Elizabeth G. Austin v. United States of America, James E. Holshouser, United States Attorney for the Middle District of North Carolina
297 F.2d 356
4th Cir.
1961
Check Treatment

*1 AUSTIN, Appellant, G. Elizabeth America, E. James

UNITED STATES of Attorney Holshouser, for United States Carolina, North the Middle District of Appellees.

No. 8317. States Court of Fourth Circuit.

Argued March

Decided Nov. Thigpen, Jr., Charlotte,

Richard E. Thigpen (Richard N. L. C. E. Robert Hines, Charlotte, brief), C.,N. on appellant. Holshouser, Atty., U. James E. S. appellees.

Greensboro, C., for N. SOBELOFF, Judge, Chief Before BOREMAN, Cir- HAYNSWORTH and Judges. cuit Judge. SOBELOFF, Chief appellant, Austin, Elizabeth G. petition in the United filed States Dis- Middle trict Court District of enjoin Carolina to North the United presenting to a grand jury certain federal evidence al- legedly from her in obtained violation of under her and Fifth Amendments. The together petition, affidavits, stated that on June two Internal Rev- agents appeared at the office main- enue her husband in tained they conducted their business as insur- helped taxpayers and also ance preparation income returns. *2 rights, both her men, said, lation of constitutional These made affirmative was directly also her and representations to that obtained from had that come through infor- vestigate personal that use income obtained the Austins’ the alleged supplied tax that mation her. so returns. It is further merely representations a these were hearing on held no District Court “guise,” Austins intended to the deceive argument but, rather, the heard facts believing personal into that their income why from relief asked counsel as to the being investigated, returns were granted. for Aft- should or should agents reality that in “fraud- were argument, petition er the court denied endeavoring ulently” informa- obtain to Apparent- proceeding. and dismissed the prose- Austin in order to Mrs. ly the District was of aiding preparation ecute her for inappropriate that it to of false tax returns of others in income indictment, if such evidence to 7206(2). violation of 26 U.S.C.A. § petitioner should be to entitled deceit, said that because of was relief, it would be at a later available given agents by evidence to voluntarily Mrs. stage. given. Austin was not time, do While we not at Further details set forth before the actual facts have been devel petition respect and to affidavits with oped, definitively Mrs. decide whether agents conduct material are sufficient en to Allegedly, turned over to them. title sought, her to the relief to a redress threatening agents, in a manner told deprivation of Fourth or Fifth Amend go Austin she better Mrs. that to her rights, enough ment we do think that relating get to her records her home and preparation alleged require hearing, a with these of the tax returns of findings of fact and conclusions of law. persons. did, This she accom- other Wolrich, See United F.Supp, men, panied by Internal Revenue (D.C.S.D.N.Y., 1955); United States on who examined the records June Wheeler, F.Supp. (D.C.W.D. They requested appel- also Pa., 1957), grounds, reversed on other persons for list to furnish lant (3rd Cir., 1958). Cf., prepared tax returns and she had whom Smith v. To sub- sent to them. later this was 194, 99 (1954); L.Ed. 192 charge deceit, fraud stantiate the Achilli, United States v. attached the affidavit it is maintained Cir., 1956); (7th 806 Martin, United States v. petition, that the harassed to the F.Supp. (D.C.S.D.N.Y., customers, appellant’s told them that 1959). fit Austin is not walk the “Mrs. Government, argues however, streets,” put her intend out “we alleged even if Mrs. Austin has facts business,” intend check that “we inquiry pos- sufficient warrant into a every pre- returns Austin one sible violation of her constitutional long prepares any,” pares she proper remedy object her tois like statements. challenged the admission of the trial not to seek its Finally, appellant insists that not Alternatively, indictment. before September was retained on until counsel injunction asserted that could did idea she granted properly be before being vestigation was made of the re- stage action at this her for turns her customers discretionary District Court. any purpose verify than to reported point income from these There is a further own which the sources. prayed pertains that the It was Government advances. It States At- torney enjoined presenting precise involved. As- grand jury suming remedy the evidence obtained in vio- contention, rejected however, and the one whose illegal merits. and case was decided on the search been violated posi- Fourth Court restated the Government’s in contravention seizure *3 reply, a tion “In with its Amendment, asserts follows: Government the words, powerless to that Perlman was respect self-incrim- to the distinction in must Amend- avert the mischief of the order but provision Fifth ination remedy accept its a suggestion incidence and seek made that while is ment. The way injunc- at some other time in some other by procedure the remedial way. 247 We unable concur.” Fourth Amend- a be invoked for page page U.S. at 38 at an indict- S.Ct. in advance ment violation ment, remedy does not time at that Another in it ar case which was apply to the Fifth. gued presentation that the of documents ' language grand in jury lower While there to the both would violate lending support opinions Amendments, to the Fourth and court some Fifth sought Supreme petitioner position,1 the the Government’s the before return McDowell, explicitly stated that evi was Burdeau v. by 256 in U.S. dence is taken officials 65 L.Ed. 1048 Government (1921). person’s Fifth violation of a Fourth or