Braswell v. United States

• Decision Date: 22 June 1988
• Docket Number: No. 87-3,87-3
• Citation: 487 U.S. 99,101 L.Ed.2d 98,108 S.Ct. 2284
• Parties: Randy BRASWELL, Petitioner v. UNITED STATES
• Court: U.S. Supreme Court

487 U.S. 99

108 S.Ct. 2284

101 L.Ed.2d 98

Randy BRASWELL, Petitioner

v UNITED STATES.

No. 87-3.

Argued March 1, 1988.

Decided June 22, 1988.

Syllabus

A federal grand jury issued a subpoena to petitioner as the president of two corporations, requiring him to produce the corporations' records. The subpoena provided that petitioner could deliver the records to the agent serving the subpoena, and did not require petitioner to testify. The corporations involved were incorporated by petitioner, who is the sole shareholder of one of them. Petitioner, his wife, and his mother are the directors of both corporations, and his wife and mother are secretary-treasurer and vice president of the corporations, respectively, but neither has any authority over the corporations' business affairs. The District Court denied petitioner's motion to quash the subpoena, holding that the "collective entity doctrine" prevented petitioner from asserting that his act of producing the corporations' records was protected by the Fifth Amendment privilege against self-incrimination. The Court of Appeals affirmed.

Held: The custodian of corporate records may not resist a subpoena for such records on the ground that the act of production will incriminate him in violation of the Fifth Amendment. This Court's precedents as to the development of the collective entity doctrine do not support petitioner's argument that, even though the contents of subpoenaed business records are not privileged, and even though corporations are not protected by the Fifth Amendment, nevertheless his act of producing the documents has independent testimonial significance, which would incriminate him individually, and that the Fifth Amendment prohibits Government compulsion of that act. If petitioner had conducted his business as a sole proprietorship, United States v. Doe, 465 U.S. 605, 104 S.Ct. 1237, 79 L.Ed.2d 552, would require that he be provided the opportunity to show that his act of production would entail testimonial self-incrimination as to admissions that the records existed, were in his possession, and were authentic. However, representatives of a collective entity act as agents, and the official records of the organization that are held by them in a representative rather than a personal capacity cannot be the subject of their personal privilege against self-incrimination, even though production of the papers might tend to incriminate them personally. The plain mandate of the precedents is that the corporate entity doctrine applies regardless of the corporation's size, and regardless of whether the subpoena is ad- dressed to the corporation or, as here, to the individual in his capacity as the records' custodian. Any claim of Fifth Amendment privilege asserted by the agent would be tantamount to a claim of privilege by the corporation, which possesses no such privilege. Recognizing a Fifth Amendment privilege on behalf of records custodians of collective entities would have a detrimental impact on the Government's efforts to prosecute "white-collar crime." Such impact cannot be satisfactorily minimized by either granting the custodian statutory immunity as to the act of production or addressing the subpoena to the corporation and allowing it to choose an agent to produce the records who can do so without incriminating himself. However, since the custodian acts as the corporation's representative, the act of production is deemed one of the corporation, not the individual, and the Government may make no evidentiary use of the "individual act" of production against the individual. Pp. 102-119.

814 F.2d 190 (CA5 1987), affirmed.

REHNQUIST, C.J., delivered the opinion of the Court, in which WHITE, BLACKMUN, STEVENS, and O'CONNOR, JJ., joined. KENNEDY, J., filed a dissenting opinion, in which BRENNAN, MARSHALL, and SCALIA, JJ., joined, post, p. 119.

Michael S. Fawer, Herbert V. Larson, Jr., New Orleans, La., for petitioner.

Roy T. Englert, Jr., Washington, D.C., for respondent.

Chief Justice REHNQUIST delivered the opinion of the Court.

This case presents the question whether the custodian of corporate records may resist a subpoena for such records on the ground that the act of production would incriminate him in violation of the Fifth Amendment. We conclude that he may not.

From 1965 to 1980, petitioner Randy Braswell operated his business—which comprises the sale and purchase of equip- ment, land, timber, and oil and gas interests—as a sole proprietorship. In 1980, he incorporated Worldwide Machinery Sales, Inc., a Mississippi corporation, and began conducting the business through that entity. In 1981, he formed a second Mississippi corporation, Worldwide Purchasing, Inc., and funded that corporation with the 100 percent interest he held in Worldwide Machinery. Petitioner was and is the sole shareholder of Worldwide Purchasing, Inc.

