515 F.2d 1239 (5th Cir. 1975), 74-2178, Richey v. Smith

Docket Nº:74-2178.
Citation:515 F.2d 1239
Party Name:Joseph W. RICHEY and wife, Blanche Richey, Plaintiffs-Appellants, v. Jack E. SMITH, Defendant-Appellee.
Case Date:July 21, 1975
Court:United States Courts of Appeals, Court of Appeals for the Fifth Circuit

Page 1239

515 F.2d 1239 (5th Cir. 1975)

Joseph W. RICHEY and wife, Blanche Richey, Plaintiffs-Appellants,


Jack E. SMITH, Defendant-Appellee.

No. 74-2178.

United States Court of Appeals, Fifth Circuit

July 21, 1975

Page 1240

[Copyrighted Material Omitted]

Page 1241

J. W. Tyner, Tyler, Tex., for plaintiffs-appellants.

Roby Hadden, U. S. Atty., H. Kelly Ireland, Asst. U. S. Atty., Tyler, Tex., Martin Teel, Atty., Gen. Litigation Sec., Tax Div., Scott P. Crampton, Asst. Atty. Gen., Gilbert E. Andrews, Acting Chief, App. Sec., Michael L. Paup, Louis A. Bradbury, Attys., Dept. of Justice, Washington, D. C., for defendant-appellee.

Appeal from the United States District Court for the Eastern District of Texas.

Before WISDOM, SIMPSON and RONEY, Circuit Judges.

SIMPSON, Circuit Judge:

The appellants, J. W. and Blanche Richey, husband and wife (hereinafter Taxpayers), sued in the district court under Rule 41(e), F.R.Crim.P., for the return of property and suppression of evidence, business records of the husband, seized by Special Agent Jack Smith of the Internal Revenue Service (IRS). The complaint alleged that Special Agent Smith obtained possession of the records of Mr. Richey's business in violation of the Fourth and Fifth Amendments to the Constitution. Prior to any hearing on the merits the district court declared itself without jurisdiction of the matter and dismissed the suit without prejudice to renewal of the motion to suppress in the event that a criminal prosecution followed from the IRS investigation. 1 We find that the court below found lack of jurisdiction on erroneous grounds and remand for further proceedings in the district court.

The Taxpayers became the object of an IRS investigation on July 31, 1973, when Special Agent Smith of the IRS appeared at Mr. Richey's office and asked leave to examine certain of his business records. Subsequently that same day, Agent Smith obtained Mr. Richey's permission to remove the records to the IRS office for further examination. In support of the Rule 41(e) motion below Taxpayers allege that this permission was not a valid consent for Smith to remove the records because: (i) Smith did not inform Mr. Richey of his Miranda rights 2 in a meaningful fashion; and (ii) Smith threatened that he would subpoena the records if Richey did not release them voluntarily.

After consulting with an attorney, Richey delivered a letter on August 9, some ten days after delivery of the records, to Agent Smith rescinding his permission for the IRS to examine his records and demanding their return. When he was informed that his request would be taken under advisement and that, in any event, his records would not be returned until the IRS was through with them, Richey filed suit the following

Page 1242

day. The Richeys' complaint was styled as a "Motion for Return of Property and to Suppress Evidence, for Temporary Restraining Order and Injunction". 3 Jurisdiction was alleged to lie under F.R.Crim.P. 41(e) and the Fourth and Fifth Amendments to the Constitution.

The district court immediately entered a temporary restraining order enjoining Smith and other officers and agents of the government from examining, analyzing, scheduling, or copying the Richeys' records. Subsequently, on August 28, 1973, the court ordered that the records be transferred from the custody of the IRS to the custody of the clerk of the court pending determination on the Richeys' complaint.

On November 5, 1973, the district court held a hearing limited to its jurisdiction to entertain the Richeys' motion in the absence of any pending civil or criminal proceedings. At the conclusion of that hearing, the court concluded that it was without jurisdiction. The court ruled that the motion for return of property was moot because the IRS had stipulated that it would return the Richeys' original records as soon as it had completed microfilming them. On the motion to suppress, the court ruled: (i) that no jurisdiction existed under F.R.Crim.P. 41(e) since no criminal prosecution was then pending; and (ii) that no equitable jurisdiction existed because an adequate remedy at law was available either in the form of a motion to suppress evidence should a criminal prosecution ensue or of a refund suit should the records be made the basis of a civil tax suit. 4 The court continued its injunction against IRS use of the records pending the issuance of written findings of fact and conclusions of law, which were entered, as amended, on April 8, 1974. In the order accompanying its opinion, the district court continued its injunction in effect against use of the Taxpayers' records by IRS pending disposition of the case on appeal. The records remain in the custody of the clerk of the district court.

We are faced initially with the question of whether the district court order denying the requested relief is a final order subject to appellate review under Title 28, U.S.C. § 1291. The government asserts that under the test articulated by the Supreme Court in DiBella v. United States, 1962, 369 U.S. 121, 82 S.Ct. 654, 7 L.Ed.2d 614, the district court order is not appealable. In DiBella the Court was concerned with appellate review of district court orders granting or denying pre-indictment motions for suppression of evidence and/or return of property. The...

To continue reading