There too the Court decided the rights, issues, case on the Amendment he is to in entitled draw anticipation standing no stitute dictment, in of in distinction between the to restrain the use of the evi Fourth Amendment and Fifth declining dence Perlman him. v. United Amendment to hold States, questions prematurely 247 U.S. L.Ed. that Cogen States, (1918), point. Also, There a case in raised. in is v. United sought enjoin petitioner the Unit 49 S.Ct. using Attorney writing (1929), Brandéis, certain ed States Justice for Court, recognized expressly exhibits as a basis for an indictment an that against him, contending pro independent equity proceeding sup that posed press use would violate the Fourth and in of con evidence taken violation brought Constitution. Fifth Amendments before stitutional indictment, could argued in case, The in such Government decision here, final, appeal-able that Perlman was Court, as it does District Court prematurely. raising This permitting the issue er.2 Other cases ord reto See, summary concerned where be made motion or other rights: proceeding, Centracchio v. Fifth reason of the fact that (1st 1952); Garrity, possession person 198 F.2d 382 in is officer of States, (6th Biggs United v. court. See United States v. Maresca 1957). [D.C.], 266 Fed. United States v. [D.C.], Hee 219 Fed. 1020. Com said, page 225, 278 U.S. at It was there pare Weinstein v. General page 119: 49 S.Ct. Cir.], 271 Fed. 673. [2 Where papers for return “Motions application form, is in filed its es of evidence made .and the character sential the circumstances trial, in advance of the un- cause in the under which is made will determine practice, rule must be dif- der independent proceeding is an whether independent proceedings ferentiated merely step trial purpose. brought similar Where independent criminal case. character plenary one, ais like the sumary proceedings clear, is equity Dowling Collins, v. bill motion where the is filed in a F.(2d) independ- Cir.], its [6 case, application whenever obvious; ap- ent character property papers or other is made pealability the decree therein is un- stranger litigation, compare to the Ex purpose by the fact affected Tiffany, parte 252 U.S. 32 [40 S.Ct. solely to influence or control suit 443]; [City of Savannah v. pending prosecu- aof the trial Jesup, [1 Applications papers, for return tion. 276]; Pitkin, property may, however, Gumbel L.Ed. often or other tions tional Go-Bart F.2d 840 (1931); Foley (5th Cir., 1933); grounds Importing suppress (5th Cir., (2nd Cir., 282 F.2d 165 evidence Co. Turner v. 1941); 1947); In re on constitu- Camp, (2nd Grant F.2d are: asked is somewhat broader the use in legally asked in the usual motion inal turn thereof [*] jurisdiction cases *» seized the same and/or is well established. character as equity to order a property il- evidence. in crim- prevent scope, re- 1960). conclusively dem- cases above agree Finally, cannot we the lack of merit in the Gov- onstrate a difference between evidence seized *4 argument Austin, as- ernment’s that Mrs. violation of Fourth Amendment suming allegations, may the truth of the contrary self- evidence obtained to the remedy have no before indictment. provision Fifth, with incrimination of the bring respect to to the argu The Government’s further suppress to ment, suppression of that the evidence in allegations assuming really here that the advance of indictment is a matter for the Fifth involve the Amendment rather than Judge’s discretion, equally is un out, previously pointed As Fourth. tenable. None of the above cases con Court cases drawn slightest suggestion tains the distinction, permitted no such but have discretionary. relief is The Government independent equity proceedings to en- support argument, upon relies join grand jury use of evidence before a holding cases that courts do not ordinar allegedly it where obtained in ily prosecutions. restrain criminal The breach of both amend- short answer is that this is not an action States, supra; ments. Perlman v. United prosecution. to restrain a criminal The McDowell, supra. Burdeau v. Eighth Circuit, Lane, in Goodman v. 41(e) of the Federal Rules of (1931), exposed fallacy Procedure, Criminal 18 U.S.C.A. is said argument: of such an existing to be a restatement of law with Appellee prop- advances the “[1] regard evidence,3 motions to jurisdic- equity has no osition so, seem, light if this be stay proceedings; criminal tion above cited decisions the Su- effect; to that cites authorities ad- Court, illegally preme encompass ob- exceptions mits that there to the illegality tained evidence whether in- general rule; but contends that the volves the Fourth or the Fifth Amend- excep- case at bar is not within ment. may conceded, All this tions. be but Moreover, the Court of decisive, present it is not because the expressly, in In re has the Second Circuit equity in which is not one is (2nd 458-459 stay proceedings. voked 1947), applies decided that Rule asked, apart from relief here contrary to the Fifth taken to evidence property, is that return Judge Learned Hand said Amendment. enjoined making defendant concurring opinion, 161 F.2d at in his crim- certain evidence use of page 465: against appellant. inal staying agree now, spite quite much different “I This contrary, proceedings. professional relief McDowell, 1128]; or and Burdeau [58 ’’ * * * 1048]; 574, 65 L.Ed. [41 motion wherever filed before supplied). (Emphasis informa- agañnst movant, like mo- (e) to subdivision of Rule Note 3. See in Perlman tions Rules of Criminal Procedure. 950] Federal [38 clearly law, my cated. his Unless become settled it has true, en- only that, says, show he would that the Frank brother given relief, titled to hearing, ings he should be no documents

