In Re Grand Jury Matter. Appeal of James Gilbert Brown

GARTH, Before GIBBONS and Circuit TEITELBAUM, Judges, District Judge.* ALDISERT, Judge, Before Chief SEITZ, ADAMS, GIBBONS, HUNTER, WEIS, GARTH, HIGGINBOTHAM, SLO- VITER, MANSMANN, BECKER and Cir- Judges. cuit OPINION OF THE COURT GIBBONS, Judge: Circuit appeals James Gilbert Brown from adjudging an order him to con civil tempt refusing obey of court for enforcing a subpoena order duces tecum. sought pro The duces tecum duction, grand jury, before Co., records of Gilbert J. P.C. resisting the enforcement of the tecum, Brown duces asserted that his au thenticating testimony respect with those records would violate his self-incrimination. district court held that because the records be corporation, longed priv to a Brown had no self-incrimination, ilege against with either respect to the contents of authentication before ^[*] Honorable Hubert United States District I. Teitelbaum, for the Western Chief Judge, District of Pennsylvania, sitting by designation. 526 testimony though does not authentication even he is jury. appeal On Brown grand concededly target a grand jury in- privilege against his self-in- that

contend vestigation, though even he had of- applies to the contents of crimination rather, grand fered to contends, having submit records to the that He records. jury through attorney.1 possibility his The claim that authentica- made a non-frivolous testimony might the authentication him, records would incriminate tion of the was, tend to incriminate Brown in the trial contempt in absent not be held he could view, court’s irrelevant. by court the fact findings the district was not of possession his of the records Austin-Bagley United States v. pro- evidentiary significance, and that his (2d Cir.), Corp., F.2d 31 233-34 cert. of them would not be used for duction denied, 279 U.S. 49 S.Ct. 73 L.Ed. agree, evidentiary purposes. We and thus (1929) Appeals 1002 the Court of for the we reverse. Second Circuit held that communicative or testimony corpo assertive presented by appeal The issue is a compelled, rate records could be even narrow one. We must decide whether a though it in resulted self-incrimination. simply by person, virtue of his status as exception privi The Austin-Bagley corporation’s of a can be custodian lege against self-incrimination has never self-incriminating to make disclo- adopted by Supreme been this court or the testimonial, i.e., that are sures communica- exception is, moreover, Court. Such an subpoena in tive or assertive nature. The Supreme inconsistent with the Court’s re duces tecum addressed to Brown seeks the privilege. cent treatment of the Co., P.C., records of J. Gilbert accounting incorporated wholly firm owned The Court’s modern treat by Brown. Brown makes no claim that privilege against ment of the self-incrimina profes- because he is the sole owner of this tion commences with Justice Brennan’s corporation, any sional it or he can claim in opinion California, Schmerber v. privilege against self-incrimination with re- 757, 761, 1826, 1830, U.S. 86 S.Ct. spect to the contents of the records. The (1966), which, L.Ed.2d contrast government acknowledges grand that the Boyd with earlier cases such as v. United jury could obtain the records means States, 6 S.Ct. 29 L.Ed. other than a ad- duces tecum (1886), upon the Court focused the dis dressed to Brown. what is issue tinction between evidence of acts which are solely question may whether Brown noncommunicative, and evidence of acts compelled by give testi- which, nature, require the direct mony grand jury, verbally before the thoughts. manifestations of an individual’s act, a non-verbal communicative authenti- recognized v. Schmerber California cating government those records. The compelled production samples of blood did (1) urges that may compelled, he be so require pro disclosure mental (2) that if such compelled authentication person sample cess of from whom the was, grand jury, is elicited before the Schmerber, taken. Brown, against it be used to the ex- applied S.Ct. at 1832. The Court has relevant, tent in the trial of permit indictment principle to a defendant’s com same be returned him. pelled participation lineup, See 801(d). 218, 221-23, Wade, Fed.R.Evid. court The district States agreed 1926, 1929-30, (1967), government, with the and held 18 L.Ed.2d 1149 contempt refusing give compelled production Brown in and the of handwrit- doubt, expressed proffer 1. The dissent’s had been made and was in footnote sented was, fact, Later, response that such an offer made Brown’s refused. to direct court, government, through surprising Mr. counsel is in view of the statements from the Welsh, parties during argument offered to made that Brown had oral be- confirmed counsel, through the records fore all the members of this court. In the rejected. argument, attorney repre- had been course of his Brown’s offer ing samples, California, Gilbert union’s books and records could be com 263, 265-67, 1951, 1952-53, 18 pelled testify grand before a jury about (1967), exemplars, L.Ed.2d voice their location. A unanimous flatly Dionisio, United States v. contention, rejected that reasoning: 764, 767-68, suggests Fifth Amendment no such In each case the noted that the evi- exception. guarantees It per- that “No dence obtained was devoid of testimonial son compelled ... shall be in any crimi- significance. recognized Once the Court nal case to be a witness himself privilege against self-incrimination ____” custodian, A by assuming the was concerned compelled with the dis- office, duties of his undertakes the obli- thought processes, closure of it was inev- gation the books of which he holdings itable that Boyd earlier such as v. in response custodian rightful to a States, 616, supra, United 116 U.S. 6 S.Ct. exercise of the State’s powers. visitorial 524, at applying to the con- But lawfully he cannot compelled, be in tents of records which voluntarily were cre- grant the absence of adequate im- ated, would be reconsidered. That recon- munity prosecution, from to condemn sideration occurred in Fisher v. United himself testimony. his own oral States, 391, 1569, 425 U.S. 96 S.Ct. Curcio, 354 U.S. at 77 S.Ct. at (1976), L.Ed.2d holding that the com- 1149. opinion Justice Burton’s in Curcio v. pelled production attorneys from of doc- distinguishes United States the Second Cir prepared uments which had been either opinion cuit in United States v. Austin- clients or for their clients account- Bagley Corp., supra, and contains dicta to implicate ants did the clients’ the effect that mere authentication testimo against self-incrimination. As the Court ny may compelled. 125, 354 U.S. at explained, dicta, however, at 1150. That is in Fifth Amendment does not inde- [T]he consistent reasoning with the and holding proscribe pendently compelled pro- Curdo, for Justice Burton holds un every duction of incriminating sort of equivocally that “forcing the custodian to applies evidence but only when the ac- testify orally as to the whereabouts of non- compelled cused is to make a testimonial produced requires him to disclose communication that is incriminating. 128, contents of his own mind.” Id. at 408, Id. at (emphasis 96 S.Ct. at 1579 in By focusing 77 S.Ct. at 1151. on the fact original). that compulsion which Although put Fisher v. United States an sought require was a custodian of end to the successful privi assertion of the mind, records to reveal the contents of his lege against self-incrimination with respect anticipated Curdo the reasoning of the to the contents of business documents vol line Schmerber of cases. The in dicta Cur- created, untarily quoted passage makes arguably approving do the Austin-Bagley clear that the recognize Court continued to simply rule squared cannot be with such a testimonial communication of kind inquiry, furthermore, focus of are in protected might if it tend to incrimi consistent with the reasoning Court’s Indeed, long nate. before the Court cut Fisher and in the more recent case of Unit privacy back on the interests the con 605, ed States v. 104 S.Ct. tents of records recognized which it (1984). Boyd, it had determined that custodians of In Fisher the specifically referred protected business records were from com production: communicative nature of pelled incriminating testimony. In Curcio The act of evidence in United re- 77 S.Ct. (1957), sponse to a govern L.Ed.2d 1225 nevertheless has ment, relying White, own, on aspects wholly United communicative of its States v. 64 S.Ct. aside from the papers 88 L.Ed. 1542 contents of the (1944), urged that produced. the custodian of a Compliance subpoe- labor with the at supra United existence ] concedes tacitly na compels possession A government and their 1581.

