UNITED STATES v. BLUE
Legal provision: Self-Incrimination
Argument of Thurgood Marshall
Chief Justice Earl Warren: United States versus Blue, Number 531 on the docket.
Mr. Solicitor General.
Mr. Thurgood Marshall: Mr. Chief Justice, may it please the Court.
This case involves a dismissal of an indictment charging willful attempts to evade and defeat personal income taxes on the -- the dismissal was on the ground of the defendant's right against compulsory self-incrimination had been violated as a result of a previously made jeopardy assessment against the same defendant.
On August 5, 1964, the appellee was indicted in the United States District Court for the Southern District of California.
It was a six-count indictment charging violations of willful attempt to evade payment of the taxes and also to subscribing false corporate returns.
A motion to dismiss was filed against indictment and the motion dismissed was grounded on three propositions that the defendant could not get a fair trial, second, the alleged he was denied right to counsel in violation of the Sixth Amendment, and third that he had been compelled to testify against himself in violation of the Fourth and Fifth Amendments.
The facts are reasonably simple and not essentially in dispute.
The counsel for the appellee attended conferences with the Internal Revenue Service officials in November of 1962 and again in March of 1963.
And that both of these meetings, Internal Revenue made it clear to the counsel for appellee that they were going to recommend criminal prosecution with no question that was understood on both sides.
And on April 9 of 1963, the jeopardy assessment against appellees known assets was issued pursuant to Section 6861 of the Code.
And on June 6 of the same year, the statutory notice of deficiencies for each of the tax years involved were issued with the usual letter.
The attorneys for the appellee filed their petitions with the Tax Court.
And these petitions appeared to be a normal type and they provide the appellee's name and address, et cetera, the office, “the deficiencies as claimed,” and then in each of these petitions, concluded with the allegations repeating an affirmative form of the specific assertions of error contained in the earlier paragraphs.
These were practically identical and the sample of one is set out on page 5 of our brief so that it would not be necessary to go into the record.
And it was the appellee's position that the filing of these petitions amounted to testimony and incriminating evidence which made it impossible to try him for criminal charges at anytime involving the same years involved.
Justice John M. Harlan: This is self-incrimination.
Mr. Thurgood Marshall: The fact that the Government by filing its jeopardy assessment required the defendant --
Justice John M. Harlan: Sue to get it back?
Mr. Thurgood Marshall: To file his petition in the Tax Court and that in the petition in the Tax Court, he gave up some information.
When we read the petitions there, the usual type of petitions, which says that the jeopardy assessment is wrong, solely it says -- it says it over and over again in their beautiful language, well that's all there is good.
And that I think I should mention that throughout the colloquy with counsel.
The judge consulaire says that he has incriminated himself in violation of the Fifth Amendment.
Not that he will later, I'm sure he means that this will be used in trial.
However, the U.S. Attorney repeatedly made it clear that these jeopardy assessments, the petitions and nothing else were going to be used at the trial.
There was no question, if they weren't going to be used.
There was -- it was true that they were into files, this criminal -- the U.S. Attorney's Office.
And the position taken by the court below is that the -- this in and of itself was final.
We then applied to the Court's -- appeal to the Court of Appeals for the Ninth Circuit, and on that motion, the case was appealed and certified here.
There are two points that we have involved and there are only two.
One is the question as to whether or not this case is properly here on certification from the Court of Appeals in the form of a direct appeal.
And I meet that one first because it's the Court's jurisdiction.
And 18 U.S. Code 3731 provides for this direct appeal when an indictment is dismissed as a result of a motion in bar.
Now, first of all, as to whether or not this is actually what the statute says, I would like to point out that there's no question on the finality of the judgment.
The judge did not issue an order even though he invited an appeal.
He started out inviting one and ended up inviting one, he didn't write an opinion.
But the order itself says specifically that the indictment is dismissed.
The bail is discharged and the defendant is released.
And the District Judge said specifically from the bench, “When the Government said in motion the jeopardy assessment and the 90-day letter which compelled him to come forward within a certain time and filed his petition in the Tax Court, they, the Government, foreclosed themselves from proceeding in the criminal case during that time.”
Now, while this phrase, “during that time” somebody might think meant temporarily.
In fact, as the Court of Appeals of the Ninth Circuit said in this case, “If the trial court's views are correct, there is no possible way in which the defect in the indictment can be cured in this case or in any other indictment that may be found.
Secondly, there is no question that this ruling was made on the motion by the defendant based upon facts not covered by the criminal statute or the indictment.
It was not in any person who brought him in.
