124 Misc. 2d 897 | N.Y. Sup. Ct. | 1984
OPINION OF THE COURT
On October 20, 1983 this court issued a warrant which authorized the search of the premises of a restaurant, Tom’s Shangri-La, owned and operated by Tom’s Associates, Inc., for books and records of the corporation which constituted evidence, inter alia, of sales tax and corporate income tax evasion. The search was upheld under the Fourth Amendment (US Const, 4th Arndt) in a separate opinion. Following the return of the warrant, the documents were placed in custody of the District Attorney (CPL
JURISDICTION
A preliminary question is whether this court has jurisdiction over the subject matter of the petition. The court’s authority to control the disposition of property seized pursuant to its warrant is established by statute (CPL 690.55) and by long usage. (Simpson v St. John, 93 NY 363, 365.) Courts retain an “inherent authority” to decide questions concerning an allegedly unreasonable use
MERITS
The several lines of precedent relied upon by the parties are not dispositive of the issue.
The Supreme Court’s recent decision prohibiting the criminal division of the Internal Revenue Service from disclosing documents obtained by Grand Jury subpoena to the civil division, was based upon principles of secrecy in regard to disclosures of the nature and substance of Grand Jury evidence (Fed Rules Crim Pro, rule 6, subd [e] [in US Code, tit 18, Appendix]) which are not applicable here, since the documents at issue were obtained by the court pursuant to search warrant independent of any Grand
On the other hand, the Supreme Court’s ruling that documents unlawfully seized by law enforcement agents could be introduced as evidence in civil tax proceedings under certain circumstances was based upon the perceived limitations of the deterrent effect of applying the exclusionary rule to such proceedings, and did not constitute sanction or approval for the disclosure of such documents by law enforcement to civil tax authorities. (United States v Janis, 428 US 433, 447; see Tirado v Commissioner of Internal Revenue, 689 F2d 307, 309-312.) There was no occasion to review the propriety of the disclosure, as opposed to the seizure, of the documents in those proceedings. It is a general principle of procedure that courts will not inquire into the source of relevant and admissible evidence. (Adams v New York, 192 US, at p 587; Matter of Grand Jury Proceedings, 466 F Supp 863, 867; cf. United States v Janis, 428 US, at p 447.) The exclusionary rule, designed to promote the policies of the Fourth Amendment, is an exception. (Weeks v United States, 232 US 383, 395.) However, once evidence has been lawfully seized, Fourth Amendment criteria are met, regardless of the subsequent application of the evidence by the government. (See Gouled v United States, 255 US 298, 311-312.) The intragovernmental transfer of evidence is not a new seizure requiring de novo application of Fourth Amendment criteria. (See Elkins v United States, 364 US 206.) It should be noted, however, that were it to appear that the seizure was to obtain evidence of civil wrongdoing, probable cause for the seizure would be lacking, since the validity of the warrant depends upon the establishment of a nexus between the thing seized and a stated crime, and necessarily entails consideration of the police purposes in making the seizure. (Warden v Hayden, 387 US 294, 307; Matter of B. T. Prods. v Barr, 44 NY2d 226, 236-237; see People ex rel. Simpson Co. v Kempner, 208 NY 16, 20-23; cf. Camara v Municipal
The same principle was recognized by one Circuit Court in the context of court-ordered electronic surveillance, where it was held that the applicable statute (US Code, tit 18, § 2517, subd [2]; CPL 700.65, subd 2) did not prohibit the disclosure of conversations lawfully intercepted by law enforcement agents to civil tax authorities in the course of performing law enforcement duties and in the absence of reason to believe the surveillance was “a ‘subterfuge for developing information for civil tax proceedings’ ” (Griffin v United States, 588 F2d 521, 524; Fleming v United States, 547 F2d 872, 874, cert den 434 US 831).
