Appeal Right
to
7203:
Willful Failure to File Return, Supply Information, or Pay Tax: Appeal,
Right to
[81-2
USTC ¶9494]
United States of America
, Plaintiff-Appellee v. James Doyle
Rob
bins, Defendant-Appellee
(CA-6),
U. S. Court of Appeals, 6th Circuit, No. 81-1121, 4/17/81, Dismissing
the taxpayer's appeal of an unreported District Court order
[Code Sec. 7203 and 28 U. S. C. §1291]
Failure to file income tax returns: Order denying dismissal of
indictment: Appealability.--The Court of Appeals dismissed the
taxpayer's appeal, seeking review of an unreported district court order
denying his motion to dismiss an indictment for failure to file income
tax returns, because the order was not appealable, leaving the appellate
court without jurisdiction.
James
S. Brady, United States Attorney,
Grand Rapids
,
Mich.
49503
, for plaintiff-appellee. James Doyle
Rob
bins, Route 2,
Box
38
, Howard City, Mich. 49329, pro se.
Before
LIVELY, KENNEDY, and MARTIN, Circuit Judges.
This
appeal has been referred to a panel of the court pursuant to Rule 9(a),
Rules of the Sixth Circuit. After examination of the record, this panel
agrees unanimously that oral argument is not needed. Rule 34(a), Federal
Rules of Appellate Procedure.
After
carefully reviewing the district court record, it is determined that
this Court does not possess jurisdiction to review the district court's
order denying defendant's motion to dismiss the indictment charging him
with failure to file income tax returns in violation of 26 U. S. C. §7203.
Applying the Cohen considerations which militated in favor of
appealability in Stack v. Boyle, 342 U. S. 1 (1951) and Abney
v. United States, 431 U. S. 651 (1977), it is apparent that the
district court's judgment is not appealable under 28 U. S. C. §1291 or
under the collateral order doctrine. Cf.
United States
v. MacDonald, 435
U. S.
850 (1978).
It
is, accordingly, ORDERED that this appeal be and hereby is dismissed for
lack of jurisdiction pursuant to Rule 9(d)1, Rules of the Sixth Circuit.
[74-2
USTC ¶9825]Donn VonderAhe and Barbara VonderAhe, Plaintiffs-Appellants
v. Roy H. Howland, et al., Defendants-Appellees
(CA-9),
U. S.
Court of Appeals, 9th Circuit, No. 71-1982, 508 F2d 364, 11/7/74, Rev'g
and rem'g, District Court, 71-1 USTC ¶9315, CA-9. Opinion at 73-1 USTC
¶9333 withdrawn
[Code Secs. 7201 and 7206(1)]
Crimes: Tax evasion: False statements: Evidence: Injunction against:
Constitutional rights: Money damages.--A dentist and his wife
obtained an injunction against the use of any evidence IRS agents seized
from his office and home, except for certain cards and sheets that the
agents had probable cause to believe contained evidence of tax evasion
and false statements. The general search warrants pursuant to which the
searches were executed were overly broad. The plaintiffs' contention
that use of the evidence seized would violate their privilege against
self-incrimination was premature, since no proceeding had yet been
instituted. Moreover, they were entitled to have their claim for money
damages because of the agents' acts adjudicated.
One
concurrence and dissent.
Neil
F. Horton, Johnston, Klein & Horton & Solomon, 833 United Calif.
Bank Bldg., 1330 Broadway, Oakland, Claif., for plaintiffs-appellants.
Crombie J. D. Garrett, Department of Justice,
San Francisco
,
Calif.
, for defendants-appellees.
Before
MOORE, * BARNES and
ELY, Circuit Judges.
MOORE,
Circuit Judge:
Just
after 8:00 A. M., on the morning of June 16, 1970, a group of four
Special Agents of the Internal Revenue Service (IRS) arrived at the
office of Dr. Donn VonderAhe, a dentist practicing in
Fremont
,
California
. Simultaneously, a second group of three agents arrived at the home of
the doctor and his wife, Barbara, in
Newark
,
California
. Each group was armed with a search warrant issued by a United States
Commissioner. The Agents then proceeded to search or, more accurately,
to ransack both office and home and to asport practically every piece of
paper they could lay their hands on.
