Dunbar v. U.S., 73-3804

• Decision Date: 07 October 1974
• Docket Number: No. 73-3804,73-3804
• Citation: 502 F.2d 506
• Parties: 74-2 USTC P 9744 Hugh Leroy DUNBAR, Jr., a/k/a H. L. Dunbar, et al., Plaintiffs-Appellants, v. UNITED STATES of America et al., Defendants-Third Party Plaintiffs-Appellees, J. Arthur HAWKESWORTH, Jr., et al., Third Party Defendants-Appellees.
• Court: U.S. Court of Appeals — Fifth Circuit

Page 506

502 F.2d 506

74-2 USTC P 9744

Hugh Leroy DUNBAR, Jr., a/k/a H. L. Dunbar, et al., Plaintiffs-Appellants, v. UNITED STATES of America et al., Defendants-Third Party

Plaintiffs-Appellees, J. Arthur HAWKESWORTH, Jr.,

et al., Third Party Defendants-Appellees.

No. 73-3804.

United States Court of Appeals, Fifth Circuit.

Oct. 7, 1974.

Robert M. Bader, Miami, Fla.for plaintiffs-appellants.

Robert W. Rust, U.S. Atty., Mervyn L. Ames and Robert C. Byrne, Asst. U.S. Attys., Miami, Fla., for defendantsthird party plaintiffs-appellees.

Before BELL, GOLDBERG and CLARK, Circuit Judges.

GOLDBERG, Circuit Judge:

This case comes to us primarily as a result of an unusual abuse of power by the federal officers involved. On May 17, 1973, Plaintiff-Appellant Hugh Leroy Dunbar, Jr., called a friend in Miami, Florida, one Ann Arzbedker, and informed her that he planned to send her a package within the next few days that he wished her to keep for him. On or about May 21, 1973, plaintiff placed a shoe box wrapped in a brown paper bag into the United States mails at Boston, Massachusetts, as first-class mail. Inside the package was $21,500 in cash; on the outside was the mailing address of Arzbecker's employers, a Miami law firm, and a return address: 'H. Dunbar, Somerville, Massachusetts.' Unfortunately, plaintiff neglected to include Arzbecker's name in the mailing address.

The package was delivered to the offices of Arzbecker's employers on May 22 and was opened in the presence of the senior member of the firm. A great commotion ensued, in the midst of which Arzbecker entered and informed her employer that she was the intended addressee. After some indecision, the lawyer met with a representative of the United States Attorney's office and informed that gentleman that it was his fondest wish to be rid of the $21,500 as soon as possible, as he had no claim to the money, and that if 'H. Dunbar' appeared and satisfied the lawyer that he was the sender of the package, the money would be turned over to him. The United States Attorney, however, had a better idea-- for the lawyer to turn the cash over to the Federal Bureau of Investigation (FBI). The lawyer adopted this plan on May 23, receiving in return a 'hold harmless' agreement.

The FBI immediately began an extensive investigation of the currency and of plaintiff, but found no evidence of criminal activity connected with either specie or sender, save the vague recollection of an unidentified Internal Revenue Service agent that someone named Hugh Dunbar had once been arrested in Vermont on a narcotics charge.

At this point, the ever-vigilant Internal Revenue Service (IRS) learned of the problem and gave notice of a jeopardy assessment of income tax against plaintiff, pursuant to 26 U.S.C. 6851 in the amount of $5460.17. When a notice of levy was served upon the FBI agent in charge of the funds, the agent made no objection to the IRS action and delivered said $5460.17 to a representative of the service on May 25, 1973.

When plaintiff's attorney asked the FBI to return the money to plaintiff, however, the Bureau made a very different response. It claimed that it was not at all certain that plaintiff was the 'H. Dunbar' in question, or that plaintiff owned the cash. In order to ascertain the truth of the matter, therefore, the FBI demanded that plaintiff provide information as to the source and ownership of the cash.

This plaintiff declined to do. Instead, he filed a complaint against the Government in federal district court on June 12, seeking a writ of mandamus to compel the FBI and the IRS to return the money to him on the basis of certain postal regulations. ¹

In the course of civil discovery, the Government propounded interrogatories to plaintiff pursuant to Rule 33, Federal Rules of Civil Procedure, all of which plaintiff answered, except for the following:

'9. State the purpose and reasons for sending the package containing $21,500 in United States currency in the United States mails, as alleged in your complaint, from Boston, Massachusetts to Miami, Florida.

. . . .the

11. Describe in detail exactly how all of the United States currency, which is the subject of this action, was acquired by you. In further response to this interrogatory: a. State the dates of acquisition b. State the places of acquisition c. State names and addresses of persons or parties from whom any of the above monies were acquired and respective amounts therefrom received.'

