UNITED STATES v. RYLANDER
Legal provision: Self-Incrimination
ORAL ARGUMENT OF LAWRENCE G. WALLACE, ESQ., ON BEHALF OF THE PETITIONERS
Chief Justice Burger: We'll hear arguments next in United States against Rylander.
Mr. Wallace, I think you may proceed whenever you're ready.
Mr. Wallace: Thank you, Mr. Chief Justice, and may it please the Court:
This case is here on the Government's petition from the Court of Appeals' reversal of a judgment holding the respondent in civil contempt for noncompliance with an order enforcing Internal Revenue summonses.
A motion to expand the issues beyond those raised in the Government's petition was denied by this Court.
Briefly, what occurred here was a summons was issued as part of an investigation of respondent's tax liabilities for the years 1973 through '77.
The summons called upon him as president of two real estate corporations to produce the books and records of those corporations, as well as to testify.
When he failed to comply, the usual petition for enforcement of the summons was filed within a... a supporting affidavit by the Internal Revenue agent, and a show cause order was issued for the summons enforcement proceeding.
There were some evasions of efforts to serve the order.
Those are for the most part more relative to the criminal contempt proceeding rather than the civil contempt proceeding now before the Court, although they could have a bearing on the respondent's credibility when he did appear.
Eventually he was served and directed to appear at an enforcement hearing held about one year after the summons had been issued, and he was also asked to respond, to put into issue any issues that might be controverted.
He neither appeared nor filed a response, nor did anyone else appear on behalf of the corporation, although he did prior to the hearing send a letter to the Deputy United States Marshall and to the Court in which he claimed he was not the president of the corporations and had been improperly served.
Because the Government therefore anticipated that he might put that issue into contest into the summons enforcement proceeding, it did come prepared to make proof that the corporations had been duly chartered with him as a director and had not been dissolved and that he had acted in banking and business transactions on behalf of the corporations.
This offer of proof was made in his absence, and an enforcement order was issued, and he was ordered to comply.
And when he failed to produce the records upon meeting with the agent in pursuit of that, and after other difficulties in serving him again, eventually a show cause order for the contempt proceeding was served upon him after his arrest pursuant to a bench warrant; and the hearing was held some months later with the respondent in attendance.
And at that time he again did not testify or present any evidence, was... the Government attempted to further bolster its case with some additional evidence, but that proved to be unsuccessful because the witnesses in one case pleaded the Fifth Amendment, in the other case had nothing of value to state.
And the District Court held the respondent in contempt and then gave him an opportunity to purge himself, whereupon he offered a written statement entitled "Oath in Purgation of Contempt", but refused to testify or to be cross examined on the statement and did not produce any other evidence in response to the order.
And the District Court found that he as president of the corporations had possession or control of the records and had not satisfied his burden to show that he could not comply with the summonses and failed to produce any evidence of the contempt proceeding.
Now, while our position gained some strength from the belated nature of the respondent's submission of this oath in purgation, as I will explain for purposes of the civil contempt, our basic position would be the same if he had made precisely the same submission at the outset of the summons enforcement hearing.
This Court has considered the showing that the Government is required to make in an Internal Revenue summons enforcement proceeding on a number of occasions.
The basic case, United States v. Powell, is of course cited in the briefs.
And if those cases mean anything they mean that when the Government made that showing, it is entitled to have its summons enforced unless... and the question in this case is what does that "unless" mean in the context of a summons seeking production of corporate records from an officer who would ordinarily be their custodian, have either possession or control over them.
And in answering the question of what the "unless" means, we look to, and we think it's proper for the Court to look to, cases involving not only Internal Revenue summons but other forms of legal process such as grand jury subpoenas, congressional subpoenas, proceedings to direct a bankrupt to turn over his records to a trustee, et cetera.
Because the issue is basically the same, and the principle that we draw from the case law is that when the Government has made its requisite showing, it has established a prima facie case that it's entitled to enforcement, that the order should be complied with, and that a burden of production then shifts to the respondent to introduce some evidence of why he should not comply.
The burden of persuasion does not shift, but a burden of production shifts at that point because the Government is not required to anticipate and negate every possible defense.
This is... this principle is explained perhaps most explicitly in an excerpt that we reproduce on page 24 of our brief from this Court's opinion in United States v. Fleischman, which happened to be a criminal contempt proceeding involving a congressional subpoena.
But it explains that the rule being adopted is a rule affecting merely the time and manner of proof rather than a shift of the burden of persuasion, but it explains that the prosecution would be under a serious practical handicap if it must negate all possible defenses, and that the... the relevant facts are peculiarly within the respondent's knowledge of why, contrary to what one would normally think of the president of a corporation, he is not in a position to comply with the subpoena.
There is sort of a presumption of business regularity, that the person normally thought to be in possession or control of a business' records would be the person to seek them from.
This is the way grand jury subpoenas are issued, and there's never any further showing than that.
Then it's up to that officer to say why it is that he can't comply.
Unidentified Justice: Mr. Wallace, could I interrupt you for a moment?
You say you don't think it makes any difference that he was late making this.
He didn't make the same showing at the original judicial enforcement proceeding.
Do you rely at all on the fact that instead of getting on the witness stand, he submitted this so-called written oath?
Supposing he had gotten on the witness stand and said exactly the same thing he said in the oath?
Mr. Wallace: That would be a very different case.
Our position is that he submitted no evidence at all.
Unidentified Justice: Oh, I see.
Mr. Wallace: That's what we're leading up to.
It wouldn't have mattered whether he did it at one hearing or the other.
Unidentified Justice: Let's assume for a moment, Mr.... are you finished?
Well, it's... yes, I am.
Because I gather you would say it would be different if he, instead of submitting a written affidavit he'd given oral testimony saying in haec verba the same thing.
Mr. Wallace: If he had submitted himself to cross examination--
Unidentified Justice: No, no.
Without cross examination.
Mr. Wallace: --Oh, no.
Unidentified Justice: In other words, if he'd done what he did in the Curcio case, which was get on the stand, say I don't have the records, and I refuse to say why because of the privilege, which is exactly--
Mr. Wallace: --The... the... but in the Curcio case, the only thing contested at the appellate level was his refusal to testify rather than his refusal to produce the records.
