BELLIS v. UNITED STATES
Legal provision: Self-Incrimination
Argument of Leonard Sarner
Chief Justice Warren E. Burger: We’ will hear arguments first this morning in number 73-190, Bellis against The United States.
Mr. Sarner, you may proceed whenever you are ready.
Mr. Leonard Sarner: Mr. Chief Justice and members of the Court, the issue presented here is whether the Fifth Amendment privilege against self-incrimination applies to books and records of this law closely held partnership.
In our petition for certiorari, we said that the court never directly decided this issue.
In retrospect, I’m satisfied that the court did decide it in the Boyd case, decided in the favor of the position of the petitioner, and that this has been reaffirmed by the formulation which this Court enunciated in White.
The case is brought up in the context of the small three-man law partnership.
Petitioner is in lawful possession of the books and records.
The subpoena is addressed to him from the federal grand jury.
Thus, we have here the ingredient of personal compulsion, which this Court found lacking in Couch.
As a co-owner, rightful possession of the books, we submit that the petitioner’s Fifth Amendment claim against self-incrimination must be recognized unless there is something significantly unique about the nature of the books and records of a small law partnership to require a difference in result and we also submit that there is not anything unique about these records.
Your Honors will note that the Government is quick and perhaps, we think a little too quick to point out that although Boyd involved a subpoena addressed to a partnership to which the partner responded, the court says -- the court according to the Government says that this was ignored by the Boyd court that this crucial fact, that the punishable aspect of the case was disregarded.
Now, if Your Honors will note, Boyd did involve a charge by the Government at some 35 cases of plate glass had been imported to this country from England by the firm, the partnership firm of E.A. Boyd and Sons, by means of the fraudulent or false invoice.
And the subpoena was directed to the partnership providing for the production of an invoice from the English seller of this glass showing the quantity and quality and value of glass contained in 29 of these 35 cases.
Now, the emphasis Your Honors by the Boyd court that a man’s private papers cannot be used to established a criminal charge against him where the private paper was the invoice of the foreign shipper.
Hardly, as the Government characterizes it in its brief, a partner’s private written statements, this was an invoice from the foreign shipper, first indicates and that the private papers referred to in Boyd didn’t refer to the manner of the preparation or writing by the intimacy of the information contained therein, but rather to the ownership aspect.
First, that this was considered to be the private paper of the claimant of the partnership and the partner standing in the shoes of the partnership.
Of course, as Wilson points out that was never required for Fifth Amendment privilege that the documents be written by the person himself.
In fact that in Wilson, it was emphasized that the mere fact that the officer of the corporation may have written in his own handwriting, the incriminating material in the corporate books in no way would either enlarge or take away from the privilege.
But Your Honors, we submit it’s too much to suggest as I think the Government does that the Boyd court ignored the other aspect of private papers which was involved in Boyd.
That is the private papers’ concept as opposed to those quasi-public records required by law to be kept for regulatory purposes justifying in public scrutiny and you know some area of public domain.
Now, it should be noted that the rationale as we understand it for denying Fifth Amendment protection to corporate books and records lies in the visitorial powers doctrine.
The interest of the States, of the Government to inspect and regulate that state created creatures as exemplified merely by the required records doctrine.
Thus, the Boyd court was well aware what this Court in Hale versus Henkel, 10 years later, only 10 years later held about the required records doctrine when the Boyd court itself observed that what was involved in Boyd, in the private papers aspect was completely different from -- this is the quotation, “the supervision which was authorized to be exercised by revenue officers over the manufacture or custody of excisable articles and the entries there open books required by law to be kept for their inspection.”
Thus, Boyd specifically recognized the distinction between private papers of a partnership and the required records of a corporation with partnership papers assimilated to privately or individually owned.
Furthermore Your Honors, we submit that the White formulation in essence adopts this exact approach.
Now, White recognized the necessity for governmental power to regulate and inspect economically, influential, unincorporated associations such as the union involved therein.
Despite the non-applicability of the visitorial powers doctrine, the privilege applying to recast the White formulation in the affirmative rather than in negative where the organization has a character so personal, that has been substantially identical, in scope of membership and activities, that it can be said to embody or represent the purely, private or personal that is the intimate identical interest of its constituents.
Unknown Speaker: Mr. Sarner, at one time, Mr. Kolsby and Mr. Wolf had consented to the production of the records, have they not?
Mr. Leonard Sarner: No, sir.
Your Honor, that was the figment of the imagination of trial attorney who prepared a memorandum of law prior to the any evidentiary hearing.
Unknown Speaker: Who’s trail attorney?
Mr. Leonard Sarner: The Government’s trial attorney which was submitted prior to the evidentiary hearing before the District Court.
The record as Your Honors will note in my reply brief which I refer to the citation, the pages of the record on page 2 of reply brief a-32, 35, 40, a-55.
All these factual allegations were specifically denied.
In fact, in my argument before the Court of Appeals Your Honor, I was trying to indicate to the Court what their case did not involve.
It did not in anyway involve a wrongful possession of books as opposed to the other partners.
And the Court of Appeals specifically addressed itself to save the sole issue.
And if you look at page 15 of the appendix --
Unknown Speaker: So you are stating now that there is no misunderstanding or whatsoever between the three former partners?
