           IN THE UNITED STATES COURT OF APPEALS
                    FOR THE FIFTH CIRCUIT United States Court of Appeals
                                                   Fifth Circuit

                                                                            FILED
                                                                           May 13, 2013

                                     No. 12-20759                          Lyle W. Cayce
                                   Summary Calendar                             Clerk


IN RE: GRAND JURY SUBPOENAS




                   Appeal from the United States District Court
                        for the Southern District of Texas
                              USDC No. 4:12-MC-408


Before REAVLEY, JOLLY, and DAVIS, Circuit Judges.
PER CURIAM:*
       This case involves a dispute between the Government and the owner and
operator of a foreign-flagged ship known as the M/T MEDIATOR.                            The
Government appeals from the district court’s order quashing subpoenas duces
tecum issued by a grand jury to Lantra Shipping Company (the ship’s owner)
and to Evalend Shipping Tankers Co. S.A. (the ship’s operator), both of which
are Greece-based companies.           We VACATE the district court’s order and
REMAND.
       During an inspection of the MEDIATOR at the Port of Houston, the Coast
Guard identified potential violations of federal law with respect to the ship’s



       *
         Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH CIR.
R. 47.5.4.
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treatment and discharge of oily wastewater, and with its associated record
keeping, which precipitated a grand jury investigation. The Coast Guard and
the companies entered into an “Agreement on Security” permitting the ship to
leave port in return for, inter alia, the posting of a surety bond. As part of that
agreement, the companies agreed that its attorneys would be authorized “to
accept service of any correspondence or legal papers relating to the Alleged
Violation on behalf of the Vessel, Owner and Operator.” Additionally, the
companies agreed to “reasonably facilitate and assist the United States in
effecting service of federal Grand Jury . . . subpoenas to records custodians
employed by the Owner and Operator and who are not in the United States . . . .
The Owner and Operator will instruct records custodians to cooperate with the
United States in carrying out its investigation and will act in good faith in
carrying out this obligation.”
      As part of the grand jury investigation, the Government issued subpoenas
duces tecum to defense counsel for Lantra and Evalend.            The subpoenas
commanded each company “through its custodian of records or other authorized,
knowledgeable representative [to] appear before the Grand Jury . . . and
produce” specified documents. The companies took the position that they were
not required to produce a custodian of records because the custodians had not
been personally served with the subpoenas in Greece, and because the
Government had agreed to accept a business records stipulation in lieu of a
personal appearance. Upon the Government’s motion to enforce the subpoenas,
the district court initially ordered the records custodians to appear.        The
companies moved for reconsideration, however, and the district court quashed
the service of the subpoenas on counsel. The court ordered that the Government
“must issue the proper subpoenas for the proper people. They must be served
properly.” The Government now appeals.



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       The companies urge preliminarily that we lack appellate jurisdiction
because the district court’s order is procedural in nature and merely requires the
Government to re-serve the subpoenas.                We disagree.       By quashing the
subpoenas, the district court’s order precludes the presentation of the evidence
by a personal representative of the companies and, “[a]s a practical matter, the
order . . . excludes evidence.” In re Grand Jury Subpoena (Kent), 646 F.2d 963,
968 (5th Cir. 1981); see also 18 U.S.C. § 3731. We therefore have jurisdiction.
       Turning to the merits, it is settled that corporations are subject to grand
jury subpoenas. See Wilson v. United States, 221 U.S. 361, 374–75, 31 S. Ct. 538,
542 (1911).     Here, the record shows that the subpoenas were issued to the
corporations, that the corporations had notice of the grand jury subpoenas, and
that the corporations’ counsel were authorized to receive all “legal papers”
relating to the vessel’s alleged violations on behalf of the corporations. The
subpoenas were validly served on the corporations, and the companies do not
argue otherwise. In light of the valid service, the companies had to comply.
Moreover, the Agreement on Security between the parties requires the
companies to “assist” with the service of the grand jury subpoenas on the
individual records custodians and to do so in good faith. Having been properly
served with the subpoenas, the companies must be held to their agreement.
They must either produce the records custodians or show why they cannot do so.1
       We are unpersuaded by the companies’ suggestion that the Agreement on
Security is irrelevant because the records custodians are non-parties and not



       1
         The case of United States v. Target Ship Mgmt. PTE, Ltd., 2012 WL 1415001 (S.D.
Ala. 2012), in addition to being non-binding on us, is distinguishable. That case, which
involved the attempted service of a trial subpoena rather than a grand jury subpoena, makes
no mention of a similar agreement by the corporation to assist in the service on the records
custodian. See id. at *1. Enforcement of the subpoenas in this case does not, as the companies
assert, compel the appearance of foreign-based witnesses contrary to Fed. R. Crim. P. 17(e) or
28 U.S.C. § 1783; rather, it compels the companies to comply with their own agreement as part
of a valid grand jury investigation.

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covered by the agreement.        “A command to the corporation is in effect a
command to those who are officially responsible for the conduct of its affairs. If
they, apprised of the writ directed to the corporation, prevent compliance or fail
to take appropriate action within their power for the performance of the
corporate duty, they, no less than the corporation itself, are guilty of
disobedience.” Id. at 376, 31 S. Ct. at 543. As noted, the companies were served
with the subpoenas and agreed to assist in service on the records custodians.
      The companies also argue that the Government lacks a good faith basis to
compel the appearance of the records custodians because the companies have
already produced responsive documents and because the Government agreed to
accept affidavits stipulating to the authenticity of the evidence in lieu of the
custodians’ personal appearance. The record does not show that the Government
agreed to forego the appearance by the records custodians. On the contrary, the
Government expressly and repeatedly stated its position in correspondence with
defense counsel that it did not waive the right to summon the custodians to
appear before the grand jury. Indeed, the Government had the power to compel
the custodians’ personal appearance. See id.; cf. Curcio v. United States, 354
U.S. 118, 125, 77 S. Ct. 1145, 1150 (1957) (although the grand jury may not
compel a records custodian to testify in violation of his personal Fifth
Amendment rights, the custodian may be required “to identify or authenticate
the documents for admission in evidence”); see also Branzburg v. Hayes, 408 U.S.
665, 688, 92 S. Ct. 2646, 2660 (1972) (noting that grand jury’s “investigative
powers are necessarily broad” and that its “authority to subpoena witnesses is
not only historic, . . . but essential to its task” (internal citation omitted)).
      The district court’s order quashing the subpoenas duces tecum is vacated,
and the case is remanded for further proceedings.
      VACATED AND REMANDED.



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