Court Opinion

ID: 70946
Source: CourtListenerOpinion
Date Created: 2010-04-26 07:10:01+00
Date Added: 2024-06-11T14:59:01.792182
License: Public Domain

[PUBLISH]

              IN THE UNITED STATES COURT OF APPEALS

                    FOR THE ELEVENTH CIRCUIT

                           No. 96-4676
                      Non-Argument Calendar

                    D.C. Docket No. FGJ-96-02

IN RE: Grand Jury Subpoena dated April 9, 1996,

                              (FGJ 96-02),

     versus

JOAN SMITH,

                              Appellant.

          Appeal from the United States District Court
              for the Southern District of Florida

                         (June 21, 1996)

Before KRAVITCH, EDMONDSON and BARKETT, Circuit Judges.
KRAVITCH, Circuit Judge:

     Appellant has been held in civil contempt for refusing to

testify before a grand jury on the ground that her testimony would

incriminate   her   in   violation   of   her   rights   under   the   Fifth

Amendment.    We reverse.

                                     I.

     Appellant was served with two grand jury subpoenas.           One was

directed to her in her personal capacity, and the other was

directed to the custodian of records for a corporation of which she

is the sole officer and director.          Appellant filed a motion to

quash the latter subpoena.    In that motion, she stated that she did

not have the specified records in her possession and that if she

were questioned before the grand jury as to their location, she

would invoke her Fifth Amendment right not to incriminate herself.

When appellant was called before the grand jury, she testified that

she did not have the records, and then, when asked where the

records sought in the subpoena were located, she refused to answer.

     After a hearing, the district court denied appellant's motion

to quash the subpoena and ordered her to testify.          When appellant

refused to comply, the court held her in civil contempt and ordered

her detention until she complied with the court's order or until

the expiration of the grand jury's term.        The order of contempt was

entered on May 10, 1996.      The district court stayed its contempt

                                     2
order until July 1, 1996, in order to allow this court to hear an

appeal.1

                                           II.

       The issue before us is whether a custodian of corporate

records who is not in possession of the records may be compelled to

testify regarding their location.                We conclude that she may not.

       The    Fifth     Amendment      protects      an     individual      from     being

compelled to provide testimony that might be self-incriminating.

U.S.    Const.     amend.      V.      Testimony       is    not     limited    to    oral

declarations, but may include, inter alia, the production of

documents.       E.g.,     United States v. Doe, 104 S. Ct. 1237 (1984);

Fisher v. United States, 96 S. Ct. 1569 (1976).                        In Fisher, the

Court recognized that "[t]he act of producing evidence in response

to a subpoena . . . has communicative aspects of its own . . . ."
96 S. Ct. at 1581.            The production of documents conveys the fact

that the documents exist, that they were in the possession of the

witness, and that they were the documents subject to the subpoena.

Id.        Where      these    communicative         acts       of   production       have

"testimonial"         value    and    incriminate         the   witness,     the     Fifth

Amendment privilege may be invoked.                     Doe, 104 S. Ct. at 1244
(holding that Fifth Amendment protects a sole proprietor from

   1
    Section U.S.C. § 1826(b) provides that "[a]ny appeal from an order of confinement
under this section shall be disposed of . . . not later than 30 days from the filing of such
an appeal." June 10, 1996 was the thirtieth day after this appeal was filed. This court
has held, however, that 28 U.S.C. § 1826(b) "does not apply when . . . the recalcitrant
witness is at liberty pending appeal." In re Grand Jury Proceedings, 946 F.2d 746, 749
n.3. Because the appellant has been at liberty during the pendency of this appeal, 28
U.S.C. § 1826(b) does not apply.

                                             3
producing business records when the act of production itself

constituted testimonial incrimination); Fisher, 96 S. Ct. at 1581

(suggesting that where an act of production is testimonial the

Fifth   Amendment    is    applicable,      but    holding   that   the   act    of

production   was    not    privileged       because   the    existence    of    the

documents in that case was "a foregone conclusion and the taxpayer

adds little or nothing to the sum total of the Government's

information by conceding that he in fact has the papers").