victim reclaim find- make and the court should property in violation seized that, conclusions of law. Amendment, facts and but the Fourth need when these are contraband Reversed and remanded. him, he not be returned an in- and even of advance of trial Judge (dis- HAYNSWORTH, Circuit dictment, from a court an or- secure senting) . preventing der Although, use as evidence. Judge properly I think the District know, far as so questions deferred consideration of these yet same rule been extend- has not enjoin presentation refused to procured ed to confessions in viola- grand jury. ques- formation to the Amendment, tion of I feel the Fifth tions, best, certainly arise difficult at will consistency too much the force intelligible in a much more context after True, step. not to take added grand jury shall have acted and judges reformers, are not Austin, or become known whether Mrs. *5 depends upon law which irrational any persons of the for whom she rightly discredited, distinctions is returns, indicted, income tax will be for one or alternative the other is indicted, if for what offenses. In patently wrong. I Since see cannot meanwhile, suppressing an order any rational basis here for distin- purposes possession information in the guishing the two between Amend- of the District would seem nearly ments when the situation is so me to be an unwarranted extension of same, accept am content to principles which have been in embodied ”* * * innovation. 41(e) of the Federal Rules of Crim- See also Grant v. United 282 F.2d inal Procedure. (2nd Cir., 1960). remind ourselves It useful to On hand, 41(e), the other if Rule country always been it has that in this because of applies only its language, to recognized of at the time a defendant Amendment,4 Fourth there is still no right ex to have has a a criminal trial why reason independent equity pro- of the admission cluded evidence ceeding, recognized by Supreme Court de in violation to exist in decisions antecedent to the privilege self incrim fendant’s promulgation 41(e), of Rule law, had no ination. he At common suppression of evidence taken in viola- right evidence obtained to have excluded tion of the Amendment, Fifth is not still seizure, illegal or as a search result of For, available. the rule not does by any unlawful means. It in terms extend to Fifth Amendment Supreme not Court until certainly does not overrule the of ob held that use at trial evidence authoritative case law. unlawful or seizure tained in an search summary, opin In we are of was in the Fourth Amendm violation claiming ion Supreme that an individual Court then that evi ent.1 The retreat doctrine, dence was taken him in violation of ed from new affirmed the either his or Fifth evidence and limited its trial use of such rights may bring Boyd proceeding, to its In decision facts.2 whether earlier styled motion,” it is a “Rule or an Weeks v. United “independent equity proceeding,” 652, however, ap L.Ed. suppression adjudi- proved pretrial indictment to have his claim of evi- York, 1, supra. People 4. See of New footnote State Adams v. 48 L.Ed. 575. Boyd possession regarded an interlocu- search. as unlawful dence obtained in an tory case, spring- review- order explained in Adams its decision only judgment in crim- able after final introduction over the from concern prosecution. inal trials. into criminal collateral issues trial, Inquiry, during the source into property physical If the return of competent offered otherwise purpose proceeding, not a how- thought un- at the have been trial was ever, the relation in between time duly disruptive procedures. of trial proceeding commencement of decision lead to the considerations which finding indictment, of an not need present Adams were Weeks. thus appeal- question determinative Weeks, therefore, settled the ability Supreme inti- as the pretrial suppression in aid of evidence mated and as this courts have and other enforcement rights. of Fourth Amendment expressly held.6 under- It is difficult to nothing en- It had to do with stand how after commenced forcement of Fifth Amendment having arrest but before an pre-indictment proceedings or with purpose its sole evidence under circum- evidence of contraband taken stances. plenary proceeding movant, inde- pendent The fact case. subsequent cases3 the anticipatory that it is conceal its need not