Source: https://law.justia.com/cases/federal/appellate-courts/F2/388/464/160546/
Timestamp: 2019-12-13 15:38:48
Document Index: 380705936

Matched Legal Cases: ['§ 7604', '§ 2259', '§ 2', '§ 2264', '§ 2', '§ 2264']

United States of America et al., Appellants, v. Carl Cohen, Appellee, 388 F.2d 464 (9th Cir. 1967) :: Justia
Justia › US Law › Case Law › Federal Courts › Courts of Appeals › Ninth Circuit › 1967 › United States of America et al., Appellants, v. Carl Cohen, Appellee
United States of America et al., Appellants, v. Carl Cohen, Appellee, 388 F.2d 464 (9th Cir. 1967)
U.S. Court of Appeals for the Ninth Circuit - 388 F.2d 464 (9th Cir. 1967) December 19, 1967
Beason filed a petition in the district court for enforcement of the summons pursuant to section 7604(a), I.R.C.1954, 26 U.S.C. § 7604(a) (1964). After an evidentiary hearing, the district court quashed the summons. United States v. Cohen, 250 F. Supp. 472 (D. Nev. 1965). The government appeals. We affirm.
The Fifth Amendment commands that "No person * * * shall be compelled * * * to be a witness against himself." It is obvious that the government seeks to compel Cohen to produce the described documents without regard to his wishes. It has been the law for at least eighty years that compelled production of documents falls within the ambit of the privilege.2 It is conceded that the documents demanded here might be used by the government against Cohen in a future criminal proceeding.3 Moreover, since the documents themselves are incriminating, their very production pursuant to the description in the summons would constitute an incriminating admission of their identity and authenticity.4 Clearly, recognition of the privilege in this case would serve most of the purposes of the privilege, recently restated in Murphy v. Waterfront Comm'n, 378 U.S. 52, 55, 84 S. Ct. 1594, 1596, 12 L. Ed. 2d 678 (1964):
The government rests this contention principally upon United States v. White, 322 U.S. 694, 64 S. Ct. 1248, 88 L. Ed. 1542 (1944), in which the Court held that an officer of a labor union could not avail himself of the privilege to avoid producing his union's records because they might tend to incriminate him; and Wilson v. United States, 221 U.S. 361, 31 S. Ct. 538, 55 L. Ed. 771 (1911), in which the Court held that a corporate officer could not claim the privilege to avoid the production of his corporation's records. The government reads these cases as denying the protection of the privilege to the officer-claimant because he held the records subject to an obligation to relinquish them to the organization which owned them. We read them rather as an extension of the rule that the privilege against self-incrimination is available to protect only the personal interests of natural persons and not group interests embodied in impersonal organizations.7 Custodians of organizational records may not frustrate the public policy underlying the organization's lack of privilege by withholding the organization's official records from examination by public authorities under a claim of personal privilege. This rationale is obviously inapplicable to the present case.8
It is difficult to see how this conclusion could be affected by the fact that the papers were owned by another who had the right to demand their return. The owner's demand would not involve compulsion by the state, and compliance with it would not incriminate the possessor. The considerations upon which the right depends therefore would not apply, even though the documents might thereafter be obtained by the government from the owner. " [T]he sentiments which bar the state from requiring a person to deliver to it a self-incriminating document are logically unrelated to the fact that someone else, using methods and for reasons not giving rise to those same sentiments, can require the person to deliver up the document to that someone else." 8 Wigmore, Evidence § 2259b, at 360 (McNaughton rev. 1961).11
It is true, as the government points out, that Hale v. Henkel, 201 U.S. 43, 26 S. Ct. 370, 50 L. Ed. 652 (1906), and cases which follow it, including United States v. White, 322 U.S. 694, 64 S. Ct. 1248, 88 L. Ed. 1542 (1944), establish an exception applicable to the records of a corporation or other impersonal organization. It is also settled that the production of such records may be compelled even though a natural individual claiming privilege has acquired both possession and title. Grant v. United States, 227 U.S. 74, 75, 33 S. Ct. 190, 57 L. Ed. 423 (1913); Wheeler v. United States, 226 U.S. 478, 33 S. Ct. 158, 57 L. Ed. 309 (1912).
The government argues that the purpose of the privilege is to prevent the prosecutor from invading the claimant's "privacies of life" (Boyd v. United States, 116 U.S. 616, 6 S. Ct. 524, 29 L. Ed. 746 (1886)), and to force the government "to search for independent evidence" of the claimant's guilt (United States v. White, supra, 322 U.S. at 698, 64 S. Ct. 1248). Papers which originated with the accountant and were created by him for his own purposes are not embraced (the argument continues) within the "privacies" of Cohen's life, but on the contrary, constitute an independent source of evidence of Cohen's offense. The government urges that Cohen should not be permitted to extend the area covered by the privilege or to deny the government access to independent evidence by gathering the documents into his possession after being advised of the government's interest.