     Although      the    Fifth   Amendment       protects   individuals       from

compelled, incriminating testimony, it does not do the same for

corporations; an agent of a "collective entity" may not refuse to

produce documents even when those documents will incriminate that

entity.   Hale v. Henkel, 201 U.S. 43 (1906) (corporation has no

Fifth Amendment privilege); United States v. White, 64 S. Ct. 1248

(1944) (labor union unprotected by Fifth Amendment).                Moreover, an

agent of a corporation may not refuse to turn over corporate

records even when the content of those records may incriminate the

subpoenaed agent herself.         United States v. White , 64 S. Ct. at

1250 (custodian must produce labor union's documents where contents

incriminate custodian); Wilson v. United States, 31 S. Ct. 538, 546
(1911) (custodian must produce corporate documents even where

contents are self-incriminating).                 Denying agents immunity is

justified by the fact that an agent is not compelled to prepare the

documents over which she had temporary control, nor is there a

necessary relation between the person producing the documents and

the documents themselves.         See   Braswell v. United States, 108 S.

                                        4
Ct. 2284, 2298 (1988) (Kennedy, J., dissenting).     Although it has

long been clear that a custodian of corporate records may not claim

a Fifth Amendment privilege to avoid producing documents even

though the contents of the documents would incriminate her, it was

unclear until recently whether that privilege applied when the act

of production itself constituted self-incriminating testimony.

     In Braswell v. United States, the Supreme Court answered this

question, holding that a custodian of corporate records must comply

with a subpoena ordering the production of those records even when

the act of production constitutes testimonial self-incrimination.
108 S. Ct. at 2296.     The Court held that the "collective entity"

doctrine prohibited the agent's reliance on the Fifth Amendment

when called upon to produce documents belonging to the principal.

     In reaching this conclusion, the Court relied on the "agency

rationale undergirding the collective entity decisions."    Braswell

at 2291.    The Court stated that a custodian of records acts in a

representative capacity and not a personal capacity.      Id.   As an

agent of the corporation, the custodian is bound by the same

obligation to produce records that belongs to the corporation

itself.    Id.   "[T]he custodian's act of production is not deemed a

personal act, but rather an act of the corporation," irrespective

of whether the agent's act is testimonial and incriminating.      Id.

     The Braswell Court distinguished Curcio v. United States, 77
S. Ct. 1145 (1957), which reversed a contempt citation that was

issued to the secretary-treasurer of a union who refused to answer

questions pertaining to the whereabouts of union records.          In

                                   5
Curcio, the Court rejected the government's argument "that the

representative duty which required the production of union records

in the White case requires the giving of oral testimony by the

custodian . . . ."         Id. at 1149.        The Court explained that

      forcing the custodian to testify orally as to the
      whereabouts of nonproduced records requires him to
      disclose the contents of his own mind.      He might be
      compelled to convict himself out of his own mouth. That
      is contrary to the spirit and letter of the Fifth
      Amendment.

Id. at 1151-52.         The difference between              Curcio and Braswell,

according to the Court, is that "with respect to a custodian of a

collective entity's records, the line drawn was between oral
                                                              2
testimony and other forms of incrimination."                      Braswell, 108 S.

Ct. at 2293.

      In   drawing     a    line   between     acts    of   production      and   oral

testimony, the Court appears to have relied on one fact that

distinguishes these two types of testimony: the corporation owns

the documents.       In contrast, to the extent that one's thoughts and

statements can be said to "belong" to anyone, they belong to the

witness herself.           A custodian has no personal right to retain

corporate books.       Because the documents belong to the corporation,

the state may exercise its right to review the records.                   Wilson, 31
S. Ct. at 546 (The State's "visitorial power which exists with

respect to the corporation of necessity reaches the corporate

books, without regard to the conduct of the custodian.") (quoted in

  2
    Only "incriminating" oral testimony is protected. In Curcio, the Court stated that a
witness could be compelled to identify documents that had already been produced
because in such a case "[t]he custodian is subject to little, if any, further danger of
incrimination." 77 S. Ct. 1150.

