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In re Persico

decided: February 19, 1974.

IN THE MATTER OF ALPHONSE PERSICO, APPELLANT


Appeal from order of United States District Court for the Eastern District of New York, Judd, J., holding appellant in contempt pursuant to 28 U.S.C. § 1826(a), and committing appellant for sixty days or until such time as appellant purged himself of the contempt.

Waterman and Mulligan, Circuit Judges, and Bryan, District Judge.*fn*

Author: Waterman

WATERMAN, Circuit Judge:

This is an appeal from an adjudication of civil contempt pursuant to 28 U.S.C. § 1826(a) for refusal to answer a question propounded by a grand jury. Appellant refused to answer certain earlier questions on constitutional grounds and was granted "use" and "derivative use" immunity. Then, after answering a few questions, he objected to a particular question and, relying on Gelbard v. United States, 408 U.S. 41, 33 L. Ed. 2d 179, 92 S. Ct. 2357 (1972), maintained that the question was derived from electronic surveillance which he claimed was presumptively illegal. The Government eventually acknowledged that the line of questioning the grand jury had been pursuing was a product of the electronic interception of oral communications but strenuously affirmed that the surveillance was conducted under proper court orders and was in complete conformity with the requirements of federal law under 18 U.S.C. §§ 2510-2520. We are thus called upon to decide whether appellant, in defending the contempt action brought against him when he refused, though granted "use" and "derivative use" immunity, to answer before a Grand Jury a question derived from electronic surveillance conducted under court order, has a right in a civil contempt proceeding to litigate the legality of that surveillance. We hold that he does not.

The facts in this case are not complex. On January 23, 1974, appellant was called as a witness before a federal grand jury "investigating racketeering influence in legitimate business." Relying on his Fifth Amendment privilege, he initially refused to answer any questions concerning his employment. Thereupon, pursuant to 18 U.S.C. §§ 6002 and 6003 Persico was granted "use" and "derivative use" immunity. At this point appellant continued to be recalcitrant and began to object to questioning with reference to his employment on the ground that the questions were the product of illegal electronic surveillance. The Government requested that Judge Orrin Judd issue a contempt citation for refusal to testify. Judge Judd regarded the request as premature and, not perceiving any connection between the question and the surveillance, ordered Persico to testify under threat of contempt. Persico then answered some questions regarding his lawful employment but refused to respond to a question regarding "any other occupation." This refusal was again based on appellant's contention that the question was a "fruit" of illegal electronic surveillance. The Government, conceding that this question was derived from electronic surveillance, argued that the surveillance, which was conducted pursuant to three court orders, was entirely legal. Judge Judd inspected the court orders in camera, found them to be proper, refused to grant appellant's motion that a suppression hearing be held to test the legality of the surveillance, and renewed his order to testify.

Persico returned to the grand jury where he acknowledged that he did indeed have other business interests, more particularly, an illegal gambling business involving "horses, sports and numbers." His cooperation ceased, however, when he was asked to identify the individuals who worked for him in these surreptitious enterprises.*fn1 He again grounded his objections, inter alia, on the alleged illegality of the electronic surveillance which was the source of the question, saying: "You know the answer to that question as a result of electronic surveillance of my home." Upon this refusal to respond, Judge Judd held Persico to be in contempt and sentenced him to 60 days in jail, subject, however, to immediate release should appellant decide to answer the question. Persico then reinstituted his motion to suppress and claimed the right to examine the court orders and accompanying documents under which the three wiretaps had been authorized. This motion was denied. A concurrent motion for bail pending appeal was likewise unsuccessful. On January 28, 1974, we also denied Persico's separate application to us for bail pending appeal, but, a notice of appeal on the merits having been filed on January 25, we ordered that the appeal be speedily brought on, and it was argued on February 5.

Chapter 119 of Title 18 of the United States Code, entitled "Wire Interception and Interception of Oral Communications," 18 U.S.C. §§ 2510-2520, represents an assiduous congressional effort to balance the individual's right to privacy against the Government's legitimate interest in gathering information necessary for the prosecution of crimes.*fn2 Integral to the statutory scheme are elaborate precautions taken to insure that electronic surveillance is not used unnecessarily and that when it must be used its duration is narrowly circumscribed. To maximize compliance with the provisions of Chapter 119 by investigative authorities who desire to employ wiretaps and other electronic devices the chapter contains its own "exclusionary rule," 18 U.S.C. § 2515, which provides:

Whenever any wire or oral communication has been intercepted, no part of the contents of such communication and no evidence derived therefrom may be received in evidence in any trial, hearing, or other proceeding in or before any court, grand jury, department, officer, agency, regulatory body, legislative committee, or other authority of the United States, a State, or a political subdivision thereof if the disclosure of that information would be in violation of this chapter.