The
background to this rather extraordinary procedure is best portrayed
somewhat chronologically.
Dr.
VonderAhe (usually referred to herein as the "doctor")
apparently has a successful dental practice. On June 16th his office
consisted of eight rooms and a hallway. He had one or more employees who
kept his patients' records and recorded bills and payments.
The
doctor and his wife, Barbara, filed joint income tax returns. In the
early part of 1969, i.e., between early January and late March, an IRS
Agent (Holmes) made an audit of their 1966 and 1967 income tax returns.
There were made available to him six sets of records for the years in
question: (1) combined cash-receipts-cash-disbursements journal; (2)
bank statements and cancelled checks; (3) savings account passbooks; (4)
daily patient appointments book with amounts charged and amounts
collected; (5) patient cards containing dental information together with
charges and collections; and (6) cash receipts books. Agent Holmes found
that the books and records examined accurately reflected the income
reported, and recommended acceptance of the taxpayers' returns as filed.
This
recommendation was not long to endure because a telephone call from a
former employee, Lynette Bush, to IRS revealed that the doctor during
her period of employment had maintained two sets of records. This former
employee was most specific concerning the records and the location
thereof. She stated that the records of "regular" patients
were recorded on white "Banco" cards; those of
"emergency" patients on yellow sheets--subsequently green
cards. She further disclosed that checks received for services from
patients listed on the yellow sheets or green cards were hand endorsed
by the doctor and cashed by another employee.
In
the office, according to Mrs. Bush and Mrs. Van Order, another former
employee of Dr. VonderAhe, the "emergency" cards were kept in
a portable file cabinet maintained in the "opratory" room,
separate and apart from the other file cabinets (Bush, Aff., June 14,
1970) or, during Van Order's regime, in the third drawer of the cabinets
on the right side of the office.
There
were four "emergency receipt books" during the period of
employee Bush's employment, and three during employee Van Order's
tenure, which were relevant to VonderAhe's allegedly unreported income.
The books in question were described as "approximately one inch
thick with six receipts per page." When filled, they were taken to
the doctor's home.
Agent
Romano was assigned to investigate further. To him it was obvious that
if only the white card income had been disclosed to Agent Holmes, the
doctor's income would have been understated by the amount of the yellow
sheet/green card "emergency" income. At least an investigation
was in order to ascertain whether it had been reported. This suspicion
was strengthened by remarks made by another employee, a Mrs. Comegys,
who told the Agent that she and the doctor had removed the yellow sheets
and green cards from the files when the 1969 audit was pending; that the
doctor had taken these records to his home so that they would not be
available to the Examining Agent; and that the doctor had instructed her
to remain at home on the day of the audit so that she would not give any
"wrong" answers. In addition to information about the cards
and books, Mrs. Comegys stated that she had, in 1968, arranged the
opening of a Swiss bank account for her employer and had deposited a
check for $6,050 therein.
The
Search Warrant
Having
received this information, IRS was alerted to the fact that there
existed previously unexamined yellow sheets and green cards and books in
which entries therefrom had been made. There were various ways by which
these records could have been obtained. The doctor had voluntarily made
available to Agent Holmes all records of income received from his
"regular" patients. Confronted with the knowledge that IRS
knew of the withheld records, the doctor was scarcely in a position to
place the undisclosed records in a different category from the
disclosed. The Agents could have asked for them; they could have
subpoenaed them; or, if they thought that there was danger of
destruction, they could have sought a warrant. The service chose this
last course of action.
