Morganroth, In re

• Decision Date: 30 September 1983
• Docket Number: No. 81-1574,81-1574
• Citation: 718 F.2d 161
• Parties: 14 Fed. R. Evid. Serv. 187 In re Mayer MORGANROTH, Petitioner-Appellant. Raymond J. DONOVAN, Secretary of Labor, Plaintiff-Appellee, v. Frank FITZSIMMONS, et al., Defendants.
• Court: U.S. Court of Appeals — Sixth Circuit

Page 161

718 F.2d 161

14 Fed. R. Evid. Serv. 187

In re Mayer MORGANROTH, Petitioner-Appellant Raymond J. DONOVAN, Secretary of Labor, Plaintiff-Appellee, v. Frank FITZSIMMONS, et al., Defendants.

No. 81-1574.

United States Court of Appeals Sixth Circuit.

Argued Jan. 19, 1983.

Decided Sept. 30, 1983.

Albert J. Krieger (on brief), Miami, Fla., for petitioner-appellant.

Arthur R. Goldberg, U.S. Dept. of Labor, Special Litigation Staff, Richard P. Carr, Susan S. Slattery, Bruce Rinaldi (argued), Sidney Dickstein, Dickstein, Shapiro & Morin, Washington, D.C., Jack B. Schmetterer, Gottlieb & Schwartz, Marvin Gittler, Asher, Greenfield, Goodstein, Pavalon & Segall, Edward J. Egan, Burke, Weber & Egan, Sherman M. Carmell, Carmell & Charone, Jeffrey D. Coleman, Jenner & Block, James L. Coghlan, Coghlan, Joyce & Nellis, Chicago, Ill., Alan M. Levy, Goldberg, Peviant & Uehlman, Joseph P. Balistrieri, Milwaukee, Wis., Wildman, Harrold, Allen & Dixon, Raymond J. Smith, Chicago, Ill., James P. Hoffa, Hoffa, Chodak & Robiner, Detroit, Mich., Frank M. Covey, McDermott, Will & Emery, Chicago, Ill., Bernard S. Goldfarb, Goldfarb & Reznick, Cleveland, Ohio, F.W. Dennerline, Fillenwarth & Fillenwarth, Indianapolis, Ind., for appellees.

Before KENNEDY, JONES and CONTIE, Circuit Judges.

CORNELIA G. KENNEDY, Circuit Judge.

Petitioner Morganroth seeks review of an order directing him to answer deposition questions to which he asserted his fifth amendment right to remain silent on the ground that his answers might tend to subject him to criminal liability.

In 1975 the Central States, Southeast & Southwest Areas Pension Fund made a loan to Indico Corporation of $7,000,000. Morganroth was president of Indico Corporation at that time. Subsequently, Indico defaulted on the loan and as a result the Pension Fund suffered significant losses on its investment. Morganroth has since been involved in a number of lawsuits. He was indicted by a federal grand jury on conspiracy and mail and wire fraud charges arising out of this loan transaction with the Pension Fund. On October 20, 1979, subsequent to his indictment, Morganroth was deposed in a civil action, Trustees of Central States, Southeast & Southwest Areas Pension Fund v. Indico Corp., then pending in Florida state court. This civil case was a foreclosure proceeding in connection with the same loan. At that deposition Morganroth appeared voluntarily and answered all questions put to him. Morganroth is himself an attorney. In March 1980, Morganroth was acquitted of the federal criminal charges. It appears that after his acquittal, Morganroth was subpoenaed to appear before a New York federal grand jury and was asked the same set of questions which he voluntarily answered in the Florida state foreclosure proceeding. Morganroth asserted his fifth amendment privilege to these same questions. Immunity was conferred upon Morganroth, his testimony given, and thereafter he was advised by one of the prosecutors that his testimony was in serious conflict with that of others appearing before the grand jury.

Subsequent to his acquittal and the immunized testimony before the New York federal grand jury, the Secretary of Labor subpoenaed Morganroth to appear for a deposition as a non-party witness in this civil action pending in the United States District Court for the Eastern District of Illinois. In this action, the Secretary of Labor has alleged that defendants, who are former trustees and officials of the Central States, Southeast & Southwest Areas Pension Fund, imprudently made, administered and monitored certain investments on behalf of the Fund in violation of their fiduciary obligations under the Employee Retirement Income Security Act, 29 U.S.C. Secs. 1001 et seq. Morganroth's deposition was scheduled for June 29, 1981 in Detroit, Michigan pursuant to Fed.R.Civ.P. 45(d)(2). At the deposition, Morganroth was represented by counsel. He answered questions under oath. After providing information as to his name, address and occupation, Morganroth individually refused to answer each question propounded to him by counsel for the Secretary of Labor on the ground that each answer might tend to incriminate him, without elaborating further. The questions he refused to answer at this latter deposition covered the same aspects of the Indico loan transaction with the Central States, Southeast & Southwest Areas Pension Fund about which he had previously given deposition answers voluntarily in the Florida state foreclosure proceeding on October 20, 1979 and pursuant to the grant of immunity in the New York federal grand jury proceeding. As a result, the Secretary of Labor moved the United States District Court for the Eastern District of Michigan that same day for an order pursuant to Fed.R.Civ.P. 37(a) compelling Morganroth to answer these questions on the grounds that he had waived any fifth amendment right he had with respect to these questions by answering virtually identical questions in the Florida state foreclosure proceeding and that he had no legitimate fifth amendment right to assert because there was no reasonable likelihood of criminal prosecution, given his acquittal in March 1980, that would flow from the answers requested. The District Court ordered Morganroth to testify at the deposition on the ground that he had waived his fifth amendment rights by testifying in the earlier, separate Florida foreclosure proceeding and that he would suffer no additional legal detriment from testifying. The District Court did, however, confine the Secretary of Labor to asking only the identical questions asked at the prior deposition.