papers demanded taxpayer. perform It also would the holder of document to control taxpayer’s aspects belief act testimonial indicate subpoena. in the incriminating described papers those and an effect. States, 354 U.S. Cu rcio at-, Id. 1145, 1150, 1 L.Ed.2d 125 [77 holding government urges 1225] Doe not control United States v. does Thus in 96 S.Ct. at 1581. of a the records were those because Doe approval the cited with Fisher the they proprietorship, while this case sole custodian that a record holding in Curdo corporation. That belong to a professional give evidence of could not be point of the argument misses the whole nature in- a communicative in Fisher and Doe.2 analysis Court’s to ex- The Court went on him. criminate cases, with v. Those consistent Schmerber issue, prepared by in papers amine the factor, significant for California, make the custodian, the and de- than someone other self-incrimination, nei- against the admitting as a matter of law

termined that the owns entity ther nature of the which possession papers of the the and existence documents, nor the contents of 425 U.S. at would not tend to incriminate. rather communicative or noncom- but the Court, 411, 1581. The 96 Fisher S.Ct. incrimi- arguably municative nature therefore, in the trial court this did what nating sought compelled. disclosures be do, and case what Austin- refused Bagley held to be irrelevant. It Court holding may Our that a witness not production a made determination that contempt refusing held in for to authen be requested evidence not tend of would finding either that ticate records absent a subpoenaed incriminate the witness. there is no likelihood of self-incrimination immunity grant or a of use casts no doubt Doe, in recently, More v. United States 1237, vitality —, the continued of the rules of 104 79 on 465 U.S. S.Ct. L.Ed.2d 370, 43, Henkel, (1984), Hale v. 26 S.Ct. 552 that critical determination was made, (1906) instance, in L.Ed. 652 and v. the first the district 50 United States White, 1248, L.Ed. court found that act of 322 64 S.Ct. 88 U.S. (1944), subpoenaed corporations be com- neither nor documents would 1542 that may incriminatory. privi and Su- entities a municative other collective assert preme holding affirmed of it lege against Nor does self-incrimination. utility court that the of the documents in slightest weaken of question not privileged, and could be compulsory rule in Mar record discussed compelled grant immunity 39, 57, a use- States, absent of 390 88 chetti United pursuant 18 U.S.C. 6002 and 6003. 697, 707, (1968). S.Ct. L.Ed.2d 889 §§ —, at 1245. must be Records of collective entities still The Court that maintained, stated can be compelled by ad

