Court Opinion

ID: 70944
Source: CourtListenerOpinion
Date Created: 2010-04-26 07:10:00+00
Date Added: 2024-06-11T14:58:51.184768
License: Public Domain

United States Court of Appeals,

                            Eleventh Circuit.

                               No. 96-4676

                         Non-Argument Calendar.

   In re GRAND JURY SUBPOENA DATED APRIL 9, 1996, (FGJ 96-02),

                                     v.

                         Joan SMITH, Appellant.

                             June 21, 1996.

Appeal from the United States District Court for the Southern
District of Florida. (No. FGJ-96-02), Federico A. Moreno, Judge.

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

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,        465 U.S. 605, 104 S. Ct.
1237, 79 L. Ed. 2d 552 (1984);            Fisher v. United States,        425 U.S.
391, 96 S. Ct. 1569, 48 L. Ed. 2d 39 (1976).                In Fisher, the Court

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

subpoena ... has communicative aspects of its own...." 425 U.S. at

410, 96 S.Ct. at 1581.             The production of documents conveys the

       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.
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, 465 U.S. at 617, 104

S.Ct.   at    1244    (holding     that   Fifth   Amendment    protects     a    sole

proprietor     from    producing      business     records    when   the    act   of

production itself constituted testimonial incrimination);                   Fisher,

425 U.S. at 410, 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, 26 S. Ct. 370, 50 L. Ed. 652

(1906) (corporation has no Fifth Amendment privilege);                       United

States v. White, 322 U.S. 694, 64 S. Ct. 1248, 88 L. Ed. 1542 (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, 322 U.S. at 697, 64 S.Ct.

at 1250 (custodian must produce labor union's documents where
contents incriminate custodian); Wilson v. United States, 221 U.S.
361, 384, 31 S. Ct. 538, 546, 55 L. Ed. 771 (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, 487 U.S. 99, 123, 108
S. Ct. 2284, 2298, 101 L. Ed. 2d 98 (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.
487 U.S. at 121, 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 109, 108 S. Ct. 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, 354
U.S. 118, 77 S. Ct. 1145, 1 L. Ed. 2d 1225 (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 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 122, 77 S.Ct. 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 126-28, 77 S.Ct. 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
                                                                                  2
between oral testimony and other forms of incrimination."
Braswell, 487 U.S. at 113, 108 S.Ct. at 2293.

        In   drawing    a     line   between   acts    of   production   and   oral

        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." 354 U.S. at 125, 77 S.Ct. at 1150.
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,
221 U.S. at 384, 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 Braswell, 487 U.S. at 106, 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, 354 U.S. at 126-28, 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, 354
U.S. at 121, 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

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. 487 U.S. at 101,

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, 460 U.S. 752, 103 S. Ct. 1548, 75 L. Ed. 2d 521 (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 759, 103 S.Ct. 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 754, 103 S.Ct. 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
761 n. 3, 103 S. Ct. at 1554 n. 3. Rylander did not seek
reconsideration, neither did he appeal. Id. at 754, 103 S.Ct. 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 757, 103 S.Ct.
     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, 333 U.S. 56, 69, 68 S. Ct. 401, 408, 92 L. Ed. 476
     (1948)). At the contempt hearing, where there was a
     presumption of 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
                                         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, 340 U.S. 367,

373, 71 S. Ct. 438, 442, 95 L. Ed. 344 (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, 440 U.S. 909, 99 S. Ct. 1218, 59 L. Ed. 2d
457 (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

       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

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

v. Zeitz, 333 U.S. 56, 69, 68 S. Ct. 401, 408, 92 L. Ed. 476 (1948)).

Had Hankins "appeared before 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.   Silvio,   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

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

See United States v. Rylander, 460 U.S. at 759, 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, 487 U.S. 99, 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."), vacated, 461 U.S. 912, 103 S. Ct. 1889, 77
L. Ed. 2d 280 (1983).

     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

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, 390 U.S. 39,

52, 88 S. Ct. 697, 705, 19 L. Ed. 2d 889 (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. 340 U.S. at 368, 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 614,
104 S. Ct. 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.

     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.