Fisher v. United States – Oral Argument – November 03, 1975

Media for Fisher v. United States

Audio Transcription for Opinion Announcement – April 21, 1976 in Fisher v. United States

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Warren E. Burger:

We will hear arguments next in 74-18, Fisher against the United States and 611, United States against Kasmir and others.

Mr. Wallace, you may proceed whenever you are ready.

Lawrence G. Wallace:

Mr. Chief Justice and may it please the Court.

These consolidated cases present a factual variation on this Court?s decision three terms ago in Couch against the United States.

Couch involved enforcement of an Internal Revenue summons, seeking to secure a taxpayer?s records in the possession of her accountant.

Here, by contrast, we are concerned in both cases with the accountant?s own records, reflecting his work product in preparing tax returns for the taxpayers.

In each of these cases, the records were in the accountant?s possession when the Internal Revenue Service special agents first indicated to the taxpayers that they wish to investigate their tax returns.

In each instance they have been accountant?s possession for at least several years, and in one case dating back to 1959 and it was in both cases, only after the initial investigative contact between the agents and the taxpayers, that the taxpayers hired the attorneys who now have possession of the records, and the accountants were requested to deliver the records to the taxpayers who then handed them over to their attorneys.

In one instance, within about five minutes and in the other instance in twelve days.

The Internal Revenue summonses were issued shortly thereafter to the accountants and the attorneys requesting the records and the testimony of the accountants about the records.

There are slight differences in the records involved in the summonses in the two cases, but in both instances, they are records from the accountant?s files, working for the taxpayer in helping to prepare his income tax returns and compiling other financial information for him.

Upon refusal of the accountants and the attorneys to comply with the summons, these enforcement proceedings were brought, and in each case, the Fifth Amendment privileged against self-incrimination was asserted on behalf of the taxpayers.

In the Third Circuit case, Fisher, the taxpayers intervened to assert the privileges for themselves.

In the Fifth Circuit case, Kasmir, the taxpayer?s attorneys sought to assert it on their behalf.

Both District Courts found that the records were still owned by the accountants and rejected the claim of Fifth Amendment privilege on the merits, and ordered enforcement of the summons.

The District Court in the Fisher case summarized it findings on page A7 of the appendix to the petition as follows.

The facts in the instant case as presented before this Court, demonstrate that the papers were and are the property of the accountant.

They only left his possession after the taxpayer learned of the investigation.

The transfer of the papers seems to indicate that this was an attempt to thwart to Government?s investigation.

And much the same could of be said of actual situation in Kasmir, where the time span was even shorter between the call of the special agent and the transfer of the papers to the taxpayer and then on to the attorney.

The Court of Appeals for the Third Circuit sitting en banc affirmed the enforcement order with one Judge dissenting.

A panel of the Court of Appeals for the Fifth Circuit reversed the enforcement order in that case, again, with one Judge dissenting.

Our starting point in analyzing the problem here is that these materials sought in the summonses would not be subject to a claim of the privilege against self-incrimination while in the accountant?s possession.

This follows a fortiori from the holding in Couch, which held that even papers belonging to the taxpayer would not be subject to a claim of the privilege while in the non-transitory possession of the accountant, and it also follows from this Court?s opinion in California ers and other cases, holding that there is no privilege against self-incrimination with respect to third party records as production is sought from third persons.

And so the question becomes whether they are transferred to the taxpayer in these circumstances, created a right to resist their production on the ground of the privilege against self-incrimination, where that right otherwise would not have existed and there is a further question, which I think is a less substantial one, of whether the subsequent transfer to the attorney affected the right in any way.

In the only other post Couch case dealing with this question, the transfer was handled the other way and that is in the Beattie case, which we have reproduced with the convenience of the court and the appendix to our reply brief in the Kasmir case.

That is a Second Circuit decision, dealing with an almost identical factual situation, except that there they decided to have the records transferred from the accountant through the attorney to the taxpayer and the taxpayer now has the them in his possession, rather than the other way around, but basically the same issues are involved.

Now, we believe that the Court of Appeals for the Third Circuit and the Court of Appeals for the Second Circuit in Beattie were correct in rejecting the claim of privilege here, based on really two lines of cases supporting their view.

The first are the cases dealing with what are essentially third party records, in the possession of the claimant of the privilege.

Those cases have in the past involved largely organizational records, such as corporate records, labor union records, partnership records in the most recent case.

Lawrence G. Wallace:

The line of authority starts with Wilson against the United States and goes through Wheeler, Grant, White and finally Bellis, a recent decision of the Court, and we have developed those cases in our brief.

In essence, they hold that the privilege against self-incrimination being an intimate and personal right, maybe applied only to one?s own personal papers.

William H. Rehnquist:

You are talking now simply about a subpoena to produce a non-testimony in connection with —

Lawrence G. Wallace:

That is correct, in resisting a subpoena to produce the papers.

Those cases hold that an individual in custody of the papers can invoke the privilege only with respect to his own personal papers, not with respect to other papers whose essential characters, the expression that has been used in the case is ?non-personal,? even though they are rightfully in his possession and in several of these cases even though he has a claim of title to them.