And what was upheld was his right not to testify if he claimed the privilege against self-incrimination.
But the Court was very careful... and this is one of the cases that we draw our principle from... to distinguish the question of producing the records that he, because he held them in a representative capacity had no privilege not to produce.
And if the requisite showing is made to support the production order, that is our prima facie case that it requires a burden of production to shift to him to show why he can't produce them.
Unidentified Justice: --But the Curcio case holds that the claim of privilege is proper.
You agree with that?
Mr. Wallace: With respect to the testimony that the subpoena asked him for.
Unidentified Justice: Right.
And but, therefore, the testimony on... his direct testimony "I don't have the record" is acceptable without subjecting himself to cross examination.
That's what the case holds.
Mr. Wallace: With... with respect to--
Unidentified Justice: Nonpossession of the records.
Mr. Wallace: --With respect to the... the order in the subpoena requiring him to testify with respect to the records.
But the case--
Unidentified Justice: Under the Curcio opinion would Curcio have been subject to cross examination on his answer "I don't have the records"?
You know, not on the issue of where they are if you don't have them, but on the issue of does he have them?
Mr. Wallace: --He would be subject to cross examination in the context of enforcing the order to produce the records, if that was the way he chose to respond to that order through his own testimony.
Unidentified Justice: Well, that doesn't really... that doesn't really answer my question, I don't think.
Mr. Wallace: I... I... I... I... yes.
Unidentified Justice: He gets on the stand and says
"I haven't brought the records. "
"I don't have the records. "
And concededly, under Curcio he cannot be cross examined as to where the records are if you don't have them.
Could he have been cross examined consistently with the Curcio opinion on his answer "I don't have the records"?
Mr. Wallace: Well, in... in our view he could be cross examined on both of those issues in the context of the need to get compliance with the order to produce the records.
He... he... he was responding... I mean what was at issue on appeal in Curcio was the question whether he had to testify concerning the records in response to the subpoena.
But in order to meet his burden with respect to production of the records, he doesn't have to take the stand at all.
He can introduce other evidence to show that he cannot produce the records.
Once the Government has made the requisite showing that he is an officer who ordinarily would be holding the records or have them available in his representative capacity, that is all the Government needs to show in order to get its production order enforced.
And then it's up to him through either his own testimony or the testimony of third parties or of other witnesses that he wants to bring in, and compulsory process is available to him to bring them in.
Unidentified Justice: Mr. Wallace, kill the hypothetical case.
Suppose his answer truthfully was "I burned them up".
He couldn't testify to that, could he, because he'd violate his Fifth Amendment, couldn't he?
Mr. Wallace: Well, he... he has that problem.
That is... that... he--
Unidentified Justice: You don't know any way out of that problem, do you?
Mr. Wallace: --Well, what I think should not be the way out is to have the law reward him for destroying the records when process issues by allowing him through refusing to testify and pleading his privilege against self-incrimination to defeat a... a production order that would otherwise result from the showing that the Government made.
Unidentified Justice: Is there any holding in this Court that prohibits a judicial inquiry into the good faith of the assertion of the Fifth Amendment?
Mr. Wallace: Not at all.
Precisely the contrary.
Unidentified Justice: It's done constantly in trial courts, isn't it, when... when there is an apparently dubious assertion of the Fifth Amendment and cross examination develops that there is no basis for a genuine Fifth Amendment claim?
Mr. Wallace: --That is... is... is precisely the case.
And even when there is a proper basis for a Fifth Amendment claim... and this is our basic point here... what the Court has held time and again is that once a witness chooses to offer testimony upon a fact that's been put into issue, and in this context upon whether he can produce the records, if he chooses to contest that through is own testimony, that operates as a waiver of the Fifth Amendment privilege as to matters reasonably related to that question, to the question on direct examination.
Unidentified Justice: Curcio held squarely to the contrary.
Mr. Wallace: Well, that is not our view of Curcio, because the production question was not what was at issue.
Unidentified Justice: Well, would you tell me what you think Curcio holds?
Mr. Wallace: --It... it... it holds that he can refuse to testify in response to the subpoena requiring him to produce and testify.
We are not in this proceeding--
Unidentified Justice: Well, it holds he... he testified that he didn't have the records, and then he said I won't tell you where they are because I assert the Fifth as to the cross examination.
Exactly what this man was doing.
Mr. Wallace: --That... that... that is correct and... but all I can do is repeat that what was contested was that whether he... he responded adequately and waived his Fifth Amendment privilege with respect to the order that he testified concerning the records.
Here we're not... we're not trying to enforce the subpoena requiring him to testify in face of his Fifth Amendment claim at all.
We're just saying that if he doesn't want to testify, he has to make some other showing of why he can't produce the records.
And if he chooses to make that showing through his testimony, then the normal principle of waiver of cross examination with respect to related matter has to apply.
Unidentified Justice: Mr. Wallace, I'm not quite sure yet that I understand your position.
Did I understand you to say that if the individual here, the defendant, the suspect had simply taken the Fifth rather than making any effort to explain why he didn't have the records or even to deny that he had them, could he have just said as soon as you've made your prima facie case I claim the privilege against self-incrimination?
Mr. Wallace: He... then I think he would be subject to civil contempt, because he has done nothing to satisfy his burden of production.
Unidentified Justice: So he would at least have had to bring in the... a witness, a third party, for example, to explain his situation.
Mr. Wallace: We have made the requisite showing.
Then there is a burden of production on him.
That is the way we read the law and the cases.
Unidentified Justice: Well, if he gets on the stand and says I don't have them, even if he may not be cross examined beyond that, you say that he hasn't made the requisite showing.
Mr. Wallace: Well--
Unidentified Justice: Don't you?
Don't you say that?
Mr. Wallace: --That is correct.
I mean at... at... at the least that may not be entitled to credence.
Unidentified Justice: His uncross-examined... his uncross-examined assertion is not... he cannot use an uncross-examined assertion to satisfy his burden of showing why he can't produce.
Mr. Wallace: That is our position.
Unidentified Justice: Yes.
Mr. Wallace: And that is precisely the error that we think the Court of Appeals made in this case.