[although the a document a duces tecum contents of entity. where may privileged, produc- dressed to the situations not be the act may required,3 Fed.R.Evid. ing the authentication is document be. [.Fisher great government places 2. The reliance on Bellis (1974). holdings in Fish- v. United L.Ed.2d 678 (1974), suggestion for L.Ed.2d but Bellis stands er Doe untenable render proposition a doc- require the custodian of collective a custodian to Beilis would entity’s has both documents no fifth amendment act of uments where the incriminating incriminatory. con communicative and urge, tents of those documents. Bellis did is, course, consider, grand jury proceeding not such A and the did not the often com situation, of Evidence incriminatory the Federal Rules nature of the act a since municative Petitioner, 1101(d)(2). apply. See Cos- production. Brief Bellis v. do not Fed.R.Evid. See for 901(a) requirement can greater indicates that the would even be a convenience to be satisfied the submission “suffi prosecutors, but prosecu- until occurs finding support cient evidence to tors must live with person, rule that no proponent its matter is what even the sole professional stockholder of a 104(b). claims.” Id. Fed.R.Evid. This See corporation, may to disclose particularly true the case of business the contents of his mind when such disclo- which, not, more often than can be provide sure tend to an incriminating authenticated without resort to extrinsic link chain evidentiary for use Japanese evidence. In re Electronic him. Cir.1983), Products, (3d 723 F.2d gave Since the court opportuni- Brown no granted sub part rt. nom. Mat ce toty establish and authen- Co., sushita Electric Ltd. v. Industrial tication would him, tend to incriminate — U.S. -, Corporation, Zenith Radio no offer of statutory use immunity was made, holding the order Brown in civil con- Where witness is to authenticate tempt must be reversed. Whether the act records, most business entities will have production, testimony authenticating agents provide who can with P.C., Co., records of J. Gilbert grant out self-incrimination.4 The of use fact tend to incriminate Brown is immunity pursuant to 18 U.S.C. §§ matter which must be determined is always possibility. and 6003 The dis trial court if government makes a fur- raising spectre corpora sent’s two ther effort to enforce the duces avoiding prosecution price fixing tions tecum. a corporate virtue of “de privi facto” thus, is, lege suggesting in unrealistic judgment The appealed will, from there- participants corporate the actual in a con fore, be reversed. spiracy persons only be the within organization capable authenticating of BECKER, Judge, Circuit concurring, Further, hypothetical document. ADAMS, whom Judge, with Circuit joins. notably is the possibility dissent silent on Although I agree much of with the rea- grant of use in immunity this scenar soning dissent, Judge agree Garth’s I io. with the result Judge reached Gibbons present In the government case the nev judgment that the of the district court hold- explored production er alternate means ing Brown in contempt court must be or authentication of the and it reversed; separate opinion. hence possibility grant