In fact, the Grant case involved a claim of exclusive title by the sole shareholder of a dissolved corporation.

The Bellis case also involved a claim of co-ownership of the records, but because the records were not the personal papers of the individual claimant, it was held that the principle of the Boyd case does not apply.

It seems to us that the result reached by the Third Circuit and the Second Circuit here follows a fortiori from these cases, since here there could not even be a claim of ownership asserted.

In both instances, the District Court found that the papers were still owned by the accountant and the Court of Appeals did not disturb those findings.

There was some evidence to the contrary in one of the cases, but it was properly rejected.

Byron R. White:

Mr. Wallace, do you think the accountant would be entitled to a return of those papers if he made a demand for them?

Lawrence G. Wallace:

Well, we think that is the law of the States involved, yes, Mr. Justice.

Byron R. White:

That is your position that —

Lawrence G. Wallace:

That the accountant does have a superior proprietary claim if he should choose to assert it.

In the absence of express contract specifying otherwise the accountant?s records and work papers belong to the accountant rather than to his client.

But we do not think the criterion in these case really rests on whether the possession is rightful, whether the accountant has acquiesced in the taxpayer?s possession of the records or whether he has demanded them back.

It seems to us that under the Court?s decision, the question is whether these are the personal papers of the individual seeking to resist producing them.

Otherwise, you get into the situation referred to many years ago by Mr. Justice Holmes in matter of Harris, of use of the privilege against self-incrimination as a method of gathering evidence that could then be immunized from legal process.

As he put it in that case, the right not to be a witness against one?s self is not a right to appropriate property that may tell one?s story, but this was said in the context of a question of who has the superior proprietary right as between a rupt and the trustee in bankruptcy.

As many of these aphorisms by Mr. Justice Holmes, we think the legal principle cuts much deeper and indeed goes to the heart of the distinction under our system between an inquisitorial and an accusatorial system, which is as the Court has recognized one of the functions of the privilege against self-incrimination.

One of the purpose is, the basic policies of the privileged, as recited in the Murphy against Waterfront Commission and other cases, is to assure that we will have an accusatorial system of justice in which instead of extracting incriminating information from the accused’s own lips, from the accused himself, evidence will be gathered from other sources.

This line would become, it seems to me irretrievably blurred, if an anticipation of valid legal process, whether it is an internal revenue summons, a grand jury subpoena or a trial subpoena, the person under investigation could go out and gather up the evidence that is supposed to be used in place of forcing incriminating statements from his own lips and immunize that evidence by claiming the privilege against self-incrimination.

William H. Rehnquist:

Does it make any —

Lawrence G. Wallace:

It changes the function.

William H. Rehnquist:

Does it make any difference if the accountant?s work papers were based on the taxpayer?s own personal records?

Lawrence G. Wallace:

We do not believe so, Your Honor because this is not a privileged communication between the taxpayer and the accountant as the Court recognized in Couch.

We see very little difference, I mean, obviously the accountant?s information has to be an information that the taxpayer has given him in one way or the another.

Whether it is verbally or in writing, so long as it is a non-privileged disclosure, it seems to me that that information as reflected in the accountant?s records is beyond the reach of the taxpayer?s proper scope of his privilege against self-incrimination.

Lewis F. Powell, Jr.:

Wallace, let us assume for the moment that the only records involved were taxpayer?s records.

For example his checkbook, let us assume we are dealing with a checkbook only, the stubs and canceled checks and they were turned over to the accountant and they were the subject of the subpoena, they were in the hands of the accountant, what would your position be?

Lawrence G. Wallace:

Well, I doubt that we will have a finding in these cases then that the records belong to the accountant.

They would — and if they were the taxpayer?s own papers of which the accountant had returned to the taxpayer then there would at least be a much more substantial basis for assertion of the claim whether there would be some impropriety because of the fact that the investigation was already underway, I think could be argued.

But in the absence of that factor, it seems to me that private papers in the hands of the taxpayer are the kind of thing that the Boyd case is about and in —

Lewis F. Powell, Jr.:

If the accountant has done nothing, but tabulated statistical data, without any analysis, so that the accountant?s yellow pad notes for example are nothing more than an addition perhaps of check stubs, would the mere transposition from the taxpayer?s document to the yellow pad of the accountant be controlling —

Lawrence G. Wallace:

We think it is —

Lewis F. Powell, Jr.:

— without any analysis of creative work by the tax — by the accountant?

Lawrence G. Wallace:

I would — I would answer that yes, Mr. Justice, just as the accountant could be put on the stand and required to testify from his memory of what figures were disclosed to him.

Harry A. Blackmun:

Would you say that, Mr. Wallace?

Lawrence G. Wallace:

If he could remember them, if you had an accountant with a photographic memory, he might certainly remember some totals, which might —

Harry A. Blackmun:

Just suppose — well, suppose it was a diary of the taxpayer, in which he recorded all his gambling and other illegal transactions, and that is what it was from which the accountant worked on his yellow pad?

