Source: https://www.legalcrystal.com/case/100991/reisman-vs-caplin
Timestamp: 2017-11-19 16:06:39
Document Index: 491460254

Matched Legal Cases: ['§ 7602', '§ 7210', '§ 7604', '§ 7602', '§ 7602', '§ 7210', '§ 7604', '§ 7602', '§ 7210', '§ 7604', '§ 7604', '§ 7604', '§ 7604', '§ 7210']

Reisman Vs Caplin - Citation 100991 - Court Judgment | LegalCrystal
Reisman Vs. Caplin - Court Judgment
LegalCrystal Citation legalcrystal.com/100991
Decided On Jan-20-1964
Case Number 375 U.S. 440
Appellant Reisman
Respondent Caplin
.....action to enforce a summons issued under § 7602 must be commenced in a district court or before a united states commissioner; such enforcement action would be an adversary proceeding affording a judicial determination of the challenges to the summons and giving complete protection to the witness. pp. 375 u. s. 445 -446. 3. the contention that the penalties of contempt risked by a refusal to comply with the summonses are so severe that the statutory procedure amounts to a denial of judicial review cannot be sustained, since noncompliance is not subject to prosecution under § 7210 when the summons is attacked in good faith. pp. 375 u. s. 446 -447. 4. the provision of § 7604(b) for an "attachment . . . as for a contempt" is applicable only to persons who are.....
U.S. Supreme Court Reisman v. Caplin, 375 U.S. 440 (1964)
Held: Petitioners have an adequate remedy at law, and the complaint is properly dismissed for want of equity. Pp. 375 U. S. 445 -450.
1. A witness or any interested party may attack before the hearing officer, on constitutional or other grounds, a summons issued under § 7602. P. 375 U. S. 445 .
2. Any action to enforce a summons issued under § 7602 must be commenced in a District Court or before a United States Commissioner; such enforcement action would be an adversary proceeding affording a judicial determination of the challenges to the summons and giving complete protection to the witness. Pp. 375 U. S. 445 -446.
3. The contention that the penalties of contempt risked by a refusal to comply with the summonses are so severe that the statutory procedure amounts to a denial of judicial review cannot be sustained, since noncompliance is not subject to prosecution under § 7210 when the summons is attacked in good faith. Pp. 375 U. S. 446 -447.
wholly make default or contumaciously refuse to comply. Pp. 375 U. S. 447 -448.
5. In the procedures before either the district judge or a United States Commissioner, the witness may challenge the summons on any appropriate ground, including the defenses that the material is sought for the improper purpose of obtaining evidence for use in a criminal prosecution, as well as that it is protected by the attorney-client privilege. P. 375 U. S. 449 .
6. Also, in any such procedures, third parties may intervene to protect their interests, or, in the event the taxpayer is not a party to the summons before the hearing officer, he too may intervene. P. 375 U. S. 449 .
7. Orders of a district judge or United States Commissioner in an attachment procedure under § 7604(b) are appealable, and, with a stay order, a witness would suffer no injury while testing the summons. P. 375 U. S. 449 .
8. The remedy specified by Congress works no injustice, and suffers no constitutional invalidity, wherefore the parties here are remitted to the comprehensive procedure of the Code, which provides full opportunity for judicial review before any coercive sanctions may be imposed. P. 375 U. S. 450 .
under § 7602 [ Footnote 1 ] of the Internal Revenue Code of 1954, to Peat, Marwick, Mitchell & Co., directing the production of "all audit reports, work papers and correspondence" in that firm's custody pertaining to Mr. Bromley and his several business interests. The contention is that the enforced production of the papers is an unlawful appropriation of petitioners' work product and trial preparation, as well as an unreasonable seizure requiring the Bromleys to incriminate themselves and depriving them of the effective assistance of counsel. The District Court concluded that petitioners had no standing to sue; that the complaint failed to state a cause of action; that none of the papers were the work product of the petitioners; and, that the papers did not fall within the attorney-client privilege. The Court of Appeals affirmed, but on the entirely different theory that the suit was, in substance, one against the United States to which it had not consented.
returns of the Bromleys. [ Footnote 2 ] In addition, a criminal investigation of Mr. Bromley on the tax matters was in progress. None of the parties involved here had prepared the tax returns under scrutiny nor advised the Bromleys with regard to the same.
