Petition — Estate of Ryan v. Commissioner

Supreme Court brief1978

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Text

) J. Ryan and Ha Ryan,

22 AS 62. ikl nentors

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TABLE OF CONTENTS

Page

D,, ̃ͤ HP COP OPA Fe ee EO EPP 1

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Gn eee 2

D . es ie eae 2

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Reasons ror GRANTING THE W RXrr ? 6

D ˙ ̃ A ² be chelbinteenel 10

APPENDIX ;

Judgment of the Court of Appeals .............. la

Opinion of the Court of Appeals 2a

Order of the Court of Appeals Denying Petition

FFF 25a

Order Extending Time to File Petition for Writ

r Nata 044 bilan wiowseceeedade act 26a

Order of the United States Tax Court (October 1,

EE GONE bees 6 basses tubeddscecouneéseece 27a

Opinion of the United States Tax Court (Novem-

Se Ge EEE ob ee 29a

Order of the United States District Court for the

District of Columbia (August 8, 1971) (Im-

K 45a

Motion by United States Attorney for the District

ö rens 47a

Opinion of the United States Court of A s for

the District of Columbia Circuit (November

15, 1976) (Immunity Opinion) .............. 53a

ii Table of Contents Continued

Page

Statutes

18 U.G.C. 12811. 57a

18 U.S.C. 18800ᷣh0õũ) cccncccccecccens 57a

18 U.S.C. G % % nt 58a

18 U.S.C. & 00 ů t11t t „ 59

Rules

Rule 606d) of the Federal Rules of Civil Pro-

rene e e eee ee 60a

TABLE OF AUTHORITIES

Cases:

Fuentes v. Shevin, 407 U.S. 67 (1972). 9

Gelbard v. United States, 408 U.S. 41 (1972) ........ 2, 6-7

In re Bart, 304 F.2d 631 (D.C. Cir. 1962) 8 n.9

In re Ryan, Misc. No. 1926 (C. D. Cal. May 2, 1972) ...3n.1

In re Ryan, 538 F. 2d 435 (D.C. Cir. 1976) ..........-. 5

Marshall v. United States, 355 F.2d 999 (9th Cir. 1966) .6 n.7

North Georgia Finishing, Inc. v. Di-Chem, Inc., 419 US.

11 . 9

Ryan v. Commissioner, Docket No. 4800-69 (U.S. Tax

rrr een 3 n.3,4n.4

Ryan v. Commissioner, 517 F. 2d 13 (7th Cir. 1975), cert.

denied, 423 U.S. 892 (19750)0)) cece eeeees 4

Sniadach v. Family Finance Corp., 395 U.S. 337 (1969) 9

United States v. Calandra, 414 U.S. 338 (1974) ....... 8 n.8

United States v. Ryan, 455 F.2d 728 (9th Cir. 1971) . .. 3 n.

United States v. Ryan, Crim. No. 2038-72 (D. D. C.

1 3 n.2

Srarurxs Ax D Rugs:

United States Constitution, Amendment V ........... 2, 5

rere eee ee ee ee eee eee 2, 6-8, 8 n.8

rere ITT TTT TT TTT 2, 6-7,8n.8

rere eee eee eee eee eee 2

eee eee eee eee eee e eee 2, 4, 8

rere e ese s eee eee eee 2

eee ˙ . eee eee eee 4

Trading With the Enemy Act of 19171711. 3

Title III, Omnibus Crime Control Act of 1968 ........ 7

Rule 6(d) of the Federal Rules of Civil Procedure ... 8-9

IN THE

Supreme Court of the United States

OctToBeR TERM, 1977

No.

EsrarR OF RayMonp J. Ryan and HELen Ryan,

Petitioners

COMMISSIONER OF INTERNAL REVENUE, Respondent

PETITION FOR A WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS

FOR THE SEVENTH CIRCUIT

The opinion of the Court of Appeals is reported at

568 F.2d 531 (Appendix, pp. 2a-24a, infra). The

opinion of the United States Tax Court (Appendix,

pp. 29a-44a, infra) is reported at 67 T.C. 212.

JURISDICTION

The opinion and judgment of the Court of Appeals

(Appendix, pp. la-24a, infra) was entered on Decem-

ber 15, 1977. A timely petition for rehearing and sug-

gestion for rehearing in banc were denied on February

27, 1978 (Appendix, p. 25a, infra). On March 20, 1978,

Mr. Justice Stevens extended the petitioners’ time for

filing a petition for a writ of certiorari to and includ-

ing April 21, 1978 (Appendix, p. 26a, infra). The

jurisdiction of this Court is invoked under 28 U.S.C.

§ 1254(1).

QUESTIONS PRESENTED

1. Whether the procedure provided by 18 U.S.C.

§ 3504, as applied in Gelbard v. United States, 408

U.S. 41 (1972), may be invoked by petitioners in a

Tax Court proceeding who claim that interrogatories

served upon tiem by the Commissioner of Internal

Revenue were “obtained by the exploitation” of illegal

electronic surveillance by the government.

2. Whether an immunity order under 18 U.S. C.

§ 6003 which is used to compel testimony from a tax-

payer in a civil tax proceeding involving several mil-

lion dollars may be entered without affording the tax-

payer any prior notice or opportunity to be heard.

STATUTES INVOLVED

The Fifth Amendment to the Constitution of the

United States, provides, in pertinent part:

“No person. .. shall be compelled in any criminal

case to be a witness against himself, nor be deprived

of life, liberty, or property, without due process of

62...

18 U.S.C. §§ 2515, 3504, 6002 and 6003 appear in the

Appendix at pp. 57a-59a.

STATEMENT

In 1964, the Internal Revenue Service began a mas-

sive criminal tax investigation of Raymond J. Ryan.

Its efforts never produced criminal tax charges, but

they did generate federal indictments charging Ryan

with conspiracy, obstruction of justice and criminal

contempt. Between 1968 and 1972, Ryan was acquitted

of these criminal charges,’ and a further indictment

(also growing out of the IRS investigation) for alleg-

edly violating balance-of-payments regulations issued

under the Trading with the Enemy Act of 1917—the

first and last indictment of its kind—was dismissed

before trial.’

During the time that Ryan was the target of these

federal investigations and trials, IRS filed a jeopardy

assessment of over eight million dollars against Ryan

and his wife, forcing the Ryans to file a petition in

the United States Tax Court and to agree to encum-

brances on their property and on their right to travel.

The Ryans repeatedly requested a prompt trial on

their Tax Court petition, which had been filed on

September 19, 1969, but IRS requested a delay of the

trial because its case is still not ready for trial.“

On January 1, 1974, the new Rules of Practice and

Procedure of the Tax Court came into effect. These

Rules authorize pre-trial discovery, including inter-

rogatories by the IRS to a petitioning taxpayer. On

January 18, 1974, respondent served interrogatories

ou Mr. and Mrs. Ryan. The interrogatories dealt with

the subject matter of the long-standing criminal tax

' United States v. Ryan, 455 F.2d 728 (9th Cir. 1971) (directing

judgment of acquittal on charge of obstruction of justice In Re

Ryan, Mise. No. 1926, Order of May 2, 1972 (C.D. Cal.) ( judgment

of aequittal on criminal contempt charge).

*t/nited States v. Ryan, Crim. No. 2038-72, Order of March 2.

1973 ( ..).

* Transeript of October 13, 1971 Hearing in Ryan v. Commission

er, Doeket No. 4800-69 (1'.S, Tax Ct.) at 2.

investigation of Ryan—which was then going into its

tenth year—and the Commissioner admitted that the

purpose of the interrogatories was to establish fraud“

on the part of Mr. Ryan.“

Petitioners objected on self-incrimination and other

grounds to the interrogatories. The Tax Court over-

ruled the objections and ordereg petitioners to answer

the interrogatories. Petitioners thereupon appealed

this order to the Court of Appeals for the Seventh

Cireuit. On August 8, 1974, while that appeal was

pending, a judicial order conferring immunity upon

the Ryans, pursuant to 18 U.S.C. § 6003, for “all mat-

ters about which they may be interrogated before the

United States Tax Court” was granted by the United

States District Court of the District of Columbia (Ap-

pendix, pp. 45a-46a, infra). Petitioners were given no

notice of the application for such an order, and their

counsel was first advised only after the order had been

entered. Petitioners immediately appealed the entry

of the order to the United States Court of Appeals

for the District of Columbia Circuit.

At this juncture, both Courts of Appeals held that

the appeals were premature. The Court of Appeals

for the Seventh Cireuit said that objections to the

interrogatories could only be reviewed if sanctions

were imposed for failure to answer. Ryan v. Commis-

stoner, 517 F.2d 13 (7th Cir. 1975), certiorari denied,

423 U.S. 892 (1975). The Court of Appeals for the

District of Columbia Circuit held that the ez parte

immunity order was not appealable under 28 U.S.C.

§ 1291, and that “the Ryans are entitled to refuse to

* Transeript of May 22, 1974 Hearing in Ryan v. Commissioner,

Docket No. 4800-69 (U.S. Tax Ct.) at 28.

—— —

comply and in the event contempt proceedings are

brought against them they may then litigate the valid-

ity of the immunity order.“ In re Ryan, 538 F.2d 435,

437 (D.C. Cir. 1976).

While these appellate proceedings were pending,

petitioners served and filed interrogatories in the Tax

Court. These were designed to flesh out their claims—

made earler in a motion to suppress—that illegal gov-

ernmental activity (including wiretapping’) had

tainted the evidence underlying the Commissioner’s

tax claims.

Following the ruling of the Courts of Appeals, pe-

titioners respectfully declined to comply with the Tax

Court’s order to answer the interrogatories. They con-

tended that the interrogatories were the product of

illegal governmental activity, including wiretapping,

Fourth Amendment violations and grand jury abuse,

and that the Commissioner was still withholding the

information the Ryans needed to establish those de-

fenses.“ Petitioners also asserted that answers would

violate testimonial privileges, including the Fifth

Amendment’s privilege against self-incrimination.

The Tax Court overruled these arguments and found

petitioners in contempt. A fine was imposed on Mr.

Ryan, and the Court stated that the answers proposed

by the Commissioner to his own interrogatories would

be taken as correct for purposes of the litigation.

There was substantial evidence of wiretapping, including the

discovery of wires leading to telephone terminals of Ryan's home

and office and assertions by government agents of knowledge of the

content of telephone conversations.

* The Commissioner had not even bothered to object to, much less

answer, petitioners’ interrogatories on those subjects.

The contempt order was appealed to the Court of

Appeals for the Seventh Circuit, which affirmed with

the decision now under review.’ The Court of Appeals

squarely rejected, as incorrect, the contention that

petitioners “need not answer interrogatories which are

the product of illegally obtained information,” in-

cluding illegal wiretapping. The Court concluded that

the petitioners’ proper remedy, if any were available,

would be to answer the interrogatories and then to

move to have the answers suppressed or excluded at

trial (p. 10a, infra). The Court of Appeals also held

that the immunity order was valid, notwithstanding

its ex parte nature. It held that “a grant of immunity

does not infringe on any property or liberty interest

of a witness’’ and is only an exchange of one safe-

guard for another“ (p. 12a, infra). Since, in this view,

“the witness suffers no detriment from an immunity

order,” he “had no right to be heard” (ibid.).

1. The decision of the Court of Appeals conflicts

with this Court’s ruling in Gelbard v. United States,

408 U.S. 41 (1972), which held that a grand jury wit-

ness could not be held in contempt for refusing to

answer a question derived“ from illegal wiretapping

or electronic surveillance. The Court held in Gelbard

that 18 U.S.C. § 2515 applies to a witness, as well as

to a criminal defendant or suspect, and that 18 U.S.C.

§ 3504 sets forth the procedure to be followed when-

While the appeal was pending, Mr. Ryan-—whose investigation

began after he had been a government witness in a major organized

erime prosecution (Marshall v. United States, 355 F.2d 999 (9th

Cir. 1966) )—was killed in a bombing of his personal automobile.

His estate was substituted as a party in this case. See p. 7a, infra.

ever an allegation of illegal wiretapping or electronic

surveillance is made by a grand jury witness.

Section 3504 is not limited by its terms or legislative

history to grand juries. Indeed, its opening words

specify that it covers “any trial hearing, or other

proceeding in or before any court, grand jury, depart-

ment, officer, agency, regulatory body, or other author-

ity of the United States . . .”’ Interrogatories served

upon a party in a Tax Court proceeding are plainly

covered by this language, and the procedural protec-

tions of Section 3504, as applied in Gelbard, are ap-

plicable to such a situation. Moreover, the policy

underlying Title III of Omnibus Crime Control Act

of 1968 squarely covers this situation. The Senate

Report quoted in Gelbard (408 U.S. at 50), with

emphasis added, explained that the purpose of Section

2515 was as follows:

Criminal penalties have their part to play. But

other remedies must be afforded the victim of an

unlawful invasion of privacy. Provision must be

made for civil recourse for d . The perpe-

trator must be dented the fruits of his unlawful

actions in civil and criminal proceedings.

The first of three claims of illegality made in this

case was, as the covrt below noted, that ‘‘over the

years, federal agents planted electronic devices in the

Ryans’ telephone and intercepted conversations, and

the information learned therefrom is linked to tlie

interrogatories’ (p. Sa, infra). With regard to this

pattern of illegal government activity,” the Court of

Appeals held that petitioners’ only remedy was a

motion to suppress the answers to the interrogatories

if they are offered in evidence at trial. This ruling

conflicts with Gelbard and should be reversed.’