never considered the of a Judge apparently Gibbons is of the view immunity moving of use before to have that the does not Court treat cus Indeed, contempt. Brown held in it candid corporate differently todians of records ly concedes what it wants amounts to record-keepers from other for fifth amend testimony authentication which purposes. posits ment He against target later used a protected holds to be grand jury custodians investigation. Such a result respect fifth amendment with prosecutors, would be convenience to to but testimony corporate documents, rejected essentially regarding the Court the same ar gument whether such efficiency prosecutions testimony is verbal or results States, 127, v. the act of itself. Curcio United from See su pra 77 at 1151. S.Ct. We have no doubt that According 527-529. Judge to Gibbons, repeal suggesting the contrary, self-in cases States, crimination a constitutional amendment such as Bellis United 417 v. States, 406, United government request tello v. 76 350 U.S. 4. did not this case (1965). corporation appoint court to direct that the L.Ed. Stern, agent. Rogers Transp. an such See Inc. v. (3d 1985) (en banc). 763 F.2d 165 Cir. 538, 543, (1974), 361, 378-79, 31 S.Ct. 55 L.Ed. L.Ed.2d 678 (1911). whether doc- distinc question address The rationale behind this privileged, and themselves were uments is should able tion that custodian not be not the act of whether entity, no which has to shield the collective testimonial self- would constitute custodian privilege, govern from fifth amendment incrimination. supra See at 530 n. 1. by asserting scrutiny personal mental to right. the custodian deemed interpretation of the disagree I with this with Rather, respect waived agree law. with relevant case Garth, (Garth, Judge see J. testimonial incrimination inherent infra dissenting), acceptance the Court continues of his production by the act of a distinction between custodians of make v. corporate position. United States See entity record- collective other White, U.S. at 64 S.Ct. at entity keepers. non-collective custo While recently as v. As Fisher privi claim fifth amendment dians can the difference in fifth the Court reaffirmed lege respect to both oral with corpo- amendment treatment as between production, and the act of see United record-keepers. The rate and other Doe, States v. collective-entity custodian stated that (1984), collective tecum, with a comply must duces privi claim a entity custodians can blanket responsible for though he even has been testimony.1 lege only regarding oral See keeping the books and his them Curcio United be sufficient authentication would itself To L.Ed.2d against him.2 permit introduction extent that mere doc Nothing in which United States with a compliance uments sole-pro- whether a addressed implicit would result an admission that claim fifth prietor can they un are authentic documents of business doc- custodian, however, der the control of uments, application of the cases make clear that the custodian is Fisher, taken have eradicated the can be protected by the fifth amendment. ju- drawn in fifth amendment See, White, historic line 322 e.g., United States U.S. 694, 1251, col- risprudence record-keepers between of L.Ed. 1542 88 (1944); States, 221 lective and non-collective entities.3 Wilson v. United U.S., regard my any subpoena,’ States, 1. I belief the note in intima- Curcio v. United 354 125, S.Ct., Judge opinion L.Ed.2d, in that this case at tion Gibbons’ at at 1231.14 involves the whether Brown be by give subpoena testimony to oral subpoe compliance In cases with the these grand jury, supra see the at inac- before though the na is even books Rather, view, my key issue curate. the by person subpoenaed kept and his the been personally may whether Brown be forced to be au producing them itself sufficient would light those documents of his claim permit to introduction thentication would, very production given act that the of against him. wording subpoena, compel of him "testi- Fisher, n. n. 96 S.Ct. at 1582 fy" possession are in documents and 14. by supervision. prepared him or under his were See at 531. infra changed recognize and Doe have that Fisher 3. refocusing landscape by amendment fifth part, pertinent Court stated: In 2. production and not on inquiry on act of Moreover, States, supra; in Wilson v. United pre- at issue. The the nature of documents supra Dreier v. United [221 distinguished corporate between Fisher cases (1911)]; 55 L.Ed. 784 United States v. fifth which were afforded no White, supra; supra; Bellis v. United protection, business and other amendment Harris, supra corpo In re and of custodian protected be were which held rate, union, partnership or books or those aof however, Doe, and In Fisher fifth amendment. bankrupt respond business was ordered to voluntarily prepared busi- held that the Court subpoena though for the business’ books even any fifth kind are entitled ness records doing 'representation so involved a that the of only act of protection, and produced documents are those demanded case, added.) (Emphasis production” a “mere As I read this subpoe- Were this na, request production constitutes, its incrimination to only potential effect, interrogatory an production corpo- of the asks Brown from the Brown, you prepare “Did the documents?” that which is inherent rate documents was pursuant Production of documents i.e., acknowl- production in the itself — consequently would convey im- exist, documents edgment that the plied probably incriminatory them, has control over and that custodian prepared, Brown that he had or had they corporate are authentic documents—I supervised of, preparation the doc- agree the result reached would with produced.4 compliance uments Brown’s view, however, Judge my Garth. subpoena, therefore, with the poten- would case involves testimonial incrimination be- tially in substantially result more incrimi- yond that inherent in the act nating testimony necessarily than that re- wording grand jury because of the sulting from the subpoena. It this reason that I con- is for Moreover, say documents. I cannot with by Judge cur in the reached Gibbons. result confidence that a trial court would hold grand jury specific terms sub- inadmissible Brown such im- poena, pertinent part, are as follows: Thus, plied testimony.5 the document re- Brown, To: James Gilbert Custodian quest goes beyond far permits what Fisher Co., Records J. Gilbert P.C. protected crosses the line into an area appear the fifth amendment.6 hereby You are commanded to in the United States District Court for I therefore believe that Brown’s claim of Pennsylvania the Eastern District privilege may invoked; have properly been Jury bring Federal Room ... and Grand hence, contempt sanction should be va- you workpapers, reports, all government cated. If the makes a further records, correspondence copies effort to enforce the duces te- your possession tax returns or under cum, then the district court would have to your relating accounting control ser- determine whether of the doc- performed by you your vices under uments would in fact incriminate Brown.7 supervision on behalf of the below-listed government I also believe that if the were persons years subpoena by eliminating or entities for the to narrow its through character, impermissible interrogatory 1982. it Fisher, privileged. the documents tication. See 425 U.S. at 412 n. 1241-42; Fisher, See 104 S.Ct. at U.S. at S.Ct. at n. 12. The con- 96 S.Ct. at 1580. one basis for party stitute a non-verbal assertive act of a de- pre-Fisher distinction between non-hearsay fendant which is under Fed.R.Evid. records-keepers other the latter were 801(a)(2) (d)(2)(A). —that See Fed.R.Evid. & keepers protec- of records with fifth amendment eroded tion —was these later cases. Never- represents supplemental 6. Brown in his brief theless, treating corpo- the other rationale for employees corpora- there are other of the differently, rate custodians the concern that oth- may produce tion who have been able to the they protect corporation erwise could itself government but documents insisted on disclosure, from survives Fisher and Doe production and authentication of the documents may decisions. While these cases in fact herald representations Brown himself. While these corporate an end to the between distinction and record, affirmatively they appear do not custodians, non-corporate Supreme Court by responsible made counsel and have not been yet step has to take such a and it is for this true, government; they controverted if Court to do so. position by suggesting Brown’s corroborate Garth, disagree Judge I thus 4. government’s strategy it is the to make testimo- question” Brown was never asked the “critical production by nial use of Brown. preparation merely about because he refused to produce the documents. Presumably inquiry point 7. the focal having import prepared would be the of his would, admissibility pre- mechanism of The question. returns in sume, pro- be similar to what is involved when duction is deemed sufficient to establish authen- difficulty subject subpoena); to v. United Wilson records without could obtain L.Ed. explained by Judge Garth the reasons excep- an Rather than create in his dissent. pro- corporate records rule for tion to the GARTH, Judge, dissenting, with corporations, Circuit if indeed such an fessional HUNTER, III, justified light and JAMES of Su- exception whom SEITZ can be join: Judges, reasoning, the preme precedent Circuit Court majority opinion virtually ignores the cor- Brown, appellant, is Gilbert J. rule, relying on implicitly records porate prac- incorporated his accountant who has Fisher, 425 the recent United States corporation. professional tice as a one-man 1569, 48 L.Ed.2d 39 corporation and records of The books (1976) and United States v. jury. grand subpoenaed were (1984) L.Ed.2d 552 them and has produce Brown refused to having overruled Beilis sub silen- cases privilege, as- his fifth amendment claimed tio. himself if serting that he would incriminate Yet this is not the case. Neither Fisher thereby produce to he was corporate nor Doe dealt with records. Nei corporate sought records authenticate the sapped vitality ther nor has Fisher Doe court, find- grand jury. The district case, real in this of Bellis. issue ing produce the records Brown’s refusal to address, which the fails to is meritless because Brown was of a whether of the records corporation, held representative of the professional corporation is to be one-man contempt. Brown in production by proprietor— treated as a sole I. in —or the sort of involved Doe case, In this the majority opinion holds production by repre is to be treated as that a representative obliged collective, entity— sentative of a produce corporate subpoenaed by records the sort of involved Wilson government personal assert his ques differently, Grant. Stated fifth against self-in privi is whether fifth amendment tion crimination. majority opinion so holds lege professional is available when a one in the face of nearly eighty years of unvar corporation subpoenaed man ying and Supreme continuous prece of these records records dent contrary. As recently most may incriminate the “one man.” This stated in the words of Justice Marshall in one issue to which Bellis v. 85, 88, yet speak, has and it is the one issue 2179, 2182, (1974): conflicting which has led to determinations

(A) long ... line of cases in other federal courts. See In Re Grand has established that an Morganstern, individual 747 F.2d rely Jury Proceedings, cannot upon the (6th Cir.1984), and listed in avoid vacated the records banc, (6th Cir.1985); of a entity collective Butcher 760 F.2d 670 are in his (6th possession representative in a F.2d 471 n. 9 Cir. Bailey, capacity, 1985); even if Jury Subpoena these Duces Re Grand incriminate (E.D.N.Y. him personally. (Doe), F.Supp. 174 Tecum 1985). principle This corpo- established for rate including records of a one- By treating this as a testimo- man corporation, part in the early ny of this compelled corporate case rather than a See, century. e.g., case, Grant v. United document 57 L.Ed. has decided a case not before us.1 It is for (1913) (sole corporation shareholder of these reasons I respectfully dissent. Inc., effect it has erected a (3d straw man and then 731 F.2d Cir.1984). Lines, struck it down. See Kobell v. Suburban Code,

