BELLIS v. UNITED STATES
No. 73-190
Supreme Court of the United States
Argued February 25, 1974-Decided May 28, 1974
417 U.S. 85
Leonard Sarner argued the cause for petitioner. With him on the briefs was Louis Lipschitz.
Deputy Solicitor General Wallace argued the cause for the United States. With him on the brief were Solicitor General Bork, Assistant Attorney General Crampton, Stuart A. Smith, and Meyer Rothwacks.
MR. JUSTICE MARSHALL delivered the opinion of the Court.
The question presented in this case is whether a partner in a small law firm may invoke his personal privilege against self-incrimination to justify his refusal to comply with a subpoena requiring production of the partnership‘s financial records.
Bellis left the firm in late 1969 to join another law firm. The partnership was dissolved, although it is apparently still in the process of winding up its affairs. Kolsby and Wolf continued in practice together as a new partnership, at the same premises. Bellis moved to new offices, leaving the former partnership‘s financial records with Kolsby and Wolf, where they remained for more than three years. In February or March 1973, however, shortly before issuance of the subpoena in this case, petitioner‘s secretary, acting at the direction of petitioner or his attorney, removed the records from the old premises and brought them to Bellis’ new office.
On May 1, 1973, Bellis was served with a subpoena directing him to appear and testify before a federal grand jury and to bring with him “all partnership records currently in your possession for the partnership of Bellis, Kolsby & Wolf for the years 1968 and 1969.” App. 6. Petitioner appeared on May 9, but refused to produce the records, claiming, inter alia, his Fifth Amendment privilege, against compulsory self-incrimination. After a hearing before the District Court on May 9 and 10, the court held that petitioner‘s personal privilege did not extend to the partnership‘s financial books and records, and ordered
On July 9, 1973, the Court of Appeals affirmed in a per curiam opinion. In re Grand Jury Investigation, 483 F. 2d 961 (CA3 1973). Relying on this Court‘s decision in United States v. White, 322 U. S. 694 (1944), the Court of Appeals stated that “the privilege has always been regarded as personal in the sense that it applies only to an individual‘s words or personal papers” and thus held that the privilege against self-incrimination did not apply to “records of an entity such as a partnership which has a recognizable juridical existence apart from its members.” 483 F. 2d, at 962. After MR. JUSTICE WHITE had stayed the mandate of the Court of Appeals on August 1, we granted certiorari, 414 U. S. 907 (1973), to consider this interpretation of the Fifth Amendment privilege and the applicability of our White decision in the circumstances of this case. We affirm.
It has long been established, of course, that the Fifth Amendment privilege against compulsory self-incrimination protects an individual from compelled production of his personal papers and effects as well as compelled oral testimony. In Boyd v. United States, 116 U. S. 616 (1886), we held that “any forcible and compulsory extortion of a man‘s own testimony or of his private papers to be used as evidence to convict him of crime” would violate the Fifth Amendment privilege. Id., at 630; see also id., at 633-635; Wilson v. United States, 221 U. S. 361, 377 (1911). The privilege applies to the business records of
On the other hand, an equally long line of cases has established that an 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. This doctrine was first announced in a series of cases dealing with corporate records. In Wilson v. United States, supra, the Court held that an officer of a corporation could not claim his privilege against compulsory self-incrimination to justify a refusal to produce the corporate books and records in response to a grand jury subpoena duces tecum directed to the corporation. A companion case, Dreier v. United States, 221 U. S. 394 (1911), held that the same result followed when the subpoena requiring production of the corporate books was directed to the individual corporate officer. In Wheeler v. United States, 226 U. S. 478 (1913), the Court held that no Fifth Amendment privilege could be claimed with respect to corporate records even though the corporation had previously been dissolved. And
To some extent, these decisions were based upon the particular incidents of the corporate form, the Court observing that a corporation has limited powers granted to it by the State in its charter, and is subject to the retained “visitorial power” of the State to investigate its activities. See, e. g., Wilson v. United States, supra, at 382-385. But any thought that the principle formulated in these decisions was limited to corporate records was put to rest in United States v. White, supra. In White, we held that an officer of an unincorporated association, a labor union, could not claim his privilege against compulsory self-incrimination to justify his refusal to produce the union‘s records pursuant to a grand jury subpoena. White announced the general rule that the privilege could not be employed by an individual to avoid production of the records of an organization, which he holds in a representative capacity as custodian on behalf of the group. 322 U. S., at 699-700. Relying on White, we have since upheld compelled production of the records of a variety of organizations over individuals’ claims of Fifth Amendment privilege. See, e. g., United States v. Fleischman, 339 U. S. 349, 357-358 (1950) (Joint Anti-Fascist Refugee Committee); Rogers v. United States, 340 U. S. 367, 371-372 (1951) (Communist Party of Denver); McPhaul v. United States, 364 U. S. 372, 380 (1960) (Civil Rights Congress). See also Curcio v. United States, supra (local labor union).