Mr. Leonard Sarner: No misunderstanding whatsoever before the three partners and --
Unknown Speaker: And never has been?
Mr. Leonard Sarner: And never has been and the books and records are in the possession of Mr. Bellis, the petitioner with the blessings and full blessings of his other partners.
And the Court of Appeals so found in saying that the issue is whether a partner assumingly in lawful possession of the books and records.
Unknown Speaker: Well, I think there was never any question about he is being in lawful possession.
I think the others as I read the record.
Tell me one other thing, what is this investigation all about, is it an income tax investigation?
Mr. Leonard Sarner: We understand as an income tax investigation.
That hasn’t been fully disclosed but we do understand it to be an income tax investigation.
Unknown Speaker: But you are stating here now, there is no -- between the three former partners.
Mr. Leonard Sarner: I am stating here and now that the record has absolutely nothing in it to justify any such assumption.
And not only that Your Honor, the District Judge, Judge Van Orsdel (ph) was asked by the trial attorney to open up the secrecy of the grand jury.
The witnesses were available to testify.
The Government said, it would not proceed to bring any witnesses that would satisfy to go on the record.
Unknown Speaker: Mr. Sarner?
Mr. Leonard Sarner: Yes sir.
Unknown Speaker: Suppose that Mr. Bellis had voluntarily surrendered the records to the Internal Revenue Service and subsequently, one of his other partners had been prosecuted in a tax fraud case.
What position would he have had with respect to claiming the Fifth Amendment if the records were introduced?
Mr. Leonard Sarner: Well, You Honor, I would think that if one of the partners of Mr. Bellis did surrender the records and another one, Mr. Kolsby got to say, “We’re now involved in a criminal investigation” that Mr. Kolsby would not be able to claim that there was any violation of his Fifth Amendment rights.
At least under the rationale of Couch, the personal compulsion was addressed to Mr. Bellis.
It wasn’t addressed to one of the other partners.
So unless you adopt Your Honor may be referring to that the possession was so constructive or fleeting in one of the partners.
But we don’t think we have to meet that problem in our case.
In our case, we do have the object of the tax investigation in rightful, peaceful, lawful possession of the books and records.
He is the one that the Government is seeking to get the information about.
He is the one who will be subject to the personal compulsion when he turns them over.
Unknown Speaker: On your submission, the critical fact is that personal possession by Mr. Bellis of these records.
Mr. Leonard Sarner: Personal possession plus the rightful possession?
Personal possession, rightful possession and the nature of the entity being such that it is a private intimate closely held group.
Unknown Speaker: Does every member of the law firm have the rightful possession to the records of the firm as against other members of the firm?
Mr. Leonard Sarner: This may be open to some dispute Your Honor.
As I understand the state law that which would control this issue, the other members of the firm have the right to inspect the books, no question about the inspection.
And so long as the books are in the designated -- in the possession of one of the partners, unless there was some rule of corporate -- partnership activity, some vote of the majority partners to take the books away, then he would be entitled to keep them.
Unknown Speaker: Does Pennsylvania have any entity theory of --
Mr. Leonard Sarner: No Your Honor.
The Government tried to suggest that the legislative history of sub-chapter K or the Uniform Partnership Act distinguishing between aggregate and entity theory would be a fairly controlling portion.
We cite -- I think the most definitive statement on this law, on this point in the reply brief, the Supreme Court of Pennsylvania's decision in a D.H. Shapiro case, I quoted fully on page 7 and let me just read the last sentence.
“We could multiply authorities, but we must hold that the weight of authority in this Commonwealth is to the effect that a partnership is treated as an aggregate of individuals and not as a separate entity.”
And of course, on that point --
Unknown Speaker: You have a reply brief?
Mr. Leonard Sarner: Yes, I filed the reply brief.
Chief Justice Warren E. Burger: And that’s the one over here.
Mr. Leonard Sarner: It was in file -- it was filed by Friday within the time after I had received the Government’s brief was a little late.
Chief Justice Warren E. Burger: Now, let me see if I understand -- I’m sorry -- your position was almost -- if one of the other partners had released this voluntarily to the Government, do I understand you to say that your client would have no complaint?
Or at least no complaint that he --
Mr. Leonard Sarner: Well, I would say, I would say Mr. Chief Justice that if one of the other partners had released this, we would be faced pretty much with the Couch type case.
Chief Justice Warren E. Burger: Well, then, hasn’t that somewhat undermined your idea that this is a matter of personal private papers?
Mr. Leonard Sarner: No.
Chief Justice Warren E. Burger: If someone else -- if the third person can waive the right for your client, then what’s left of your Boyd claim?
Mr. Leonard Sarner: No, the point would be this.
In situations where somebody else was in possession of them, one or the other partners was in possession, I’d see that that’s no different than of the accountant was in the possession of my papers.
He doesn’t waive my claim, but the compulsion is directed against the one in possession.
Unless, Your Honors feel that this is the situation and we can.
I mean, I may retrench a little from the -- I mentioned to Mr. Justice Powell, but you have here a situation where possibly, the possession of someone else is considered to be the rightful possession of another as indicated in the footnote.
So that it’s a form of constructive possession.
I don’t think we have to meet that problem in this particular case because we have the man against whom the subpoena is issued in possession of the books and record.