The apparently ample breadth of this proscription has been confirmed by Gelbard v. United States, supra. In that case the Supreme Court held that in contempt proceedings instituted under 28 U.S.C. § 1826(a) for failure to obey a court order to answer a question before a grand jury, the witness refusing to give the testimony may avail himself of the defense that the question propounded to him violates § 2515 because it was derived from electronic surveillance conducted in violation of Chapter 119. Appellant believes that Gelbard controls our adjudication of the facts before us and that before answering questions he believes are the product of electronic interception he is entitled to have a hearing as to whether the interception was in violation of Chapter 119. Insofar as Gelbard permits a grand jury witness to refuse to answer a question derived from concededly unlawful electronic surveillance and then successfully to defend a contempt proceeding for so refusing, we agree with appellant. Gelbard does indeed govern that narrow situation. The holding there, however, was expressly predicated on an assumption by the Court "that the communications were not intercepted in accordance with the specified procedures and thus that the witnesses' potential testimony would be 'disclosure' in violation of Title III. See 18 U.S.C. §§ 2511(1), 2517(3)." The Court left undecided the issue of "whether [witnesses] may refuse to answer questions if the interceptions of their conversations were pursuant to court order." Id. at 61 n. 22. Hence appellant urges that the mere existence of a court order should not preclude the witness from fully litigating in the contempt proceeding the lawfulness of the surveillance. We disagree.

Although the Gelbard footnote technically left "undecided" the scope of any inquiry designed to determine the legality of a court-ordered surveillance, a careful examination of that decision is revealing. Mr. Justice White in a concurring opinion supplied the decisive vote for the majority's reversal of the Ninth Circuit's holding in Gelbard, 443 F.2d 837 (1971). In that opinion he intimated, 408 U.S. at 70, that when, during grand jury proceedings, the Government does produce a court order the traditional notion that the functioning of the grand jury system should not be impeded or interrupted could prevail at that time over the witness's interest in exploring in depth the validity of the surveillance.

Where the Government produces a court order for the interception, however, and the witness nevertheless demands a full-blown suppression hearing to determine the legality of the order, there may be room for striking a different accommodation between the due functioning of the grand jury system and the federal wiretap statute. Suppression hearings in these circumstances would result in protracted interruption of grand jury proceedings. At the same time, prosecutors and other officers who have been granted and relied on a court order for the interception would be subject to no liability under the statute, whether the order is valid or not; and, in any event, the deterrent value of excluding the evidence will be marginal at best.*fn3

Congressional concern over disruption of smooth and efficient operation of the grand jury system is found in the legislative history of Chapter 119 also. Senate Report No. 1097, printed in 1968 U.S. Code Cong. & Ad. News 2112, appears to controvert Persico's contention that in defending the contempt proceedings resulting from his refusal to answer a question before the grand jury he is entitled to a suppression hearing. Though the legislative history recognizes that illegally obtained wiretap evidence, or the fruits thereof, must be excluded from any proceedings before a grand jury, the history further discloses that the exclusionary rule "must, of course, be read in light of section 2518(10)(a) discussed below, which defines the class entitled to make a motion to suppress." Senate Report No. 1097, supra at 2185. Most crucial to our task, therefore, is the congressional understanding of the effect of § 2518(10)(a) on the grand jury process:

"Paragraph (10)(a) provides that any aggrieved persons, as defined in section 2510 (11), discussed above, in any trial hearing or other proceeding in or before any court department, officer, agency, regulating body or other authority of the United States, a State, or a political subdivision of a State may make a motion to suppress the contents of any intercepted wire or oral communication or evidence derived therefrom. This provision must be read in connection with sections 2515 and 2517, discussed above, which it limits. It provides the remedy for the right created by section 2515. Because no person is a party as such to a grand jury proceeding, the provision does not envision the making of a motion to suppress in the context of such a proceeding itself. Normally, there is no limitation on the character of evidence that may be presented to a grand jury, which is enforcible by an individual. (Blue v. United States, [United States v. Blue] 86 S. Ct. 1416, 384 U.S. 251 [16 L. Ed. 2d 510] (1965).) There is no intent to change this general rule. It is the intent of the provision only that when a motion to suppress is granted in another context, its scope may include use in a future grand jury proceeding. . . . ." Senate Report No. 1097, supra at 2195. (Emphasis supplied).

As noted, though Congress prescribed that illegal wiretap evidence must be excluded from all grand jury proceedings, hearings to suppress evidence were not to be permitted during such proceedings. These seemingly inconsistent policy determinations can be reconciled only by interpreting the statute as requiring exclusion only when it is clear that a suppression hearing is unnecessary, as when the Government concedes that the electronic surveillance was unlawful or when the invalidity of the surveillance is patent, such as, for example, when no prior court order was obtained, or when the unlawfulness of the Government's surveillance has been established in a prior judicial proceeding. In these situations both statutory policies--the exclusion of illegally acquired evidence and the maintenance of unimpeded grand ...


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