Compton v. Societe Eurosuisse, SA

• Decision Date: 21 July 1980
• Docket Number: No. 79-5988-Civ-SMA.,79-5988-Civ-SMA.
• Parties: Leland L. COMPTON et al., Plaintiffs, v. SOCIETE EUROSUISSE, S.A. et al., Defendants.
• Court: U.S. District Court — Southern District of Florida

494 F. Supp. 836

Leland L. COMPTON et al., Plaintiffs, v. SOCIETE EUROSUISSE, S.A. et al., Defendants.

No. 79-5988-Civ-SMA.

United States District Court, S. D. Florida, Miami Division.

July 21, 1980.

J. Robert Olian, Britton, Cohen, Kaufman, Benson & Schantz, Miami, Fla., for plaintiffs.

Jeffrey A. Tew, Miami, Fla., for defendants.

MEMORANDUM OPINION AND ORDER

ARONOVITZ, District Judge.

This action presents novel questions concerning a judgment debtor's assertion of the Fifth Amendment privilege against self-incrimination in post-judgment proceedings.

Plaintiffs brought this action in 1975 in the United States District Court for the Northern District of Oklahoma. Following a bench trial, Chief Judge H. Dale Cook entered judgment in favor of the plaintiffs against the individual defendant, Allan H. Applestein, in the amount of $100,000.00 actual damages plus interest and $20,000 punitive damages.¹ Plaintiffs moved to enforce the judgment under the applicable Oklahoma statute.² Pursuant to Okl.Stat. tit. 11, § 842, Judge Cook ordered the defendant to produce documents and answer questions concerning his assets.

The defendant objected to this order, asserting his privilege against self-incrimination under the Fifth Amendment.³ He claimed that to compel his testimony regarding his assets might subject him to prosecution for federal tax law violations. In support of this contention, Applestein filed a letter dated July 14, 1978, from the District Director of the Internal Revenue Service. This letter informed Applestein that the Director was recommending that he be criminally prosecuted.

After an evidentiary hearing, Chief Judge Cook sustained the defendant's claim of constitutional privilege and vacated his prior order requiring testimony and production of documents. It was at this point that the action found its way to the Southern District of Florida. Pursuant to 28 U.S.C. § 1963 (1970),⁴ plaintiffs registered the Oklahoma judgment in this district, and are now petitioning this Court for aid in the enforcement of the judgment. Florida law, however, provides judgment creditors with a weapon not found in the Oklahoma arsenal of execution procedures. Fla.Stat. § 56.29 sets forth the procedure for deposing a judgment debtor regarding his assets. Under Fla.Stat. § 56.29(8),

a party or a witness examined under these provisions is not excused from answering a question on the ground that his answer will tend to show him guilty of the commission of a fraud, or prove that he has been a party or privy to, or knowing of a conveyance, assignment, transfer, or other disposition of property for any purpose . . .. An answer cannot be used as evidence against the person so answering in any criminal proceeding.

Id. (emphasis added). Plaintiffs argue that the last sentence of this provision is a self-executing grant of immunity for the defendant, and that because the defendant's responses cannot be used against him, he may not assert his Fifth Amendment privilege.

Plaintiffs have, therefore, again served defendant with a subpoena duces tecum seeking disclosure of the same information denied them in Oklahoma. The defendant still maintains, however, that he may interpose his privilege against self-incrimination, and has refused to answer any questions regarding his assets on that basis. The plaintiffs have moved for an Order compelling production and testimony, and it is upon this motion that the case is before the Court.

I.

In determining the availability of defendant's Fifth Amendment privilege in these circumstances, the Court must pursue two avenues of inquiry. Initially, the Court must determine whether there is a reasonable probability that the testimony in question will be used in a prosecution against the defendant.⁵ A witness may properly invoke the privilege when he "reasonably apprehends a risk of self-incrimination . . even if the risk of prosecution is remote." Wehling v. Columbia Broadcasting System, 608 F.2d 1084, 1087 n.5 (5th Cir. 1979). See also Garrity v. New Jersey, 385 U.S. 493, 87 S.Ct. 616, 17 L.Ed.2d 562 (1967); Spevack v. Klein, 385 U.S. 511, 87 S.Ct. 625, 17 L.Ed.2d 574 (1966). Without this requirement, any judgment debtor could assert his Fifth Amendment privilege, and judgment creditors would be powerless to enforce their judgments. "The courts cannot accept Fifth Amendment claims at face value, because that would allow witnesses to assert the privilege where the risk of self-incrimination was . . . nonexistent, thus obstructing the functions of the courts." United States v. Moreno, 536 F.2d 1042, 1046 (5th Cir. 1976).