Chief Justice Warren E. Burger: Let’s track this down on a practical basis.
Mr. Leonard Sarner: Yes.
Chief Justice Warren E. Burger: One partner of the partnership, whether it’s a three or a hundred partners, one partner has possession of the records.
The partnership has presumably made its partnership return and the Internal Revenue is checking out the information.
The man in possession, the partner in possession refuses to give it up in response to a request directed to yet another partner in the process of checking that partner’s returns.
He can refuse for any reason to give it up, is that right?
Mr. Leonard Sarner: Well, I don’t know whether we have to go that slower, Your Honor that -- Mr. Chief Justice that he can refuse for any reason to give it up.
Chief Justice Warren E. Burger: But suppose it was one of the other partners here, that’s what I’m driving at.
One of the other partners not Mr. Bellis whose personal returns or individual returns were being checked and part of that process very frequently, want to check the partnership records.
Mr. Bellis, now if I give those records in connection with my partners’ tax inquiry that may lead to some incrimination of me.
He can do that, can he?
Mr. Leonard Sarner: Yes, I would say that if Mr. Bellis takes the position that because there’s an investigation of one of his other partners that his records, the partnership records in his possession may tend to incriminate him because of items which maybe in there and not in there in reflecting transaction.
The clients I would definitely say that the partner can refuse to return.
Chief Justice Warren E. Burger: But do you suppose the Internal Revenue might do then?
Do they not have some rather harsh weapons in terms of their powers?
Mr. Leonard Sarner: They have whatever weapons are available against all taxpayers.
They don’t have the weapon Your Honor to make a taxpayer divulge his purely private books or books which he holds in a purely personal capacity.
And if you assume -- let me, I just -- I think I answer Your Honors’ observation.
If you assume that there is any group activity, any regularly conducted group activity, which is protected where the books and records are protected, where two or more people are associated together, then one of the members must be in possession of the books in order to assert the privilege.
And therefore, if you assume and the Government Your Honor does assume that there are situations where you can have group activity, some association and the books and records are protected in their petition -- in their brief in opposition to our petition for cert, and they said they thought it might be the family partnership, where you have a father-son or the brother-sister partnership.
They’ve completely discarded that formulation now and come up with the startling proposition that is only where you have the informal criminal conspiracy where no one is said to own the books, where possession is 9/10 of the law, and where therefore the one who in possession of the these books in the criminal conspiracy has as much claim or better claim than the others.
This is a formulation which has been rejected by every Court of Appeals to which has been addressed holding that the books and records of narcotics or gambling enterprises are the --
Unknown Speaker: And what do you object to the admissibility of the contents, the records or are you objecting to your having to produce them and by the act of producing them, you verify and identify --
Mr. Leonard Sarner: We, we -- I mean obviously, we would like to be able to have the two prongs to our objection.
The Schmerber case suggests by Mr. Justice Brennan that asking us to produce these books authenticates them and therefore is the testimony that these are the books required under the subpoena, and that therefore this is the compulsion which is protected against by the Fifth Amendment.
Unknown Speaker: Even if otherwise they would be admissible and not subject to.
Mr. Leonard Sarner: Well, I say that that’s the Schmerber -- that would be the rationale as I understand it of Schmerber where wouldn’t have testimony or content of the books, but the books clearly are testimony on a communicative.
So we think the contents are --
Unknown Speaker: It could be that if the books were otherwise before the grand jury, they would be admissible over your Fifth Amendment objection, and still, you would have the Fifth Amendment objection, do you yourself produce it?
Mr. Leonard Sarner: That’s perfectly true.
That could very well be.
Unknown Speaker: Where which you --
Mr. Leonard Sarner: Well, we’ve made both of the --
Unknown Speaker: Are you riding both horses here?
Mr. Leonard Sarner: Yes, indeed.
I mean, we wrote – we’re writing primarily -- I would say, we are writing primarily the content of the books, that the books are incriminating, and therefore to compel us to bring in an incriminating material in the books violates the Fifth Amendment and in addition of course, since its addressed to us and we -- the subpoena is addressed to us, we must comply and authenticate and say that these are the books and records which are required.
Unknown Speaker: But now the latter -- the latter, the objection to producing that yourself would be obviated if there were say a search warrant and the books were seized in your house -- in your client’s house and taken to court, then you would be left with one, it’s then one objection?
Mr. Leonard Sarner: That’s yes.
That’s the -- what the Government try to raise and Hill versus Philpott in this petition for cert to this Court, and which was rejected by the Circuit Court of Appeals in Hill versus Philpott which I was think was cited with someone who is approved by Mr. Justice Powell in the Couch case.
Unknown Speaker: Mr. Sarner, does your position mean or suggest a way then to make partnership books completely inaccessible?
Get them in the hands of one of the partners?
Mr. Leonard Sarner: Well, Your Honor, my position is that there is no valid distinction between partnership books, at least of the small closely-held partnership that we have here, and individually own books of the sole proprietor.
Now, the individually owned books --
Unknown Speaker: Well, how do you define a small closely-held partnerships on three-man partnerships are pretty substantial?
Is that a factor?
Mr. Leonard Sarner: I think it is.
I mean the Court of Appeals have had no way of difficulty with that concept that Mal Brothers, you have the Silverstein case where you have limited partners with 60-70 limited partners activities of capitalization of several millions of the dollars.
