Chakejian v. Trout
| Decision Date | 17 January 1969 |
| Docket Number | Civ. A. No. 43170. |
| Citation | 295 F. Supp. 97 |
| Parties | Sarkis N. CHAKEJIAN v. James F. TROUT, Special Agent Intelligence Division, Internal Revenue Service, United States Treasury Dept. Sheldon Cohen, Commissioner Internal Revenue United States of America and Girard Trust Bank. |
| Court | U.S. District Court — Eastern District of Pennsylvania |
Robert M. Taylor, Philadelphia, Pa., for plaintiff.
Drew J. T. O'Keefe, U. S. Atty., E. D. Pa., Philadelphia, Pa., and James H. Jeffries, III, U. S. Dept. of Justice, Washington, D. C., for James Trout and Sheldon Cohen.
R. Neal Risley, of Dechert, Price & Rhoads, Philadelphia, Pa., for the Girard Trust Bank.
This is a civil suit against a Special Agent of the Internal Revenue Service, the Commissioner of Internal Revenue and a bank. In this action the plaintiff seeks to enjoin compliance with or enforcement of a summons issued by Special Agent Trout to the Girard Trust Bank, and to quash and dismiss it; to suppress evidence allegedly obtained in violation of the plaintiff's constitutional right against self-incrimination; to compel the return of evidence and property allegedly illegally seized from the plaintiff, as the fruits of the unlawful interrogation; and to enjoin the defendants from using the evidence or presenting it to a grand jury.
The plaintiff's primary contention is that since an IRS special agent's sole function is to investigate the possible criminal liability of a taxpayer, when questioning the taxpayer the agent should be required to inform him of his constitutional right against self-incrimination and of his right to have a lawyer present during the interview; but that Trout, by misrepresenting the purpose of his visit and failing to give the required warnings, obtained tax information from the plaintiff, duplicated his financial records and obtained other information leading him to issue and serve a summons upon the defendant, Girard Trust Bank, demanding certain business records of the bank relevant to the possible income tax liabilities of the plaintiff, all in violation of the plaintiff's Fifth Amendment right against self-incrimination.
Counsel for the Internal Revenue Service and Agent Trout have moved to dismiss the complaint on the following grounds: (1) that this court is without jurisdiction to enjoin compliance with or enforcement of an Internal Revenue summons; (2) that this action is, in reality, a suit against the United States to which it has not consented; (3) that the court may not suppress evidence prior to indictment, nor enjoin its use or presentation to a grand jury; and (4) that a special agent in a non-custodial situation is not required to give the "Miranda warnings" to a taxpayer before he is questioned as to potential criminal tax liabilities.
An argument and an evidentiary hearing were held on the defendants' motion to dismiss. After giving careful consideration to the pleadings and evidence, to the briefs submitted by the parties and the oral arguments of counsel, the court now makes the following Findings of Fact and Conclusions of Law.
The plaintiff, Sarkis Chakejian, together with his son, Richard Chakejian, operates a cleaning establishment in Bala Cynwyd. On April 11, 1967, Special Agent Trout, accompanied by Special Agent Deubler, visited the Chakejian business establishment and requested an interview with Richard Chakejian concerning his income tax returns for the years 1962-64. (N.T. 6-7, 50-51) The agents introduced themselves, showed their credentials and informed Richard Chakejian that he could have a lawyer present, if he wanted one. (N.T. 6, 51) Richard replied that he did not feel that it was necessary because he didn't have anything to hide. (N.T. 6) The interview lasted for approximately two hours, then the agents left. (N.T. 7)
Agent Trout returned for a second visit April 25, 1967, accompanied by another special agent (Gindhart). Richard Chakejian was again informed that he could have a lawyer present and he replied, (N. T. 8) Richard showed the agents his cancelled checks for the years in question at their request, and they were duplicated on a microcopying machine by Agent Gindhart during the interview. After the interview the agents accompanied Richard to his home to see whether he had any additional cancelled checks there, then to the Girard Trust Bank to examine the contents of his safe deposit box. (N.T. 9)
