RF MICRO DEVICES, INC. v. XIANG et al

Filing 212

MEMORANDUM OPINION AND ORDER signed by CHIEF JUDGE WILLIAM L. OSTEEN, JR on 06/09/2016. For the reasons stated herein, Plaintiff's Motion for Disclosure of Grand Jury Materials (Doc. 184 ) is GRANTED. (Garland, Leah)

IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF NORTH CAROLINA

RF MICRO DEVICES, INC.,
Plaintiff,
v.
JIMMY S. XIANG, XIAOHANG DU,
FENG WANG, and VANCHIP
TECHNOLOGIES LTD.,
Defendants.

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1:12CV967

MEMORANDUM OPINION AND ORDER
OSTEEN, JR., District Judge
Presently before the court is a Motion for Disclosure of
Grand Jury Materials filed by Plaintiff RF Micro Devices, Inc.,
(“Plaintiff”). (Doc. 184.) Defendants Jimmy Xiang (“Defendant
Xiang”), Xiaohang Du (“Defendant Du”), Feng Wang, and Vanchip
Technologies, Ltd. (collectively “Defendants”) have responded.
(Docs. 186, 191.) The United States, as Intervenor, has also
filed a response to Plaintiff’s motion. (Doc. 192.) Plaintiff
has replied. (Doc. 193.) This matter is now ripe for resolution,
and for the reasons set forth herein, Plaintiff’s motion will be
granted.

I.

BACKGROUND
Plaintiff initiated this suit in 2012, bringing causes of

action against Defendants for copyright infringement,
misappropriation of trade secrets, breach of contract, unfair
and deceptive trade practices, and conversion. (See Complaint
(“Compl.”) (Doc. 1).) In 2014, the United States moved to
intervene in this case and stay discovery until the resolution
of parallel criminal proceedings pending against Defendants
Xiang and Du. (Doc. 121.) The United States Attorney indicted
Defendants Xiang and Du on multiple counts of theft of trade
secrets, and after that indictment was unsealed, Defendant Xiang
was arrested upon reentry into the United States from China.
(See Gov’t’s Resp. to Pl.’s Mot. for Disclosure of Grand Jury
Materials (“Gov’t Resp.”) (Doc. 192) at 2.) On March 20, 2015,
Defendant Xiang pled guilty to one count of theft of trade
secrets (see Criminal Case 1:14CR160-1, Doc. 94; Minute Entry
03/20/2015), and on December 10, 2015, the court lifted the stay
in the civil case. (See Doc. 179.) Defendant Du has not returned
to the United States, and his criminal case remains outstanding.
(Gov’t Resp. (Doc. 192) at 2.)
The Indictment in the parallel criminal proceedings
identified several documents and emails in its allegations of
theft of trade secrets.

According to Plaintiff, the individual
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Defendants in this case have refused to provide substantive
information or documents during discovery by invoking the Fifth
Amendment, including refusing to provide the individual
documents identified in the Indictment. (Pl.’s Br. in Supp. of
Mot. for Disclosure of Grand Jury Materials (“Pl.’s Br.”) (Doc.
185) at 3.) Plaintiff has also apparently been unable to obtain
these documents from other sources, having subpoenaed numerous
other individuals and entities to no avail. (Id. at 3-4).
However, those documents are in the possession of the United
States, and Plaintiff now asks this court to order the
disclosure of those documents.
II.