These decisions reflect the Court‘s consistent view that the privilege against compulsory self-incrimination should be “limited to its historic function of protecting only the natural individual from compulsory incrimination through
Since no artificial organization may utilize the personal privilege against compulsory self-incrimination, the Court found that it follows that an individual acting in his official capacity on behalf of the organization may likewise not take advantage of his personal privilege. In view of the inescapable fact that an artificial entity can only act to produce its records through its individual officers or agents, recognition of the individual‘s claim of privilege with respect to the financial records of the organization would substantially undermine the unchallenged rule that the organization itself is not entitled to claim any Fifth Amendment privilege, and largely frustrate legitimate governmental regulation of such organizations. Mr. Justice Murphy put it well:
“The scope and nature of the economic activities of incorporated and unincorporated organizations and their representatives demand that the constitu-
tional power of the federal and state governments to regulate those activities be correspondingly effective. The greater portion of evidence of wrongdoing by an organization or its representatives is usually to be found in the official records and documents of that organization. Were the cloak of the privilege to be thrown around these impersonal records and documents, effective enforcement of many federal and state laws would be impossible. The framers of the constitutional guarantee against compulsory self-disclosure, who were interested primarily in protecting individual civil liberties, cannot be said to have intended the privilege to be available to protect economic or other interests of such organizations so as to nullify appropriate governmental regulations.” Id., at 700 (citations omitted).
See also Wilson v. United States, supra, at 384-385.
The Court‘s decisions holding the privilege inapplicable to the records of a collective entity also reflect a second, though obviously interrelated, policy underlying the privilege, the protection of an individual‘s right to a “‘private enclave where he may lead a private life.‘” Murphy v. Waterfront Comm‘n, 378 U. S. 52, 55 (1964). We have recognized that the Fifth Amendment “respects a private inner sanctum of individual feeling and thought“-an inner sanctum which necessarily includes an individual‘s papers and effects to the extent that the privilege bars their compulsory production and authentication-and “proscribes state intrusion to extract self-condemnation.” Couch v. United States, supra, at 327. See also Griswold v. Connecticut, 381 U. S. 479, 484 (1965). Protection of individual privacy was the major theme running through the Court‘s decision in Boyd, see, e. g., 116 U. S., at 630, and it was on this basis that the Court in Wilson distinguished the corporate records involved in
But a substantial claim of privacy or confidentiality cannot often be maintained with respect to the financial records of an organized collective entity. Control of such records is generally strictly regulated by statute or by the rules and regulations of the organization, and access to the records is generally guaranteed to others in the organization. In such circumstances, the custodian of the organization‘s records lacks the control over their content and location and the right to keep them from the view of others which would be characteristic of a claim of privacy and confidentiality. Mr. Justice Murphy recognized the significance of this in White; he pointed out that organizational records “[u]sually, if not always, . . . are open to inspection by the members,” that “this right may be enforced on appropriate occasions by available legal procedures,” and that “[t]hey therefore embody no element of personal privacy.” 322 U. S., at 699-700. And here lies the modern-day relevance of the visitorial powers doctrine relied upon by the Court in Wilson and the other cases dealing with corporate records; the Court‘s holding that no privilege exists “where, by virtue of their character and the rules of law applicable to them, the books and papers are held subject to examination by the [state],” 221 U. S., at 382, can easily be understood as a recognition that corporate records do not contain the requisite element of privacy or confidentiality essential for the privilege to attach.
