U.S. Markets open in 3 hrs 52 mins

Mystery Company in Mueller Subpoena Fight Loses at Top Court

Greg Stohr

(Bloomberg) -- The U.S. Supreme Court turned away an appeal connected to Special Counsel Robert Mueller’s now-completed investigation, rejecting arguments from a mystery company that was trying to avoid having to turn over information to a grand jury.

The justices, without explanation Monday, left intact a federal appeals court ruling that said the company, owned by an unidentified foreign government, had to comply with a subpoena. The company, which refused to cooperate, faces fines that have increased by $50,000 a day and may have grown to well more than $2 million.

The U.S. attorney’s office in Washington will be taking over the matter, the special counsel’s office said Monday. The ongoing significance isn’t clear now that Mueller has submitted his final report on the investigation to Attorney General William Barr.

The case marked the first known effort to get the Supreme Court to weigh in on Mueller’s probe, which centered on Russian meddling with the 2016 election and possible obstruction of justice. The justices previously refused to block the appeals court ruling while they considered whether to take up the case.

The dispute became a source of intrigue in part because a federal appeals court in Washington closed an entire floor of a courthouse to the public while the case was being argued in December.

The case has been so secret that Mueller’s name didn’t appear publicly in a Supreme Court document until this month. Court records provide no hints as to what Mueller was seeking.

The company has an American office where the July 2018 subpoena was served. Prosecutors contended the company conducts "considerable business" in the U.S., according to an appeals court opinion.

At the Supreme Court, the company argued that the 1976 Foreign Sovereign Immunities Act protects foreign governments and entities they own from being dragged into U.S. criminal cases. The appeal also argued that U.S. courts can’t impose sanctions on a foreign sovereign for not complying with a subpoena.

In ruling against the company on a 3-0 vote, the federal appeals court in Washington said the 1976 law, while shielding foreign governments in some contexts, gives American courts authority over them when they are involved in U.S. commercial activity.

Mueller didn’t have authority to file briefs at the Supreme Court, but U.S. Solicitor General Noel Francisco weighed in on the special counsel’s behalf and urged the court to reject the appeal.

The case is In Re Grand Jury Subpoena, 18-948.

(Updates third paragraph to say U.S. attorney’s office will take over matter.)

To contact the reporter on this story: Greg Stohr in Washington at gstohr@bloomberg.net

To contact the editors responsible for this story: Joe Sobczyk at jsobczyk@bloomberg.net, Laurie Asséo, Laura Litvan

For more articles like this, please visit us at bloomberg.com

©2019 Bloomberg L.P.