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Smith v. United States

decided: June 2, 1967.

CHARLES SMITH AND IRENE SMITH, APPELLANTS
v.
UNITED STATES OF AMERICA AND DAVID M. SATZ, JR., UNITED STATES ATTORNEY FOR THE DISTRICT OF NEW JERSEY, APPELLEES



McLaughlin, Hastie and Seitz, Circuit Judges.

Author: Seitz

Opinion of the Court

SEITZ, Circuit Judge

This is an appeal from an order of the District Court dismissing a petition which (1) sought to enjoin the defendants from presenting certain evidence before a Federal Grand Jury; (2) sought to enjoin the use of such evidence in any manner in the prosecution of the petitioners; and (3) demanded the return of such evidence.

We are dealing with two appealing petitioners who are husband and wife, the husband being the principal actor. He received from the Intelligence Division of the Internal Revenue Service a letter stating that in connection with an official investigation concerning his income tax liability for certain years he was "being afforded an opportunity to appear for an interview by" a designated Special Agent. He was also advised that he might appear with counsel, if he desired, or with any other person who might have knowledge of the facts in his case. He was requested to bring all of his records in support of his income tax returns for the years involved.

The husband appeared alone on April 3, 1963. He was advised that he could refuse to answer any questions which might tend to incriminate him and that anything he might say or produce might be used against him in a criminal prosecution conducted by the United States Government. He said he understood the warning. He was not then advised that he had the right to have an attorney. Nor did he indicate that he understood that he had such a right and waived it. The questioning, which lasted somewhat over one hour, was recorded. He left his records with the two agents present.

In the spring of 1964 the husband retained counsel and on April 15, 1964, he and his counsel went to the offices of the Intelligence Division, read over the transcribed questions and answers given earlier by him, made certain corrections and signed both the original and supplemental transcripts. Several subsequent conferences were held between his counsel and the Revenue Service agents, presumably in an attempt to settle the matter.

On October 1, 1965, petitioners commenced a civil action in the District Court in the form of the petition here involved. At that time the petitioners had not been indicted. Based on the prayers of the petition the District Court issued an order directing the two defendants, the United States of America and the United States Attorney (appellees), to show cause why they should not be required to return any evidence obtained from petitioners in violation of their constitutional rights and why they should not be enjoined from presenting such evidence to a Federal Grand Jury for purpose of securing an indictment or from using it to obtain a lead to other evidential matter which could be so used.

A hearing was held on the Rule on November 3, 1965. At its conclusion the court announced orally that the Rule was discharged and the petition denied. However, no order was then entered because the court undertook to write an opinion setting forth the grounds for its determination. On February 23, 1966, petitioners were indicted for income tax evasion for the years 1959 to 1961 inclusive. On February 25, 1966 the court filed its opinion reflecting its earlier decision. The court considered, inter alia, petitioner's claim that certain of his constitutional rights were violated at the first interrogation when he appeared without counsel. It decided that petitioners' contention lacked merit. A final order was entered March 4, 1966 denying the petition. The petitioners promptly filed this appeal.

We are confronted at the outset with the defendants' contention that the District Court's order of March 4, 1966 is non-appealable. Petitioners base jurisdiction here on 28 U.S.C.A. § 1291 (right to hear appeals from final decisions of the district courts); or, alternatively, 28 U.S.C.A. § 1292(a)(1) (jurisdiction to hear appeals from interlocutory orders of the district courts, inter alia, refusing injunctions) or, alternatively, 28 U.S.C.A. § 1292(b) (possible appeal where district court's order in a civil action states, inter alia, that a controlling question of law is involved).

Petitioner in reality invoked the equity jurisdiction of the district court in seeking the relief requested in his petition. In view of the relief sought it is evident that the order dismissing the petition is final in the sense that there will be no further orders entered thereon. But, in view of the relief sought by the petitioner, is the order thereon appealable at the instance of the petitioners?

We think the Supreme Court of the United States in DiBella v. United States, 369 U.S. 121, 7 L. Ed. 2d 614, 82 S. Ct. 654 (1962) has spoken decisively to the present issue. The Court there said:

"We should decide the question here -- we are free to do so -- with due regard to historic principle and to the practicalities in the administration of criminal justice. An order granting or denying a pre-indictment motion to suppress does not fall within any class of independent proceedings otherwise recognized by this Court, and there is every practical reason for denying it such recognition. To regard such a disjointed ruling on the admissibility of a potential item of evidence in a forthcoming trial as the termination of an independent proceeding, with full panoply of appeal and attendant stay, entails serious disruption to the conduct of a criminal trial. The fortuity of a pre-indictment motion may make of appeal an instrument of harassment, jeopardizing by delay the availability of other essential evidence. See Rodgers v. United States, supra 158 F. Supp. at 673 n. 1. Furthermore, as cases in the Second Circuit make ...


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