## Facts

- Arthur Andersen, LLP (Andersen) was connected to the collapse of Enron Corporation and faced federal scrutiny arising out of Enron-related conduct, including document destruction.
- A federal grand jury indicted Andersen for obstruction of justice based on alleged destruction of documents.
- Andersen urged the United States to move quickly with an indictment.
- After Andersen was indicted, a different grand jury issued subpoenas concerning criminal conduct by individuals and entities involved in the Enron scandal, including Andersen employees.
- Andersen filed a motion in the United States District Court for the Southern District of Texas to quash the post-indictment grand-jury subpoenas and to limit the grand-jury proceedings.
- Andersen’s motion sought to restrict continued grand-jury activity that, in Andersen’s view, affected an already-indicted defendant and its personnel.

## Issues

1. Whether post-indictment grand-jury subpoenas directed at Andersen employees and other Enron-related targets should be quashed on the ground that the government was improperly using the grand jury in connection with the pending prosecution of Andersen.
2. Whether the district court should limit ongoing grand-jury proceedings after Andersen’s indictment where the subpoenas related to conduct and witnesses overlapping with the indicted matter.

## Decision

- The district court denied Andersen’s motion to quash the grand-jury subpoenas.
- The district court denied Andersen’s request to limit the grand-jury proceedings.

## Legal Principles

- A federal grand jury has broad authority to investigate possible federal crimes and potential defendants, and that investigative function may continue even after an indictment has been returned against a related party.
- Post-indictment grand-jury activity is not barred simply because it concerns facts, witnesses, or entities connected to a pending case; the grand jury may pursue legitimate investigative objectives, including investigation of unindicted individuals or additional offenses.
- A court may intervene to quash or restrict a subpoena where the moving party shows the subpoena reflects an improper purpose or grand-jury abuse, but the moving party bears a heavy burden and the process is generally presumed regular.
- A grand jury may not be used solely as a substitute for criminal discovery in the pending case; however, overlap with an existing prosecution does not, by itself, establish misuse where there is a continuing investigative basis.

## Conclusion

In this post-indictment dispute, Andersen asked the Southern District of Texas to quash new grand-jury subpoenas and to curtail further grand-jury proceedings connected to the Enron investigation, but the court declined to stop the subpoenas or restrict the ongoing grand-jury work.


United States v. Arthur Andersen, LLP, Crim. Action No. H-02-0121 (2002)