The oath in purgation really was in the nature of a pleaing of what it is that he could prove if he... if he put in his proof.
Unidentified Justice: In your view could he be then asked and required to answer
"Did you ever have possession of them? "
Mr. Wallace: I think that would be a proper question on cross examination, and that if he chose to testify on the subject he would have waived that.
He would have waived any effort to find out from him what became of the records.
Unidentified Justice: I'm not talking about a waiver.
I'm talking about a compelled answer.
Let's assume a hypothetical now.
The man is put on the stand.
It's established by objective evidence other than his testimony that at one time he was the secretary of the corporation, and then he's asked where are these records.
He takes the Fifth Amendment.
Then the next question is
"Did you ever have these records in your possession? "
Can that answer be compelled?
Mr. Wallace: I rather doubt it, not in the face of this Fifth Amendment claim, because it could be a step in the chain of proof against him.
Unidentified Justice: Without any explanation of how the Fifth Amendment protection is required to explain whether he ever had possession of them?
Mr. Wallace: --That... that... that might be a proper inquiry into whether he has a basis for the claim.
Unidentified Justice: But if he... if he invokes the Fifth Amendment in response to a question like that, the District Court is entitled to weigh that invocation of privilege against him in making a factual determination as to whether he testified truthfully on the original question, isn't it?
I mean this is a civil proceeding.
Mr. Wallace: Yes, yes, that is correct also.
Unidentified Justice: You can also say if you're going to take the Fifth Amendment and not make a showing, you're going to have to produce the records because you just haven't made... unless you permit cross examination, you just haven't satisfied your burden.
Mr. Wallace: That is precisely our position.
Unidentified Justice: Well, I suppose... doesn't the court have to, on your motion to strike, simply strike the preceding testimony and the answer?
There's nothing then in the record in the way of evidence that he's produced.
Isn't that the reality the court must enforce?
Mr. Wallace: That is our position.
That is our position, that he has produced nothing except something that's in the nature of a pleading that the Court of Appeals erred in giving any evidentiary weight to.
Unidentified Justice: But if he takes the stand and says
"The reason I didn't produce them is because I don't have them and I never had them. "
I don't know why that is not an adequate answer.
Mr. Wallace: --It... it... it may well be, but it would be subject to the test of cross examination.
Unidentified Justice: And you ask him "Did you ever have them", and--
Mr. Wallace: Well, we might ask--
Unidentified Justice: --And then he says,
"I refuse to answer on the grounds it would incriminate me. "
I think he has a perfect right to do that, doesn't he?
Mr. Wallace: --Well, then we... we might... he might still not satisfy his burden with... with that kind of testimony.
That's a pretty thin showing for a president of a corporation to make with respect to corporate records.
And he's not--
Unidentified Justice: When I take the Fifth Amendment--
Mr. Wallace: --The fact that he's taken the Fifth Amendment does not require the District Court to give credence to his testimony prior to his taking the Fifth Amendment.
If anything, it detracts from the credibility of his prior testimony.
Unidentified Justice: --Well, I don't understand what else he can do after he asks and says that my answer would incriminate me.
Mr. Wallace: Well, that... that is up to him.
It depends on the circumstances what else he can do.
Unidentified Justice: But isn't that what he did here?
He said "I would incriminate myself".
Mr. Wallace: Here he didn't submit himself to any cross examination whatsoever.
He refused to take the stand.
Unidentified Justice: All you're saying is that the Government can't have... all you're saying is that he can't have his cake and eat it, too.
Mr. Wallace: That is correct.
I mean under the District... under the Court of Appeals holding, he has been put in a stronger position than a forthright witness who got on the stand and who submitted himself to examination by the Government, and whose credibility was undercut by the Government's cross examination, and who was disbelieved by the District Court.
The... the... here someone who refuses to take the stand at all and couples this written statement, which he tries to get weighed as evidence, with a plea of the Fifth Amendment has been put into an impregnable position in comparison with a forthright witness who does take the stand.
Now, that can't be right.
Unidentified Justice: Well, of course, you're really disagreeing again with Curcio, because of course that same thing happened there.
But what is your understanding, Mr. Wallace, on what will happen on remand if the Ninth Circuit order were carried out?
Didn't they send it back for an investigation of the bona fides of the Fifth Amendment claim?
Mr. Wallace: That is correct.
Unidentified Justice: And what do you understand that means?
What will they be doing?
Asking him the factual basis for his... for his claim, is that it?
Mr. Wallace: As far as I can tell.
They didn't really specify.
And, you know, my surmise is really no better than anyone else's on that.
I don't see what else would be at issue.
There might be a further effort made by the Government to bolster its proof, but our position is that we've already introduced more than is necessary under the Powell case and others that spell out what our requisite showing is in the absence of some production of evidence on the other side.
I'd like to reserve my remaining time, please.
Mr. Harbison: Mr. Chief Justice Burger--
Chief Justice Burger: Mr. Harrison.
ORAL ARGUMENT OF JOSEPH F. HARBISON, III, ESQ., ON BEHALF OF THE RESPONDENT
Mr. Harbison: Mr. Chief Justice Burger, and may it please the Court:
What this case is really all about is whether or not my client, Mr. Rylander, met his burden of production on his defense of inability to comply by several things, not just his oath and affirmation that he didn't have the documents, but when he showed up in front of the IRS on February 4th and said I don't have them and I take the Fifth, when the agents testified on the trial on October 8th that he had said that, when he filed the oath, and finally, in answer to Justice Stevens' question, when he took the stand on October 23rd and Federal Judge Carlton said to him,
"Mr. Carl... Mr. Rylander, you have filed an oath in purgation stating that you do not have the records. "
"That is correct, Your Honor. "
Judge Carlton said to him, "Where are the records"?
And he said,
"I take the Fifth on the advice of my counsel. "
As the Court is aware from the record, I was appointed to represent him on October 9th, the day after the trial, a combined trial, civil and criminal contempt.
The first thing I did immediately was have the civil contempt vacated.
We then proceeded to adduce more evidence.
So it's not just his oath that's in evidence to support his burden.
