Court Opinion

ID: 9455481
Source: CourtListenerOpinion
Date Created: 2023-08-04 19:23:35.809534+00
Date Added: 2024-06-11T17:34:36.908394
License: Public Domain

*452McCREE, Circuit Judge
(dissenting in part).
I would affirm appellant’s conviction on count 6 for making and fermenting mash on premises not lawfully qualified for the production of distilled spirits in violation of 26 U.S.C. §§ 5222(a) (1) and 5601(a) (7) and on count 7 for aiding and assisting in the use of a still for the production of distilled spirits in a dwelling house in violation of 26 U.S.C. §§ 5178(a) (1) (B) and 5601(a) (6). Appellant’s only objection to his convictions on these counts is directed to the sufficiency of the evidence to uphold these convictions, and I agree that the evidence is sufficient to uphold them. I would, however, reverse appellant’s convictions on count 1 for carrying on the business of a distiller without giving bond in violation of 26 U.S.C. §§ 5173(a) and 5601(a) (4); on counts 3 and 4 for possessing and transporting distilled spirits in containers not having affixed thereto the required revenue stamps in violation of 26 U.S.C. §§ 5205(a) (2) and 5604(a) (1); on count 5 for possessing an unregistered still in violation of 26 U.S.C. §§ 5179(a) and 5601(a) (1); and on count 8 for carrying and delivering raw materials to an unlawful distillery at which no sign was posted in violation of 26 U.S.C. §§ 5180(a) and 5681(c). I would reach this result because appellant’s refusal to comply with the statutory requirements upon which these convictions are based was a proper exercise of his fifth amendment privilege against self-incrimination and therefore he may not be criminally punished for his failure to comply. See Marchetti v. United States, 390 U.S. 39, 61, 88 S.Ct. 697, 19 L.Ed.2d 889 (1968).
The fifth amendment provides, in pertinent part, that “No person * * * shall be compelled in any criminal case to be a witness against himself jn a serjes 0f recent decisions involving the relationship between this privilege and the' Government’s right to require a person, upon threat of criminal prosecution, to provide potentially incriminating information, the Supreme Court has decided that “The central standard for the privilege’s application [is] whether the claimant is confronted by substantial and ‘real,’ not merely trifling or imaginary, hazards of incrimination.” Marchetti v. United States, supra at 53, 88 S.Ct. at 705 (emphasis added). Accord, Grosso v. United States, 390 U.S. 62, 88 S.Ct. 709, 19 L.Ed.2d 906 (1968); Haynes v. United States, 390 U.S. 85, 88 S.Ct. 722, 19 L.Ed.2d 923 (1968); Leary v. United States, 395 U.S. 6, 89 S.Ct. 1532, 23 L.Ed.2d 57 (1969). If the obligation to provide information creates “ ‘real and appreciable,’ and not merely ‘imaginary and unsubstantial,’ hazards of self-incrimination,” a person cannot be criminally punished for refusing to comply. Marchetti v. United States, supra at 48, 88 S.Ct. at 702.
At the outset, it should be observed that this standard renders inapposite one of the factors relied on by the majority to distinguish Marchetti, Grosso, Haynes and Leary from the present case. The majority points out that the alcohol tax laws are “essentially noncriminal revenue measures” and that the purpose of the disclosure provisions is to facilitate securing the payment of the taxes imposed and not to aid law enforcement officials in their efforts against illegal manufacturers of distilled spirits. However, regardless of the Congressional purpose for inclusion of the disclosure provisions in the alcohol tax laws, the refusal to comply with these provisions cannot be criminally punished if compliance would create substantial and real hazards of self-incrimination. See generally Counselman v. Hitchcock, 142 U.S. 547, 585, 12 S.Ct. 195, 35 L.Ed. 1110 (1892)1 The question *453before us, then, is whether appellant “* * may compelled to give evidence against himself.” Marchetti v. United States, supra 390 U.S. at 51, 88 S.Ct. at 704.
Considering the substantiality of the risk of self-incrimination if appellant complied with the disclosure provisions of the alcohol tax laws, the majority concludes that the degree of risk involved is “considerably less than ‘purely hypothetical’ ” (1) because the disclosure provisions are “directed at the public at large” and not “at a highly selective group inherently suspect of criminal activities”, Albertson v. SACB, 382 U.S. 70, 79, 86 S.Ct. 194, 199, 15 L.Ed.2d 65 (1965), and (2) because it is doubtful, in any event, whether appellant would ever have the opportunity to perform the affirmative acts of disclosure.
Admittedly, compliance with a statutory provision requiring the disclosure of illegal activity creates a greater risk of self-incrimination when the disclosure requirement is directed at a “group inherently suspect of criminal activities,” since it identifies the discloser as a member of the suspect group. Leary v. United States, supra, 395 U.S. at 18, 89 S.Ct. at 1539. See also Marchetti v. United States, supra 390 U.S. at 57, 88 S.Ct. 697; Grosso v. United States, supra, 390 U.S. at 68, 88 S.Ct. 709. However, the character of the group subject to a disclosure requirement certainly is not by itself determinative of the substantiality of the risk of self-incrimination attendant on compliance with such a requirement. Even if the requirement is not directed at an inherently suspect group, the risk encountered as a consequence of compliance may still be “real and appreciable”.