Lawrence G. Wallace:

Well, any record that the accountant has made even if it reflects illegal —

Harry A. Blackmun:

No matter how incriminating the taxpayer?s own document maybe?

Lawrence G. Wallace:

If the taxpayer has chosen to disclose this information in a non-privileged communication, I do not see any basis for resisting the testimony of the person to whom it was disclosed in whatever form and that person can call upon his own record —

Harry A. Blackmun:

If as if he has written a letter or the accountant (Inaudible) called him on telephone?

Lawrence G. Wallace:

I think all of those cases are the same for purposes of the privilege and the policies underlying the privilege —

Harry A. Blackmun:

Would you regard it as any different because the letter was written to the lawyer, or the diary was given to the lawyer?

Lawrence G. Wallace:

We would not, Your Honor and we do not believe that in anticipation of legal process, documentary evidence of this sort can be gathered up whether by purchase or by persuasion or any other way and immunize the proper legal process.

Now, the other line of cases that also supports the holding below of the Third Circuit en banc and the holding of the Second Circuit in Beattie, is —

Harry A. Blackmun:

May I just get back to that question for a moment Mr. Wallace?

I take it if this communication were addressed directly to the lawyer, not to the accountant and turned over by the accountant to the lawyer, you might have a different case?

Lawrence G. Wallace:

Well, there-there be a question of attorney-client privilege —

No different way (Inaudible) lawyer-client difference?

Lawrence G. Wallace:

I think so, Your Honor.

Although in the privilege relationship between the taxpayer and the lawyer, there is a basis for saying that the taxpayer retains constructive possession of his papers turned over to the lawyer for purposes of preparing the legal defense that is not a non-privilege disclosure, it seems to us quite a different case.

The other line of authority that supports the Third Circuit?s holding here is the Schmerber, Warden against Hayden, Wade, Gilbert, Dionisio, Marron line of authority.

The leading case in modern times being Schmerber, which limits the privilege to testimonial or communicative compulsions, and the Boyd principle is described then in Schmerber as being a principle which protects responses, which are themselves communications.

Here, the taxpayer can comply with the subpoenas? by furnishing the accountant?s records without making any incriminating disclosure, in doing so.

It is up to the accountant to make the meaningful to authenticate and to verify their accuracy in some way.

They have no evidentiary significance in the absence of that verification or as Judge Friendly, analyzed to this point, for the Second Circuit in the Beattie case on page 10A of the appendix to our reply brief, ?However, in order to bring a case of compelled production of papers within the privilege, the process must illicit not simply responses which are also communications, but communicative responses tending to incriminate.

It is here that the taxpayer?s argument breaks down.

Lawrence G. Wallace:

By responding to the summons in this case, the taxpayer would not be admitting the genuineness, correctness or reliability of the accountant?s work papers.

He would be admitting only his present possession of them effect of no-significance in a criminal trial for filing false returns.?

William H. Rehnquist:

What if the Government directs a subpoena to me, requiring a production of some counterfeit plates or counterfeit money that I have made, might that be a different question?

Lawrence G. Wallace:

It might indeed, and I think often whether your response to the subpoena would have evidentiary significance, would depend on how the subpoena is drafted.

William H. Rehnquist:

Or the elements of the crime being investigated?

Lawrence G. Wallace:

Yes, yes, Your Honor.

It is certainly two different cases whether the results would be different, if you were asked for the weapon you have used in committing a certain crime on a certain day, or if you are asked for a revolver with a particular description known to be on your possession for which you have a license.

I do not — we do not need in this case to decide that there are two different results, but it is certainly two different cases with respect to the privilege.

Warren E. Burger:

What if the counterfeiter turns the illegal plates over to his lawyer or a murderer turns the murder weapon over to his lawyer, did you — does that find that answer lurking in anything you have said —

Lawrence G. Wallace:

[Laughter] Well, we have take the position with respect to these documents that turning them over to the lawyer does not increase or diminish the ability of the taxpayer to claim the privilege.

Warren E. Burger:

Well, there you will go back to Boyd where the language quoted the English Judge and described papers as man?s dearest possession and you say that would not necessarily apply to counterfeit plates?

Lawrence G. Wallace:

We certainly do not think that turning them over to the lawyer would give a right to resist their production that would not otherwise exist.

Otherwise, the lawyer would become a sanctuary for incriminating evidence repository for it, a way of taking it out of circulation and making it unavailable to legal process.

Warren E. Burger:

But say it is a deposit box, something of a sanctuary too, would it not?

Lawrence G. Wallace:

Yes.

Warren E. Burger:

Or say for the man?s own home, the fact that it is a sanctuary does not really —

Lawrence G. Wallace:

Well, this sanctuary —

Warren E. Burger:

— (Voice Overlap) another person, is it not?

Lawrence G. Wallace:

If the privilege were extended to immunize it for legal process such as a search warrant or a subpoena, merely because it had been given to the lawyer, so that it would be unavailable for trial or for grand jury proceeding or what have you, that seems to us to be an improper extension of the lawyer-client relationship.

At least with respect to documentary evidence which is all we have addressed here, tuning over to the lawyer should not create any privilege that otherwise did not exist, with respect to resistance — to legal process demanding production of the documents.