In
spite of the fact that the "things" to be seized and the
places to be searched were known to the Service with a high degree of
specificity, the warrants as they were requested and issued were, for
all practical purposes, "general warrants." The property
allegedly concealed was described as: "Fiscal records relating to
the income and expenses of Dr. Donn VonderAhe from his dental practice
and other sources since January 1, 1966, to date, including, but not
limited to dental patient cards, appointment books, combined
appointment-cash receipts books, combined cash receipts and cash
disbursements journals, business ledgers, expense records, bank ledger
sheets and statements, cancelled checks, bank savings account pass
books, records and correspondence relating to the opening of and
deposits and withdrawals from a bank account maintained by said Doctor
at the Banaue Romande in Geneva, Switzerland, plus copies of invoices
and bills sent to patients of the aforesaid Doctor."
The
grounds for search and seizure were stated as: "now and have been
used as a means of committing and constitute evidence of offenses in
violation of the provisions of the Internal Revenue laws; particularly
Sections 7201 and 7206(1) of Title 26 United States Code; and which
further comprise and constitute evidence of offenses committed in
violation of the laws of the United States within the meaning of Section
1001 of Title 18, United States Code."
There
was no allegation in the supporting affidavit of Agent Holmes that he
sought to re-audit the material listed by him as already audited and
reconciled. In the principal affidavit of Agent Romano, he states that
he has "reason to believe that the amount of fees collected from
patients during the years 1966 and 1967 whose names appeared on yellow
information sheets were intentionally segregated by Dr. VonderAhe and
Mrs. Comegys and not made available to Revenue Agent Holmes for the
audit examination of early 1969." Thus, what had been revealed
and what had been concealed had already been made abundantly
clear.
The
Execution of the Warrants The Office
According
to Dr. VonderAhe, at about 8:15 A. M., on June 16, 1970, three
(elsewhere stated as four or five) Treasury Agents forced their way into
his inner office. They apparently took over the premises, and continued
their search until 1:15 P. M. The search necessitated cancellations of
patient appointments because the Agents seized patient cards and records
and virtually were in charge of the office. The doctor alleges that he
was unable to resume his practice for approximately two weeks when most
of the original records were returned.
The
extent of the seizure may be judged by the list ("Document
Receipt") made by the Agents, which consisted of thirty-two pages
of papers and records which were carted away in cartons in a small
truck. By way of brief illustration, the Agents took the contents of the
drawers of the doctor's desk in his private office, including
correspondence relating to the purchase of property in
Bull River
,
Montana
, a U-Haul rental contract, an application for insurance, personal
letters, notes relating to the VonderAhe's planned new home, and
correspondence with an investment advisory service. Hundreds of patient
record cards were taken. The receptionist's desk was also searched.
The
Home
The
warrant enforcement technique employed by the Agents at the home was
quite similar to that used at the office. They forced their way in, made
a room by room search of the premises, searched the contends of Mrs.
VonderAhe's purse and even that of a Mrs. Perez, a visting friend. Items
were seized in an unused bedroom involving the VonderAhe's real estate
and records labeled "New House." Again, over objection, an IRS
Agent forced his way into the VonderAhe's car which was parked in their
garage and searched it. Papers taken from the garage included many
folders of patients' records, "lab slips," etc. Several
cartons of seized material were loaded into a truck and taken away.
The
oral protests of the VonderAhes were quickly followed by legal protests.
From a procedural point of view, Rule 41(e) of the Federal Rules of
Criminal Procedure was unavailable to the doctor because neither he nor
his wife had been indicted and there was no criminal case in being
against them. However, they were well aware of potential civil and
criminal consequences of the alleged concealment of records. They quite
naturally desired to cause these records to be unavailable for use by
the Commissioner or by a Grand Jury. Accordingly, they brought "an
independent civil action prior to indictment pursuant to the Court's
inherent equity power seeking return of property seized and its
suppression as evidence in any subsequent criminal proceedings."