Indeed, manufacturers of distilled spirits are a prime example of this. Although distillers may not be a “group inherently suspect of criminal activities,” they are involved in a business which is subject to extensive state and federal controls. In Michigan, the liquor industry is an area permeated with statutory requirements, the violation of which can be criminally punished. See, e. g., Mich.Comp.Laws §§ 436.1, 436.2, 436.17, 436.19, 436.22, 436.32, 436.50. Moreover, at the time appellant was engaged in the illegal manufacture of distilled spirits, there was a statutory requirement that certain internal revenue offices maintain a list of persons who had paid the special taxes assessed on the manufacture of distilled spirits and that this list be furnished to any prosecuting officer of any state, county, or municipality upon request. 26 U.S.C. § 6107.2 There is therefore sufficient attention focused on manufacturers of distilled spirits to indicate that the hazards of self-incrimination attendant on compliance with the disclosure provisions of the alcohol tax laws would be more than “merely trifling or imaginary.”
The important inquiry then is whether, in reality, these hazards ever would materialize. Cf. Leary v. United States, 395 U.S. 6, 89 S.Ct. 1532, 23 L.Ed.2d 57 (1969); Minor v. United States (Buie v. United States), 396 U.S. 87, 96 S.Ct. 284, 24 L.Ed.2d 283 (1969). The majority concludes that this is “greatly to be doubted” because a prerequisite to compliance with the disclosure provisions of the alcohol tax laws is the securing of a basic permit, 27 U.S.C. § 203(b) (1), and the Secretary of the Treasury is prohibited from issuing a *454basic permit when “the operations proposed to be conducted * * * are in violation of the law of the State in which they are to be conducted.” 27 U. S.C. § 204(a) (2) (C).
The effect on the privilege against self-incrimination of practical barriers to actual compliance with provisions requiring disclosure of illegal activity depends on the nature of the barriers. In Leary v. United States, supra, the Government contended that there was no substantial risk of self-incrimination because one who intended unlawfully to purchase marihuana would know he could not obtain the order form which contained the incriminating questions and consequently never would apply for it. The Government also contended that even if the buyer did apply for an order form, it was doubtful that the unsuccessful application would be revealed to law enforcement officials. Id'., 395 U.S. at 18-20, 89 S.Ct. 1532. The Supreme Court rejected both of these contentions and concluded that “real and appreciable” hazards of self-incrimination did confront Leary because the Congressional intent, as revealed by the statutory scheme adopted, was that an unlawful purchaser of marihuana should be able to obtain an order form.
On the other hand, in Buie v. United States, supra, the Court decided that the practical barriers encountered by one who unlawfully sold marihuana were sufficiently insurmountable to preclude any real possibility that he actually would comply with the order form requirements and thereby incriminate himself. Indeed, it was the Court’s earlier decision in Leary that reduced the hazards of self-incrimination to the point where they were “imaginary and unsubstantial” as far as the seller was concerned because its decision relieved the purchaser of marihuana of his obligation of obtaining the order form and of providing the seller with an opportunity to comply with its requirements and thereby incriminate himself. Buie v. United States, supra, 396 U.S. at 91-93, 90 S.Ct. 284.
The practical barriers to compliance confronted by appellant in the instant case are not as artificial as those in Leary, but neither are they as substantial as those in Buie. Although a basic permit is a prerequisite to the lawful manufacture of distilled spirits, the absence of such a permit might not preclude appellant from complying with the provision requiring him to post a sign at the site of the still. 26 U.S.C. § 5180(a). Under the terms of the statute and the regulation adopted pursuant thereto, appellant apparently could have complied with this requirement merely by fabricating a sign containing the required information and installing it. See 26 C.F.R. § 201.235. Since “a sign placed conspicuously on the outside front or entrance [of the still] and exhibiting in readily legible and durable characters (a) the real name of the proprietor, (b) the plant number, and (c) the designation of the kind of business”, 26 C.F.R. § 201.235, would disclose the operation of the still, I think the hazards of incrimination attendant on compliance with 26 U.S.C. § 5180(a) are “real and appreciable”. Accordingly, I would hold that appellant cannot be criminally punished for his failure to comply with this statutory provision.