Any disclosure to the lawyer by the client would be within the attorney-client privilege, but we are dealing here with documents that were made prior to the beginning of the attorney-client relationship and the reflect is not privileged disclosures of the taxpayer to his accountant, not disclosures to the lawyer.

If I may, I will reserve the balance of my time for rebuttal.

Warren E. Burger:

Very well.

Mr. Goodfriend.

Robert E. Goodfriend:

Mr. Chief Justice and may it please the Court.

As we understand the Government?s argument in this case, they say that the privilege is unavailable to the taxpayer here, basically for four reasons.

One, they say the taxpayer did not own these papers; two, he was not the author of them; three, he did not maintain them in sufficient secrecy, that argument is not made explicitly, but the quotation from the language from Couch about the expectation of privacy is relied on.

And Finally, they rely on this doctrine which is explained more fully by Judge Friendly in the Beattie decision, that there is in effect no incriminating act of production here, and therefore, production of the records they say will not incriminate the taxpayer.

That premise, as I understand it, that theory is based on the notion that the privilege does not protect the writing itself, but rather the privilege insofar as applied to documentary evidence is based upon the testimonial act of production.

We take issue seriatim with each of these arguments.

Robert E. Goodfriend:

First, we say that this Court has held in Couch and in White that ownership, that to the tie the privilege to ownership is a meaningless — is to draw a meaningless line.

And in the White decision the Court said, that the papers in effect which the privilege protects must be the private property of the person claiming the privilege or at least in his possession in a purely personal capacity.

Certainly admitting the possibility of the application of the privilege to papers that are not owned by a person.

Now, before this argument, my colleague and I investigated something that was not — has not been hereto before investigated at any point in this case.

Namely, what is the basis in common law for saying that accountant?s work papers are in fact the property of the accountant.

Now, I went back and among the very few cases, I was able to find, was a case, a Massachusetts case of Ipswich Mills versus Dylan in 19 —

It is in the brief?

Robert E. Goodfriend:

It is not in the brief, Your Honor.

It is a —

[Inaudible]

Robert E. Goodfriend:

It appears at 53 ALR 792 and in that ca —

It is an old-timer?

Robert E. Goodfriend:

Excuse me?

It is an old-timer?

Robert E. Goodfriend:

It is an old-timer, Your Honor, and I have —

Ipswich what?

Robert E. Goodfriend:

Ipswich Mills versus William Dylan.

One of the few cases I could find directly on the property, the common law property concepts involved in this case and as best as I could tell, accountant?s work papers are owned by the accountant because the paper upon which his computations are made is owned by the accountant before he applies his functions or applies the figures to them.

As the Court there said, the paper on which the computations were made belong to them, that is the accountants.

They were not employed to make these sheets.

The sheets were merely the means by which the work for which the defendants? were employed might be accomplished.

The title to the worksheets remained in the defendants? after the computations were made.

In the absence of an agreement that these sheets were to belong to the plaintiff, or were to be held for it, they were owned by the defendants, that is the accountants.

Now, we submit to this Court that the Court meant what it said in the Couch case when it stated that to tie the privilege to a concept of ownership is to draw a meaningless line.

And that this fact illustrates it because the concept of ownership, a great constitutional privilege should not turn on a question as privilege as who owned the paper prior to the performance of the accountant?s functions, nor we submit; will anything be accomplished in this Court if that ownership concept is adopted, since all that will be required to alter to outcome of any case will be a prior agreement between the client and his accountant that the work papers will be owned by the client when the work is done, as we understand the common law concepts of ownership as applicable to this situation.

We also —

Warren E. Burger:

Conceivably — conceivably some clients might not want that ownership because of the burdens that would carry with it, is not that so?

Robert E. Goodfriend:

Why would there be burden to who owned the accountant?s work papers?

I do not see it — see the problem.

I mean, you just take them home if you — if you want them, you put them in a drawer if you do not, you just —

Warren E. Burger:

I was merely suggesting that that might be the attitude of the client?

He does not want responsibility for how —

Robert E. Goodfriend:

In that event —

Warren E. Burger:

— the accountant?s arrives at his conclusions because he wants to use as a shield, the fact that the accountant has taken the responsibility, which conceivably in many instances might shelter him from criminal liability, by reason the lack of intent?

Robert E. Goodfriend:

I see.

Yes, that it — would his — would shifting the ownership though of the work papers necessarily — necessarily change the question of who is liable?

Warren E. Burger:

I was just addressing myself to your suggestion that this could be avoided very easily by these contractual arrangements?

Robert E. Goodfriend:

Well —

Warren E. Burger:

But it is not quite that simple perhaps?

Robert E. Goodfriend:

I am suggesting that a great constitutional — that it is indeed to draw a meaningless line, as the Court has stated in Couch and the reason I emphasize what the Court has stated is because both Judge Friendly in the Beattie decision and in the Fisher case, the Judge has attempted to explain away this Court?s language.

Rather than simply the argue the Court?s language back to the Court, which a Court is in the best position to construe and interpret, I tried to understand by going to the basis of these concepts why that was in fact the case.