                                           6
Braswell, 108 S. Ct. at 2289).        For Fifth Amendment analysis, oral

statements are different.       The government has no right to compel a

person to speak the contents of her mind when doing so would

incriminate that person; to do so would be "contrary to the spirit

and letter of the Fifth Amendment."         Curcio 77 S. Ct. at 1151-52.

      Appellant in this case is not refusing to produce corporate

documents; she claims not to possess them.           As in Curcio, she is

refusing to provide oral testimony regarding the location of the

documents. Curcio appears, therefore, to be on all fours with this

case.   Nevertheless, the government argues, and the district court

held, that Curcio does not apply.

      The district court distinguished Curcio on the ground that the

witness in that case was called before the grand jury pursuant to

a   personal   subpoena   and   not   in   his   capacity   as   the   records

custodian, noting that the Court made clear that "[t]his conviction

related solely to petitioner's failure to answer questions asked

pursuant to the personal subpoena ad testificandum." Curcio, 77 S.

Ct. at 1148.     The reason for this language, however, was not to

limit the analysis only to personal subpoenas, but merely to

indicate that the Court was not addressing Curcio's obligation "to

produce the books and records demanded in the subpoena duces
tecum."   Id. (first emphasis added).

      Had the Court intended to rely on the distinction between

types of subpoenas, it would have been unnecessary to analyze

Curcio's rights under the Fifth Amendment; rather, the Court could

simply have held that the Fifth Amendment bars the production of

                                      7
testimonial evidence under a personal subpoena.                    Furthermore, were

Curcio limited to personal subpoenas, the Court would not have

found it necessary to consider that case in Braswell, where the
witness was served in his capacity as president of a corporation

and the subpoena did not require his testimony. 108 S. Ct. at

2286.    We see no basis, therefore, for distinguishing
                                                      Curcio on the

ground that Curcio involved a personal subpoena.

        The   line    drawn    between     the    act   of    production      and    oral

testimony may be a purely formal one, but it is the line that the

Supreme       Court   has   drawn.       The     refusal     to   provide     testimony

pertaining       to   the     location    of     documents     not    in   appellant's

possession falls squarely on the side of the line that the Supreme

Court has held is subject to Fifth Amendment protection. Absent an

adequate grant of immunity, the appellant may not be compelled to

testify as to the location of documents not in her possession when

that testimony would be self-incriminating.3

   3
     The instant case is distinguishable from United States v. Rylander, 103 S. Ct. 1548
(1983), in which the Court held that where a claim of lack of possession is raised for the
first time at a contempt hearing for failure to produce documents, the witness has the
burden of proving a present inability to comply, even where this requires providing oral
testimony. Id. at 1554. In that case, after Rylander refused to comply with an IRS
summons, the district court issued an order to show cause why the order should not be
enforced. Id. at 1551. Rylander failed to file a responsive pleading, did not appear for
the show cause hearing, and did no more than send an unsworn letter to the court
stating that he was not the president of the corporation and that he did not possess the
records. Id. The court found that he possessed the documents and ordered the
summons enforced. Id. at 1554 n.3. Rylander did not seek reconsideration, neither did
he appeal. Id. at 1551.
        Having never raised a claim of inability to comply with the summons (and the
court having found to the contrary), the only issue before the court at the contempt
hearing was whether Rylander had the present ability to comply with the order -- he was
not permitted to raise his original inability to comply with the original summons. Id. at
1552 ("[A] contempt proceeding does not open to reconsideration the legal or factual
basis of the order alleged to have been disobeyed . . . .") (quoting Maggio v. Zeitz, 68 S.
Ct. 401, 408 (1948)). At the contempt hearing, where there was a presumption of

                                            8
                                          III.

       The government next argues that by stating to the grand jury

that she did not possess the records, the witness has waived her

Fifth Amendment privilege. Rogers v. United States, 71 S. Ct. 438,

442 (1951). We disagree. Because a custodian of corporate records

is required to produce corporate documents sought pursuant to a

subpoena, her statement at an enforcement hearing that she is not

in possession of those documents does not constitute a waiver of

her Fifth Amendment rights.