The necessity of a basic permit and the prohibition on its issuance if the proposed operation violates the laws of the state probably would foreclose “literal and full compliance” with the statutory provisions requiring appellant to register the still and to file a qualification bond. 26 U.S.C. §§ 5179(a), 5173 (a). However, the basic permit requirement would not prevent appellant from attempting to comply with the registration and qualification bond provisions by submitting an application. There is no statutory requirement that a distiller obtain a basic permit prior to filing an application for registration and a qualification bond.3 Also, pursuant to 26 U.S. *455C. § 5171(a), “Every person shall, before commencing or continuing the business of a distiller * * * make application” for the registration of his still. (Emphasis added). Accordingly, under the statutory scheme adopted by Congress, a distiller can file the registration form and qualification bond simultaneously with his request for a basic permit. Moreover, the likelihood that a distiller would do this is increased by the fact that he can lawfully obtain distilling apparatus prior to securing a basic permit.
Similarly, appellant also would not be precluded from attempting to procure the revenue stamps which must be affixed to containers of distilled spirits. 26 U.S.C. § 5205(a) (2). Again, the likelihood of “literal and full compliance” is small, since the purpose of the stamps is to evidence compliance with the provisions of the alcohol tax laws. However, in determining whether appellant would attempt to comply with this requirement, and with those imposed by sections 5179(a) and 5173(a), I doubt that we are permitted to speculate that, in reality, he would not attempt to obey the law. Implicit in the Supreme Court’s decision in Leary is the notion that regardless of whether, in reality, one who purchases marihuana illegally would attempt to obtain an order form, the Court, in analyzing the substantiality of the risks of self-incrimination, would assume that this was a realistic alternative for the purchaser.4
Therefore, even with regard to the registration, qualification bond, and revenue stamp requirements, the hazards of self-incrimination confronting appellant were greater than those confronting Buie. In Buie, the Court concluded that the seller would never have an opportunity to complete the order form and disclose his illegal activity.5 Appellant, on the other hand, by attempting to comply with the requirements of 26 U.S.C. §§ 5170(a), 5173(a) and 5205(a) (2), would reveal his intention to engage in the manufacture of distilled spirits.6
Of course, whether the potentially incriminating inforcnation provided by the attempt to comply would, in reality, ever be used by law enforcement officials to forge a “ ‘link in the chain’ of evidence tending to establish his guilt,” Marchetti v. United States, supra, 390 U.S. at 48, 88 S.Ct. at 703, and thus, whether *456the hazards of incrimination involved in such an attempt are “real and appreciable”, involves some conjecture. The court has before it no factual data indicating the likelihood that the information contained in unsuccessful applications to register, to post the qualification bond, and to obtain revenue stamps is passed on to other law enforcement officials. However, in the absence of such data, I would resolve the doubts in favor of the applicability of the Constitutional privilege.
Until recently, an exchange of information between treasury officials and prosecuting officers of states, counties, and municipalities with regard to persons paying the special taxes assessed on the manufacture of distilled spirits was mandated by 26 U.S.C. § 6107. Thus, the channels of communication have been established. Moreover, although 26 U.S.C. § 6107 has been repealed, see n. 2, supra, there are still no restrictions imposed upon the use of the potentially incriminating information contained in an application for registration or a qualification bond form. See Grosso v. United States, 390 U.S. at 66, 88 S.Ct. 709.
It is also relevant that “other methods, entirely consistent with constitutional limitations,” Haynes v. United States, 390 U.S. at 98, 88 S.Ct. at 731, could be employed to obtain the information provided by compliance with the statutory provisions in question. See generally Counselman v. Hitchcock, 142 U.S. 547, 585, 12 S.Ct. 195, 35 L.Ed. 1110 (1892). See also Adams v. Maryland, 347 U.S. 179, 74 S.Ct. 442, 98 L.Ed. 608 (1954); Murphy v. Waterfront Commission, 378 U.S. 52, 84 S.Ct. 1594, 12 L.Ed.2d 678 (1964). Thus, permitting appellant to invoke the privilege against self-incrimination in order to prevent criminal prosecution for failing to comply with these provisions would not “prevent the effective regulation or taxation by Congress” of distilled spirits. Haynes v. United States, supra, 390 U.S. at 98, 88 S.Ct. at 731.
Accordingly, I would hold that sections 5179(a), 5173(a) and 5205(a) (2),7 as well as section 5180(a), compelled appellant, upon threat of criminal punishment, to disclose his illegal activities and that the hazards of self-incrimination which would have resulted from disclosure were “real and appreciable”. I would therefore reverse his convictions on counts one, three, four, five and eight.

