Netflix Gets Discovery of Grand Jury Materials in Challenge to Prosecution Over Cuties

"Netflix alleges that Tyler County’s District Attorney, Lucas Babin, is 'abusing his office' through a 'singular and bad-faith effort' to maliciously prosecute Netflix in violation of the United States Constitution and in retaliation against Netflix for exercising its First Amendment rights."

From Judge Michael Truncale's opinion today in Netflix, Inc. v. Babin (E.D. Tex.) (for the backstory on the prosecution, see here):

Netflix alleges that Tyler County's District Attorney, Lucas Babin, is "abusing his office" through a "singular and bad-faith effort" to maliciously prosecute Netflix in violation of the United States Constitution and in retaliation against Netflix for exercising its First Amendment rights. Babin initially charged Netflix in 2020 under Tex. Penal Code § 43.262 [governing "Possession or Promotion of Lewd Visual Material Depicting Child" -EV]. This was not done quietly. Babin courted media attention by emphasizing his integral role in securing an indictment.

On October 26, 2021, in the case of Ex Parte Lowry, the First District [Texas] Court of Appeals held that Section 43.262 was facially unconstitutional. Notably, the appellate court specifically referenced Babin's prosecution of Netflix as evidence of the statute's overbreadth.

In light of the Lowry decision, Netflix filed a state pre-trial habeas petition, raising a facial challenge against Section 43.262 under the First and Fifth Amendments. Then, in what Netflix alleges was another act of "gamesmanship," Babin sought a 120-day delay in Netflix's hearing on the habeas action. But in the interim, he initiated new grand jury proceedings to obtain additional indictments against Netflix under Section 43.25, which allowed him to 'drop' the charge under Section 43.262. When it became clear that Babin had outmaneuvered Netflix, using the delay to bolster his "bad-faith" prosecution and to shut down any avenues for pre-trial relief in the state system, Netflix turned to the federal courts.

On March 3, 2022, Netflix filed a complaint seeking injunctive relief against Babin. At a hearing held the next day, the Parties agreed to stay the criminal proceedings in Tyler County until after a decision had been made on Netflix's request for a preliminary or permanent injunction. About a month later, Babin filed a motion for summary judgment, asserting as an affirmative defense that the grand jury constitutes an "independent intermediary" that severs the causal chain between any alleged "bad faith-conduct" on his part and the injunctive relief that Netflix seeks.

Netflix contends, however, that the "independent intermediary" defense is only effective when the underlying proceedings are untainted; when the grand jury's independence or impartiality cannot be called into question, United States v. Williams (1992); when a prosecutor has not "seriously misstated the applicable law," United States v. Peralta (S.D.N.Y. 1991); and when "all the facts [were] presented to the grand jury," Hand v. Gary (5th Cir. 1988).

Accordingly, Netflix has filed an Emergency Motion to Obtain Grand Jury Discovery, seeking the disclosure of evidence and testimony presented to the grand jury. To be clear, Netflix is not seeking to depose any grand jurors or grand jury witnesses. Its requests are focused on uncovering whether Babin properly presented "all the facts" and "applicable law" to the grand jury….

[F]or almost a century now, the Supreme Court has placed its stamp of approval upon the practice of using grand jury transcripts in criminal cases "to impeach a witness, to refresh his recollection, [or] test his credibility," because these are often presumed to be "cases of particularized need where the secrecy of the proceedings is lifted discretely and limitedly." Furthermore, … it is clear that the vault of secrecy "may be broken" in civil cases when a party can demonstrate a "particularized need" for the disclosure of grand jury materials …. And indeed, when the requisite showing has been made, federal district courts within the Fifth Circuit have ordered the disclosure of grand jury materials in a wide variety of civil matters….

[T]o establish a "particularized need" under FED. R. CRIM. P. 6(e), a party must show that: (1) the material they seek is needed to avoid a possible injustice in another judicial proceeding; (2) the need for disclosure is greater than the need for continued secrecy; and (3) their request is structured to cover only material so needed.

Netflix suggests two reasons for why the production of the grand jury materials is necessary to avoid possible injustice. First, with regard to Netflix's prayer for preliminary and permanent injunctive relief, Babin's mental state in seeking the underlying indictments is material to showing a "bad faith" prosecution in violation of the United States Constitution and in retaliation against Netflix for exercising its First Amendment rights. Second, with respect to Babin's invocation of the independent intermediary defense, Netflix's claim will be irreparably harmed if it is prevented from discovering evidence that shows the grand jury proceedings in Tyler County were "tainted" because Babin withheld or misconstrued evidence, misstated the law, or otherwise misled the grand jury.

Arguably, either of these two reasons would independently suffice, and certainly, in combination, it appears beyond dispute that injustice would result if the requested grand jury materials are not produced….

[As to t]he need for disclosure outweighs the need for secrecy[,] … [t]raditionally, five reasons have been advanced for maintaining the secrecy of grand jury proceedings:

To prevent the escape of those whose indictment may be contemplated; (2) to insure the utmost freedom to the grand jury in its deliberations, and to prevent persons subject to indictment or their friends from importuning the grand jurors; (3) to prevent subornation of perjury or tampering with the witnesses who may testify before [the] grand jury and later appear at the trial of those indicted by it; (4) to encourage free and untrammeled disclosures by persons who have information with respect to the commission of crimes; (5) to protect [the] innocent accused who is exonerated from disclosure of the fact that he has been under investigation, and from the expense of standing trial where there was no probability of guilt.

As an initial matter, because it is Netflix, the publicly named criminal defendant, seeking disclosure here, the first and fifth reasons are inapplicable. Furthermore, since the underlying grand jury proceedings have been terminated, the risks to the particular grand jury that indicted Netflix have been greatly "reduced" by the "passage of time." Finally, with regard to Douglas Oil's instruction to consider the risk to "future grand juries," this Court finds such risk minimal. Netflix is not seeking the disclosure of the grand jury's deliberations, the deposition of any of its members, or the deposition of any witnesses that appeared before the grand jury. Accordingly, there is no tangible threat to the "free and untrammeled" discourse of future grand juries or the testimony of witnesses that might appear before them. It is also worth noting that the "public's interest in accurate information about its public officials" may be an additional factor that weighs in favor of disclosure here….

As a final matter, the Court finds that Netflix's request is "structured to cover only the material needed." It is uncontroverted that Netflix is not seeking to depose any grand jury members or witnesses, or to access any records of the grand jury's deliberations. Instead, its requests are narrowly tailored toward uncovering whether Babin properly presented "all the facts" and "applicable law" to the grand jury. As explained earlier, these materials may (a) provide necessary evidence of Babin's state of mind in pursuing these indictments, which goes to the "bad faith" prong of Netflix's claim for preliminary or permanent injunctive relief, and (b) allow Netflix to challenge Babin's otherwise unverifiable assertion that the grand jury proceedings were untainted, which is an inherent component of his independent intermediary affirmative defense.

Therefore, Netflix has demonstrated a "particularized need" for the state grand jury materials, and its Emergency Motion to Obtain Grand Jury Discovery is GRANTED. As a final safeguard, the Court ORDERS that the requested materials and interrogatory responses be submitted for its in camera inspection. After the submitted materials and interrogatory responses have been inspected, the Court will enter a further order consistent with its in camera findings….