(Applts' Br. p. 14). By this "independent equitable action"
they sought to avoid the appealability question which might have
otherwise arisen. Thus, having invoked the equity powers of the court,
they must abide by this standard. In their complaint, filed July 7,
1970, they sought (1) the return of their books and records; (2) an
injunction against the use of their property, allegedly illegally
seized, in any investigation and prosecution against them; (3) an
injunction against the use of copies or notes made from the material
seized for prosecution purposes; (4) an injunction against contacting
persons or businesses, the names of which were disclosed in the seized
material; (5) the suppression of the property seized as evidence in any
"criminal proceeding" and in any proceeding to determine the
tax liability of the VonderAhes; and (6) a hearing to be held by the
court, prior to the presentation of evidence to a Grand Jury or a
Commissioner, at which the defendants "shall prove that said
evidence was not illegally obtained." By leave of court, the
complaint was amended to assert damages suffered by the disruption to
the doctor's dental practice caused by the Agent's action in the amount
of $15,000.
The
government moved to dismiss the complaint on the grounds that (1) the
United States
had not consented to be sued; (2) the court lacked jurisdiction over the
subject matter; and (3) that the complaint failed to state a claim upon
which relief could be granted.
In
the meantime, the government had photocopied the seized records and
returned the originals.
The
District Court denied the VonderAhes' motion for a preliminary
injunction and granted the government's motion to dismiss. The doctor
and his wife appealed.
Jurisdiction
A
threshold question is posed with respect to our jurisdiction to
entertain this appeal. The government contends that we are without
jurisdiction because the decision of the district did not result in a
final order as required by 28 U. S. C. §1291. We have held that an
order dismissing an action for the return of documents and for the
suppression of evidence is final and appealable when a plaintiff, as
here, seeks recovery of copies and when no criminal action is pending. Goodman
v. United States [66-2 USTC ¶9774], 369 F. 2d 166 (9th Cir. 1966); Selinger
v. Biglar [67-1 USTC ¶9420], 377 F. 2d 542 (9th Cir. 1967). Our
finding of appealability is reinforced by United States v. Ryan
[71-1 USTC ¶9404A], 402
U. S.
530 (1971), in which the Supreme Court said: "We have thus
indicated that review is available immediately of a denial of a motion
for the return of seized property, where there is no criminal
prosecution pending against the movant. See DiBella v.
United States
, supra, at 131-32." 402
U. S.
at 533. Accordingly, we conclude that the order of the court below was
final and that we have appellate jurisdiction under 28
U. S.
C. §1291.
The
Fourth Amendment
Initially,
the search and seizure must be considered within the confines of the
Fourth Amendment. In fact, limitation to consideration of this appeal
within the confines of the Fourth Amendment is suggested by the
taxpayers themselves in arguing (Appellants' Brief, pp. 12, 13) that
"assuming the Court finds probable cause for a search warrant to
exist, the government's showing of probable cause did not justify the
extent of the searches and seizures at bar," and that "the
affidavits only justified the search for the records which the taxpayers
allegedly had withheld, the location of which an employee of the
VonderAhes had described to the Treasury Agents."
The
Fourth Amendment declares the "right of the people to be secure in
their persons, houses, papers and effects" but only against "unreasonable
searches and seizures" (emphasis supplied). Any warrant therefor
shall issue "upon probable cause" and shall describe "the
place to be searched, and the persons or things to be seized." As
to "probable cause," the district court found that "the
affidavits submitted were more than sufficient to provide probable cause
to believe that plaintiffs were violating the income tax laws."
But
the words "probable cause" are not
self-defining--"probable cause" for what? The supporting
affidavits were quite specific in describing the allegedly concealed
property, namely, yellow sheets and green cards. No facts were alleged
which showed probable cause for the issuance of a general warrant. No
charge was made that the books and records submitted to Agent Holmes
were false and that they should be subject to a re-audit. To proceed by
the "warrant" method without first seeking the desired papers
by request or subpoena should be based upon the strongest showing of
necessity but if such drastic procedure is to be availed of, it should
be strictly limited as constitutionally required. Therefore, although
there may have been "probable cause" to search for and seize
the yellow sheets and green cards for 1966 and 1967, there was no
probable cause shown for a seizure of all the doctor's dental books and
records, or his personal and private papers.
In
seeking and executing such a general warrant, the agents themselves must
assume the responsibility for its breadth. They could have restricted it
to the concealed items and thus have avoided the ransacking procedure in
which they, in executing the warrant, indulged.