II. States Section 1001 which deals alleged with the submissions of false case, Significantly, deciding this during statements or documents Internal majority opinion specific makes no refer- Revenue audits. subpoena ence to the that was issued to J. Brown, proceedings

Gilbert to the before A. No. Jury, the Grand nor to the form of con- Q. I want to you advise of certain mat- tempt citation issued the district court. ters that all witnesses are entitled to. Since reference subpoena and the one, you Number are entitled to be grand jury proceedings is essential advised lawyer any case, frame the true issue I set them Jury the Grand I may you or ask forth below. you may lawyer consult with a any you time. Do understand that? The subpoena issued provided to Brown that: A. Yes. Brown,

To: James Gilbert Custodian of Q. your And to knowledge Shapi- David Co., Records J. Gilbert Brown P.C. ro, your attorney, is outside that door? hereby You are appear commanded to A. Yes. in the United States District Court for Q. If at time that I you ask or if a the Eastern District Pennsylvania Grand you something Juror ask you Federal Jury Grand Room your like to ask lawyer, feel free to dis- Courthouse, Street, 601 Market in the it. cuss Some witnesses under circum- city Philadelphia day on the 7th right (sic) stances have the to evoke March 1984 at 11:00o’clockA.M. to testi- fifth amendment if an ques- answer to a fy Jury before the bring Grand with tion you. tend to incriminate Do you workpapers, reports, records, all cor- you right? understand that respondence copies of tax returns in A. Yes. your possession your or under control Q. Is it you correct that presi- relating accounting per- services dent and/or owner of James Gilbert by you formed or your supervision under Corporation? Brown Professional on behalf of persons the below-listed IA. was. years entities for through 1982: Q. you longer? And are no Rothman, Jack d/b/a Penn Builders A. That’s correct. persons The list of or entities for whom Q. professional corporation? That was a prepared by returns were employees of A. Yes. corporation during 1980 and pursuant maintained to 26 U.S.C. Q. you being Do recall subpoenaed or 6107(b). § having you served on through your lawyer calling for records appear did before the Jury Grand pertaining doing to Jack Rothman busi- upon appointed At date. this time ness as Penn Builders? Brown did not the requested corpo- my attorney? A. with Can consult rate documents. The entire colloquy be- (Whereupon, consulting the witness is tween Brown and Assistant United States attorney.) Attorney appears Welsh as follows: BY MR. WELSH:

Q. Sir, you please your state name? Q. Brown, going Mr. I’m you to hand A. James G. Brown. G.J.B, one, what I marked as for Brown Q. Now, Brown, you Mr. are before a which is a calling for certain Federal Jury Grand conducting an inves- concerning Jack doing Rothman tigation of violations of Builders; Title business as Penn is it correct doctrine, collective-entity underlying that with been served you have first announced your lawyer?

through Henkel, nearly eightly years ago in v. Hale Yes. A. L.Ed. 652 brought you with to- you Q. And have (1906) and Wilson subpoe- for records called day the 361, 31 55 L.Ed. 771 na? of cor- These cases held that the custodian and for of counsel the advice A. On personal on his porate may rely (sic) forth, hereby I evoke reasoning set privilege to resist constitution to the the fifth amendment majority documents. The also reasons question. your to answer refuse and Doe, supra, the case of United States you will Q. it correct And isn’t compelled held that the response any other the same make testimony, may be a without concerning pro- that I ask questions compelled pro- form of self-incrimination those records? duction of amendment, abolishes tected the fifth A. Yes. pro- any distinction between and the point, Brown was excused At that thereby the collec- duction and abolishes The district proceedings adjourned. were doctrine; only tive-entity a doctrine which contempt hearing, and Brown held a court permits compelled production of doc- contempt “the wit- cited for because fifth exception uments as an to the amend- comply failed and refused ness has privilege. ment provide the Court to the sub- the order of grand before the poenaed documents Thus, rests on majority’s decision August Contempt and Bail jury.” Order First, majority as- premises. three added). (emphasis in this case sumes that what was called for Second, the testimony. was authentication immediately emerge facts two collective-entity 1) majority was never assumes that the from this record: Brown distinction, testify depends or authen- on the since asked to identification doctrine records; 2) abandoned, subpoenaed public of the documents and tication between contempt Third, cited not because majority Brown was as- private documents. testify response any he refused to recognition sumes that the produce the question but he refused to incrimina- act of itself be was ad- documents to which tory, overrules the unbroken line of collec- dressed. assertion, tive-entity bar the cases which custodian, by corporate personal privi-

III. lege doc- to resist majority’s According to the view these suggest uments. I that each of case, wheth- in this must decide issue premises “[w]e is flawed. simply by virtue of his status person, er a corporation’s a custodian of a IV. self-incriminating can to make opinion’s premise first is a majority testimonial, i.e., com- disclosures that are misreading the record. result of Maj or assertive nature.”