And the appellee's position in this regard was summarized in its assertion which was in its motion to dismiss that by virtue of the assertion of taxes, penalties and interest against the defendant, the filing of income tax, liens, and the seizure of his assets, defendant had been compelled to execute statements of fact pertaining to his income tax liabilities from the years 1958 to 1960 in pleadings required to be presented to the Tax Court of the United States and to the Internal Revenue Service, thereby, compelling this defendant to testify against himself in violation of the Fourth and Fifth Amendments to the characters of the United States.”
That seems to me clearly that this is within the general rule on the question of appellate jurisdiction of this Court.
I would say further that it's clearly set forth in the Court of Appeals decision in this very case.
The appellee here claims and indeed the District Court followed what they considered to be the law of the Ninth Circuit.
And when this case reached the Ninth Circuit, the Ninth Circuit distinguished both of the cases and held that it was no question that this case was not the type of case which they relied upon.And now as to the merits themselves, well, I think first I have to -- I just notice here we have the problem that both sides are relying on United States against Mersky which is the recent case of this Court.
And I would say that this case is certainly of course different.
But on in each of these cases -- I mean in the Mersky case, it appeared that the previous cases of Hark and Murdock and Storrs were in bar and that it was clear that the manner in which the defendant frames his pleading is not determinative of whether or not it was actually a motion in bar.
The critical factor is the effect of the ruling.
On the other hand, the justices of this Court came to the diverging conclusion with respect to the type of ruling which would have the requisite effect.
Justices Brennan and Justice Whitaker expressed the view that a judgment which will end of course an escapade of the defendant was sufficient to make it a motion in bar.
Mr. Justice Stewart, Mr. Justice Frankfurter, and Mr. Justice Harlan interpreted the pertinent jurisdiction in the ground of Section 3731 as limited to the old common law “special plead in bar.”
And it was stated that it must be a plea in confession and avoidance which does not contest the facts of the indictment but relies on matters outside the indictment.
And we say that the dimis -- dismissal of this indictment by the District Court satisfies both of these tests.
And whichever way this Court reads the Mersky opinion as of this case, we think it is clear that the District Court was not only in error but that we come under Section 3731 and the case is properly here.
We say that because we believe that the only reason for interpretation of the District Court ruling is that it is necessarily had the effect of permanently baring prosecution for income tax violation during that period of time from 1958 to 1961 and actually escapaded the appellee for any Internal Revenue charges during that period of time.
And in view of the rejection of the Government's argument below and of its suggestion of an alternative remedy which is a motion to dismiss or any other kind of remedy other than to dismiss the indictment, the Court's dismissal in indictment was after it had intended to leave no means open to the Government by which indictment could be reinstated.
And the cases relied on by appellees, there are cases of suppression of evidence, of evidence that could be produced and could make future trial possible.
In this case, the only way that this man under the decision of the District Court here, the only way the appellee could be reindicted legally under this opinion would be to turn the clock back and not file the jeopardy assessment which has already been filed.
Justice Abe Fortas: But General, only jurisdictional point of -- as -- if we could determine that this is subject to direct appeal, is there any kind of situation in which the indictment would be dismissed before a jeopardy of taxes which is not appealable here?
Mr. Thurgood Marshall: Oh yes sir, the ones where -- for example, the ones I can remember where a motion to suppress is made or the --
Justice Abe Fortas: But that is not a disposition.
That's not a dismissal of the indictment.
Mr. Thurgood Marshall: Well, this is one case that they tried and they held that didn't' apply.
Justice Abe Fortas: I know but any -- any order of the -- any plea which results has a direct result to the dismissal of the indictment rightly or wrongly under your theory would be appealable here, would be directly appealable here as a dismissal on the plea in bar provided it happened before jeopardy of tax.
Mr. Thurgood Marshall: No sir.
To the contrary, one of the Ninth Circuit cases if I remember was where the Court ordered the District -- the U.S. Attorney to produce certain documents before trial and the claim was made that they couldn't find them or what have you.
And the District Court says, “Well, the defendant cannot try this case without those.”
And the indictment was dismissed and that held was held not to be a plea in bar because there was a possibility that they could eventually find them.
And if ever they found those papers, they could retry.
But there are still plenty of exceptions there.
Justice Abe Fortas: But this does not fit in.
You said few moments ago, if I correctly understand you, that the present case satisfies reasoning and both of the questions to which you referred in Mersky.
Mr. Thurgood Marshall: Yes, Mersky.
Justice Abe Fortas: But is this -- is this the kind of thing that a common law would be recognized as a plea in bar?
Mr. Thurgood Marshall: Yes sir.
For several reasons, one, it's in confession and avoidance, and in two is bringing in material outside of the indictment itself.