The analysis of the Court in White, of course, only makes sense in the context of what the Court described as “organized, institutional activity.” 322 U. S., at 701. This analysis presupposes the existence of an organization which is recognized as an independent entity apart from its individual members. The group must be relatively
The Court in White had little difficulty in concluding that the demand for production of the official records of a labor union, whether national or local, in the custody of an officer of the union, met these tests. See id., at 701-703. The Court observed that a union‘s existence in fact, if not in law, was “as perpetual as that of any corporation,” id., at 701, that the union operated under formal constitutions, rules, and bylaws, and that it engaged in a broad scope of activities in which it was recognized as an independent entity. The Court also pointed out that the official union books and records were distinct from the personal books and records of its members, that the union restricted the permissible uses of these records, and that it recognized its members’ rights to inspect them. Although the Court was aware that the individual members might legally hold title to the union records, the Court characterized this interest as a “nominal” rather than a significant personal interest in them.
We think it is similarly clear that partnerships may and frequently do represent organized institutional activity so as to preclude any claim of Fifth Amendment privilege with respect to the partnership‘s financial records. Some of the most powerful private institutions in the Nation are conducted in the partnership form. Wall Street law firms and stock brokerage firms provide significant examples. These are often large, impersonal,
In this case, however, we are required to explore the outer limits of the analysis of the Court in White. Petitioner argues that in view of the modest size of the partnership involved here, it is unrealistic to consider the firm as an entity independent of its three partners; rather, he claims, the law firm embodies little more than the per-
Despite the force of these arguments, we conclude that the lower courts properly applied the White rule in the circumstances of this case. While small, the partnership here did have an established institutional identity independent of its individual partners. This was not an informal association or a temporary arrangement for the undertaking of a few projects of short-lived duration. Rather, the partnership represented a formal institutional arrangement organized for the continuing conduct of the firm‘s legal practice. The partnership was in
Equally important, we believe it is fair to say that petitioner is holding the subpoenaed partnership records in a representative capacity.8 The documents which
It should be noted also that petitioner was content to leave these records with the other members of the partnership at their principal place of business for more than three years after he left the firm. Moreover, the Government contends that the other partners in the firm had agreed to turn the records over to the grand jury before discovering that petitioner had removed them from their offices, and that they made an unavailing demand upon petitioner to return the records. Whether or not petitioner‘s present possession of these records is an unlawful infringement of the rights of the other partners, this provides additional support for our conclusion that it is the organizational character of the records and the representative aspect of petitioner‘s present possession of
Petitioner relies heavily on language in the Court‘s opinion in White which suggests that the “test” for determining the applicability of the Fifth Amendment privilege in this area is whether the organization “has a character so impersonal in the scope of its membership and activities that it cannot be said to embody or represent the purely private or personal interests of its constituents, but rather to embody their common or group interests only.” 322 U. S., at 701. We must admit our agreement with the Solicitor General‘s observation that “it is difficult to know precisely what situations the formulation in White was intended to include within the protection of the privilege.” Brief for United States 21. The Court in White, after stating its test, did not really apply it, nor has any of the subsequent decisions of this Court. On its face, the test is not particularly helpful in the broad range of cases, including this one, where the organization embodies neither “purely . . . personal interests” nor “group interests only,” but rather some combination of the two.
In any event, we do not believe that the Court‘s formulation in White can be reduced to a simple proposition based solely upon the size of the organization. It is well settled that no privilege can be claimed by the custodian of corporate records, regardless of how small the corporation may be. Grant v. United States, 227 U. S. 74 (1913); Fineberg v. United States, 393 F. 2d 417, 420 (CA9 1968); Hair Industry, Ltd. v. United States, 340 F. 2d 510 (CA2 1965); cf. George Campbell Painting Corp. v. Reid, 392 U. S. 286 (1968). Every State has now adopted laws permitting incorporation of professional associations, and increasing numbers of lawyers, doctors, and other professionals are choosing to conduct their business af-
This might be a different case if it involved a small family partnership, see United States v. Slutsky, 352 F. Supp. 1105 (SDNY 1972); In re Subpoena Duces Tecum, 81 F. Supp., at 421, or, as the Solicitor General suggests, Brief for United States 22-23, if there were some other pre-existing relationship of confidentiality among the partners. But in the circumstances of this case, petitioner‘s possession of the partnership‘s financial records in what can be fairly said to be a representative capacity compels our holding that his personal privilege against compulsory self-incrimination is inapplicable.
