Grand Jury Subpoena Duces Tecum Served Upon Underhill, In re, s. 85-5127

• Decision Date: 27 February 1986
• Docket Number: Nos. 85-5127,85-5134,s. 85-5127
• Citation: 781 F.2d 64
• Parties: In re GRAND JURY SUBPOENA DUCES TECUM SERVED UPON Randall UNDERHILL, d/b/a East Side Motors (85-5127, W.D.). In re GRAND JURY PROCEEDINGS, Ward MASSEY (85-5134, E.D.), Petitioners- Appellees, v. UNITED STATES of America, Respondent-Appellant.
• Court: U.S. Court of Appeals — Sixth Circuit

Page 64

781 F.2d 64

54 USLW 2403

In re GRAND JURY SUBPOENA DUCES TECUM SERVED UPON Randall

UNDERHILL, d/b/a East Side Motors (85-5127, W.D.).

In re GRAND JURY PROCEEDINGS, Ward MASSEY (85-5134, E.D.),

Petitioners- Appellees,

v.

UNITED STATES of America, Respondent-Appellant.

Nos. 85-5127, 85-5134.

United States Court of Appeals, Sixth Circuit.

Argued Oct. 31, 1985.

Decided Jan. 13, 1986.

Rehearing and Rehearing En Banc Denied Feb. 27, 1986.

Louis DeFalaise, U.S. Atty., Robert Michael Murphy, Lexington, Ky., Ronald E. Meredith, U.S. Atty., Louisville, Ky., David P. Grise, Office of Consumer Litigation, Civil Div., U.S. Dept. of Justice, Leonard Schaitman (Lead), Douglas Letter (argued), U.S. Dept. of Justice, Washington, D.C., for the U.S.

Larry G. Bryson (argued), London, Ky., for Massey.

Randall Underhill, pro se.

Gary R. Haverstock (argued), for Underhill.

Before KRUPANSKY and MILBURN, Circuit Judges and HIGGINS, District Judge. ^*

MILBURN, Circuit Judge.

In this consolidated appeal, we are asked to decide whether sole proprietors operating automobile dealerships, who are required by law to maintain and make available to federal officials and to their transferees odometer statements for motor vehicles they buy and sell, are protected by the Fifth Amendment bar against self-incrimination from producing the odometer statements in response to federal grand jury subpoenas. Because in our view the contents, as well as the act of producing the odometer statements, come within the required records exception to the Fifth Amendment, Shapiro v. United States, 335 U.S. 1, 68 S.Ct. 1375, 92 L.Ed. 1787 (1948), we hold the statements must be produced.

I.

In the Motor Vehicle Information and Cost Savings Act, 15 U.S.C. Sec. 1981 et seq. ("the Act"), Congress banned tampering with or disconnecting odometers and required the Secretary of Transportation to prescribe rules mandating that any person who transfers a motor vehicle give written disclosure to the transferee of the mileage registered on the odometer and a notice if the odometer reading is known to be inaccurate. 15 U.S.C. Secs. 1984 and 1988. In order to insure compliance with the Act and to permit its enforcement, Congress also authorized the Secretary to require automobile dealers to maintain records reasonably needed by the Secretary and to permit inspection of those records by designated federal officials. 15 U.S.C. Sec. 1990d(a), (b), and (c)(2). Pursuant to this statutory authority, the Secretary has mandated that automobile dealers retain for four years copies of all odometer statements they issue or receive. 49 C.F.R. Sec. 580.7. These statements must be kept at the dealer's primary place of business in a systematically retrievable order. Id.

In late 1984, the Department of Justice conducted investigations into possible violations of the Act by automobile dealers in Kentucky. During these investigations, the grand jury sitting in the Western District of Kentucky issued a subpoena duces tecum to petitioner Randall Underhill, a sole proprietor doing business as East Side Motors in Murray, Kentucky.

Underhill was called to testify before the grand jury and to bring with him all odometer statements for motor vehicles he bought and sold between June 1, 1981, and June 1, 1982, as well as other required state and federal records. Underhill moved for the district court to quash the subpoena insofar as it required production of the odometer statements, contending that the subpoena required him to make incriminating testimonial communications in violation of his Fifth Amendment protection against self-incrimination.

In October 1984, as part of the same Justice Department investigations, another sole proprietor automobile dealer, petitioner Ward Massey, d/b/a A.T.V. Leasing in London, Kentucky, was commanded to appear before the grand jury sitting in the Eastern District of Kentucky. Massey was asked to bring with him, among other things, handwriting exemplars and odometer statements for motor vehicles bought and sold between April 1, 1984, and September 15, 1984.