At first blush these cases present an attractive precedent. They are, however, ultimately unpersuasive for several reasons. There is statutory authorization for disclosure of information obtained pursuant to court-ordered electronic surveillance where “appropriate to the proper performance of * * * [law enforcement] duties” (US Code, tit 18, § 2517, subd [2]; CPL 700.65, subd 2). There is no similar authorization in the search warrant statute (CPL art 690). The court has, nonetheless, accepted this principle in regard to physical evidence by permitting disclosure of documents to civil tax authorities engaged to assist the prosecution and other law enforcement agents in evaluating the evidence in regard to criminal wrongdoing. The civil tax authorities may undoubtedly, through whatever procedures are ordinarily available to them, act upon the basis of information thus obtained. (Griffin v United States, supra.) However, the disclosure of information in order to obtain advice in preparation of a prosecution, which is a law enforcement function, does not necessarily impart the right to transfer physical possession of seized evidence, or copies thereof in the case of documents, for the enforcement of civil tax laws. Insofar as the decision of one Circuit Court concluded that the Internal Revenue Service is a law enforcement agency entitled to receive evidence obtained by other such agencies pursuant to search warrant, the court notes that, unlike the Internal Revenue Service, our city and State tax agencies do not possess law enforcement
More importantly, although an interceptee may retain a protectable privacy interest in intercepted conversations (Fleming v United States, 547 F2d, at p 874), there is no cognizable property interest in such conversations. (United States v King, 528 F2d 68, 69.) The court’s concern in Hubbard (supra) was also with the privacy, and not with the property interests, of the owner in seized documents. (United States v Hubbard, 650 F2d 293.) There is no question, however, that a business retains a property interest in its records seized pursuant to a search warrant. (Sovereign News Co. v United States, 690 F2d 569, 577; Richey v Smith, 515 F2d 1239, 1242, n 5.) The seizure of property as evidence does not affect the title in the thing seized, but is only a temporary deprivation of use and possession. (Simpson v St. John, 93 NY, at p 365; cf. Plymouth Sedan v Pennsylvania, 380 US 693, 699 [no title in per se contraband].) Therefore, a seizure and retention of property as evidence, although lawful in terms of the possessor’s expectations of privacy, may constitute a deprivation of the owner’s property interests deserving of due process protection. (See, e.g., Rawlings v Kentucky, 448 US 98; United States v Salvucci, 448 US 83, 91, n 6; Matter of Special Investigation No. 228, 54 Md App 149; Warden v Hayden, supra, at pp 307-308 [lawful seizure does not necessarily justify retention of property].) In general, the government may not interfere with an owner’s use and continued possession of property without affording the owner due process. (Fuentes v Shevin, 407 US 67, 84-86.) The degree of procedural protection required, and the timing of the process in relation to the deprivation, depends upon the weight of the government’s interest in the property in comparison with the extent of the deprivation. (See Morrissey v Brewer, 408 US 471, 481.) As the government’s interest increases in importance in relation to the degree of intrusion upon the owner’s use of property, less procedural protection is required, and in extraordinary cases of governmental necessity the process may be postponed until after the seizure. (Fuentes v Shevin, supra, at
The government has a uniquely important need to obtain, and to avoid the destruction of evidence of crimes, which enables it, in compliance with Fourth Amendment standards, to deprive a person of property without notice or any preseizure right to be heard. (Fuentes v Shevin, supra, at p 93, n 30; see CPL 690.50; cf. Zurcher v Stanford Daily, 436 US 547, 581-583, Stevens, J., dissenting [innocent possessors of mere evidence should receive preseizure notice and hearing].) Moreover, in the Fourth Amendment context, the owner is not automatically entitled to a post-seizure hearing, but must initiate an action at law or in equity to regain possession of the thing seized (Warden v Hayden, 387 US, at p 308; cf. Fuentes v Shevin, supra, at pp 90-91; United States v Spilotro, 680 F2d 612, 617 [postseizure Rico hearing]), and as long as the exigencies of prosecution require retention of the property as evidence, a motion to regain possession must be denied. (United States v Sherwin, 539 F2d 1, 8, n 10; United States v Hubbard, 686 F2d 955, 961, supra [MacKinnon, J., concurring]; cf. McClendon v Rosetti, 460 F2d 111; but see A Quantity of Books v Kansas, 378 US 205, 210, n 2 [First Amendment liberty entitled to preseizure protection].) However, a prolonged retention of property as evidence without initiation of any proceedings may violate due process (Coury v United States, 426 F2d 1354, 1356; United States v Premises Known as 608 Taylor Ave., 584 F2d 1297, 1304-1305; Sovereign News Co. v United States, 690 F2d, at p 578; Matter of Brenner, 6 F2d 425, 426-427), and the property must be returned to the owner once its evidentiary value has been exhausted. (Bova v United States, 460 F2d 404, 406, n 5; United States v Farrell, 606 F2d 1341, 1343.)
When the property seized is no longer needed as evidence, the government must establish, in an appropriate proceeding, an independent interest to justify any further retention. (McClendon v Rosetti, supra; Matter of Brenner, 6 F2d, at p 427; Lowther v United States, 480 F2d 1031, 1035.) Independent grounds for retention of seized property
The issue before the court can be resolved upon principles established by the foregoing cases, as follows. The corporation has a property interest in the seized business records which survives the seizure. (Warden v Hayden, 387 US 294, supra.) The surviving property interest is entitled to due process protection when the State attempts to extend its authority over the documents beyond the requirements of the prosecution of crimes. (McClendon v Rosetti, supra; Lowther v United States, supra.) The process due depends upon the degree to which the government’s
The court orders, however, that at the conclusion of the investigation and/or prosecution the original documents be returned to the owner, together with notice to the owner of the copies provided the civil tax authorities, sufficient to provide the owner an opportunity to contest the tax authorities’ possession by an action at law for replevin. (Fuen
The court orders the District Attorney to maintain the original documents in his exclusive possession (CPL 690.55.)