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In re Grand Jury Empanelled March 19

decided: June 10, 1982.

IN THE MATTER OF: GRAND JURY EMPANELLED MARCH 19, 1980 UNITED STATES OF AMERICA, APPELLANT


ON APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW JERSEY

Before Adams and Sloviter, Circuit Judges, and VanARTSDALEN, District Judge.*fn*

Author: Adams

Opinion OF THE COURT

The United States appeals from a district court order quashing, subject to a limited exception, a number of grand jury subpoenas duces tecum. The wide-sweeping subpoenas, if enforced, would require a sole proprietor, who is a target of the grand jury's investigation, to produce a host of records allegedly pertaining to his business and in his possession and control. Aside from those records required to be kept by law, the district judge, citing the protection against self-incrimination afforded by the fifth amendment, declined to direct that the requested documents be made available to the grand jury. We affirm.

I

This appeal arises out of an investigation by a federal grand jury in New Jersey into corruption relating to the awarding of county and municipal contracts. A portion of the investigation focused on the appellee,*fn1 who, according to the United States, operated as a sole proprietor several companies that did business with various units of local government. In November and December 1980, the appellee received five separate subpoenas duces tecum, which commanded him to appear before the grand jury and produce certain documents. Specifically, the appellee was directed to provide the jurors with numerous records relating to two of appellee's companies, including ledgers, journals, workpapers, vouchers, bank statements, contracts, corporate minutes, etc.;*fn2 "all records, including but not limited to bank statements, cancelled checks, check stubs and deposit tickets" connected with specified bank accounts of the appellee or his companies; and the telephone toll records of certain businesses. The appellee moved to quash the subpoenas on fifth amendment grounds.

The district judge conducted two hearings before ruling on the appellee's motion. Counsel for the United States conceded, for purposes of the argument, that "all the corporations described in the subpoenas are sole proprietorships," and that the subpoenaed records "are in (the appellee's) hands." Additionally, the Government admitted that the documents it sought to obtain "will or may incriminate" the appellee. See note 17 infra.

In an opinion and order dated February 4, 1981, the district court granted substantially all the relief sought by the appellee. The court reasoned that, "(although) the Fifth Amendment does not protect the records of corporations, unincorporated associations or partnerships, a sole proprietor can invoke the privilege to his benefit." The court then determined that the fifth amendment right of the appellee would be infringed were he forced to turn over the various subpoenaed documents, inasmuch as the appellee thereby would be compelled to make an incriminating testimonial communication. In this connection, the district judge observed that "the (mere) act of producing the documents has communicative aspects which warrant Fifth Amendment protection.... (Enforcement) of the subpoenas would compel (the appellee) to admit that the records exist, that they are in his possession, and that they are authentic." The court accordingly granted the appellee's motion to quash, except as the motion related to those subpoenaed items, such as tax returns and W-2 statements, that are required by law to be kept or to be disclosed to a public agency.

After its motion for reconsideration was denied, the United States filed a timely appeal. We have jurisdiction under 18 U.S.C. ยง 3731, which has been held to authorize an appeal by the Government from a district court order quashing a grand jury subpoena duces tecum. See In re Grand Jury Empanelled (Colucci), 597 F.2d 851, 854-58 (3d Cir. 1979).

II

We proceed to analyze the scope of protection under the fifth amendment available to a sole proprietor whose records and papers have been subpoenaed by a grand jury. Our inquiry in this regard is fourfold: (A) Can the fifth amendment privilege be invoked by a sole proprietor in response to a subpoena for his business-related records? (B) If so, under the particular circumstances of this case, would compelled production of the subpoenaed documents amount to an incriminating testimonial communication, thereby entitling the appellee to take refuge in the protection afforded by the amendment? (C) Did, as the United States contends, the appellee fail to qualify for that protection by proffering an overly-broad motion to quash? (D) And, even if the appellee prevails with respect to the previous questions, can the Government nonetheless compel production of the requested records by suggesting that the act of their surrender be "immunized"?

A

As has often been noted, the constitutional privilege against self-incrimination is "essentially a personal one, applying only to natural individuals," United States v. White, 322 U.S. 694, 698, 64 S. Ct. 1248, 1251, 88 L. Ed. 1542 (1944) (emphasis added). The privilege, consequently, cannot be asserted by a collective group, such as a corporation or a union, or by a representative, employee, or agent of a collective group. Employing this principle, the Supreme Court has refused to recognize a claim of fifth amendment protection with respect to individually held records of corporations, Wilson v. United States, 221 U.S. 361, 31 S. Ct. 538, 55 L. Ed. 771 (1911); labor unions, United States v. White, supra ; organizations, McPhaul v. United States, 364 U.S. 372, 81 S. Ct. 138, 5 L. Ed. 2d 136 (1960); political parties, Rogers v. United States, 340 U.S. 367, 71 S. Ct. 438, 95 L. Ed. 344 (1951); and partnerships, Bellis v. United States, 417 U.S. 85, 94 S. Ct. 2179, 40 L. Ed. 2d 678 (1974). "(A)n individual cannot rely upon the privilege to avoid producing the records of a collective entity which are in his possession in a representative capacity, even if these records might incriminate him personally." Bellis, supra, 417 U.S. at 88, 94 S. Ct. at 2182.

From this, the United States urges that the appellee should be obligated to turn over the documents requested here, however incriminating, for the same reasons that an individual in possession of corporate or partnership records is required to comply with a grand jury subpoena. The Government maintains that "it would be anomalous to hold that a corporation or partnership, no matter how small or personal, enjoys no fifth amendment rights, while a sole ...


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