Hill v. Philpott

• Decision Date: 29 July 1971
• Docket Number: No. 18487.,18487.
• Citation: 445 F.2d 144
• Parties: Vincent R. HILL, Appellant, v. Jay G. PHILPOTT, District Director of Internal Revenue, Thomas Vicars, Le Roy Wise, John Hohmann, Ralph Ranaletta, Frank E. Strang, and Other Unknown Agents of Internal Revenue Service, Appellees.
• Court: U.S. Court of Appeals — Seventh Circuit

445 F.2d 144 (1971)

Vincent R. HILL, Appellant, v. Jay G. PHILPOTT, District Director of Internal Revenue, Thomas Vicars, Le Roy Wise, John Hohmann, Ralph Ranaletta, Frank E. Strang, and Other Unknown Agents of Internal Revenue Service, Appellees.

No. 18487.

United States Court of Appeals, Seventh Circuit.

May 17, 1971.

Rehearing Denied July 29, 1971.

Robert G. Heckenkamp, Heckenkamp & Fuiten, Springfield, Ill., for appellant.

Johnnie M. Walters, Asst. Atty. Gen., Vincent P. Russo, Atty., Dept. of Justice, Washington, D. C., Donald B. Mackay, U. S. Atty., Springfield, Ill., Joseph M. Howard, Atty., Dept. of Justice, Washington, D. C., Frank J. Violanti, U. S. Atty., Springfield, Ill., for appellees.

Before DUFFY, Senior Circuit Judge, FAIRCHILD, Circuit Judge, and CAMPBELL, Senior District Judge.^*

CAMPBELL, Senior District Judge.

This case concerns the extent to which a citizen's personal books and records are protected by the Fourth and Fifth Amendments against seizure by the government. Petitioner-Appellant, Dr. Vincent R. Hill, commenced this action in the district court by seeking a rule to show cause why certain properties seized pursuant to search warrants should not be returned and suppressed on the grounds that the seizure was in violation of his constitutional rights under the Fourth and Fifth Amendments. The district court denied the petition and refused the request for the return or suppression of the property. Its memorandum opinion is reported as United States v. Premises, 801 North Seventh Street, 310 F.Supp. 1316 (S.D.Ill.1970). This appeal followed.

The facts giving rise to this somewhat unusual proceeding are as follows. Dr. Hill, a licensed physician and surgeon, has been engaged in the practice of medicine in Springfield, Illinois for more than twenty years. On February 19, 1970, a special agent of the Intelligence Division of the Internal Revenue Service presented to the district court applications for search warrants directed against Dr. Hill's residence and office. In support of the applications for warrants, the special agent presented the affidavits of four former employees of Dr. Hill detailing his office procedures which indicated that the financial records relating to certain patients were kept separate from the general patient and financial records. The records relating to these patients were called "Red Letter Folders." One former employee stated in her affidavit that the employees were directed, "that if any tax man visited the office to make an investigation, one employee should occupy him in the receptionist's area and the other employee was to incinerate all of the `red letter folders' contained in the office in the automatic incinerator."

An affidavit of a "Red Letter" patient of Dr. Hill stated that at least one or two checks tendered to Dr. Hill for visits showed a second endorsement by Myers Brothers Department Store in Springfield. The affidavit of the special agent concluded, that based on his experience there was probable cause to believe that the actions and practices described by the former employees of Dr. Hill, "were analogous with conduct such as: (1) keeping a double set of books, (2) making alterations, (3) concealing sources of income, and (4) destroying or proposing to destroy records in furtherance of concealment, and are designed to prevent or controvert discovery of the omission." The affidavit further concluded, "All of such acts and conduct constituted an attempt to evade or defeat income tax laws in violation of Title 26, U.S.C., § 7201 * * *".

The district court found that the affidavits established "probable cause" for the issuance of the warrants and, "also established that the papers, books, records, and documents sought to be seized were the instrumentalities by which the crimes of wilfully attempted tax evasion had been and were then being committed, as well as evidence of the crimes of wilfully attempted tax evasion." 310 F. Supp. at 1320. Two search warrants directed to Dr. Hill's residence and office were issued. The warrants described the objects of the search in terms which included most if not all of the financial and medical records maintained by Dr. Hill. The property to be seized as recited in the warrants is set forth in the margin.¹

Agents of the I.R.S. searched the office and home of Dr. Hill that same day and seized and removed thirty-five (35) cardboard cartons comprising what the agents described as a "truckload of books, records and papers." The next day Dr. Hill presented his petition for an order directing that the property seized be returned and suppressed on the grounds that the seizure was in violation of the petitioner's constitutional rights, particularly under the Fourth and Fifth Amendments. No criminal proceedings are pending against Dr. Hill.