To these questions plaintiff raised his Fifth Amendment privilege against self-incrimination, whereupon the United States filed a motion under Rule 37(a), Federal Rules of Civil Procedure, to compel answers to the questions. This motion was granted, in the form of an order requiring plaintiff to answer or suffer his complaint to be dismissed.

On September 14, 1973, pursuant to 28 U.S.C. 2361 and Rules 14 and 22 of the Federal Rules of Civil Procedure, the United States filed a third-party complaint for interpleader against plaintiff, the law firm to which the package had been addressed, and 'all absent, unknown persons having or claiming any right, title or interest in and to the subject matter funds.' The Government disclaimed any right or interest in the money, but disputed plaintiff's claim and asked the court to determine which party had rightful possession and ownership of the fund. The law firm immediately denied any interest in the money; the 'absent, unknown persons' made no reply.

When plaintiff persisted in his refusal to answer the disputed interrogatories, the United States filed a motion to dismiss the complaint for plaintiff's failure to comply with the previous court order compelling answers. The district court dismissed the complaint on October 5, 1973, pursuant to Rule 37(b) of the Federal Rules of Civil Procedure. Plaintiff appeals, arguing that the dismissal was improper because the disputed interrogatories were irrelevant to the issue raised by the complaint; plaintiff urges also that the Government has violated his Fourth and Fifth Amendment rights.

I.

Rule 37 of the Federal Rules of Civil Procedure provides various sanctions against parties who fail to make discovery. When a party has failed to comply with a court order compelling an answer to a particular interrogatory, Rule 37(b)(2)(C) empowers a court to dismiss an action brought by the disobedient party. Although such a sanction is obviously necessary to effectuate the discovery provisions of the Federal Rules, Rule 37(b) also provides that courts are to impose only such sanctions 'as are just.' See Bon Air Hotel, Inc. v. Time, Inc., 5th Cir., 1967, 376 F.2d 118. This admonition, and the drastic nature of an order dismissing the complaint without reaching the merits, have led the courts to employ the sanctions of Rule 37(b) only on the clearest showing that such an action is required. Anderson v. Nosser, 5 Cir., 1971, 438 F.2d 183, modified on other grounds, 1972, 456 F.2d 835, (en banc); Campbell v. Eastland, 5 Cir., 1962, 307 F.2d 478, cert. denied, 1963, 371 U.S. 955, 83 S.Ct. 502, 9 L.Ed.2d 502. Finally, although the application of Rule 37 is fully within the discretion of the trial court, Diaz v. Southern Drilling Corp., 5 Cir., 1970, 427 F.2d 1118, cert. denied, Trefina A. G. v. United States, 1971, 400 U.S. 878, 91 S.Ct. 118,28 L.Ed.2d 115, a court must be mindful of the demands of the Due Process Clause in its proceedings under the Rule. Societe Internationale Pour Participations Industrielles et Commerciales, S.A. v. Brownell, 1958, 357 U.S. 197, 78 S.Ct. 1087, 2 L.Ed.2d 1255.

In order to determine the propriety of a particular application of a Rule 37 sanction, we must examine the nature of the dispute that led to the Rule 37 disposition. If the disputed information was not properly discoverable, it follows that the district court should not have imposed a Rule 37 sanction upon plaintiff for refusal to reveal such information.

The Government instigated this Rule 37 controversy by propounding interrogatories to plaintiff under the rubric of Rule 33 of the Federal Rules of Civil Procedure. That Rule provides that interrogatories 'may relate to any matters which can be inquired into under Rule 26(b).' Rule 26(b), in turn, enables parties to 'obtain discovery regarding any matter, not privileged, which is relevant to the subject matter involved in the pending action . . .'

The question in this case, then, is whether the Government's interrogatories relating to the source and ownership of the cash were 'relevant to the subject matter' of this lawsuit. We think that the questions were not relevant, and that the district court improperly dismissed plaintiff's complaint.

Plaintiff's action was brought under the auspices of 28 U.S.C. 1361. The relief requested was a writ of mandamus to compel the FBI to perform a non-discretionary duty owed to plaintiff-- to return the cash in question. Plaintiff alleges that this duty arises under the postal regulations, which provide that first-class mail must be returned to the sender when the 'addressee has refused to accept mail' or when 'it cannot be determined which of the disputing parties has better right to the mail.' 39 C.F.R. 159.2. Plaintiff contends that he was the sender, and that the addressee law firm refused the package, so that the right of plaintiff and the duty of the United States are clear under the regulation.

Plaintiff has not alleged ownership of the money in his complaint, and he need not do so in order to substantiate his cause of action; it is enough to show that he was the sender of the package. A determination of ownership, therefore, is not relevant to the scope of the Government's duty under the regulation. Once that is said, it is not necessarily true that all questions regarding ownership would be irrelevant in all cases involving the regulation. ² The United States Supreme Court has recognized that the discovery rules 'are to be accorded a broad and...