Petition — Rader v. Superior Court of California

i Supreme Court, U. &

FILED

AUG 7: 1979

IN THE

|

Supreme Court of the United State ont 1c.

edna

October Term, 1978

aes & ger

STANLEY R. RADER,

Petitioner,

f

vs.

\

THE STATE OF CALIFORNIA,

Respondent.

Petition for Writ of Certiorari to the Supreme Court

of the State of California.

ALLAN BROWNE

of

ERVIN, COHEN & JESSUP

Ninth Floor

9401 Wilshire Blvd.

Beverly Hills, Calif. 90210

WM. MARSHALL MORGAN

f

fe)

MORGAN, WENZEL

& McNICHOLAS

Suite 800

1545 Wilshire Blvd.

Los Angeles, Calif. 90017

DAVID M. HARNEY

of

HARNEY & MOORE

650 South Grand Ave.

Los Angeles, Calif. 90017

ELLIS J. HORVITZ

MARC J. POSTER and

ee G. MARTIN

re)

HORVITZ, GREINES

& POSTER

A Law Corporation

Seventh Floor

15760 Ventura Blvd.

Encino. Calif. 91436

(213) 995-0800,

Counsel for Petitioners

Parker & Son, Inc., Law Printers, Los Angeles.

Phone 724-6622

SUBJECT INDEX

Page

EES Sie Suit is RRL Ae a 1

ia aS cscen aceon igen en cqnsenspsoenbone 2

Questions Presented for Review ...................--------++- 2

Statutory and Constitutional Provisions Involved .... 2

lS ae 3

RN ona ost cncsenesnntenconces 3

B. The Present Proceeding ................................ 5

Finality of Judgment Below ...................-2..--20.-00+---+- 7

Reasons for Granting the Writ .............-..............---- 9

I

The State’s Action Against the Worldwide Church

of God Violates Religious Freedoms Guaran-

teed by the First Amendment. Petitioner May

Not Be Forced to Testify in Proceedings

Which Exceed the Constitutional Power of the

ele ARNE SATS 58 IE! ISS CARS SEES) cg

A. Petitioner Has No Duty to Testify in Pro-

ceedings Beyond the Jurisdiction of His

ei Le

B. The Free Exercise and Establishment

Clauses of the First Amendment Bar the

Attorney General From Civil Jurisdiction

to Supervise the Affairs of a Church ........

II

The Order Compelling Petitioner to Testify While

Concurrent Criminal Proceedings Are Pending

Subverts His Constitutional Rights Under the

Fifth and Fourteenth Amendments ..................

Page

A. The Attorney General May Not Conduct

a Civil Proceeding to Discover Evidence

for Use in a Criminal Prosecution ..........

B. The Attorney General May Not Call Peti-

tioner as a Witness Against Himself While

Criminal Proceedings Arising From the

Same Alleged Facts Are Pending ............

lil

Petitioner, at the Focus of a Criminal Investiga-

tion, May Not Be Compelled by Law Enforce-

ment Officers to Testify After He Has Been

Advised of His Right to Remain Silent and

Has Exercised That Right

A. The Attorney General’s Investigation Is

Criminal in Nature

ee eee ee ee eee ee ee

B. The Attorney General’s Criminal Investi-

gation Has Focused on Petitioner

C. The Court-Ordered Deposition, Taken in

the Offices of the Attorney General Under

Threat of Civil and Penal Sanctions, Is a

Custodial Interrogation

CO

Conclusion

5, 1979

Appendix B. California Corporations Code Sec-

tion 9505

Appendix C. Notice of Ruling on Motion for Or-

der Compelling Deponent Stanley R. Rader to

Answer Questions Propounded at Deposition

14

16

20

20

25

ili.

TABLE OF AUTHORITIES CITED

Cases Page ©

A. & M. Records, Inc. v. Heilman, 75 Cal.App.3d

SSS, DGG Mees SPO CLIT P csesssecesetessaresennes

Beckwith v. United States, 425 U.S. 341 (1975) ....

Campbell v. Eastland, 307 F.2d 478 (5th Cir.

1962), cert. denied 371 U.S. 9355. ........ccccnccesss:.-

Construction Laborers v. Curry, 371 U.S. 542

“ot REAR RESIS Oe eto aot are Re Reo

Cox Broadcasting v. Cohn, 420 U.S. 469 (1975) ..