That's a classic one on back the old statute plea in bar.
Justice Abe Fortas: What about if --
Mr. Thurgood Marshall: Unless he doesn't contest the -- the facts as alleged in the indictment or anything about the indictment.
Justice Abe Fortas: Well, he's really attacking the indictment though in the basis of a collateral circumstance.
Mr. Thurgood Marshall: But not on its face.
He's going outside.
He's going outside of the indictment.
He's not saying that the statute's unconstitutional or that the indictment is holding it on, hold it on or what have you.
He is saying because of something that she did to me before.
It would be very much like the case -- the man comes in and says, “I was forced to confess, coerced into a confession which the U.S. Attorney has used before the grand jury and he has in his possession now.
And the Court says, “You'd been incriminated and therefore dismissed the indictment,” there's never been such a case.
Justice Abe Fortas: And you regard that as a dismissal on the plea in bar?
Mr. Thurgood Marshall: Well yes sir, because it had nothing to do about the confession.
Justice Abe Fortas: So you could directly appeal here.
Mr. Thurgood Marshall: Yes sir.
Justice Abe Fortas: And that you wouldn't have to go to the Court of Appeals.
Mr. Thurgood Marshall: I'm --
Justice Abe Fortas: You couldn't go to the Court of Appeals though.
Mr. Thurgood Marshall: Certainly.
No, we couldn't go to the Court of Appeals because this 3731 says that you're not going to the Court of Appeals if you can't come here.
Justice Byron R. White: What about a dismissal on the statute of limitations?
Dismissal of an indictment of time barred, is that --
Mr. Thurgood Marshall: I don't know of any but it would -- it would -- if it was -- well there's no way you could change the time so it wouldn't be barred.
Justice Byron R. White: So you say that the time and case is over.
Mr. Thurgood Marshall: The case is over.
There's nothing -- I mean --
Justice Byron R. White: So you think that would be appealable?
Mr. Thurgood Marshall: I think so.
The cases I run across and the cases that we're citing both of our briefs are cases where there's something that could be done to make it possible to validly reindict it.
Where you could -- if you produce certain records, you could go ahead and try.
And well, if you produce this, you could go ahead and try it.
But I think that with the statute of limitations and I don't frankly don't know or change one way or the other but I would say it was in much of the same category.
We have three cases and they're on page 14 of our brief, Mr. Justice White.
If I may for a moment just get to the merits, there's nothing in this record.
First of all, I think I'd mentioned that when the case was first tried before, now the judge not tried obviously on a motion.
That judge said that it was a horrible thing for the Government to make a man a pauper and then try him in an in bar tax case where he needed not only a good lawyer but a good accountant.
And he thought that should be tried out.
Then when the case got up for actual hearing on this motion, it was tried with the cross motions for summary of -- I mean cross motions for judgment and the affidavits, and there was live testimony.
The live testimony consisted of agents, different levels of Internal Revenue explaining about jeopardy assessments and what have you and how they operate.
It was made clear throughout all of these that when the jeopardy assessment was made, they did know that they contemplated criminal proceedings and I don't see anything wrong with that.
For some reason, the U.S. Attorney trying the case did not voluntarily turnover the copies of the petitions or the documents which they had.
And the only thing the defendant wanted to show was that the criminal side of the Government did have these copies of these petitions in their files and eventually it's so stipulated.
There was also testimony to the fact of the lawyer himself and I have -- none of us would have any disagreement whether that the tax case, this kind, you need counsel and you need counsel fees and you need auditors and you need accountants and you need these for that.
Justice William J. Brennan: But tell me that -- there should be -- is there was a Tax Court proceeding that‘s on the jeopardy -- challenging jeopardy assessments involved here.
Mr. Thurgood Marshall: Yes sir, they filed a petition challenging it.
Justice William J. Brennan: Well, what's your position whether that ought to be concluded before the criminal proceedings to uphold?
Mr. Thurgood Marshall: I don't see any reason why it should.
Justice William J. Brennan: You don't think they should.
Mr. Thurgood Marshall: I don't think they should control --
Justice William J. Brennan: Or may there not be -- may there not be a necessity for barring from the criminal trial.
I don't know what that would be -- testimony or otherwise that this taxpayer might give before the Tax Court?
Mr. Thurgood Marshall: Well, I think that it would be up to the taxpayer.
We have --
Justice William J. Brennan: Let me put it rather this way.
Is he entitled -- the defendant against the jeopardy assessment?
Mr. Thurgood Marshall: Oh surely.
Justice William J. Brennan: And suppose he has to testify with something which may be incriminating in respect of the pending tax prosecution.
