United States v. Rylander

Citation460 U.S. 752,103 S.Ct. 1548,75 L.Ed.2d 521
Decision Date19 April 1983
Docket NumberNo. 81-1120,81-1120
PartiesUNITED STATES, et al., Petitioners v. Richard W. RYLANDER, Sr., As President of Rylander & Co. Realtors, Inc., et al
CourtUnited States Supreme Court
Syllabus

The Internal Revenue Service (IRS) summoned respondent Rylander (respondent) to appear before an IRS agent and to produce for examination, and testify with respect to, records of two corporations of which respondent was president. When respondent failed to comply with the summons, the District Court enforced it and ordered him to produce the corporate records. Subsequently, after a hearing, the District Court held respondent in civil contempt for failure to comply with the court's enforcement order, finding that he had failed to introduce any evidence in support of his claim that he did not possess the records. The Court of Appeals reversed, holding that respondent's out-of-court declaration that he did not possess the documents, together with his invocation of the privilege against self-incrimination under the Fifth Amendment, required the Government to shoulder the burden of producing evidence that respondent was able to produce the records in question, and that, notwithstanding the issuance of the enforcement order, respondent was free to relitigate the question of his possession or control of the records in the contempt proceeding.

Held: The Court of Appeals was incorrect both in its view of the relationship between the enforcement proceeding and the contempt proceeding, and in its view of the effect of respondent's invocation of his Fifth Amendment privilege on the burden of production at the contempt hearing. Pp. 756-762.

(a) Because a proceeding to enforce an IRS summons is an adversary proceeding in which the defendant may contest the summons on any appropriate ground, and because lack of possession or control of records is such a ground, the issue may not be raised for the first time in a contempt proceeding. In the latter proceeding, the defendant may assert a present inability to comply with the enforcement order, but in raising this defense he has the burden of production. Thus, while respondent in the contempt hearing could not attack the enforcement order on the ground that he lacked possession or control of the records at the time the order was issued, he could defend the contempt charge on the ground that he was then unable to comply because he lacked possession or control. Pp. 756-757.

(b) While assertion of the Fifth Amendment privilege may be a valid ground upon which a witness such as respondent declines to answer questions, it is not a substitute for evidence that would assist in meeting a burden of production. Curcio v. United States, 354 U.S. 118, 77 S.Ct. 1145, 1 L.Ed.2d 1225, distinguished. The Court of Appeals' view would convert the privilege from the shield against compulsory self-incrimination that it was intended to be into a sword whereby a claimant asserting the privilege would be freed from adducing proof in support of a burden that would otherwise have been his. Pp.757-761.

656 F.2d 1313, reversed.

Lawrence G. Wallace, Washington, D.C., for petitioners.

Joseph F. Harbison, III, Sacramento, Cal., for respondents.

Justice REHNQUIST delivered the opinion of the Court.

Respondent Rylander was held in civil contempt by the United States District Court for the Eastern District of California because of his failure to comply with its earlier order enforcing an IRS summons for corporate books and records. The Court of Appeals for the Ninth Circuit reversed that holding, concluding that Rylander's showing at the contempt hearing, together with his invocation of the privilege against compulsory self-incrimination, required the government to shoulder the burden of producing evidence that Rylander was able to produce the documents in question. Because of a conflict among the various Courts of Appeals on this issue, we granted certiorari, --- U.S. ----, 102 S.Ct. 2006, 72 L.Ed.2d 464 (1982), and we now reverse.

In January, 1979, the IRS issued a summons to Rylander pursuant to 26 U.S.C. § 7602 (1976). The summons ordered him to appear before an agent of the Service in Sacramento, California, and to produce for examination, and testify with respect to, books and records of two corporations. Rylander was the president of each corporation. When he failed to comply with the summons, the District Court issued an order to show cause why the summons should not be enforced. Rylander for several months succeeded in evading service, but in November, 1979, the Marshal was able to personally serve the fourth successive order to show cause issued by the court. In January, 1980, on the return date of that order, Rylander failed to file a responsive pleading and did not appear at the show cause hearing. He had sent an unsworn letter to the court claiming he was neither the president of either corporation nor associated with them in any way. The District Court enforced the IRS summons and ordered Rylander to appear before an agent of the Service in February, 1980, to produce the corporate records.

