejudice was warranted based on newly-discovered evidence that the government had engaged in misconduct, including making intentionally misleading statements and omissions to the court. The district court directed the government to respond, in affidavit form, to the allegations and, during oral argument on the motion, concluded that an evidentiary hearing was necessary to address the district court's concerns regarding the government's conduct and its prior representations to the court. The defendants pled guilty before the hearing occurred and, under their plea agreements, withdrew their motions for reconsideration.
However, on April 22, 2022, the district court issued an order noting that, pursuant to its inherent authority to supervise conduct of the members of its bar, "additional fact-finding may be warranted where it is unclear if government lawyers intentionally made a misleading statement to the Court." Thus, the district court considered "whether the Court, on its own, should resolve those factual disputes, notwithstanding the withdrawn motions" by the defendants. Moreover, the district court ordered that, if the government took the position that no further misconduct inquiry by the district court was necessary, it should file a submission setting forth the basis for that position, including any potential "plans the government has to pursue the issues on its own internally."
In a decision and order dated July 20, 2022, the district court granted the government's motion to file its submission ex parte and under seal. The district court determined, based upon the government's submission and affidavit in support of its motion to seal (collectively, the "Sealed Submissions"), that it would "not take further steps sua sponte to investigate the allegations that were the subject of the planned evidentiary hearing …."
