Grand Jury Proceedings U.S., In re

• Decision Date: 23 May 1980
• Docket Number: Nos. 79-1562,79-1584,s. 79-1562
• Citation: 626 F.2d 1051
• Parties: In re GRAND JURY PROCEEDINGS UNITED STATES of America, Appellant. In re GRAND JURY PROCEEDINGS Hector G. Rodriguez MARTINEZ, Appellant.
• Court: U.S. Court of Appeals — First Circuit

Page 1051

626 F.2d 1051

In re GRAND JURY PROCEEDINGS UNITED STATES of America, Appellant In re GRAND JURY PROCEEDINGS Hector G. Rodriguez MARTINEZ, Appellant.

Nos. 79-1562, 79-1584.

United States Court of Appeals, First Circuit.

Argued March 12, 1980.

Decided May 23, 1980.

Jose E. Fernandez Sein, Rio Piedras, P. R., with whom Harvey B. Nachman, Sonturce, P. R., was on brief, for Hector G. Rodriguez Martinez.

William G. Otis, Atty., U. S. Dept. of Justice, Washington, D. C., with whom Jose A. Quiles, U. S. Atty., Old San Juan, P. R., and Pedro J. Durand, Sp. Atty., Miami Strike Force, were on brief, for United States.

Before COFFIN, Chief Judge, BOWNES, Circuit Judge, WYZANSKI, Senior District Judge. ^*

COFFIN, Chief Judge.

In deciding these appeals, we must resolve an important question about the scope of Fifth Amendment protection available to an independent professional practitioner when the grand jury attempts to subpoena his personal business records. The government appeals from an order of the district court quashing a subpoena duces tecum ordering a physician to turn over his appointment logs to the grand jury. The physician appeals from a subsequent district court order that he deposit the logs with the court pending appeal. Although we agree with much of the district court's reasoning, we vacate the order quashing the subpoena. We affirm the district court's order to deposit the records pending appeal.

I.

A federal grand jury in Puerto Rico is investigating alleged illegal payments made by Hospital Sagrado Corazon, a corporation to officials of a local labor union. Dr. Hector Rodriguez Martinez is chairman of the hospital's board of directors and an officer of the corporation. The government commanded the doctor to bring to the grand jury, "all appointment books for the years 1975 thru 1978." The government anticipates that these records will disclose the dates of meetings between hospital and union officials.

The doctor moved to quash the subpoena on the grounds that compliance would violate his Fifth Amendment right against self-incrimination. ¹ The district court held a hearing on an order to show cause why the subpoena should not be quashed. The evidence presented at the hearing, testimony of the physician and of a former secretary who made the record entries, was directed at establishing the nature of the appointment books and delineating whether they were corporate or personal records. The significance of this latter inquiry arises from the long established rule that the custodian or creator of corporate records enjoys no Fifth Amendment right to resist a subpoena for the records. Wilson v. United States, 221 U.S. 361, 31 S.Ct. 538, 55 L.Ed. 771 (1911). See also Bellis v. United States, 417 U.S. 85, 94 S.Ct. 2179, 40 L.Ed.2d 678 (1974) (partnership). If the records were those of the physician's private practice, however, the court was required, under Fisher v. United states, 425 U.S. 391, 96 S.Ct. 1569, 48 L.Ed.2d 39 (1976), to assess the Fifth Amendment rights applicable to the subpoena of such records.

The testimony showed that the records are appointment logs in which the secretary, under the sole direction of the doctor, would note the names of patients who visited the doctor for treatment or consultation, the date of the visit, and the amount of any payment or insurance coverage. Reminders to telephone the doctor's business and personal acquaintances were also included. Occasionally, the doctor would have recorded money paid to family members and the secretary would make notes to herself. The government contended that the appointment logs were corporate records largely on the basis of the financial relationship between the doctor and the hospital: some of the blank books were provided by the hospital, the logs were kept in a private office in the hospital for which the doctor paid no rent, and the entries were made by a secretary whose salary was paid by the hospital. The district court found that the appointment logs were records of the physician's private practice rather than records pertaining to his corporate position.

As an initial matter in this case, we must address the government's argument that the court erred in not finding that the logs were corporate records in which the individual had merely mingled personal entries. The district court's conclusion that the appointment logs were personal business records is a finding of mixed law and fact subject to review under the clearly erroneous standard. See Sweeney v. Board of Trustees of Keene State College, 604, F.2d 106, 109 n. 2 (1st Cir. 1979). This standard applies even if the order quashing the subpoena should properly be classified as a criminal proceeding, since the classification was not an ultimate finding of guilt or innocence. See 3 C. Wright & A. Miller, Federal Practice and Procedure, § 374. Cf. United States v. Jobin, 535 F.2d 154, 156 (1st Cir. 1976) (findings of fact in a pre-trial suppression hearing are binding on appeal unless clearly erroneous).