ANALYSIS
Before addressing whether or not Plaintiff has met its

burden of showing that it is entitled to the disclosure of grand
jury materials, this court must decide the preliminary question
of whether the materials sought are in fact grand jury materials
subject to protection in the first place.
Rule 6(e)(2)(B) of the Federal Rules of Criminal Procedure
prohibits the disclosure of “matter[s] occurring before the
grand jury.” This long-established policy of nondisclosure seeks
to: (1) prevent the escape of prospective indictees, (2) insure
the grand jury of unfettered freedom in its deliberations, (3)
impede the subornation of perjury and tampering of witnesses by
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targets of the investigation, (4) encourage forthrightness in
witnesses without fear of retaliation, and (5) act as a shield
for those who are exonerated by the grand jury. United States v.
Proctor & Gamble Co., 356 U.S. 677, 681 n.6 (1958).
While the content of matters occurring before the grand
jury “can be anything that may reveal what has transpired before
the grand jury,” Rule 6(e)(2) protects “only the essence of what
takes place in the grand jury room.” In re Grand Jury Subpoena,
920 F.2d 235, 241 (4th Cir. 1990) (internal quotations and
citations omitted). Several courts have held that information
that is “produced by criminal investigations paralleling grand
jury investigations does not constitute matters occurring before
the grand jury if the parallel investigation was truly
independent of the grand jury proceedings.” Id. at 242 (internal
quotations omitted); see also In re Grand Jury Matter (Catania),
682 F.3d 61 (3d Cir. 1982); Anaya v. United States, 815 F.2d
1373 (10th Cir. 1987). Courts also distinguish between documents
that are sought for the information that they contain, which may
be disclosed, and documents that are sought to reveal the
direction or strategy of a grand jury investigation, which are
subject to protection. (See generally United States v. Dynavac,
Inc., 6 F.3d 1407, 1411-12 (9th Cir. 1993); DiLeo v. Comm’r of

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Internal Revenue, 959 F.2d 16, 19 (2d Cir. 1992); In re Grand
Jury Investigation, 630 F.2d 996, 1000-01 (3d Cir. 1980).
In the instant case, Plaintiff seeks documents 1 that were
obtained by the Government via a search warrant that was
executed prior to the convening of a grand jury. (See Gov’t
Resp. (Doc. 192) at 2-3.) The documents include several emails
sent between Defendants in this case and unnamed
co-conspirators, a document containing “Assembly and Parts Cost
Information,” apparently relating to one of Plaintiff’s
products, and a data file. (See Def. Xiang’s Resp. to Pl.’s Mot.
for Disclosure of Grand Jury Materials (“Def. Xiang’s Resp.)
(Doc. 186) at 3-4.)
This court finds that the first two items sought by
Plaintiff, “Document One” and “File One,” (Pl.’s Br. (Doc. 185)
at 4), are not “matters occurring before the grand jury” for
purposes of Rule 6(e)(2). These documents, as noted above, were
either obtained via a search warrant in a criminal investigation
or voluntarily given to the Government by Defendant Xiang,
rather than obtained by grand jury subpoena. Further, these two

1

Plaintiff’s motion seeks the disclosure of fourteen
documents. However, Defendant Xiang states in his reply brief
that, due to the resolution of the criminal case against him, he
now plans to produce nine of the fourteen documents sought, and
as such, this court will limit its discussion to the remaining
five.
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documents are technical in nature, sought for the information
that they contain rather than to reveal the grand jury’s
deliberations or use of them, and will not reveal the “essence”
of what took place in the grand jury room. See In re Grand Jury
Subpoena, 920 F.2d at 241.

As such, this court finds that these

two documents are not subject to Rule 6(e) restrictions, and
will order that they be disclosed to Plaintiff.
The remaining three emails raise a closer question. While
they were seized as part the same search warrant, rather than a
grand jury subpoena, they are not documents that simply detail
technical information. While Plaintiff does not apparently seek
these documents for the purpose of learning what use the Grand
Jury made of them, these emails contain the names of individuals
who were under investigation and were apparently not indicted,
as well as communications that allegedly formed the basis of the
misappropriation alleged in the Indictment. As such, they fall
closer to documents that risk revealing the inner workings of
the grand jury.
However, this court need not resolve this issue, because
even if these three documents are in fact “matters occurring
before the grand jury” for purposes of Rule 6, Plaintiff has met
its burden of showing that they should be disclosed.