Statements in United States v. White, 322 U.S. 694, 64 S. Ct. 1248, 88 L. Ed. 1542 (1944), that the privilege applies to "personal" or "private" records do not support the government's position. As this court pointed out in United States v. Judson, 322 F.2d 460, 464 (1963), the Supreme Court intended only to distinguish between records of a natural person which are entitled to Fifth Amendment protection in appropriate circumstances and records of an impersonal organization which are never entitled to such protection. Since the latter are open to inspection by the government at its pleasure, so far as the privilege against self-incrimination is concerned, they may properly be characterized as quasi-public in character. There is nothing in White or earlier cases to suggest that the Court intended to base Fifth Amendment consequences upon the degree of privacy which attended the creation or maintenance of particular records or upon the degree of the intimacy of the information which they contain.
The privilege has not been limited to documents prepared by the claimant himself or containing his own incriminating statements of fact. Wilson v. United States, 221 U.S. 361, 378, 31 S. Ct. 538, 55 L. Ed. 771 (1911); Maguire, Evidence of Guilt § 2.04, at 22 (1959); Mansfield, The Albertson Case, Sup. Ct. Rev. 103, 126-28 (1966)
Professor Mansfield raises the question of whether the emphasis on testimonial or communicative use in Schmerber v. State of California, 384 U.S. 757, 86 S. Ct. 1826, 16 L. Ed. 2d 908 (1966) (see also Warden v. Hayden, 387 U.S. 294, 302-303, 87 S. Ct. 1642, 18 L. Ed. 2d 782 (1967); United States v. Wade, 388 U.S. 218, 222, 87 S. Ct. 1926, 18 L. Ed. 2d 1149 (1967); and Gilbert v. State of California, 388 U.S. 263, 266-267, 87 S. Ct. 1951, 18 L. Ed. 2d 1178 (1967)), may foreshadow change in this area. But even if the privilege were to be restricted to papers containing verbalizations by the claimant of his own state of mind, or were to be held inapplicable even to these on the ground that the statements reflected in such papers were not compelled, the privilege would still seem to be available for the second aspect mentioned in the text, namely, the identification and verification of the papers by the claimant which is necessarily implicit in their production under the compulsion of the subpoena. See note 4. This is apparently what the Court had in mind when it stated in Schmerber: "It is clear that the protection of the privilege reaches an accused's communications, whatever form they might take, and the compulsion of responses which are also communications, for example, compliance with a subpoena to produce one's papers" 384 U.S. at 763-764, 86 S. Ct. at 1832. (Emphasis added.)
Curcio v. United States, 354 U.S. 118, 125, 77 S. Ct. 1145, 1 L. Ed. 2d 1225 (1957); 8 Wigmore, Evidence § 2264, at 379-80 (McNaughton rev. 1961); Maguire, Evidence of Guilt § 2.04, at 22 n. 3 (1959). See also United States v. White, 322 U.S. 694, 698, 64 S. Ct. 1248, 88 L. Ed. 1542 (1944)
The district court found that Cohen held the documents "in his rightful and indefinite possession in a purely personal capacity"; and that this was "sufficient to entitle him to invoke the privilege against self-incrimination; and there was "no need to determine the ownership of the work papers." 250 F. Supp. at 475. The government contends that at the very least the case should be remanded for a determination of the issue of title
Thus, in United States v. White, 322 U.S. at 700, 64 S. Ct. at 1252: "The scope and nature of the economic activities of incorporated and unincorporated organizations and their representatives demand that the constitutional power of the federal and state governments to regulate those activities be correspondingly effective. The greater portion of evidence of wrongdoing by an organization or its representatives is usually to be found in the official records and documents of that organization. Were the cloak of the privilege to be thrown around these impersonal records and documents, effective enforcement of many federal and state laws would be impossible." See also Wilson v. United States, 221 U.S. at 380-382, 31 S. Ct. 538; United States v. Silverstein, 314 F.2d 789, 791 (2d Cir. 1963)
The distinction between White and Wilson and the present case may be stated another way. Return of the White and Wilson papers to the owning principal would have automatically turned the papers over to the government, for the government clearly had a right to the papers free of any claim of privilege when the papers were in the "hands" of the corporation or the union. The Court held that the officers could not abrogate the government's right. But no such right is present here; in Berke's hands, the government's right would be conditioned on whether Berke claimed privilege in the papers. The papers sought to be withheld are not open to government inspection but for their being withheld by a fiduciary; they are not papers already determined to be available to the government independent of the privilege against self-incrimination.