The other reason very quickly, why we say ownership is not only meaningless in an elevation of form over substance, but also we think very dangerous is we pose to the Court, the situations for example, where, let us say notes of a psychiatrist or notes of a priest in the confessional might be involved in the governmental subpoena — summons case, perhaps having come back into the possession either of the parishioner or of the client.

In those situations if ownership dictates the outcome of the privilege, there is no question that under the common law that those papers as they — as they were originated were the property of the psychiatrist or of the priest.

Yet we suggest that the statements they contain are essentially a blueprint of a man?s mind and they are as entitled to the privilege as statements to a man makes upon the witness stand himself.

We move to the question of authorship.

We do not think that authorship, as this Court has stated flatly in Wilson versus United States, can vary the applicability of the privilege.

Warren E. Burger:

I am not sure I have followed you.

Were — were you suggesting that the ownership should dominate over everything else?

Robert E. Goodfriend:

No, I am saying if the ownership dominated over everything else then in the case of the psychiatrist notes or notes that a priest might have made about the statements he heard in the confession, that insofar as the Fifth Amendment is concerned, putting aside other privileges, under the Government?s theory in these cases those papers would be compellable, would be producible, because as they originated, they were unquestionably the property of a third party and not the claimants.

Warren E. Burger:

So you would put the emphasis on the possession?

Robert E. Goodfriend:

I would put the emphasis one on the possession, and the testimonial compulsion, which is unquestionably being directed to the accused in this case, to the accused and to a person in such an intimate relationship, namely the attorney, that is tantamount to be directed to the accused.

Warren E. Burger:

What if they were — what if the papers were stolen from the attorney or by a faithless secretary to the lawyer and given to the treasury agent?

Robert E. Goodfriend:

Well, I think that is the Burdeau versus McDowell case if I am not mistaken, I think this Court has answered that question.

I would — I would like to address myself if I may before going into authorships, since I think that is clear.

To Judge Friendly?s analysis in the Beattie case, which I find extremely troublesome and which I think will virtually end the application — if adopted will end the application of the Fifth Amendment to documents.

As I understand, Judge Friendly?s theorem, by the way this theory was no where inserted in the District Court or in the Court of Appeals in United State versus Kasmir.

Warren E. Burger:

Well, what would be so bad about doing away with the Fifth Amendment as applied to documents?

Robert E. Goodfriend:

Well, in this, I think this case illustrates it.

There are many documents, which reflect prior testimonial communications, admissions, confessions of the accused himself.

If those documents are back into his possession, and he — judicial process is issued to him, he is essentially republishing under compulsory process his own prior statements.

William H. Rehnquist:

Well, but if he once lets them out, they lack certainly some of the privacy that some of our cases apply?

Robert E. Goodfriend:

My answer to that privacy rationale, Mr. Justice Rehnquist, is that suppose I where to admit that I committed a crime to a friend of mine, and the government knew of that, they would be able to put the friend on the stand and have him testify, but because of that fact, they could make me mount the stand and repeat what I had told him previously.

In fact, I suggest to the Court that the expectation of privacy rationale, which was — which the government relies on here, is totally misapplied in this case.

What the Court was talking about in Couch, when it was directing its attention to the — to the statement that there was no legitimate expectation of privacy between the accountant and the — and the accused was to Mrs. Couch?s argument that she stood in these shoes of the accountant, therefore, directing process to her accountant, was the same as directing process to her.

That is a very different question in what is involved here.

Namely, there is no question that the Government concedes that directing process to one?s attorney is tantamount to directing process to the accused.

What they are saying — arguing instead is, if you somehow treated these papers previously in a manner inconsistent with privacy concepts, namely, you gave him to an accountant for purpose of republication portions of the information, then you have forfeited the privilege and we are now authorized to compel you to produce documents in your actual possession.

So, privacy becomes a rationale for authorizing or justifying testimonial compulsion directly against the accused.

We reject that proposition.

We, turning again, to Judge Friendly?s analysis, which I think is critical, Judge Friendly says in effect that the application of documents is limited to this act of production and he says in this case if the taxpayer comes forward with the records there will be no incriminating act.

We submit that, first of all under the Curcio rationale there is a testimonial statement with the productions even in this case.

Namely, when you come forward you state — the attorney comes forward and states and I think it would be binding on his client that these are all the records called for by the summons.

William H. Rehnquist:

Of course, Curcio was examined at some length as to why it did not have the records, not why he did?

Robert E. Goodfriend:

That is right, but as I understand it, the Court did say in dicta in that case that when you come forward you make a statement.

The holding of the case that is correct, was whether that you could go further and compel him to tell you the whereabouts of records when you place them elsewhere, but what the Court said there was in that case the mere act of production was not incriminating because you recall there was a collective entity involved, and therefore, with respect to the act of production there was no incriminating statement; since the collective entity of association or partnership had no privilege.

Here the Government has expressly taken that point out of the case.

They say they are not arguing the collective entity exception.