municative reproduced the essential features op., at 526. The then reasons of. to demonstrate record in this case in order put an supra, that Fisher v. United pro- that this ease concerns document public end to distinction between duction, testimony. The and not verbal purpose of fifth private documents for duces tecum subpoena was protection concerning the con- was issued because According contempt citation of the documents. tents It documents. refused to holding, that the con- Brown majority, the Fisher refused to not issued because voluntarily created records are al- was tents of reasoning testify. ways unprotected, vitiates the collective-entity exception the first time2 sion. The argues, for sought documents privilege

because the fifth amendment self-in- performed accounting services “relating to long history. crimination has It was first your supervision,” under by you or by the announced testimony con- required subpoena somehow Henkel, case of Hale v. 43, 74, per- who identity person cerning the 370, 378, (1906): S.Ct. 50 L.Ed. 652 “We question. accounting services formed opinion are of the there is a clear that, Brown the record discloses However particular in this distinction between an question: critical never asked the was corporation, and a individual and that prepared by you?” papers “were these the right latter has no to refuse to submit its question for not asked that He was papers for an books examination at the he at all times refused simple reason that suit of the State.” This exclusion from the Inclusion produce the documents. to privilege was soon extended to bar asser- sought description the documents can personal privilege by tion of the the custo- subpoena. Brown could hardly invalidate documents. Wilson v. corporate dian of easily produced States, supra. United testify then if asked Wilson despite acknowledgment so held them, could have claimed his testimonial by very produc act an action would have privilege.3 Such might tion of the documents have a testi up very case in a different brought this aspect personally monial which would in light in which the ma- light indeed, — criminate the custodian of the documents. erroneously decided this case. jority has See 31 S.Ct. at 543. V. Wilson holding applied has been Grant corporation. records of a one-man collective-entity A doctrine review of majority’s illustrates the fallacies of the (1913).4 remaining premises supporting corporate excep- two its deci- 57 L.Ed. 423 This argument presented produces corporation’s 2. This was not to the dis- tion records. The court, preserved yet supplied and thus has not been trict answer to that has to be record, grand jury re- by our review. Neither the court. this above, produced nor the district court record Rogers, did no In the en banc court more than produced reveals that Brown would have court remand the action to the district for fur- subpoenaed they records no matter how were light representa- proceedings certain ther It is district court record which identified. government argument at oral tions made necessarily governs our review here. immunity granted to that use had been two corporate employees, other who there- purported 3. The on a offer relies corporate produce the documents. We after through produce Brown to the documents his any fifth amend- thus did not decide whether attorney. appears No such unconditional offer by requiring privilege ment would be violated court. in the record before the district That corporation produce doc- one-man record, course, controls our review here. appointed agent uments means of an —here Moreover, assuming even an unconditional of attorney. particular his That issue remains attorney fer made Brown to have his unresolved, open despite any intimation to produce subpoenaed nothing in the majority’s opinion. maj. contrary See in the us whether record before reveals Brown would op., at n. 4. then have claimed that attorney his act which necessar —an v. United Grant ily would have Brown to furnish the (1913) subpoenaed party 57 L.Ed. 423 subpoenaed attorney documents to —would himself, not as in the documents was incriminate Brown and thus come within case, corpora- sole shareholder of the Indeed, privilege. Brown’s fifth amendment Nevertheless, establishes that no tion. Grant argument Rogers very was made in Trans corporation, corporation, even a one-man Stern, (3d portation, 763 F.2d Cir. Inc. its on assert the fifth 1985) (en banc), en which was heard banc on recognize decided that Grant was own behalf. day appeal. the same as the instant There the long professional corporations au- were before as: whether a fifth amend issue was framed Nevertheless, currency. gained thorized or corpo ment to a one-man is available overruled, yet and indeed has has to be Grant agent (attorney) corpora- when of that ration People to bar the assertion authenticate documents. tion has been extended privilege by privilege; corpo- have a fifth amendment personal fifth amendment of a entities, corporations and do representatives of other collective rate documents not. unions, including principle subpoe- v. This obtains whether labor United States 694, White, 1248, corporation, 88 L.Ed. directed at the or na is direct- (1944), corporate representative. partnerships, and Bellis ed at 2179, States, 417 U.S. S.Ct. against personal bar assertion of the The (1974). 40 L.Ed.2d 678 by corporate representatives privilege does from that not result the fact we fail to The both confirmed and re- Beilis case production of recognize the act against assertion the fifth stated the bar of corporate repre- personally incriminate the privilege representatives amendment of Rather the doctrine comes sentative. into Supreme The rea- collective entities. that, play per- because we realize were the prevent soned that in to the collective order privilege apply, corporation to sonal could entity privilege, a de gaining from facto avoid of evidence of its criminal representatives of such entities must not activity long so act of as the personal be allowed to assert own also representa- would incriminate those privilege fifth since assertion capable producing of and tives authenticat- personal privilege effectively would ing the documents. subpoe- entity immunize the collective from wrote, referring na. to As the Beilis Court Thus, if presidents of corpora two labor White decision included tions, with complicity of the boards of exception: unions in the corporations, conspired directors of both organization may uti- Since no artificial prices products kept fix on their and personal privilege against lize the com- agreement, memorandum of the under the self-incrimination, pulsory the Court today majority’s holding such evidence found that it follows that an individual grand jury would immune from sub acting capacity behalf his official on of director, poena. Each officer only and organization may not take likewise capable persons and authenti advantage personal privilege. In incriminating cating memorandum, inescapable view of the fact an arti- show could the act of entity only ficial act produce can its personally. incriminate him would Under through its individual or officers majority’s holding the fifth amendment agents, recognition of the individual’s privilege repre would be available to each claim privilege By allowing sentative. the assertion of organization financial records of the personal privilege, such a the corporations substantially un- undermine the gain de themselves would facto challenged organization that the it- rule self-incrimination; square a result self is not entitled to claim Fifth inly eighty years conflict with and Bellis privilege, largely Amendment frus- prior precedent. legitimate governmental regulation trate organizations. of such VI. legal majority’s premises, S.Ct. at 2186. The two

upshot cases, collective-entity depends of these from v. Henk that the doctrine Hale el, States, supra, “public” “pri- is not on Bellis United a distinction between collective-entity records are themselves vate” and that the exempt privilege, non-recognition no cor relies on from but that doctrine porate representative may per produc- aspects assert his of document testimonial tion, supported by Supreme sonal when recently been as cited as authoritative as 1974 in Bellis v. United not on sound him.

