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In re Grand Jury Subpoenas Duces Tecum

November 1, 1983

IN RE GRAND JURY SUBPOENAS DUCES TECUM DATED JUNE 13, 1983 AND JUNE 22, 1983


Appeal by a former corporate officer from an order of the Southern District of New York, Abraham D. Sofaer, Judge, holding him in civil contempt for refusal on Fifth Amendment grounds to comply with a grand jury subpoena duces tecum commanding production of corporate records retained by him after he ceased to be employed by the corporation. The witness refused on the ground that the act of production, as distinguished from the contents of the documents, would tend to incriminate him.

Mansfield, Kearse and Winter, Circuit Judges.

Author: Mansfield

MANSFIELD, Circuit Judge:

Respondent-appellant, former President of Saxon Industries, Inc. (Saxon) who retained certain of that company's records after leaving its employment, appeals from an order entered in the Southern District of New York by Judge Abraham D. Sofaer holding him in contempt for refusing to produce the documents pursuant to a subpoena duces tecum issued by a grand jury sitting in the Southern District of New York. Appellant is the target of the grand jury's investigation into alleged fraud in the financial statements of Saxon which in 1982 filed a petition for reorganization under Chapter 11 of the Bankruptcy Reform Act. We reverse and remand.

In June 1983 a grand jury subpoena duces tecum was issued by the district court commanding appellant to produce all records of Saxon, its subsidiaries and divisions, in his possession.*fn1 When appellant, who had ceased to be employed by Saxon in mid-1982, refused to comply, the government on July 7, 1983, moved to enforce the subpoena.*fn2 Appellant opposed on the grounds that most if not all of the Saxon documents in his possession were duplicates of records already in the government's hands and that his act of producing them would tend to incriminate him in violation of his Fifth Amendment rights, see Fisher v. United States, 425 U.S. 391, 48 L. Ed. 2d 39, 96 S. Ct. 1569 (1976). On August 15, 1983, the district court granted the government's motion, holding that even though production of the documents would tacitly admit their existence and possession in appellant's hands, the possessor was not entitled to assert his act of producing corporate documents as a basis for a claim of compulsory self-incrimination in violation of the Fifth Amendment since "the act-of-production doctrine [enunciated by Fisher ] only applies, if at all, to the nonrequired records of an individual or sole proprietor. See United States v. Fox, 554 F. Supp. 422, 425 (S.D.N.Y.1983)."*fn3 Appellant appeals from the district court's decision and subsequent order adjudging him in contempt for failure to produce the records.

Discussion

The Fifth Amendment provides, "No person . . . shall be compelled in any criminal case to be a witness against himself." Beginning with Boyd v. United States, 116 U.S. 616, 29 L. Ed. 746, 6 S. Ct. 524 (1886), and continuing at least until Fisher v. United States, 425 U.S. 391, 48 L. Ed. 2d 39, 96 S. Ct. 1569 (1976), this privilege was construed to protect an individual from compulsory production of all of his personal records that might tend to incriminate him. The rationale has been that a person's papers represent his personal communications and that without such protection he could be subjected to coercion designed to extract the evidence from him in the same manner as if he were forced to testify against himself. Couch v. United States, 409 U.S. 322, 327-28, 34 L. Ed. 2d 548, 93 S. Ct. 611 (1973). To compel production of an individual's communications in oral or written form has been viewed as an invasion of his privacy that is inconsistent with the dignity and integrity of his person. As we stated in United States v. Beattie, 522 F.2d 267, 270 (2d Cir.1975), vacated and remanded, 425 U.S. 967, 96 S. Ct. 2163, 48 L. Ed. 2d 791 (1976), modified on remand, 541 F.2d 329 (2d Cir.1976), "if an accused is forced to produce his own papers, with the consequence that the prosecutor can put them in evidence without further ado, he is in effect forced to take the stand if he wishes to dispute or explain them."

Thus, under Boyd and its progeny, the Fifth Amendment analysis was focused on the nature and content of the subpoenaed documents. On the one hand, private papers were held privileged, provided they were in the personal possession of the person claiming the privilege. Couch v. United States, supra, 409 U.S. at 333. On the other, an individual was not permitted to invoke the privilege with respect to records of an organization or collective entity. Wilson v. United States, 221 U.S. 361, 55 L. Ed. 771, 31 S. Ct. 538 (1911) (corporate records); United States v. White, 322 U.S. 694, 699, 88 L. Ed. 1542, 64 S. Ct. 1248 (1944) (labor union); United States v. Fleischman, 339 U.S. 349, 357-58, 94 L. Ed. 906, 70 S. Ct. 739 (1950) (Joint Anti-Fascist Refugee Committee); McPhaul v. United States, 364 U.S. 372, 380, 5 L. Ed. 2d 136, 81 S. Ct. 138 (1960) (Civil Rights Congress); Curcio v. United States, 354 U.S. 118, 1 L. Ed. 2d 1225, 77 S. Ct. 1145 (1957) (labor union); Bellis v. United States, 417 U.S. 85, 40 L. Ed. 2d 678, 94 S. Ct. 2179 (1974) (law partnership).