Mr. Thurgood Marshall: I don't think there -- I am not too certain that that can be used in the criminal prosecution.
Justice William J. Brennan: Well, that's my question.
How can you know that until the tax proceedings have been concluded, the Tax Court proceedings?
Mr. Thurgood Marshall: I don't know what the position of the Government would take or the Court would take but I submit that that would not come up until, one, he did testify in the Tax Court, two, the U.S. Attorney tried to use it, and three, the judge ruled one way or the other.
That's the only time I could see we could get to that point.
Justice William J. Brennan: Well, I gather your position that is -- both can proceed simultaneously or the criminal prosecution can proceed ahead of the Tax Court proceeding.
Mr. Thurgood Marshall: I don't -- first of all, I have to keep emphasizing that it's not this case.
Justice William J. Brennan: I know but I'm --
Mr. Thurgood Marshall: But the --
Justice William J. Brennan: -- thinking about it (Voice Overlap)
Mr. Thurgood Marshall: -- point is I believe that if the point had been made that I am tried up over here in the Tax Court on these petitions and I can handle both at the same time that that would be a motion that would have to be made to the Court.
Or if you make a motion on the Tax Court and say, “I don't want to testify here because I'm only already in the criminal case.”
But the resolution of this problem is not to dismiss the indictment.
That's my point.
Justice Byron R. White: But as a matter of fact, the Government's policy is to try consistently the criminal cases first.
That's the Government's policy.
Mr. Thurgood Marshall: The record shows that that is the policy but it is not a rigid one.
Justice Byron R. White: No, and then that you have a reason before the party come up here.
Mr. Thurgood Marshall: You must have a good reason --
Justice Byron R. White: But that's your consistent policy, say you're not bound to it that way but that is your consistent policy to try to get the criminal case out of the way --
Mr. Thurgood Marshall: Right.
Justice Byron R. White: So that no testimony in this civil case to be given.
Mr. Thurgood Marshall: Well, do you have -- does the Government have a reason here for departing from a mutual fund.
Justice Byron R. White: I'm absolutely certain that there is a reason but it's not in here.
Justice William J. Brennan: I see.
Justice Byron R. White: The only reason I say is that I could gather from the record is they did find a sizable bank account.
And it's the only thing that I can see.
But the other point I was getting at the original argument was that he was denied right at the counsel because he didn't have any money.
But the record shows that the Internal Revenue did not touch his earnings.
And he has all of his earnings whatever he would do with them.
Indeed, the District Court did rule with the Government on that point, that there was no showing that he had been denied enough money to defend --
Justice William J. Brennan: Well, this isn't the clearest record in the world.
I think you, agree Mr. Solicitor General?
Mr. Thurgood Marshall: It's (Voice Overlap) it's clear on one point.
Justice William J. Brennan: But it's dismissed.
Mr. Thurgood Marshall: It's actually is, and it's also clear the reasons for the dismissal, the reasons for the dismissal was that because a man have been compelled to file a petition in the Tax Court, he had -- the Government had violated the Fifth Amendment.
And consequently, the Government was prohibited that from coming in the criminal court.
Justice Hugo L. Black: Suppose that was true, suppose it were true that they had compelled to come in and incriminate themselves, why shouldn't it be, if the first time that it comes out in the Court, why shouldn't the Court throw the Government out?
Mr. Thurgood Marshall: Because Mr. Justice Black, if the agent of the federal government in taking a blackjack and beating a confession out of a man, that wouldn't be grounds for dismissal in the indictment.
Justice Hugo L. Black: Suppose, if the indictment shows that -- shows that that's all they did.
They just brought a man there and get hold of him in two places at the same time and one of them admitted, plead guilty, and the other one be debarred.
Mr. Thurgood Marshall: Well, I would say that you couldn't give your back to the Maryland case where the man didn't have a lawyer when he plead guilty then they tried to use it in the White against Maryland.
And they tried to use it in the second case and this Court said you couldn't do it.
But it shouldn't say you can dismiss the indictment.
Justice William J. Brennan: Your point is I gather that anything he has in the way of defense based on self-incrimination or anything else to the Government's trial of a money indictment.
Whatever that may be is properly interposed at the trial on the indictment not by dismissal of the indictment.
Mr. Thurgood Marshall: Or before the in -- before the trial, that he could file a motion to suppress.
Justice William J. Brennan: I see, yes.
Mr. Thurgood Marshall: He could also under Rule 6 (e) even if he thinks that these materials were used before the grand jury.
Justice William J. Brennan: But in any event that certainly they can't dismiss a price for that.
Mr. Thurgood Marshall: That's our position here.
