## Facts

- After a 20-month investigation before successive grand juries, a federal grand jury indicted the Bank of Nova Scotia and other defendants on 27 counts alleging conspiracy and related mail and tax fraud; one defendant was separately charged with obstruction of justice.
- The district court initially dismissed the first 26 counts on pleading and mens rea grounds as to the bank; the obstruction count proceeded to trial and resulted in a conviction.
- On the government’s appeal, the court of appeals remanded for a hearing on whether prosecutorial misconduct and grand jury irregularities provided an additional basis to dismiss the indictment.
- On remand, the district court dismissed the indictment based on asserted grand jury misconduct and irregularities, citing violations of Federal Rule of Criminal Procedure 6(d) and 6(e), the immunity statutes, and constitutional provisions, plus alleged misinformation presented to the grand jury and mistreatment of witnesses.
- The district court also stated that dismissal under its supervisory authority was necessary to deter future misconduct.
- The court of appeals reversed, concluding the defendants were not prejudiced and that supervisory power could not support dismissal absent prejudice.

## Issues

1. Whether a district court may dismiss an indictment under its supervisory power for prosecutorial misconduct in grand jury proceedings absent a showing of prejudice to the defendant.
2. What prejudice standard governs dismissal for nonconstitutional errors in grand jury proceedings under Federal Rule of Criminal Procedure 52(a).

## Decision

- The Supreme Court affirmed the court of appeals in an 8–1 decision.
- A district court generally may not dismiss an indictment for errors in grand jury proceedings unless the errors prejudiced the defendant.
- A court may not use its supervisory power to avoid the harmless-error inquiry required by Federal Rule of Criminal Procedure 52(a).
- For nonconstitutional grand jury errors, dismissal is warranted only if the violation substantially influenced the grand jury’s decision to indict, or if there is grave doubt the decision was free from such substantial influence.
- Applying that standard, the Court found no sufficient showing that the asserted misconduct affected the decision to indict, so dismissal was unauthorized.

## Legal Principles

- Federal Rule of Criminal Procedure 52(a) applies to grand jury errors; harmless errors do not justify dismissal of an indictment.
- Supervisory power must operate consistently with the Federal Rules and cannot be used to impose remedies that the harmless-error rule forbids.
- For nonconstitutional grand jury violations, the defendant must show the violation substantially influenced the indictment decision or creates grave doubt that it did not.
- Deterrence of prosecutorial misconduct, standing alone, does not justify dismissal where the defendant cannot show prejudice.

## Conclusion

A federal court may dismiss an indictment for grand jury misconduct only when the defendant shows prejudice under the Rule 52(a) harmless-error framework; supervisory authority cannot be used to dismiss as a deterrent when the errors did not substantially affect the grand jury’s decision to indict.


Bank of Nova Scotia v. United States, 487 U.S. 250 (1988)