There
remain for consideration specificity and unreasonableness, issues which
are subject to a similar analysis. Although the District Court noted
that "general warrants which fail to adequately specify the area to
be searched or the items to be seized have historically met with
judicial disapproval," it held that "the warrants were as
specific as practical" and while recognizing their "broad
scope," they were "not overly broad in a constitutional
sense."
What
is "overly broad" cannot be resolved in an abstract or
academic manner but only in relation to the facts, circumstances under,
and the purpose for, which the warrants were issued. The warrants here
were, in effect, general warrants. They sought all fiscal records of the
doctor from January 1, 1966 to date [June 1970] relating to his income
and expenses "but not limited to [books and records enumerated] * *
*." In short, except for the yellow sheets and green cards, this
was the identical material which had been delivered to and examined by
Agent Holmes.
The
Supreme Court has stated that there are certain permissible standards to
be applied in connection with the issuance of search warrants. Thus in Berger
v.
New York
, 388
U. S.
41, 48 (1967), the Court said:
"The
proceeding by search warrant is a drastic one," Sgro v. United
States, 287
U. S.
206, 210, 53 S. Ct. 138, 140, 77 L. Ed. 260 (1932), and must be
carefully circumscribed so as to prevent unauthorized invasions of
"the sanctity of a man's home and privacies of life." Boyd
v. United States, supra, 116
U. S.
616, 630, 6 S. Ct. 524, 532.
And
in Coolidge v.
New Hampshire
, 403
U. S.
443 (1971), the Court said:
The
second, distinct objective is that those searches deemed necessary
should be as limited as possible. Here, the specific evil is the
"general warrant" abhorred by the colonists, and the problem
is not that of intrusion per se, but a general exploratory
rummaging in a person's belongings. [Citations omitted.] The warrant
accomplishes this second objective by requiring a "particular
description" of the things to be seized.
Upon
the information available to it, the government knew exactly what it
needed and wanted and where the records were located. There was no
necessity for a massive re-examination of all records bearing on income
and expenses. Where this the law, the Commissioner, upon finding any
suspicious deficiency, could order a seizure of every such taxpayer's
records upon the mere allegation that the omission or an inaccurate
statement of one item might bespeak inaccuracies as to others which, in
his opinion, necessitates a seizure of all records, at office and home.
Important as it is to enable the government to obtain information to
assure itself of the correct reporting of taxes, it is difficult to
believe that the draftsmen of the Fourth Amendment did not insert
"unreasonable" to avoid just as an in terrorem state as
the Agents created and wreaked here.
Moreover,
just as "unreasonable" can be applied to the breadth of the
warrant, so much the more can it be applied to the manner of execution
because it is the "manner" which, as vividly illustrated by
the facts of this case, can create and constitute the prohibited
invasion. As previously mentioned, the Agents could have sought the
allegedly concealed records by other means. If they had desired to
question the accuracy of patient payments, they could have made a
patient check. All this court have occurred in an orderly way without
the sudden assault causing not only damage to the doctor's finances and
prestige but undoubtedly inconvenience and possibly pain and suffering
to the many patients who could not be treated for weeks due to the
disruption.
The
Fifth Amendment
Appellants
have addressed much of their argument to the point that the use of any
of the seized papers would be a violation of their Fifth Amendment
rights against self-incrimination. The district court held, in answer to
appellants' contention, that such records is seized under a search
warrant, would compel them to incriminate themselves, that "the
requirement that all individuals subject to tax liability keep accurate
financial records" is not sufficiently related to the investigation
of criminal activity to require the protection of the Fifth Amendment.
Two
recent cases are directly apposite to the issue addressed by the
District Court. Hill v. Philpott, 445 F. 2d 144 (7th Cir. 1971), cert.
denied, 404
U. S.
199 (1971). The facts are strikingly similar to those now before us. A
Dr. Hill allegedly kept a set of financial records referred to as
"red letter folders" separate and apart from his regular
patient records. There, as here, disclosure to the IRS came from the
doctor's former employees, who said that they had been instructed by Dr.