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The secrecy requirements of Rule 6 are not absolute, and a
private party may seek disclosure of grand jury materials for
use in civil matters when it demonstrates a “particularized
need” for those materials that outweighs the public’s interest
in secrecy. See Douglas Oil Co. v. Petrol Stops Nw., 441 U.S.
211, 223 (1979).

A party can establish a “particularized need”

by showing that (1) the materials are needed to avoid an
injustice in another proceeding; (2) the need for disclosure is
greater than the need for secrecy; and (3) the request is
structured to cover only needed materials. United States v.
Moussaoui, 483 F.3d 220, 235 (4th Cir. 2007).

The court has

substantial discretion to determine whether particularized need
has been established.

In re Grand Jury Proceedings GJ-76-4 &

GJ-75-3, 800 F.2d 1293, 1299 (4th Cir. 1986). As the
considerations requiring secrecy become less relevant, a party
asserting a need for those materials will have a lesser burden
of showing justification for that need. Douglas Oil Co., 441
U.S. at 223.
Here, Plaintiff contends that these materials are needed to
impeach and/or cross-examine the individual Defendants on the
issues of whether they possessed and transmitted trade secrets
belonging to Plaintiff, which they currently deny. Further,
Plaintiff argues that it has a particular need for these
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documents because disclosure would “serve the interests of
fairness and justice,” as Plaintiff has been unable to obtain
these documents through normal discovery, and is the only party
that has not had access to them, in part due to Defendants’
invocation of the Fifth Amendment. (See Pl.’s Br. (Doc. 185) at
8-10.)
This court finds that Plaintiff has demonstrated a
“particularized need” that outweighs the public’s interest in
the secrecy of grand jury proceedings. First, courts have found
the need to impeach witnesses, the need to avoid misleading the
trier of fact, and a party’s inability to obtain needed
discovery due to the invocation of the Fifth Amendment to
constitute a “particularized need” for grand jury materials.
See, e.g., Douglas Oil Co., 441 U.S. at 222 n.12; In re
Corrugated Container Antitrust Litig., 687 F.2d 52, 56 (5th Cir.
1982). Here, the balance of Plaintiff’s need for these materials
with the public’s interest in secrecy tips in Plaintiff’s favor,
especially when considering that, because the grand jury has
finished its deliberations and the Indictment has now been
unsealed, the concerns for secrecy in the grand jury proceedings
at issue are considerably lessened. See United States v.
Colonial Chevrolet Corp., 629 F.2d 943, 950 (4th Cir. 1980)
(“[W]hen the grand jury has completed its work and the criminal
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proceedings initiated by the grand jury indictment have been
concluded, the reasons for secrecy, in the opinion of the
Supreme Court, are substantially diminished and correspondingly
the requirement of a showing of a ‘particularized need’ as a
basis for disclosure is diminished.”). Further, there is little
concern that disclosure of these documents will impede the
ability of future grand juries to function or receive honest and
open testimony from witnesses. See Douglas Oil Co., 441 U.S. at
229. Contrary to, for example, a transcript of grand jury
deliberations, the documents at issue here do not disclose the
procedures used by the grand jury or the identity of any
witnesses who testified in front of them.

That Plaintiff also

seeks only a limited disclosure of fourteen documents in total,
all of which were named in the Indictment, rather than a large
set of materials reviewed by the grand jury, further weighs in
favor of disclosure. Finally, this court notes that the
Government has indicated in its response to Plaintiff’s motion
that it does not oppose the disclosure of these documents. (See
Gov’t Resp. (Doc. 192).)
Thus, this court finds that Plaintiff has met its burden of
showing a “particularized need” that outweighs the typical
secrecy requirements of Rule 6.

As such, it will order the

disclosure of those documents to Plaintiff by the Government.
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III. CONCLUSION
For the reasons stated herein, Plaintiff’s Motion for
Disclosure of Grand Jury Materials (Doc. 184) is GRANTED.
This the 9th day of June, 2016.

_______________________________________
United States District Judge

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