In this court, as in the court below, Dr. Hill urges three propositions: (1) the seizure of his private books, papers and documents in the manner described above violated his privilege against self-incrimination as contained in the Fifth Amendment to the Constitution; (2) the broad language in the search warrants constitutes "a general warrant" and the search was therefore unreasonable and in violation of his constitutional rights under the Fourth Amendment to the Constitution; and (3) the seizure of his books and records under the warrants and in the manner as described above deprived him of his property without due process of law in violation of the Fifth Amendment to the Constitution.

The district court considered and rejected all three contentions and denied Hill's petition for the return of the property and the suppression of the evidence. We consider only the first contention, which is based on the petitioner's privilege against self-incrimination.

The first premise in Dr. Hill's self-incrimination argument, and one which is not refuted by the government, is that many if not all of the records seized are records which if sought by subpoena or summons are generally considered privileged from disclosure by a taxpayer under the Fifth Amendment.²

In numerous cases where the Internal Revenue Service has sought court enforcement of its summons pursuant to statute (26 U.S.C. § 7402), courts have held that a taxpayer may refuse production of personal books and records by assertion of his privilege against self-incrimination. See, e. g., Stuart v. United States, 416 F.2d 459 (5th Cir. 1969); United States v. Cohen, 388 F.2d 464 (9th Cir. 1967); United States v. Kleckner, 273 F.Supp. 251 (S.D.Ohio 1967) app. dism. 382 F.2d 1022 (6th Cir. 1967).

As indicated, the government admits that production of the records in question could properly be refused if sought by summons. It argues, however, that because the records in this case were obtained pursuant to a search warrant proper in form, the only question is whether the warrant was issued in compliance with the Fourth Amendment as implemented by the United States Code and the Federal Rules of Criminal Procedure. See 18 U.S.C. § 3103(a); Rule 41, F.R.Crim.Proc. It thus diminishes Dr. Hill's self-incrimination argument to what it describes as, "an abortive assault on the constitutionality of Rule 41(e) of the Federal Rules of Criminal Procedure," which authorizes the issuance of search warrants based on probable cause, supported by oath or affirmation, and particularly describing the place to be searched, and the persons or things to be seized.

In short, the government takes the position that once the validity of a search is established under the Fourth Amendment — and by that fact alone — the Fifth Amendment is not and cannot be violated.

The relationship between the Fourth and Fifth Amendments as each pertains to an individual's right to refuse the production of his personal books and records is not a new problem to the courts. As early as Boyd v. United States, 116 U.S. 616, 6 S.Ct. 524, 29 L.Ed. 746 (1885), the Supreme Court discussed the "intimate relation" between the two Amendments. In Boyd, the defendant was ordered to produce an invoice relating to several cases of glass which were alleged to have been fraudulently imported. The production order was based on a statute which required production and which further provided that failure to so produce would serve as an admission of the offense alleged. In discussing the "intimate relation" between the two Amendments the Court stated (at p. 633, 6 S.Ct. at p. 534):

"* * * compelling a man `in a criminal case to be a witness against himself,\' which is condemned in the fifth amendment, throws light on the question as to what is an `unreasonable search and seizure\' within the meaning of the fourth amendment. And we have been unable to perceive that the seizure of a man\'s private books and papers to be used in evidence against him is substantially different from compelling him to be a witness against himself."

Although the Boyd case involved a court-issued production order and not a search and seizure,³ its reasoning was relied on by the Supreme Court in a later case, Gouled v. United States, 255 U.S. 298, 41 S.Ct. 261, 65 L.Ed. 647 (1921), which did involve a search made pursuant to a warrant. In that case the defendant was charged with defrauding the government in certain procurement contracts. Documents were taken from his office and used as evidence against him over his objection that their seizure and introduction into evidence violated his Fourth and Fifth Amendment rights.

In considering these contentions raised in Gouled, the Supreme Court first distinguished the seizure of "mere evidence" as opposed to the seizure of the "instrumentalities of a crime". The distinction was essential because, under the theory prevailing at that time, the government's right to seize evidence and the right of a citizen to resist such seizure were both dependent upon the property interest each could assert as to the evidence sought to be seized. If the property was the fruits of a...