Court has been concerned with a number every substance, is, sense, for it aspects problem pretrial en- interlocutory move in the criminal case. *6 tangi- possessory forcement of Here, suppression merely is not incidental things wrongfully by ble court withheld possessory to the enforcement of or officials, law enforcement with the by it is the end itself which movant using tention of them as evidence. hopes prosecution prose- to defeat before recurring frequently question most formally cution has commenced. appealability been of a order an Moreover, refusing adjudicating purpose when the or sole proceeding adjudicate grand possessory rights jury’s is to forestall which, things attention to physical crime, when ordered evidence of there play many come into suppressed claimant, returned to their other considerations importance general, ques- use as In evidence. the enforcement traditional, criminal answered as Perlman4 char- laws. There is the acterizing essential, proceeding, narrowly such a if com- reluctance to cir by grand scope menced plenary inquiry cumscribe the one, jury fully adjudicating so that an order or to undertake to in ad determine immediately ap- that claim particular persons is final and vance whether law charge pealable while, might fully if commenced some after convicted of be dictment, closely Staying so related to the hand if indicted. tangible proceeding grand pre-indictment jury criminal which the determin things expected competency are to be offered in evi- of a mass of in ation dence, adjudication formation, the claim can which be disclosed to the States, 7, States, 7, 3. Perlman v. United U.S. v. United 4. Perlman U.S. 417, 950; 417, Silverthorne S.Ct. 62 L.Ed. 950. 38 S.Ct. States, Lumber Co. v. United 251 U.S. 182, 319, States, 40 S.Ct. L.Ed. v. United 354 U.S. Carroll 1426; McDowell, Burdeau A.L.R. 1 77 S.Ct. 41 S.Ct. U.S. L.Ed. Cogen Williams, 4 v. United 6. United Zacarias L.Ed. Go-Bart Co. 3 L.Ed.2d United States v. Wal Co., Marquette, & lace Tiernan 824, F. 214. ing testimony, only through court was commenced to indictment. extensive Judge interruption opinion protracted Frank Would a was of the be person’s reputation processes impairing effi criminal interest his being im- ciency expedition. Con not indicted sufficient as their was of well portance sup- pre-indictment to be held siderations such as are warrant these paramount fearing pression un- persons indict obtained when sought lawful ment purpose .through Hand was means. Learned to serve refus orders Amendment review of that Fifth standing grand quash jury subpoenas equal duces were of pre- tecum7 rights, and that indictment for the available sup- sought When the evidence protection of the one should be available thing physical tangible, pressed is not a protection for the He of the other. pro- information, the merely at all but countervailing recognized, however, the ceeding basis lacks the historical considerations, prosecution the effective proceeding plenary of a characteristics crime, orderly working prompt things tangible taken repossess procedures of bility impossi- and the search. unlawful in an claimant testing compe- in advance the pre- held cases which While those tency accused, of all evidence suppres- proceedings for the indictment prospective thought might accused, evidentiary pur- sion contraband Judge Augustus offered him. independent of poses both allowable and dissented, opin- Hand for he ofwas thought ion that pre- there was no for a basis little anomalous, until now has been of an extorted those limitation dissent from the confession. a District pre-indictment claims which which, years subsequent exten- required hear and the limited Court is final, appealable represented In re heard, or- of the rule result in sion when expanded. has not further arise out Fried those which ders. *7 tangible property some in been criticized and violation seizure of unpersuasive.8 I Amendment courts have found it of the claimant’s any rights. Rules in Federal am unable to find case which expression ex- is an conclusion of re Fried has been Procedure of Criminal prevailing not con- tended to cover the kind of situation of rule. It does template pre-indictment we deal. with which information, which the use of might Much be said for the reasonable- if time of trial will be excluded at the ness of the