DeGregory v. Attorney General, 383 U.S. 825

RGNNRR +. 5: c2sGsstssiasise ciecorrncpoiesiasubenaneneebiannialgiey

Everson v. Board of Education, 330 U.S. 1 (1957)

ieee

Kedroff v. St. Nicholas Cathedral, 344 U.S. 94

EPID sentainbcabekanvechiceiconvansonetaiiieaboesaieapiecbieliateients

Lemon v. Kurtzman, 403 U.S. 602 (1971) ........ FR

Lo-Ji Sales, Inc. v. New York, .... U.S. ...., 60

Renee ED IED © hic iad. chan pinigaobaiaindeadtcinsation

Lopez, et al. v. State of California, Los Angeles Su-

perior Court No. C 276767 .............ssecsesesnees 14,

Mathis v. United States, 391 U.S. 1 (1968) ............

McSurely v. McClellan, 426 F.2d 664 (D.C. Cir.

BPD. cc ii clbsesicscbiheactthece ning sobageanahenstbsbionk

Md. & Va. Churches v. Sharpsburg Church, 396

RP I CPT OD ecthsssensvcinconcyeciusacucnecumberiehaonpatuans

25

iv.

Page

Mercantile Nat. Bank v. Langdeau, 371 U.S. 555

IUD <sscdracelsdgiiee dilcdiadaa Siaseeste oot slacs teahiinisdisioechartibeasestacs 7

Michigan v. Mosley, 423 U.S. 96 (1975) ................ 20

Miranda v. Arizona, 384 U.S. 436 (1966) ............

shidissabeas ten Ss Be Oo Os Oy Bee ee a, es Oe Os

Murdock v. Pennsylvania, 319 U.S. 105 (1943) .... 10

National Discount Corp. v. Holzbaugh, 13 F.R.D.

rR 8 Es ) Rot aero 18

New York v. Cathedral Academy, 434 U.S. 125

CIE Y ccacissisnccisetacecvenciashigeaieapiotcntacsouibasbanaen 11, 12

N.L.R.B. v. Catholic Bishop of Chicago, .... U.S. ....,

IP NoMa TOF GRMCPD ccncditinniencchimeiiinctionss 10, 11

Orozco v. Texas, 394 U.S. 324 (1969)

Paul Harrigan & Sons v. Enterprise Animal Oil

Co., 14 F.R.D. 333 (E.D. Pa. 1953)

People v. Arnold, 66 Cal.2d 438, 58 Cal.Rptr. 115,

SE Fe PR AEE D cocchineernstlisicse cata cini anes 24

People v. Worldwide Church of God, Inc., et al.

(Los Angeles Sup. Ct. No. C 267607) ............ ) Pa

Perry v. McGuire, 36 F.R.D. 272 (S.D.N.Y. 1964)

Presbyterian Church v. Blue Hull Mem. Presb.

Church, 393 U.S. 440 (1969)

Radio Station WOW, Inc. v. Johnson, 326 U.S. 120

RUE D .. ..nesisesencencebeusssieanscbinhiinsieeinmacteteamiiie aie ae 7

Romanelli v. C.1.R., 466 F.2d 872 (7th Cir. 1972)

Page

Securities & Exch. Com’n v. Gilbert, 79 F.R.D. 683

IY aii ice cessphiccanpsadondiarnanycecs tabtapipete 19

Serbian Orthodox Diocese v. Milivojevich, 426 U.S.

Nica we chcaspahi eh acco onspeignadinbesnnanmend 12

Shaffer v. Heitner, 433 U.S. 186 (1977) ................ 7

Sweezy v. New Hampshire, 354 U.S. 234 (1957) .. 9

United States v. Bachman, 267 F.Supp. 593 (W.D.

i MIN cs bbes oh cially css opdapensetboecbaniestanchassndeebipubute 24

United States v. Caiello, 420 F.2d 471 (2d Cir.

SOR SGI A AS ae Ae AL chask 25

United States v. Guerrina, 112 F.Supp. 126 (E.D.

Pe where cae des cotinentaancnnebeelatherectnadesch 16

United States v. Hankins, 565 F.2d 1344 (Sth Cir.

tae 15, 19, 20, 21

United States v. Kordel, 397 U.S. 1 (1970) ............ 15

United States v. Lipshitz, 132 F.Supp. 519 (E.D.

i I Da a a aid hicecikondanssncdanbeubaie iedweeds 16

United States v. Parrott, 248 F.Supp. 196 (D.D.C.

of RES REC RR IER EE CD aE Ere ieee: 16, 17

United States v. Procter & Gamble Co., 356 U.S.

