U.S. v. Edgerton

• Decision Date: 10 May 1984
• Docket Number: No. 723,D,723
• Citation: 734 F.2d 913
• Parties: 84-1 USTC P 9497 UNITED STATES of America, and Ann Marie Govine, Revenue Officer, Internal Revenue Service, Appellees, v. David Edwin EDGERTON, Appellant. ocket 83-6220.
• Court: U.S. Court of Appeals — Second Circuit

Page 913

734 F.2d 913

84-1 USTC P 9497

UNITED STATES of America, and Ann Marie Govine, Revenue Officer, Internal Revenue Service, Appellees, v. David Edwin EDGERTON, Appellant.

No. 723, Docket 83-6220.

United States Court of Appeals, Second Circuit.

Argued Feb. 10, 1984.

Decided May 10, 1984.

Jacob D. Zeldes, Bridgeport, Conn. (Paul F. Thomas, and Zeldes, Needle & Cooper, Bridgeport, Conn., on the brief), appointed by the District Court, for appellant.

Linda K. Lager, Asst. U.S. Atty., Bridgeport, Conn. (Alan H. Nevas, U.S. Atty., Bridgeport, Conn., on the brief), for appellee.

David Edwin Edgerton, Stanford, Conn., appellant, pro se filed a supplemental brief on his own behalf.

Before TIMBERS and VAN GRAAFEILAND, Circuit Judges, and RE, Chief judge. ^*

TIMBERS, Circuit Judge:

This case presents the anomalous situation of a conscientious district court displaying the patience of Job in dealing with an obstreperous taxpayer determined to thwart and mock the very concepts of justice which he solemnly invoked in the name of the Constitution of the United States. And yet we are compelled to vacate the contempt order which the district court felt constrained to enter. We do so because a district court, in exercising the awesome power of contempt, must turn square corners.

The appeal is from an order entered July 20, 1983 in the District of Connecticut, Warren W. Eginton, District Judge, holding appellant Edgerton in civil contempt pursuant to 26 U.S.C. Sec. 7604(b) (1982) because of his failure to answer questions put to him by the court at a contempt hearing. The Internal Revenue Service (IRS) had petitioned the district court for an order holding appellant in contempt because of his failure to comply with an earlier order of the court, entered March 11, 1983, which enforced an IRS summons. For the reasons below, we vacate the contempt order entered July 20, 1983 and remand the case to the district court for further proceedings.

I. FACTS AND PRIOR PROCEEDINGS

On August 2, 1982, appellant was served with a standard IRS Collection Summons to appear before an IRS revenue officer on August 18, 1982. He was required to give testimony and to produce documents--such as W-2 forms, 1099 forms and records of deposits with financial institutions--regarding the tax years 1980 and 1981 for which the IRS contends appellant failed to file federal income tax returns. Appellant appeared on August 18, but did not comply with the summons either by testifying or by producing any of the requested documents. ¹

The IRS then petitioned the district court, pursuant to 26 U.S.C. Secs. 7402(a) and 7604(a) (1982), for an order enforcing the summons. At a hearing before United States Magistrate Thomas P. Smith, appellant appeared pro se. He opposed the enforcement petition by asserting his Fifth Amendment privilege against self-incrimination. He asserted the privilege not only with respect to questions put to him by the magistrate, but also with respect to any attempt to compel him to produce records. He claimed that such records were his personal papers. As for the remainder of the magistrate's questions, appellant did not specify why he believed that his answers somehow would incriminate him.

The magistrate held that the IRS had complied with the standards for enforcement of a summons as set forth in United States v. Powell, 379 U.S. 48 (1964). He concluded that the requested records were not personal documents for the purpose of the Fifth Amendment. Appellant was ordered to comply with the summons. He was advised of his right to appeal to the district court, which he did.

After receiving memoranda from both sides, the court filed a written decision on March 4, 1983. Since the ultimate adjudication of contempt derives from this decision, the exact language is relevant:

"The court agrees with the magistrate that, at least in this civil investigation, the respondent has no Fifth Amendment privilege to withhold the documents described * * *

above to the extent they were prepared by third parties, not by the respondent.

The respondent is therefore ORDERED to comply when summoned again by the IRS, and to produce any requested documents which he himself did not prepare and which are otherwise properly subject to summons. If the respondent objects to any request to produce or to any question, he is to particularize that objection so that the court can independently assess the validity of his claim."

