Grand Jury Proceedings of Guarino, Matter of

• Decision Date: 15 October 1986
• Citation: 516 A.2d 1063,104 N.J. 218
• Parties: In the Matter of GRAND JURY PROCEEDINGS OF Joseph GUARINO.
• Court: New Jersey Supreme Court

Page 218

104 N.J. 218

516 A.2d 1063

In the Matter of GRAND JURY PROCEEDINGS OF Joseph GUARINO.

Supreme Court of New Jersey.

Argued Feb. 4, 1986.

Decided Oct. 15, 1986.

Nancy L. Singer, Deputy Atty. Gen., for appellant State (W. Cary Edwards, Atty. Gen., attorney).

Robert L. Sloan, Mount Holly, for respondent Joseph Guarino (James Logan, Jr., attorney).

The opinion of the Court was delivered by

GARIBALDI, J.

This appeal presents the questions whether, and to what extent, the voluntarily-prepared business records of a sole proprietor are privileged against compelled self-incrimination--first, under the Fifth Amendment of the United States Constitution, U.S. Const., Amend. V, and second, under the laws of New Jersey.

I

The relevant facts in this case are undisputed. Since 1959, respondent, Joseph Guarino, has been doing business as a sole proprietor under the name of Green Acres Estates, a real estate concern. In 1984, a state Grand Jury began an investigation of Green Acres Estates. During the course of that investigation, the Grand Jury served Guarino with a subpoena duces tecum. The subpoena directed him to produce the records listed on an attached schedule that read as follows:

For the period January 1, 1970 to present, the following records pertaining to real property sold by Joseph Guarino, doing business as Green Acres Estates.

1) all contracts for the sale of real estate (including conditional land sales contracts) by or on behalf of Joseph Guarino d/b/a Green Acres Estates, seller-grantor, in Burlington County and Cumberland County (regardless of whose signature appears on behalf of the seller);

2) cash receipts journal and general ledger recording all payments made by purchasers/grantees of property from Joseph Guarino d/b/a Green Acres Estates in Cumberland and Burlington Counties (whether payments are complete or ongoing; whether or not the deed has been transferred);

3) all payment coupons or other documentation which reflect and record payments made by purchasers/grantees of property from Green Acres Estates in Burlington and Cumberland Counties.

Guarino moved to quash the subpoena. The trial court ruled that the motion was untimely and ordered Guarino to appear before the Grand Jury.

In June 1984, Guarino did appear. Relying on his Fifth Amendment privilege against self-incrimination, he refused to produce the documents listed in the subpoena. Shortly thereafter upon application by the Attorney General, the trial court entered an order pursuant to N.J.S.A. 2A:81-17.3, ¹ compelling Guarino to produce the documents and immunizing him from the use of the evidence against him of the act of production of said records in any proceeding or prosecution for a crime or offense, concerning matters arising out of the act of production of the records produced under order of the court pursuant to the provisions of N.J.S.A. 2A:81-17.3 (emphasis added.)

Guarino filed another motion to quash, arguing that use against him of the contents of the subpoenaed documents violated his privilege against self-incrimination under both the Fifth Amendment to the United States Constitution and the laws of New Jersey. Relying on the authority of the United States Supreme Court decision in United States v. Doe, 465 U.S. 605, 104 S.Ct. 1237, 79 L.Ed.2d 552 (1984), the trial judge denied the motion. He stated that in the absence of a clear mandate from this Court he was reluctant to decide that the New Jersey privilege against self-incrimination was broader than that provided by the United States Constitution. He ordered Guarino to comply with the subpoena; however, that order was stayed pending appeal.

On March 28, 1985, the Appellate Division issued a per curiam decision reversing the trial court's order. We granted the State's petition for certification. 101 N.J. 306, 501 A.2d 962 (1985).

II

We first examine whether, and to what extent, the Fifth Amendment privilege against self-incrimination applies to voluntarily-prepared business records of a sole proprietor. The constitutional privilege against self-incrimination is "essentially a personal one, applying only to natural individuals." United States v. White, 322 U.S. 694, 698, 64 S.Ct. 1248, 1251, 88 L.Ed. 1542, 1546 (1944). "[A]n individual cannot rely upon the privilege to avoid producing the records of a collective entity which are in his possession in a representative capacity, even if these records might incriminate him personally." Bellis v. United States, 417 U.S. 85, 88, 94 S.Ct. 2179, 2183, 40 L.Ed.2d 678, 683 (1974). Consequently, the privilege cannot be asserted by a collective group (such as a corporation or a union) or by a representative employee or agent of that collective group. See Wilson v. United States, 221 U.S. 361, 31 S.Ct. 538, 55 L.Ed. 771 (1911) (corporation and its officers); United States v. White, 322 U.S. 694, 64 S.Ct. 1248, 88 L.Ed. 1542 (1944) (labor union); McPhaul v. United States, 364 U.S. 372, 380, 81 S.Ct. 138, 143, 5 L.Ed.2d 136, 143 (1960) (political organization); Rogers v. United States, 340 U.S. 367, 71 S.Ct. 438, 95 L.Ed. 344 (1951) (political party); and Bellis v. United States, 417 U.S. 85, 94 S.Ct. 2179, 40 L.Ed.2d 678 (1974) (partnership).