But the issue here is is the oath... and I say along with his other testimony, including that on the stand and that in front of the IRS agent... sufficient to meet his burden of production at a contempt hearing to prove his inability sufficient to put the burden of production again back to the Government along with their burden of persuasion, which they had all along, by clear and convincing evidence to prove that the records that they sought ever existed, which they never showed.
If we return to the summons enforcement hearing, which this Court has said in Donaldson must be summary in nature, and this Court said in Powell you must meet only these minimum conditions, and in Freedom Church said that the issue of his possession, the person summoned, is never in issue was met.
Their... their offer of proof there was... and you have to remember this is 1979 now... excuse me... 1980... that he was president of a corporation in 1975, that he signed two checks in 1975, that he was president of the other corporation in 1975, and that he signed two checks in 1975.
As the Court should be aware from the trial on October 8th, the Government introduced two affidavits from the Secretary of State of California that both of those corporations weren't active.
One died in 1975, and the other one had been active in '74, '76 and '78.
So the Government at the summons enforcement hearing never had the burden to show that those records existed, never tendered the issue that those records existed, and never proved that those records existed.
At the contempt trial for the first time Mr. Rylander said,
"The reason I can't produce them is I don't have them. "
And when asked why don't you have them, he properly, under McPhaul, Curcio, O'Henry, Meeks, Traub, Hansen Niederhauser and every other case we've cited in our brief, said,
"I can't tell you that. "
"I take-- "
Unidentified Justice: You say... you say at the contempt trial he said he didn't have them.
Did he actually testify at the contempt trial?
Mr. Harbison: --Yes.
That's why I made the point that the day I was appointed, the day after the so-called trial, I had the civil contempt vacated.
There was no longer a conviction of civil contempt.
Judge Carlton gave me time to prepare for a continued hearing.
That hearing was had on October 23rd.
At that hearing Judge Carlton forced Mr. Rylander to the stand.
He asked him the question, "Where are the records"?
And Mr. Rylander said,
"I can't answer that. "
"I invoke my Fifth Amendment on the advice of counsel. "
He then reinstated civil contempt.
Unidentified Justice: He said, "Where are the records"?
Did your client at that hearing himself get on the stand and say "I don't have the records"?
Mr. Harbison: No.
He filed the oath, the affidavit saying I don't have them.
The first question from the Federal judge is
"You have filed an oath stating you do not have them. "
He said, "That is true".
The second question was "Where are the records"?
He said, "I take the Fifth".
That was the end of the questioning.
Judge Carlton said I've made my record.
Take it to the Ninth.
Unidentified Justice: Well, what was he held in contempt for... failure to produce the records or failure to testify?
Mr. Harbison: That's a very interesting question, Judge White.
Unidentified Justice: Well, let's assume for the moment that the judge had said,
"Look, I know you're taking... you're validly taking the Fifth Amendment, but you have not made a showing. "
"I think the Government has made its case. "
"I know you disagree with that, but the Government has made its case, and you are either going to have to explain why you can't produce, or you're going to be held in contempt for failing to produce, not for failing to testify. "
Mr. Harbison: --Okay.
Unidentified Justice: That's Curcio.
Mr. Harbison: --Okay.
Well, I... I have a couple of points to make to answer your hypothetical.
First, there is no difference between producing and testifying.
The original summons said,
"Mr. Rylander, come testify and produce. "
The summons enforcement order that the judge signed said "Produce".
Unidentified Justice: Well, he certainly never made any claim that producing the records would... would violate his Fifth Amendment rights.
Mr. Harbison: No.
And nor do I state that here.
Unidentified Justice: No.
Mr. Harbison: I think this Court--
Unidentified Justice: --So there is quite a difference between those--
Mr. Harbison: --Certainly.
Unidentified Justice: --Two things.
Don't tell me there isn't.
Mr. Harbison: Well, that... I haven't finished yet.
In this case there isn't because there are two purging conditions.
The conditions are produce or testify.
Now, that's my precise point here.
To carry his burden of production, to force him to go further than to say I don't have them and I can't tell you their whereabouts, puts him in the cruel trilemma that the Fifth Amendment, the policies behind it, are designed to protect.
He's forced to produce something that may not exist.
If it doesn't exist, he goes to jail.
He's forced to incriminate himself if he can't produce for some crime.
Unidentified Justice: Well, has he made any showing that they don't exist?
Mr. Harbison: My point is, Your Honor, that he doesn't have to make that showing.
That's the Government's burden to show that the records exist once he states inability.
Once he tenders an issue of fact "I don't have them", then the burden goes back to the Government to prove that they exist, and if the Government proves that, he's in contempt.
Unidentified Justice: Well, suppose they... let's make this concrete... suppose the treasurer of... or the secretary of General Motors Corporation is called as a witness and he's asked to produce the minutes of the last five meetings of the board.
Do you think he could get by with this procedure you're talking about?
Mr. Harbison: He would have to show up--
Unidentified Justice: He's presumptively in charge of those records unless he can demonstrate that he is not.
Mr. Harbison: --No, Your Honor, I disagree with the so-called presumption that he is in possession of those records without at least some showing.
The case of Straub, Hansen Niederhauser, Rizzo... they all say no contempt unless the Government--
Unidentified Justice: Are those cases from this Court?
Mr. Harbison: --No, but Fleischman is, Your Honor.
Fleischman impliedly said since the Government has shown that the record exist, now the burden is on you to give us some reason for inability, and you've given us nothing.
You never made a statement to the Committee on Un-American Activities, you never made a statement to the District Court.
If you had of said... they used the word "any"... if you hadn't made any reference to the fact of inability, then the burden of persuasion is back to the Government to show they exist, and if they show--
Unidentified Justice: I suppose the point is, though, that if all he says is
"I don't have them and won't submit to cross examination. "
then the trial court has to strike his statement that he doesn't have them.
So there is no evidence.
That's why there is no evidence.
Mr. Harbison: --I disagree, Justice O'Connor.
He has met his burden of production.
I agree that at a contempt hearing the alleged contemptor has to tender the issue, the issue being inability.
He does that by saying "I don't have the records".
Now, that... if that's the only evidence--
Unidentified Justice: He wouldn't let himself be cross examined on that.
So that evidence goes out--
--So that evidence goes out--
--Front, and there's nothing.
Mr. Harbison: --No.