IR IID Y aingiisti bens denanesh on dahl maktciieigamencaulansiees 14

United States v. Rand, 308 F.Supp. 1231 (N.D.

Pe IE Riss bch ss ichcaeihntns puke RMS CAAMPADA ronsaectecnhiceecenss 15

United States v. Simon, 373 F.2d 649 (2d Cir.

1967), vacated as moot 389 U.S. 425 (1967) .. 15

Worldwide Church of God v. State of California,

SN RPE FHM cxcahccsvadaceumaienk Ms ERE HEME OY IER PER a

Vi.

Statutes Page

California Corporations Code, Sec. 2253 ................ 21

California Corporations Code, Secs. 2254-2255 .... 21

California Corporations Code, Sec. 2255 ................ 21

California Corporations Code, Sec. 9505 ............ 3, 10

California Penal I es 21

United States Code, Title 28, Sec. 1257(3) -........... 2

United States Constitution, First Amendment ........

PRG ie Rena Se er oe Oo. Oe ee hk 2

United States Constitution, Fifth Amendment ..........

ses hesaaiiiied Aim ae ee oa a a By Res toc a oe oe

United States Constitution, Fourteenth Amendment

PRS SA ON OAL ACTER I LO SMD Ee NT EMR > ae BR

IN THE

Supreme Court of the United States

October Term, 1978

TE acebisehsiuie

STANLEY R. RADER,

Petitioner,

vs.

THE STATE OF CALIFORNIA,

Respondent.

Petition for Writ of Certiorari to the Supreme Court

of the State of California.

This is a companion case to Worldwide Church

of God v. State of California, No. 78-1720, now pend-

ing before this Court on Petition for Writ of Certiorari.

In this case Petitioner Stanley R. Rader respectfully

prays that a Writ of Certiorari issue to review a final

determination by the California Supreme Court that

Petitioner has no right to refuse to submit to interroga-

tion after the State Attorney General has advised Peti-

tioner of his Miranda rights and declared he would

supply Petitioner’s interrogation testimony to pending

and contemplated criminal investigations.

Opinion Below.

On May 7, 1979, the Los Angeles Superior Court

ordered Petitioner to submit to interrogation by the

California Attorney General in the action People vy.

Worldwide Church of God, Inc., et al. (Los Angeles

qualiieas

Sup. Ct. No. C 267607). A Petition for Writ of

Prohibition/Mandate to the California Court of Appeal

was denied on May 25, 1979. The California Supreme

Court denied a Petition for Hearing on July 5, 1979.

(A copy of the Supreme Court’s order is attached

as Appendix A.)

Jurisdiction.

This Court’s jurisdiction rests on 28 U.S.C. section

1257(3).

Questions Presented for Review.

1. Can the State of California, consistent with the

Religion Clauses of the First Amendment, maintain

an action against Petitioner and his Church to obtain

and audit all Church records, pass on the pro-

priety of religious expenditures, remove and replace

Church leaders, and restructure Church governance,

and in connection therewith compel Petitioner, a high

Church official and personal advisor to the spiritual

leader of the Church, to submit to comprehensive inter-

rogation concerning Church affairs?

2. Can the State of California, consistent with the

Fifth and Fourteenth Amendments, compel Petitioner

to submit to interrogation by the State Attorney General

after the Attorney General advised Petitioner of his

Miranda rights and announced his intention to supply

Petitioner’s statements to any pending or contemplated

criminal investigation and Petitioner has invoked his

right to remain silent?

Statutory and Constitutional Provisions Involved.

The rights asserted by Petitioner arise under the

Religion Clauses of the First Amendment, and the

Fifth and Fourteenth Amendments of the United States

canton

Constitution. Respondent grounds its authority in part

on California Corporations Code section 9505 which

appears as Appendix B.

Statement of the Case.

A. Related Litigation.

The first phase of the State of California’s assault

on the Worldwide Church of God is already before

this Court for review on Petition for Writ of Certiorari

in Worldwide Church of God v. State of California,

No. 78-1720. In that first phase the State Attorney

General obtained appointment of a receiver ex parte

on the basis of allegations and representations by some

dissident ex-members that Church officers were misap-

propriating assets, liquidating Church property below

value and destroying Church records.’ Refusing to

acknowledge that any First Amendment rights were

involved, the trial court put a receiver in possession

and control of Church operations, records and assets.