When summoned to appear, Massey declined to furnish any of the requested records except the handwriting samples and asked that the subpoena duces tecum be quashed by the supervising district court. He argued that both the contents and the production of the odometer statements were protected by the Fifth Amendment privilege against self-incrimination.

Both district courts quashed the subpoenas duces tecum at issue. The court in the Western District of Kentucky first held that the contents of the odometer statements sought from Underhill were not protected by the Fifth Amendment. The court concluded that the statements themselves fell within the required records exception to the Fifth Amendment. However, the court did hold that the act of producing these nonprotected records was protected by the Fifth Amendment and could not be compelled unless use immunity was given by the government. The court first concluded that requiring production would call for testimonial self-incrimination by Underhill. The court then based its ultimate holding on United States v. Doe, 465 U.S. 605, 104 S.Ct. 1237, 79 L.Ed.2d 552 (1984), wherein the Supreme Court held that the contents of voluntarily kept sole proprietorship records were not protected by the Fifth Amendment, but that their production was protected because that production would require testimonial self-incrimination by the record holder.

The court in the Eastern District of Kentucky quashed the subpoena duces tecum directed to Massey on similar grounds. The court explained that "the real question at issue here does not involve the contents of the documents, but whether the act of producing the documents themselves involves testimonial self-incrimination." The court noted that failure to maintain the odometer statements is a misdemeanor and that the government had declined to grant Massey use immunity for production of the documents, or complete immunity if he failed to keep the mandated records.

II.

A.

The first issue we must decide is whether the contents of the requested documents fall within the required records exception to the Fifth Amendment. In making this determination we are mindful that the privilege against self-incrimination must be construed so as to preserve its constitutional imperative "as a bulwark against iniquitous methods of prosecution." United States v. White, 322 U.S. 694, 699, 64 S.Ct. 1248, 1251, 88 L.Ed. 1542 (1944). In order to meet this narrow exception, three requirements must be met. First, the purposes of the government's inquiry must be essentially regulatory, rather than criminal. Second, the records must contain the type of information that the regulated party would ordinarily keep. Third, the records "must have assumed 'public aspects' which render them at least analogous to public documents." Grosso v. United States, 390 U.S. 62, 67-68, 88 S.Ct. 709, 713, 19 L.Ed.2d 906 (1968) (interpreting Shapiro v. United States, 335 U.S. 1, 68 S.Ct. 1375, 92 L.Ed. 1787 (1948)).

Turning to the first Grosso factor, petitioners argue that the inquiry at issue is clearly criminal. Petitioners note that the proceedings from which these consolidated appeals arose were grand jury investigations into criminal activity, and in Massey's case the government stated that if Massey could not produce the documents, he likely would be prosecuted. However, in determining whether the contents of the documents, which were prepared prior to the grand jury subpoenas, fall within the required records exception, we believe the relevant inquiry is whether the statute and regulations which require their maintenance are regulatory in nature. Although it appears beyond question that the grand jury inquiry is criminal in nature, such is irrelevant to the present issue.

Petitioners next observe that whereas the Act places on every motor vehicle transferor the obligation of providing an odometer disclosure statement to his transferee, only dealers and distributors are required to retain the odometer disclosure statements for four years. Petitioners argue this demonstrates that the record keeping requirements are obviously motivated by the government's desire to obtain convictions for violations of the Act by providing enforcement officials with documentation to support convictions. Petitioners also argue that the legislative history of the Act demonstrates that the policy behind the Act is one of punishment, and the statute has no other purpose than to facilitate the discovery of criminal activity. Petitioners further argue that if the record keeping provisions were strictly regulatory there would be an immunity provision incorporated into the Act, and, furthermore, the Secretary would not have the authority to release information to the Attorney General for criminal investigations. See 15 U.S.C. Sec. 1990d(a)(1).

We disagree. Although the specific provisions of the Act and the regulations requiring maintenance of odometer statements may have criminal application, these provisions serve the overall purpose of enforcement of an essentially regulatory program. See In re Grand Jury Subpoena To Custodian of Records, 497 F.2d 218, 220 (6th Cir.) (statute should be read "as a whole" to determine whether regulatory in nature), cert. denied, 419 U.S. 1009, 95 S.Ct. 328, 42 L.Ed.2d 283 (1974). Morever, enforcement may be accomplished through either civil or criminal proceedings. For example, in addition to criminal prosecutions, the Act provides that individuals may bring civil actions for damages, 15 U.S.C. Sec. 1989; the Attorney General and the states may seek injunctive relief, 15 U.S.C. Secs. 1990 and 1990a; and the Secretary may impose a civil penalty, 15 U.S.C. Sec. 1990b. Thus, the Act's record keeping requirements do not serve only criminal prosecution purposes.

The record keeping requirements of the Act are similar to the requirements upheld by the...