Justice Hugo L. Black: Suppose you -- suppose the Government comes in on a motion to dismiss and says we admit that we've already made and confess, we admit that we can't convict him because that's the -- he got a constitutional privilege which he's raising here but we say because you had raised on this by motion to dismiss instead by motion to suppress, you got to decide against him.
Why shouldn't he -- why shouldn't he get rid of the thing if it's -- maybe they shouldn't.
Mr. Thurgood Marshall: Well, my -- my whole point is in this.
The only thing this man “confessed” if we use confessed in quotes was his allegations that the Government was wrong.
Justice Hugo L. Black: So that's on the -- that's on the merits.
Mr. Thurgood Marshall: Yes sir.
Justice Hugo L. Black: That's on your number two point.
Mr. Thurgood Marshall: Yes sir.
Justice Hugo L. Black: But the judge found that he had already been compelled, will be compelled in the future to become part on the same matters you're concerned to this criminal cases.
Is it your argument that that's not enough to show that they had already made to confess?
That gets to the merits of it.
Mr. Thurgood Marshall: Well, (Voice Overlap) did we --
Justice Hugo L. Black: And that frankly wasn't here discussed.
Mr. Thurgood Marshall: Well that's what I thought I was doing.
Justice Hugo L. Black: I know you are but we've been all of it.
We've asked you so many question though (Voice Overlap) discussion here.
Mr. Thurgood Marshall: Yes, my whole point is that there -- the Government said over and over again, “We do not intend to use anything from the Tax Court proceeding.”
And if we do -- I mean if they do, they're subject to a motion of course.
Justice Hugo L. Black: Well, would he be immune from punishment or does he just have to plead that as a defense?If the Government forces him in to confess, can they then punish him?
Mr. Thurgood Marshall: No sir.
Justice Hugo L. Black: Unless he raises the question that it doesn't matter of saying that you can't use this evidence against him?
Mr. Thurgood Marshall: If he --
Justice Hugo L. Black: Is he not -- Is he or not immune from punishment when the Government does this?
Mr. Thurgood Marshall: He is not immune from punishment when the Government extorts a confession from him.
He is -- the Government is prohibited from using the confession.
But if the Government has other testimony or that does not include the proof -- confession or the fruits of the confession, the Government can convict him literally.
Obviously, that's my understanding of the law.
And it's my understanding that at that stage, you'll file a motion to suppress, you suppress the confession, and if the judge is really careful, he says this includes all the fruits from this confession and the Government can do it.
Then the Government decides as to whether we've got anything else.
And if we've got anything else he can be tried.
That's my understanding.
And in this case, it's different because he didn't confess anything except that he said the Government is wrong in and out.
Chief Justice Earl Warren: And that wasn't the rule, I suppose, that every time we reverse the case here because of the coerced confession, there'd be no sense in saying I'm back for a new trial because they just have to dismiss it.
Mr. Thurgood Marshall: Well, and that then I think it's correct.
But I -- I still say there's a little difference in this one.
And the difference is that here that he know that these two going along together, the civil and the criminal.
Chief Justice Earl Warren: Well, I wasn't disagreeing with you.
Mr. Thurgood Marshall: Yes sir.
Chief Justice Earl Warren: In fact that was --
Mr. Thurgood Marshall: I -- I'm sorry --
Chief Justice Earl Warren: -- with what you're thinking but I'm applying up to our practice here.
Mr. Thurgood Marshall: You're absolutely true.
And if I could save a few minutes for rebuttal.
Chief Justice Earl Warren: Yes, you may.
Argument of Ernest R. Mortenson
Mr. Ernest R. Mortenson: Chief Justice, may it please the Court.
I think the facts were well stated by the Solicitor General.
However, the dates are important.
The letter advising Ben Blue that criminal prosecution was contemplated -- was mailed on November 1st, 1962.
The counsel for Ben Blue held the conferences in Los Angeles, in San Francisco on the criminal case.
Then in 1963 in April, the jeopardy assessments were made.
It was 14 months later approximately when the indictment was brought.
Now, before I get into the matter of jurisdiction, I don't intend to spend too much time on that.
I would like to say something about jeopardy assessments.
When the jeopardy assessment is filed, levies are made against all the known assets of the taxpayer.
And in the County Recorder's Office, liens are filed showing the same amounts of taxes due that are in the jeopardy assessments.
Now, as stated by the Solicitor General, the Government did not take any current earnings of Ben Blue.
But it had a right to do it over attorneys.
Not only that but the liens that were filed attached to not only the property and existence at the time of the assessments but after acquired property.
And if Ben Blue had no funds, and borrowed some from -- let's say his sister, the lien would attach to that if it were paid over to an attorney.