2. The Court of Appeals concluded that no property

or liberty interest of the petitioners was infringed by

the entry of an order which requires the petitioners to

answer questions to be used against them in a civil

tax proceeding involving several million dollars. On

this account, the Court of Appeals held that no prior

notice or hearing was required before entry of the

immunity order granted by the United States District

Court for the District of Columbia. That proposition,

we submit, blinks reality and denies to the petitioners

the procedural protections of the Fifth Amendment.

The applicable statute is, as the Court of Appeals

observed, silent on the question whether notice and

hearing is required to the subject of an immunity

order. Simply as a matter of statutory instruction,

therefore, 18 U.S.C. § 6003 should be read, as was its

predecessor,’ to require the government to provide a

prospective witness with notice and an opportunity

to be heard on an application for immunity. Moreover,

Rule 6(d) of the Federal Rules of Civil Procedure

— —

* Because the claim here is based upon illegal electronic surveil-

lance which is subject to the specific statutory mandates of 18

U.S.C. §§ 2515 and 3504, this Court’s ruling in United States v.

Calandra, 414 U.S. 338 (1974), is inapplicable. See 414 U.S. at 335-

356, n. 11. Moreover, there is no interruption of important ongoing

proceedings, such as a grand jury investigation, if a Tax Court

judge is required to rule, during the usual pret rial discovery stage,

whether an interrogatory is derived from illegal government con-

duet. Consequently, the policies discussed in Calandra (414 U.S. at

342-346) are inapplicable here.

See In re Bart, 304 F.2d 631, 637 (D.C. Cir. 1962) ( the wit-

ness is entitled to notice and must be given opportunity to be heard

before being compelled to testify ...’’).

ee ee ee ee

requires advance notice and opportunity to be heard

on any motion “other than one which may be heard

ex parte.“ In the absence of any specific authorization

for ex parte consideration, the Rule—if not the statute

itself—requires advance notice and opportunity to be

heard.

Apart from statute and rule, however, the Due

Process Clause of the Constitution, as applied by this

Court in various circumstances, requires prior notice

and an adversary hearing. In North Georgia Finish-

ing, Inc. v. Di-Chem, Inc., 419 U.S. 601 (1975), this

Court invalidated a local garnishment procedure under

which property could be impounded during the pen-

dency of litigation simply on the basis of a conclusory

affidavit by a creditor, without prior notice or hearing.

The Court relied on its earlier decisions in Sniadach

v. Family Finance Corp., 395 U.S. 337 (1969), and

Fuentes v. Shevin, 407 U.S. 67 (1972).

It is no answer to these arguments to assert, as the

court below suggested, that no hearing was necessary

because the court to which an immunity application

is submitted “is exercising a ministerial function“

(p. i8a, infra). In view of the Article III limitation

on the power of federal courts to “cases or contro-

versies,” it is doubtful, at best, whether a federal court

could constitutionally be given statutory duties that

are totally “ministerial” and that require it to act

entirely as a “rubber-stamp.’’ We submit that there

are substantial legal and factual issues presented in

an application for immunity—particularly one that is

phrased as open-endedly as this one (“all matters

about which they may be interrogated before the

United States Tax Court“) —and that the Due Process

Clause requires that the subjects of such a proposed

immunity be afforded notice and an opportunity to be

heard before the judicial order is entered.

CONCLUSION

For the foregoing reasons, this petition for a writ

of certiorari should be granted.

Respectfully submitted,

RayMonpD G. LARROCA

NATHAN LEWIN

MER, Cass, LARROCA

& LEWIN

2555 M Street, N. W., Suite 500

Washington, D.C. 20037

(202) 293-6400

Attorneys for Petitioners

— ee ee

APPENDIX

8 W ,

JUDGMENT OF THE COURT OF APPEALS

UNITED STATES COURT OF APPEALS

FOR THE SEVENTH CIRCUIT

Chicago, Illinois 60604

December 15, 1977

Before

Hon. WALTER J. Cummines, Circuit Judge

Hon. WIL BUR F. PRLL, In., Circuit Judge

Hon. Prentice H. MansRHALL., District Judge“

Raymonp J. Ryan and HELEZN Ryan,

Petitioners-Appellants,

CoMMISSIONER OF INTERNAL REVENUE,

Respondent-Appellee.

No. 76-2161.

Appeal from the United States Tax Court.

This cause came on te be heard on the transcript of the

record from the United States Tax Court, and was argued

by counsel.

On consideration whereof, it is ordered and adjudged

by this court that the decision of the United States Tax

Court in this cause appealed from be, and the same is

hereby, AFFIRMED, with costs, and the cause is RE-

MANDED to the Tax Court for further proceedings, in

accordance with the opinion of this court filed this date.

* District Judge Prentice H. Marshall of the United States Dis-

trict Court for the Northern District of Illinois is sitting by

designation.

*- — tte tet

OPINION OF THE COURT OF APPEALS

Raymonp J. Ryan and HLN Ryan,

Petitioners-Appellants,

Vv.

CoMMISSIONER OF INTERNAL REVENUE,

Respondent-A ppellee.

No. 76-2161.

UNITED STATES COURT OF APPEALS,

SEVENTH CIRCUIT.

Argued June 9, 1977.

Decided Dec. 15, 1977.

Berore Cumminos and Pu, Circuit Judges, and

MarsnHaL., District Judge.“

Mans,, District Judge.

This is an appeal from a decision of the Tax Court hold-

ing taxpayer-appellants, Raymond and Helen Ryan, in

contempt of court for refusing to answer seven interroga-

tories propounded by appellee, Commissioner of Internal

Revenue. The issue is whether the Tax Court properly

rejected the Ryans’ claims of Fifth Amendment privilege,

and of marital privilege. Additionally, we must decide

whether the Tax Court property rejected the Ryans’ con-

tention that they need not answer because the interroga-

tories were the product of illegal government surveillance

upon the Ryans, and deferred consideration of the Ryans’

underlying claims of illegal governmental conduct until the

hearing of the Ryans’ motion to suppress. We hold that

the court below ruled correctly and affirm its decision in

all respects.

* District Judge Prentice H. Marshall of the United States Dis-

trict Court for the Northern District of Illinois is sitting by

* ee

— UU———᷑ tee ater ee 0

Before discussing the complex procedural history of

this case and of the issues raised, it is appropriate to

commend Judge Drennan of the Tax Court for his dili-

gent efforts in administering this litigation. In a proceed-

ing punctuated by stalls and appeals, he has exercised

extraordinary patience in pressing for a trial over the

course of this litigation, now in its eighth year.

A detailed recitation of the early course of the Tax

Court proceedings would serve no purpose here. That his-

tory has been recounted in the opinion of the Tax Court

and in a previous, premature appeal of this case, Ryan v.

C. I. R., 517 F.2d 13 (7th Cir. 1975). The following state-

ment is sufficient.

In September, 1969, the Ryans filed a petition in the

Tax Court for a redetermination of deficiencies in income

taxes assessed by the Commissioner for the taxable years

1958 through 1962, 1964 and 1965. In order to obtain in-

formation about allegedly questionable dealings between

the Ryans and a Swiss bank in a form admissible in Tax

Court, the Commissioner spent several years attempting

to take depositions of Swiss bank officials pursuant to an

agreement between the United States and Switzerland, the

Double Taxation Convention of 1951.

In 1972, while the Commissioner’s efforts were proceed-

ing, the Ryans filed a Motion to Suppress and to Enjoin

all Proceedings Based upon Evidence Illegally Obtained

and [legally Derived from Grand Jury Investigations of

Petitioners’’ (motion to suppress). In this motion the

Ryans alleged that federal agents had obtained damaging

information by abusing grand jury process and by illegal

searches and seizures of their papers. The Ryans then

served subpoenas on several Internal Revenue Service

(IRS) agents and other federal officials seeking informa-

tion about any illegal electronic surveillance of the Ryans.

The Commissioner moved to quash the subpoenas, and

this motion was called for a hearing at the same time as

the Ryans’ motion to suppress. At a hearing on Novem-

ber 16, 1972, Judge Drennan tried to determine what facts,

if proved, would justify suppression of evidence at trial.

He sought to define the issues on any subsequent evi-

dentiary hearing on the motion to suppress with sufficient

clarity so that the evidentiary hearing would be manage-

able. Without making a final determination regarding the

legal grounds for suppression, Judge Drennan limited the

evidence at the suppression hearing to three topics: a

meeting of the Commissioner’s agents with Ryan Oil Com-

pany representatives in 1965, electronic surveillance of the

Ryans, and illegal use of grand jury subpoenas by the

Commissioner. Insofar as the motion sought to enjoin pro-

ceedings, it was denied on the grounds that the court

lacked the power to enter such an order. Late in 1973,

the Ryans moved to suspend the hearing on their motion

to suppress until trial, apparently under the assumption

that the trial would be held early in 1974. This motion

was granted.

But on January 1, 1974, the new Rules of Practice and

Procedure of the United States Tax Court (Tax Court

Rules) became effective and set the stage for the instant

appeal. These rules provide for discovery methods, inelud-

ing interrogatories to parties, similar to those of the

Federal Rules of Civil Procedure. Without abandoning his

attempt to secure information from the Swiss banking

officials, the Commissioner served seven interrogatories

upon the Ryans seeking information as to any relationships

or transactions between the Ryans and the Commercial

Credit Bank of Zurich, Switzerland, or with one Carl

W. Hirschmann between 1958 and 1965.

The interrogatories were:

Respondent requests that petitioners, jointly or separately,

answer under oath, in accordance with Rule 71 of the Court s

Rules of Practice and Procedure, the following interrogatories :

5 Do you know Carl W. Hirschmann, of Zurich, Switzer-

and?

« ~~ As&® «4

The Ryans objected to the interrogatories, resting on

their constitutional privilege against self-incrimination.

Rejecting the claim of privilege, the Tax Court granted

the Commissioner’s motion to compel answers. The Ryans

appealed that order to this court. The appeal was dis-

missed for lack of jurisdiction because the order was not

a fina) judgment. This court suggested that the proper

avenue for appellate review of the order would be for the

Ryans to risk a contempt citation. Ryan v. C. I. R., 517

F.2d 13 (7th Cir. 1975).

In the meantime, the United States Attorney for the

District of Columbia obtained an order in the United

States District Court for the District of Columbia grant-

ing the Ryans use immunity in exchange for their testi-

mony, pursuant to 18 U.S.C. 5 6002 and 6003. This order

2. Did you, on your own behalf or on behalf of others,

have any business or financial dealings with him or with the

Handelskredit Bank, A. G. Zurich, Switzerland (Commercial

Credit Bank), during the years 1958 through 1965?

3. During those years, what were Mr. Hirschmann s owner-

ship and employee statuses with the Commercial Credit Bank?

4. If your answer to 2 is affirmative, identify each such

dealing by date of inception, general description or char-

acterization, and party or parties for whom you were acting.

5. In connection with any item identified in 4, did you enter

into a Trehandkonto (Trust-Hand Agreement), and if so,

identify each such item?

6. Do you have in your possession, or under your custody

or control, or available at your request or command any docu-

ments evidencing or relating to any item identified in 4?

7. If your answer to 6 is affirmative, identify the documents

and attach a copy of each to your answers or state the earliest

date when they can be made available for inspection and

copying.

PLease Take Notice that a copy of such answers must be

served upon the undersigned within 45 days after notice of

these interrogatories. App. 46a-47a.

directed the Ryans to give testimony or provide other

information and to produce documents which they refuse

to give or to provide on the basis of their privilege

against self-incrimination as to all matters about which

they may be interrogated before the United States Tax

Court.“ App. 23a-24a. The Ryans appealed the order

granting immunity to the Court of Appeals for the Dis-

trict of Columbia Circuit. That appeal was dismissed for

lack of jurisdiction on the grounds that the order grant-

ing immunity was not a final, appealable order. Jn re

Ryan, 176 U.S.App.D.C. 87, 538 F.2d 335 (1976). That

court also noted that the proper method to litigate the

validity of the immunity order would be through contempt

proceedings, which would be subject to appellate review.

On remand, the Ryans persisted in their refusal to ans-

wer the interrogatories, asserting for the first time that

— — 3 — their refusal to answer the

interrogatories. The Tax Court set a hearing on Augus

18, 1976 to rule on the Ryans’ claim of marital . —

and to determine what, if any sanctions should be imposed

against the Ryans. On the day of the hearing, the Ryans

filed an 87 page brief entitled Request that No Sanctions

be Imposed upon Them and for Other Relief.“ This brief

resuscitated the Fourth Amendment claims previously as-

serted in their motion to suppress, which they had pre-

viously urged be deferred until trial. This time, however,

the Ryans asserted that the alleged government conduct

justified not only the exclusion of the tainted evidence at

trial, but also justified their refusal to answer interroga-

tories.