precedent. assuming their custody he has assertion that ground accepted obligation with its Fisher permit incident Beilis. inspection. Doe have overruled 545. More- A. over, in Curcio v. United First, majority opinion relies on the (1957), L.Ed.2d 1225 recognition court’s of the testimonial Doe Court reaffirmed validity potentially incriminating aspects of of collective-entity doctrine even while pure document undercutting acknowledging very act produc- collective-entity the rationale for the doc- required tion by the doctrine have majority trine. The reads Supreme the aspects testimonial incriminatory of the that, opinion in Doe to establish be- custodian who was to production subpoenaed cause the of doc- documents. The recognized Curcio court may prove uments evidentiary link in that books and records of corpora- “[t]he subpoenaed target, incrimination of the tions cannot be insulated from reasonable production equivalent is therefore to testi- governmental demands of by authorities mony not be the face personal claim of privilege part on the privilege. agree of a claim of that Doe so their custodian.” 354 U.S. at however, majority, goes holds. The on to at 1148. The Court went on to recognize principle reason that the Doe is inconsist- custodian, by assuming the duties “[a] ent with the rationale underlying the collec- office, of his obligation undertakes the to

tive-entity doctrine and that Doe has thus produce the books of which he is custodian abrogated the doctrine and thus has over- response rightful to a exercise of the ruled the giving cases rise to it. powers.” State’s visitorial 354 U.S. at 77 S.Ct. at 1149. part company

It is here that I with those my colleagues in the majority. I do so More significantly, the Court reaffirmed because, above, as I have noted the collec- collective-entity exception to the fifth tive-entity doctrine is not based on the the- privilege amendment despite explicit recog- ory that the fifth pro- amendment fails to nition that: protection against compelled vide document The custodian’s act of books production, but is rather based on the theo- in response or records to ry that corporate custodians of records representation duces tecum is .itself may not personal assert their own fifth that the produced documents are those amendment subpoena. demanded Requiring

production corporate documents. identify custodian to or authenticate the documents for admission in evidence theory, corporate This custodian merely explicit makes implicit what is personal waives his fifth rights amendment itself. The custodian is upon accepting corporate office, little, subject any, to if danger further explicit made in Wilson. incrimination. ground The fundamental of decision in cases, where, this class of Indeed, is that 77 S.Ct. at 1145. virtue of their character goes and the rules of this statement even further than the them, applicable law presented to the books and requires issue this case us to papers subject go: opinion held to examination the Curcio would allow com- demanding authority, pulsion testimony by the custodi- of oral an has no to refuse identify custodian to doc- although uments, their contents tend to criminate an issue that is not before us.5 denied, Since this case involves no more than the 73 L.Ed. 1002 (1929), corporate repre- majority great pains documents which the takes sentative, however, rely reject. significant, I need on United States v. It is that the Aus- (2d Cir.), Austin-Bagley majority Corp., tin-Bagley 31 F.2d 229 cert. rule decried finds tions, the custodian has because accept this clear but refuses extent, waived, fifth amend Court, to a limited charac- by the statement assuming the duties of his right upon with the ment in conflict dicta and

terizing it as not, despite majority’s does How- office. Doe holding Curdo. actual Court’s demise, overrule Beil dicta, reasoning of Bellis’s forecast ever, being from far holding. In lis.6 Cur- to Curdo’s was essential fifth upheld the do, Supreme Court Bellis, to overrule If Doe meant of union of the custodian claim does, implies that it majority opinion longer posses- who was no documents by the Su yet recognized has fact be had refused the documents and who sion of Certainly expect it preme Court. would current where- testimony as to their give in fifth amendment such a reversal ed that to eliminate desired Had the Court abouts. stated ex been jurisprudence doctrine, it could have collective-entity speculation. not left to plicitly and Instead, re- Supreme Court done so. collective-entity vitality

affirmed B. doctrine, fifth amendment limited the but rejection of Nor does the Fisher Court’s exception for the con protection fifth amendment while authentication and —even documents, any voluntarily created tents of testi- production and recognizing that such individual, the collec corporate or abolish incriminatory. mony may be ac Fisher held that tive-entity doctrine. Fisher, the Su- recently, in Much more in the hands of the sheets countant’s work the col- again reaffirmed preme Court once fifth subject taxpayer were not explicit despite an lective-entity doctrine long so as privilege amendment the custodi- production by recognition that by taxpayer was not the documents of a testimonial act: an was act. incriminatory testimonial in itself compliance with the sub- prin In these cases simply affirmed the The Fisher Court though the books poena even line of cases that ciple implicit in the Bellis subpoe- kept by person have been corporate or indi whether such itself producing them would privilege. naed and his vidual, fifth amendment enjoy no permit Bellis, authentication overruling be sufficient doing, far from In so against him. their introduction explicitly reaffirmed the Bel Fisher Court of a collec principle representatives lis 14, at n. 14. 413 n. 1582 personal entity may not assert their tive recogni- explicit Fisher’s and Doe’s production of collective privilege to avoid implicit Curdo —that tion of what 408, Fisher, 413 & documents. production may have testimonial the act of 1579, 14. 14, 1582 n. n. 96 S.Ct. at repeal aspects be claimed —cannot de- collective-entity doctrine does not Rather, The the doc- collective-entity doctrine. individual upon a distinction between survives, pend trine not because depend It does corporate documents. ramifica- has no testimonial the custodian voluntarily proprietorship, a like passage records of sole expression of Curcio v. in the 118, 125, entity, any kept 1 other U.S. business records 354 Curdo, (1957) quoted text. protected the fifth amend L.Ed.2d not themselves distinguishing Austin-Bagley, holding, cites while part Doe ment. In the second Bagley approval. case with Austin recognized that the act of acting proprietor such records sole Indeed, Doe, 6. the United States be incrimi representative capacity itself (1984) Court S.Ct. 79 L.Ed.2d 552 testimonial, privileged un natory and thus holding com it considered its indicated that "representative” The der the fifth amendment. States v. pletely with both United consistent before the present us was not before context Fisher, L.Ed.2d 39 U.S. Indeed, ap Court referred the Doe Doe court. (1976) U.S. v. United and Bellis opinion, provingly to Bellis in its —Doe, (1974). See -, 104 S.Ct. at at -, two-part S.Ct. at 1240. Doe’s first, voluntarily kept holding business held upon distinction individual and answering between which I be- entities, requires that presents; is, collective since lieve this case whether amendment such a corporation collective entities have no fifth should be treated as a sole privilege privilege proprietorship, allowing waiver of that assertion of implied. privilege representatives must be Fisher’s under or whether it holding way corporation, should be treated no undercuts this distinc- as a which representative’s bar its tion. assertion of