You admit here of an economically influential unincorporated association.
If Your Honors --
Justice William H. Rehnquist: Mr. Sarner, after Justice Blackmun’s earlier question to you about whether Mr. Wolf or Mr. Kolsby did consent, I went back to the appendix and I see on A-13 of the Government and its memorandum alleged that authorization was given by Mr. Herbert F. Kolsby and Edward L. Wolf for the grand juries to examine those records.
Then on A-22, there’s your motion to quash the subpoena on A-24 is a memorandum in support of the motion.
Now, in one of those two documents that you have, did you traverse that allegation?
Mr. Leonard Sarner: No, Your Honor because those documents were filed prior to the evidentiary hearing.
Also, all this was --
Justice William H. Rehnquist: Where is that denial of the Government’s allegation?
Mr. Leonard Sarner: Well, the Government’s allegation is only in the memorandum of law.
There was no factual basis for it but the denials are several Your Honors, and they are specified in the reply brief.
A-32, A-55 in fact we say that they the Government haven’t even come forward with any suggestion that this is not with the complete consent and authorization of the other partners.
Nothing has been adduced.
You must find that that is so.
They waive their right to proceed on A-114, and the court -- the District Court asked the Government where they one of the procedure --
Unknown Speaker: So, on A-32 for example, scanning at which, I don’t see anything there, and I perhaps, I’m overlooking something.
Mr. Leonard Sarner: Alright, let me see, what I referred to A-32, Your Honor.
Yes, I mean, this was with counsel.
Yes, we denied. This is the denial of the allegation.
Specifically on A-14, that’s where I am.
Yes, the last paragraph Your Honor.
In addition if Your Honor please, there are matters that are alleged as factual matters which we claim are not correct.
Unknown Speaker: Well, but is that your way of traversing a specific allegation?
Mr. Leonard Sarner: It wasn’t a specific allegation.
It was an memorandum filed before --
Unknown Speaker: Well, but it was a very specific allegation.
Let me read it to you.
“Authorization was given by Mr. Herbert F. Kolsby and Edward L Wolf on behalf of Kolsby and Wolf for the federal grand jury to examine those records.”
Now, do you anywhere in the appendix specifically deny that?
Mr. Leonard Sarner: A-114, if you look at A-114.
Unknown Speaker: Where about in A-114?
Mr. Leonard Sarner: Right beneath -- the last paragraph before the word 104, before the 104.
Unknown Speaker: Where you say they haven’t even come forward with any suggestion that this is not with the complete consent and authorization of other person?
Mr. Leonard Sarner: Yes, nothing has been adduced.
You must find -- and then the court went on to so find.
They said they -- the Government was contend to --
Unknown Speaker: Where did the court find that it was with the consent or without the consent of the other party?
Mr. Leonard Sarner: Well, the Court of Appeals --
Unknown Speaker: I am talking about the District Court.
Mr. Leonard Sarner: The District Court --
Unknown Speaker: Well, I don’t mean to make you --
Mr. Leonard Sarner: The District Court finds that they are in the possession of Mr. Bellis and no suggestion --
Unknown Speaker: Well, but that you’ll find in there in that possession --
Mr. Leonard Sarner: Well, no, no suggest of any unlawful or wrongful possession.
Unknown Speaker: I know, but I don’t think Justice Blackmun’s question was addressed to the issue of wrongful possession.
I think his question was addressed to the consent of the other partners.
Mr. Leonard Sarner: I would say that the record indicates -- the record there indicates that it was with the consent of the other partners.
There is nothing to suggest that its not with the consent of the other partners other than the allegation in the memorandum filed before any evidence whatsoever and denied -- is as factually denied by counsel the same as the allegation was made by counsel.
No testimonies brought in the Government refuse to do so.
That men were available, they refused to --
Unknown Speaker: Well, on A-114, all you say is the Government hasn’t come forward with any evidence.
You don’t deny that it's the case.
Mr. Leonard Sarner: Oh, yes.
I think we do.
We thought we did maybe --
Unknown Speaker: Well, you’re referring to us a statement in A114.
You say, “They haven’t even come forward with any suggestion that this is not with the complete --”
Mr. Leonard Sarner: You must -- what I say, you must find that this is so.
Unknown Speaker: But you don’t say its not so.
Mr. Leonard Sarner: Well, I -- we meant to.
Maybe we are a little inartistic then and --
Unknown Speaker: Well, I think you’re a little inartistic in answering Justice Blackmun’s question.
Mr. Leonard Sarner: I’m sorry.
I didn’t mean to be that.
Unknown Speaker: (Inaudible)
Mr. Leonard Sarner: Yes, Your Honor.
Unknown Speaker: I think it’s not been asked that is, whether your posture here opens the way to a complete closure of any partnership books in any case?
Mr. Leonard Sarner: No.
It doesn’t open the way to a complete closure of any partnership books.
It opens the way that the complete closure of partnership books which are small closely-held partnership in the possession of one of the partners, just like the individual books of the sole proprietor.
Unknown Speaker: Well, isn’t the way then to put the books in the possession of one of the partners?
Mr. Leonard Sarner: If the books are in the possession of one of the partners, and if it’s an intimate close relationship, just as this law partnership is, then the books are protected from scrutiny by subpoena.