Here, the district court applied the proper legal standard; it primarily looked to "the nature of the documents and the capacity in which they are held", Wilson v. United states, supra, 221 U.S. at 380, 31 S.Ct. at 544; In re Grand Jury Proceedings, 349 F.Supp. 417, 418 (N.D.Ohio 1972). Assessing the legal or financial relationship between a doctor and a hospital may be difficult because the doctor's private practice may be performed on the hospital's premises and the hospital may compensate the physician for services to the hospital by providing space and auxiliary service. See generally Hospital San Jorge v. Secretary of Health, Education and Welfare, 616 F.2d 580 (1st Cir. 1980). The district court had reasonable grounds for characterizing the business transacted in the doctor's office and memorialized in his logs as a private practice. The logs dealt primarily with payment by patients visiting the doctor for treatment. On this record, we cannot say that the district court clearly erred in concluding that the appointment logs were the doctor's personal business records.

The district court concluded that compelling the doctor to submit personal business records in his possession to the grand jury would violate his Fifth Amendment privilege against compelled testimonial self-incrimination. The court examined Supreme Court precedents and distinguished prior holdings on the grounds that the appointment logs at issue in this case were prepared under the personal supervision of the physician and remained in his possession. Applying the rationales of the prior cases, the court determined that submission of the records would be tantamount to testimony that the documents were authentic and that they were the documents described in the subpoena. To prevent this perceived violation of the doctor's Fifth Amendment right, the court quashed the subpoena. While we agree with the substance of much of the district court's analysis, we vacate its order and remand for further consideration in light of our examination of the scope of a sole practitioner's Fifth Amendment right when his personal business papers are subpoenaed.

At one time it was thought that the Fifth Amendment prohibited the government from forcing an individual to produce personal papers that might incriminate him. See Boyd v. United States, 116 U.S. 616, 6 S.Ct. 524, 29 L.Ed. 746 (1886). Such a rule was justified by the person's privacy interest in his own papers both the embodiment of his own thinking as preserved statements to himself and his private property. See Note, Formalism, Legal Realism, and Constitutionally Protected Privacy Under the Fourth and Fifth Amendments, 90 Harv.L.Rev. 945, 951-56 (1977).

Since Boyd, the rule has been hedged about with exceptions and its rationales have been rejected. Today, no collective entity, such as a corporation, labor union or partnership, can resist a subpoena for its business records on Fifth Amendment grounds. See, e. g., Bellis v. United States, supra. Nor can an individual invoke the privilege if the documents are not in his possession or "constructive possession", Couch v. United States, 409 U.S. 322, 93 S.Ct. 611, 34 L.Ed.2d 548 (1973), or if the documents were prepared by a third party, Fisher v. United States, supra. Further, an individual's business records can be seized from his desk by police officers bearing an otherwise valid warrant. Andresen v. Maryland, 427 U.S. 463, 96 S.Ct. 2737, 49 L.Ed.2d 627 (1976).

In Fisher, supra, the Court discussed at length the current Fifth Amendment concerns implicated by the subpoena of business documents. ² The Court stressed that the privilege does not protect any privacy interest in the contents of business records, even when written by and for an individual. Rather, the privilege "applies only when the accused is compelled to make a testimonial communication that is incriminating." 425 U.S. at 408, 96 S.Ct. at 1579 (emphasis in original). Whatever information the requested documents may contain is irrelevant because creation of the documents was not compelled by the subpoena. Id. at 410 n. 11, 96 S.Ct. at 1580 n. 11. The Court's concern was focused on the testimony implicit in the compelled act of producing the documents; it considered whether compliance with the subpoena would constitute evidence admitting the existence of the documents, their identity with the papers designated, or their authenticity. Although it noted that the answer to this inquiry would depend on the facts of each case, the Court was "quite unprepared to hold that either the fact of existence of the papers or of their possession by the taxpayer poses any realistic threat of incrimination to the taxpayer." Id. at 412, 96 S.Ct. at 1581. On the facts before it, the Court found no substantial possibility of compelled authentication because the papers at issue were prepared by an accountant rather than by the individual. Left open was...