After two months, the court dissolved the receivership

but ordered the Church to make virtually all of its

records available to the Attorney General for inspec-

tion; when the Church appealed from this order, the

trial court reinstated the receivership as punishment.

The California Supreme Court by a 4-3 decision de-

clined to review the First Amendment issues inherent

in the receivership proceedings, and the Church peti-

tioned this Court for vindication of its First Amendment

freedoms.

1These allegations were later found to be false. While the

Attorney General continues to charge “misappropriation”, as

he uses the term it means expenditures of which he disapproves.

inesliliie

The Aitorney General has meanwhile launched the

second phase of his assault on the Church, its leaders

and their First Amendment freedoms, through discovery

proceedings. The Attorney General has already ob-

tained, without the Church’s knowledge or consent,

over 800 Church documents, including those of the

most sensitive and confidential nature, e.g., letters

to the ministry, contribution data, mailing lists, internal

communications, and complete financial information

for at least the last ten years.” Discovery proceedings

take place virtually on a daily basis. The Attorney

General has noticed depositions for all of the major

Church officers, including Herbert W. Armstrong, Pas-

tor General and spiritual and temporal leader of the

Church. If permitted to take these depositions, the

Attorney General will achieve through discovery many

of his objectives in this lawsuit, inciuding comprehensive

review of all Church records, and, should Church lead-

ers decline to testify, disparagement of their reputations

with the Church membership and perhaps their incar-

ceration.

In these discovery proceedings the trial court has

again accepted and endorsed the Attorney General’s

argument that First Amendment rights are not involved.

Petitioner cannot be certain how the Attorney General came

into possession of this material. It seems likely, however, that

the receiver, who confiscated boxloads of Church documents

in early January, delivered them to the Attorney General as

directed by court orders of January 12 and 19.

There is a striking parallel between this case and Lo-Ji Sales,

Inc. v. New York, .... US. ..., 60 L.Ed.2d 920 (1979) in

which a court officer issued a virtually blank search warrant

which he then helped execute by personally inspecting materials

and authorizing seizure of items later included in the warrant.

As this Court admonished (60 L.Ed.2d at 927): “This search

warrant and what followed on petitioner’s premises are reminis-

cent of the general warrant or writ of assistance of the 18th

century against which the Fourth Amendment was intended

to protect.”

sess

B. The Present Proceeding.

As the present litigation has developed since Jan-

uary 2, Petitioner Stanley R. Rader (who is the

chief personal advisor to Herbert W. Arnistrong,

the spiritual and temporal leader of the Church) has

emerged as one of the principal targets of the Attorney

General’s attack. Both in open court and to the media,

the Attorney General has repeatedly vilified and dis-

paraged Petitioner, accused him of theft and fraud,

and has addressed him and described him in language

utterly inappropriate for a public official in a judicial

proceeding.*

On April 3, 1979, the Attorney General commenced

taking Petitioner’s deposition. Petitioner answered some

questions, but he refused to answer others on First

Amendment grounds. When the deposition resumed

on April 4, the Attorney General advised Petitioner

of his Miranda rights, including his right to remain

silent (Exh. E,* p 98). Petitioner exercised his right

to remain silent and the deposition was terminated

(Exh. E, p. 100).

8Characteristic of the fury of the Attorney General’s attack

on Petitioner is language in his First Amended Complaint in

which the Attorney General seeks an order removing Petitioner

and other Church leaders from any position of leadership in

the Church and forever barring them from holding such positions

in the Church or in any charitable corporation in California.

In other words, the Attorney General in a civil i

seeks an order stripping Petitioner and others of their civil

rights as if they were convicted felons. Indeed, we know of

no rule of law which would permit a court to bar even a

convicted felon from holding church office, contrary to the

fundamental Christian doctrine of redemption.

‘All exhibit references are to those accompanying the Petition

for Writ of Prohibition/Mandate in the California Court of

Appeal.

a

The Attorney General then reversed himself and

sought an order compelling Petitioner to resume his

deposition notwithstanding the Miranda warning and

Petitioner’s invocation of his right to remain silent

(Exh. F). The trial court requested the Attorney Gen-

eral to file a declaration from the head of his Criminal

Division stating Petitioner is not the subject of any

pending or contemplated criminal investigation (Exh.