result of In re itself. its would be violation admission thing sought suppressed There the to be rights. Fifth Amendment tangible confession, piece a a written was for the evidence which would be offered The Court Second Cir., suppressed. Fried, 2 F.2d such if not There was a in In Re Circuit showing plain a limited that the confession was ex- undertook extension suppression procedure. pre-indictment in violation of Fifth torted rights. pre-indictment written, pro- in court in ordered the a ceedings though voluntary confession, proceed- could discover from the confes- Biggs Cir., United 246 F.2d v. Cobbledick 783; Dugan cert. denied 355 U.S. 84 L.Ed. & 78 S.Ct. 60 S.Ct. 353; Clark, Cir., 118; Canary, 170 F.2d Benes v. v. McNamara Cir., Mfg. Russo, 224 F.2d cert. denied 350 Co. v. F. Homan 801; 2d Tuzzo, D.C.N.J., 9 F.R.D. Garrity, Marshall, D.C.D.C., 198 F.2d 8. Centracchio State, F.R.D. McGee v. 230 Ind. Cicenia, Pontiac 104 N.E.2d State v. Chieftain Julian, Corp. A.2d N.J. taking say that, are not now in dis- disclosed sion the crime it posing says true, a violation all that she with act matter, could it clearly appears and comparison constitutional disadvantages in few, any, yet ought hearings never stage. it orders which Pre- later with a trial court at unless indictment be held advance suppression of that confession necessary hearings clearly are advantageous con- obviously was plain- disrup- redress constitutional hand, the fessor. On the other ly slight been invaded. was but procedure tion of criminal at- widespread unless it should lead to thing as What we not have here is admissibility of con- tempts to test the easily dealt with as a written confession indictment. fessions advance relatively uncomplicated of a act. criminal Here, hand, suppression, on Mrs. Austin other Mrs. seeks the purposes, pleadings all do show and affidavits all information obtained outrageous regarding of her constitu- violation from her books and records rights clearly as- tional returns, occurred. She her returns and the large serts that she led to believe number of individuals which other agents seeking prepared by her, information revenue were infor- were as well as adjust- agents possible acquired by in connection with civil mation the revenue obliga- personal through her ments of income tax information.10 the use of such though tions, alleges they record, she not know On this do what we charges contemplation possible though is, infer information we prepa- her connection with her appear Mrs. is voluminous. It does al- ration for others. If returns Austin fears basis of the that on the legation true, however, accepted acquired, she formation the does not charged alone of con- establish violation preparation of will be rights, for, stitutional as has held fraudulent of her returns for some or all courts,9 gave when she If, however, customers. agents she information to revenue formation that false returns were filed they obligated to must have known customers, on behalf her Austin proper of- law enforcement disclose possible, is not the sole defend- ficials evidence of crime which signed ant, for each customers who investigation. Her discovered in their upon a false return be indictable dependent upon constitutional claim is basis hearings If same information. significance of her further majority ordered threatening that she was told in a manner held, therefore, the, get produce the information should find that some violation of Mrs. *8 agents they requested, or would revenue Austin’s constitutional had occur- get by means, and that her red, required pretry he would then be by state- customers were harassed substantially return might evidence which agents against Austin, intended to con- ments that the be offered Mrs. any customers, investigation each of her of Austin number of Mrs. their tinue charges upon not by which have cases yet her. all returns brought been and are now unknown. in com- that these enough circumstances, inquiry any these to warrant Under balanc- bination majority appropriate pro- time. The the interest of the in the law at an States, Cir., Apparently, 4 222 F. 10. Austin United Mrs. contends Turner v. 9. agents 831, 926, 350 76 the revenue identified U.S. her tax re- 2d only through 65, 100 L.Ed. Russo v. United turn customers a list which S.Ct. 285, gave States, Cir., suppression