Tillotson v. Boughner, 15036.

• Decision Date: 13 July 1965
• Docket Number: No. 15036.,15036.
• Citation: 350 F.2d 663
• Parties: Paul W. TILLOTSON, Special Agent, Internal Revenue Service, Plaintiff-Appellee, v. Jackson L. BOUGHNER, Defendant-Appellant.
• Court: U.S. Court of Appeals — Seventh Circuit

350 F.2d 663 (1965)

Paul W. TILLOTSON, Special Agent, Internal Revenue Service, Plaintiff-Appellee, v. Jackson L. BOUGHNER, Defendant-Appellant.

No. 15036.

United States Court of Appeals Seventh Circuit.

July 13, 1965.

William A. Barnett, Chicago, Ill., Crowley, Barnett & Goschi, Chicago, Ill., of counsel, for defendant-appellant.

Louis F. Oberdorfer, Asst. Atty. Gen., Tax Division, Burton Berkley, Atty., U. S. Department of Justice, Washington, D. C., Edward V. Hanrahan, U. S. Atty., Joseph M. Howard, Washington, D. C., John B. Jones, Jr., Acting Asst. Atty. Gen., Lee A. Jackson, Attorney, Department of Justice, Washington, D. C., of counsel, for plaintiff-appellee.

Before DUFFY, CASTLE and KILEY, Circuit Judges.

DUFFY, Circuit Judge.

This is an appeal from an order of the District Court holding defendant Boughner in civil contempt for his refusal to obey an order of the District Court dated February 12, 1965.

Defendant Boughner is an attorney at law specializing in federal tax matters. He was retained for a confidential conference by another attorney, and through that attorney, by an unnamed taxpayer. Boughner was asked not to divulge the name of the attorney. On July 27, 1961, defendant Boughner delivered to the Internal Revenue Service a cashier's check for $215,499.95 on behalf of the unnamed taxpayer.

On August 27, 1963, Special Agent Tillotson petitioned the United States District Court to enforce an Internal Revenue summons served on defendant Boughner. On December 16, 1963, the District Court entered an order requiring defendant "to give testimony relating to the tax liability of John Doe, the unknown taxpayer, or taxpayers, on whose behalf Jackson L. Boughner delivered to the Internal Revenue Service a cashier's check for $215,499.95, dated July 27, 1961, and drawn on the LaSalle National Bank, Chicago, Illinois." The validity of this order was upheld by this Court, 333 F.2d 515. Defendant petitioned for certiorari, but certiorari was denied, 379 U.S. 913, 85 S.Ct. 260, 13 L.Ed.2d 184.

On December 8, 1964, defendant appeared before plaintiff as required by the order of December 16, 1963. He admitted he was the person who, on July 27, 1961, delivered a cashier's check for $215,499.95 to the Internal Revenue Service. He refused to name the person who brought the matter to him or any other question which might indirectly tend to reveal this name. Defendant asserted the attorney-client privilege.

On January 22, 1965, the United States Attorney filed a motion to advise the Court that its order of December 16, 1963 had not been obeyed, and to request the entry of a rule to show cause why the Court should not enter appropriate sanctions against the defendant.

Defendant appeared on February 12, 1965, but denied he was in disobedience of the order of December 16, 1963, except as to those questions to which he deemed the attorney-client privilege applied. The District Judge stated he thought defendant had waived the right to claim the attorney-client privilege, but that he would not decide the case on that point. He then issued an order for defendant to appear on that date at 2 p. m. before Special Agent Charles Schulze in a witness room in the United States Courthouse. Later that day, the Court was advised by an Assistant United States Attorney that defendant had refused to respond to questions, asserting the attorney-client privilege. The Court then entered an order finding defendant guilty of civil contempt for refusal to obey the order of February 12, 1965, and directing him to personally pay the sum of $100.00 each day until such time as he should purge himself of contempt by obeying the order.

Defendant's first claim is that the proceeding below deprived him of his right to due process under the law. Defendant claims the Court, in reality, was proceeding under the summary provisions of Rule 42(a), Federal Rules of Criminal Procedure. Defendant points out there was no contempt committed in the presence of the Court, hence that he could only be proceeded against by notice and a hearing with allowance for reasonable time to prepare his defense.

The difference between civil and criminal contempt is well established. A commitment or fine for civil contempt is to coerce the defendant. The sentence for a criminal contempt is not intended to coerce, but rather as a punishment to vindicate the Court's authority. Duell v. Duell, 85 U.S.App.D.C. 78, 178 F.2d 683, 685, 14 A.L.R.2d 560.

Defendant, himself an attorney, was also represented by counsel on February 12, 1965. Neither objected to the hearing being held on that date. In fact, counsel was asked by the Court if there were any other reasons why defendant should not be held in contempt, and he replied there were none other than the attorney-client privilege. We hold the defendant was not deprived of his right to due process.

On this appeal, plaintiff argues that defendant could have raised the question of attorney-client privilege in the prior litigation which came before this Court, and that not having done so, he has waived the right to claim such privilege.

On January 15, 1963, the defendant appeared pursuant to the summons and identified himself. He declined to state his profession or to answer this question: "Are you the party who, on or about July 27, 1961, either submitted or had submitted a cashier's check in the amount of $215,499.95 to the Internal Revenue Service, in payment of a taxpayer whose name we do not know?"

Obviously, neither defendant's profession nor the undisputed fact that he had submitted the cashier's check could possibly have involved the attorney-client privilege. The hearing was then terminated by plaintiff who had asked no question to which any attorney-client privilege could have been asserted. Therefore, the only issue before the trial court and before this Court on the previous appeal was the validity of the summons. Our decision was limited to that question. Note in particular Judge Knoch's concurring opinion, 333 F.2d at page 517.

Another reason why the privilege has not been waived is that the privilege is that of the client. Here, the client is not a party to this suit. As stated in 8 Wigmore, Evidence, § 2321 — "Under the original theory of the privilege, it was the...