So therefore, here when you come forward and produce the papers and a natural individual and he says these are all the papers called for by the summons, that is in fact an identifying act and the mere fact under Judge Friendly?s theory that you can get the accountant to do that for you, is not a reason to make the accused himself to do it.

William H. Rehnquist:

Of course, you are asking a lawyer to do it, here you are not asking the accused to do it?

Robert E. Goodfriend:

Yes, that is correct, Your Honor.

We would take the position on that simply that a lawyer?s admissions made in the course of a judicial proceeding are normally binding upon his client and the same would probably apply here.

William H. Rehnquist:

How can a lawyer invoke a client’s Fifth Amendment privilege, if it is a personal privilege which must depend on assertion that the thing would be incriminated, how can a lawyer know that?

Robert E. Goodfriend:

We say this.

We say that the policy of allowing the lawyer to invoke the privilege is the same here as it is in the case of the attorney-client privilege, where the lawyer not only is allowed to invoke the privilege, but has an affirmative duty to do so and the reason is to promote the policy of free communication between lawyer and client —

William H. Rehnquist:

You take a typical trial and if your client is not a defendant, he has to mount the stand and claim the privilege question by question.

Most judges would not hear of his lawyer saying, my client declines to answer; it is the client that has got to make the assertion?

Robert E. Goodfriend:

Your Honor, first in this case of course we are not dealing as we were in Huffman with oral statements.

We are dealing with —

William H. Rehnquist:

Well should that be any different with documents?

Robert E. Goodfriend:

Well, I think because first of all the documents determine the incriminating nature of the material, but more importantly because the — if you do not permit the lawyer to assert this on behalf of his client, we submit that it will chill the transfer of documents between the lawyer and his client because the lawyer will always be in fear if he possesses the documents necessary to make an intelligent decision on a tax fraud investigation case.

Robert E. Goodfriend:

He will always be in fear, my God! The client may not be around when the day comes when the government subpoenas these documents from me.

So I am going to make sure that whenever I examine these documents I do it in my client?s home or he does it my office.

Also we say, Your Honor, that this is a matter entirely within the Government?s own control, under their own rules stated to this court in Couch.

They usually direct the subpoena to the man who has the right to custody as opposed to the man who has physical custody.

So, the whole standing question has been created by the person to whom the government shows to direct the summons.

Had they directed the summons to the client and said produce any records that you have or that are in custody of your agents, there would be no standing question in the case.

I would like to answer a few questions Justice –Mr. Justice Blackmun asked a question of opposing counsel, whether or not we thought that the accountant could seek return of the papers from the taxpayer.

I would say that that depends on the reason you are seeking return of the papers.

If he is seeking return of the papers for his own property purposes, as in matter of Harris, the trustee and bankruptcy was invested with title, then I think he would have a good shot at it in a State Court, although even there I think the taxpayer here would have a defense, namely, the papers were turned over expressly stated by the accounting firm, turned over and giving the taxpayer the rightful indefinite and legitimate possession of such documents.

Warren E. Burger:

Mr. Goodfriend, I think you may be getting into your colleague’s time now.

Robert E. Goodfriend:

Thank you.

Warren E. Burger:

Mr. Bazelon.

Richard L. Bazelon:

Mr. Chief Justice and may it please the Court.

The issue in this case as the petitioners in 74-18 C is whether the taxpayer has a Fifth Amendment right with respect to documents which are properly in his possession, in a purely personal capacity, prepared at his personal direction for his personal use, based entirely on personal records supplied by him.

The record in our case makes very clear what the nature of the documents sought by the government is.

They are simply summaries of canceled checks and deposit receipts of the taxpayer.

The accountant in preparing this record has simply transcribed information from the canceled checks and deposit receipts in no different way than a Scribner would transcribe information from documents that are given to him.

We submit that when a citizen makes available to a third party, personal information and that third party merely transcribes that information, and the document containing that transcript is given back to the citizen and the citizen can assert a Fifth Amendment protection if the production of that document will incriminate him.

We believe that the facts in this case are very compelling and fall squarely within the Fifth Amendment protection.

The Government argues in this case that solely because the taxpayer made a revelation to a third party of highly personal material, that he in some way forfeited his Fifth Amendment protection.

We can see no justification in the Fifth Amendment for such a position.

The compelled production by the taxpayer is no less self-incriminating and the information is no less personal, of no less a personal nature because of this disclosure to a third party.

William H. Rehnquist:

How Mr. Bazelon, how personal are canceled checks which presumably you have already sent out to a payee, they have been paid through a bank, they certainly are not like a diary, are they?

Richard L. Bazelon:

Your Honor, they are not like a diary.

They are personal in a sense that they reflect the financial transactions and financial business of the citizen involved and this Court has stated in the Bellis case for example that the records of a sole proprietor, business records, fall within the Fifth Amendment protection.

Certainly, we would say that a fortiori the records based on canceled checks and deposit receipts would also fall within the Fifth Amendment protection.

We would like to point out to the Court with respect to the revelation of this information to an accountant that we believe it is particularly inappropriate in this situation to hold that this works a forfeiture of the Fifth Amendment protection.