H, pp. 6-9), but the Attorney General failed to do

so. Instead a Deputy in the Attorney General’s Chari-

table Trust Section filed a declaration stating that his

office had not conducted any such proceeding or investi-

gation to date, but emphasizing that it was the Attorney

General’s obligation and intention to refer any possible

evidence of criminal conduct to the appropriate enforce-

ment agencies (Exh. I).°

Nevertheless, the trial court ordered Petitioner to

resume his deposition on May 29, 1979, and overruled

all First Amendment objections to questions asked be-

fore the Miranda warnings were given (Exh. A; Exh.

L, pp. 12, 15-16; see Notice of Ruling, attached as

Appendix C).

Clearly, the Attorney General is attempting to use

an unconstitutional civil proceeding which is virtually

limitless in scope and which requires no showing of

‘In a document filed in the California Supreme Court in

this proceeding, the Attorney General has stated it is well

known Petitioner is the subject of a pending “criminal proceed-

ing.” He did not elaborate. Petitioner is aware that the criminal

branch of the Internal Revenue Service commenced an investiga-

tion in January, 1979, shortly after the present action began

(no doubt at the instigation of the Attorney General or the

dissident ex-members who initiated the action). Petitioner is

also informed that the Attorney General has been funneling

information obtained in this case to the Los Angeles District

Attorney’s Office. Petitioner is unaware of any “criminal pro-

ceeding” aside from these investigative activities.

oi

probable cause to believe there has been wrongdoing,

as a means of eliciting testimony which he intends

to use in connection with subsequent criminal prosecu-

tion. As a basis for his interrogation, the Attorney

General possesses over 800 detailed, confidential and

illicitly-obtained Church documents; he has repeatedly

accused Petitioner of crimes without any supporting

evidence; he has given him a Miranda warning; he

has assured the court he intends to refer any evidence

of possible criminal conduct to other law enforcement

agencies; and it appears he is in fact funneling informa-

tion to such agencies. Notwithstanding, Petitioner was

ordered to reappear for deposition and to answer ques-

tions.

While pursuing state appellate remedies, Petitioner

declined to appear as ordered. The State sought a

contempt citation and hearing on the matter is now

scheduled for August 7, 1979.

Finality of Judgment Below.

Petitioner has been denied relief by the highest court

in the state. This judgment, on a collateral matter

in which Petitioner is threatened with irremediable loss

of his rights, is final. (See, e.g., Shaffer v. Heitner,

433 U.S. 186, 195 n. 12 (1977); Cox Broadcasting

v. Cohn, 420 U.S. 469, 485 (1975); Mercantile Nat.

Bank v. Langdeau, 371 U.S. 555, 558 (1963); Con-

struction Laborers v. Curry, 371 U.S. 542, 549 (1963);

Radio Station WOW, Inc. v. Johnson, 326 U.S. 120

(1945).)

If relief is not granted now, Petitioner confronts a

Hobson’s choice. As a high officer of the Church and

personal advisor to its spiritual and temporal leader,

wes

Petitioner is privy to the most sensitive, confidential and

privileged Church information. His refusal to divulge

this information on First Amendment grounds has al-

ready been rejected. His only remaining vehicle for

refusing to disclose this information, and the one urged

on him by the Attorney General, is the assertion of the

privilege against self-incrimination. Petitioner should

not be forced to assert such a privilege. Were he to do

so it would be used to disparge him in the eyes of the

Church membership,” and the Attorney General will

attempt to bar his testimony at trial. (See A. & M. Rec-

ords, Inc. v. Heilman, 75 Cal.App.3d 554, 142 Cal.

Rptr. 396 (1977).) Yet if Petitioner stands on his

First Amendment objections he risks a contempt citation

and incarceration.

Sooner or later, the constitutional issues will have

to be determined by this Court. The only question

is whether it will be now, before Petitioner and the

Church suffer further injury and infringement of First

Amendment rights, or later, after the Attorney General

has succeeded in destroying the Church in California,

seriously impairing its religious programs worldwide,’

compromising the privacy and sanctity of Church docu-

ments, and irreparably and unjustifiably staining the

reputation of the Church leadership.

*Thus the Attorney General continues to act in harmony

with the goals of the dissident ex-members who initiated the

action.