Hill to incinerate these particular records if any "taxman"
sought to make an investigation. Pursuant to a search warrant, agents of
the IRS searched both the doctor's office and home, indiscriminatingly
seizing as much material as was seized in this case. No criminal
proceedings were pending against Dr. Hill. Dr. Hill immediately
petitioned for the return of the seized property and its suppression on
the ground of violation of his constitutional rights--particularly under
the Fourth and Fifth Amendments. The district court denied the petition.
On appeal the majority reversed but restricted its opinion to "only
the first contention, which is based on the petitioner's privilege
against self-incrimination." Then followed a lengthy discussion and
review of cases from a Fifth Amendment self-incrimination point of view.
Judge Fairchild in dissent, assuming that the seizure was based on an
"adequately grounded warrant," wrote that
Assuming,
however, that there is a class of papers so intimately confidential and
so much a part of personhood that they ought to enjoy a superlative
privacy and be protected from seizure upon an adequately grounded
warrant, it does not seem to me that the records in question here have
the required character. They appear to have been maintained for business
and professional purposes, with the knowledge and assistance of
employees, and the manner in which they were allegedly kept and used,
made them, in a sense, instrumentalities of the tax evasion offense
claimed.
Hill
v. Philpott, supra, was
followed in point of time by United States v. Blank, 459 F. 2d
383 (1972), in the Sixth Circuit. There the search warrant was executed
on June 3, 1971, gambling records were seized on June 15, 1971, and
indictment was returned and on August 3, 1971, a motion to suppress was
filed. The district court, relying on Philpott, supra, granted
the motion and held the records to be "per se
self-incriminatory." The Court of Appeals vacated the judgment and
remanded the case for further proceedings. That court, in reaching this
result, said that: "No claim is advanced that there has been any
violation of the specific language of the Fourth Amendment" and
that since "the papers are not communicative in nature; that papers
are business records rather than personal and private writings; and that
they are on their face instrumentalities of the crime with which
appellant [Blank] is charged" they were subject to seizure under
Fourth Amendment search warrant procedures and therefore should not have
been suppressed. Blank, supra, at 387. The court rejected
"the rationale which underlies the majority decision of the Seventh
Circuit [Philpott] * * *" and noted Judge Fairchild's
dissent in Philpott wherein he "concerned himself more with
the nature of the evidence under consideration than the method employed
to obtain it" (quoting the portion of Judge Fairchild's opinion
previously quoted herein).
Nevertheless,
it would appear from the Blank opinion that the ultimate decision
as to admissibility or Fifth Amendment protection had to await such
further proof as might be adduced upon a trial. Thus, the court said:
Here,
in fact, we have no way of knowing that the instant records are
connected with the defendant beyond his counsel's statement in the
motion to suppress that they "may be" in his handwriting.
This, however, is an important fact upon which the government must at
trial bear the burden of proof and upon which, for all we know, there
may be strong dispute.
In
our opinion, appellant's Fifth Amendment contention is premature.
Resolution will depend upon facts and developments not before us at this
time. As stated, no civil or criminal proceedings are currently pending.
When, as and if such proceedings are brought, there will be ample
opportunity for the taxpayers to make appropriate objection of Fifth
Amendment grounds as the situation may warrant.
Were
we to attempt to decide the Fifth Amendment
"self-incrimination" problem at this time far more facts would
be needed for its resolution. Did the doctor waive these rights by
showing Agent Holmes all (except the yellow sheets and green cards) his
books? Were the books kept for business purposes with entries made,
possibly not by the doctor, but by third persons, actual declarations by
and against himself? What instructions, if any, did he give to his
employees? What entries, if any, did he personally make? These are but a
few of the many questions which may arise. The records might even be
placed in a "required records" category. The privilege of
practicing a profession and gaining income thereby from the public might
well not carry with it the shield of Fifth Amendment immunity. If so,
both government and appellants will have an opportunity when, as and if
the yellow sheets and green cards are offered in any proceeding,
criminal or civil, to argue the effect of 26 U. S. C. §6001.