Affirmed.
MR. JUSTICE DOUGLAS, dissenting.
Bellis, the petitioner, was formerly one of three partners in a small law firm; the partnership was dissolved, and Bellis currently has lawful possession of the firm‘s records. The grand jury has subpoenaed those records apparently for the purpose of a tax investigation directed against Bellis personally.* He refused to comply, claiming his Fifth Amendment privilege against self-incrimination, but the Court today holds that privilege not available to Bellis. I think the case is clearly controlled by Boyd v. United States, 116 U. S. 616, and thus I dissent.
*See App. 24; Tr. of Oral Arg. 8.
In extending these corporation cases to the union papers involved in White, we stressed that the test is not a mechanical one, but “whether one can fairly say under all the circumstances that a particular type of organization has a character so impersonal in the scope of its membership and activities that it cannot be said to embody or represent the purely private or personal interests of its constituents, but rather to embody their common or group interests only.” Id., at 701. In finding that the union was such an impersonal organization, the court pointed out that the union‘s existence is not dependent upon the life of any member, that it separately owns property apart from any of its members or officers, that its treasury exists apart from the personal funds of its members, and
I would treat a partnership as Boyd treated it. This partnership is as different from a labor union or the run of corporations as black is from white. By the Court‘s opinion a man and wife who form a law partnership or medical partnership or dental partnership are treated as some kind of new “entity” so as to expand the power of government into an area from which the Fifth Amendment excludes it. The nature of a partnership is not even a federal question; it turns on its creator, the State. Pennsylvania tells us by its Supreme Court that a Pennsylvania partnership “is treated as an aggregate of individuals and not as a separate entity.” Tax Review Board v. Shapiro Co., 409 Pa. 253, 260, 185 A. 2d 529, 533. For federal income tax purposes the partnership pays no tax, it is merely the conduit through which income passes
The majority refers to large law firms or brokerage houses as examples of partnerships which take on the characteristics of independent entities in the manner of corporations. None that I know could properly be considered an organization with “a character so impersonal in the scope of its membership and activities that it cannot be said to embody or represent the purely private or personal interests of its constituents,” White, supra, at 701. That certainly is not the case presented here. At times the law may treat unlikes as if they were alike; but it surpasses understanding when a two- or three-man partnership is treated the same as members or officers of a giant corporation or a giant union. See United States v. Cogan, 257 F. Supp. 170 (SDNY 1966) (Frankel, J.). This small three-man firm had no real existence apart from the three individual attorneys.
All this only goes to demonstrate that Bellis was not holding the records involved here as a representative of some separate, impersonal entity with no rights under the Fifth Amendment. The records he holds are his own, in both a legal and a practical sense. Nor could the grand jury investigation result in any finding of tax liability by the partnership as a separate entity, for the partnership has no tax obligations other than the filing of informational forms that aid in determining the liabilities of the individual partners. It was only Bellis individually, or his two former partners, against whom the investigation could have been directed. If Bellis had been conducting a solo practice, his claim of privilege could not be overridden, as the Government here necessarily conceded. I am unable to perceive why he should be held to have forfeited that constitutional right by joining with two others in a partnership.
“This command of the Fifth Amendment . . . registers an important advance in the development of our liberty-‘one of the great landmarks in man‘s struggle to make himself civilized.’ Time has not shown that protection from the evils against which this safeguard was directed is needless or unwarranted. This constitutional protection must not be interpreted in a hostile or niggardly spirit.” Ullmann v. United States, 350 U. S. 422, 426. But it is the niggardly view which prevails today, with the Court effectively overruling Boyd in holding that the Government can compel an individual to produce his private records to aid a Government investigation of him. That is a view I cannot join.