## Facts

- During a 1983 criminal investigation of Curtis J. Corn, corporate books and records of three corporations (including Allied Tank Cleaning, later Dynavac, Inc.) were produced to a federal grand jury.
- Corn was later indicted on multiple charges and ultimately pleaded guilty to three counts.
- Years later, the IRS opened a civil investigation into Dynavac’s federal income tax liability for taxable years ending in 1979–1982.
- IRS Revenue Agent Ronald Sheresh issued administrative summonses under 26 U.S.C. §§ 7601 and 7602 to Dynavac and individuals associated with it (including Corn), seeking Dynavac’s business books and records for the years under audit.
- The requested records were physically held by the U.S. Attorney because they had previously been produced to the grand jury.
- The summons recipients resisted enforcement, arguing the documents were protected grand-jury material under Federal Rule of Criminal Procedure 6(e) because they had been before the grand jury.
- In an earlier episode, an IRS civil auditor had improperly received and used a Special Agent’s Report containing grand-jury information; a court found a Rule 6(e) violation.
- After that violation, the IRS removed references to the tainted report from work papers and reassigned the audit to Agent Sheresh, who was insulated from the report and related communications.
- The district court enforced the summonses, finding the corporate records were not Rule 6(e) “matters occurring before the grand jury” and that the earlier Rule 6(e) problem had been cured.

## Issues

1. Whether preexisting corporate business records become “matters occurring before the grand jury” under Federal Rule of Criminal Procedure 6(e) solely because they were produced to and used by a grand jury, thereby restricting later use in an IRS civil tax investigation.
2. Whether an earlier Rule 6(e) violation involving disclosure of grand-jury information required denying enforcement of later IRS summonses where the IRS implemented remedial steps and used a new, insulated agent.

## Decision

- The Ninth Circuit affirmed the district court’s orders enforcing the IRS summonses.
- The court held that preexisting corporate records do not become Rule 6(e) protected “matters occurring before the grand jury” merely because they were presented to a grand jury.
- The court held that standards governing disclosure of protected grand-jury materials (including the “judicial proceeding” and “particularized need” requirements) did not apply because the requested records were not Rule 6(e) matters.
- The court upheld the district court’s finding that the prior Rule 6(e) violation tied to the Special Agent’s Report was cured by purging tainted references and walling off Agent Sheresh from the improper material.

## Legal Principles

- Rule 6(e) secrecy applies to “matters occurring before the grand jury,” meaning material that would reveal the grand jury’s internal workings (such as witness identities, testimony substance, investigative direction, juror questions, or deliberations).
- Documents and tangible evidence that preexist the grand-jury investigation do not become Rule 6(e) protected solely because the grand jury reviewed them; Rule 6(e) is not a blanket confidentiality rule for all items in a grand jury’s possession.
- Requirements for court-authorized disclosure of grand-jury matters (including “judicial proceeding” and “particularized need” showings) are triggered only when the government seeks disclosure of material that is actually protected by Rule 6(e).
- A prior Rule 6(e) violation does not automatically bar later civil investigative steps where the government demonstrates effective remediation, including purging tainted material and insulating later investigators from improper disclosures.

## Conclusion

The Ninth Circuit held that the IRS could enforce civil summonses for Dynavac’s preexisting corporate books and records even though those records had been produced to a grand jury, because their disclosure would not reveal grand-jury proceedings within the meaning of Rule 6(e), and a prior Rule 6(e) violation did not taint the later summonses after corrective measures were implemented.


United States v. Dynavac, Inc., 6 F.3d 1407 (9th Cir. 1993)