       The case before us is distinguishable from United States v.

Hankins, 565 F.2d 1344 (5th Cir.), clarified, 581 F.2d 431 (5th

Cir. 1978), cert. denied, 99 S. Ct. 1218 (1979), where the Former

Fifth Circuit refused to permit a defendant at a contempt hearing

to invoke his Fifth Amendment right not to testify about the

present location of documents that he had been previously ordered

to produce.4

continued possession of the documents, Rylander had the burden of demonstrating his
present inability to comply. Id. The Rylander Court held, therefore, that in defending
a contempt charge where the defendant had not previously challenged his inability to
comply with a summons to produce documents (and where the court had already found
that the defendant had possessed the documents), a defendant may raise only the
defense of a present inability to comply. The Court further held that in making such a
defense, the burden of proving that inability is on the defendant, even if doing so
requires testimony that may be self-incriminating. The Court did not address the
question of whether a defendant could be forced to provide self-incriminating oral
testimony in a subpoena enforcement proceeding or in support of a motion to quash a
subpoena. See White Collar Crime: Survey of Law -- 1983 Update, 21 Am.Crim.L.Rev.
179, 181-82 (1983) ("Rylander leaves open the question of whether resort to the privilege
against self-incrimination in a subpoena enforcement proceeding will shift the burden
of proving availability to the government."). As our opinion makes clear, a defendant
may not be forced to testify under these circumstances. Inability to comply, however,
may possibly be provable by means other than defendant's own testimony.
   4
    Decisions of the Fifth Circuit decided prior to the close of business on September
30, 1981, are binding precedent in the Eleventh Circuit under Bonner v. City of Pritchard,

                                            9
       Hankins had refused to turn over partnership records to the

IRS on the ground that the records themselves would incriminate

him. 565 F.2d at 1348.         The district court properly rejected this

claim and ordered the records produced.          Id. at 1351.      When all the

documents were not produced, upon petition by the government, the

court issued an order to show cause why Hankins should not be held

in contempt.       Id.   Because Hankins failed to produce evidence that

he could not comply with the enforcement order, he was held in

contempt.

       On appeal, "Hankins argue[d] that the District Court erred in

holding him in contempt because he had informed the Court at the

enforcement hearing . . . that he did not have all the records

summoned by the government."             Id. (emphasis added).       The Fifth

Circuit    found    this    contention    "totally   devoid   of   merit.   No

evidence on inability to produce was presented by Hankins during

the enforcement hearing in response to the government's evidence

that the books and records were in his hands."            Id.      In fact, the

district court explicitly had found that Hankins had "acknowledged

to the Court that he had in his possession, in whatever capacity,

the summoned records."          Id. at 1351 n.3.
       In a clarifying opinion, the Fifth Circuit explained that it

would not permit Hankins to relitigate the district court's earlier

finding that he had possessed the records at the time the court

ordered the summons enforced. 581 F.2d at 437 n.8. (citing Maggio

v. Zeitz, 68 S. Ct. 401, 408 (1948)).         Had Hankins "appeared before

661 F.2d 1206, 1209 (11th Cir. 1981).

                                         10
the Internal Revenue Agent as ordered by the District Court and

testified under oath" that he did not possess all the documents,

the burden would not have shifted to Hankins to prove that he never

had the documents. 565 F.2d at 1352 (distinguishing United States

v. Silvo, 333 F. Supp. 264 (W.D.Mo. 1971)).            The issue before the

court at the contempt hearing was only Hankins's present inability

to comply.