The same --
Unknown Speaker: Then I ask you again, and I still get a negative answer from you.
I ask again, does this not open the way to a complete barring of partnership books to any investigation?
Mr. Leonard Sarner: If they are in the hands of one of the partners.
Chief Justice Warren E. Burger: What if one of the other partners involved in a tax case needs them by way of defense to a Government claim under deficiency assessment, is he barred from getting them too?
Mr. Leonard Sarner: From the -- no, I was --
Chief Justice Warren E. Burger: From Mr. Bellis?
Mr. Leonard Sarner: No, I assume that he can get them from Mr. Bellis.
Chief Justice Warren E. Burger: Even in the face of a claim on Mr. Bellis’ part that turning them over to IRS for the other partner will expose him to criminal prosecution?
Mr. Leonard Sarner: Well, Your Honor, what you’re asking me to speculate on is the fact that once you have two people associated in some joint enterprise, you can never have any Fifth Amendment protection.
I don’t think that’s how I think that what you have here is the situation that the mere fact that one of the partners is entitled to get them from the other partner in no way means that the Government is entitled to get them from the other partner.
And it’s never been equated to the fact that because there are other ways that the material can be obtained, that therefore the Fifth Amendment privilege doesn’t apply with the one in possession.
May I just --
Unknown Speaker: The fact that -- the fact that you must be able to get objective producing because it authenticates the records, that wouldn’t be distinctive of partnership books, it would be of any kind of the record in your possession?
Mr. Leonard Sarner: It would indeed and I --
Unknown Speaker: Not just of partnership one but a corporation --
Mr. Leonard Sarner: I think then --
Unknown Speaker: Friend or anybody?
Mr. Leonard Sarner: That’s right, and the Government’s suggestion that Schmerber means just that very thing would actually protect corporate books and records from being introduced.
That’s why I think the content is --
Unknown Speaker: Is this protected against being introduced?
Mr. Leonard Sarner: Well, being subject to a subpoena.
Chief Justice Warren E. Burger: Very well.
Argument of Wallace
Mr. Wallace: Mr. Chief Justice, and may it please the Court.
The records at issue here are the financial records of a law partnership.
The production order which is set forth on page 116 of the appendix excludes any individual client files containing any advice or confidential relationships between the Attorney and the client.
There essentially -- essentially, we are dealing here with a production order enforcing a grand jury subpoena for the financial records of the partnership, the receipts and disbursements record of that kind.
The claim is that the partner in possession is entitled to assert the Fifth Amendment claim that this would violate the provision stating that no person shall be compelled at any criminal case to be a witness against himself.
This is a provision, the background of which has been reviewed by the Court many times in recent years.
Last term in the Couch opinion, the Court noted that historically, the privilege was to protect the individual from resort by the state to the expedient of compelling incriminating evidence from the individuals on mouth as the Court put it in Couch.
And in light of the language of the amendment and its historical background, the view has been expressed by members of the Court, including Mr. Justice Stewart, that perhaps the privilege might have been intended to be restricted to the protection of the testimony and judicial proceedings, and only to bar the compulsion of testimony.
But in the Boyd case in 116 U.S., the Court did extend the privilege also to the compulsion of the production of a person’s papers in his possession.
Now, it was only the issue in Boyd didn’t -- the parties in Boyd and the court in Boyd didn’t address the problem of the relationship between an individual and an association or a group with whom he was related.
The entire issue was whether the privilege would be extended beyond testimonial compulsion.
And as the Court noted in the Shapiro case, the Government in essence contended that the privilege didn’t extend to in rem proceedings of any kind that it only extended to in personam proceedings.
But the fact that these were partnership records in the Boyd case simply wasn’t discussed either by the parties or in the Court’s opinion which treated them as Mr. Boyd’s personal papers and several times in the principle passages of the Boyd opinion.
The Court referred to these as personal papers as it has insubsequently referring to the Boyd holding in United States against White and also in the Couch case last term.
It was only after Boyd was decided and the privilege was thus extended that the issue arose as to the records of entities other than natural individuals and the rights of individuals who are parts of those entities.
And throughout that entire series of cases, the Court has been very conscious of the basic concept that’s implicit in the history of the amendment, and that was also restated last term in the Couch case that in its nature, the privilege is an intimate and personal one.
And even in the context of its extension to the production of papers or perhaps of other effects, this personal element of the privilege and the personal delimitation of the privilege has been emphasized.
And accordingly in the series of cases beginning with Hale against Henkel through United States against White and its progeny, the Court first held that the privilege is not available to a corporation or to an unincorporated organization of any kind, although there was no specific discussion of partnerships, but the rational of the White case which extended this was -- that the privilege is not extend to “the records of any organization, whether it be incorporated or not”, but that it is “limited to its historic function of protecting only the natural individual from compulsory incrimination through his own testimony or personal records.”
Now, there is a possible limitation on that principle expressed in dictum in the White case to which I will return in a moment.
The other aspect involved in the series of cases and slightly more difficult aspect in light of the Boyd holding is, what about the individual through whom the state seeks to compel the production.
The Government seeks to compel the production of the group’s records isn’t he being force to come forward in producing them and identify and authenticate what might incriminate him?