his fifth amendment privilege, we are not VII. guidance. without some Supreme The already spoken has to this issue. collective-entity Since the doctrine of Bei- Not was a corporation one-man held in survives, only question remaining lis equally Grant lacking in the fifth applies whether it the case of a one-man corpora- other professional corporation. reasoning tion, but this holding was reaffirmed in “corporate-individual” has led to the specific Beilis in the incorporat- context of pertinent equally distinction is in this con- professional practices: ed text. The Court has stated: It is well settled that no can be activity, form of business [T]he claimed the custodian privileges, with its chartered raises a dis- records, regardless of how small the cor authority tinction when the govern- poration may Every be.... State has ment demands the examination of books. adopted now laws permitting incorpo demand, expressed That pro- lawful professional associations, ration cess, confining requirements its within increasing doctors, lawyers, numbers imposes the limits which reason in the professionals and other are choosing to case, circumstances of the corpora- conduct their business in the privilege tion has no to refuse. It cannot affairs corporate rather than the more production upon resist ground form partnership. traditional Whether cor Although self-crimination. object poration partnership, many or these inquiry may be to detect the abuses independent will be entities committed, it has to discover its viola- firms whose records are held tions of law punishment by and to inflict financial representative capacity. in a otherwise, forfeiture of franchises or it firm circumstances, applicability these papers must submit its duly books and should not turn on an insub authority constituted when demand is stantial difference in the form of the suitably made. This is involved in the enterprise. business reservation of the power visitatorial State, authority 100-01, (cita- at at 2189 National corpo- omitted) Government where the (emphasis added). tions rate activities subject the domain recognize While I that the distinction be- powers to the Congress. proprietorship tween a sole and a one-man Wilson v. United supra, 221 corporation just is as much “an insubstan- 31 S.Ct. at approval cited with tial difference in the form of the business Bellis, supra, enterprise” typical S.Ct. at as that three between 2183. We have not had called partner- to our atten and a corporation director close tion, either counsel or Supreme the majority, ship, I read the Court’s cannot why reasoning this is less authorizing us precedents relevant to obliterate corporation when the involved is a eighty years one-man the distinction of un- professional corporation. yielding case law has established.7 simple majority’s sugges- privilege. 7. The answer legitimate fifth amendment See Kast- tion, Maj. 530-31, op. igar immunity that use v. United Brown, (1972); should have been offered to is that im- United 32 L.Ed.2d States v. Frumen- munity (3d only required to, Cir.1977). as a substitute for a F.2d To obtain an Grant, has chosen Supreme Court Bellis, to draw the dicta reaffirmed PASKEL, Individually Judith on behalf treating the one-man the side of line on similarly of herself and all others situ all fifth corporation for corporation as a ated, Appellees/Cross-Appellants, may The time purposes. this the lines and discard to redraw arrived HECKLER, Margaret Secretary distinction, decision that the that is a of Health but Services, Svahn, and Human John A. Supreme Court—not Court— Commissioner, Security Admin make. Social istration, Heckler, Margaret Secretary slate, writing clean it we on a Were Services, Appel of Health and Human equate argued that should we Cross-Appellee. lant/ corporation with a professional one-man But we are not writ- proprietorship. sole Nos. 84-1060 and 84-1067. slate; rather, the instruction ing on a clean Appeals, Court of States which distin- from the Third Circuit. guishes between business forms quite proprietorships has been and sole Argued Sept. 1984. explicit, necessarily and must en- clear and compass professional corpora- the one-man July Decided 1985. analysis, majority’s tion. Under the July As Amended away entity, the collective would do rule, “corporate” any corporate officer

could claim a fifth amendment

when asked to authenticate holds,

records. as the

corporation may “take the fifth.” now degree

This no than a 180 turn from less doctrine.

established respectfully I therefore dissent. would contempt imposed by

affirm the citation

the district court. very predicate granting immunity pursuant representatives. to 18 U.S.C. or its

order certify 6003(b)(2) attorney immunity request § a United States must is for an under § likely event, the witness "has refused utility granting or lacking. any testify provide refuse to other information on immunity corporation, where that to a one-man privilege against the basis subpoenaed produce corporate self-incrimina- "one-man" is 6003(b)(2) added). (emphasis tion." 18 U.S.C. § record discloses no and where the Here, explained, Supreme as I have officials, questionable. other corporation has denied such to a

Case Details

Case Name: In Re Grand Jury Matter. Appeal of James Gilbert Brown

Court Name: Court of Appeals for the Third Circuit

Date Published: Jul 29, 1985

Citation: 768 F.2d 525

Docket Number: 84-1475

Court Abbreviation: 3rd Cir.