In Re MH
648 F.3d 1067
9th Cir.2011Background
- In 2009 UBS provided records linking MH to potential tax evasion; MH had moved funds to UEB Geneva.
- In June 2010 a San Diego grand jury issued a subpoena for records MH must keep under 31 C.F.R. § 1010.420 relating to foreign accounts.
- MH refused to produce or deny having the records, citing Fifth Amendment self-incrimination concerns.
- The district court ordered production and held MH in contempt after a show-cause; contempt stayed pending appeal upon MH posting $250,000 bond.
- The sought information mirrors FBAR reporting requirements and BSA-regulated record-keeping MH must maintain for inspection.
- The Government argued the Required Records Doctrine makes the Fifth Amendment inapplicable; MH argued the doctrine does not apply.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does the Required Records Doctrine apply to §1010.420 records? | MH: doctrine does not apply to these records. | United States: doctrine applies, removing privilege. | Yes; records fall under Required Records Doctrine, Fifth Amendment not applicable. |
| Is §1010.420 essentially regulatory or criminal in nature? | MH: regulation is criminal in nature. | United States: regulation is essentially regulatory. | Essentially regulatory; not inherently criminal. |
| Are the requested records 'customarily kept'? | MH: not customarily kept for offshore banking. | United States: records are customarily kept by bank customers. | Yes, records are customarily kept. |
| Do the records have public aspects for the Required Records Doctrine? | MH: records lack public aspects since not produced by regulation. | United States: records have public aspects under regulatory regime. | Yes, have public aspects. |
| Should immunity be addressed given Fifth Amendment issues? | MH: immunity considerations are needed if privilege applied. | United States: immunity not necessary if privilege does not apply. | Immunity not addressed; privilege not implicated. |
Key Cases Cited
- California Bankers Ass'n v. Shultz, 416 U.S. 21 (1974) (BSA concerns civil vs. criminal purposes not inherently criminal)
- Shapiro v. United States, 335 U.S. 1 (1948) (records required by law may have public aspects)
- Marchetti v. United States, 390 U.S. 39 (1968) (three-pronged Grosso framework; essential regulatory analysis)
- Grosso v. United States, 390 U.S. 62 (1968) (three Grosso factors for Required Records Doctrine)
- Byers v. California, 402 U.S. 424 (1971) (public aspects of records under regulatory scheme)
- Bouknight v. United States, 493 U.S. 549 (1990) (explains limits of testimonial use under regulatory production)
- Des Jardins v. United States Customs Service, 747 F.2d 499 (1984) (records in regulatory scheme not inherently criminal)
- Rosenberg v. United States, 515 F.2d 190 (1975) (public aspects of records may exist even without explicit filing requirement)
- Doe M.D. v. United States, 801 F.2d 1164 (1986) ( Ninth Circuit: records required to be maintained outside privilege)
- Doe v. United States, 465 U.S. 605 (1984) (voluntary creation vs. compelled production; scope of privilege)