Key Points:

• Court of Appeals allows founders of charter school to use secret grand jury transcripts in lawsuit against state Attorney General’s Office

• Grand jury transcripts usually kept secret to protect witnesses and prevent negative publicity for accused

• The federal judge will assess whether the defendants have a particularized need for the transcripts

The founders of a charter school may be able to use secret grand jury transcripts to sue the state Attorney General’s Office, the Court of Appeals has said.

In a new ruling, the three-judge panel acknowledged that such documents are normally kept from the public to protect everyone, from witnesses to those named in the indictment.

However, appellate Judge David Weinzweig, writing the unanimous decision, stated that this is not absolute. And in this case, he said there is sufficient reason to allow Amanda Jelleson and April Black to use it in their federal court case claiming the AG’s office and two investigators violated their civil rights in how they got the indictment in the first place — an indictment that was subsequently dismissed.

The decision does not mean everyone will get to review the evidence presented to charge Jelleson, Black and Incito Schools with fraud, theft, forgery and conspiracy.

Instead, Weinzweig said the transcripts should be delivered, under seal, to the federal court handling their case against the prosecutors. And it will be the federal judge who determines whether they have a “particularized need for the transcripts” that outweighs the state law, which actually makes it a crime to knowingly disclose the nature or substance of any grand jury testimony.

At the heart of the case is an indictment brought in 2021 against the school and the founders accusing them of fraud in connection with grant funding. Then-Attorney General Mark Brnovich issued a press release naming the pair and their school, saying the total loss exceeded $567,000.

Attorneys for the defendants said they had provided prosecutors with an audit that showed there had been no wrongdoing. Prosecutors disclosed that report to the grand jury but an expert for the state, in his own testimony, discredited it.

The indictment was thrown out when Maricopa County Superior Court Judge Ronee Korbin Steiner called the statements made by the state’s experts “wildly misleading,” “outright wrong,” and “troubling,” describing the mischaracterizations as “egregious.’’ The state never sought a new indictment and the charges went away.

Now the two women and the school want a federal court to rule they were subject to malicious prosecution, defamation, and the victims of intentional infliction of emotional distress.

To do that, however, they say they need to show the federal court what prosecutors said and did inside the grand jury room.

A state trial judge rejected their request for access to the grand jury records. In the new ruling, Weinzweig said that was wrong.

“Secrecy is vital to grand jury proceedings,” he wrote. “Grand jury proceedings must be kept secret to prevent negative publicity for those accused and ultimately exonerated, to diminish the risk of flight, and to safeguard members of the grand jury from influence or retribution.”

But given the facts of this case, Weinzweig wrote, “society had a diminished interest in grand jury secrecy.”

For one, he said, it is the defendants in the criminal case — the ones who were indicted — who want to use the transcripts in their lawsuit.

“So we are less concerned about negative publicity for those accused and ultimately exonerated,” Weinzweig said.

He also said secrecy is not essential since the indictments already had been made public, meaning there was no way for the defendants to influence the proceedings.

Third, said Weinzweig, the defendants already had the transcripts, which had to be made available to them to defend their case. So he said there was no risk of them using the information in retribution against those who testified.

Weinzweig also noted that the indictments had already been dismissed and the Attorney General’s Office had decided not to refile the charges.

Finally, he said that the trial judge could have allowed them to use the transcripts in the federal case but imposed “protective orders” on how the information could be used.

That, however, still leaves the question of whether the defendants in the criminal case have a “particularized need” for the transcripts.

Weinzweig said that allows a judge to determine that, absent the transcripts, the defendant “will, in some manner, be prejudiced, or his legal rights adversely affected.”

And that, he said, is why the material is being turned over to the federal judge, under seal, who will “assess and balance the particularized need against society’s diminished interest in secrecy.”

A spokesman for Kris Mayes, who became attorney general after the original criminal case was dropped, declined to comment on the ruling or whether her office would appeal to the Arizona Supreme Court.

There’s another party to the case, however: Brnovich, who, as attorney general at the time, not only oversaw the proceedings but also issued a press release about the indictment. He was sued in both his role as attorney general and individually.

Brnovich did not immediately return messages seeking comment.