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Third Circuit: Non-Disclosure Orders to Prevent Revealing Receipt of Grand Jury Subpoenas Allowed Under First Amendment

January 16, 2020

By: Carolyn H. Kendall

On January 10, 2020, the Third Circuit Court of Appeals considered whether a non-disclosure order, entered pursuant to the Stored Communications Act, preventing an electronic service provider from informing a third party that it received a grand jury subpoena, runs afoul of the First Amendment. In In re: Subpoena 2018R00776, No. 19-3124, 2020 U.S. App. LEXIS 842 (Jan. 10, 2020), the Third Circuit held that despite constituting a content-based, prior restriction on the speech of a grand jury witness – who is not typically bound by grand jury secrecy – non-disclosure orders withstand strict scrutiny given the government’s compelling interest in maintaining grand jury secrecy.

The Stored Communications Act and Grand Jury Secrecy

The Stored Communications Act of 1986 (“SCA”) was designed to balance the legitimate needs of law enforcement with users’ privacy interests and electronic communication services providers’ business interests. It authorizes the government to obtain search warrants, court orders, and subpoenas to get subscriber data directly from an electronic service provider. A service provider who complies with a grand jury subpoena for such information is a grand jury witness.

Federal Rule of Criminal Procedure 6(e)(2) requires certain types of individuals to maintain the secrecy of grand jury proceedings, such as grand jurors, court reporters, and government attorneys. Grand jury witnesses generally are not subject to this secrecy obligation under Rule 6(e)(2). However, the SCA expressly authorizes courts to prohibit a service provider from notifying “any person” of its receipt of a grand jury subpoena or other legal process, if certain conditions are met. See 18 U.S.C. § 2705(b). The SCA provides that a court “shall grant” a non-disclosure order when the court determines that disclosure by the service provider would result in:

  1. endangering the life or physical safety of an individual;
  2. flight from prosecution;
  3. destruction of or tampering with evidence;
  4. intimidation of potential witnesses; or
  5. otherwise seriously jeopardizing an investigation or unduly delaying a trial.

Id. A non-disclosure order prohibits the service provider from revealing its receipt of a grand jury subpoena or similar process for up to one year. Id.

In re: Subpoena 2018R00776:  First Amendment Challenge to Non-Disclosure Orders

In In re: Subpoena 2018R0776, an unnamed electronic service provider received a grand jury subpoena and a warrant for information about one of its customer’s employees, who was the subject of an ongoing criminal investigation. Both the grand jury subpoena and the warrant were accompanied by non-disclosure orders (“NDOs”), prohibiting the provider from disclosing the existence of the subpoena or warrant for a year. The service provider complied with both requests and furnished information to the government.

After the service provider’s customer filed for bankruptcy and a bankruptcy trustee was appointed, the service provider asked the district court to modify the NDOs to permit disclosure to the bankruptcy trustee. According to the service provider, the trustee was disinterested, posed no risk of informing the target of the grand jury of the subpoena and warrant, and needed to know about these requests to assert the now-bankrupt customer’s rights, such as the attorney-client privilege and any cognizable cause of action against the debtor’s officers and directors. The service provider argued that these modifications constituted a less restrictive alternative to the NDOs’ total ban on disclosure, which implicates the service provider’s First Amendment speech rights. The district court disagreed and the Third Circuit affirmed.

Strict Scrutiny Applies

The Third Circuit determined that it had to apply strict scrutiny to the service provider’s First Amendment challenge for two reasons. First, the NDOs constituted a content-based, rather than content-neutral, restriction on speech, as they only prohibited the service provider from conveying information about the grand jury investigation. This would trigger strict scrutiny. Second, the NDOs also constituted a prior restraint on speech, which is presumptively unconstitutional and therefore also subject to strict scrutiny. 2020 U.S. App. LEXIS 842 at *9-*11.  