Employing this principle, the Supreme Court in two recent cases, Fisher v. United States, 425 U.S. 391, 96 S.Ct. 1569, 48 L.Ed.2d 39 (1976) and United States v. Doe, 465 U.S. 605, 104 S.Ct. 1237, 79 L.Ed.2d 552 (1984), has substantially limited the application of the Fifth Amendment privilege to business records, including those possessed by sole proprietors. Since Boyd v. United States, 116 U.S. 616, 6 S.Ct. 524, 29 L.Ed. 746 (1886) but prior to Fisher, the Supreme Court in a series of opinions consistently had repeated the axiom that an individual's private papers were protected by the Fifth Amendment from compelled disclosure. See Fisher, 425 U.S. at 419-20, 96 S.Ct. at 1585-86, 48 L.Ed.2d at 61 (Brennan, J., concurring.) The prevailing rule was that "the Fifth Amendment privilege against compulsory self-incrimination protects an individual from compelled production of his personal papers and effects as well as compelled oral testimony." Bellis, 417 U.S. at 87, 94 S.Ct. at 2182, 40 L.Ed.2d at 683. ² The protection of personal privacy, the fear that private thoughts recorded on paper might become the object of criminal sanctions, was the most prevalent rationale for this rule. And the privilege was viewed quite expansively, applying to the business records of the sole proprietor or sole practitioner as well as to the personal documents containing more intimate information about an individual's private life. Bellis, 417 U.S. at 87, 94 S.Ct. at 2182, 40 L.Ed.2d at 683; Note, "Organizational Papers and the Privilege Against Self-Incrimination," 99 Harv.L.Rev. 640 (1986).

In Fisher and then again in Doe, the Court departed from these precedents. ³ In Fisher, the Court held that a sole proprietor's tax records in the possession of his accountant were not protected. Justice White, writing in Fisher for himself and five other Justices, noted that "[s]everal of [the old] express or implicit declarations have not stood the test of time." Fisher, 425 U.S. at 407, 96 S.Ct. at 1579, 48 L.Ed.2d at 54. He stated that "the prohibition against forcing the production of private papers has long been a rule searching for a rationale consistent with the proscriptions of the Fifth Amendment against compelling a person to give 'testimony' that incriminates him." Id.

No longer constrained by the old rule, the Fisher Court fashioned a new one. The Court focused on the precise words of the Fifth Amendment--"[n]o person ... shall be compelled in any criminal case to be a witness against himself." Id. at 396, 96 S.Ct. at 1574, 48 L.Ed.2d at 47 (emphasis in the original.) Rather than existing to shield certain private writings from discovery by the Government, the Fifth Amendment "applies only when the accused is compelled to make a testimonial communication that is incriminating." Id. at 408, 96 S.Ct. at 1579, 48 L.Ed.2d at 54 (emphasis added.) In effect, the focus of the Court shifted from privacy to the process of compulsion. See id. at 400, 99 S.Ct. at 1575-76, 48 L.Ed.2d at 50; In re Grand Jury Empanelled Mar. 19, 1980, 680 F.2d 327, 332 (3d Cir.1982); Note, "The Rights of Criminal Defendants and the Subpoena Duces Tecum: The Aftermath of Fisher v. United States," 95 Harv.L.Rev. 683, 683 (1982). ⁴

Applying the new test to the facts of the Fisher case, the Court concluded that requiring a defendant-taxpayer to produce an accountant's workpapers in the taxpayer's possession would not violate the Fifth Amendment, regardless of how incriminating those papers might be to the taxpayer, because "the privilege protects a person only against being incriminated by his own compelled testimonial communications." 425 U.S. at 409, 96 S.Ct. at 1580, 48 L.Ed.2d at 55. (Emphasis added.)

The accountant's workpapers were therefore in no sense testimonial communications, according to the Court, because the workpapers were not prepared by the taxpayer. Nor were they compelled communications because they were voluntarily prepared. Id. at 409-10, 96 S.Ct. at 1580-81, 48 L.Ed.2d at 55. The court wrote that:

A subpoena served on a taxpayer requiring him to produce an accountant's workpapers in his possession without doubt involves substantial compulsion. But it does not compel oral testimony; nor would it ordinarily compel the taxpayer to restate, repeat, or affirm the truth of the contents of the documents sought. Therefore, the Fifth Amendment would not be violated by the fact alone that the papers on their face might incriminate the taxpayer, for the privilege protects a person only against being incriminated by his own compelled testimonial communications. [citations omitted.] The accountant's workpapers are not the taxpayer's. They were not prepared by the taxpayer, and they contain no testimonial...