In the instant case, the record contains a letter to the defendant from the District Director of the Internal Revenue Service which indicates a substantial possibility of prosecution.⁶ At the other end of the scale, the defendant has conceded that in June, 1980, the Grand Jury investigating him concluded its proceedings and failed to bring forth an indictment.⁷

However, this Court need not determine the probability of the defendant's prosecution in light of Judge Cook's prior ruling on the same issue. Judge Cook meticulously considered the contents of the information sought by plaintiffs and held that "from the facts and circumstances in this case it appears that the . . . testimony sought from the defendant, Applestein as to his assets could have a tendency to incriminate him either directly or by furnishing a link in the chain of evidence needed to prosecute him." Compton v. Societe Eurosuisse, S.A., No. 75-C-374-C (N.D.Okl. July 23, 1979) at 6. Judge Cook's determination that the defendant faces a substantial possibility of prosecution constitutes the law of the case. This doctrine "expresses the practice of courts generally to refuse to reopen what has been decided . . .." Messenger v. Anderson, 225 U.S. 436, 444, 32 S.Ct. 739, 740, 56 L.Ed. 1152 (1912) (Holmes, J.). See also Steamship Co. of 1949 v. China Union Lines, 123 F.Supp. 802 (S.D.N.Y.1954). Although invocation of the law of the case doctrine requires the Court to exercise its discretion, Southern R. R. Co. v. Clift, 260 U.S. 316, 43 S.Ct. 126, 67 L.Ed. 283 (1922),⁸ this Court is persuaded to accept Judge Cook's determination in the Oklahoma proceeding.⁹ Based upon Judge Cook's reasoning,¹⁰ this Court adopts his conclusion that there is a reasonable probability that the information sought by the plaintiffs could be used against the defendant in a criminal prosecution.¹¹

II.

The second avenue of inquiry that the Court must pursue is whether the self-executing grant of immunity in Fla.Stat. § 56.29(8) is sufficiently broad to supplant the defendant's privilege against self-incrimination.¹² In arguing against this contention, defendant summarily asserts that a state grant of immunity furnishes no protection from federal prosecution.

The Supreme Court has rejected this contention. In Murphy v. Waterfront Commission, 378 U.S. 52, 84 S.Ct. 1594, 12 L.Ed.2d 678 (1964), the petitioner interposed his privilege before a state investigatory commission, despite the commission's grant of immunity to the petitioner. In addressing the petitioner's fear of federal prosecution, the Court recognized the petitioner's dilemma. Accordingly, the Court held that a state grant of immunity would be deemed effective against the federal government:

We hold the constitutional rule to be that a state witness may not be compelled to give testimony which may be incriminating under federal law unless the compelled testimony and its fruits cannot be used in any manner by federal officials in a criminal prosecution against him. We conclude, moreover, that in order to implement this constitutional rule and accommodate the interests of the State and Federal Governments in investigating crime, the Federal Government must be prohibited from making any such use of compelled testimony and its fruits.

Id. at 79, 84 S.Ct. at 1609 (footnote omitted). Thus, a sufficiently broad grant of immunity by a state must be respected by the federal government as well.

This Court's analysis cannot end with Murphy, however. The rationale of Murphy does not come into play unless the state grant of immunity is first determined to be coextensive with the Fifth Amendment privilege. For if a state grant of immunity is to be given the effect of precluding use of testimony and its fruits in federal prosecutions, it follows, a fortiori, that the state grant of immunity must adequately protect against self-incrimination from state prosecution as well.¹³ When measured alongside the Fifth Amendment, Fla.Stat. § 56.29(8) fails to provide this protection.

In reaching this conclusion, the Court is guided by several cases comparing specific grants of immunity with the protection contained in the Fifth Amendment. For example, in Counselman v. Hitchcock, 142 U.S. 547, 12 S.Ct. 195, 35 L.Ed. 1110 (1892), the Court examined a federal immunity statute which provided that no "evidence obtained from a party or witness by means of a judicial proceeding . . . shall be given in evidence, or in any manner used against him . . .." Id. at 560, 12 S.Ct. at 197. The Court upheld appellant's claim of privilege on the ground that the statute "could not, and would not, prevent the use of his testimony to search out other testimony to be used in evidence against him or his property, in a criminal proceeding in such court." Id. at 564, 12 S.Ct. at 198. The quoted language indicates the Court's concern that the fruits of the compelled testimony could be as damaging to the witness as the testimony itself.

In Kastigar v. United States, 406 U.S. 441, 92 S.Ct. 1653, 32 L.Ed.2d 212 (1973), the Court held that the protection afforded by the current federal immunity statute, 18 U.S.C. §§ 6002, 6003, was coextensive with the Fifth Amendment. That statute provides "no testimony or other information compelled under a grant of immunity (or any information directly or indirectly derived from such...