Jung Chul Park v. Cangen Corp.

• Citation: 7 A.3d 520,416 Md. 505
• Decision Date: 27 October 2010
• Docket Number: No. 152, Sept. Term, 2008.,152, Sept. Term, 2008.
• Parties: JUNG CHUL PARK v. CANGEN CORPORATION.
• Court: Court of Appeals of Maryland

7 A.3d 520

416 Md. 505

JUNG CHUL PARK

v.CANGEN CORPORATION.

No. 152, Sept. Term, 2008.

Court of Appeals of Maryland.

Oct. 27, 2010.

Carl R. Gold (Law Offices of Carl R. Gold, Townson), on brief, for appellant.

Harry Levy (Schumaker Williams, P.C., Townson), on brief, for appellee.

Argued before BELL, C.J., HARRELL, BATTAGLIA, GREENE, MURPHY, ADKINS and BARBERA, JJ.

BARBERA, J.

This case involves the privilege against compelled self-incrimination, based on the command of the Fifth Amendment that "[n]o person ... shall be compelled in any criminal case to be a witness against himself...." U.S. Const. amend. V. We are asked to determine whether a former employee of a corporation is entitled to invoke the privilege in response to asubpoena duces tecum commanding him to produce corporate documents. We hold, by application of the "collective entity doctrine," see, e.g., Braswell v. United States, 487 U.S. 99, 104-05, 108 S.Ct. 2284, 101 L.Ed.2d 98 (1988), that the former corporate employee is not entitled to invoke the privilege.

I.

This appeal has its genesis in a replevin action filed by Appellee Cangen Corporation ("Cangen"), in the Court of Common Pleas of Montgomery County, Pennsylvania. According to counsel's description, Cangen "is a biotech[nology] company located in Baltimore, but it does have offices and, significant, connections to Korea." In the replevin action, Cangen sued Richard A. Silfen, the company's former president and chief executive officer, whom Cangen fired in 2006. Cangen sought to replevy "thousands of [Cangen's] documents, records, information, and materials, in electronic form or otherwise," which Mr. Silfen allegedly "stole after his employment with Cangen was terminated." Cangen stated at a later hearing before the Circuit Court for Howard County, Maryland, that "some of these documents were ... given to journalists and financial concerns in Korea, which is where [Cangen] gets a lot of its financing, we believe in an effort to discredit the company."

As part of the replevin action, Cangen filed in the Montgomery County, Pennsylvania Court of Common Pleas a motion for issuance of a commission for a subpoena for a deposition of Appellant, Dr. Jung Chul Park, a former employee of Cangen who currently resides in Howard County, Maryland. The Court of Common Pleas granted Cangen's motion and directed the Clerk of the Circuit Court for Howard County to issue the subpoena. Pursuant to the Maryland Uniform Interstate Depositions and Discovery Act, Maryland Code (1973, 2006 Repl. Vol.), §§ 9-401 to 9-407 of the Courts and Judicial Proceedings Article, Cangen filed the commission and an application for a subpoena duces tecum with the Clerk of the Circuit Court for Howard County. The Clerk of the Circuit Court issued a Subpoena and Notice of Deposition DucesTecum De Bene Esse ("the Subpoena"), which were duly served on Dr. Park.

The Subpoena commanded Dr. Park to appear at a deposition in Howard County and bring documents fitting the requests attached to the Subpoena. Of the twenty-two document demands, most referred to documents that Dr. Park allegedly had received, provided, or sent to various individuals or entities, including Mr. Silfen, "relating to or concerning Cangen Corporation." Other demands referred to "transcripts, recordings, videotapes, notes, memos, etc., concerning [a] meeting that took place on October 12, 2007," which Dr. Park allegedly attended, and documentsthat were "provided, exchanged or made available at the meeting." The remaining demands sought production of "[a]ll documents" in Dr. Park's possession "relating to Cangen Corporation, including any personal notes, memoranda, or other similar documents," and "[a]ll Cangen Corporation documents" in Dr. Park's possession.

Dr. Park appeared at the deposition but did not produce any of the documents that were the subject of the Subpoena. Instead, he asserted a Fifth Amendment privilege in connection with the act of producing those documents. Dr. Park also invoked the privilege in response to nearly every question posed by Cangen's counsel during the deposition.

Cangen filed in the Circuit Court for Howard County a motion to compel Dr. Park to produce "documents responsive to Cangen's subpoena duces tecum" in his "custody, control and possession." Cangen limited the motion, however, to corporate documents in Dr. Park's possession. Cangen alleged in the motion that, "through its own fact investigation, [Cangen] has determined that Dr. Park is in possession of certain business records for [sic] which Dr. Park does not own and has no right to possess."