I think you missed the point of Curcio and McPhaul.
Once he says "I don't have them", just like Curcio... Curcio admitted they existed and said "I don't have them".
And the Court... this Court held he couldn't cross examine him as to whereabouts.
Unidentified Justice: Well, I know, but they... they... they held him... want to hold him in criminal contempt for failing to testify any farther.
They did... they carefully set aside the question about production.
Mr. Harbison: Well, that... that was answered in O'Henry.
O'Henry is a well-reasoned opinion of Curcio and McPhaul.
Unidentified Justice: Is O'Henry a case from this Court?
Mr. Harbison: No, it is not.
It is, I believe, a Fifth Circuit.
But it's a well-reasoned opinion that takes into account Curcio and McPhaul just as Meeks, which is pending before this Court, and as does Rylander.
It was established long ago in Austin Bagley Corporation by Judge Learned Hand that a corporate custodian has no personal Fifth Amendment right not to produce corporate records, but having produced those, he can give unprivileged testimony to identify them.
He makes explicit that which is implicit in their production.
Curcio and then O'Henry after it takes that rationale and says when a corporate custodian produces the record and says... when he doesn't produce the records, his burden requires him to take the stand, testify under oath, as Mr. Rylander did here, "I do not have them".
Then under the rationale of Curcio, you can't cross examine him any more because you're going to violate his Fifth Amendment right.
Unidentified Justice: Even the question "Did you ever have them"?
Can't ask him that?
Mr. Harbison: --That's one of the questions in Curcio, one of the 15 written questions: "Did you ever have them"?
"When did they become unavailable to you? "
Unidentified Justice: The setting is different in Curcio.
Take my hypothetical, the secretary of General Motors, and let's enlarge a little bit.
The evidence shows that the records have been kept by him up to the last five meetings, the most recent five meetings, his name on them, no question about it.
Then he's asked about the last five, and he just simply says Fifth Amendment.
Is that the end of it?
Can no inquiry be made thereafter?
Mr. Harbison: No.
Because in your hypothetical, Your Honor, somebody has shown that those records existed at one time, and in all the cases the Government cites, either at the summons enforcement or the contempt hearing, one of those two the Government carried its burden.
They showed that the records exist.
They showed either that they existed, or like in Oriole the only year that was missing was 1925, in Maggio the trustee made a specific finding in the turnover order that they existed, in NLRB v. Transocean a Special Master was appointed and specific detailed findings were made that they existed.
That has never happened in this case.
If the Government had tendered the issue of his ability either at the summons enforcement or at the trial and given some evidence, any kind, one scintilla of evidence that those records existed, my argument wouldn't hold up.
Unidentified Justice: Does the law in... does the law in California say who is to have custody of corporate records?
Mr. Harbison: No, it does not, and that's why the Ninth Circuit held that on the--
Unidentified Justice: Isn't that about the only one of the 50 states, isn't it, that says that a corporation doesn't have to keep records?
Mr. Harbison: --No.
A corporation does have to keep records.
Unidentified Justice: And whose possession are they in?
Mr. Harbison: There is no presumption as to whose possession they are in, but it is reasonable to assume that a corporate officer might possess them.
But that presumption is not sufficient to get a conviction of contempt.
Unidentified Justice: Including... including the president.
Mr. Harbison: Including the president.
Unidentified Justice: And is it presumed under California law that this president we are now talking about did at one time have possession of those records?
Mr. Harbison: Well, apparently someone made that presumption that since he might have had them in 1975, he still ought to have them in 1980, but there's no proof.
Unidentified Justice: Well, do you agree that they... he presumed to have had them in '75?
Mr. Harbison: No, I do not.
Unidentified Justice: You presume that he violated the California laws?
I'm talking about your client now.
Mr. Harbison: No, I do not, because one of the documents that the Government introduced at trial was an affidavit from the Secretary of State saying that the corporation they wanted the records from was defunct in 1975.
Therefore, they wiped out any presumption they might have had with their own evidence.
Unidentified Justice: Why?
Mr. Harbison: Because they proved that the corporation was defunct; therefore, there's no presumption that it was keeping any records.
Unidentified Justice: If the biggest rum running, dope peddling corporation in a state is caught by IRS or somebody and the ring leader is subpoenaed to bring in the records, if we follow this case, will his best defense be to burn them up?
Mr. Harbison: Well, that's apparently what the Solicitor General is arguing, that it will be very difficult to enforce the law.
But I don't think that this Court should make an exception and carve out a piece of the Fifth Amendment because it's going to be difficult--
Unidentified Justice: I said in my hypothetical case.
Mr. Harbison: --Is it going to be difficult?
Unidentified Justice: Yes.
Mr. Harbison: I would need more facts.
Do they have the liquor?
Did they confiscate it?
Is the only way to convict them the records?
Then it would be difficult.
If there's some other means, then no, it wouldn't be any more difficult than any other case.
Unidentified Justice: But wouldn't that be the normal thing for a corrupt law... not law-abiding but law-destroying organization to do would be the best way would be to burn them up?
Mr. Harbison: If they had records--
Unidentified Justice: And the lawyer would say if you burn them up, I've got a good case that'll support you.
Mr. Harbison: --Well, you'd have a better case, because the Government could not--
Unidentified Justice: Wouldn't this be a good one, if we come out your way?
Mr. Harbison: --I don't think it would be good.
It would be harder for the prosecution to prove their case certainly because they... one avenue of proof is now gone.
They won't have the company's records.
Unidentified Justice: My point is... I thought I made it clear... this is the only evidence they had.
Mr. Harbison: Well, if that's the only evidence they have, then it's impossible.
Unidentified Justice: That's right.
So he goes free.
Mr. Harbison: That's true.
Unidentified Justice: Mr. Harbison, I just glanced over Curcio again, and it didn't involve... the issue on appeal didn't involve production at all.
It involved criminal contempt for failure to answer questions for which the privilege against self-incrimination was claimed.
Mr. Harbison: I agree--
Unidentified Justice: The... the Court said that the fact that they were union records and not his personal records didn't mean that he couldn't invoke this privilege against self-incrimination if questions about the union records would in fact incriminate him.
But I don't see how that bears on the production issue here at all.