On July 7, 1961, petitioners filed the complaint involved here. They alleged that Peat, Marwick, Mitchell & Co. intended to comply with the subpoenas. [ Footnote 3 ] This would result, they claimed, in an unlawful appropriation of their work product and trial preparation, as well as an unconstitutional seizure of confidential and privileged documents for future use in civil and criminal litigation against petitioners' clients, the Bromleys. They moved for and obtained a temporary restraining order which was later dissolved when the complaint was dismissed. On appeal, the Court of Appeals for the District of Columbia held that the complaint was properly dismissed because "it is not within the court's jurisdiction because it is in substance a suit against the United States to which it has not consented." 115 U.S.App.D.C. 59, 317 F.2d 123, 125.
appropriate process to compel such attendance, testimony, or production of books, papers, or other data." [ Footnote 4 ]
On the other hand, in tax enforcement proceedings, the hearing officer has no power of enforcement or right to levy any sanctions. It is true that any person summoned who "neglects to appear or to produce" may be prosecuted under § 7210, [ Footnote 5 ] and is subject to a fine not exceeding
$1,000, or imprisonment for not more than a year, or both. However, this statute, on its face, does not apply where the witness appears and interposes good faith challenges to the summons. It only prescribes punishment where the witnesses "neglects" either to appear or to produce. We need not pass upon the coverage of this provision in light of the facts here. It is sufficient to say that noncompliance is not subject to prosecution thereunder when the summons is attacked in good faith. [ Footnote 6 ]
Petitioners also point to § 7604(b) [ Footnote 7 ] as posing the risk of arrest should the Commissioner proceed under that section for an "attachment . . . as for a contempt." Arguably,
such a sanction, even though temporary, might be a penalty severe enough to bring the section within the rationale of Young, supra, but we do not so read § 7604(b). This section provides that, where "any person summoned . . . neglects or refuses to obey such summons," the Commissioner may proceed before the United States Commissioner or the judge of the District Court "for an attachment against him as for a contempt." Upon a showing of "satisfactory proof," an attachment for the person so refusing is issued, and he is brought before the United States Commissioner or the district judge, who proceeds "to a hearing of the case." Upon the hearing, the United States Commissioner or the district judge may "make such order as he shall deem proper, not inconsistent with the law for the punishment of contempts. . . ." The predecessor of § 7604(b) was adopted by the Congress in 1864 (13 Stat. 226) at a time when Congress was greatly concerned with tax collection delay. Cong.Globe, 38th Cong., 1st Sess. 2440-2441 (1864). The proponents of the bill emphasized that, after arrest, the witness could assert his objections to the summons. Cong.Globe, 38th Cong., 1st Sess. 2997 (1864). It appears to us that the provision was intended only to cover persons who were summoned and wholly made default or contumaciously refused to comply. Section 7402(b) came into the statute in 1913 (38 Stat. 179), and has been uniformly used since that time. [ Footnote 8 ] As we read the legislative history, § 7604(b) remains in this
Finding that the remedy specified by Congress works no injustice and suffers no constitutional invalidity, we remit the parties to the comprehensive procedure of the Code, which provides full opportunity for judicial review before any coercive sanctions may be imposed. Cf. United States v. Babcock, 250 U. S. 328 , 250 U. S. 331 (1919).
The only prosecution under § 7210 is United States v. Becker, 259 F.2d 869. There the word "neglect" was equated with willfulness. The Government admits that the section is inapplicable to persons who appear and in good faith interpose defenses as a basis for noncompliance. Brief for the Respondent Caplin, pp. 9, 22. Cf. Federal Power Comm'n v. Metropolitan Edison Co., 304 U. S. 375 , 304 U. S. 387 (1938).