Ownership, without possession, of course, does not give rise to a claim of the privilege, for although the owner may watch with regret the giving up of his materials to the government by their possessor, the compulsion which underlies their surrender is not exercised against him and requires no incriminating disclosure, express or implicit, on his part —he need not choose among self-accusation, contempt, or perjury. The privilege prevents self-incrimination, not incrimination itself. Johnson v. United States, 228 U.S. 457, 33 S. Ct. 572, 57 L. Ed. 919 (1913) (Mr. Justice Holmes): "A party is privileged from producing the evidence, but not from its production." Id. at 458, 33 S. Ct. at 572. "If the documentary confession comes to a third hand alio intuitu, as this did, the use of it in court does not compel the defendant to be a witness against himself." Id. at 459, 33 S. Ct. at 572. See also Ex Parte Fuller, 262 U.S. 91, 93-94, 43 S. Ct. 496, 67 L. Ed. 881 (1923); Dier v. Banton, 262 U.S. 147, 149-150, 43 S. Ct. 533, 67 L. Ed. 915 (1923); Perlman v. United States, 247 U.S. 7, 15, 38 S. Ct. 417, 62 L. Ed. 950 (1918); Remmer v. United States, 205 F.2d 277, 285 (9th Cir. 1953), rev'd on other grounds 347 U.S. 227, 74 S. Ct. 450, 98 L. Ed. 654 (1954).
Application of House, 144 F. Supp. 95, 101 (N.D. Cal. 1956); Fahey, Testimonial Privilege of Accountants in Federal Tax Fraud Investigations, 17 Tax.L.Rev. 491, 504 (1962); Meltzer, Required Records, The McCarran Act, and the Privilege against Self-Incrimination, 18 U. Chi. L. Rev. 687, 706-08 (1951); 8 Wigmore, Evidence § 2264, at 379-80 (McNaughton rev. 1961). See also United States v. Foster, 16 A.F.T.R.2d 5121 (W.D. Tex. 1965); Application of Daniels, 140 F. Supp. 322, 327 n. 5 (S.D.N.Y. 1956). See note 17
See also Cohen, Accountants' Workpapers in Federal Tax Investigations, 21 Tax L.Rev. 183, 199 n. 52, 200 n. 53 (1966). It may be argued that since seizure by the state armed with a proper warrant does not involve compelled self-incrimination and since the decision in Warden v. Hayden, 387 U.S. 294, 87 S. Ct. 1642, 18 L. Ed. 2d 782 (1967), abolished the "mere evidence" rule, refusal to permit the government to obtain the documents sought here by its summons unduly exalts form. One of many answers to this contention is that the Fourth Amendment has its own set of protective limitations, including those of specificity and probable cause.
See, e.g., Fahey, Testimonial Privilege of Accountants, 17 Tax L.Rev. 491, 504 (1962); Meltzer, Required Records, 18 U. Chi. L. Rev. 687, 707 (1951)
Cf. Silverthorne Lumber Co. v. United States, 251 U.S. 385, 392, 40 S. Ct. 182, 183, 64 L. Ed. 319 (1920): "But the rights of a corporation against unlawful search and seizure are to be protected even if the same result might have been achieved in a lawful way."
The government relies principally upon the pronouncement in Deck v. United States, 119 U.S.App.D.C. 240, 339 F.2d 739, 740-741 (1964), "that one who holds papers against the owner's demands for their return cannot resist production by claiming the privilege against self-incrimination." Compare In re Fahey, 300 F.2d 383 (6th Cir. 1961)
Judge Learned Hand in In re Grant, 198 F. 708, 709 (S.D.N.Y. 1912), aff'd 227 U.S. 74, 33 S. Ct. 190, 57 L. Ed. 423 (1913), noted that in Wilson v. United States, 221 U.S. 361, 31 S. Ct. 538, 55 L. Ed. 771 (1911), the documents belonged to the corporation and the directors had demanded their return but the Supreme Court did not place its decision upon either ground, but rather upon the quasi-public character of the corporate books. Explaining why neither lack of title nor a demand to relinquish possession would be sufficient to deny the privilege, Judge Hand said:
The district court found that Berke took this step "only because of Beason's request. Berke did not make the request because he wanted the records back. The contrary is true. At all times, Berke disclaimed any property or possessory right to the records." 250 F. Supp. at 473
250 F. Supp. at 473 n. 1, quoting a letter from Berke to Beason dated September 29, 1964. This is the date upon which the summons was served upon Cohen. However, the concluding paragraph of the letter, not quoted by the district court, indicates that the letter was confirmatory of a telephone conversation between Berke and Beason on September 2, 1964