Your client wasn't sentenced for failure to answer a question to which he'd raised the privilege.
He was sentenced for failure to obey the summons order.
Mr. Harbison: --Yes, but he was sentenced for that because he is unable because of the Fifth Amendment to meet his burden.
Unidentified Justice: He's not unable.
Mr. Harbison: Well, see, no one knows that.
It's never been proved by the Government the records exist.
If they don't exist, it's impossible.
Unidentified Justice: But at this stage the Government has come forward with enough, the Government says, so that your client should take the laboring oar for a while, and if he refuses, he's entitled to refuse under the Fifth Amendment, but he's not entitled to go scott-free of the summons order.
Mr. Harbison: Well, therein lies the issue.
He has rowed the oar, I am arguing, by submitting his affidavit, by appearing in front of the IRS agent pursuant to the enforcement order and stating he does not have them, and by taking the stand and saying he cannot testify where they are.
He has done enough.
To force him to go further forces him to give up his Fifth Amendment right and incriminate himself for burning those records, not keeping those records, and subjecting himself to further criminal penalties.
Unidentified Justice: It doesn't force him to give up anything because--
Mr. Harbison: He's going to go to jail if he doesn't.
Unidentified Justice: --Well, he's going to go to jail under one of two theories.
It's really his choice.
Mr. Harbison: That's compulsion.
Unidentified Justice: But a defendant... but a defendant... counsel, in a criminal case where a defendant, for instance, is charged with murder and the only people present at the scene of the alleged murder were the deceased and the defendant, now, if the defendant wants to plead the Fifth Amendment so he can't take the stand and say well, it was self-defense, then he risks going to jail because he's convicted possibly of the offense charged.
It puts him in a tough position to choose, but we've said he has to make that choice.
He either gives up the Fifth Amendment and testifies fully and tries to get off the hook, or he pleads the Fifth and perhaps is convicted.
Now, how is Mr. Rylander in this case in any worse position than that?
Mr. Harbison: He's in a much worse position, Your Honor, because in your hypothetical that gentlemen is not compelled.
He has a tactical choice to make, albeit difficult.
In this case he either produces the records or goes to jail.
There is no uncertainty.
In your hypothetical the man has a tactical advantage about whether or not to take the stand, and he listens to the prosecution's case, and if he feels it's pretty strong, then tactically he's going to have to take the stand and rebut it.
If he doesn't, he stays off.
That's like McGautha or Brooks v. Tennessee or U.S. v. Jackson.
They're cases that compelled the violation of the Fifth like this one does.
It said you either testify first in your defense, or you don't testify at all.
And the other one said if you plead guilty before a judge under a specific statute, you cannot get the death penalty.
Unidentified Justice: Mr. Harbison, suppose... suppose that... that... that you would agree that... at the... at the enforcement hearing the Government made a prima facie showing that the records existed and that... and that you would agree to it, that that showing had been made.
Then what is your client's--
Mr. Harbison: --Then I would... I would say to you, Your Honor, if you were the District Court judge and we had legitimate presumption of possession because somebody had shown it at the summons enforcement, which wasn't done here, I would cite to you the case of Maggio.
Maggio specifically sets forth that inability is a defense to Powell for conditions under Powell to stop the order.
And it's also--
Unidentified Justice: --So you're... what you're really saying is that the Government... that there's no way the Government can come back and meet its burden here when he takes the Fifth Amendment.
Mr. Harbison: --No.
Unidentified Justice: All he has to do is say I'm sorry, I just can't... I don't have them.
I can't produce them.
And that's the end of the case.
Mr. Harbison: No.
There's a very good factual distinction in Maggio.
If they had of shown possession at the summons enforcement, then you have a legitimate continuing presumption at the contempt hearing.
Then they have made their prima facie case of contempt, and it's up to him to show present inability to comply.
The burden would be on him.
Unidentified Justice: All right.
If he took the Fifth Amendment then and refused to say another word and produced no other evidence, he would be in trouble.
Mr. Harbison: Yes.
Unidentified Justice: All right.
So when do you... what do you say the Government has to have proved, that they were in existence once?
Mr. Harbison: Yes.
At least to get... the Government makes a very novel argument on page 21 and 25 of their brief.
They claim that the findings of fact entered by the court on October 24th, the day after contempt, created a presumption, retroactive, that he had the records at the summons enforcement hearing eight months before on January 14th.
That presumption carried forward to the trial on October 8th.
That's how they met their burden.
So what they're saying to this Court is we never showed he had possession.
Unidentified Justice: Well, it sounds to me like what you really should argue is that... is that the turnover order was infirm in that there never was a requisite showing to substantiate or to support a turnover order.
Mr. Harbison: If we were in a bankruptcy proceeding, that would be precisely what I'm doing.
But in a summons enforcement, the issue of possession does not arise.
That's what this Court said in Powell.
The only possession in Powell is that the IRS doesn't have them, and Mr. Rylander already beat Agent Vandenburg in a prior summons enforcement by going to the Ninth Circuit and showing that she did have possession.
She lied in her affidavit.
She said I don't have possession, but the IRS did.
Unidentified Justice: Is it... do you think the Government... I'll ask the other side... but do you think the Government agrees that at some point it has the burden of showing existence?
Mr. Harbison: I think they have, Your Honor, because every case they've cited for the proposition that they have this continuing presumption or that there was a final appeal of our order... that is, res judicata... those cases that they cite found possession.
They didn't find possession.
Unidentified Justice: Well, the only difference between... it sounds to me like the only difference between you two then is whether the Government has made an ample showing of possession.
Mr. Harbison: Ever.
Unidentified Justice: If they have, if they have, you just a while ago, I thought, indicated--
Mr. Harbison: I did.
Unidentified Justice: --That your client would have... could not just take the Fifth and be quiet.
Mr. Harbison: No.
That's why the Government doesn't have the... the Government wants to shift the burden back to us.
Unidentified Justice: So this isn't a question of the Fifth Amendment or anything else.
It's just a question of... it's a question of whether the Government made an ample showing and satisfied its burden.
Mr. Harbison: Well, you're right to a certain extent, but here--
Unidentified Justice: Thank you.