‘To date, this action, including the receivership, has cost

the Church in excess of $5,000,000 in lost revenues, additional

expenses and the like. As a result, vital Church programs have

been crippled: The National Youth Program has been cancelled,

distribution of important Church literature has been cut by

40%, Church employees including ministers have been dismissed,

and welfare payments to Church families to permit them to

attend religious convocations have been curtailed. (Declaration

of Willis J. Bicket, Appendix C to Petition fer Certiorari, No.

78-1720.)

allied

REASONS FOR GRANTING THE WRIT.

I

The State’s Action Against the Worldwide Church of

God Violates Religious Freedoms Guaranteed by

the First Amendment. Petitioner May Not Be

Forced to Testify in Proceedings Which Exceed the

Constitutional Power of the State.

A. Petitioner Has No Duty to Testify in Proceedings Beyond

the Jurisdiction of His Inquisitor.

Petitioner may not be required to testify in proceed-

ings which are beyond the jurisdiction of inquiry of

the officer conducting the interrogation.

For example, in Gojack v. United States, 384 U.S.

702 (1966), this Court held that a witness could

not be held in contempt for refusing to testify before

a congressional investigative committee which was unau-

thorized to conduct the inquiry. Similarly here, Peti-

tioner may not be compelled to testify in an inquiry

by the Attorney General which is absolutely forbidden

by the Religion Clauses of the First Amendment. (See

also, DeGregory v. Attorney General, 383 U.S. 825,

829 (1966); Sweezy v. New Hampshire, 354 US.

234, 254 (1957) [“[I]|f the Attorney General’s inter-

rogation of petitioner were in fact wholly unrelated

to the object of the Legislature in authorizing the

inquiry, the Due Process Clause would preclude endan-

gering of constitutional liberties.”].)

B. The Free Exercise and Establishment Clauses of the First

Amendment Bar the Attorney General From Civil Juris-

diction to Supervise the Affairs of a Church.

The Attorney General, claiming the State has super-

visory authority over churches, seeks to take control

of the assets and records of the Worldwide Church

_

of God, to review and audit all Church records, to

remove and replace present Church leaders, to restruc-

ture Church polity, and to determine whether Church

assets are used for a proper religious purpose. The

attempt to interrogate Petitioner is but one component

of the State’s exercise of a general supervisory power

over the affairs of religious organizations. In the State’s

view, this supposed common-law/statutory (California

Corporations Code §9505) power results simply from

the State’s characterization of the Church as a “public

or charitable trust.”

The mere statement of this premise illustrates the

impermissibility of the proceedings under the First

Amendment. Yet the California courts have turned

a deaf ear to all claims of First Amendment rights.

They have implicitly rejected the following holdings

of this Court on the subject of church-state separation:

1. A state cannot strip a church of its religious

character by labelling it a charitable trust, any more

than it can label a Jehovah’s Witness who sells the

Bible or religious tracts “merely a bookseller” (Murdock

v. Pennsylvania, 319 U.S. 105, 111 (1943)).

This Court has repeatedly rejected state or federal

action which would subject religious institutions to

state control applicable only outside the protective

sphere of religion. Most recently, in N.L.R.B. v. Cath-

olic Bishop of Chicago, ........ Rent cite , 59 L.Ed.2d

533 (1979), this Court rejected the National Labor

Relations Board’s claim of jurisdiction over “religiously

associated” private institutions which otherwise met the

Board’s jurisdictional requirement. To the Board, a

church school was just a school and church teachers

merely employees. This Court refused to let the Religion

par

Clauses of the First Amendment be swept aside by

this simplistic characterization, stressing that religious

schools involve religious teaching and teachers at such

schools fulfill a religious function (59 L.Ed.2d at 541-

543).

2. A state cannot constitutionally operate a church

(Everson v. Board of Education, 330 U.S. 1, 15 (1957)

[“Neither a state nor the Federal Government can

set up a church .... Neither a state nor the Federal

Government can, openly or secretly, participate in the

affairs of any religious organizations or groups and

vice versa.” |).

3. State supervision of church affairs necessitates

unconstitutional entanglement with religion (Lemon vy.

Kurtzman, 403 U.S. 602, 619 (1971) [“A comprehen-

sive, discriminating, and continuing surveillance. . .

will involve excessive and enduring entanglement be-

tween state and church.” ).

4. More specifically, the accounting of church fi-

nances results in unconstitutional entanglement even

where the church is willing to accept an audit (Lemon

v. Kurtzman, supra, 403 U.S. at 621-622 [“In particu-

lar the government’s post-audit power to inspect and

evaluate a church-related school’s financial records and

to determine which expenditures are religious and which

are secular creates an intimate and continuing relation-

ship between church and state.” | ).