And doesn’t that run into the essence of the Boyd holding or as it was re-expressed not long ago by the Court in Schmerber against California that the privilege extends not only to testimony, but also to responses which are themselves communications such as the production of one’s papers citing the Boyd case.
Well, the Court has rejected that argument in the context of compulsory production by an individual who is holding papers in a representative capacity so long as the production order requires in to do no more than produced papers that he is holding in that fashion.
We’re not dealing here with the situation where the production order says that he is to produce such records of the partnership as will show that you, Isadore Bellis under reported your income tax so that the production would be any -- would constitute more the communication --
Unknown Speaker: (Inaudible)
Mr. Wallace: Well, the Court has rejected the --
Unknown Speaker: What’s the case?
Mr. Wallace: Well, the first case was Wilson against the United States where the question came up in the context of corporate records and the custodian holding corporate records in Hale against Henkel which was 201 U.S., the custodian of the corporate records had been granted immunity so the question didn’t arise.
The sole issue is whether the corporate records themselves were privileged, and the court held that they were not.
And then in the Wilson case in 221 U.S. --
Unknown Speaker: Didn’t the Court hold really that a corporation didn’t have any Fifth Amendment privilege against compulsory self incrimination?
Mr. Wallace: It did in Hale against Henkel.
Unknown Speaker: Right, so that wholly different --
Mr. Wallace: Well, the question in the Wilson case was whether the custodian could claim that his producing the records would tend to incriminate him because the act of production would identify and authenticate the records.
Unknown Speaker: I thought he was given immunity?
Mr. Wallace: And the records -- that was in Hale against Henkel, Mr. Justice.
Unknown Speaker: I thought you’re talking about that.
Mr. Wallace: No, I’ve gone out to the Wilson case which is in 221 U.S. in which the custodian made the claim that he could assert the privilege and not produced the records because their production would incriminate him.
And the Court rejected that claim in an opinion by Chief Justice Hughes during his earlier tenure as an Associate Justice on the Court, and the rationale of its rejection is summarized in a quotation that’s on page 17 of our brief.
And this is, I think the most precisely that the Court has addressed this issue in the context of these cases.
The fundamental ground of decision in this class of cases is that where by virtue over their character in the rules of law applicable to them, the books and papers are held subject to examination by the demanding authority.
The custodian has no privilege to refuse production, although their contents tend to incriminate him.
In assuming their custody, he has accepted the incident obligation to permit inspection and that --
Unknown Speaker: But you wouldn’t suggest that however that the -- whether you’re obligated to produce that or not -- at a criminal trial, the defendant could be called to the stand to identify these records that he’s produced.
Mr. Wallace: I would not suggest that the Curcio case seems to suggest the contrary in 354 U.S.
Unknown Speaker: Well, if you respond to a subpoena and produce records that are described in such and such a way.
Aren’t you authenticating them with that respect?
Mr. Wallace: Well, that is what the Court has emphasized is what seems to be the basic rationale that remains of the Boyd holding.
It was restated again just last term in Couch, quoting from the White case.
Unknown Speaker: Well, how does that support with Wilson?
Don’t you say Wilson holds that?
Mr. Wallace: Well, Wilson has created an exception to this rationale for anyone holding records in a representative capacity.
This exception was reiterated in United States against White with respect to association records, and the custodian in that case of the labor union records.
And the Court there, I’m quoting on page 699 of volume 322 put it this way, “But individuals when acting as representatives of a collective group cannot be said to be exercising their personal rights and duties, nor to be entitled to their purely personal privileges.
Rather, they assume the rights, duties and privileges of the artificial entity or association in which there are agents or officers and they are bound by its obligations.”
In their official capacity therefore, they have no privilege again self-incrimination at least to the extent of having to comply with the production of order when they are the custodian of the records.
That it seems to be the basic rationale of these series of cases and I think in light of the Couch in particular which holds that financial records of this kind if properly secured by the Government are admissible in evidence over a Fifth Amendment claim by their owner, the rationale about authentication and identification of the records becomes really what is left of the Boyd holding as I understand --
Unknown Speaker: When the Couch case --
Mr. Wallace: That the records themselves can’t be introduced against the person.
Unknown Speaker: Let me interrupt you Mr. Wallace, in the Couch case, was there any suggestion that the records in that case would have been producible if there had been the accountant who was asserting the Fifth Amendment privilege?
Mr. Wallace: Well, that --
Unknown Speaker: He was the custodian of the records, was he not?
Mr. Wallace: He had them in his possession, yes.
Unknown Speaker: And there’s no suggestion that case that the -- that he could not have asserted the Fifth Amendment privilege, is there?
Mr. Wallace: No, he did not assert the Fifth Amendment because there is no occasion to.
Unknown Speaker: And --
Mr. Wallace: But the fact is that the Court upheld the admissibility of the records against Mrs. Couch, even though they were her records and she was claiming that their admission into evidence against her violated her privilege against self-incrimination, so that it isn’t --
Unknown Speaker: Because they were in the possession of somebody else --
Mr. Wallace: That’s right.
Unknown Speaker: --the accountant, but there is no suggestion that had the accountant been asserting that privilege, his personal privilege there would have been --
Mr. Wallace: But implicit in the holding, it seems to us is that if the Government properly secures the records, they are admissible, financial records are admissible against their owner, not withstanding the owner's claim of privilege.