Mr. Harbison: --Here, after my client makes his showing and the burden goes back to them, they want to cross examine him to make their showing instead of them going out and getting the third party or introducing the extrinsic evidence.
They want to convict him out of his own--
Unidentified Justice: Well, how can your client make a showing... that is, at a hearing where there's presumably the facts are adduced by oral testimony... if he simply gets up and makes an assertion, albeit orally, and refuses to be cross examined on it.
I think Justice O'Connor is quite right.
The Government is entitled to have that testimony stricken.
Mr. Harbison: --Your... that hypothetical is akin to a Fleischman-type situation where the Government did show some possession, and the person failed to say anything.
They didn't even say I don't... I don't have the ability.
Unidentified Justice: Well, the discussion... the discussion in Fleischman was not in the context of anyone having taken a witness stand and offered a partial explanation.
It was in the context of having offered no explanation, as I read Fleischman.
Mr. Harbison: That's true.
My client has offered some explanation.
Unidentified Justice: But utterly worthless so far as cross examination is concerned.
Well, it may be... and it may be worthless, but what if you said well, yes, it's worthless, but nevertheless before my client can be held in contempt for failing to produce, there must be... the Government must have shown somewhere in this proceeding that the... that the records existed.
Mr. Harbison: That's precisely my argument.
And until they do, he's got the Fifth Amendment.
Unidentified Justice: Which is a... it's, a) a question of law, and it's also a question of fact: is there some kind of a showing in the record?
Mr. Harbison: Correct.
Unidentified Justice: I'm not sure your responses now are consistent with your responses to me on my hypothetical.
When I hypothesized the secretary of General Motors and the Government showing that he had traditionally kept these records and... up to a point, put his signature on them, all this established so that their existence and his testimony was established, but then they asked him a question and he says he takes the Fifth Amendment, and you say that's the end of it.
They can't ask him when he last saw them, if he knows where they are, or if he knows who has them in custody.
Mr. Harbison: No.
I think we jibe, Mr. Chief Justice, because in your hypothetical you take it as a given that somebody has proved possession.
Unidentified Justice: Well, that is given.
Mr. Harbison: No, it's not given in this case.
Unidentified Justice: In my... I'm talking about my hypothetical.
But you said even the secretary of General Motors may just assert the Fifth Amendment, and that's the end of it.
There can't be any pursuit or cross examination beyond that; that that's an absolute.
Mr. Harbison: Then I would retract that answer and say to your hypothetical once there has been proven possession, the Fifth Amendment is no longer bona fide.
The burden is back on him, and he will... he has forfeited it because the Government has shown they exist.
And he has no--
Unidentified Justice: They still can't make him answer.
It's just that he might be in--
Mr. Harbison: --He's in contempt.
He can legitimately be held in contempt.
Unidentified Justice: --He might be in jail for not producing.
Mr. Harbison: And he wasn't sent there because he wouldn't violate his Fifth Amendment right like he is in this case, because they never carried a burden, either at the summons enforcement or at the trial.
Their argument, their threefold argument here: we didn't have the burden.
If we did have the burden, it was res judicata at the summons enforcement, although the issue was never raised.
And if you don't like that, then when he filed the affidavit, that's not competent evidence to carry his burden.
And if you think it is competent evidence, then he waived his Fifth, and we can cross examine it and carry our burden.
All of their arguments are thrusted at carrying their burden that the records existed, which it didn't, and their arguments fail because there is no proof.
Unidentified Justice: Let me ask you a question, if I may.
I... I detect some change in your position, too, I think.
Assume that he proved that the records were in existence and in the custody of your client at the date he was supposed to respond to the subpoena.
Mr. Harbison: The summons enforcement hearing.
Unidentified Justice: The summons... no, the General Motors example.
And then at the contempt hearing, in civil contempt, not criminal contempt... I understand he's been held in criminal contempt, but that's not before us.
At the civil contempt hearing he gets on the witness stand and says yes, it's true I had the documents then.
I am now, however, unable to comply.
They are no longer in existence, something of that... and he does not explain why, and he pleads the Fifth as to the explanation of why.
Can he be held in civil contempt, in your opinion?
Mr. Harbison: Absolutely.
Unidentified Justice: You think he can be held in civil contempt?
Mr. Harbison: Absolutely, because they proved... they have a legitimate presumption that the records exist, and he has not rebutted it.
He can still take the Fifth.
In my case my client has taken the Fifth, and there never was a continuing presumption.
Unidentified Justice: Well, I understand that, but you think that your--
Mr. Harbison: And there's no proof at the contempt hearing that they ever existed.
Unidentified Justice: --You think under Maggio that he could be held in civil contempt even though he has testified under oath that the documents no longer exist.
Mr. Harbison: Sure.
His Fifth Amendment then was no longer bona fide.
That's why the Ninth Circuit said send it back, and let's see if it's bona fide, and let's see if the Government can carry some burden of proof here to show that the records exist.
Unidentified Justice: Is it your position that once he says they're not, you can't any questions about those records, is that right?
Mr. Harbison: My position is that if the Government at the summons enforcement shows that they exist, they're entitled to a continuing presumption.
If they don't at the contempt hearing, they must put on a prima facie case that the records exist.
In the light of either of those, the Fifth Amendment would fall and he would be held in contempt.
Unidentified Justice: What do you mean when you say... oh, excuse me.
But you argue... you say they don't put on prima facie evidence, right?
Mr. Harbison: Prima facie is--
Unidentified Justice: Well, why isn't it prima facie when he says "I don't have the records"?
He said that.
Mr. Harbison: --That carries his burden, yes.
Unidentified Justice: Well, he said he didn't have the records.
Mr. Harbison: Yes.
Unidentified Justice: So he admitted that the records existed.
Mr. Harbison: No.
He said he didn't have the records that were the subject of the subpoena.
I don't think that's an admission that they ever existed.
Unidentified Justice: He said he didn't have them at this time.
Didn't he infer that he had them?
Mr. Harbison: No, absolutely not.
This case would be akin, I think, on the issue of Fifth Amendment to someone who committed a murder, and the district attorney does not go after that individual.
Either the city attorney or maybe the heir of the person murdered files a civil action, and they hit this guy with a summons, a subpoena, or a motion to produce the gun.