Following a hearing, the Tax Court entered an order

holding the Ryans in contempt of court for their refusal

to obey the earlier order that they answer the interroga-

tories. The Court imposed a fine upon Raymond Ryan. In

its memorandum opinion, the Tax Court rejected the

Ryans’ Fifth Amendment claims because the Ryans had

—

——— c! Ä

not established a reasonable apprehension that they would

be prosecuted for any crime connected to the information

sought in the interrogatories. Specifically, the Tax Court

noted that the questions were innocuous, that no criminal

prosecutions were then pending against the Ryans, and

that the statute of limitations had run for any prosecutions

for the years referred to in the interrogatories. Without

passing on the validity of the immunity order, the Court

said that the order supported its independent conclusion

that the Ryans had nothing to fear from answering interro-

gatories. Next, the Tax Court rejected the Ryans’ claim

of marital privilege because the privilege against adverse

spousal testimony is only applicable in criminal proceed-

ings. Finally, without ruling on the merits of the Ryans’

claim of illegal governmental conduct, the Court held that

these contentions, which were referred to as Fourth

Amednment claims, were premature and should be raised

in the Ryans’ motion to suppress, scheduled for hearing at

the time of trial. It is from the contempt order that the

Ryans appeal.

After oral argument was held in this case, Raymond

Ryan died and the Commissioner filed a suggestion of

death of a party pursuant to F.R.A.P. 43(a). At our re-

quest, the parties have filed memoranda which takes the

position that the action is not moot but continues in full

force with respect to appellant Helen Ryan and to the

Estate of Raymond Ryan, since the civil contempt sanc-

tions remain effective against them. The Tax Court has

entered an order substituting the Estate of Raymond Ryan

for Raymond Ryan. We agree with the parties and hold

that the controversy is not altogether moot. See Wetzel v.

Ohio, 371 U.S. 62, 83 S.Ct. 111, 9 L.Ed.2d 26 (1962) (Doug-

las, J., concurring). The Tax Court, however, also deemed

it appropriate to impose a criminal sanction upon Ray-

mond Ryan alone and fined him $1,000 as punishment for

his wilful disobedience of its orders. It may be that Mr.

Ryan’s death moots the imposition of this particular sanc-

tion. Death of a criminal defendant while his appeal is

pending moots the prosecution and requires the appellate

court to dismiss the appeal, vacate the judgment, and re-

mand to the district court with instructions to dismiss the

indictment. United States v. Moehlenkamp, 557 F.2d 126

(7th Cir. 1977). Nevertheless, because in this case the ap-

peal from the civil contempt sanction continues to present

a viable controversy, we find it unnecessary to decide

whether the criminal sanction should be vacated as moot

and leave that issue to the Tax Court. Powell v. McCor-

mack, 395 U.S. 486, 496, 89 S.Ct. 1944, 23 L.Ed.2d 491

(1969).

I. Illegal Governmental Activity

The Ryans’ first contention is that they should not be

compelled to answer the interrogatories because the very

questions put to them by the Commissioner are the product

of illegal activities by federal agents. They assert that

there were three patterns of illegal governmental activity.

First, they claim that over the years, federal agents

planted electronic devices in the Ryans’ telephone and in-

tercepted conversations, and the information gleaned there-

from is linked to the interrogatories. Second, they claim

that IRS agents improperly obtained information from sit-

ting grand juries and by issuing false grand jury sub-

poenas, and that they utilized this information in develop-

ing the interrogatories. Third, they assert that IRS agents

and customs agents obtained information through illegal

searches and seizures of the Ryans’ papers in violation of

the Ryans’ Fourth Amendment rights.

As stated above, Judge Drennan did not rule on the

merits of these contentions, but held that he would decide

immediately prior to trial in the context of the Ryans’ mo-

tion to suppress. Although the parties have addressed

such thorny questions as whether the exclusionary rule of

the Fourth Amendment is applicable to civil proceedings

3 ee

in the Tax Court, see Patrick v. United States, 524 F.2d

1109, 1115 n.8 (7th Cir. 1975), we need not reach the merits

of the claims of illegal governmental conduct if Judge

Drennan’s decision to defer ruling on these issues was

correct. The question is one of timing.

Initially, it is clear that Judge Drennan had established

an orderly method for disposing of the claim of illegal

governmental conduct in a timely manner. At the hearing

on the motion to suppress in 1972, he had narrowed and

defined the issues to be tried at the evidentiary hearing. At

the Ryans’ request, the evidentiary hearing had been post-

poned until trial. When the Ryans interposed the grounds

for suppression as an excuse for not answering interroga-

tories, they interfered with the orderly procedure estab-

lished by the Tax Court. At no time did the Ryans request

that the evidentiary hearing on the motion to suppress be

held before their answers to interrogatories were due.

The interruption would have been justified, however, if

the Ryans were correct in their assertion that they need

not answer interrogatories which are the product of illegally

obtained information. But the Ryans’ position funda-

mentally misconceives the role of discovery in a civil pro-

eeeding and we reject their argument.

The basic premise underlying the discovery procedures

of the Tax Court Rules like those of the Federal Rules of

Civil Procedure, is that any matter which is relevant to

the subject matter of a pending case is subject to discovery

unless it is privileged. Tax Court Rule 70(b); compare

Fed.R.Civ.P. 26(b)(1). A party may not object to discov-

ery on the grounds that the information sought would not

be admissible at trial, if that information appears reason-

ably calculated to lead to discovery of admissible evidence.

Tax Court Rule 70(b); compare Fed.R.Civ.P. 26(b)(1).

Furthermore, the court may, in the interest of justice, enter

a protective order to protect a party from annoyance, em-

barrassment, oppression or undue burden or expense. Tax

10a

Court Rule 103; compare Fed.R.Civ.P. 26(c). The Ryans’

claims of illegal governmental conduct do not fall within

either of the two recognized limitations to the scope of

discovery recognized in the rules, privilege and irrelevance:

Consequently, under the rules, the Ryans may not rely on

their claims of illegal governmental conduct as an excuse

for not answering the interrogatories.

The Ryans nevertheless complain that the Commissioner

may use the interrogatories to ‘‘launder’’ illegally ob-

tained information. This contention confuses the scope of

discoverable information with the scope of information ad-

missible at trial, and is entirely without merit. Tax Court

Rule 70(d) provides that no information obtained through

discovery shall be considered as evidence. The answers to

interrogatories, therefore, cannot be used for or against

the Ryans in the Tax Court action unless they are inde-

pendently determined to be admissible. And that question

will be determined at the hearing on the Ryans’ motion to

suppress. Moreover, at oral argument in this court, the

Commissioner took the position that any information ob-

tained through the interrogatories would be within the

scope of the motion to suppress. Therefore, if the Tax

Court later accepts the Ryans’ theory that an exclusionary

rule should be fashioned to bar information obtained

through illegal governmental conduct, the interrogatories

could not be used to transform inadmissible evidence into

admissible evidence.“

On remand, the Tax Court will be asked to decide whether the

Fourth Amendment exclusionary rule is applicable to civil tax

proceedings. The opinion in United States v. Janis, 428 U.S. 433,

96 S.Ct. 3021, 49 L.Ed.2d 1046 (1976), particularly it criticism

of Suarez v. Commissioner, 58 T.C. 792 (1972), should prove in-

structive. Additionally, the Tax Court should, in its evaluation of

the Ryans’ claim of abuse of grand jury process, take note that

the Court of Appeals for the Ninth Circuit has withdrawn its

opinion in Simplot v. United States, killed per order opinion va-

cated No. 76-183 (9th Cir. June 28, 1977), on which the Ryans

heavily rely.

11a

II. Fifth Amendment Privilege

Second, the Ryans contend that the Tax Court erred

in rejecting their claim that there was a reasonable dan-

ger of self-incrimination. They assert that the Tax Court

wrongfully placed the burden of proving the possibility

of a future prosecution upon them. The enstablished rule

is that the privilege against self-incrimination extends only

to instances where the witness has reasonable cause to

fear danger from answering the question. Zicarelli v. New

Jersey Investigation Comm’n, 406 U.S. 472, 478, 92 S.Ct.

1670, 32 L.Ed.2d 234 (1972). The court, not the witness,

must decide whether the witness’s claim is justified and

the court may order the witness to answer if it clearly

appears that no danger of prosecution exists. Hoffman v.

United States, 341 U.S. 479, 486, 71 S.Ct. 814, 95 L.Ed.

1118 (1951). The trial judge is in the best position to

consider whether, in the particular factual circumstances,

a responsive answer to the question or an explanation of

why it cannot be answered could be harmful to the wit-

ness. Zicarelli, supra, 406 U.S. at 480-81, 92 S.Ct. 1670.

Of course, he must be sensitive to the fact that the wit-

ness frequently cannot prove that his claim is legitimate

without surrendering it. Malloy v. Hogan, 378 U.S. 1, 11-

12, 84 S.Ct. 1489, 12 L.Ed.2d 653 (1964); Hoffman, supra,

341 U.S. at 486-88, 71 S.Ct. 814.

The Ryans assert that the Tax Court overlooked sev-

eral significant factors in rejecting the privilege for the

reason that the likelihood of further prosecutions was too

remote. First, Raymond Ryan had already been prose-

cuted three times for non-tax offenses relating to foreign

transactions. Second, although the six-year statute of

limitations for criminal tax prosecutions had expired for

the period from 1958 to 1965, there was a continuing

possibility that Ryan might be prosecuted for other crim-

inal acts. Finally, even if the information elicited in the

interrogatories was not damming in itself, it could lead

12a

to other information which, in turn, could lead to indict

ments for crimes still within the statute of limitations.

hese possibilities of prosecution still appear to be remote.

But even assuming arguendo that the Ryans’ fear of

prosecution was reasonable, we accept the Commissioner’s

contention that the grant of immunity by the District

Court for the District of Columbia is valid and is co-ex-

tensive with the scope of the privilege. Kastigar v. United

States, 406 U.S. 441, 92 S.Ct. 1653, 32 L.Ed.2d 212 (1972).

The grant of immunity obviates any question that Judge

Drennan improperly rejected the Ryans’ claim of privilege.

Against this obvious conclusion, the Ryans have raised

a series of substantive and procedural reasons why the

grant of immunity is invalid. None of them has any merit.

First, the Ryans contend that the immunity order denied

them due process of law because they were neither notified

of a hearing on the immunity request nor given an oppor-

tunity to be heard before the order was entered. The

Ryans rely on cases holding that the due process clause

requires some kind of notice and some kind of hearing

before a person may be deprived of a governmentally

created property or liberty interest. H. g., Fuentes v.

Shevin, 407 U.S. 67, 92 S.Ct. 1983, 32 L.Ed.2d 556 (1972);

Bell v. Burson, 402 U.S. 535, 91 S.Ct. 1586, 29 L. Ed. 2d 90

(1971); Goldberg v. Kelly, 397 U.S. 254, 90 S.Ct. 1011, 25

L.Ed.2d 287 (1970). These cases are inapposite. The pro-

cedural protections of the due process clause come into

effect only if a person is threatened with deprivation of

a property or a liberty interest. A grant of immunity

does not infringe on any property or liberty interest

of a witness. Rather, an immunity order is effectively an

exchange of one safeguard for another. The witness re-

linquishes his privilege to remain silent and avoid incrim-

inating himself and receives a promise from the govern-

ment that the inforniation he gives will not be used

against him, directly or indirectly, in a subsequent crim-

o>. te ines ©

13a

inal prosecution. As a matter of constitutional law, the

witness suffers no detriment from an immunity order and

therefore has no right to be heard.

Nor does the immunity statute, 18 U.S.C. $4 6001-03, re-

quire that the witness be notified of a prospective grant

of immunity, suggesting that no notice is required. United

States v. Leyva, 513 F.2d 774, 776 (5th Cir. 1975). The

absence of a statutory requirement that the witness be

notified is consistent with the limited role of the court

in issuing a grant of immunity. As this court recently

noted, In re Daley, 549 F.2d 469, 479 (7th Cir. 1977), the

immunity statute delegates the authority to obtain an

immunity grant solely to the executive branch of govern-

ment. The United States Attorney determines whether a

grant of immunity is in the public interest, and the dis-

trict court may not review that judgment. The court may

only scrutinize the record to ascertain that a request for

immunity complies with the procedural and jurisdictional

requirements of the statute. In these circumstances, there

is little need for an adversary hearing before the court

approves a request for immunity, because the court is

exercising a ministerial function. While nothing in the

statute bars the court or the United States Attorney from

notifying the witness, see United States v. Taulbee, 476

F.2d 804, 805 (9th Cir. 1973), or hearing any objections,

see In re Bonk, 527 F.2d 120, 123 (7th Cir. 1975), these

procedures are not required by the constitution or by the

immunity statute. Moreover, at the contempt hearing be-

fore the Tax Court, the Ryans had an opportunity to raise

every objection they could have raised at an immunity

hearing. In re Kilgo, 484 F.2d 1215, 1221 (4th Cir. 1973);

United States v. Handler, 476 F.2d 709, 714 n.6 (2d Cir.

1973).