Cangen argued that Dr. Park's "broad assertion of the Fifth Amendment privilege is wholly inappropriate." In support, Cangen argued: "[T]here is no privilege in the contents of documents"; "[f]urther, there is no Fifth Amendment protectionin the production of corporate records" because "artificial entities are not protected by the Fifth Amendment"; a "custodian of corporate records cannot object to the production of business documents on self-incrimination grounds even if the records may personally incriminate the custodian"; and "[t]his holds true for former employees as well." Cangen did not argue in that motion or file a separate motion arguing that Dr. Park should be compelled to produce non-corporate documents that were the subject of Cangen's original document demand. Nor did Cangen ask that Dr. Park be made to respond to one or more of the questions he refused to answer at the deposition.

Dr. Park filed an answer in opposition to the motion to compel the corporate documents, arguing that the "so-called collective entity doctrine" relied upon by Cangen "has no application where the individual [from whom the corporate documents are sought] is acting only in his personal capacity[,]" and a former employee holds corporate documents in a purely personal capacity. Thus, Dr. Park asserted, he is entitled to invoke the Fifth Amendment privilege because the compelled act of producing the corporate documents, under the circumstances presented, would be testimonial and incriminating.

The Circuit Court held a hearing on the motion to compel Dr. Park's compliance with the portion of the Subpoena that commanded production of "Cangen documents that are in Dr. Park's possession." In the words of Cangen's counsel, "we're seeking Cangen documents and [Dr. Park], certainly, had no right to retain them after leaving Cangen." Dr. Park denied that he was the custodian of any corporate records, and "he wasn't deposed in any kind of custodial capacity, 'cause (sic) he couldn't have been." Cangen, through counsel, responded that Dr. Park "holds [the corporate documents sought] in a representational capacity," and he "would never have had those documents had he not been our employee[.]"

The Circuit Court held the matter sub curia and, shortly after the hearing, entered an order granting the motion tocompel. The order was not accompanied by a memorandum opinion setting forth thecourt's findings of fact and conclusions of law.

Dr. Park noted an appeal to the Court of Special Appeals. On our own initiative we issued a writ of certiorari to address the following issue:

Whether the Circuit Court erred in granting Cangen Corporation's Motion to Compel Production of Documents over Dr. Park's invocation of the Fifth Amendment privilege against self-incrimination; in other words, does the "collective entity doctrine" apply to a former employee such as Dr. Park, even in the case in which it is the corporation itself seeking the production of documents.

II.

The language of the Fifth Amendment, "No person ... shall be compelled in any criminal case to be a witness against himself," if read literally would appear to imply that the privilege applies only to testimony sought to be compelled in a criminal case.¹ Yet, the Supreme Court has given a broader interpretation to the privilege, holding that it

not only protects the individual against being involuntarily called as a witness against himself in a criminal prosecution but also privileges him not to answer official questions put to him in any other proceeding, civil or criminal, formal or informal, where the answers might incriminate him in future criminal proceedings.

Lefkowitz v. Turley, 414 U.S. 70, 77, 94 S.Ct. 316, 38 L.Ed.2d 274 (1973). The privilege, moreover, protects a mere witness as fully as it does one who is a party defendant. Id.

The Fifth Amendment privilege is a personal right, belonging solely to the person who is himself incriminated by his compelled testimony, because the privilege prevents "extortion of information from the accused himself [.]"Couch v. United States, 409 U.S. 322, 328, 93 S.Ct. 611, 34 L.Ed.2d 548 (1973). Consequently, the privilege may be asserted by anyone who expects that responding to the information sought would tend to incriminate him or her in a subsequent criminal case, by compelling either a direct admission of the commission of an illegal act or information that would "furnish a link in the chain of evidence needed to prosecute the claimant [.]" Hoffman v. United States, 341 U.S. 479, 486-87, 71 S.Ct. 814, 95 L.Ed. 1118 (1951).

The mere assertion of the privilege, however, does not excuse the witness from testifying. Rather, "[i]t is for the court to say whether his silence is justified, and to require [the witness] to answer, if it clearly appears to the court that [the witness] is mistaken" in relying on the privilege for the refusal to testify. Id. at 486, 71 S.Ct. 814; Simmons v. State, 392 Md. 279, 297, 896 A.2d 1023, 1034 (2006). The standard that guides the courts in deciding whether the witness can invoke the privilege is whether "the witness has reasonable cause to apprehend danger from" answering a direct question or producing documents demanded. Hoffman, 341 U.S. at 486, 71 S.Ct. 814. Further, "[t]o sustain the privilege, it need only be evident from the implications of the question, in the setting in which it...