5. A state cannot constitutionally determine whether

church funds are properly spent for religious pur-

poses (New York v. Cathedral Academy, 434 USS.

125, 133 (1977) [“The prospect of church and state

litigating in court about what does or does not have

religious meaning touches the very core of the constitu-

om

tional guarantee against religious establishment. . . .”];

Cf. Presbyterian Church v. Blue Hull Mem, Presb.

Church, 393 U.S. 440, 449-450 (1969) [“. . . First

Amendment values are plainly jeopardized when church

property litigation is made to turn on the resolution

by civil courts of controversies over religious doctrine

and practice .. . . [T]he departure-from-doctrine ele-

ment of the Georgia implied trust theory requires the

civil court to determine matters at the very core of

a religion—the interpretation of particular church doc-

trines and the importance of those doctrines to the

religion. Plainly, the First Amendment forbids civil

courts from playing such a role.” | ).

6. A state cannot constitutionally dictate the man-

ner of church governance or decide who shall and

shall not be a church leader (Kedroff v. St. Nicholas

Cathedral, 344 U.S. 94, 116 (1952) [Freedom of

religion encompasses the power of religious bodies “to

decide for themselves, free from state interference, mat-

ters of church government as well as those of faith

and doctrine”|; Serbian Orthodox Diocese v. Milivo-

jevich, 426 U.S. 696, 724 (1976) |[“[T]he First and

Fourteenth Amendments permit hierarchical religious

organizations to establish their own rules and regula-

tions for internal discipline and government .. . .”];

Lemon v. Kurtzman, supra, 403 U.S. at 625 [“The

Constitution decrees that religion must be a private

matter for the individual, the family, and the institu-

tions of private choice ... .”]; see Md. & Va.

Churches v. Sharpsburg Church, 396 U.S. 367, 369

(1970) (Brennan, J. concurring) [“To permit civil

courts to probe deeply enough into the allocation of

power within a church so as to decide where religious

law places control . . . would violate the First Amend-

—

oe, ae

ment in much the same manner as civil determination

of religious doctrine.” (N. omitted.) ]).

The State’s actions in the instant case plainly contra-

vene these principles. By proceeding in this constitu-

tionally-impermissible fashion the State exceeds its juris-

diction. Absent jurisdiction to inquire into and super-

vise the affairs of the Worldwide Church of God,

the Attorney General may not compel Petitioner to

testify.

II

The Order Compelling Petitioner to Testify While Con-

current Criminal Proceedings Are Pending Sub-

verts His Constitutional Rights Under the Fifth

and Fourteenth Amendments.

Since January of this year the criminal branch of

the Internal Revenue Service has been conducting an

investigation of Petitioner presumably based on the same

events and circumstances under investigation by the

State in the instant proceedings. Petitioner is also in-

formed that the Attorney General has supplied and

is supplying other criminal law enforcement agencies

with information obtained by it in this supposedly

civil proceeding.* Petitioner contends that to compel

him to submit to deposition by the Attorney General

under such circumstances would subvert his constitu-

tional right not to be called as a witness against himself

as well as his right to due process of law.

8Indeed, while the Attorney General refuses to admit (or

deny) that he has supplied other agencies with information,

he has announced his intention to “refer any possible evidence

of criminal conduct to those agencies primarily responsible for

the enforcement of such criminal laws.” (Exh. I.)

vey Se

A. The Attorney General May Not Conduct a Civil Proceeding

to Discover Evidence for Use in 2 Criminal Prosecution.

The Attorney General may not employ civil proceed-

ings for purposes of conducting a criminal investigation.

Yet there is weighty evidence that he is doing this

very thing, using this lawsuit as a “shortcut to goals

otherwise barred or more difficult to reach.” (United

States v. Procter & Gamble Co., 356 U.S. 677, 683

(1958).)

1. The Attorney General has gone on record that

in 1978 he conducted an investigation which “revealed

to a substantial certainty” that Petitioner was “guilty

of misuse and misappropriation of millions of dollars.”

(Response to Order to Show Cause re Preliminary

Injunction, p. 4, filed on or about April 4, 1979,

in Lopez, et al. v. State of California, Los Angeles

Superior Court No. C 276767). Since that time he

has evidently received massive amounts of material

from the receiver and possibly others describing in

_ great detail Petitioner’s relationship with the Church.