Morganroth then filed for certification under 28 U.S.C. Sec. 1292(b) asserting that no Supreme Court or Sixth Circuit authority existed on this issue and that the District Court had adopted a rule followed in only one circuit, rejecting the rule followed by a majority of circuits, and applied it erroneously. The District Court granted the motion and certified the question as follows:

When a deponent has testified on October 20, 1979, in a deposition pursuant to a civil proceeding in which he is not a party without invoking his Fifth Amendment privilege against self-incrimination, and later on June 29, 1981, in a separate and unrelated proceeding to which he is also not a party, he refused to answer the same question asked in the earlier deposition on the basis that his answer would further incriminate him, may he do so, or does his earlier testimony constitute a waiver of the privilege, notwithstanding any possible intervening circumstances.

In granting Morganroth's petition for leave to appeal, this Court stated that it may consider other issues raised in the order of the District Court even though they were not included in the certified question formulated by the District Court.

The fifth amendment states that "No person shall be ... compelled in any criminal case to be a witness against himself ...." U.S. Const. amend. V. The privilege extends not only to answers which would in and of themselves support a criminal conviction, but also to answers which would furnish a link in the chain of evidence needed to prosecute. Hoffman v. United States, 341 U.S. 479, 486, 71 S.Ct. 814, 818, 95 L.Ed. 1118 (1951). See also Maness v. Meyers, 419 U.S. 449, 462, 95 S.Ct. 584, 593, 42 L.Ed.2d 574 (1975); Kastigar v. United States, 406 U.S. 441, 444-45, 92 S.Ct. 1653, 1656, 32 L.Ed.2d 212 (1972); Arndstein v. McCarthy, 254 U.S. 71, 72-73, 41 S.Ct. 26, 26-27, 65 L.Ed. 128 (1920). The fifth amendment privilege 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 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, 94 S.Ct. 316, 38 L.Ed.2d 274 (1973). See also Lefkowitz v. Cunningham, 431 U.S. 801, 805, 97 S.Ct. 2132, 2135, 53 L.Ed.2d 1 (1977); Arndstein, supra.

In this appeal, Morganroth urges that this Court reject the "minority" rule adopted by the District Court, or its application of that rule, and adopt the "majority" rule that waiver of the privilege and voluntary testimony in response to specific questions or a particular subject matter in one proceeding does not constitute a waiver of the fifth amendment privilege with respect to identical questions or a particular subject matter in a second proceeding if the witness remains at risk for the same offense. United States v. Licavoli, 604 F.2d 613 (9th Cir.1979), cert. denied, 446 U.S. 935, 100 S.Ct. 2151, 64 L.Ed.2d 787 (1980); United States v. Cain, 544 F.2d 1113 (1st Cir.1976); United States v. Lawrenson, 315 F.2d 612 (4th Cir.1963); United States v. Miranti, 253 F.2d 135 (2d Cir.1958). The policy behind the majority rule that the privilege is "proceeding specific" and not waived in a subsequent proceeding by waiver in an earlier one, rests on the thought that during the period between the successive proceedings conditions might have changed creating new grounds for apprehension, e.g., the passage of new criminal law, or that the witness might be subject to different interrogation for different purposes at a subsequent proceeding, or that repetition of testimony in an independent proceeding might itself be incriminating, even if it merely repeated or acknowledged the witness' earlier testimony, because it could constitute an independent source of evidence against him or her. Miranti, supra, 140; In re Corrugated Container Antitrust Litigation, Conboy, 661 F.2d 1145, 1155 (7th Cir.1981), aff'd, Pillsbury Co. v. Conboy, --- U.S. ----, 103 S.Ct. 608, 74 L.Ed.2d 430 (1983) (hereinafter Conboy ).

The Secretary of Labor urges that the District Court correctly adopted and applied the minority rule set forth in Ellis v. United States, 416 F.2d 791 (D.C.Cir.1969). In Ellis, the court...