In Pennsylvania for example, there is a state statute, 63 Pennsylvania Statute Annotated Section 9.11 A, which creates an attorney-client privilege.

The record of our case makes clear that these documents, the analysis of receipts and disbursements, were held by the accountant only for a limited time in any event, and after a period of several years they were regularly returned to the taxpayer.

This was the twenty-five year history of the accountant-taxpayer relationship.

Richard L. Bazelon:

The accountant further made clear and testified that he was holding these papers for a temporary period solely as a matter of convenience and it was holding them at the request of the taxpayer as the taxpayer wanted them.

We also believe that the reason for the taxpayer going to the accountant, argue strongly against working a forfeiture of the taxpayer?s Fifth Amendment right.

It is precisely because the tax laws in this Country make it mandatory or necessary for many taxpayers to seek third party assistance, that a taxpayer goes to a third party.

It is in the taxpayer?s interest and we submit it is in the government?s interest that the taxpayers avail themselves of assistance of qualified third parties, as the taxpayers did in these cases going to certified public accountants and to hold the taxpayers who do seek this assistance which is important to them and to the government, thereby forfeit a Fifth Amendment right, we believe is very inappropriate to the policies of the Fifth Amendment.

Harry A. Blackmun:

Mr. Bazelon, would your case be any stronger if a taxpayer had gone to a lawyer and then these were the work papers of the lawyer?

Richard L. Bazelon:

If the lawyer was serving, Mr. Justice Blackmun, the same function that the accountant was serving in this case, then I do not see why the case should be any stronger if the lawyer performs that work.

Harry A. Blackmun:

Except that a lawyer practices law and an accountant sometimes practices law?

Richard L. Bazelon:

[Laughter] A comparison to the Boyd case further substantiates our position.

The document which the claimant in Boyd was protected against producing was an invoice produced by — given to him by a third party.

Certainly, that invoice did not concern the personal affair of the claimant to anywhere near the same extent as the records in this case concern personal affairs of the taxpayer.

And those records were not nearly as personal in terms of their history, as the records in this case — in these cases.

The government, we believe in their brief and in their argument to this court in the Couch case, has conceded that if this accountant had been an employee of the taxpayer or even he were serving as an independent contractor, but did his work at the offices of the taxpayer and left his records at the offices of the taxpayer, that the taxpayer could claim a Fifth Amendment protection with respect to these records.

We cannot perceive any policy of the Fifth Amendment, which is advanced, by making the status and the work conditions of the accountants determinative of the applicability of a Fifth Amendment privilege.

There is no question that under the opinions of this Court, the act of producing a document which entails in it a representation that the documents produced are those documents described in the summons is a testimonial act.

We submit that the act of production of a testimonial source is testimonial in an additional sense as well, in that it constitutes a publication of the information, which is contained in the document.

The government says that unless the particular communication —

Byron R. White:

You would say search warrant would be equally effective?

Richard L. Bazelon:

Well, Your Honor, a search warrant does not require any compulsion on the person of the —

Byron R. White:

No, but it is a publication of testimony [Inaudible]

Richard L. Bazelon:

Yes it is, Mr. Justice White, but not by the person who is claiming the protection with respect —

Byron R. White:

[Inaudible] Are you suggesting a search warrant could be validly used to secure these papers from the accountant?

Richard L. Bazelon:

I am suggesting that whether —

Byron R. White:

Or with a lawyer?

Richard L. Bazelon:

— whether to could or not would not justify the government in obtaining these documents in a way that places the taxpayer in a position where he has to incriminate himself.

Byron R. White:

By the Act —

Richard L. Bazelon:

That is right.

The Government has argued that unless the actual testimonial content of the act of production is incriminatory in and of itself, there could be no satisfying of the criteria of a testimonial act, and we submit this is just not what the law has been.

This Court as recently as in the case of Maness versus Meyers has held, that where there is a compelled testimonial response which is part of the link of the evidence against the accused, that the accused is entitled to claim the Fifth Amendment protection, the actual response of a taxpayer need not be the kind of incriminatory evidence that would be admissible at the trial, if it is part of the link and the chain of evidence against him.

And clearly in this case, the taxpayer in producing the documents is saying, these are the analysis of receipts and disbursements.

And we would even go further and say that the taxpayers’ implied testimony in doing that amounts to an authentication because the history in this case is that the taxpayer had regularly received these documents over twenty-five year period from the accountant, that is these analysis of receipts and disbursements, he was familiar therefore with the accountant?s work product and under the law of evidence in terms of witnesses who can testify to authentication, he was in a position to authenticate those documents.

Richard L. Bazelon:

He was familiar with the accountant?s work product.

He had seen it in circumstances which would indicate the genuineness of the past documents.

He could be a witness to authenticate those documents.

William H. Rehnquist:

What is the incriminatory link in just the production along the lines that you are just talking about?

Richard L. Bazelon:

The incriminatory link is that the taxpayer is providing the government with the information that the papers produced by the taxpayer are indeed the records transcribed from his own records by the accountant.

William H. Rehnquist:

But now, apart from the content of those records, how does that assertion, if it be an assertion, tend to incriminate him at all?