       In a subsequent habeas proceeding, Hankins v. Civiletti, 614
F.2d 953 (5th Cir. 1980), Hankins submitted affidavits attesting to

his inability to comply with the summons when initially served and

at any time thereafter.       Id. at 954.     The district judge rejected

this proffer as insufficient to purge Hankins of his contempt or to

comply with earlier mandates of the court.           Id.   Hankins then took

the stand and testified that he had complied to the best of his

ability.     Upon cross-examination, he refused on Fifth Amendment

grounds to explain what he knew about the missing papers.                On

appeal,    the   court    held   that    Hankins's   testimony   on   direct

examination constituted a waiver "of his Fifth Amendment privilege

with regard to matters relevant to his direct testimony."             Id. at

955.

       In contrast to the present case, Hankins involved an attempt
to relitigate an issue during a contempt hearing that was never

raised at the initial enforcement hearing.           Because the defendant

failed to raise the claim of inability to produce records at the

time the summons was enforced, the burden shifted to the defendant

to prove a present inability to comply at the time of the contempt

                                        11
hearing, even when doing so would result in self-incrimination. See

United States v. Rylander, 103 S. Ct. at 1554, discussed infra at

n.3.    Once Hankins testified at the contempt hearing that he was

unable presently to comply, however, the government was entitled to

cross-examine    him.     Accordingly,    his   testimony   on   direct

examination constituted a waiver of his Fifth Amendment privilege

with regard to that testimony.

       In this case, unlike Hankins, appellant raised her claim of

inability to comply at the time of the enforcement proceeding. Had

appellant been in possession of the records, she would have been

required to turn them over pursuant to the subpoena duces tecum.

See    Braswell, 108 S. Ct. 2284.      Had she remained silent at the

enforcement proceeding, the inference would have been that she was

refusing to comply with the order to produce corporate records; it

would not have been that she was unwilling to state that she did

not possess them.    This is precisely what happened to Hankins. See

United States v. Meeks, 642 F.2d 733, 735 (5th Cir. Unit A, April

1981) ("Hankins never made clear that his claim of privilege was

directed solely against explaining what role he might have played

in the fact that records were no longer available rather than a

general claim that the records within themselves might incriminate

him.").

       Thus, for the Court to treat appellant's statement as a waiver

would create an intolerable result, placing appellant in the

position of remaining silent and being held in contempt for failing

to produce the records that she did not have, or saying that she

                                  12
did not have the records and then being ordered to testify.                             In

other    words,     the   appellant     would       have    had    to    chose    between

testifying and being held in contempt.                 Her Fifth Amendment right

would have slipped between the cracks.                  We hold, therefore, that

appellant did not waive her rights under the Fifth Amendment.

        The    government    also    relies    on    Rogers       to    argue    that   any

statement appellant might have made concerning possession of the

records would not be self-incriminating.                   When a witness invokes a

claim of privilege, there must be a "substantial and `real' fear"

of self-incrimination.            Marchetti v. United States, 88 S. Ct. 697,

705 (1968); United States v. Cuthel, 903 F.2d 1381, 1384 (11th Cir.

1990)    ("A    witness     may   properly     invoke      the    privilege      when   he

`reasonably apprehends a risk of self-incrimination . . . .'")

(quoting In re Corrugated Container Anti-Trust Litigation, 620 F.2d
1086, 1091 (5th Cir. 1980)).             In Rogers, the witness refused to

testify out of a desire to protect the person who possessed the

records. 71 S. Ct. at 439.      After considering what information the

testimony would reveal about the witness, the Court determined that

on the facts of that case it would not have been incriminating.

Id. Whether testimony is self-incriminating is, however, a factual
question.       Doe at 1243.       Thus, we leave to the district court the

question of whether testimony by the appellant as to who possessed

the records sought by the subpoena would constitute incriminating

evidence.

                                         IV.

                                         13
    The district court's order of contempt is REVERSED. This case

is REMANDED to the district court for a determination of whether

appellant   has   demonstrated   a    substantial   risk   of   self-

incrimination.

                                 14