And he shows up and he says "I don't have the gun".
Unidentified Justice: Why not get a man for treason if you're going to give a hypothetical.
They're not talking about a murder.
Mr. Harbison: Well, I'm trying to make a demonstration of the Fifth Amendment.
If he's forced to produce that gun, obviously he violates his Fifth Amendment' because he would be convicting himself out of his own mouth.
That is what the Government here wants to do.
They want to violate my client's Fifth Amendment to carry their burden of proof, and my argument is that his Fifth Amendment holds up as long... as well as his statement that he does not have those records until the Government at either the summons enforcement or the contempt hearing proves that those records exist.
Unidentified Justice: I don't think you're defending everything that you can find in the Court of Appeals opinion then, are you?
Do you think the Government, for example, has to show by clear and convincing evidence that the records are in Rylander's possession or under his control--
Mr. Harbison: Yes.
Unidentified Justice: --Are in his possession or under his control.
Mr. Harbison: Yes.
At some time, either in the summons--
Unidentified Justice: Well, that is not... that isn't what... that isn't what the Court of Appeals is saying.
And do you think their burden of proof is by clear and convincing evidence?
Mr. Harbison: --Absolutely.
And that was one of the reasons that this decision was overturned, because the Federal judge at page 353 of the transcript stated,
"I find you guilty of civil contempt by the weight of the evidence, and I tell you, Mr. Robinson. "
--who was the U.S. Attorney...
"that if the burden is clear and convincing, we have a serious problem here. "
Because he didn't even believe by clear and convincing evidence that Mr. Rylander was in civil contempt.
And the Government in all of its briefs in both the criminal and civil contempt at the Ninth Circuit and its brief here admit that the burden is clear and convincing.
Unidentified Justice: Do you think--
Mr. Harbison: In fact, on page 21 they say it's on us by clear and convincing to prove inability.
Unidentified Justice: --If you think... do you think that at an enforcement proceeding in connection with one of these subpoenas the issue of presumption or existence comes up, that the Government then before it gets a turnover order or an enforcement order must show by clear and convincing evidence that they are then in possession and control of the defendant?
Mr. Harbison: No.
Because they can send the summons to anybody, and under Freedom Church it doesn't even have to be the person in possession.
Unidentified Justice: So they can get a turnover, or they can get an order for him to produce.
Mr. Harbison: Right.
Unidentified Justice: And then--
Mr. Harbison: An order enforcing the summons.
Unidentified Justice: --An order enforcing the summons.
And then if he doesn't produce them and the gentleman comes in and says
"I'm sorry; I don't have them. "
then the Government has to... has to prove by clear and convincing evidence that they are in his possession and under his control.
That's what the Ninth Circuit said.
Mr. Harbison: Yes.
If he says "I don't have them" and takes a valid Fifth Amendment.
If he doesn't have a valid--
Unidentified Justice: I'm not sure.
I'm really not sure what your position is right now.
Mr. Harbison: --If he doesn't have--
Unidentified Justice: I understand your... I understand you think the judgment was wrong.
Mr. Harbison: --Well, if he doesn't have a valid Fifth Amendment, then under Transocean he has to show detail why he doesn't have.
Chief Justice Burger: Do you have anything further, Mr. Wallace?
ORAL ARGUMENT OF LAWRENCE G. WALLACE, ESQ., ON BEHALF OF THE PETITIONERS -- REBUTTAL
Mr. Wallace: Yes, Mr. Chief Justice.
We agree that we have to show in a contempt hearing by clear and convincing evidence that he failed to comply with a valid order.
Unidentified Justice: Exactly.
Mr. Wallace: But we don't agree with what the Ninth Circuit said we have to show by clear and convincing evidence.
Unidentified Justice: Well, Mr. Wallace, don't you... do you think that at some place in this whole proceeding the Government must produce at least probable cause to believe that these records are in existence and that he has them?
Is that ever a part of your case?
Mr. Wallace: I wouldn't use the term "probable cause".
Unidentified Justice: Well, all right.
Then whatever it is that you have--
Mr. Wallace: --We... it can be shown by inference.
Ordinarily you would expect a corporation to have records and the officer to have possession or control of them, as it... there is a finding by the District Court in this case on page 17A, Finding Number 7,
"The defendant as president or other corporate officer had possession or control or both of the books and records of said corporation. "
And this is based partly on this inference from the circumstances, but also on page 54 of the Joint Appendix there is testimony by an Internal Revenue agent who interviewed Mr. Rylander in 1975, that he indicated that at that time the records were in existence, and that they were at Apex Bookkeeping, and an address was given by this agent testifying about what Mr. Rylander said in the interview at that time.
And I want to point out that in Curcio, unlike this case, the Court pointed out quite specifically at page 21 the conviction related solely to petitioner's failure to answer questions as pursuant to the personal subpoena ad testificandum.
He had not been charged with failing to produce the books and records demanded in the subpoena duces tecum.
He had been called to the stand in Curcio pursuant to the subpoena ad testificandum, and the questions were propounded to him.
In our situation he has been asked to produce the records, and it was up to him either to produce them or to submit third party testimony about why he couldn't produce them or to take the stand.
That's his choice of voluntarily taking the stand, although he didn't legitimately do it because he refused to submit to cross examination.
But the court on pages 57 and 58 of the Joint Appendix, the District Court made it quite clear that he could purge himself of the contempt by... merely by indicating his willingness to comply with the court's order relating to the production of the documents, unlike Curcio's situation where he was called to the stand, and the contempt was in failing to answer questions propounded to him.
Or he may forthrightly come forward to this Court and in fact demonstrate that he is incapable of doing so, which doesn't necessarily require his own testimony.
Unidentified Justice: --The court's order didn't make clear that third party witnesses would also suffice, did it?
Mr. Wallace: I... I... I would prefer that it be more explicit, but this portion--
Unidentified Justice: But it's your position that that would have sufficed.
Mr. Wallace: --That's right.
And that is consistent with the court's explanation on page 58 of the Joint Appendix.
Chief Justice Burger: Thank you, gentlemen.
The case is submitted.
Unidentified Justice: The Honorable Court is now adjourned until tomorrow at 10:00.