Richard L. Bazelon:

It becomes part of the link in the chain of evidence against the taxpayer.

William H. Rehnquist:

But how?

Richard L. Bazelon:

Because it allows, it is — it is a statement that these are the documents that permits the government — that is incriminatory because it gets the government to the next stage in the possession of evidence against the accused, namely to go to the accountant and have the accountant come in and testify.

Now, the fact that the accountant may be able to give much the same testimony in terms of identifying these documents does not make the taxpayers own admission any less incriminatory as to him.

Byron R. White:

But if the subpoena simply described the piece of paper with a certain title on it, certain set of — produce any paper with a certain title on it and dated a certain date, not saying that who it belong to or anything else, would you make the same argument?

Richard L. Bazelon:

We would have a different case, no question about it, Mr. Justice White.

I think they would raise the separate question of whether or not part of a testimonial act is producing a testimonial source, in fact publishing it.

Byron R. White:

Whether having possession of it would be irrelevant piece of paper?

Richard L. Bazelon:

Well, that is always, that is always a —

Byron R. White:

Not always, I would say?

Richard L. Bazelon:

No, no, well, if that element is involved that is a separate item of testimony and on that score I would like to mention briefly part of the Second Circuit?s opinion in the Beattie case.

We believe that the Boyd case fully supports the position we are taking with respect to the act of production being a testimonial response by the taxpayer.

After all those were third party documents and the taxpayer by producing them were saying, this is the invoice and the government wanted that invoice to establish how much glass there was in the twenty-eight or whatever number of quadrants have been imported.

They wanted the invoice for the truth of the averments in the invoice.

The Second Circuit said with respect to the Boyd case, that the invoice had significance in establishing that the claimant had received the invoice, but there is nothing in this Court?s opinion in the Boyd case that indicates that there was any relevance whatsoever to the fact that the claimant had received the invoice and in fact the Court?s opinion is quite to the contrary.

The Court said, on the trail of the cause it became important to show the quantity and value of a glass contained in the twenty-nine cases previously imported.

The only significance of that invoice was for the truth of the statements contained therein.

Therefore, the production of the invoice in Boyd was testimonial in exactly the same way the production of the documents in this case would be testimonial.

Warren E. Burger:

What if they subpoenaed the original records from the English quarters, Judge Friendly suggested they could do that, could not they?

Richard L. Bazelon:

They certainly could, and there would be no act of compulsion on the claimant in that case.

Thank you.

Warren E. Burger:

Very well.

Mr. Wallace, you have four minutes.

Lawrence G. Wallace:

The act of production here is no more incriminating than was the act of production in Bellis or in White or Wilson or that whole line of cases.

Lawrence G. Wallace:

It is precisely the same act of production with respect to its communicative nature.

It says, this is the file that the accountant — of the accountant?s papers that he placed in my custody just as in Bellis, this — these is the partnership records that are placed in my custody is the implicit communication.

It seems to me that line of cases establishes that production of a third person?s records that are not one?s own personal papers can be required of the custodian.

The fact that those records contain information about the taxpayer?s personal financial affairs is not controlling, because as I have said in starting my analysis for my argument, the records could have been required to be produced by the accountant while they were in the accountant?s possession even though they have this information in them.

Byron R. White:

That is, that is peculiar under the facts of this case, would you say that you could subpoena the records from the taxpayer?

Lawrence G. Wallace:

Not his own personal records.

That is the distinction that that is the operative one under the cases, whether the records are his own personal papers or whether he his holding in his custody someone else?s record.

Byron R. White:

You cannot subpoena them, even though the act of production might not be incriminating at all?

Lawrence G. Wallace:

Well, that would raise a more difficult issue under Boyd, which need not be decided here and I might not foresee all the possible ramifications there —

Well, insofar as these are check stubs or whatever else we were told they were, if they had been in the possession of the taxpayer, you would not suggest they could be a subpoenaed, would you?

Lawrence G. Wallace:

No, we do not subpoena such records against a claimant, privilege would not subpoena them?

You are giving the transcripts of the evidence not the yellow sheet of paper that the accountant made using the original checks and checkbooks until then?

Lawrence G. Wallace:

I do want to suggest —

I mean, that is distinction?

Lawrence G. Wallace:

It is a distinction.

This is the disclosure to the accountant and these are his papers and they are his papers not merely because of ancient documents about ownership of the piece of paper, because as the Court recognized in Couch the accountant has responsibilities under the Internal Revenue laws to be able to substantiate that he filed accurate tax returns and that he is conducting his business in accordance with law.

But we do agree that ownership is not in itself the governing criterion.

We think if the taxpayer had acquired title whether by purchase or by some other method, the result would not change because these would still not be his personal papers.

Their essential character just as in Grant would remain third person records, even though —

Well, had he given the yellow pad to the accountant, I bought this yellow pad and the rule was you use this, make your records on these, it belongs to me, it is my pad, makes no difference?

Lawrence G. Wallace:

It would make no difference, Your Honor.

Thank you.

Warren E. Burger:

Thank you gentlemen.

The case is submitted.