UNITED STATES of America, Plaintiff-Appellee, v. Richard W. (Dick) RYLANDER, Sr., Defendant-Appellant.
Nos. 80-4594, 80-4595.
United States Court of Appeals, Ninth Circuit.
Decided Sept. 4, 1981.
Submitted Feb. 17, 1981.
656 F.2d 1313
Commodore also contends that the district court‘s review of the magistrate‘s first report was defective because it was required to but did not hear all of the evidence itself before acting on the case. This argument is based on United States v. Bergera, 512 F.2d 391 (9th Cir.1975), in which the court held that protection of the integrity of the fact finding process requires that, before the district court may enter a judgment that disregards the recommendation of a magistrate who has heard all of the evidence, the district court must itself rehear all of that evidence. Id. at 393-94.
Commodore maintains that Bergera governs this case because remand is tantamount to reversal. We cannot agree. The district court did not substitute its judgment for that of the magistrate on questions of witness credibility and weight of the evidence, and it did not adopt findings that differed from those presented by the magistrate. Rather, when it determined that the first report was deficient in some undisclosed respect, it called upon the magistrate who had heard the evidence to reconsider his conclusions. The integrity of the fact finding process was in no way implicated in this proceeding; indeed, the district court followed a course of action well calculated to protect it. It would be a most inefficient practice to compel a district court to hear all of the evidence itself before remanding to the magistrate, and we decline to mandate such a practice.
III
Finally, Commodore argues that the district court‘s review of the magistrate‘s first report was deficient because it applied an incorrect standard of review. Relying on
In any case,
Commodore thus has presented no meritorious arguments for reversal of the judgment entered in this case. Accordingly, that judgment is AFFIRMED.
Joseph F. Harbison, III, Mandich, Clark & Barker, Sacramento, Cal., for defendant-appellant.
Michael L. Paup, Charles E. Brookhart, Washington, D.C., for plaintiff-appellee.
Before WALLACE, FLETCHER and NORRIS, Circuit Judges.
FLETCHER, Circuit Judge:
This is an appeal from an order holding Rylander in civil contempt for failure to comply with an IRS summons. The court below ordered Rylander incarcerated until he produces the records described in the summons or testifies as to why he cannot do so. Rylander appeals pursuant to
I
FACTS
These contempt proceedings arose out of an IRS attempt to investigate the tax liability of two corporations, Rylander and Company Realtors, Inc., and Affiliated Investments and Mortgage Company. The IRS issued a summons to Richard W. Rylander, Sr., as president of the corporations, ordering him to testify and to produce certain records of the corporations. The IRS petitioned the district court for judicial enforcement of the summons,
Rylander appeared on February 4, but brought no records with him. He stated that he did not have any of the records called for by the summons, and that he had therefore complied with the summons as far as he was able. He then refused to answer any further questions.
The IRS petitioned for enforcement of the court‘s order, and the court issued an order to show cause why Rylander should not be held in contempt. Attempts to serve Rylander with this order and several subsequent orders to show cause were unsuccessful. Finally, on May 27, 1980, the court determined that Rylander was avoiding service and issued a bench warrant for his arrest.1
On October 8, 1980, the court held a show cause hearing to determine whether Rylander should be held in contempt for failure to obey the order enforcing the summons.2
The court concluded that, while inability to comply with the summons would constitute a defense to the contempt charges, Rylander had the burden of showing that he was unable to comply and had failed to meet his burden. The court found Rylander guilty of civil contempt, and ordered him
remanded to the custody of the Attorney General unless and until he purges himself of the civil contempt charge by either: (1) Complying with the Court Order to produce the documents; or (2) Testifies [sic] why he cannot produce the documents.
At this point, Rylander stated that he wished to purge himself of the contempt by testifying as to why he could not produce the documents. The government responded that it intended to cross-examine Rylander on his testimony. The court then continued the proceedings until the following day so that counsel could be appointed to represent Rylander. The next morning Rylander submitted a sworn “Oath in Purgation of Contempt” stating that he did not have any of the records called for by the IRS summons. Recognizing that Rylander‘s fifth amendment rights might be involved, the court vacated its contempt order and continued the proceedings until October 23, 1980 to give counsel an opportunity for further briefing.