The reason for not permitting an officer or agent of a separate entity to refuse to produce its organization's records is that the privilege is purely personal and designed to protect the human being, not an artificial entity. The latter, being impersonal, has no human dignity needing protection. Its records are usually available to others within the entity and may not be treated as the private confidential papers of any one officer or employee. The officer creates or handles the records in a representative capacity, not on his own behalf. The records, moreover, do not belong to him but to the organization. He has no right to use the papers for his personal purposes, at least without the consent of the entity. To compel him to produce corporate records does not invade his personal privacy or violate his dignity or integrity as a person, protection of which is the aim of the Fifth Amendment. In addition, the organization, unlike the individual, is often the creature of the state, subject to visitation, obligated from its inception to make disclosures needed for enforcement of federal and state laws and subject to greater governmental control and regulation than the individual. Bellis v. United States, supra, 417 U.S. at 88-94.

This "corporate records exception" was a logical reaction to the content-oriented approach of Boyd. The scope of the privilege was further reduced by a line of Supreme Court decisions holding that to qualify for the privilege the evidence sought to be withheld by the individual must be not only personal but communicative or testimonial in nature. Requiring a suspect to give a blood test, for instance, is not protected; "blood test evidence, although an incriminating product of compulsion, [is] neither petitioner's testimony nor evidence relating to some communicative act or writing by the petitioner." Schmerber v. California, 384 U.S. 757, 765, 16 L. Ed. 2d 908, 86 S. Ct. 1826 (1966). See, in accord, United States v. Wade, 388 U.S. 218, 221-23, 18 L. Ed. 2d 1149, 87 S. Ct. 1926 (1967) (identification lineup); Gilbert v. California, 388 U.S. 263, 265-67, 18 L. Ed. 2d 1178, 87 S. Ct. 1951 (1967) (handwriting exemplars); Holt v. United States, 218 U.S. 245, 252-53, 54 L. Ed. 1021, 31 S. Ct. 2 (1910) (modelling clothing).

In Fisher v. United States, 425 U.S. 391, 48 L. Ed. 2d 39, 96 S. Ct. 1569 (1976), the Court confirmed this narrowing of the protection that an individual may claim under the Fifth Amendment. Fisher held that a taxpayer may be compelled by subpoena to produce his accountant's workpapers in the taxpayer's possession. The Court reasoned that since the Fifth Amendment protected an individual only against compelled testimonial communications it was not violated by a subpoena directing him to produce papers already generated and in existence, which had not been prepared by him but by an independent accountant at his request.

"A subpoena served on a taxpayer requiring him to produce an accountant's workpapers in his possession without doubt involves substantial compulsion. But it does not compel oral testimony; nor would it ordinarily compel the taxpayer to restate, repeat, or affirm the truth of the contents of the documents sought. Therefore, the Fifth Amendment would not be violated by the fact alone that the papers on their face might incriminate the taxpayer, for the privilege protects a person only against being incriminated by his own compelled testimonial communications. Schmerber v. California, supra; United States v. Wade, supra ; and Gilbert v. California, supra. The accountant's workpapers are not the taxpayer's. They were not prepared by the taxpayer, and they contain no testimonial declarations by him. Furthermore, as far as this record demonstrates, the preparation of all of the papers sought in these cases was wholly voluntary, and they cannot be said to contain compelled testimonial evidence, either of the taxpayers or of anyone else. The taxpayer cannot avoid compliance with the subpoena merely by asserting that the item of evidence which he is required to produce contains incriminating writing, whether his own or that of someone else." 425 U.S. at 409-10.

At the same time, however, the Court recognized that disclosure of contents of personal papers is not the only method of self-incrimination; a person may under some circumstances incriminate himself by the act of producing documents that tend to incriminate, whether or not they be personal. As the Supreme Court pointed out in Curcio v. United States, supra, 354 U.S. at 125, "the custodian's act of producing books or records in response to a subpoena duces tecum is itself a representation that the documents produced are those demanded by the subpoena." This "act of production" doctrine was also confirmed by the Court in Fisher :

"The act of producing evidence in response to a subpoena nevertheless has communicative aspects of its own, wholly aside from the contents of the papers produced. Compliance with the subpoena tacitly concedes the existence of the papers demanded and their possession or control by the taxpayer. It also would indicate the taxpayer's belief that the papers are those described in the subpoena. Curcio v. United States, 354 U.S. 118, 125 [1 L. Ed. 2d 1225, 77 S. Ct. 1145] (1957). The elements of compulsion are clearly present, but the more difficult issues are whether the tacit averments of the taxpayer are both 'testimonial' and 'incriminating' for purposes of applying the Fifth Amendment. These questions ...


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