Jerry T. O'Brien, Inc. v. Securities & Exchange Commission

KENNEDY, Circuit Judge,

with whom SNEED, ANDERSON, POOLE, and NORRIS, Circuit Judges, join, dissenting from denial of rehearing en banc:

Our court, once again, gives a simple shrug when requested to invoke the short en banc procedure permitted us by Congress.' 28 U.S.C. § 46(c), (d). We decline to review a panel decision that is novel, of vast importance, and, in my view, most erroneous. Our refusal to review panel decisions of this type imposes an unnecessary burden on the Supreme Court. I dissent from the failure of the court to consider the case en banc.

The rule set forth by the panel opinion goes beyond any reasonable interpretation of the Supreme Court’s opinions in United States v. Powell, 379 U.S. 48, 85 S.Ct. 248, 13 L.Ed.2d 112 (1964), and United States v. Miller, 425 U.S. 435, 96 S.Ct. 1619, 48 L.Ed.2d 71 (1976); is an unwarranted extension of, if not in open conflict with, our own opinions in Kelley v. United States, 536 F.2d 897 (9th Cir.1976), cert. denied, 429 U.S. 1047, 97 S.Ct. 756, 50 L.Ed.2d 762 (1977), and Howfield, Inc. v. United States, 409 F.2d 694 (9th Cir.1969); and is an improper intrusion on the administrative function.

There is no principled basis for confining the panel holding to the context of an SEC investigation. It threatens to compromise government investigations by most agencies. Not only will wrongdoers be provided a new instrument of obstruction or delay, but also employees and others subject to reprisals will be chilled from cooperating with investigators. Under the panel decision, government agencies will find it increasingly difficult to conduct confidential, nonpublie investigations in which actual targets are not discovered until a number of subpoenas have been served. Agencies may instead be forced to articulate premature conclusions about potential targets.

The panel decision should have been taken en banc.