The agents returned to the Chakejian business establishment for a third visit on May 9, 1967. This time they asked to see both Richard and Sarkis Chakejian. The agents gave Sarkis Chakejian the same warning they had previously given Richard — i. e., that he could have a lawyer present if he wanted one. Sarkis Chakejian replied, "Where could I get a lawyer now if I wanted one." (N.T. 10, 30, 33) Both Chakejians were adamant, and I so find, that Agent Trout did not inform them that they were not required to make any statements that they felt might incriminate themselves.1 (N.T. 20, 21, 40, 41, 79, 82) Agent Trout then proceeded to question Sarkis Chakejian about his income tax returns for the years 1964-66. Mr. Chakejian answered freely and also made available for photocopying certain personal documents, business records, etc. (N.T. 11, 33, 37, 61) Toward the end of the interview Special Agent Trout stated words to the effect: "You are aware that this is a criminal investigation Mr. Chakejian?" This was the first point at which the Chakejians realized that the agents were present on more than a routine tax investigation. (N.T. 11-12, 34)
The agents retained no cancelled checks, personal documents or other property of the plaintiff; merely the copies which they made of the documents. (N.T. 49, 50)
On June 29, 1967, Agent Trout served upon the Girard Trust Bank an Internal Revenue summons requesting that an officer of the bank appear at his office on July 17, 1967, bringing with him certain bank records pertaining to all financial transactions by the Chakejian family (including in-laws), for the years 1962-66. On July 10, 1967, the bank notified Chakejian of its receipt of the summons and its intent to comply unless Chakejian, through his attorney, obtained a court order enjoining the production of the records, prior to the required date of compliance. By agreement between the bank and the Internal Revenue Service, the time for compliance with the summons was deferred until July 20, 1967; and on July 19, 1967, the plaintiff filed his complaint seeking to quash the summons and to obtain the other relief set forth in the opening paragraph of this opinion. (Complaint, amplified by affidavits and appendices attached thereto.)
On the facts as stated above, and drawing inferences most favorable to the plaintiff, I conclude that the plaintiff is not entitled to the relief which he seeks, and that the complaint should be dismissed for lack of equity jurisdiction in this court.
On the threshold issue of the challenge by counsel for defendants Trout and the Commissioner of Internal Revenue, Sheldon Cohen, to the jurisdiction of this court to consider the complaint on the ground that it is a disguised suit against the United States to which it has not consented; such a contention was made, and disposed of by the Court of Appeals for the District of Columbia in a case remarkably similar in its facts to the present case, wherein the court noted:
"There are some gasps of vitality left in this fading doctrine of sovereign immunity — notably in cases involving Government property. * * But it is lifeless when offered as a defense barring examination of a plea that action threatened by an executive official transcends constitutional limitations. It is the American doctrine that a suit against an official threatening to act unconstitutionally stands in theory as a suit against him personally and individually even though the action he takes or threatens is of the kind which only a government official can take. His action is deemed the action of the Government in form, but not in substance. * * * This approach sustaining jurisdiction * * is available not only in the familiar situation of threatened enforcement of an unconstitutional statute, but also where an individual action is challenged on constitutional grounds. Joint Anti-Facist Refugee Committee v. McGrath, 341 U.S. 123, 71 S.Ct. 624, 95 L.Ed. 817 (1951).2
I consider the judgment of that court dispositive of the defendants' contention in this case.
With respect to that part of the plaintiff's complaint which seeks to quash or otherwise enjoin enforcement of the summons issued by Special Agent Trout to the Girard Trust Bank, the Supreme Court has held that such an action will not lie. In Reisman v. Caplin, 375 U.S. 440, 84 S.Ct. 508, 11 L.Ed.2d 459 (1964), the plaintiffs, attorneys for a taxpayer, sought injunctive and declaratory relief against the Commissioner of Internal Revenue, and an accounting firm which the attorneys had retained to work on the financial records of their clients in preparation for certain civil and criminal tax proceedings arising from alleged tax liabilities of the clients. The contentions of the plaintiffs were that enforced production of the records and documents in question (including original records and papers of the taxpayers) would be an unlawful appropriation of the plaintiffs' work product and trial preparation as well as an unreasonable seizure requiring the taxpayers to incriminate themselves and depriving themselves of the effective assistance of counsel. The Court affirmed a District Court dismissal of the complaint, but found it unnecessary to reach the issues decided by the courts below, holding instead that the plaintiffs had an adequate remedy at law. The Court, after discussing the Commissioner's summons power and the enforcement machinery which...
To continue reading
Request your trial