F.2d denied 241 cert. she The or- them. 18, she seeks S.Ct. L.Ed.2d der all informa- Wolrich, D.C.S.D.N.Y., tion obtained from all of her tax return United F.Supp. books, customers their 538. as well as from her her books. shadowy press, prior claim of information tection of Mrs. Austin’s of of and the interest this sort.13 constitutional integrity efficiency, or- the law in the 41(e) only expressed au- Rule is the procedures derliness of its criminal sup- pre-indictment thorization of the greatly weighted should find the scales pression of evidence. It authorizes favor latter. problem action when the arises out tangible things. seizure That Many taxpayers position compa- in a does not authorize this sought rable to Mrs. Austin’s simi- prevent grand telling witnesses from pre-indictment suppression lar infor- jury they what know when knowl- given agents. mation them to revenue edge is unrelated to unlawful seizure exception, With one I have been unable to physical object. of a does Mrs. Austin find case which succeeded. not contend that Rule entitles Some of them failed because the court present to maintain action. know concluded that the information had been general jurisdiction equity through of no given voluntarily, for, despite claim- may greatly expand scope which we agents, taxpayer ed deceit of the must of that Rule. by grand inquiry jury known that agents would follow if the discovered In Rea v. United crime.11 Others them have Treasury Department’s failed because general supervi- held there was a policy prosecuting sory jurisdiction announced those over the conduct of fed- voluntarily agents. their tax eva- who sions, disclose eral law enforcement exer- The disclosures jurisdiction did not make involun- cise of to indict- tary though upon made in is, reliance least, ment case a mat- Treasury Department’s announcement, or ter within the discretion of bring taxpayer failed to himself require with- Court.14 rule Rea policy.12 subsequent in the literal terms of the exclusion at a Still trial of because, despite procured others have failed information In re revenue through Court was conduct there violated general jurisdiction equity no sup- was there Biggs States, Cir., 11. Mrs. Austin United 246 F.2d seeks here. court treat cert. denied 355 U.S. ed if it one for suppression tangible prop Grant return and erty. 227, petition general equity 291 F.2d existence filed, jurisdiction enjoin (U.S. agent cert. 30 U.S.L.Week. 3081. a federal Aug. 10, 1961.) 297). (No. testifying grand jury was See, also, portion not discussed. Lapides opinion in Lefkowitz States, Cir., White v. United Dist., Cir., for Southern 52 F. cert. denied 343 U.S. 2d in which was held pre-trial no Garrity, Centracchio v. 198 F. secretary, Paris, which the letter 2d cert. denied trickery induced write Chieftain agents. *9 Julian, Corp. Cir., Pontiac v. 1 209 F.2d 657; Biggs Cir., Klapholz, Cir., v. United 6 v. United States 14. proceedings F.2d F.2d contemplation Even within 41(e), Benes v. of Rule it has been Canary, Cir., discretionary cert. court has de held that postpone nied 350 U.S. until the time of trial Bradshaw, question suppres v. Eastus consideration of 94 F.2d cert. denied 304 U.S. sion of Panzich evidence. Hof F. United States Lester, D.C.S.D.N.Y., fritz v United 109, F.R.D. taxpayers qualified Leiser, D.C.Mass., won a vic United States Johnson, tory. was remanded to the F.R.D. D.C.M.D.Pa., United States v. just F.Supp. hearing, what Court for a nothing requires rule Rea possible pre-indictment pretrial charged upon the offenses which agents acquired, basis information applying Rea it was think in rule only necessary, for permissible, did, consider, he the District questions should be

whether the tendered pre-

inquired at into and resolved they stage, should or whether stage until, a later in the reserved proceedings they may be dealt with more

intelligibly disruption undue without impairment processes

of criminal grand jury. independence His

conclusion that should be reserved stage

until a later one, proper

a reasonable in no sense unless,

an abuse of discretion as the gives majority appear hold, the law

him no discretion about the matter. _____,,

T

NATIONAL LABOR RELATIONS Petitioner, BOARD, METAL

STANDARD FABRICATING CO., Respondent.

No. 16829. States Court of Eighth Circuit. 27, 1961.

Dec.