Rylander neither sought reconsideration of the enforcement order nor did he appeal from it. He appeared as ordered before the agent, but failed to produce the records. After this encounter, the District Court issued an order to show cause why Rylander should not be held in contempt. Rylander again successfully evaded service of the court's order, and the court in May, 1980, found that he was willfully avoiding service and issued a bench warrant for his arrest.

The contempt hearing took place on two different dates in October, 1980. After an initial skirmish, Rylander took the witness stand and verified an "Oath and Purgation of Contempt" which he had earlier submitted to the court. The essence of this declaration was that he did not possess the records and had not disposed of them to other persons. He refused to submit to additional questioning under oath from the government, asserting the privilege against compulsory self-incrimination conferred by the Fifth Amendment to the United States Constitution.

The District Court held Rylander in contempt, finding that he had "fail[ed] to introduce any evidence" in support of his claim that he did not possess the records. The court affirmatively found that Rylander "as president or other corporate officer had possession or control, or both, of the books and records of said corporations." App. to Pet. for Cert. A17-18. Thus 21 months after the IRS had issued a summons to him, Rylander was finally faced with a civil contempt order directing him to either produce the subpoenaed records or face imprisonment.

Rylander appealed to the Court of Appeals, which reversed the District Court. 656 F.2d 1313 (CA9 1981). The Court of Appeals agreed that the government, in a contempt proceeding, meets its initial burden by showing only a failure to comply and the burden is then on the defendant to come forward with evidence showing "categorically and in detail" why he is unable to comply. Id., at 1318. But the Court of Appeals concluded that a defendant need not meet this burden where "he properly claims that his testimony as to the whereabouts of the documents might be incriminating." Id., at 1319. The court stated further:

"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." Ibid.

After concluding that Rylander's failure to raise this defense in the enforcement proceeding did not limit his argument in the contempt proceeding, the court determined that if Rylander's Fifth Amendment claim is valid, his burden of production had been met.1 We think the Court of Appeals was incorrect both in its view of the relationship between the enforcement proceeding and the contempt proceeding, and in its view of the effect of Rylander's invocation of his Fifth Amendment privilege on the burden of production at the latter hearing.

On numerous occasions this Court has been called upon to review the statutory authorization for the IRS to summon witnesses and records and seek judicial enforcement of such summons. See, e.g., United States v. LaSalle National Bank, 437 U.S. 298, 98 S.Ct. 2357, 57 L.Ed.2d 221 (1978); Fisher v. United States, 425 U.S. 391, 96 S.Ct. 1569, 48 L.Ed.2d 39 (1976); United States v. Powell, 379 U.S. 48, 85 S.Ct. 248, 13 L.Ed.2d 112 (1964); Reisman v. Caplin, 375 U.S. 440, 84 S.Ct. 508, 11 L.Ed.2d 459 (1964). There is no disagreement here concerning that basic statutory scheme. In the present case, the Court of Appeals held that notwithstanding the issuance of the enforcement order, Rylander was free to relitigate the question of his possession or control of the records in the contempt proceeding. The Court of Appeals emphasized that the enforcement proceeding was summary in nature, that the government's burden was light, and that there had been no express finding in the enforcement proceeding that Rylander was in possession or control of the records.

We think the Court of Appeals' view of the matter gave insufficient weight to this Court's observations in Maggio v. Zeitz:

"It would be a disservice to the law if we were to depart from the long-standing rule that a contempt proceeding does not open to reconsideration the legal or factual basis of the order alleged to have been disobeyed and thus become a retrial of the original controversy. The procedure to enforce a court's order commanding or forbidding an act should not be so inconclusive as to foster experimentation with disobedience." 333 U.S. 56, 69, 68 S.Ct. 401, 408, 92 L.Ed. 476 (1948). See also id., at...

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