Opinion ID: 1997305
Heading Depth: 2
Heading Rank: 1

Heading: Collective Entity Doctrine

Text: The origins of the collective entity doctrine can be traced to two cases. The first case, Hale v. Henkel, 201 U.S. 43, 26 S.Ct. 370, 50 L.Ed. 652 (1906), held that corporations have no Fifth Amendment privilege. In Hale, a corporation was under investigation. A grand jury summoned an officer of the corporation to produce the corporation's books and records, which the officer refused to produce, claiming production of the documents would incriminate the corporation. The Court, holding that an officer of a corporation cannot assert a Fifth Amendment privilege for a corporation as to that corporation's books and records, reasoned: If, whenever an officer or employee of a corporation were summoned before a grand jury as a witness he could refuse to produce the books and documents of such corporation, upon the ground that they would incriminate the corporation itself, it would result in the failure of a large number of cases where the illegal combination was determinable only upon the examination of such papers. Conceding that the witness was an officer of the corporation under investigation, and that he was entitled to assert the rights of the corporation with respect to the production of its books and papers, we are of the opinion that there is a clear distinction in this particular between an individual and a corporation, and that the latter has no right to refuse to submit its books and papers for an examination at the suit of the state.... ... While an individual may lawfully refuse to answer incriminating questions unless protected by an immunity statute, it does not follow that a corporation, vested with special privileges and franchises, may refuse to show its hand when charged with an abuse of such privileges. Id. at 74-75, 26 S.Ct. at 378-79, 50 L.Ed. at 665-66. In the second case, Wilson v. United States, 221 U.S. 361, 31 S.Ct. 538, 55 L.Ed. 771 (1911), the Supreme Court limited an individual's ability to assert his Fifth Amendment privilege as to the books and records of a corporation, thus giving birth to what has become known as the collective entity doctrine. In Wilson, a grand jury issued a subpoena to United Wireless Telegraph Company, compelling it to produce copies of letters and telegrams made by the president of the company, Wilson. The subpoena was served on Wilson, as president of the company, and two other persons. Refusing to produce the records before the grand jury, Wilson asserted that the requested documents would tend to incriminate him and therefore he was not required to produce them. The lower court disagreed, and he was found in contempt. Citing to Hale, the Court held the custodian of corporate records did not have a Fifth Amendment privilege as to the contents of the records, even though the records tended to incriminate the individual. See also Dreier v. United States, 221 U.S. 394, 31 S.Ct. 550, 55 L.Ed. 784 (1911) (holding corporate officer subpoenaed to produce records of a corporation could not assert his Fifth Amendment privilege against self-incrimination with respect to the corporate records). In United States v. White, 322 U.S. 694, 64 S.Ct. 1248, 88 L.Ed. 1542 (1944), the Court examined whether an officer of an unincorporated labor union could assert a Fifth Amendment privilege in the contents of the union's records in his possession. The Court held he could not. Explaining the rationale behind the collective entity doctrine, the Court stated: The constitutional privilege against self-incrimination is essentially a personal one, applying only to natural individuals.... Since the privilege against self-incrimination is a purely personal one, it cannot be utilized by or on behalf of any organization, such as a corporation. Moreover, the papers and effects which the privilege protects must be the private property of the person claiming the privilege, or at least in his possession in a purely personal capacity. But individuals, when acting as representatives of a collective group, cannot be said to be exercising their personal rights and duties nor to be entitled to their purely personal privileges. Rather they assume the rights, duties and privileges of the artificial entity or association of which they are agents or officers and they are bound by its obligations. In their official capacity, therefore, they have no privilege against self-incrimination. And the official records and documents of the organization that are held by them in a representative rather than in a personal capacity cannot be the subject of the personal privilege against self-incrimination, even though production of the papers might tend to incriminate them personally. Such records and papers are not the private records of the individual members or officers of the organization. Id. at 698-99, 64 S.Ct. at 1251, 88 L.Ed. at 1545-46 (citations omitted). In Bellis v. United States, 417 U.S. 85, 94 S.Ct. 2179, 40 L.Ed.2d 678 (1974), the Court applied the collective entity doctrine to small partnerships. Bellis, the senior partner of a disbanded three-partner law firm, was served with a subpoena ordering him to produce the partnership records in his possession. The federal district court held an individual's Fifth Amendment privilege did not extend to a partnership's financial books and records. The Court of Appeals for the Third Circuit agreed, and the Supreme Court affirmed. The Court noted a partnership, like a corporation, had an existence of its own apart from its members. It also recognized that the privilege against compulsory self-incrimination should be `limited to its historic function of protecting only the natural individual from compulsory incrimination through his own testimony or personal records.' Id. at 89-90, 94 S.Ct. at 2184, 40 L.Ed.2d at 684 (quoting White, 322 U.S. at 701, 64 S.Ct. at 1252, 88 L.Ed. at 1547 (1944)). The Court concluded: We think it is similarly clear that partnerships may and frequently do represent organized institutional activity so as to preclude any claim of Fifth Amendment privilege with respect to the partnership's financial records. Id. at 93, 94 S.Ct. at 2186, 40 L.Ed.2d at 687. This Court applied the collective entity doctrine to a professional association in In re Special Investigation No. 281, 299 Md. 181, 473 A.2d 1 (1984). In that case, a dentist formed a professional association in 1981. Prior to that time, the dentist operated as a sole practitioner. Pursuant to an investigation of alleged medicaid fraud, a grand jury served a subpoena duces tecum on the dentist as the custodian of records of the professional association. The subpoena required production of the medical records of specific patients for the years 1979 to 1982 and daily journal sheets from 1 July 1979 to 30 April 1983. Relying on the Fifth Amendment privilege against self-incrimination, the dentist moved to quash the subpoena. The trial court denied the dentist's motion. On appeal to this Court, we addressed whether the dentist's preincorporation patient records may be produced without violating his Fifth Amendment privilege against self-incrimination. Id. at 194, 473 A.2d at 7 (footnote omitted). The dentist conceded that he had no Fifth Amendment privilege as to the records of the professional association. Holding the dentist did not have a Fifth Amendment privilege as to the patient records created while he was a sole practitioner and relying, in substantial part, on the Supreme Court's discussion of the collective entity doctrine in Bellis, supra, we stated: The patient records here at issue were a part of the warp and woof of the professional association. We believe the trial judge was correct in his conclusion that title to those patient records passed to the professional association once the records were turned over to it. These are no longer the records of the individual dentist. Hence, he has no Fifth Amendment right or privilege in those records. Id. at 198, 473 A.2d at 10.