Both companies are active corporations, maintaining their current status with the State of Mississippi, filing corporate tax returns, and keeping current corporate books and records. In compliance with Mississippi law, both corporations have three directors, petitioner, his wife, and his mother. Although his wife and mother are secretary-treasurer and vice-president of the corporations, respectively, neither has any authority over the business affairs of either corporation.

In August 1986, a federal grand jury issued a subpoena to "Randy Braswell, President Worldwide Machinery Sales Inc. [and] Worldwide Purchasing, Inc.," App. 6, requiring petitioner to produce the books and records of the two corporations.¹ The subpoena provided that petitioner could deliver the records to the agent serving the subpoena, and did not require petitioner to testify. Petitioner moved to quash the subpoena, arguing that the act of producing the records would incriminate him in violation of his Fifth Amendment privilege against self-incrimination. The District Court denied the motion to quash, ruling that the "collective entity doctrine" prevented petitioner from asserting that his act of producing the corporations' records was protected by the Fifth Amendment. The court rejected petitioner's argument that the collective entity doctrine does not apply when a corporation is so small that it constitutes nothing more than the individual's alter ego.

The United States Court of Appeals for the Fifth Circuit affirmed, citing Bellis v. United States, 417 U.S. 85, 88, 94 S.Ct. 2179, 2182, 40 L.Ed.2d 678 (1974), for the proposition that a corporation's records custodian may not claim a Fifth Amendment privilege no matter how small the corporation may be. The Court of Appeals declared that Bellis retained vitality following United States v. Doe, 465 U.S. 605, 104 S.Ct. 1237, 79 L.Ed.2d 552 (1984), and therefore, "Braswell, as custodian of corporate documents, has no act of production privilege under the fifth amendment regarding corporate documents." In re Grand Jury Proceedings, 814 F.2d 190, 193 (1987). We granted certiorari to resolve a conflict among the Courts of Appeals.² 484 U.S. 814, 108 S.Ct. 64, 98 L.Ed.2d 28 (1987). We now affirm.

There is no question but that the contents of the subpoenaed business records are not privileged. See Doe, supra; Fisher v. United States, 425 U.S. 391, 96 S.Ct. 1569, 48 L.Ed.2d 39 (1976). Similarly, petitioner asserts no self-incrimination claim on behalf of the corporations; it is well established that such artificial entities are not protected by the Fifth Amendment. Bellis, supra. Petitioner instead relies solely upon the argument that his act of producing the documents has independent testimonial significance, which would incriminate him individually, and that the Fifth Amendment prohibits Government compulsion of that act. The bases for this argument are extrapolated from the decisions of this Court in Fisher, supra, and Doe, supra.

In Fisher, the Court was presented with the question whether an attorney may resist a subpoena demanding that he produce tax records which had been entrusted to him by his client. The records in question had been prepared by the client's accountants. In analyzing the Fifth Amendment claim forwarded by the attorney, the Court considered whether the client-taxpayer would have had a valid Fifth Amendment claim had he retained the records and the subpoena been issued to him. After explaining that the Fifth Amendment prohibits "compelling a person to give 'testimony' that incriminates him," 425 U.S., at 409, 96 S.Ct., at 1580, the Court rejected the argument that the contents of the records were protected. The Court, however, went on to observe:

"The act of producing evidence in response to a subpoena nevertheless has communicative aspects of its own, wholly aside from the contents of the papers produced. Compliance with the subpoena tacitly concedes the existence of the papers demanded and their possession or control by the taxpayer. It also would indicate the taxpayer's belief that the papers are those described in the subpoena. Curcio v. United States, 354 U.S. 118, 125 [77 S.Ct. 1145, 1150, 1 L.Ed.2d 1225] (1957). The elements of compulsion are clearly present, but the more difficult issues are whether the tacit averments of the taxpayer are both 'testimonial' and 'incriminating' for purposes of applying the Fifth Amendment. These questions perhaps do not lend themselves to categorical answers; their resolution may instead depend on the facts and circumstances of particular cases or classes thereof." Id., at 410, 96 S.Ct., at 1581.

The Court concluded that under the "facts and circumstances" there presented, the act of producing the accountants' papers would not "involve testimonial self-incrimination." Id., at 411, 96 S.Ct., at 1581.³

Eight years later, in United States v. Doe, supra, the Court revisited the question, this time in the context of a claim by a sole proprietor that the compelled production of business records would run afoul of the Fifth Amendment. After...