Conclusion
The
problem here is one of resolving the equities. The government should not
be benefitted in any forthcoming actions against the VonderAhes, civil
or criminal, by using books and records illegally seized. On the other
hand, the VonderAhes should not benefit from their own acts of
concealment and thus avoid the payment of taxes legally due and also the
possible consequences of illegal concealment. Our equitable powers would
be much distorted were we to hold that the allegedly concealed records
(yellow sheets and green cards) were improperly seized.
The
VonderAhes have asked us to invoke in their favor what has become known
as the "exclusionary rule," i. e., to decree at this time that
all records seized, including yellow sheets and green cards and any
leads therefrom cannot be introduced in any proceeding, civil or
criminal against them. However, if the facts are, as represented, that
the taxpayers by their own wrong, deliberatedly concealed income and
failed to pay taxes thereon, it would seem to be the height of inequity
for the courts to enable them to profit thereby. Using equity as the
standard, the warrants as issued restricted to the yellow sheets and
green cards would have been reasonable; beyond these records they were
too broad. Although the manner of execution was quite unjustified, the
penalty of exclusion which the taxpayers would impose is equally
unjustified. Our present task is to place the government's allegedly
unlawful procedure in obtaining and executing the warrants and the
VonderAhes' allegedly unlawful concealment on the mythical scales of
justice, and observe the balance. Observing this balance (or possibly
imbalance), we believe that justice can best be achieved by reversing
the order of the District Court dismissing the complaint and upon
remand, directing the District Court to grant the injunctive relief
sought by appellants except as to the yellow sheets and green cards,
copies of which the government may retain and use subject, however, to
any all objections thereto, including objections based on the Fifth
Amendment, in any proceeding, civil or criminal, which may be raised by
the VonderAhes.
Insofar
as the complaint seeks money damages because of the Agents' acts, the
serious pecuniary loss caused thereby would appear to bring this case
within the Bivens doctrine. In Bivens v. Six Unknown Fed.
Narcotics Agents, 403 U. S. 388 (1971), the Supreme Court upheld
federal jurisdiction over such a suit and held that money damages may be
recovered for any injuries consequent upon a violation of the Fourth
Amendment by federal officials. Mr. Justice Harlan in his concurring
opinion pointed to the judiciary's "particular responsibility to
assure the vindication of constitutional interests such as are embraced
by the Fourth Amendment." Bivens, supra, at 407.
The
amended complaint seeks damages of $15,000 for the description of the
doctor's practice. Upon the facts set forth, appellants are entitled to
have these issues adjudicated. Therefore, the complaint as amended
should not have been dismissed.
Order
affirmed in part, reversed in part.
*
The Honorable Leonard P. Moore, Senior Circuit Judge for the Second
Circuit, sitting by designation.
Concurring
and Dissenting Opinions
ELY,
Circuit Judge (Concurring in part; Dissenting in part):
I
concur in my Brother Moore's majority opinion insofar as it condemns, on
Fourth Amendment grounds, the overbreadth of the warrant and the
absolutely unreasonable scope of the search. I would go further,
however, and hold in favor of the appellants as to the so-called yellow
sheets and green cards because their seizure, in my opinion, was
thoroughly corrupted by the intolerable process under which the search
and seizure were conducted. Moreover, I do not retreat from the Fifth
Amendment views originally set forth by me and which were originally
endorsed by both Judges Moore and Barnes, 1 I note at
the beginning that I see no irreconcilable conflict between my original
opinion and our court's opinion in United States v. Murray, 492
F. 2d 178 (9th Cir. 1973). In our case, the flagrant abuse of the search
and seizure process necessitated our judicial disapproval. In
Murray
, on the other hand, despite a substantial question as to whethr
a certain address book was testimonial, the seizure of the book was
properly upheld as resulting from a search incident to a lawful arrest.
