Legal Document

375 U.S. 440 84 Supreme Court Reporter 508 11 United States Reports Lawyer’s Edition 2d Series KF101.8 U54 459 Samuel REISMAN et al., doing business as Trammell, Rand and Nathan, Petitioners,v.Hon. Mortimer M. CAPLIN al. Number 119. Argued Dec. 12, 1963. Decided Jan. 20, 1964. [Syllabus from pages 440-441 intentionally omitted] Warren E. Magee, Washington, D.C., for petitioners. Louis Federal KF105 F3 Oberdorfer, respondents. Mr. Justice CLARK delivered the opinion of Court. 1 Petitioners, attorneys taxpayers Martin Judge Allyn Bromley, seek declaratory injunctive relief against respondent Caplin, Internal Revenue Commissioner, accounting firm Peat, Marwick, Mitchell & Co., which at instance petitioners has been working on financial records Bromleys. Petitioners claim null void summonses issued by under § 76021 Code 1954, to directing production 'all audit reports, work papers correspondence' in that firm's custody pertaining Bromley his several interests. The contention is enforced an unlawful appropriation petitioners' product trial preparation well unreasonable seizure requiring Bromleys incriminate themselves depriving them effective assistance counsel. Dis rict concluded had no standing sue; complaint failed state a cause action; none were petitioners; and, did not fall within attorneyclient privilege. Appeals affirmed, but entirely different theory suit was, substance, one it consented. 115 U.S.App.D.C. 59, 317 Reporter, 2nd 123. We granted certiorari, 374 825, 83 1873, 10 1049, have adequate remedy law therefore subject dismissal want equity. This obviates our passing upon any other questions presented. I. 2 Petitioner Reisman, attorney California, years represented In April 1960 he associated with himself three counsel connection Bromleys' tax matters. employed company assist certain civil criminal proceedings arising alleged liability Under supervision petitioners, accountants analyzed various original interests made periodic reports thereof. products joint together all furnished kept separate files labeled property 3 subpoenas served June 13, 1961, after refused make available being informed investigation him was pending. directed branches located Los Angeles, Chicago, New York. They required testify before special agent Commissioner performed also produce documents, material their possession regard At time service there four cases pending Tax contesting deficiencies income returns Bromleys.2 addition, matters progress. None parties involved here prepared scrutiny nor advised same. 4 On July 7, filed here. intended comply subpoenas.3 would result, they claimed, unconstitutional confidential privileged documents future use litigation clients, moved obtained temporary restraining order later dissolved when dismissed. appeal District Columbia held properly dismissed because 'it court's jurisdiction substance consented.' 123, 125. 5 case reaches us stage only affirmative action taken issuance appear hearing officer, i.e., Service, records. yet do so. It necessary we first consider statutory scheme Congress provided enforcement summonses. II. 6 Section 7602 authorizes Secretary Treasury, or delegate, 'the purpose ascertaining correctness return * *, determining person internal revenue collecting such (t)o summon liable having possession, custody, care books account containing entries relating delegate may deem proper, books, papers, records, data, give testimony, oath, be relevant inquiry *.' this provision suffers constitutional infirmity its face. never passed rights party summoned officer 7602. However, Government concedes witness interested attack summons officer. There are among circuits hold both those affected disclosure intervene challenge asserting claims. re Albert Lindley Lee Memorial Hospital, 209 122 (C.A.2d Cir.); Falsone versus States, 205 734 (C.A.5th Corbin Deposit Bank Corbin, Ky. 244 177 (C.A.6th Cir.). agree view see reason why same rule apply Should rejected examiner still refuse produce, given power enforce compliance impose sanctions noncompliance. 7 If wishes summons, must proceed 7402(b), grants Courts 'by appropriate process compel attendance, data.'4 8 Any section adversary proceeding affording judicial determination challenges giving complete protection witness. refusal district judge subjects contempt proceedings. III. 9 urged penalties risked y so severe procedure amounts denial review. leading question Ex parte Young, 28 441, 52 L.Ed. 714 (1908), Oklahoma Operating Love, 252 331, 40 338, 64 596 (1920). believe point Young railroad rates could tested failure comply, occasioned risk imprisonment large fines, regardless willfulness comply. And laundry rate fixed Corporation Commission penalty $500 per day, each day violation. hand, right levy sanctions. true who 'neglects produce' prosecuted 72105 fine exceeding $1,000, more than year, both. statute face does where appears interposes good faith summons. prescribes punishment witnesses 'neglects' either produce. need pass coverage light facts sufficient say noncompliance prosecution thereunder attacked faith.6 7604(b)7 posing arrest should 'attachment contempt.' Arguably, sanction, even though temporary, might enough bring rationale supra, read 7604(b). provides 'any neglects refuses obey summons' 'for attachment Upon showing 'satisfactory proof,' refusing brought proceeds 'to case.' 'make shall inconsistent contempts predecessor 7604(b) adopted 1864 (13 Statutes-at-Large 226) greatly concerned collection delay. Cong.Globe, 38th Cong., 1st Sess. 2440—2441 (1864). proponents bill emphasized assert objections 2997 cover persons wholly default contumaciously 7402(b) came into th 1913 (38 179) uniformly used since time.8 As legislative history, remains comprehensive contumacious honor But cases, just 7210, court authorized 'shall proper.' 12 Furthermore, these procedures ground. include, held, defenses sought improper obtaining evidence prosecution, Boren Tucker, Cir., 239 767, 772—773, protected attorney-client privilege, Sale 228 682. third protect interests, event taxpayer he, too, intervene. See supra. whether nature. Cf. McCrone 307 61, 59 685, 1108 (1939); Brody 243 378. Finally, orders appealable. O'Connor O'Connell, 253 365 (C.A.1st supra; Bouschor 316 451 (C.A.8th Chandis Securities 128 731 (C.A.9th D. 321 586 Contra, Application Davis, 303 601 (C.A.7th follows stay suffer injury while testing 13 Nor difference indicate Co.—that voluntarily turn over Commissioner. true, restrain compliance, suggests, until ordered competent jurisdicti n. Had been, intervened asserted 14 Finding specified works injustice invalidity, remit Code, full opportunity review coercive imposed. Babcock, 250 328, 39 464, 465, 63 1011 (1919). 15 Affirmed. '§ Examination 'For return, making made, equity transferee fiduciary respect tax, liability, authorized— '(1) To examine data inquiry; '(2) perform act, employee person, place named '(3) take testimony concerned, inquiry.' These heard now advisement answer admitted essential allegations complaint, except alleging subpoenas. said 'would compromise preparation' cases. joined prayer relief. 7604(a) (b) gives additional considered hereafter. 1954 7210: 'Any who, duly testify, accounts, memoranda, sections 6420(e)(2), 6421(f)(2), 7602, 7603, 7604(b), shall, conviction thereof, fined imprisoned both, costs prosecution.' 7210 Becker, 259 869. word 'neglect' equated willfulness. admits inapplicable interpose basis Brief Respondent Pages 9, 22. Power commission Metropolitan Edison 304 375, 387, 58 963, 968, 92 1408 (1938). 7604(b): 'Enforcement. Whenever required, commissioner resides found contempt. duty hear application, if satisfactory proof issue attachment, some proper case; contempts, obedience requirements punish disobedience.' occasionally claimed E.g., 682, Brownson 32 844. context inappropriate. Attachment neither defaulted raise considerations, reading statute.

Classification Label: 11