. It is interesting to speculate on the effect on the privilege against self-inerimination of a doctrine which would jjermit infringement of the privilege if occasioned by a legitimate Congressional purpose, since the suppression of criminal activity, in certain areas, would be a legitimate Congressional purpose.

. This provision was repealed, effective December 16, 1968, by Section 203(a), Title II of the Gun Control Act of 196S, Pub.L.No. 90-618, 1968 U.S.Code Cong. & Adm.News, p. 1423, but this does not affect the relevance of section 6107 to the substantiality of the risk of self-incrimination confronting appellant at the time of his illegal activity. See Albertson v. SACB, 382 U.S. 70, 77, 86 S.Ct. 194, 15 L.Ed.2d 65 (1965). Furthermore, although the Internal Revenue Service is no longer required to compile a list of persons who pay the special alcohol taxes and to furnish this list to prosecuting officials, “neither has Congress imposed explicit restrictions upon the use of information obtained as a consequence of payment of the tax.” Grosso v. United States, 390 U.S. at 66, 88 S.Ct. at 712. See Marchetti v. United States, 390 U.S. at 60, n. 18, 88 S.Ct. 697.

. The qualification bond is filed at the same time as the application for registration. 26 U.S.C. § 5173(a).

. If the Court had not made this assumption, the substantiality of the risks of incrimination confronting Leary would have been no greater than those confronting Buie. In other words, if the Court took judicial notice of the fact that illegal purchasers of marihuana do not, in reality, attempt to comply with the requirement of obtaining an order form, the risks of self-incrimination confronting Leary would have been minimal. Accordingly, the significant distinction between Leary and Buie would seem to be that Leary could have attempted to obtain an order form and incriminate himself where as Buie could not, since the obligation to procure the order form is on the purchaser. See 26 U.S.C. §§-4705 (a), 4742(a). In the present ease, the various obligations imposed by the statutory provisions in question are on the distiller.

. In Buie, the Court also observed that the statutory obligation to furnish the information requested on the order form was on the buyer and that this may eliminate the problem of “self-incrimination”, as that term is ordinarily understood. In the present ease it is the distiller himself who is obligated to disclose his activities.

. The fact that appellant would be revealing an intention to violate the law at some future time may reduce the sub-stantiality of the risks of self-incrimination, but it would not make these risks trifling or imaginary. “We see no reason to suppose that the force of the constitutional prohibition is diminished merely because confession of a guilty purpose precedes the act which it is subsequently employed to evidence. * * * [A]l-though prospective acts will doubtless ordinarily involve only speculative and insubstantial risks of incrimination, this will scarcely always prove true.” Mar-chetti v. United States, 390 U.S. 39, 54, 88 S.Ct. 697, 705, 19 L.Ed.2d 889 (1968), overruling United States v. Kahriger, 345 U.S. 22, 73 S.Ct. 510, 97 L.Ed. 754 (1953), and Lewis v. United States, 348 U.S. 419, 75 S.Ct. 415, 99 L.Ed. 475 (1955).

. The fact that counts 3 and 4 are directed at appellant’s possession and transporta- ■ tion of unstamped containers, and not at his failure to obtain revenue stamps per se, is irrelevant, since the effect of 26 U.S.C. § 5205(a) (2) is to require a distiller to obtain revenue stamps in order to lawfully possess and transport distilled spirits in containers. See Haynes v. United States, 390 U.S. 85, 90-95, 88 S.Ct. 722, 19 L.Ed.2d 923 (1968).