Next, the Ryans complain that the government’s proce-

dures in obtaining the immunity order were defective

14a

in three respeets.“ First, they complain that the record

does not affirmatively show that the Acting United States

Attorney, Earl Silbert, personally decided to request the

immunity order. The motion presented to the district

court was signed for Silbert by an Assistant United

States Attorney, Lester Seidel. Second, the record con-

tains no affidavits. Third, the United States Attorney re-

quested the immunity order after, not before the Assist-

ant Attorney General had given his approval. Not one

of these objections invalidates the immunity order. As

for the signature, the statute has no requirement that the

United States Attorney, rather than one of his assist-

ants, personally sign the petition, although the statute

does require that the United States Attorney must make

the request. Since the motion for a grant of immunity

was brought in the name of the United States Attorney,

The immunity statute, 18 U.S.C. § 6003, provides:

(a) In the case of any individual who has been or may be

called to testify or provide other information at any proceed-

ing before or ancillary to a court of the United States or a

grand jury of the United States, the United States district

court for the judicial district in which the proceeding is or

may be held shall issue, in accordance with subsection (b) of

this section, upon request of the United States attorney for

such district, an order requiring such individual to give testi-

mony or provide other information which he refuses to give

or provide on the basis of his privilege against self-incrimina-

tion, such order to become effective as provided in section

6002 of this part.

(b) A United States attorney may, with the approval of

the Attorney General, the Deputy Attorney General, or any

designated Assistant Attorney General, request an order under

subsection (a) when in his judgment—

; (1) the testimony or other information from such indi-

vidual may be necessary to the public interest; and

(2) such individual has refused or is likely to refuse

to testify or provide other information on the basis of

his privilege against self-incrimination.

;

„ „ ae — 2 a naan

15a

and the motion was signed in his name, it was in sub-

stantial compliance with the statute. United States v.

Silkman, 543 F.2d 1218, 1220 (8th Cir. 1976). There is no

suggestion that Assistant United States Attorney Seidel

was acting outside the scope of his duties.*

The Ryans’ second objection is that the record of the

immunity hearing contains no affidavits of the United

States Attorney or the Attorney General. The simple

answer to this objection is that 5 6003 does not require

that a request for immunity be supported by affidavits or

take any particular form. In re Santiago, 533 F.2d 727,

729 (1st Cir. 1976); United States v. Smith, 532 F. 2d 158,

160 (10th Cir. 1976). The record here does contain letters

demonstrating the approval of the Attorney General and

the motion was signed in the name of the United States

Attorney. That is sufficient.

Finally, the Ryans assert that according to the immu-

nity statute, the United States Attorney must make the

initial decision to seek an immunity order, and then must

secure the approval of the Attorney General. The se-

quence of events was transposed in this case. First, Meade

Whittaker, Chief Counsel of the Internal Revenue Service,

asked the Assistant Attorney General to authorize the

United States Attorney to seek the grant of immunity.

The Assistant Attorney General agreed and wrote a let-

ter to Earl Silbert, United States Attorney, authorizing

In In re Bella, 499 F.2d 1175 (2d Cir. 1974), the court sug-

gested that the ‘‘wiser course’’ would be to involve the United

States Attorney directly in an application to a district court for

a grant of immunity. In that case, however, the initial request for

the immunity grant was made by a Special Attorney attached to

the Brooklyn Strike Force. The court may have been influenced

by the fact that Strike Force attorneys, unlike Assistant United

States Attorneys, are not directly supervised by the United States

Attorneys. Instead, Strike Force attorneys are responsible to the

Department of Justice.

16a

him to obtain the order. Nothing in this order of events

violates § 6003. The essential fact is that the United

States Attorney and the Attorney General, or Assistant

Attorney General agree on the need for the order before

the United States Attorney files the motion in court, and

that is what occurred here. Di Bella, supra, at 1177.

Additionally, the Ryans claim that the record does not

contain facts showing that the prosecutor had any basis

for making the judgment that the grant of immunity

would be in the public interest. Since that judgment is

entirely a matter for the executive branch, unreviewable

by a court, there is no need for the record to contain

any facts supporting the decision of the United States

Attorney. In re Daley, supra; In re Kilgo, supra, at 1219,

The Ryans also claim that the immunity order was im-

proper because it was too broad and did not specify what

questions would be asked of the Ryans. The fact that the

immunity order was broad does not invalidate it; the

scope of the use immunity afforded the witness corres-

ponds with the scope of the information obtained from

the witness. The breadth of the immunity order does not

affect principles of relevancy or other evidentiary rules

that will limit the admissibility of evidence at trial. More-

over, §6003 does not require that the immunity order

specify precisely what questions will be put to the witness.

Finally, the Ryans claim that since a tax fraud penalty

could be imposed on them, they are not adequately pro-

tected by the immunity grant. They contend that the Fifth

Amendment’s ban on self-incrimination would bar the

imposition of a fraud penalty pursuant to 26 U.S. 56653

(b)“ on the basis of their compelled testimony, but since

26 U.S.C. § 6653 provides:

Failure to pay tax

(b) Fraud.—lf any part of any underpayment (as defined

in subsection (e)) of tax required to be shown on a return is

ee ee ee

17a

the immunity order only shields against the use of their

testimony in a criminal case, they have no guarantee

under the order that their testimony will not be used

against them to establish fraud. Ultimately, they assert,

their testimony could be used to impose a penalty which,

though civil in form, is criminal in nature. This position,

which erroneously assumes that the privilege is broader

than the immunity grant, is without merit.

The Fifth Amendment states that no person shall

be compelled in any criminal case to be a witness against

himself.“ By its own terms, it applies only to criminal cases.

It is true that in some instances, the civil-criminal distinc-

tion is hard to ascertain. The Supreme Court has held that

the privilege against self-incrimination may be invoked

in a forfeiture proceeding against property intended for

use in violating the provisions of the internal revenue laws

under 26 U.S.C. § 7302. United States v. United States Coin

and Currency, 401 U.S. 715, 91 S.Ct. 1041, 28 L.Ed.2d 434

(1971). This holding, however, is predicated on the fact

that the forfeiture statute, though civil in form, is only in-

tended to impose a penalty upon those who are significantly

involved in a criminal enterprise. 401 U.S. at 723, 91 S.Ct.

1041; Calero-Toledo v. Pearson Yacht Leasing Co., 416

U.S. 663, 689, 94 S.Ct. 2080, 40 L.Ed.2d 452 (1974). There-

fore, the forfeiture penalty is closely related to a criminal

sanction, and the privilege against self-incrimination is op-

erative. The fraud penalty facing the Ryans, however, is

a purely civil penalty. Helvering v. Mitchell, 303 U.S. 391,

due to fraud, there shall be added to the tax an amount equal

to 50 percent of the underpayment. In the case of income taxes

and gift taxes, this amount shall be in lieu of any amount

determined under subsection (a). In the case of a joint return

under section 6013, this subsection shall not apply with respect

to the tax of a spouse unless some part of the underpayment

is due to the fraud of such spouse.

18a

401, 58 S.Ct. 630, 82 L.Ed. 917 (1938); Plunktaa v. C. I. R.,

465 F. 2d 299, 303 (7th Cir. 1972). It is not limited to per-

sons involved in criminal activity and there is no need to

probe behind the civil form of the proceedings to discern

its true nature. Consequently, we reject the Ryans’ asser-

tion that § 6003 may not be used to secure evidence in a

tax fraud deficiency action.

III. Marital Privilege

The Ryans next claim that they need not answer the in-

terrogatories due to the marital privilege against adverse

spousal testimony. This privilege, where recognized, per-

mits each spouse to preclude the adverse testimony of the

other and sometimes also permits each spouse to decline

to testify against the other. Hawkins v. United States, 358

U.S. 74, 79 S.Ct. 136, 3 L.Ed.2d 125 (1958); 8 Wigmore,

Evidence §§ 2227-2245 (McNaughton rev. 1961). The Tax

Court held that the privilege against adverse spousal tes-

timony was only available in criminal cases and therefore

was not applicable in civil tax proceedings. The Court also

noted that the privilege had been subject to policy eriti-

cisms and that proposed Federal Rule of Evidence 505

would have restricted the privilege to criminal cases. We

agree that the privilege against adverse spousal testimony

provides no screen to the Ryans, but in light of the argu-

ments made on appeal, find it necessary to give our reasons

in more detail.

As the Tax Court stated in its memorandum decision, the

Internal Revenue Code provides that proceedings in the

Tax Court shall be conducted in accordance with the rules

of evidence applicable in trials without a jury in the United

States District Court for the District of Columbia. 28

U.S.C. § 453. Since July 1, 1975, the Federal Rules of Evi-

dence have been in effect in all United States District

Courts. Rule 501 provides that the privileges of a witness

shall be governed by principles of federal common law:

n ST

19a

Except as otherwise required by the Constitution of

the United States or provided by Act of Congress or

in rules prescribed by the Supreme Court pursuant to

statutory authority, the privilege of a witness, per-

son, government, State, or political subdivision thereof

shall be governed by the principles of the common law

as they may be interpreted by the courts of the United

States in the light of reason and experience. However,

in civil actions and proceedings, with respect to an

element of a claim or defense as to which State law

supplies the rule of decision, the privilege of a witness,

person, government, State, or political subdivision

thereof shall be determined in accordance with State

law.

In determining whether the privilege should be recog-

nized in this case, several principles are useful in inter-

preting the common law ‘‘in light of reason and expe-

rience. First, the Supreme Court has recognized that

privileges must be narrowly construed because they block

the judicial fact-finding function. ‘‘Whatever their origins,

these exceptions to the demand for every man’s evidence

are not lightly created nor expansively construed for they

are in derogation of the search for truth.“ United States

v. Nixon, 418 U.S. 683, 710, 94 S.Ct. 2090, 3108, 41 L.Ed.2d

1039 (1974). Second, it is important to decide whether the

privilege is applicable taking into account the particular

factual circumstances of this case. The intention of Con-

gress in enacting Rule 501 was tha recognition of a

privilege based on a confidential relationship and other

privileges should be determined on a case-by-case basis.

1974 U.S.Code Cong. & Admin.News, p. 7059. See United

States v. Allery, 526 F.2d 1362, 1366 (8th Cir. 1975). In

making the case-by-case determination, it is helpful to

weigh the need for truth against the importance of the

relationship or policy sought to be furthered by the privi-

lege, and the likelihood that recognition of the privilege

20a

will in fact protect that relationship in the factual setting

of the case. United States v. King, 73 F. R. D. 103, 105 (E. D.

N.Y.1976). This court has refvsed to extend the marital

privilege against adverse spousal testimony when it was

unlikely that it was necessary to further its underlying ra-

tionale. United States v. Doughty, 460 F.2d 1360 (7th Cir.

1972).

The essential reason for the privilege against adverse

spousal testimony is to foster family peace and harmony,

for the benefit of husband, wife, children, and the public.

Hawkins, supra, 358 U.S. at 77, 79 S.Ct. 136. If the com-

munication is personal in nature, the privacy interests of

husband and wife are also at stake. United States v. Kahn,

471 F.2d 191, 194 (7th Cir. 1972), reversed on other

grounds, 415 U.S. 143, 94 S.Ct. 977, 39 L.Ed.2d 225 (1974).

The Ryans, who were married for about 40 years, realis-

tically do not contend that recognition of the marital privi-

lege would have been necessary to protect their marriage.

They do not allege that the denial of the privilege would

have had any effect on their marriage at all. Since the in-

terrogatories do not seek information relating to intimate

marital communications, no privacy interest of the Ryans

is threatened. The Ryans’ policy argument is that the

privilege is necessary to avoid a distaste or repugnance for

forcing one spouse to condemn the other through testi-

mony. Since that distaste stems from the fear that forcing

husband to speak against wife, or wife against husband

will be likely to destroy the marriage, it is of little force

here. Again any repugnance is a much more weighty policy

—that in favor of fair and full enforcement of federal tax

laws. United States v. King, 73 F.R.D. 103, 106 (E. D. N. v.

1976); cf. United States v. Janis, 428 U.S. 433, 447, 96

S. Ct. 3021, 49 L.Ed.2d 1046 (1976); Donaldson v. United

States, 400 U.S. 517, 91 S.Ct. 534, 27 L.Ed2d 580 (1971).

The policy is particularly strong given the lumbering his-

tory of this case. The Ryans have resisted every attempt

to wrest information about their income for the years in

W „*

question, and have steadfastly refused to volunteer infor-

mation. In some method to obtain the information other

than through the interrogatories existed, it is likely that

the Commissioner would have utilized it during the eight

years that the action has been pending. Finally, we note

that the actual harm which one Ryan’s testimony would

unleash upon the other is diminished by the grant of use

immunity to both Ryans, precluding the use of the informa-

tion in any subsequent criminal proceedings. United States

v. Doe, 478 F.2d 194 (1st Cir. 1973).

As further support for overruling the Ryans’ claim of

marital privilege, the Commissioner argues that with rare

exceptions, the privilege is only recognized in criminal

cases. In Hawkins, supra, 358 U.S. at 77, 79 S.Ct. at 138,

the Court preserved the privilege in a trial ‘‘where life or

liberty is at stake. In United States v. Van Drunen, 501

F.2d 1393, 1396 (7th Cir. 1974), cert. denied, 419 U.S. 1091,

95 S.Ct. 684, 42 L.Ed.2d 684 (1974), this court held that

the privilege should be limited to cases where a ‘‘spouse

.. . observes evidence of the other spovse’s crime.’’ More-

over, Proposed Federal Rule of Evidence 505, which was

adopted by the Supreme Court but rejected by Congress,

would have restricted the privilege to criminal cases. Pro-

posed Rule 505 does provide some guidance in interpreting

the scope of privileges under Rule 501. United States v.

King, supra, at 105; 2 Weinstein’s Evidence 501101] at

501-20.5 (1977).

*The Ryans contend that we should disregard Proposed Rule

505 because it generated great controversy and was rejected by

Congress because it limited the marital privilege. See S. Rep. No.

93-1277, 1974 U.S. Code Cong. & Admin. News, p. 7053. But the

more likely source of dissension was not the choice to restrict the

privilege against adverse spousal testimony to criminal cases, but

rather the total elimination of the privilege protecting confidential

marital communications. The latter privilege has not been the

target of the intense criticism which has been leveled against the

privilege against adverse spousal testimony. Compare, e. 9. Me-

22a

We acknowledge that an argument can be made that no

policy supports the distinction between allowing the privi-

lege against adverse spousal testimony in criminal cases

but not in civil cases. As one commentator put it,

If it be said that there is a greater ‘‘repugnancy”’ in

denying a man his life or liberty on the strength of his

spouse’s condemnation than is felt when only his

property is at stake, it can also be argued that the least

defensible and most ‘‘repugnant”’ aspect of the privi-

lege is that which allows thieves and murderers to go

free for such reasons of ‘‘sentiment.’’ Reutlinger, Pol-

icy, Privacy and Prerogatives: An Initial Examina-

tion of the Proposed Federal Rules of Evidence as

The Affect Marital Privilege, 61 Cal.L.Rev. 1353, 1384

(1973).

Indeed, the Advisory Committee’s Note to Proposed Fed-

eral Rule of Evidence 505 fails to explain why the criminal-

civil distinction was suggested, other than commenting that

some states have adopted the distinction. A partial expla-

nation could be that the privilege has the greatest societal

value in criminal cases because it encourages the preser-

vation of a marriage that might assist the defendant spouse

in his or her rehabilitation efforts. United States v. Van

Drunen, supra, at 1396. This rationale would not be ap-

plicable in a civil case.

Nevertheless, it is not necessary to fully defend the civil-

criminal distinction in order to reject the marital privilege

in this case. The independent policy reasons lead us to con-

clude that it should not be recognized here. We adhere to

this court’s statement in the Van Drunen case that the

Cormick, Evidence § 66 (2d ed. 1972) (eriticizing the privilege

against adverse spousal testimony as ‘‘an archaic survivor of mysti-

eal religious dogma’’) with Id. § 78-86 (recognizing that a quali-

fied privilege protecting confidential marital communications should

be retained).

23a

privilege should be limited to instances in which it makes

the most sense, where a spouse who is neither a victim nor

a participant observes evidence of the other spouse’s crime.

501 F.2d at 1397.

The Ryans assert that even if the marital privilege, as

construed under the standard of reason and experience of

Rule 501, is not applicable in this case, Rule 501 excepts

Acts of Congress which provide otherwise. They contend

that Congress has expressly preserved the marital privi-

lege in civil cases in § 14-306(a) of the District of Columbia

code. That section provides:

In civil and criminal proceedings, a husband or his

wife is competent but not compellable to testify for or

against the other.

Unlike other sections of Title 14 of the District of Colum-

bia Code, Proof, § 14-306(a) does not expressly state that

it is applicable to federal courts in the District of Colum-

bia.’ If Congress had intended the husband-wife privilege

of § 14-306(a) to apply to the federal courts in the District

of Columbia, it could have clearly so provided. The Court

of Appeals for the District of Columbia held that when the

intended scope of a section of Title 14 is not specified, the

court would not extend the section to federal courts and

imply a rule for the federal courts of the District of Co-

lumbia which is different than that in other federal courts.

United States v. Hairston, 161 U.S. App.D.C. 466, 495 F. 2d

1046 (1974). We conclude that § 14-306 (a) of the District

of Columbia Code is not an act of Congress providing oth-

erwise within the meaning of Rule 501.

To summarize, we conclude that the Tax Court properly

postponed its ruling on the Ryans’ claim of illegal govern-

Two sections of Title 14 of the District of Columbia Code do

provide that they shall apply to United States Courts for the Dis-

trict of Columbia. They ere the physician-patient privilege, § 14-

307, and the priest-penitent privilege, § 14-309.

ͤ ee

—

24a

ment surveillance because these claims would not excuse

the Ryans from their duty to answer the interrogatories.

The Tax Court properly rejected the Ryans’ claim of the

privilege against self-incrimination because the grant of

use immunity removed the danger of self-incrimination.

Finally, the Tax Court was correct in rejecting the privi-

lege against adverse spousal testimony given the factual

circumstances of this case.

No objection is made to the power of the Tax Court to

impose contempt sanctions, or the choice of sanctions im-

posed. Accordingly, the judgment is affirmed and the cause

is remanded to the Tax Court for further proceedings.

25a

ORDER DENYING PETITION FOR REHEARING

UNITED STATES COURT OF APPEALS

FOR THE SEVENTH CIRCUIT

Chicago, Illinois 60604

February 27, 1978

Before

Hon. WALTER J. Cummineos, Circuit Judge

Hon. WI gun F. Pew, In., Circuit Judge

Hon. Prentice II. Marsua.u, District Judge

Raymonp J. Ryan and HxLxN Ryan,

Petitioners-Appellants,

CoMMISSIONER OF INTERNAL REVENUE,

Respondent-A ppellee.

No. 76-2161.

Appeal from the Order of the United States Tax Court,

William Drennen, Judge

Order

On consideration of the petition for rehearing and sug-

gestion for rehearing in banc filed in the above entitled

cause by appellants, no judge in active service has re-

quested a vote thereon, and all of the judges on the original

panel have voted to deny a rehearing. Accordingly,

Ir Is Onperep that the aforesaid petition for rehearing

be, and the same is hereby, Dentep.

* District Judge Prentice H. Marshall of the United States Dis-

trict Court for the Northern District of Illinois is sitting by

designation.

26a

ORDER EXTENDING TIME TO FILE PETITION FOR

WRIT OF CERTIORARI

SUPREME COURT OF THE UNITED STATES

No. A-788

Raymonp J. Ryan and Hexen Ryan, Petitioners,

CoMMISSIONER OF INTERNAL REVENUE

Unper Constperation of the application of counsel for

petitioner(s),

Ir Is Orperep that the time for filing a petition for writ

of certiorari in the above-entitled cause be, and the same

is hereby, extended to and including April 21, 1978.

/3/ Joun Paul Stevens

Associate Justice of the Supreme

Court of the United States

Dated this 20th day of March, 1978.

;

ORDER OF TAX COURT

UNITED STATES TAX COURT

WASHINGTON

Docket No. 4800-69

Raymonp J. Ryan and Hexen Ryan, Petitioners

CoMMISSIONER OF INTERNAL Revenue, Respondent

Order

(October 1, 1976)

This case came on for hearing, pursuant to the Court’s

orders of August 24, 1976, and September 17, 1976, on

whether petitioners should be held in contempt of court for

failure and refusal to obey the orders of this Court entered

July 24, 1974, and July 16, 1976, directing them to answer

respondent’s first interrogatories; and on what sanctions,

if any, should be imposed on petitioners for failure to obey

the Court’s orders. Petitioner Raymond J. Ryan was pres-

ent in court as was petitioners’ counsel Raymond G. Lar-

roca, and Helen Ryan filed with the Court a waiver of her

right and desire to be present. Respondent was represented

by counsel, Sommers T. Brown, All parties were given an

opportunity to be heard. For reasons appearing in the tran-

script of this proceeding and the memorandum attached

hereto, it is hereby

Orperep that respondent’s answers to his first interroga-

tories filed with the Court on August 30, 1976, shall be

taken to be established as the correct answers to those in-

terrogatories for purposes of this case.

The Court finds that petitioners have deliberately and

without reasonable cause failed and refused to obey the

Court’s orders of July 24, 1974, and July 16, 1976, directing

28a

them to answer respondent’s first interrogatories, and have

also refused to rectify this disobedience under the order of

this Court issued August 24, 1976. Accordingly it is

FurtHer Orperep that petitioners are found to be in

contempt of court for failing and refusing to obey the or-

ders of this Court aforesaid; and there is hereby imposed

on petitioner Raymond J. Ryan a fine in the amount of

$1,000, to be paid to the Clerk of this Court as punishment

for this contempt. Execution of this fine will be stayed

pending outcome of an appeal of this order.

The memorandum attached is made a part of this order.

/s/ W. M. Drennen

W. M. Drennen

Judge

Dated: Washington, D.C.

October 1, 1976

Oh eee 8

at SP AE. e

29a

OPINION OF TAX COURT

Raymonp J. Ryan anp HELIX Ryan, Peririoners v.

CoMMISSIONER OF INTERNAL ReEvENvE, ResponDENT

Docket No. 4800-69. Filed November 15, 1976.

Petitioners were ordered by this Court to answer respon-

dent’s interrogatories but they refused to do so. Petitioners

appealed from that order but the appeal was dismissed be-

cause our order was not a final order. Pending the appeal,

petitioners were granted use immunity by an order of the

U.S. District Court for the District of Columbia. Subse-

quently petitioners were again ordered by this Court to

answer the interrogatories but they again refused to do so.

Held: Petitioners may not avoid answering the interro-

gatories on a claim of privilege under the fifth amendment

to the U.S. Constitution. They have not established the

requisite reasonable basis for apprehension of the hazards

of self-incrimination. Held, further, petitioners may not

avoid answering the interrogatories on a claim of marital

privilege against adverse spousal testimony. Held, further,

petitioners’ claim of protection under the fourth amend-

ment to the U.S. Constitution is premature.

Held, further: Petitioners are in contempt of court. As

sanctions for disobedience of this Court’s orders—

1. Pursuant to Rule 104(cX1), Tax Court Rules of Prac-

tice and Procedure, respondent’s answers to his interroga-

tories are taken to be established for the purposes of this

case.

2. Pursuant to sec. 7456 0d), LR. C. 1954, and Rule 13 (e),

Tax Court Rules of Practice and Procedure, petitioner

Raymond J. Ryan is fined $1,000.

Held, further, respondent’s motion for a protective order

against being required to answer petitioners’ interroga-

tories is denied and respondent is directed to answer the

interrogatories.

30a

Raymond G. Larroca, for the petitioners.

Sommers T. Brown, for the respondent.

OPINION

Drennan, Judge: This protracted litigation, which is

still in the pretrial stages, had its genesis in the petition

filed by petitioners in this Court in 1969 asking the Court

to redetermine the deficiencies in petitioners’ joint income

taxes for the years 1958 through 1962, totaling $4,375,-

868.48, and additions to tax for fraud for each of these

years totaling $2,312,322.35.

As reflected in the opinion of this Court found in Ray-

mond J. Ryan, 58 T.C. 107, on October 16, 1969, the Internal

Revenue Service of the United States requested from the

Federal Tax Administration of Switzerland on the basis of

article XVI of the Double Taxation Convention of May 24,

1951, between Switzerland and the United States, informa-

tion from the books and records of a Swiss bank on alleg-

edly questionable dealings between that bank and petitioner

Raymond J. Ryan, asserting there was reason to suspect

that Ryan had defrauded the United States tax authorities.

Ryan and the bank objected to this procedure but eventu-

ally, on the basis of the decision of the Swiss Federal Su-

preme Court in X. v. The Federal (Swiss) Tax Administra-

lion, 28 AFTR 2d 71-5510, 71-1 USTC par. 9435 (Dee. 23,

1970), the Swiss Federal Tax Administration apparently

gave the Internal Revenue Service the information re-

quested, or at least part thereof. Thereafter respondent

sought authority from this Court to request the United

States Competent Authority, as referred to in the Double

Taxation Convention of 1951, to request the Swiss Com-

petent Authority to take depositions upon written interro-

gatories of various officers of the Swiss bank for the pur-

pose of obtaining evidence of petitioners’ dealings with

the Swiss bank in a form that would be admissible as evi-

dence in this proceeding. This authority was granted by this

31a

Court by order entered April 24, 1972, for reasons ex-

plained in the opinion of this Court referred to above.

When the Swiss Competent Authority attempted to ob-

tain the evidence requested by the U.S. Competent Author-

ity through the interrogatories, petitioners again objected

and appealed to the Swiss Federal Supreme Court. How-

exer, in X. and F- Bank v. Confederation (Swiss) Tax Ad-

ministration, 37 AFTR 2d 76-1282, 76-1 USTC par. 9452

(May 16, 1975), the Swiss Federal Supreme Court held

that while under the tax treaty information from bank

records could be made available to the Internal Revenue

Service under certain conditions, the treaty did not au-

thorize the Swiss Confederation Tax Administration to

furnish the Internal Revenue Service with evidence from

the bank records in a form that would be admissible in

evidence in a trial in the United States Courts. Pursuant

to that decision the Swiss Confederation Tax Administra-

tion refused, so we are informed, to furnish the evidence

requested for use in this proceeding. Activity in this pro-

ceeding was more or less suspended until the culmination

of the Swiss proceedings.

On January 18, 1974, respondent served on petitioners

seven interrogatories pertaining to petitioners’ transac-

tions with the Swiss bank or Swiss banking officers. Peti-

tioners objected to the interrogatories on the grounds,

inter alia, that these answers would incriminate them in vio-

lation of their rights under the fifth amendment to the U.S.

Constitution. For reasons appearing in the transcript of

these proceedings and discussed in the briefs, this Court

by order entered May 24, 1974, granted respondent’s mo-

tion to compel answers to the interrogatories and directed

petitioners to answer the interrogatories. Petitioners filed

a writ of mandamus with the United States Court of Ap-

peals for the Seventh Circuit to compel the Chief J udge of

the Tax Court to vacate its order, which writ was denied.

Petitioners also filed with the Court of Appeals for the

32a

Seventh Circuit an appeal from the order. On May 23, 1975,

the Court of Appeals dismissed petitioners’ appeal for the

reason that the order was not an appealable final order

and suggested that the procedure for petitioners to test

the validity of the Tax Court was to fail to comply with

the order and risk being held in contempt of the Court.

See Ryan v. Commissioner, 517 F.2d 13 (7th Cir. 1975),

cert. denied 423 U.S. 892 (1975).

During the pendency of the appeal in the Seventh Cir-

cuit, the Department of Justice obtained from the United

States District Court for the District of Columbia an im-

munity order pursuant to 18 U.S.C. sections 6002 and 6003

protecting petitioners from the use against them in any

subsequent criminal proceedings of testimony which they

may be required to give in the proceedings in the Tax

Court. Petitioners appealed the immunity order to the

United States Court of Appeals for the District of Co-

lumbia Circuit on the grounds, inter alia, that it was

granted in an ex parte proceeding and that the immunity

was not coextensive with their rights under the fifth

amendment. On June 28, 1976, the United States Court of

Appeals for the District of Columbia Circuit dismissed

petitioners’ appeal on the grounds that the immunity or-

der was not an appealable final order and also suggested

the contempt procedure as a vehicle for adjudication of

petitioners’ claims. See In Re Ryan, F. 2d (D.C.

Cir. 1976), 38 AFTR 2d 76-5462, 76-2 USTC par. 9518,

dismissing appeal from an unreported District Court deci-

sion.

Upon conclusion of the appellate proceedings above men-

tioned, this Court entered an order on July 16, 1976, again

directing stitioners to answer respondent’s first interro-

gatories d vr before July 28, 1976. By letter dated July

28, 1976, from their attorney, petitioners declined to com-

ply with the Court’s order. In the meantime, both petition-

ers filed with the Court a claim of marital privilege against

either spouse testifying against the other. By order dated

33a

July 30, 1976, the Court set August 18, 1976, for hearing

on: (1) Petitioners’ claims of marital privilege; (2) what

sanctions if any should be imposed on petitioners for fail-

ure to comply with the Court’s order to answer respond-

ent’s first interrogatories; and (3) a motion filed by re-

spondent for a protective order against being required to

answer petitioners’ initial interrogatories served upon re-

spondent.“

Per order dated August 24, 1976, this Court ruled as

follows in respect to the matters considered at the hearing

held August 18, 1976: Petitioners’ claims of marital privi-

lege were denied to the extent the claims were made to

avoid answering respondent’s interrogatories as directed

by this Court by its orders entered May 24, 1974, and July

16, 1976; respondent was permitted to proffer his answers

to his first interrogatories, which answers would be deemed

admitted unless petitioners filed their own answers on or

before September 10, 1976; and respondent’s motion for a

protective order was denied and respondent was directed

to answer or object to petitioners’ initia] interrogatories

on or before October 18, 1976.

This Court’s order of August 24, 1976, further specified

that if petitioners did not answer respondent’s first inter-

rogatories by September 10, 1976, petitioners would be

held to be in contempt of this Court and subject to penalty

of fine to be determined. Petitioners did not file answers

to the interrogatories. Accordingly, pursuant to the above

order and upon notice given per order dated September 17,

'‘ Respondent is not without fault in frustrating the Court s ef-

forts to move this case to trial on its merits. His broad motion for

A protective order against answering petitioners’ initial interroga-

tories was filed without any effort being made to answer or object

to the interrogatories. Also, as indicated in the transcripts at

various times, respondent has been reluctant to disclose the sources

of the information upon which his determination of the tax liability

was hased.

;

34a

1976, this Court set October 1, 1976, for further hearing as

to the citation for contempt and penalty therefor.

Counsel for both parties were present at the hearing on

October 1, 1976, as was Raymond J. Ryan. Helen Ryan was

not present but filed a waiver to her right to be present. All

were given an opportunity to be heard. At the conclusion of

the hearing the Court found petitioners to be in contempt

of Court for failing and refusing to obey the Court’s orders

to answer the interrogatories. As a sanction for petition-

ers’ civil disobedience the Court ordered that respondent’s

answers to the interrogatories would be taken as estab-

lished as facts for purposes of this case. As punishment for

contumacious disobedience of the Court’s orders, an un-

conditional fine of $1,000 was imposed on Raymond J. Ryan.

Heretofore the Court has not stated in writing the rea-

sons for its rulings because the rulings were considered to

be interlocutory and nonappealable. We state briefly below

the reasons for our various rulings in these pretrial pro-

ceedings.

We will first discuss petitioners’ claim of privilege

against self-incrimination afforded by the fifth amendment

of the U.S. Constitution as grounds for not answering the

interrogatories. This was the principal, if not the only,

ground relied upon by petitioners when the Court first di-

rected them to answer the interrogatories by order of May

24, 1974.

There is no dispute as to the general availability of the

fifth amendment privilege in civil cases, as are tax proceed-

ings in this Court. Kastigar v. United States, 406 U.S. 441,

444 (1972). Cf. John Harper, 54 T.C. 1121 (1970); Ameri-

can Cyamid Co. v. Scharff, 309 F.2d 790, 794 (3d Cir. 1962).

In the context of the instant case, however, we cannot ac-

cept petitioners’ asserted fifth amendment claim of the

privilege against self-incrimination as grounds for their

refusal to answer respondent’s first interrogatories. In our

original order entered July 24, 1974, we rejected as with-

35a

out merit petitioners’ claimed privilege against self-in-

crimination for reasons which reflected, inter alia, not only

the innocuous character of the questions themselves but

also our understanding (not challenged by petitioners)

that no criminal investigations were then pending against

them and that, indeed, the statute of limitations had ru

in respect of the years to which the interrogatories were

directed. We reaffirmed this position in our more recent

order of July 16, 1976. Petitioners did not establish at the

time of the prior order, nor have they since, the requisite

reasonable basis for apprehension of the hazards of in-

crimination.? See Hoffman v. United States, 341 U.S. 479,

486 (1951); Marchetti v. United States, 390 US. 39, 48

(1969). Indeed, while we adhere to the validity of our origi-

nal order, we believe that the intervening order granting

immunity to petitioners further buttresses our conclusion

as to the untenability of petitioners’ fifth amendment

claims. Although we do not purport to pass on the validity

of the immunity order since that question is not open to

us at this time, we do state our disagreement with peti-

tioners’ contention that the immunity order is inadequate

to protect their fifth amendment rights. To the contrary,

use immunity, that granted to both petitioners herein, is

recognized to be coextensive with the fifth amendment

privilege against self-incrimination. Kastigar v. United

States, supra at 461; United States v. Cappetto, 502 F.2d

1351, 1359 (7th Cir. 1974), cert. denied 420 U.S. 925 (1975).

2 While we of course recognize that petitioners -annot be held to

such a standard of specificity as would defeat the purpose of the

fifth amendment privilege, we emphasize that the above-mentioned

orders of this Court are predicated on petitioners’ failure to satisfy

the established requirement that the risks of self-inerimination be

real, not remote and speculative possibilities. Zicarelli v. New Jersey

State Commission of Investigation, 406 U.S. 472, 486 1972) ; Hoff-

man v. United States, 341 U.S. 479, 486 (1951). The dangers of

criminal prosecution, by either the United States Government or 4

foreign authority, to which petitioners have adverted, partake only

of the latter quality.

36a

To the extent that petitioners further assert the insuffici-

ency of the immunity order to protect against incrimina-

tion of one of them by virtue of the testimony of the other,

inasmuch as the immunity order was issued to both peti-

tioners in respect of the instant tax case wherein they are

jointly as well as severally liable, we do not believe that

under these circumstances, the immunity order could be

construed as to allow the cross-testimony of petitioners to

be so used. .

In challenging the validity of the immunity order, which

no one else has challenged or is apt to challenge, petition-

ers lend support to our suspicion that they are less inter-

ested in protecting themselves from possible criminal

prosecution by refusing to answer the interrogatories than

they are in not disclosing evidence of their tax liability

and possible fraudulent returns.

Petitioners are required by law to correctly report their

taxable income. Under our self-assessment system of in-

come taxation, petitioners are required by law to keep ade-

quate records by which the Internal Revenue Service can

check their returns. It is most important that taxpayers

do this and that these records be made available to the In-

ternal Revenue Service to ensure that each taxpayer pays

his legal share of the taxes collected to operate the Gov-

ernment. We believe the public need for requiring volun-

tary disclosures of income transcends any personal right

to thwart national objectives by allowing an undisclosed

self-determination of possible incrimination to excuse com-

pliance with the income tax laws.

Nor can we accept as a ground for their refusal to an-

swer respondex.t’s first interrogatories petitioners’ claim

of marital privilege against adverse spousal testimony,

which privilege in general comprises the privilege of one

spouse to decline to testify adversely against the other

and the corelative privilege of one spouse to preclude the

37a

adverse testimony of the other.“ While the privilege against

adverse spousal testimony is generally recognized in the

context of criminal proceedings, we find no basis for its

application in a civil tax proceeding in this Court.

As prescribed by section 7453,“ I.R.C. 1954, evidentiary

matters in this Court are governed by the Federal Rules of

Evidence which in respect of privileges provide as follows:

Rule 501. General Rule

Except as otherwise required by the Constitution of

the United States or provided by Act of Congress or

in rules prescribed by the Supreme Court pursuant to

statutory authority, the privilege of a witness, person,

government, State, or political subdivision thereof

shall be governed by the principles of the common law

as they may be interpreted by the courts of the United

States in the light of reason and experience. However,

in civil actions and proceedings, with respect to an

element of a claim or defense as to which State law

supplies the rule of decision, the privilege of a witness,

person, government, State, or politica] subdivision

thereof shall be determined in accordance with State

law.

We are not herein presented with a claim based on the other

privilege in respect of the marital relation, namely, the privi-

lege barring testimony as to confidential communications between

spouses. See Blau v. United States, 340 U.S. 332 (1951).

*Sec. 7453. Ruutes or Practice, ProcepurE, AND EVIDENCE.

Except in the case of proceedings conducted under section 7463,

the proceedings of the Tax Court and its divisions shall be con-

ducted in accordance with such rules of practice and procedure

(other than rules of evidence) as the Tax Court may prescribe and

in accordance with the rules of evidence applicable in trials without

a jury in the United States District Court for the District of

Columbia.

38a

Applying this rule in the context of the instant situation,

we perforce focus on the privilege at issue (hereinafter

sometimes designated as the testimonial privilege) as it

exists under Federal law and, more specifically, whether

the privilege is recognized in Federal civil proceedings.

We believe it is not.

Quite simply, although the testimonial privilege is well

recognized as a matter of criminal law, see, e.g., Hawkins

v. United States, 358 U.S. 74 (1958), we have found no

authority, nor have petitioners directed us to any, which

establishes the privilege in Federal civil cases.“ For this

reason alone, we are inclined to deny petitioners’ claims

herein; however, there are additional factors which guide

our consideration and which we believe militate against

recognition of the testimonial privilege herein. For one,

we are mindful of the criticism to which the testimonial

privilege has been subject.“ Further, we note that the Fed-

eral Rules of Evidence as originally proposed and submit-

ted to Congress by the Supreme Court contained a pro-

vision (proposed rule 505) that specifically limited recog-

nition of the testimonial privilege to criminal proceedings.

Thus we are reinforced in our reluctance to extend the scope

of the testimonial privilege in the absence of express au-

thority in support thereof.

We are aware that the privilege was recognized in Gilles v. Del

Guercio, 150 F.Supp. 864 (S.D. Cal. 1957), a civil deportation

ease, and that the privilege has been claimed and rejected in the

context of grand jury proceedings (In Re Snoonian, 502 F.2d 110

(Ist Cir. 1974), and United States v. George, 444 F.2d 310 (6th

Cir. 1971)), none of which we believe suffices to warrant recogni-

tion of the testimonial privilege herein.

* See, e.g., 8 Wigmore, sec. 2228, pp. 216-222 (McNaughton ed.

1961) ; MeCormick on Evidence, sec. 66, pp. 145-146 (2d ed. 1972) ;

Reutlinger, ‘‘Policy, Privacy, and Prerogatives: An Initia] Ex-

amination of the Proposed Federal Rules of Evidence as They

Affect Marital Privilege, 61 Calif. L. Rev. 1353, 1385-1386 (1973).

39a

In sum, petitioners have not demonstrated that the mari-

tal privilege against adverse spousal testimony presently

applies in Federal civil cases in general nor have petition-

ers persuaded us that in the absence of authority to that

effect we would be justified in recognizing the privilege in

the instant context. We therefore hold that the marital

privilege against adverse spousal testimony does not apply

to a civil tax proceeding in this Court; accordingly, peti-

tioners’ claims are denied and as such afford no basis for

petitioners’ refusal to answer respondent’s first interro-

gatories.

In their memorandum filed August 18, 1976, and at the

hearing held on that date, petitioners argued as an addi-

tional ground against the imposition of any sanctions for

their noncompliance that the interrogatories at issue are

the product of illegal and unconstitutional acts by the Gov-

ernment. To the extent that petitioners attempt thereby to

invoke the protection of the fourth amendment of the U.S.

Consitution, without addressing ourselves to the merits of

petitioners’ purported fourth amendment claim, we con-

sider any such claim premature at this stage.’ Indeed, the

very purpose for which petitioners have propounded their

initial interrogatories to respondent, and for which we

have denied respondent’s motion for a protective order

and instead directed respondent to more precisely answer

or object to the interrogatories, is to obtain sufficient in-

formation and/or evidence, which they presumably lack

at present, to enable petitioners to frame any fourth

amendment issues to be raised.

In sum, it is the province of the Court to ascertain

whether petitioners’ refusal to answer is justified and, if

not, require them to answer, Hoffman v. United States,

supra, as we have directed by the prior orders of July 24,

1974, and July 16, 1976, which orders petitioners have dis-

See discussion infra and n. 13 related thereto.

40a

obeyed. On the basis of the foregoing, we have concluded

that petitioners have failed to establish a reasonable basis

to justify their repeated refusals to answer the first inter-

rogatories propounded by respondent. By such recalei-

trance, petitioners have adopted a posture of disobedience

to the orders of this Court in derogation of its lawful au-

thority. As such, we find petitioners’ disobedience war-

rants exercise of our power to punish for contempt of the

Court.

Pursuant to section 7456(d), I.R.C. 1954, the Court pos-

sesses the power to punish by fine or imprisonment, at its

discretion, such contempt of its authority as disobedience

or resistance to its lawful writ, process, order, rule, decree,

or command.“ See also Rule 13(c), Tax Court Rules of

Practice and Procedure.’ Specifically, in the context of a

party’s failure to obey an order of this Court in respect

of the discovery provisions of our Rules of Practice and

*Sec. 7456. ADMINISTRATION OF OATHS AND PROCUREMENT OF

TESTIMONY

(d) InciwwentaL Powers.—The Tax Court and each division

thereof shall have power to punish by fine or imprisonment, at its

discretion, such contempt of its authority, and none other, as—

(1) misbehavior of any person in its presence or so near

thereto as to obstruct the administration of justice;

(2) misbehavior of any of its officers in their official trans-

actions; or

(3) disobedience or resistance to its lawful writ, process,

order, rule, decree, or command.

It shall have such assistance in the carrying out of its lawful writ,

proces, order, rule, decree, or command as is available to a court

of the United States.

See 18 U.S.C. sec. 401, which provides the power of Federal courts

to punish for contempt.

Rule 13. Jurispiction.

(o) Contempt of Court. Contempt of the Court may be punished

by fine or imprisonment within the scope of Code Section 7456(d).

4la

Procedure, Rule 104 thereof provides latitude in the sanc-

tions which we may impose. These sanctions include: (1)

An order that the matters regarding which the order was

made, or any other designated facts, shall be taken to be

established for the purposes of the case in accordance with

the claim of the party obtaining the order; (2) an order

refusing to allow the disobedient party to support or op-

pose designated claims or defenses, or prohibiting him

from introducing designated matters in evidence; or (3)

an order striking out pleadings or parts thereof or staying

further proceedings until the order is obeyed, or dismis-

sing the case or any part thereof, or rendering a judgment

by default against the disobedient party. All of these sanc-

tions may be imposed in addition to an order treating as

contempt of Court the failure to obey the Court’s order.

Rule 104(c)(4), Tax Court Rules of Practice and Pro-

cedure.“

In general, a contempt of court may be either civil or

criminal in nature. The distinction depends on the purpose

to be served thereby; civil contempt is coercive and reme-

dial in character whereas criminal contempt is punitive

to vindicate the authority of the Court. See, e.g., Gompers

v. Buck’s Stove d Range Co., 221 U.S. 418 (1911); Shilli-

tani v. United States, 384 U.S. 364 (1966). Thus,

When the duly issued orders of a court, in the exer-

cise of its jurisdiction, are disobeyed, the recalcitrant

may be cited, according to the circumstances, for crim-

inal contempt or civil contempt or both. The sanction

to be imposed is dictated by the purposes to be served.

If the purpose is to punish defiance of judicial author-

1% Rule 104. ENrorceEMENT ACTION AND SANCTIONS.

(e) Sanctions: * * *

(4) In lieu of the foregoing orders or in addition thereto, an

order treating as a contempt of the Court the failure to obey any

such order.

42a

ity, criminal contempt is involved. The beneficiaries

there are the courts and the public interest.

Even when a court issues an order which it had not

the power or authority to issue, in matters of criminal

contempt the disobedient party may be held and ap-

propriately punished. This is true if the order is later

found to have been invalid, even to the extent of in-

fringing constitutional rights, Maness v. Meyers, 1975,

419 U.S. 449, * * United States v. Dickinson, 5 Cir.

1972, 465 F.2d 496, on remand, D. C., 349 F.Supp. 227,

affirmed on second appeal, 5 Cir., 476 F.2d 373, cert.

denied, 414 U.S. 979, * * *

On the other hand, where the purpose is to compel

obedience of the court order or to compensate the liti-

gant for injuries sustained from the disobedience, civil

contempt is proper. In civil cases, the beneficiary of

civil contempt is the individual litigant. See, e.g.,

Gompers v. Bucks Stove and Range Company, 1911,

221 U.S. 418, * * * Salvage Process Corporation v.

Acme Tank Cleaning Process Corporation, 2 Cir.

1936, 86 F.2d 727; Rivers v. Miller, 5 Cir., 1940, 112

F.2d 439; Nelson v. Steiner, 7 Cir. 1960, 279 F.2d 944;

Southern Ry. Co. v. Lanham, 5 Cir. 1968, 403 F.2d 119.

[Norman Bridge Drug Co. v. Banner, 529 F.2d 822,

827 (5th Cir. 1976).]

In view of the instant circumstances which we have out-

lined, we conclude that we are justified in applying both

the sanction prescribed under Rule 104(c)(1) as well as a

criminal sanction for petitioners’ contumacious disobedi-

ence. Petitioners, by their repeated refusals to answer re-

spondent’s first interrogatories, have frustrated this

Court’s efforts to move this case to trial on its merits. In

furtherance of this objective, we impose the following sanc-

tion for petitioners’ civil disobedience of this Court’s or-

ders: That respondent’s proffered answers to his first in-

42a

terrogatories shall be taken to be established as facts for

the purpose of this case. Since by virtue of this sanction,

answers to the interrogatories will be provided, there re-

mains no coercive purpose to be served, hence we impose

no additional civil contempt sanction by way of conditional

fine or imprisonment.

In addition, as punishment for the criminal disobedience

of the Court’s orders, we impose on petitioner Raymond

J. Ryan an unconditional fine of $1,000. We intend thereby

to impress on petitioner, who we believe to be the moving

force behind petitioners’ disobedience, the necessity of

obeying the lawful orders of this Court. We will not coun-

tenance such conduct which has resulted in both lengthy

delay in the progress of this case and burden on the vari-

ous courts that have to date been involved thereby."

Lastly, we turn to respondent’s motion for a protective

order. On July 19, 1976, respondent filed a motion for a

protective order against responding to petitioners’ initial

interrogatories to respondent. Argument on the motion was

heard at the aforementioned hearing held August 18, 1976.

While we recognize that respondent’s task may be extended

and potentially onerous, we believe that the better pro-

cedure to be followed by respondent in respect of these in-

terrogatories is that contemplated by Rule 71(c), Tax

Court Rules of Practice and Procedure, which requires

that each interrogatory be either answered or objected to

specifically. Cf. John W. Pearsall, 64 T.C. 94 (1974); see

In fixing the amount of the fine, we have considered petitioner's

financial status as well as the overall circumstances for which we

have found punishment warranted. See United States v. United

Mine Workers, 330 U.S. 258, 304 (1947). Consequently, while we

recognize that the fine of $1,000 exceeds the $500 limitation for

petty offenses as defined by 18 U.S.C. sec. 1(3), we believe that

the fine, being neither excessive nor otherwise onerous, may be

imposed without jury trial. See Muniz v. Hoffman, 422 U.S. 454

(1975) ; Rule 42(b), Federal Rules of Criminal Procedure.

ESTE — SS

44a

also Flood v. Margis, 64 F. R. D. 59, 61-62 (1974). This is

particularly appropriate in light of petitioners’ assertion

in their memorandum filed August 18, 1976, entitled ‘‘ Peti-

tioners’ Request that No Sanctions be Imposed upon Them

and Other Relief in which they allege that the notice of

deficiency upon which this case is based and the interro-

gatories here involved are based on illegally obtained evi-

dence or leads obtained from illegally obtained evidence.”

Accordingly, as per our order entered August 24, 1976, we

have denied respondent’s motion and directed respondent

to answer or object to the interrogatories propounded on

or before October 18, 1976. Rule 103(b), Tax Court Rules

of Practice and Procedure.

An appropriate order has been entered.

By this we do not mean to infer that we are ruling one way

or the order on whether evidence illegally obtained by Federal

officers or agents will be excluded in the trial of a civil tax fraud

vase in this Court under the exclusionary rule of the fourth amend-

ment. See United States v. Janis, 428 U.S. 433 (1976).

45a

IMMUNITY ORDER OF D. C. DISTRICT COURT

UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF COLUMBIA

Miscellaneous No. 74-86

In Re: Raymond J. Ryan and Helen Ryan

United States Tax Court

Docket No. 4800-69

Order

(Fb Aveust 8, 1974)

On motion of the United States Attorney for the District

of Columbia, filed in this matter on August 8, 1974;

And it appearing to the satisfaction of the Court from the

Motion papers filed in this matter and the oral representa-

tions of the Government:

1. That said parties have been called to testify, provide

other information and produce documents before said Tax

Court;

2. That in the judgment of the said United States Attor-

ney, said parties have refused to testify, provide other

information and produce documents on the basis of their

privilege against self-incrimination ;

3. That in the judgment of the said United States Attor-

ney, the testimony, other information and production of

documents from said parties may be necessary to the public

interest;

4. That the aforesaid Motion filed herein has been made

with the approval of the Assistant Attorneys General in

charge of the Criminal Division and Tax Division of the

Department of Justice, pursuant to the authority vested

in them by 18 U.S.C. § 6003 and 28 C. F. R. 0.175;

46a

Now, Txererore, Ir Is Onperep pursuant to 18 U.S.C.

§ 6003 that the said parties give testimony or provide other

information and produce documents which they refuse to

give or to provide on the basis of their privilege against

self-incrimination as to all matters about which they may

be interrogated before the United States Tax Court.

/s/ Georce L. Hast, JR.

Judge

Dare: August 8, 1974

47a

MOTION BY u. S. ATTOHNEY FOR p. c.

UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF COLUMBIA

(Caption Omitted in Printing)

Motion

Comes now the United States Attorney for the District

of Columbia and moves this court to issue an order pursu-

ant to the provisions of Title 18, United States Code, See-

tion 6001 et seq., compelling Raymond J. Ryan and Helen

Ryan to give testimony, provide other information, and

produce documents which they refuse to give and provide,

on the basis of their privilege against self-incrimination,

as to all matters about which they may be interrogated be-

fore the United States Tax Court, a court of the United

States, and respectfully alleges as follows:

1. The said Raymond J. Ryan and Helen Ryan have been

called to testify and provide other information and pro-

duce documents before said Tax Court;

2. In the judgment of the undersigned, the testimony,

other information and documents from said parties may be

necessary to the public interest;

3. In the judgment of the undersigned, said parties have

refused to testify or provide other information or produce

documents on the basis of their privilege of self-incrimina-

tion;

4. This application is made with the approval of Henry

Petersen, Assistant Attorney General in charge of the

Criminal Division in the Department of Justice and with

the approval of Scott P. Crampton, Assistant Attorney

General in charge of the Tax Division in the Department of

Justice, pursuant to the authority vested in them by 18

U.S.C. § 6003 and 28 C. F. R. 0.175. Copies of the letters from

said Assistant Attorneys General expressing such approval

are attached hereto.

48a

Wuenrerore, the United States prays that said motion be

granted.

Respectfully submitted,

ERL. J. SARA [by] LBS

United States Attorney

/s/ Lester B. Serer

Assistant United States Attorney

49a

DEPARTMENT OF JUSTICE

WASHINGTON 20530

August 6, 1974

ERL. SaRRT, Esquire

United States Attorney

Washington, D.C.

Re: Raymond J. Ryan and Helen Ryan v.

Commissioner of Internal Revenue

Tax Court Docket Number 4809-69

Dear Mr. Silbert:

In response to a request by Mr. Meade Whitaker, Chief

Counsel, Internal Revenue Service, Assistant Attorney

General Scott P. Crampton has authorized you to apply,

pursuant to 18 U.S.C. 6001, et seq., to the United States

District Court for orders compelling testimony and pro-

duction of information by Raymond J. Ryan and Helen

Ryan. The Criminal Division has no objection to the pro-

posed grants of immunity. The Ryans are petitioners in a

Tax Court case who have recently filed a notice of appeal

and petition for mandamus in the Court of Appeals for the

Seventh Circuit, contesting the Tax Court’s order direct-

ing them to answer Government interrogatories.

At such time as the Internal Revenue Service requests

you to proceed with this matter, and in the event you find,

pursuant to 18 U.S.C. 6003(b), that testimony or other in-

formation from the Ryans is necessary to the public inter-

est, you are requested to move the United States District

Court for orders requiring Raymond J. Ryan and Helen

Ryan to give testimony or provide other information. At-

tached are the authorization letters signed by Assistant

Attorney General Scott P. Crampton, and a copy of the

request for authorization by the Internal Revenue Service.

50a

Also attached is a copy of a memorandum outlining the

Tax Division’s understanding of the procedures which will

be followed before you move for orders pursuant to 18

U.S.C. 6001, et seg. Any questions you may have regarding

this matter should be directed to Mr. Sommers T. Brown,

Assistant Chief, Tax Court Trial Branch, Internal Revenue

Service, (IDS 184-3351).

Sincerely,

/s/ Henry E. Perersen

Assistant Attorney General

51a

DEPARTMENT OF JUSTICE

WASHINGTON, D.c. 20530

July 25, 1974

Eart Srsert, Esquire

United States Attorney

Washington, D.C.

Re: Raymond J. Ryan and Helen Ryan v.

Commissioner of Internal Revenue

Tax Court Docket Number 4800-69

Dear Mr. Silbert:

This is with regard to the request for an authorization

for you to apply, pursuant to 18 U.S.C. 6001. et seq., for

an order compelling testimony and production of informa-

tion by Raymond J. Ryan, a prospective witness in the

above-captioned matter, involving violations of the Internal

Revenue Code.

I find that the testimony of Raymond J. Ryan is neces-

sary and in the public interest. You are advised that the

Criminal Division has notified this office that it has no ob-

jection to the proposed grant of immunity.

Accordingly, you are hereby authorized to seek a grant

of immunity for Raymond J. Ryan, pursuant to the pro-

visions of 18 U.S.C. 6003, in the event said witness is called

to testify in connection with the above-captioned matter

and asserts the Fifth Amendment privilege against self-

incrimination.

Sincerely yours,

/s/ Scorr P. Crampron

Assistant Attorney General

52a

DEPARTMENT OF JUSTICE

WASHINGTON, b. c. 20530

July 25, 1974

Eart SLaRERT, Esquire

United States Attorney

Washington, D.C.

Re: Raymond J. Ryan and Helen Ryan v.

Commissioner of Internal Revenue

Tax Court Docket Number 4800-69

Dear Mr. Silbert:

This is with regard to the request for an authorization

for you to apply, pursuant to 18 U.S.C. 6001, et seq., for an

order compelling testimony and production of information

by Helen Ryan, a prospective witness in the above-cap-

tioned matter, involving violations of the Internal Revenue

Code.

I find that the testimony of Helen Ryan is necessary and

in the public interest. You are advised that the Criminal

Division has notified this office that it has no objection to

the proposed grant of immunity.

Accordingly, you are hereby authorized to seek a grant of

immunity for Helen Ryan, pursuant to the provision of 18

U.S.C. 6003, in the event said witness is called to testify

in connection with the above-captioned matter and asserts

the Fifth Amendment privilege against self-incrimination.

Sincerely yours,

/s/ Scott P. Crampton

Assistant Attorney General

53a

IMMUNITY OPINION OF D. C. CIRCUIT

In re Raymond J. Ryan and Helen

Ryan, U.S. Tax Court No. 4800-69.

No. 74-1906.

United States Court of Appeals,

District of Columbia Circuit.

Argued Oct. 28, 1975.

Decided June 28, 1976.

Rehearing Denied July 30, 1976.

Before Baze.ton, Chief Judge, Hasrm,“ Senior Circuit

Judge for the Third Circuit and ROBB, Circuit Judge.

Senior Circuit Judge Hastie participated in the consid-

eration of this case but died before opinion was entered.

Opinion for the Court filed by Circuit Judge Ross.

Ross, Circuit Judge:

On August 8, 1974 pursuant to 18 U.S.C. §§ 6002 and

6003 the United States District Court for the District of

Columbia entered an order directing the appellants to ‘‘give

testimony or provide other information and produce docu-

ments which they refuse to give or to provide on the basis

of their privilege against self-incrimination as to all mat-

ters about which they may be interrogated before the

United States Tax Court.’’ The Ryans challenge that order.

On January 18, 1974, pursuant to Rule 71 of the Tax

Court Rules of Practice and Procedure, the Commissioner

of Internal Revenue served upon the Ryans written inter-

rogatories and a request for production of documents. The

interrogatories and requested documents concerned cer-

tain business transactions relevant to deficiency determina-

* Sitting by designation pursuant to 28 U.S.C. § 294(d).

54a

tions awaiting adjudication in the Tax Court. The Ryans

objected to the interrogatories, upon the ground among

others that the information and documents requested were

irrelevant and that compulsory disclosure would violate

the Ryans’ privilege against self-incrimination. After a

hearing the Tax Court ordered the Ryans to answer, and

thereafter a motion for reconsideration was denied. The

Ryans appealed from that order to the Circuit Court of

Appeals for the Seventh Circuit; they also filed with that

court a petition for a writ of mandamus directing the chief

judge of the Tax Court to vacate the disclosure order.“

On August 8, 1974, while the mandamus proceeding in

the Seventh Circuit was pending, the United States Attor-

ney for the District of Columbia requested the United

States District Court for that district to enter an or‘er

directing the Ryans io give testimony or provide other

information which they had previously refused to give

on the basis of their privilege against self-incrimination.

The United States Attorney acted pursuant to 18 U.S.C.

§ 6003 and Department of Justice regulations, and at the

request of the assistant attorneys general in charge of the

criminal division and the tax division of the Department

of Justice. On the same day, August 8, 1974, the district

judge acting ex parte entered the order which the Ryans

challenge on this appeal. The order granted them use im-

munity with respect to testimony, information or docu-

ments which might be produced before the Tax Court in

theaction pending there, and directed the Ryans to comply

with the request for information. Pursuant to 18 U.S.C.

§ 6002 the order was forwarded to the Tax Court and was

The present case is but one phase of the controversy between

the Ryans and the Commisioner of Internal Revenue. See United

States v. Ryan, 402 U.S. 530, 91 S.Ct. 1580, 29 L.Ed.2d 85 (1971);

Ryan v. Commissioner of Internal Revenue, 517 F.2d 13 (7th Cir.),

cert. denied, 423 U.S. 892, 96 S.Ct. 190, 46 L.Ed.2d 124 (1975).

55a

communicated to the Ryans’ counsel by Judge Drennen of

that court on August 9, 1974.

The Ryans attack the District Court’s order on several

procedural grounds but we think it unnecessary to reach

reach the issues thus raised. In our opinion the order is not

a final order, appealable under 28 U.S.C. § 1291.

The Ryans argue that

[t]he proceeding to obtain that [immunity] order is

a separate action, and there will be no other and later

opportunity for this Court to review it—just as there

would be no such opportunity if the court’s jurisdiction

had been invoked to secure compliance with an admin-

istrative subpoena. Accordingly, review by this Court

is warranted now. [Appellants’ Br. p. 12.]

See Reisman v. Caplin, 375 U.S. 440, 84 S.Ct. 508, 11 L.Ed.

2d 459 (1964). We think however that the order is essen-

tially one compelling testimony and the production of docu-

ments before a court of the United States—the Tax Court“

—in exchange for immunity. The order therefore stands on

the same footing as any other order compelling testimony

and the production of documents; and the Supreme Court

has consistently held that such orders are not final and

hence not appealable. United States v. Ryan, 402 U.S. 530,

91 S.Ct. 1580, 29 L.Ed.2d 85 (1971); Cobbledick v. United

States, 309 U.S. 323, 60 S.Ct. 540, 84 L.Ed. 783 (1940);

Alexander v. United States, 201 U.S. 117, 26 S.Ct. 356, 50

L.Ed. 686 (1906). As were the witnesses in those cases the

Ryans are entitled to refuse to comply and in the event con-

tempt proceedings are brought against them they may then

litigate the validity of the immunity order. Those proceed-

ings may be instituted in the Tax Court pursuant to 26

A proceeding in the Tax Court is a proceeding before a court

of the United States’’ in which the immunity statute may be in-

voked. 18 U.S.C. § 6001(4).

56a

U.S.C. §7456(d)(3) with review in this court under 26

U.S.C. § 7482. A contempt judgment in the District Court,

if proceedings were instituted there, would of course be

appealable under 28 U.S.C. § 1291.

As the Supreme Court observed in Alexander v. United

States, 201 U.S. 117, 121, 26 S.Ct. 356, 358, 50 L.Ed. 686:

In a certain sense finality can be asserted of the orders

under review; so, in a certain sense, finality can be

asserted of any order of a court. And such an order

may coerce a witness, leaving to him no alternative but

to obey or be punished. It may have the effect and the

same characteristic of finality as the orders under re-

view, but from such a ruling it will not be contended

there is an appeal. Let the court go farther, and punish

the witness for contempt of its order—then arrives a

right of review, and this is adequate for his protection

without unduly impeding the progress of the case.

The appeal is dismissed for lack of jurisdiction.

So ordered.

57a

STATUTES

18 U.S.C. § 2515

§ 2515. Prohibition of use as evidence of intercevted wire

or oral communications

Whenever any wire or oral communications has been

intercepted, no part of the contents of such communica-

tion and no evidence derived therefrom may be received

in evidence in any trial, hearing, or other proceeding in or

before any court grand jury, department, officer, agency,

regulatory body, legislative committee, or other authority

of the United States, a State, or a political subdivision

thereof if the disclosure of that information would be in

violation of this chapter.

Added Pub.L. 90-351, Title III, § 802, June 19, 1968, 82

Stat. 216.

18 U.S.C. § 3504

§ 3504. Litigation concerning sources of evidence

(a) In any trial, hearing, or other proceeding in or be-

fore any court, grand jury, department, officer, agency, reg-

ulatory body, or other authority of the United States—

(1) upon a claim by a party aggrieved that evidence

is inadmissible because it is the primary product of an

unlawful act or because it was obtained by the exploi-

tation of an unlawful act, the opponent of the claim

shall affirm or deny the occurrence of the alleged un-

lawful act;

(2) disclosure of information for a determination if

evidence is inadmissible because it is the primary

product of an unlawful act occurring prior to June 19,

1968, or because it was obtained by the exploitation of

an unlawful act occurring prior to June 19, 1968, shall

not be required unless such information may be rele-

vant to a pending claim of such inadmissibility ; and

58a

(3) no claim shall be considered that evidence of an

event is inadniissible on the ground that such evidence

was obtained by the exploitation of an unlawful act

occurring prior to June 19, 1968, if such event occurred

more than five years after such allegedly unlawful act.

(b) As used in this section ‘‘unlawful act’’ means any

act the use of any electronic, mechanical, or other device

(as defined in section 2510(5) of this title) in violation of

the Constitution or laws of the United States or any regu-

lation or standard promulgated pursuant thereto.

Added Pub.L. 91-452, Title VII, § 702(a), Oct. 15, 1970, 84

Stat. 935.

18 U.S.C. § 6002

§ 6002. Immunity generally

Whenever a witness refuses, on the basis of his privilege

against self-incrimination, to testify or provide other in-

formation in a proceeding before or ancillary to—

(1) a court or grand jury of the United States,

(2) an agency of the United States, or

(3) either House of Congress, a joint committee of

the two Houses, or a committee or a subcommittee of

either House,

and the person presiding over the proceeding communicates

to the witness an order issued under this part, the witness

may not refuse to comply with the order on the basis of his

privilege against self-incrimination; but no testimony or

other information compelled under the order (or any in-

formation directly or indirectly derived from such testi-

mony or other information) may be used against the wit-

ness in any criminal case, except a prosecution for perjury,

giving a false statement, or otherwise failing to comply

with the order.

59a

(Added Pub. L. 91-452, title II, § 201 (a), Oct. 15, 1970, 84

Stat. 927.)

18 U.S.C. § 6003

§ 6003. Court and grand jury proceedings

(a) In the case of any individual who has been or may

be called to testify or provide other information at any

proceeding before or ancillary to a court of the United

States or a grand jury of the United States, the United

States district court for the judicial district in which the

proceeding is or may be held shall issue, in accordance with

subsection (b) of this section, upon therequest of the

United States attorney for such district, an order requir-

ing such individual to give testimony or provide other in-

formation which he refuses to give or provide on the basis

of his privilege against self-incrimination, such order to

become effective as provided in section 6002 of this part.

(b) A United States attorney may, with the approval of

the Attorney General, the Deputy Attorney General, or

any designated Assistant Attorney General, request an

order under subsection (a) of this section when in his judg-

ment—

(1) the testimony or other information from such

individual may be necessary to the public interest; and

(2) such individual has refused or is likely to refuse

to testify or provide other information on the basis of

his privilege against self-incrimination.

(Added Pub. L. 91-452, title II, § 201(a), Oct. 15, 1970, 84

Stat. 927.)

60a

FEDERAL RULE OF CIVIL PROCEDURE 6(d)

(d) For Motions—Affidavits. A written motion, other than

one which may be heard ex parte, and notice of the hearing

thereof shall be served not later than 5 days before the

time specified for the hearing, unless a different period is

fixed by these rules or by order of the court. Such an order

may for cause shown be made on ex parte application.

When a motion is supported by affidavit, the affidavit shall

be served with the motion; and, except as otherwise pro-

vided in Rule 59(c), opposing affidavits may be served not

later than 1 day before the hearing, unless the court permits

them to be served at some other time.

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.