Unknown Speaker: This is securing them properly? That’s the question in this case.
Mr. Wallace: That is correct.
And now, these are not records that are individually owned as was the case in the Couch case, but they are records of the partnership in which each of the partners has a sort of tendency in common rights, or rights as a co-owner.
And for that reason, we’ve argued that the rationale of the White case and subsequent cases in this Court, all of which have reached the same result with the mere citation of the White case with respect to association of records, is that in that circumstance, the custodian does not have a right to resist their production.
Unknown Speaker: To whom did the subpoena run in this case?
Mr. Wallace: It ran to Mr. Bellis, who is the custodian of the records.
It was not a subpoena issue to the partnership.
Unknown Speaker: To whom that the subpoena run in the Wilson case?
Mr. Wallace: I don’t recall, Your Honor.
Unknown Speaker: It ran to the corporation.
Mr. Wallace: In the White case --
Unknown Speaker: If you got a subpoena of the records, you have got to serve some person you just can’t serve the corporation.
Mr. Wallace: That is correct.
Unknown Speaker: And whoever you serve, whoever is that custody, the corporate papers, has to produce them.
Mr. Wallace: In the White case, if I recall it correctly, the subpoena was issued to the custodian of the labor union’s records, rather than to the association itself.
But, I don’t see that that makes a difference, he is the one who has to comply with it.
Unknown Speaker: Are the subpoena that White case was directed to local number 542 International Union of Operating Engineers?
What do you suppose the Court meant by setting of that test, so called test in the White case, when it is a catastrophe --
Mr. Wallace: Well, this we’ve been puzzled by that as have the District Courts in all of these cases cited on page 29 of Mr. Sarner’s brief.
We have noted first of all that neither this Court nor any Court of Appeals has ever yet held that any organizational records are privileged or that the custodian is entitled to assert their privilege in resisting a production order.
And in light of the question put by the Chief Justice, we suggested one possibility of what this rationale -- what this essentially dictum in the White case meant.
The test that was stated --
Unknown Speaker: Applied in the White case?
Mr. Wallace: It may have been part of the rationale of the decision.
Unknown Speaker: Right.
Mr. Wallace: That the courts have found it difficult to apply in any meaningful way.
The Chief Justice has suggested, well, what if the Government were investigating one of the other partners rather than the one in who happens to have custody of the records at the moment, what is the situation there?
Unknown Speaker: Well, that would be the Couch case, wouldn’t it?
You wouldn’t need to have this partnership doctrine.
Mr. Wallace: Well, it’s not exactly the Couch case because the custodian might say that these records would tend to incriminate him as well as his other partner --
Unknown Speaker: Well, probably this case.
Mr. Wallace: Even if his partner needed them for exculpatory purposes, he might still raise the same claim --
Unknown Speaker: If the custodian who’s making the claim, and then that would be this case.
Mr. Wallace: That would be this case.
And that seems to us to suggest one possible answer to what is meant by the White case, and we suggested that on page 22 of our brief that when the association is one in which the law recognizes testimonial privilege of confidential communications between the members of the group, then it seems to us the extension of protection in the White case makes some sense.
For example, a family’s own financial records, they belong to the husband and the wife.
But the law does recognize a privilege of confidentiality in that relationship, and that is what in the words of Murphy against the Waterfront Commission can accurately be characterized as a private enclave where persons are entitled to lead a private life, at least free from the intrusion of the law to compel self-incrimination in the absence of a grant of immunity which is what we understand that rational to mean.
And we suggested on page 22 that that seems to us to mark the sensible bounds in terms of legal rights.
This rationale or dictum expressed in the White case which the Court has not yet applied in any context, which gives guidance.
It's difficult for us to see that this statement from the White case distinguishes meaningfully between a three-man partnership or a four-man partnership or between a 19-man partnership or a 20-man partnership.
What is involved here as we set forth in some detail are the ordinary business records of the ordinary operation of a law partnership, receipts and disbursements of a partnership that had been in the general practice of law for some 15 years which had in addition to the three partners, at least five other employees which had a firm name, the firm bank account, firm stationary was representing itself as engaged in the general practice of law.
It is difficult to see on what basis distinction should be drawn.
Justice Thurgood Marshall: I understand Mr. Wallace that he says that while he is the custodian of these records, these records would incriminate him personally?
That’s his point.
Mr. Wallace: That was the point made in Wilson and White also Your Honor.
Justice Thurgood Marshall: That it seems to me that here -- there’s no showing of criminality at all, yet, right?
It’s just an investigation.
Mr. Wallace: It’s just an investigation by the grand jury which has been brought investigatory powers.
Justice Thurgood Marshall: And suppose he has two sets of records, one are his personal records and the other are his records in relationship to the partnership.
Does he have to produce all of them?
Mr. Wallace: Well, under Boyd, he can claim the privilege with respect to his personal papers, and the Internal Revenue Service in its enforcing activities has been complying with Boyd.
Justice Thurgood Marshall: Good, next case.
He says there is so entwined together, I can’t separate.
Mr. Wallace: Well, that he would have the burden of showing that.
He has obligations as a fiduciary under state law to be able to make an accounting to his partners of the partnership records, and they are available to his partners for inspection and the District Judge said for copying.