Now, while among this matter of jeopardy assessments --
Chief Justice Earl Warren: May I interrupt just for a moment; I thought the Solicitor General said that the Court had found that he was not deprived of his right, to his ability to have counsel and so forth by reason of the -- of anything it had done on a -- under that jeopardy assessment.
Mr. Ernest R. Mortenson: At the time of the hearing, that is true.
The judge so found --
Chief Justice Earl Warren: Well then, it has no application here, has it?
Mr. Ernest R. Mortenson: Well --
Chief Justice Earl Warren: Is it the material here?
Mr. Ernest R. Mortenson: It's material in this respect, as the Solicitor General stated, in the Daeche case in particular, it takes a lot of money to defend a case and we don't know how much money Ben Blue is going to make.
This much is sure the record shows that none of the money that was levied upon had been released at that time.
But we are not urging at this point that Ben Blue cannot employ counsel.
That is not being urged at this time.
We don't know what the future will hold in that regard because we don't know how long this case is going to take.
Now, back to the jeopardy and I'm sorry I didn't stress this in my brief.
I alluded to it but I didn't give any figures.
In the transcript, the first thing we have is the indictment.
And count 1 shows -- count 1 states that Ben Blue reported on his return taxable income of $9,817.98, that he shouldn't have reported $12,649.56.
In other words, he had a deficiency of $2,831.
That's -- that's the money that he owed.
That's according to the indictment.
Now, if you turn to page 76 of the record, you find that the jeopardy assessment was made in the amount of $12,023.18, three or four times that amount.
And assets were seized to cover that amount.
In addition to that, the jeopardy assessment was in $6,011.
Now, the indictment figures are but a small fraction of the jeopardy assessment fees.
But note also that when the statutory notices were sent out, 60 days after the jeopardy assessments were made, the Government admitted in its report that the assessment was in excess of the liability by $2,850.67 for that year and the penalty was in excess of $1,425.33.
Now, after the Government takes his assets, within two months, it finds that it has taken $5,000 too much.
And a year and four months later, in his indictment, it says well, we -- at this point, we can only prove $2,831 instead of $12,023.
I have to say, I mentioned in my brief that these amounts have been reduced but I didn't put the figures in there and I think I should have because when we take the six counts, this is what we find.
That in the indictment it claims that he understated his tax and that of the corporation by little less than $40,000.
But if you take the figures from the jeopardy assessment, which are in the transcript, the amount there is about $135,000 or about three times as much.
And as the record also shows, during this whole period in between the jeopardy assessment and the time of the indictment, none of the liens were abated.
They stayed in the recorder's office, in the same amounts that it were -- that they had when they were originally filed.
Now, another thing there, when the jeopardy assessment was made, 50% civil penalty was assessed which was reduced admittedly because they were in error.
And there, the Government has the burden of proof on a jeopardy assessment.
The point is that it shows how loose the Government is in doing these jeopardy assessments.
It -- it admits in -- within 60 days that was quite long.
And by the time he gets throughout the indictment a year or more later, that it was even worst of than it originally thought it was.
Now, with regard to the operation of the Tax Court --
Chief Justice Earl Warren: Now, may I ask just how does that affect our case here, what you've just been saying?
Mr. Ernest R. Mortenson: Well, what I am saying is that the use of the jeopardy assessment procedures, which was intended to be purely for civil purposes, is being used in this case to compel the defendant to incriminate himself, because the same income, the same tax is involved in the Tax Court case -- in the Tax Court petitions in the Tax Court case as are in the indictment.
Chief Justice Earl Warren: I understand that but you seem to stress the fact that the jeopardy assessment was a $100,000 or more and that the indictment only charged $40,000 or more.
Now, if the jeopardy assessment had been for $40,000 as the indictment fixed the amount, wouldn't he then have, under your theory, have been called upon to violate and called upon to -- called upon to testify as to that and therefore the -- in the same shape?
Mr. Ernest R. Mortenson: Yes, Your Honor, the same principle applies.
Chief Justice Earl Warren: Well what -- what is the difference between these variations?
Mr. Ernest R. Mortenson: Well, I think (Voice Overlap) perhaps indirectly I was attacking the whole jeopardy assessment procedures.
That's when we come to this Court, I think someday and you'll have a good look at --
Chief Justice Earl Warren: Well, that may be but another day is another day, how does it affect this case?
Mr. Ernest R. Mortenson: The combination -- it's the combination of the jeopardy assessment.
Its use in the hands of a special agent whose recommending prosecution to implement his criminal case.
That's what I'm getting at.
But my point in showing these figures is to show that the jeopardy assessment itself is a loose procedure.
And in this case, were used apparently to set up a criminal case.
