Court Opinion

ID: 5795945
Source: CourtListenerOpinion
Date Created: 2022-01-12 18:18:23.600887+00
Date Added: 2024-06-11T08:42:25.289943
License: Public Domain

Hopkins, Acting P.J.
(dissenting in part). The petitioner is the holder of a solicitor’s permit. He was served with a subpoena duces tecum requiring him to produce certain records, including canceled checks, bank records and his income tax returns. He appeared before the respondent with his attorney and produced all the records under the subpoena, except the income tax returns. His attorney stated the returns were joint returns of the petitioner and his wife, who objected to their disclosure, and the attorney claimed confidentiality of the returns pursuant to Federal statutory provisions. Thereupon the respondent charged the petitioner with failure to cooperate, warranting revocation of his permit. After a hearing, his permit was revoked by the respondent.
The respondent is empowered to revoke a permit issued by it for improper conduct of the holder of the permit (9 NYCRR 53.1 [n]). In pursuance of its powers, the respondent may "examine any person under oath and in connection therewith * * * require the production of any books or papers relative to the inquiry” (Alcoholic Beverage Control Law, § 17, subd 10). Though those powers are not beyond constitutional restrictions (Matter of Finn’s Liq. Shop v State Liq. Auth., 24 NY2d 647), within the statutory framework governing the sale of liquor generally they are indeed broad (cf. Matter of Wager v State Liq. Auth., 4 NY2d 465).
The true inquiry in each case is whether the respondent was engaged in an investigation within its powers requiring the production of papers relevant to the investigation. Here the respondent alleges that it was investigating a complaint that the petitioner had been giving kickbacks to retailers— conduct, if correct, violative of the statute (Alcoholic Beverage Control Law, § 101-b). Hence, the respondent was entitled to require that the petitioner furnish his books and papers relating to the investigation. In this sense, the issue whether the subpoena duces tecum could be enforced by the respondent disappears, since a simple request could serve as well in requiring the petitioner to bring in his books and records to the respondent’s office, and, if he refused, could serve as well as the basis for a revocation proceeding on the ground of his noncompliance with the request.
*232But in this case the petitioner complied with the subpoena duces tecum, except with respect to the joint income tax returns of himself and his wife. I am prepared to say that the petitioner could not refuse to supply his income tax returns, even in the face of the Federal statute wrapping the return with confidentiality (U.S. Code, tit. 26, §§ 6103, 7213, subd. [a]; see, generally, Ann. 70 ALR2d 240). This is so because the petitioner must be considered to have waived his statutory right to confidentiality when he applied for, and received, his permit (cf. Colonnade Corp. v United States, 397 US 72, 73-74, 76-77; Manchester Press Club v State Liq. Comm., 89 NH 442; Oklahoma Alcoholic Beverage Control Bd. v McCulley, 377 P2d 568 [Okla]).
In short, the petitioner does not have an absolute right to confidentiality under the statute, and the right falls when a legitimate inquiry by the State requires the disclosure of an income tax return.
That concept of waiver does not, however, reach the objection of the petitioner’s wife to disclosure, since the returns in question were joint returns executed by both her and the petitioner. There is no evidence in this record of waiver by the petitioner’s wife and, failing waiver, her right of confidentiality prevails against the respondent (Federal Sav. & Loan Ins. Corp. v Krueger, 55 FRD 512; Association of Amer. R. R. v United States, 371 F Supp 114; Peterson v Peterson, 70 SD 385).
I do not at this time consider whether the respondent may be enabled to demonstrate waiver by the petitioner’s wife of her right to confidentiality under the statute. I would thus annul the order of revocation, without prejudice to any further proceedings which the respondent may be advised to bring.
Martuscello, Benjamin and Munder, JJ., concur with Latham, J.; Hopkins, Acting P.J., concurs in annulment of the order, but dissents to the extent that he votes that the annulment be without prejudice to any further proceedings which respondent may be advised to bring.
Order annulled, on the law, with costs.