On October 23, Rylander took the stand and testified that he did not have the records. When asked where the records were, he declined to answer on fifth amendment grounds. The court then reinstated its order of October 8, holding Rylander in contempt and setting the same purging conditions. Incarceration was suspended pend
II
DISCUSSION
The purpose of a civil contempt sanction is to compel compliance with a court‘s order. United States v. Powers, 629 F.2d 619, 627 (9th Cir. 1980); United States v. Asay, 614 F.2d 655, 659 (9th Cir. 1980). If compliance is impossible, a contempt sanction can serve no purpose. For this reason, inability to comply is generally recognized as a defense to a charge of civil contempt. Asay, 614 F.2d at 660; see United States v. Hankins, 565 F.2d 1344, 1351-52 (5th Cir. 1978); United States v. Rizzo, 539 F.2d 458, 465-66 (5th Cir. 1976).4 In this case, the trial court‘s contempt order was designed to compel Rylander to produce the documents covered by the IRS summons. Rylander has claimed that he is unable to comply, but has put forth no evidence other than his own sworn statement in support of his claim. In order to determine whether Rylander was properly held in contempt, we must therefore decide two questions: First, who has the burden of proving Rylander‘s ability or inability to comply with the summons? And second, has that burden of proof been met? Our analysis is, of course, colored by our recognition that Rylander has asserted what appears to be a bona fide fifth amendment claim.5
A. Res Judicata.
As a preliminary matter, we must consider the government‘s contention that at the time of the contempt hearing, Rylander was foreclosed from asserting that he did not have the documents. In the government‘s view, Rylander could have asserted this defense during the summons enforcement proceeding. Because he failed to do so, the government argues that the enforcement order is res judicata on the issue of whether Rylander actually had the documents. We disagree. As the government itself points out, enforcement proceedings under
B. Burden of Proof.
In a civil contempt proceeding, the proof of contempt must be clear and convincing. United States v. Powers, 629 F.2d 619, 626 n.6 (9th Cir. 1980); United States v. Rizzo, 539 F.2d 458, 465 (5th Cir. 1976). To make a prima facie showing of contempt, however, the government need prove only that the defendant has failed to comply with a valid court order. It need not prove that the defendant is able to comply. As we stated in NLRB v. Trans Ocean Export Packing, Inc., 473 F.2d 612, 616 (9th Cir. 1973) (citations omitted),
although inability to comply with a judicial decree constitutes a defense to a charge of civil contempt, the federal rule is that one petitioning for an adjudication of civil contempt does not have the burden of showing that the respondent has the capacity to comply. The contrary burden is upon the respondent. To satisfy this burden the respondent must show “categorically and in detail” why he is unable to comply.
We view Trans Ocean as imposing on the defendant a burden of production. This burden is normally satisfied when the defendant produces sufficient evidence of his inability to comply to raise a question of fact. Texas Department of Community Affairs v. Burdine, 450 U.S. 248, 255 & n.8 (1981); see United States v. King, 587 F.2d 956, 964-65 (9th Cir. 1978). The burden of persuasion remains on the government, but what may be required to sustain the burden varies according to the evidence produced by the defendant. Initially, the government need persuade the court only that the defendant has failed to comply with a valid court order. Once the defendant has produced detailed evidence regarding his inability to comply with the order,7 the government has the additional burden of persuading the court that the defendant actually is able to comply. Cf. United States v. Hearst, 563 F.2d 1331 (9th Cir. 1977), cert. denied, 435 U.S. 1000 (1978) (in criminal case, government has burden of disproving only those defenses which are actually raised).
Rylander asserts that he cannot “show ‘categorically and in detail’ why he is unable to comply” without incriminating himself. He argues that application of the Trans Ocean rule to his case would therefore violate his fifth amendment rights. No fifth amendment claim was involved in Trans Ocean, so the court had no opportunity to consider whether the rule it announced could constitutionally be applied in cases such as this one.8 We now conclude that it cannot, and that if Rylander‘s fifth amendment claim is valid, his rights would be violated if he were required to produce categorical and detailed evidence demonstrating his inability to comply with the court‘s order enforcing the summons.