To survive strict scrutiny, the government must establish that the NDOs (1) serve a compelling governmental interest; (2) are narrowly tailored to achieve that interest; and (3) constitute the least restrictive means of advancing that interest. The Third Circuit found each requirement satisfied with respect to the NDOs at issue.

Court Rejects First Amendment Challenge

Applying the three-prong strict scrutiny test, the court first determined that “protecting the secrecy of an investigation is a paramount interest of the government,” especially when the investigation is ongoing. Id. at *12. The court rejected the service provider’s contention that the government’s interest was limited to avoiding notifying the grand jury investigation’s target of the proceedings. The court ruled that the government’s interest in grand jury secrecy is broader and encompasses avoiding harm to an individual, preventing intimidation of potential witnesses, and protecting the innocent accused. Id. at *13-*14. This is consistent with the SCA’s prohibition of disclosure to “any other person,” rather than simply the investigation’s target. Id. at *14; cf. 18 U.S.C. § 2705(b). Thus, the service provider’s proposed disclosure to the bankruptcy trustee was insufficient to protect the government’s interest, even if there was minimal risk that such a disclosure would reveal the investigation’s existence to its target.  

Second, the court held that the NDOs were narrowly tailored because they are limited to one year and only apply to information about the instant grand jury proceeding. The court noted that the NDOs “do not prohibit [the provider] from discussing the government’s requests abstractly . . . by disclosing the number of data requests and NDOs they receive in public docket civil complaints” and thus could “hardly be described on a ‘total ban’ on speech.” Id. at *15.

Finally, the court concluded that the NDOs were the least restrictive means of advancing the government’s interest in maintaining grand jury secrecy. The court rejected the service provider’s contention that less restrictive options were available, such as notifying the trustee but not informing it of the identity of the target employee. The court held that such a solution posed an unacceptable risk to grand jury secrecy in an on-going investigation. Although the bankruptcy trustee is approved by the Department of Justice prior to appointment, the court held that neither the court nor the government “can be expected to vet individuals selected by service providers [to receive disclosures] and determine their risk of subverting an ongoing investigation.” Id. at *17.

Practice Points

  • Grand jury witnesses – unlike the grand jurors themselves and most government and court personnel – are not subject to Federal Rule of Criminal Procedure 6’s general secrecy obligation, unless an exception applies. However, other secrecy obligations may be imposed by statute.
  • Electronic service providers, such as those providing cloud computing services or email hosting, can be subject to the Stored Communications Act’s additional secrecy obligations when providing data or information to the government in an active investigation.
  • The Stored Communications Act permits entry of a non-disclosure order to bar a service provider from revealing a government request for information about a subscriber or customer for reasons beyond alerting the investigation’s target. These include avoiding witness intimidation or harm, preventing destruction of evidence, and unduly delaying trial.
  • A non-disclosure order probably must be temporally limited, like the NDOs here, which were limited to a single year. It likely cannot be used to bar a service provider from revealing information that it had independent of its receipt of the government request for information. Similarly, the service provider likely cannot be prevented from discussing government requests in the abstract, including, for example, by disclosing the aggregate number of data requests and NDOs the provider has received.
  • First Amendment challenges to appropriately tailored non-disclosure orders likely will be unsuccessful in the Third Circuit unless a virtually risk-free disclosure can be proposed as a less restrictive alternative.


Disclaimer: This post does not offer specific legal advice, nor does it create an attorney-client relationship. You should not reach any legal conclusions based on the information contained in this post without first seeking the advice of counsel.

About the Author:

Carolyn Kendall

Carolyn H. Kendall conducts internal investigations and defends corporations, officers and other individuals facing criminal and civil investigation. Her practice includes matters relating to potential criminal tax and money laundering violations, as well as allegations involving securities violations, mortgage, and financial institution fraud, the Federal Anti-Kickback Statute and Stark Law, and other fraud and regulatory statutes. She also assists clients in offshore account disclosure and compliance via IRS disclosure programs (OVDP and Streamlined Procedures). Learn More.