Now, let me give you an example.
As you find in the record in these -- in the statutory notices that were sent out by the Government, they raised the question of depreciation on an automobile that was disallowed on the part of the Merry-Go-Round Incorporation and the use of the automobile was said to be personal.
It doesn't involve an awful lot of money compared with the whole picture but it's one of the items there.
Alright, now the Tax Court petitions are filed a year ahead -- a year or more ahead of the -- of the indictment.
And if the Tax Court case comes to trial first, and the Tax Court does not necessarily follow the recommendation of the Government, then I've said that in the case in my brief where the Circuit Court held that the Tax Court need not continue a case if there is a related criminal case pending.
But the Tax Court case can come to trial and he -- that the taxpayer has the burden of proof.
If he doesn't appear, and I don't see how he can claim a constitutional burden, he loses the tax.
In other words, he loses his case.
He has to come in.
Chief Justice Earl Warren: But has he been putting that position yet?
Mr. Ernest R. Mortenson: He has because there is no way of extending the period of time in which the Government files a statutory notice after the jeopardy assessment is made.
It has to be done within 60 days.
There is no way of extending the 90-day period for the petitioner to come here to file a verified complaint.
The Court can't extend that.
Nobody can extend that period.
So that after the jeopardy assessment is filed within 150 days, the taxpayer must verify a petition in which he meets the allegations of the Government.
Chief Justice Earl Warren: Had he done that?
Mr. Ernest R. Mortenson: He did that.
Chief Justice Earl Warren: And did he do more than just to simply deny that he owed that money?
Mr. Ernest R. Mortenson: Well, in this particular case, there were general denials of what might be called general denials (Voice Overlap).
Chief Justice Earl Warren: Was there anything more than that?
Did he make any admissions in there that would hurt him in the criminal trial?
Mr. Ernest R. Mortenson: No.
But, let's take our depreciation matter.
Chief Justice Earl Warren: Take what?
Mr. Ernest R. Mortenson: The depreciation of automobiles.
So in the petition, Ben Blue states that the depreciation was properly taken.
Now, suppose -- suppose he'd taken a three-year life on the automobile and it turns out the automobile lasted five years.
In the Tax Court petition, he might be in a position where he'd have to admit that.
Now whereas in the criminal case --
Chief Justice Earl Warren: I know but he never had -- he's never been compelled yet to do that at the time that the indictment was dismissed.
Mr. Ernest R. Mortenson: We -- there's no way of knowing how fast the Tax Court is going to operate and in this case, he has already -- he has his verifications.
Supposed then in the criminal case, he comes in and says -- and this incidentally is in a corporate return.
And the charge there is under Section 7206(1) in filing a false statement, not tax evasion, not a tax evasion count.
So at the criminal trial, he says, “Oh, this was false because you took the deduction and the Tax Court proceeding, you admit that the car's lasted -- the car lasted five years or lasted three -- five years when you took a three-year life on that thing.
But it's a case of whipsawing between the Tax Court and the District Court on the criminal trial.
Justice William O. Douglas: Did you not suppress the Tax Court admission?
Mr. Ernest R. Mortenson: I beg your pardon.
Justice William O. Douglas: Didn't you manage to suppress everything you said in the Tax Court, rather than dismissing that one?
Didn't you object that just having to testify before the Tax Court and therefore you couldn't make him -- you couldn't use that against him in the criminal case because you've been forced to testify there?
Mr. Ernest R. Mortenson: Well, then you get into a procedural matter which I think was brought up before.
If a defendant is in a position where he can defend himself as he was in the case that Mr. Solicitor General gave us here, whether he have lost the records.
I believe that's the Heath case.
What is the point of going to trial when the Government knows that it can't -- that it can't succeed?
And here again, going back to the Boyd case which we relied on, it's the procedure that's unconstitutional.
And I think that's what the Boyd case stands for.
In the last paragraph it mentions that, the unconstitutional procedure that was adopted --
Justice William O. Douglas: Well, that just omits suppression, that doesn't say you have to dismiss the indictment that you're confusing, it seems to me, immunity from suppression of a confession.
Mr. Ernest R. Mortenson: Well --
Justice William O. Douglas: Or statement.
Mr. Ernest R. Mortenson: Aren't we moving -- aren't we moving into -- aren't we moving into an area, Your Honor, where it's a question of -- what the question of due process and not -- and not a matter of evidence?
In other words, it seems to me that if a defendant is put in the case where he's discriminated against, and -- and can't have a fair trial, that he has the right to go beyond the mere suppression of evidence.
And that --
Justice William O. Douglas: And the Government hadn't a chance to show if he can get a fair trial.
You haven't given him a chance yet.
You dismissed the indictment.
Mr. Ernest R. Mortenson: Well, but he -- he has -- he has been compelled to come in and make statements under oath.
Justice Byron R. White: Could you give one statement in his practical provision that you think is incriminated?
Mr. Ernest R. Mortenson: Well, I tried to give the example of the depreciation.
Chief Justice Earl Warren: Did he admit anything in regard to that?
Didn't he just deny that he owed the money?
Isn't that all he did in that answer?
Mr. Ernest R. Mortenson: In this particular case, that's true.
Chief Justice Earl Warren: Yes.
Mr. Ernest R. Mortenson: And if counsel had known at that time that there was going to be an indictment, this might have been a little different petition.
What we're talking now, it seems to me, about -- again, you put a man on a rack and you don't get the kind of confession you want, I still don't think that makes the procedure right.
Chief Justice Earl Warren: Well, let me -- let me put this question to you.
Suppose that the motion to dismiss the indictment in this case had been denied, and suppose you then had a motion to suppress the certain evidence.
And the Court found that certain evidence should be suppressed for the reason that you have just given, that the jeopardy procedure conflicts with the -- his rights on a -- on a trial.
Would the judge have the right then to dismiss the indictment or would be -- he'd be limited in his -- in his response to your motion to -- to suppress the evidence?
Mr. Ernest R. Mortenson: Well, I believe procedurally, he would suppress the evidence and then wait for the Government to do something under the situation that you've just given me Mr. Chief --
Chief Justice Earl Warren: Yes, why shouldn't we do that here?
Mr. Ernest R. Mortenson: Well, there's another point which I haven't mentioned and that is the discrimination element of this.
It is conceded by the Government, that it is not the usual procedure to make a jeopardy assessment when criminal prosecution is under consideration.
That is conceded by the Government in this brief at page 16.
Now, there isn't one iota of evidence regarding the reason for the jeopardy assessment, not one bit.
The Chief of the Intelligence Division in Los Angeles was on the stand during the hearing.
No questions were asked to him about the reason for this.
So we have a -- we have a situation where the Government admits that it doesn't do this.
The mere fact that it doesn't indicates two, the unfairness of the procedure of having a jeopardy and then having a trial on the issues later on, on the same issues because here, there's a -- the income is the same, the tax -- and the tax is the same for both the jeopardy assessment and for the indictment.
The -- it seems to me that in the light of the cases that have been decided by this Court recently, and I mentioned the Griffin case, Douglas, Coppage, Draper, Gideon, the Rideout case.
Now, you've gone beyond the matter of using evidentiary rules to give a man a fair trial.
Here, I repeat what I said before that the jeopardy assessment procedure which is intended as a civil matter was used here to compel Ben Blue to come in and make statements.
Now, you say, well, these are just general denials.
Every item that was in the statutory notice had been answered in the petition.
And it puts -- it puts the defendant in a position where he has one case in one court and if he use the material there, and a case in another court, and you don't know how that's going to come out.
And incidentally, in the criminal case, that's dealt on a bank deposit, on a bank deposit method.
And some years back, you have the four net worth cases, Holland and Smith on -- there you laid down some rules in the use of evidence and procedures in net worth cases.
Bank deposit is a similar type of prosecution where you use indirect evidence was all circumstantial.
In fact, there should be more safeguard around a bank deposit case than there are in the net worth case.
And yet here, the Government comes in and makes the defendant swear to some petitions, and then more than a year later, indicts on the same income and the same tax.
Chief Justice Earl Warren: Mr. Mortenson, suppose the Government sued a man for taxes that he didn't pay for illegally operating a skill, would it then be deprive to be -- of the right to prosecute him until that case was decided?
Mr. Ernest R. Mortenson: Well, as the Government points out, Mr. Chief Justice, in its brief, this question may arise in other areas.
And I -- I frankly am in no position to take those and try to evaluate them in terms of what we have here.
I know the tax field and I know how this operates.
And we can see in this particular type of situation where there is discrimination and where there is oppression.
Now, if you might ask too, suppose the jeopardy assessment had come after the indictment, where to the indictment that would be a different situation too.
It just happens here that the defendant was put in a position where he was discriminated against and where he had to come up with evidence which the Government might use in a criminal case.
Thank you, Your Honors.
Chief Justice Earl Warren: Solicitor General.
Rebuttal of Thurgood Marshall
Mr. Thurgood Marshall: Mr. Chief Justice, may it please the Court.
Unless you have questions, we'll waive for rebuttal.
I have three minutes.
Chief Justice Earl Warren: Very well.
We'll adjourn then.