We do not mean to suggest that a defendant in Rylander‘s position can simply stand mute and force the government to come forward with proof that the defendant is able to comply with the court‘s order. It is clear that when the defendant gives no indication that he cannot comply, the government need prove only his noncompliance. McPhaul v. United States, 364 U.S. 372, 378-79 (1960); Trans Ocean, 473 F.2d at 615-16; United States v. Hankins, 565 F.2d 1344, 1351-52 (5th Cir. 1978). We therefore hold that when a court order requires the production of documents, the defendant must either produce the documents or state under oath that they are not in his possession or under his control. United States v. O‘Henry‘s Film Works, Inc., 598 F.2d 313, 318 (2d Cir. 1979). Although the defendant would ordinarily have the burden of producing detailed evidence regarding his inability to comply, Trans Ocean, 473 F.2d at 616, he cannot be forced to produce such evidence if he properly claims that his testimony as to the whereabouts of the documents might be incriminatory. Curcio, 354 U.S. at 123-25; O‘Henry‘s Film Works, 598 F.2d at 318.
When the defendant has made a bona fide fifth amendment claim, his statement that the documents are not in his possession or under his control is sufficient to satisfy his burden of production. The burden then shifts to the government to produce evidence showing that the documents in question actually exist and are in the defendant‘s possession or under his control. United States v. Hansen Niederhauser Co., 522 F.2d 1037, 1040 (10th Cir. 1975); see United States v. Fleischman, 339 U.S. 349, 353-55 (1950). Although relevant, inferences that the records sought are of a type ordinarily kept by corporations, and that a person in the defendant‘s position would ordinarily have control over such records are not adequate to meet the government‘s burden of proof.
Applying the standard we have articulated above, we hold that if Rylander‘s fifth amendment claim is valid, his statement that the documents were not in his possession or under his control was sufficient to meet his burden of production. We must remand for the district court to make a finding concerning the validity of Rylander‘s fifth amendment claim. Davis v. Fendler, 650 F.2d 1154, 1159-60 (9th Cir. 1981); United States v. Neff, 615 F.2d 1235, 1239 (9th Cir.), cert. denied, 447 U.S. 925 (1980). If the court finds that Rylander‘s fifth amendment claim is valid, the government will have an opportunity to show that the summoned records are in Rylander‘s possession or under his control. The court should permit the government to introduce additional evidence in order to meet its burden. At this stage of the proceedings, however, we must conclude that the government has not met its burden of showing by clear and convincing evidence that Rylander is in contempt. The order of the court below must therefore be reversed.
REVERSED AND REMANDED.
I believe the majority decides, unnecessarily, a novel Fifth Amendment question, yet fails to address squarely a nonconstitutional issue that I believe is dispositive of this appeal.
I agree with the majority that the defendant carries the initial burden of production on the issue of his inability to comply with a summons to produce documents, which, as the majority notes, is a defense to a charge of civil contempt. I also agree that once this initial burden is met, the government has the ultimate burden of persuading the court that the defendant is able to comply.
Where I have difficulty with the majority is its failure to analyze whether Rylander‘s sworn statements were sufficient to meet his burden of production. The majority gives Rylander credit for nothing more than a general denial that he had any of the records called for by the summons, when in fact his response was much more detailed. In his oath of purgation, Rylander stated:
I know not the location of any such records, if any there be, or that any such records, if any there be, are in any way under my control or supervision or that I have in any way placed such records, if any there be, in the hands of other persons to hold for me. I further swear an oath that I have no intent, plan or purpose to withhold any such records, if any there be, from the Court....
In my view, such a detailed statement denying under oath knowledge of the location of any such records or that any such records are in his possession or control should be sufficient to put into issue defendant‘s “inability to comply” defense, shifting the burden of going forward back to the government. To require him to produce more evidence runs a serious risk of threatening a person with imprisonment for failure to do what may be difficult if not impossible for him to do, i. e., adduce evidence, beyond his own denials, to prove a negative—the nonexistence of the subpoenaed records or his lack of possession or control of such records. Cf. Battaglia v. United States, 653 F.2d 419 (9th Cir. 1981) (in a contempt proceeding for failure to answer questions before a grand jury, defendant‘s testimony that he did not remember the events in question is sufficient to meet his burden of production on the issue of inability to comply).
Like the majority, I agree that the case should be remanded to give the government an opportunity to carry its burden of persuasion that Rylander has the ability to produce the records. To be sure, in attempting to carry that burden the government may question Rylander concerning the existence of the records and any knowledge he may have of their whereabouts.1 Rylander may again decline to answer the questions on Fifth Amendment grounds, leaving it to the trial judge to determine whether his assertion of the privilege is bona fide. But there is no need to decide now what the majority seems to hold, i. e., that a defendant who fails to satisfy his burden of production on his inability to comply, may effectively carry that burden by claiming the Fifth Amendment privilege.
NORRIS, Circuit Judge, filed a concurring opinion.