His partners can inspect and copy these records and they have the right to an accounting from him.
He would be violating his fiduciary obligations, if he were unable to separate the partnership --
Justice Thurgood Marshall: Could the partner say, I can’t let you have this because if I let you have it, you’ll take it to the authority and I’ll end up in jail?
Mr. Wallace: Well, there has been no holding on that that I’m aware of.
Justice Thurgood Marshall: I have no either.
Mr. Wallace: The whole thrust of state law that his partners have rights that can be frustrated.
Justice Thurgood Marshall: I’m not too sure Boyd covers this personal complaint he has that these papers are the one that’s been doing the dirty work here.
And I’m the one that’s messed with the books and everything else.
So, I can’t come loose because they’ll send me to jail for sure.
Mr. Wallace: Well, the only response I can make to that is that the whole thrust of this line of cases in the Court is that when one is holding the papers as a custodian and a representative capacity rather than holding his own personal papers, he’s not entitled to make that claim because to me, issues the rights of the other persons.
Justice Thurgood Marshall: You wouldn’t extend to be huge partnerships to have 200 or 300 partners you would -- you wouldn’t extend it there, you say you are limited.
Mr. Wallace: Well, many of the case have involved large partnerships, but some of them have involved small partnerships.
Justice Thurgood Marshall: Well, that’s what the appellants says and of course, it’s true that when they use partnerships, that we have a small partnership is different.
Mr. Wallace: Well, --
Justice Thurgood Marshall: And you originally said that family, of course would be very little problem with that.
Mr. Wallace: Well, I didn’t refer to a family partnership necessarily.
I was referring to the family’s own family records.
Justice Thurgood Marshall: Right.
Mr. Wallace: Now, when you get in to a partnership, there are legal rights that state law recognizes between the partners that affects the confidentiality of the partnership records.
And whether one individual has a right to take them in to what the Court called it his own inner sanctum in Couch.
Justice Thurgood Marshall: Well, it wouldn’t have no difference as to how small the partnership was or how intimate it was?
Mr. Wallace: Well, we think that the legal attributes that the partnership relationships are more meaningful than comparing the sizes and activities of various partnerships which the courts have had great difficulty.
Justice Thurgood Marshall: So, you don’t base it on the numbers alone.
You base on the nature of the partners.
Mr. Wallace: Well, our contention doesn’t base it on numbers at all.
Our contention bases it on the legal rights between partners who are associated together in the partnership, and because each individual's partner’s rights are limited with respect to the partnership records by state law.
In this case by the Uniform Partnership Act that’s in most states, his rights are limited by the rights of the other partners.
And that doesn’t vary whether there are two partners or 200.
Unknown Speaker: Mr. Wallace, I take it if Mr. Bellis have gotten these records and thrown them in the river, and they were then subpoenaed.
He was subpoenaed for grand jury as to produce him.
He said, he didn’t have them, and then, he was asked what you do with them.
Under Curcio, he would have the right to plead self-incrimination there, wouldn’t he?
Mr. Wallace: He would, he would, Your Honor.
He is not required to testify under Curcio, but he is required to produce.
The court in Curcio assumed that he could be required to produce them in a response to the subpoena.
In fact, they have been noted in the footnote that he had produced them in response to the subpoena.
The court reaffirmed the White holding that he could be required to produce them, but said that he couldn’t be required to testify as to their whereabouts if he chose not to produce them.
That isn’t the issue here.
Of course, there can be subpoenas whether they deal with papers or not that would elicit incriminatory information from an individual.
If you subpoena someone to produce the blunt instrument with which you beat a certain individual on the night of April 14th or something of that sort.
His producing of the instrument in response to the subpoena is in effect some communication.
If the subpoena attempts to elicit that kind of information.
But we’re not dealing with anything of that sort here.
The only thing that’s required here is the essentially neutral obligation of the custodian that he undertook -- when he undertook custody of the association’s records to produce them and say these are the records of the association.
They are called for in the subpoena.
Not to say anything else about his own activities that would tend to incriminate him, and there’s no need to introduce in evidence even that much of an admission on his part.
It’s just implicit in his responding to the subpoena and the consistent holding of this Court’s series of cases dealing with associational records is that that’s an obligation he undertook and undertaking custody of the associational records.
Unknown Speaker: Mr. Wallace, may I ask you, you have suggested limitation of the White test, what’s the example of an associational relationship with respect to which the law recognizes testimonial privileges?
Mr. Wallace: Well, the one that occurred to me, is the one I mentioned are the families records where the law recognizes a testimonial privilege between the wife and the husband.
Unknown Speaker: Do you conceive of any connection with the partnership of this type?
Mr. Wallace: I could not Your Honor, unless under the law, a partnership between a husband and wife would be treated the same way.
I have some doubt that it would because of the provisions under the Uniform Partnership Act, giving the partners rights against one another and producing fiduciary obligation in that context.
With that, it was one possibility that occurred to us --
Unknown Speaker: It would be very limited.
Mr. Wallace: It would be very limited.
On the other hand, no Court of Appeals has found any context at all in which to apply this test neither has this Court, and we don’t think that this case is a proper context we are applying it either.
Chief Justice Warren E. Burger: Thank you Mr. Wallace.
Thank you Mr. Sarner.
The case is submitted.