One week later, on March 11, 1983, the court signed the enforcement order, directing appellant to appear on April 4, 1983.

Appellant thereafter did appear at the IRS office on April 4, 1983. He refused to be sworn, produced no documents, and asserted a Fifth Amendment privilege with respect to virtually every question asked of him. The IRS thereupon petitioned the court for an order holding appellant in contempt.

Pursuant to an order to show cause, appellant appeared before the court on July 7, 1983. An assistant federal public defender, James Bergenn, Esq., was made available to appellant at this time, but appellant refused to recognize him as his attorney. The court painstakingly explained to appellant his right to counsel at a civil contempt hearing, ² In re DiBella, 518 F.2d 955 (2 Cir.1975), and offered to appoint counsel if he desired. Upon appellant's request for time to consider his alternatives, the hearing was adjourned until July 20.

On July 20, appellant appeared with two individuals, both non-lawyers, whom he wished to have serve as his counsel. The court correctly denied this request, explaining that it would permit only a member of the bar to appear in a representative capacity. Appellant again was assisted by attorney Bergenn.

The court began the discussion of the substantive issues by stating that it was satisfied that the prior order enforcing the IRS summons had not been complied with. The court attempted to accommodate appellant's concern with the accuracy of the transcript of his April 4 appearance at the IRS office by stating that "we will cut right through that and go right to the questions which the law provides that you should be asked, and I will ask those questions at the behest of the Government." The court referred to the Supreme Court decision in United States v. Rylander, 460 U.S. 752, 103 S.Ct. 1548 (1983), and stated that it would conduct the hearing in accordance with that opinion. After interruption by appellant, the court said, "we're not dealing here with refusal to answer questions .... What we're talking about here is document production ...." Thereupon, the court stated its intended procedure:

"So it is the Court's intention in that connection merely to ask the three elements that really were considered by the Ninth Circuit in Rylander, and that is, as of right now, as of this date which is the 20th of July, there are only three significant questions. One, do the documents which are set forth in the Collection Summons in those categories exist at the present time? That's the first question the defendant should be directed to answer and will be directed to answer when I finish here. Second, are they currently within his possession or control? And third, does he regard them as being private documents?"

After an extensive colloquy with appellant on the difference between equity and law during which the court continued to display its patience, appellant was directed to be sworn by the clerk. Appellant flatly refused to take an oath or an affirmation.

In response to the first question set forth by the court and repeated to appellant, he declined to answer on the ground of his To the second question, appellant again asserted his Fifth Amendment privilege. The court took it to be on the same ground as had just been outlined by attorney Bergenn, although appellant called it "personal information".

                Fifth Amendment privilege against self-incrimination.  The court endeavored, with attorney Bergenn's assistance, to advise appellant of the court's power to hold him in contempt.  Attorney Bergenn then stated to the court the basis for appellant's assertion of his Fifth Amendment privilege:  "[I]f he were to admit that the papers exist, that could be used in a Schiff -like prosecution, that is, a prosecution for willful failure to file."    The court responded:  "Your point is well made, Mr. Bergenn in behalf of Mr. Edgerton.  I think it's well answered by the United States Supreme Court decisions in Rylander, Couch and Fisher."
                

The court asked appellant the third question, in response to which appellant rambled about the invalidity of the summons. Appellant conferred with attorney Bergenn, after which he responded that "[i]f any papers do exist, then those papers are, indeed, private." The court clarified on the record appellant's position to be that all of the documents mentioned in the Collection Summons were private papers.

The court then stated its order as follows:

"Now, I'm prepared, Mr. Edgerton, to sentence you to the custody of the Attorney General or his representative for an indefinite period, emphasizing that you hold the key to your release in your hands. I sentence you on a coercive basis of civil contempt, and you are confined until such time as you answer the three questions that I have put to you on this record today."

Execution of the civil contempt order and sentence were stayed pending the instant appeal. Jacob D. Zeldes, Esq. was appointed by the district court as advisory counsel for appellant on this appeal.

II. ISSUES ON APPEAL

Three essential questions are presented on this appeal. First, which the government argued extensively in its brief, is whether appellant was barred by res judicata from raising his claimed Fifth Amendment privilege at his contempt hearing because it had been litigated fully and fairly in the enforcement proceeding. Second, precisely for what was the appellant adjudged in contempt? Third, whether appellant properly substantiated his claim of...