Because
the original opinion written by me for a unanimous court does not wholly
conflict with the present opinion of Judge Moore, no useful purpose
would be served by now reproducing the whole of my first opinion. That
portion which remains pertinent, and to which I adhere, reads as
follows:
As
we have said, the appellants contend that the searches and seizures of
their books and records violated the privilege against compulsory
self-incrimination under the Fifth Amendment. It is clear that had the
Government attempted to acquire possession of these records and writings
pursuant to a subpoena, appellants would have been privileged under the
Fifth Amendment to refuse their production. Boyd v. United States,
168
U. S.
616 (1886); United States v. Cohen [68-1 USTC ¶9140], 388 F. 2d
464 (9th Cir. 1967); United States v. Judson [63-2 USTC ¶9658],
322 F. 2d 460 (9th Cir. 1963). The District Court, however, ruled that
the use of a warrant, rather than a subpoena, removed "the
impermissible aspect of compulsion" from these seizures. It
reasoned that, under the warrant procedure, appellants were "merely
passive agents not required to do anything that would tend to be
incriminating." No authority was cited for this proposition, but
the reasoning is consistent with that recently adopted by our Brothers
of the Sixth Circuit in United States v. Blank, 459 F. 2d 383,
385 (1972), cert. denied, 409 U. S. 887 (1972).
"We
believe that there is a valid and important distinction between records
sought by subpoena and records sought by search warrant. The subpoena
compels the person receiving it by his own response to identify the
documents delivered as the ones described in the subpoena. The search
warrant involves no such element of compulsion upon an actual or
potential defendant."
See
8 J. Wigmore, Evidence §2264 (McNaughton rev. 1961).
We
cannot accept the substantive merit of this approach. One need ask only
what would happen if the addressee of a warrant refused to allow the
search to be conducted to appreciate the magnitude of compulsion
produced by a search warrant. Without the slightest hesitation his doors
would be broken down, he would be placed under arrest, and the desired
material would be seized. How the imminence of such force can be
considered as anything other than compulsion escapes us. In this
respect, we are in full agreement with the result reached by our
Brothers of the Seventh Circuit as expressed in Hill v. Philpott,
445 F. 2d 144, 149 (7th Cir. 1971); cert. denied, 404 U. S. 991
(1971), cited with approval in Couch v. United States [73-1 USTC
¶9159], 409 U. S. 322, 330 (1973):
The
facts in Hill are strikingly similar to those at bar. The
Affidavits in support of the warrant alleged that a doctor maintained
two sets of financial records for two categories of patients and that he
had instructed an employee to destroy one set "if any tax man
visited the office to make an investigation. . . ." 445 F. 2d at
145. The Government, as in the case at bar, argued that because the
records were obtained by a search warrant, the only question was whether
the warrant complied with the Fourth Amendment.
"In
short, the government takes the position that once the validity of a
search is established under the Fourth Amendment--and by that fact
alone--the Fifth Amendment is not and cannot be violated."
445
F. 2d at 146.
Relying
on Boyd v.
United States
, infra, and Gouled v.
United States
, supra, the Hill court rejected the Government's argument.
It read Warden v. Hayden, 387 U. S. 294 (1967), as overruling
only Gouled's fourth amendment ("mere evidence rule")
pronouncements, leaving intact the Fifth Amendment holding that personal
books and records are privileged against seizure by search warrant. In
such a situation, the Hill court pointed out, the accused remains
the unwilling source of the evidence:
"The
jury knows the books and records belong to the defendant and the entries
he has made therein speak against him as clearly as his own voice. This
seems particularly true in a prosecution for violation of the income tax
laws."
445
F. 2d at 149.
Further,
the suggestion that the presence of a search warrant, in and of itself,
removes the impermissible aspects of compulsion, is particularly
untenable in light of several Supreme Court cases describing the form of
compulsion covered under the Fifth Amendment. In Boyd v. United
States, 116
U. S.
616 (1886), the Supreme Court considered a customs statute that required
the defendant to produce certain documents upon pain of an adverse
finding of fact if he failed to obey. The Supreme Court, considering the
Fourth and Fifth Amendments as "almost running into each
other," struck down the statute:
