Petition — Shiffman v. United States

Seana

Supreme Court, U.

FILED

) JUN 2

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MI tis JR., CLERK

at

Supreme Court of the Gnited States

October Term, 1977

No, £6 4 6% S

MILTON SHIFFMAN,

Petitioner.

V.

UNITED STATES

Respondent.

PETITION FOR A WRIT OF CERTIORARI TO

UNITED STATES COURT OF APPEALS

FOR THE SIXTH CIRCUIT

IRWIN M. ALTERMAN

17117 W. 9 Mile Rd.

16th Floor

Southfield, MI 48075

(313) 559-7500

Counsel for Petitioner

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INDEX

Page

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Constitutional Provision Involved .................00455 3

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Reasons For Granting The Writ

The Decision Below Conflicts With This Court’s

Decision In Bellis v United States, 417 US 85 (1974),

On An Important Question Of Construction Of The

Fifth Amendment And Adopts A New Rule Which

Should Only Be Settled By This Court .................. 5

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Appendix

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Excerpt From District Court

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CITATIONS

Bellis v United States,

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Fisher v United States,

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Wilson v United States,

EE a 6

United States v Slutsky,

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United States v White,

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De Uk. UU adesies deéensesewesaauh 2

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Fifth Amendment, United States

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SUPREME COURT OF THE UNITED STATES

October Term, 1977

No.

MILTON SHIFFMAN,

Petitioner,

V.

UNITED STATES,

Respondent.

PETITION FOR A WRIT OF CERTIORARI TO

UNITED STATES COURT OF APPEALS

FOR THE SIXTH CIRCUIT

The petitioner, Milton Shiffman, prays that a writ of

certiorari issue to review the opinion and judgment of the

United States Court of Appeals for the Sixth Circuit entered in

this proceeding on May 4, 1978.

OPINION BELOW

The opinion of the Court of Appeals for the Sixth Circuit,

not yet reported, appears in the Appendix. (A1-10).

There was no formal opinion of the District Court for the

Eastern District of Michigan. Excerpts from the transcript of

the — court hearing are reproduced in the Appendix.

(Al1-12).

JURISDICTION

The opinion and judgment of the Court of Appeals for the

Sixth Circuit were dated and entered on May 4, 1978, and this

petition for certiorari was filed within the time prescribed by

law. This Court’s jurisdiction is invoked under 28 USC

1254(1).

QUESTIONS PRESENTED

1. Whether the long-standing Fifth Amendment “‘institu-

tional entity’’ doctrine, reaffirmed in Bellis v United States, 417

US 85 (1974), reaches limited financial records of two tenants in

common (along with their wives), of a single piece of land,

merely because both co-tenants share ownership and access to

these records.

2. Whether the privilege against self-incrimination excepts

documents of an institutional entity under the standard

consistently applied by this Court or excepts all documents in

which more than one person shares ownership or access rights

under the novel per se ru/e established by the court of appeals.

CONSTITUTIONAL PROVISION INVOLVED

The Fifth Amendment, in pertinent part, provides:

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

case to be a witness against himself... ’’

STATEMENT OF THE CASE

The grand jury sitting in the United States District Court for

the Eastern District of Michigan issued a subpoena dated

January 20, 1978, to ‘‘Dr. Milton Shiffman or any other

authorized representative — G and S Investment’’* requesting

(1) cash receipts journal, (2) cash disbursements journal, (3)

bank statements, (4) cancelled checks, (5) deposit forms, (6)

general ledger, and one other specification not relevant to this

appeal. The subpoena was returnable February 8. Shiffman,

through his counsel, advised the United States Attorney he

would not comply with the subpoena, relying instead on his

Fifth Amendment privilege against self-incrimination. The

actual appearance was waived.

The U.S. Attorney filed a motion in the district court for an

order compelling compliance. The court held a non-testimonial

hearing on February 24, in which Dr. Shiffman’s lengthy

affidavit was the only document filed that contained facts of

admissible evidence. The court granted the motion to compel

compliance from the bench.

The order to comply wiih the subpoena was issued March 8

requiring Dr. Shiffman’s appearance March 9. Dr. Shiffman

appeared before the grand jury and again asserted his Fifth

Amendment righis.

A motion for adjudication of contempt was filed March 10,

noticing a hearing for March 14. The parties fiied a stipulation

reciting that Dr. Shiffman’s defense to the contempt would be

the same Fifth Amendment grounds.

The district court entered an order of contempt and

confinement on March 17. Dr. Shiffman forthwith filed a

* Technically, ‘‘G & S Investments,’’ cited here as G & S.

3

notice of appeal. The court then entered an order for the release

of Dr. Shiffman on his personal recognizance pending appeal,

the government having stipulated, ‘*[I]t does not appear that

the appeal is frivolous or taken for delay,’’ pursuant to 28 USC

1826.

The appeal was perfected in the United States Court of

Appeals for the Sixth Circuit. The court of appeals filed an

opinion and judgment affirming the district court on May 4,

1978.

The uncontradicted affidavit of Dr. Shiffman sets forth these

facts. In 1972, Dr. Shiffman and one Hyman B. Gordon each

owned an undivided one-half interest as tenants in common in

certain real property in Whitmore Lake, Michigan. That year

they each deeded a portion of their interest to their wives, so

that they all held as tenants in common. Recently, Dr. and Mrs.

Shiffman deeded their respective interests to revocable living

trusts they established in which they are the respective trustees.

Shiffman and Gordon, in late 1974, opened a bank account

under the style G & S. The sole purpose of the account was to

segregate transactions relating to the ownership of the real

estate from other bank accounts maintained in individual

names. The only activity of the bank account is to receive

owner’s income for the real property and to disburse such

income. The only disbursements are to the mortgagee for he

mortgage payments and to the tenants in common. Both

Shiffman and Gordon have authority to issue checks from the

account, but only for these two purposes.

G & S has no activity whatever other than the assumed name

bank account for the limited purpose just described. G & S has

no business office and has never had one. It has no telephone

number, no stationery, and does not advertise. It has no

employees, nor has it ever had employees. It files no separate

tax return. It has no written agreement of any kind except for

the bank account mentioned above.

G & S is not a partnership, does not hold itself out to the

public as a separate institutional entity, nor does it so hold itself

out to those few persons or entities from whom it may receive

funds, or to whom it may disburse funds.

A nursing home is operated on the involved real estate by a

separate corporation. The records of that corporation were not

the subject of the subpoena.

The district court, without an express finding that G & S is an

4

organized, institutional entity, rejected the Fifth Amendment

claim on the ground that the records were not wholly personal.*

The court of appeals held:

‘*Though there was no organized institutional activity

equivalent to the usual business activity of the

corporation or partnership, the records of G & S unde-

niably reflect transactions which were not wholly

those of Dr. Shiffman.

*“‘We conclude that to the extent Dr. Shiffman

has elected to join with Mr. Gordon in conducting

financial transactions related to the real estate owned

by them and their wives as tenants in common under

the assumed name G & S Investments he has with-

drawn the records of such transactions from the

privilege against compulsory production. The sub-

poenaed records cannot be said to be purely personal

or wholly the individual records of the appellant.’’

(A9, 10).

Because this Court has never authorized the departure from

the organized institutional entity doctrine which it recently

reaffirmed, and for the reasons urged below, Dr. Shiffman

requests this Court to grant certiorari and to reverse the

decision of the court of appeals.

REASONS FOR GRANTING THE WRIT

The Decision Below Conflicts With This Court's Decision

In Bellis v United States, 417 US 85 (1974), On An

Important Question Of Construction Of The Fifth Amend-

ment And Adopts A New Rule Which Should Only Be

Settled By This Court

This Court has long held that the privilege against self-

incrimination applies to an individual’s personal papers but not

* The government also argued the privilege was unavailable under the

doctrine of Fisher v United States, 425 US 391 (1976), and under the

required records exception. The district court rejected the required records

argument at the hearing, and the court of appeals did not discuss it.

Neither court reached the Fisher point.

$

those of a “‘collective entity which are in his possession in a

representative capacity.’’ Be/lis v United States, 417 US 85, 87,

88 (1974). This Court has reviewed several kinds of joint

enterprises to determine in each instance whether the privilege

may apply. This Court has always applied the facts to the

standard it established. The court of appeals below, in the

context of limited documents relating to a tenancy in common

of one parcel of real estate, has essentially held that mere co-

ownership vitiates the privilege. This Court has never

sanctioned the per se rule and, as recently as 1974 in Bellis,

reaffirmed the institutional entity standard. Under the

applicable standard, the privilege applies here.

This Court first announced the institutional entity doctrine in

cases denying the privilege to records of a corporation, Wilson v

United States, 221 US 361 (1911), and later extended it to

records of a labor union, United States v White, 322 US 694

(1944). In the latter case, this Court recognized the union’s

existence was ‘‘as perpetual as that of any corporation,’’ /d. at

701, and that it had a formal constitution, rules, and by-laws

and engaged in a broad range of activities as an independent

entity.

Recently in Bellis this Court denied the privilege to the

records of a three-partner law firm partnership upon the express

central finding that the partnership had ‘‘an established

institutional identity independent of its individual partners.”’

417 US at 95. This Court was careful to note its decision related

to ‘the circumstances of this case,’’ /d. at 95, and that the facts

represented ‘‘the outer limits of the analysis. . . .’’ /d. at 94. This

Court reaffirmed that collective entity analysis ‘‘presupposes

the existence of an organization which is recognized as an

independent entity apart from its individual members.’’ /d. at

92. This Court stated that its earlier analysis in White, the labor

union case, ‘‘of course, only makes sense in the context of what

the Court described as ‘organized, institutional activity.’ ’’

Id. at 92.

To underscore the factual standard applicable to the

question, this Court in Bellis devoted many pages of the opinion

to a catalog of the specific facts that prompted its conclusion.

Id. at 95-99. These factors included holding out by the

partnership to third parties that it was an independent

institutional entity, employment of six persons, stationery on

firm letterhead, business records reflecting transactions of all

6

employees, bank account in firm name, partnership tax return,

and many legal incidents of partnership law.

This Court in Bellis and its predecessors could have, if it had

wanted to, stated that when more than one person engages in a

joint enterprise, the privilege is lost and is allowed only for the

sole proprietor. This Court failed to establish such a per se rule.

This petition for certiorari represents the extreme case of

joint enterprise, for it involves neither an institutional entity,

nor even an entity. It is a limited purpose joint enterprise and

includes only two men and their wives who are inactive. As the

uncontradicted facts show, the records relate solely to owners’

income from the real estate which is operated by a separate

corporation whose records are not involved here, and

disbursement to the mortgagee, for taxes, and to the co-owners.

G & Sis merely the name of a bank account established for this

purpose and has no other activity. Although the government

argued G & S was a partnership, the court of appeals expressly

rejected that argument. (A6-7).

In these circumstances the lower courts could not and did not

find an institutional entity under the factual standard

established by this Court. There was no holding out to third

parties, no employees, no separate tax return, and no

stationery. A tenancy in common is far different from other

associations in that one tenant cannot bind another, and each

tenant, without the consent of any other, may convey,

mortgage, or lease his undivided interest. There is no entity for

any purpose of which we are aware.

The court of appeals below expressly acknowledged that any

organized institutional activity here is far less than in Bellis

(A7), which, as noted above, this Court had regarded as the

‘‘outer limits of the analysis... .’’ In order to deny the

privilege, therefore, the lower courts shifted the emphasis from

organized, institutional activity to notions of privacy. The court

of appeals simply held that the mere creation of joint financial

transactions related to the real estate created records which were

not wholly personal, and thus the expectation of privacy was

surrendered. The court of appeals said:

“*in setting up G&S Shiffman and Gordon created

an entity through which the financial transactions

related to the jointly owned real estate were carried

out. Though there was no organized institutional

activity equivalent \o the usual business activity of the

7

corporation or partnership, the records of G&S unde-

niably reflect transactions which were not wholly

those of Dr. Shiffman. Also, though the appellant

has an interest in the records of G&S, since Gordon

has the same interest, their possession by Dr. Shiff-

man is in a representative capacity.’’ (A9).

The shift from organized, collective entity to any joint

ownership unduly restricts the application of the constitutional

privilege. The rule below would limit the privilege to records of

a sole proprietorship. But even here there is no expectation of

privacy under the lower court’s analysis, since usually book-

keepers, secretaries, and other employees or agents have ac-

cess to the records. There is no greater expectation of privacy

among such people than there is between the co-tenants here.

The only application of the privilege to records would be those

created and maintained by the person himself in total privacy,

with the possible exception of persons between whom there is a

testimonial privilege. The privilege would largely disappear with

respect to records since, as a practical matter, the privilege is

usually exercised with respect to business records.

This Court has never made such notions of privacy the

controlling criterion on this question, although it has

considered them relevant. In Bellis this Court said, ‘* . . .[A]

substantial claim of privacy or confidentiality cannot often be

maintained with respect to the financial records of an organized

collective entity.’ 417 US at 92 (emphasis added). If this Court

left room for the privilege in some organized, collective entities,

the privilege would certainly apply to the limited arrangement

here.

This Court also approved in Bellis a lower court decision

applying the privilege to a partnership consisting of two

brothers, and in which there were many full time financial

employees plus their two sons. 417 US at 101; United States v

Slutsky, 352 F Supp 1105 (SDNY 1972). There was no greater

expectation of privacy in that action than there is here.

CONCLUSION

Because the decision below creates an unwarranted intrusion

into the Fifth Amendment privilege against self-incrimination

and because it is inconsistent with the standard consistently

applied by this Court, petitioner Milton Shiffman respectfully

prays that a writ of certiorari issue to review the opinion and

judgment of the Sixth Circuit.

Respectfully submitted,

Irwin M. Alterman

17117 West Nine Mile Road

16th Floor

Southfield, Michigan 48075

(313) 559-7500

Counsel for Petitioner

June 2, 1978

No. 78-5105

UNITED STATES COURT OF APPEALS

FOR THE SIXTH CIRCUIT

APPEAL from. the

United States District

Dr. Milton Shiffman, Court for the Eastern

Appellant.| District of Michigan.

In re GRAND JuRY PROCEEDINGS

Decided ind Filed May 4, 1978.

Before: Prituips, Chief Judge; Livecy and Encex, Circuit

Judges.

Live.y, Circuit Judge. This case presents the question of

whether a tenant in common of real estate who, together

with one of his co-tenants in common, has conducted the fi-

nancial transactions related to the real property under an as-

sumed name using a jointly controlled bank account, may

claim the Fifth Amendment privilege against compulsory self-

incrimination with respect to the records of those transactions.

Dr. Milton Shiffman has perfected an expedited appeal from

an order of the district court adjudging him in contempt for

refusing to produce before a grand jury certain records speci-

fied in a subpoena duces tecum. Though Dr. Shiffman was or-

dered confined, upon stipulation that “it does not appear

that the appeal is frivolous or taken for delay,” he was ad-

mitted to bail and released upon his personal recognizance,

with no restrictions as to travel, pending determination of this

appeal. 28 U.S.C. § 1826 (1970).

The grand jury subpoena was directed to “Dr. Milton

Shiflman or any other authorized representative of G and S$

App. |

2 In re Grand Jury Proceedings, Dr. Shiffman No. 78-5105

Investment.” It commanded the production of “the following

records of G and S Investment for the period 1972 to 1975:

(1) Cash Receipts Journal

(2) Cash Disbursements Journal

(3) Bank statements for any and all bank accounts of G and

S Investment above mentioned

(4) Cancelled checks related to these bank ac¢ounts

(5) Deposit forms for deposits made to referenced bank ac-

counts

(6) General Ledger

(7) Rental and Contractual agreements between G and S$

Investment and the following nursing homes:

Nightengale North Nursing Home

Nightengale East Nursing Home

Nightengale South Nursing Home

Clintonview Nursing Home

Whitmore Lake Nursing Home.”

Dr. Shiffman refused to produce the subpoenaed documents

and records, asserting that they would tend to incriminate

him, and relying upon the Fifth Amendment guarantee that

“{njo person . . . shall be compelled in any criminal case to

be a witness against himself... .”

In support of his position Dr. Shiffman filed an affidavit

which is uncontradicted in the record. The affidavit dis-

closes that “G & S Investments” (the true designation, rather

than “G and S Investment” used in the subpoena; hereafter

“G&S") is the name in which he and one Hyman Gordon

have maintained a bank account since 1974. The only activi-

ty of G&S is to receive income from real estate owned by

App. 2

No. 78-5105 In re Grand Jury Proceeding, Dr. Shiffman 3

Dr. Shiffman, Hyman Gordon and their wives as tenants in

common (an undivided one-third by each of the husbands and

an undiveded one-sixth by each of the wives), and to dis-

burse the income to the owners after making required pay-

ments on a mortgage, including payments to an escrow ac-

count for taxes and insurance. The affidavit states that the

only purpose of G&S is to segregate the transactions relating

to the real estate rentals from the individual accounts of the

owners. Both Gordon and Dr. Shiffman have authority to is-

sue checks on the G&S account. The affidavit also discloses

that a certificate was filed with the county clerk of Oakland

County, Michigan, that Gordon and Shiffman were transacting

business under the assumed name G&S Investments. This was

probably done at the request of the bank.

Though the subpoena sought copies of agreements between

G&S and five nursing homes, the affidavit asserts that G&S

has never had a relationship with any of the nursing homes

except the Whitmore Lake Convalescent Center. This home

is located on the real estate owned by the Gordons and the

Shiffmans and is operated by a Michigan corporation, Whit-

more Lake Convalescent Center, Inc. (Whitmore Lake). G&S

collects rents from Whitmore Lake. The only evidence intro-

duced by the government in support of its motion for en-

torcement of the subpoena is a certified copy of the articles

of incorporation which lists Gordon and Shiffman as incorpo-

rators and members of the first board of directors of Whitmore

Lake. Hyman B. Gordon was designated first resident agent

of the corporation.

A trial brief of the government disclosed that the grand

jury which issued the subpoena to Dr. Shiffman is investi-

gating alleged fraudulent claims for medicare benefits by nurs-

ing homes in Michigan. In response to questions by the Dis-

trict Judge counsel for the government stated that no attempt

had been made to subpoena copies of leases or other contracts

with G&S from Whitmore Lake. Advising government coun-

sel that he would have to use his “own resources” to get

App. 3

4 Inre “rand Jury Proceedings, Dr. Shiffman No. 78-5105

these documents Judge Feikens ordered Shiffman to produce

only the first six items listed in the subpoena. The decision

to enforce the subpoena to this extent was based on a find-

ing that “. . . when one human being throws his lot in with

three other human beings, as with Mr. Gordon and the re-

spective wives, it seems to me that he, by that action is say-

ing, ‘I am not looking for any Fifth Amendment protection

as to any of this activity.” (Oral opinion, Joint Appendix

at 42).

In United States v. White, 322 U.S. 694, 697 (1944), the

Supreme Court considered “the nature and scope of the con-

stitutional privilege against self-incrimination.” The issue in

White was whether a representative of a labor union could

decline to obey a subpoena duces tecum for certain union rec-

ords on the ground of self-incrimination. Holding that “[t]he

constitutional privilege against self-incrimination is essentially

a personal one, applying only to natural individuals,” Id. at

698, the court ruled that the witness was not entitled to in-

voke the Fifth Amendment. It explained this restriction on

the privilege in the following language:

Since the privilege against self-incrimination is a purely

personal one, it cannot be utilized by or on behalf of

any organization, such as a corporation. Hale v. Henkel,

201 U. S. 43; Wilson v. United States, 221 U. S. 361;

Essgee Co. v. United States, 262 U. S. 151. See also

United States v. Invader Oil Corp., 5 F. 2d 715. More-

over, the papers and effects which the privilege protects

must be the private property of the person claiming the

privilege, or at least in his possession in a purely personal

capacity. Boyd v. United States, 116 U. S. 616. But indi-

viduals, when acting as representatives of a collective

group, cannot be said to be exericising their personal

rights and duties nor to be entitled to their purely per-

sonal privileges. Rather they assume the rights, duties

and privileges of the artificial entity or association of

which they are agents or officers and they are bound by

App. 4

No. 78-5105 In re Grand Jury Proceeding, Dr. Shiffman 5

its obligations. In their official capacity, therefore, they

have no privilege against self-incrimination. And the

official records and documents of the organization that

are held by them in a representative rather than in a

personal capacity cannot be the subject of the personal

privilege against self-incrimination, even though produc-

tion of the papers might tend to incriminate them per-

sonally. Wilson v. United States, supra; Dreier v. United

States, 221 U. S. 394; Baltimore & Ohio R. Co. v. Inter-

state Commerce Commission, 221 U. S. 612; Wheeler

v. United States, 226 U. S. 478; Grant v. United States,

227 U. S. 74; Essgee Co. v. United States, supra. Such

records and papers are not the private records of the

individual members or officers of the organization. Usual-

ly, if not always, they are open to inspection by the

members and this right may be enforced on appropriate

occasions by available legal procedures. See Guthrie v.

Harkness, 199 U. S. 148, 153. They therefore embody

no element of personal privacy and carry with them no

claim of personal privilege.

322 U.S. at 699-700.

The union was held to represent “organized, institutional

activity as contrasted with wholly individual activity.” Id.

at 701. The union had no Fifth Amendment privilege and

the witness could not claim the privilege on behalf of him-

self either as an individual or as a union officer. Since the

subpoenaed documents were held by the witness as a rep-

resentative of the union he could not claim “that any part

of them constituted his own private papers.” Id. at 704.

The principles of White and cases cited therein were ap-

plied to the records of a three-partner law firm in Bellis

v. United States, 417 U.S. 85 (1974). There a witness was

commanded to produce the financial records of a law firm from

which he had withdrawn as a partner. The records which

were left with the remaining partners at the time of his

withdrawal had been delivered to the witness a short time

App. 5

6 In re Grand Jury Proceedings, Dr. Shiffman No. 78-5105

before issuance of the subpoena. The Supreme Court upheld

an adjudication of contempt for failure to obey the subpoena

upon a finding that the records sought were those of a col-

lective entity in the possession of the witness in a repre-

sentative capacity. Even though the records of a collective

entity might incriminate him personally, an individual can-

not rely upon the privilege against self-incrimination to avoid

producing them.

The Bellis court found that the rule which prevents one

possessing the records of a collective entity from invoking the

privilege against self-incrimination with respect to its records

serves an underlying purpose of the privilege — “the protec-

tion of an individual’s right to a ‘private enclave where he

may lead a private life.’”' Describing protection of indi-

vidual privacy as the “major theme” of Boyd v. United States,

116 U.S. 616 (1886), the Court held that the very nature of

an organized collective entity makes it impossible to sustain

a claim of privacy or confidentiality with respect to its records.

The government contends that G&S is a partnership and

that Shiffman is entitled to no Fifth Amendment privilege

with respect to any of its records. The appellant maintains

that G&S is not a partnership or any form of “organized col-

lective entity.” We conclude that G&S is not a partnership

under Michigan law. Michigan has adopted the Uniform

Partnership Act and Michigan Compiled Laws Annotated

(M.C.L.A.) 449.7 sets forth “Rules for determining existence

of a partnership.” M.C.L.A. 449.7(2) provides that tenancy in

common does not of itself establish a partnership, whether or

not the owners share in profits from the property. Similarly

M.C.L.A. 449.7 (4)(b) provides that receipt of rent by a

landlord as a share of profits shall not be the basis of an in-

ference that the landlord is a partner. See also Moore v. Du-

Bard, 318 Mich. 578, 594 (1947). There is no evidence in

1 Quoted from Murphy v. Waterfront Commission, 378 U.S. 52, 55

(1965) -_ quotation marks omitted.) Bellis v. United States,

supra a 1

App. 6

No. 78-5105 In re Grand Jury Proceeding, Dr. Shiffman 7

the record from which it could be determined that G&S is

a partnership.

This does not end our inquiry, however. It is clear that

a joint checking account on which two people — Gordon and

Dr. Shiffman — have the authority to draw checks is main-

tained under the assumed name G&S Investments. The ques-

tion for decision is whether Dr. Shiffman, by joining with

Gordon in establishing and maintaining G&S as a medium

for financial transactions related to the real estate owned by

them and their wives, removed the records of such transac-

tions from his individual “private enclave.” The appellant

argues that the Supreme Court did not establish a rule in

White and Bellis that an individual can never claim the privi-

lege against self-incrimination with respect to records other

than those owned solely by himself. It is pointed out that in

both cases the Court discussed at length various features of

the entities involved — a labor union and a law partnership —

which indicated substantial rights in the records of persons

other than the witness. In Bellis emphasis was also placed on a

number of indicia of a separate entity's existence, such as use

of partnership stationery, telephone listing and bank account

and holding itself out to the public as an established firm.

Furthermore, Justice Marshall described the circumstances in

Bellis where the witness was a former member of a three-

person partnership with six employees as “the outer limits of

the analysis of the Court in White.” 417 U.S. at 94.

In cases decided by the various courts of appeals since

Bellis the outcome appears invariably to have depended on

whether the records subpoenaed related to wholly individual

activity, as contrasted with organized, institutional activity.

This was said to be the “key focus” of Bellis in Matter of Wit-

ness Before the Grand Jury, 546 F.2d 825, 827 (9th Cir.

1976). Though the degree of organized, institutional activity

in that case was great, as opposed to that disclosed in the

present case, the court’s decision appears to hinge on its ulti-

App. 7

8 Inve Grand Jury Proceedings, Dr. Shiffman No. 78-5105

mate determination that the witness had no expectation of

privacy with respect to the subpoenaed records.

As in Bellis, the records of a law firm were the subpoenaed

matter in Matter of Grand Jury Impaneled January 21, 1975,

529 F.2d 343 (3d Cir.), cert. denied, sub nom Freedman v.

United States, 425 U.S. 992 (1976). The district court found

that by agreement among the partners only the witness had

access to the firm’s records. Nevertheless, the court found that

the partnership had an institutional identity apart from the

witness-partner. The witness exclusive right of access was hel!

to be inconsequential for purposes of the privilege which was

claimed. The court stated:

To hold that the members of an institution could resur-

rect the fifth amendment privilege with respect to rec-

ords, that they individually forfeited by identifying them-

selves with that institution, would seriously erode the

established principle that the privilege against self-in-

crimination is purely personal. 529 F.2d at 547-48. sand

tion omitted ).

In United states v. Kuta, 518 F.2d 947 (7th Cir.), cert. denied,

423 U.S. 1014 (1975), the Bellis principles were applied to the

records of a two-member law firm. In addition to noting a

number of factors indicating the existence of a separate insti-

tutional entity, the court found it “equally important” that

there could be no expectation of privacy with respect to the

subpoenaed records. Id. at 953.

All of the cases just discussed have dealt with the claims

of partners that they had a privilege not to produce sub-

poenaed partnership records. The common thread which runs

through them, however, is not the existence of a formal part-

nership. Rather, it is the fact that each witness has joined

with one or more other persons in a venture which has pro-

duced records that are not in fact his wholly individual ree-

ords. In so doing the witness has surrendered any expecta-

tion of privacy with respect to the records of the venture.

App. 8

No. 78-5105 In re Grand Jury Proceeding, Dr. Shiffman 9

The fact that Dr. Shiffman and the other tenants in com-

mon each could have collected his or her share of the rent

and paid the proper share of expenses is immaterial. In setting

up G&S Shiffman and Gordon created an entity through which

the financial transactions related to the jointly owned real

estate were carried out. Though there was no organized

institutional activity equivalent to the usual business activity

of the corporation or partnership, the records of G&S unde-

niably reflect transactions which were not wholly those of Dr.

Shiffman. Also, though the appellant has an interest in the

records of G&S, since Gordon has the same interest, their pos-

session by Dr. Shiffman is in a representative capacity.

In dealing with a Fifth Amendment claim of privilege in a

somewhat different setting the Second Circuit recently had

occasion to review the historic underpinnings of the privilege.

See United States v. Beattie, 522 F.2d 267 (2d Cir. 1975),

vacated, 425 U.S. 967 (1976), modified, 541 F.2d 329 (1976).

In discussing the Supreme Court's treatment of the subject

in Bellis, Judge Friendly found that the Court had “emphasized

its recent tendency to place increased reliance on privacy as

the prime rationale of the privilege .. . .” 522 F.2d at 273.

Quoting Justice Frankfurter, “what's not yours is not yours,”?

the court concluded that cases denying the privilege with re-

spect to records of entities have established the rule that

“neither possession nor ownership, within or without the cor-

porate context, can transform someone else's documents into

one’s own for the purpose of asserting the privilege . . . .” Id.

In Bellis, after citing United States v. White, supra, and

u number of its other opinions denying the availability of the

privilege against self-incrimination in various contexts the

Court stated:

These decisons reflect the Court's consistent view that the

privilege against compulsory self-incrimination should be

2 Quoted from Shapiro v. United States. 335 US. 1, 58 (1948)

(Frankfurter, J., dissenting).

App. 9

10 In re Grand Jury Proceedings, Dr. Shiffman No. 78-5105

“limited to its historic function of protecting only the

natural individual from compulsory incrimination through

his own testimony or personal records.” United States v.

White, supra at 701.

417 U.S. at 89-90.

We conclude that to the extent Dr. Shiffman has elected

to join with Mr. Gordon in conducting financial transactions

related to the real estate owned by them and their wives as

tenants in common under the assumed name G&S Investments

he has withdrawn the records of such transactions from the

privilege against compulsory production. The subpoenaed

records cannot he said to be purely personal or wholly the

individual records of the appellant.

The judgment of the district court is affirmed.

App. 10

UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF MICHIGAN

In re: Grand Jury Subpoena

Misc. No. 78-44

Excerpt From Transcript Of

Hearing He!d On February 24, 1978

THE COURT: Well, I will tell you what my difficulty is with

your argument, and I am thinking about the Fifth Amendment

protection to the individual. None of us have any difficulty with

the need for that. It is actually mandated, and it makes good

sense. But when one human being throws his lot in with three

other human beings, as with Mr. Gordon and the respective

wives, it seems to me that he, by that action is saying, ‘‘] am not

looking for any Fifth Amendment protection as to any of this

activity.”"” And the entity of which he speaks is a tacit

recognition of that fact. Why should that entity, by virtue of the

fact that the individual has said that I am not looking for

personal, individual protection because I am putting in with

three other people — why should he then be permitted to turn

around and say, ‘‘Hey, wait a minute. This is not an entity that

you can attack with a subpoena. I demand my Fifth

Amendment rights.”’

That’s my problem with your argument, when you get right

down to it.

App. I!

THE COURT: . . . I will enforce the subpoena in regard to

the canceled checks and the ledgers that you seek, and the bank

statements. You will have to use your own resources to get the

contract from the convalescent home.

You may prepare an Order.

MR. HAVILAND: Thank you, Your Honor.

MR. ALTERMAN: Your Honor, when you enforce the

subpoena as you have just indicated, is that by finding that G &

S is an entity within Bellis? Is that your position?

THE COURT: I don’t think I have to say that. Yes, in this

sense it is an entity. For the purpose of enforcing this subpoena,

1 am finding it is an entity within Bellis.

Transcript pp 26, 33-34;

Court of Appeals Joint

Appendix pp 42, 49-50

App. 12