Nevertheless, even now the Attorney General holds

criminal action in abeyance, continues to seek civil

discovery in the present action, and attempts to force

Petitioner to testify in deposition.

2. Refusing to submit a declaration from the local

head of his Criminal Division, the Attorney General

instead submitted a declaration of a person in the

Charitable Trusts Section, who later explained he had

been told there was no pending criminal proceeding

or investigation by the Attorney General.°

*Since the Attorney General has vehemeatly resisted inform-

ing Petitioner of the pendency of criminal investigations or

proceedings, he can hardly argue that Petitioner’s lack of knowl-

edge forecloses objection that his constitutional rights are threat-

a oe

3. The Attorney General expressly refused to re-

spond to interrogatories inquiring as to which other law

enforcement agencies he is furnishing information ob-

tained in this suit, objecting that Petitioner is not

entitled to these facts. At the same time, the Attorney

General has revealed he is in possession of over 800

Church documents, including letters to the ministry,

contribution data, internal memoranda, and detailed

financial information for a period of more than ten

years. It appears that the bulk of this information,

including the most sensitive and privileged materials,

was unlawfully obtained.”

4. The Attorney General’s giving of the Miranda

warnings was a clear signal of the criminal base under-

lying the civil veneer of the proceedings. (See United

States v. Hankins, 565 F.2d 1344, 1351 (5th Cir.

1978) [“The Miranda warnings given to Smith by

the [Internal Revenue Service] was a clear signal of

his potential criminal liability.” ].)

The Attorney General has skillfully wedged Petitioner

into an incredible trilemma. Petitioner can (1) testify,

in which case First Amendment rights are lost and

anything he says may be used against him in pending

or contemplated criminal proceedings; (2) stand on

the First Amendment without asserting the Fifth

Amendment, in which case he may be found in con-

tempt and jailed, or (3) assert the Fifth Amendment,

ened by the concurrence of such proceedings. Indeed, the danger

to Petitioner is exacerbated by this fact. (See United States

v. Rand, 308 F.Supp. 1231, 1237 (N.D. Ohio 1970).)

10This evidence of the Attorney General’s misuse of this

civil proceeding should alone preclude further efforts to depose

petitioner. (Cf. United State v. Kordel, 397 U.S. 1, 7, 11

(1970); United States v. Simon, 373 F.2d 649, 652 (2d

Cir, 1967), vacated as moot 389 U.S, 425 (1967).)

= }6—

in which case this fact will be used to disparage him

with Church membership and may be asserted as a

bar to his testimony at trial.

Had no Miranda warnings been given, Petitioner

could prevent the Attorney General from making any

use of his deposition should it be determined warnings

were required. (United States v. Lipshitz, 132 F.Supp.

519, 523 (E.D.N.Y. 1955); United States v. Guerrina,

112 F.Supp. 126, 128-131 (E.D. Pa. 1953); and see

Romanelli v. C.1.R., 466 F.2d 872, 878-879 (7th Cir.

1972).) But since the warnings were given, Petitioner

cannot later complain they were not or plead ignorance

of the potential criminal use against him of his deposi-

tion.

If the Attorney General’s ploy succeeds, Petitioner

will have “had his rights” but have been powerless

to enforce them. Both the requirement of due process

of law and the Fifth Amendment compel condemnation

of the Attorney General’s conduct. Petitioner cannot

constitutionally be compelled to resume his deposition.

B. The Attorney General May Not Call Petitioner as a Witness

Against Himself While Criminal Proceedings Arising From

the Same Alleged Facts Are Pending.

United States v. Parrott, 248 F.Supp. 196 (D.D.C.

1965), frames the initial question for analysis (at p.

199):

“May the Government by bringing a parallel

civil proceeding avail itself of the almost unlimited

opportunity that a civil litigant has to take exten-

sive depositions of the other party to the civil

proceeding ard then utilize the fruits of this inter-

rogation . . . in the preparation of the criminal

case?”

——~

—17—

To frame the question is to answer it. In Parrott,

“The court holds that the Government may not bring

a parallel civil proceeding and avail itself of civil dis-

covery devices to obtain evidence for subsequent crimi-

nal prosecution.” (At p. 202.) (See, also, McSurely

v. McClellan, 426 F.2d 664, 671-672 (D.C. Cir. 1970)

[“[C]ivil discovery may not be used to subvert limita-

tions on discovery in criminal cases either by the Gov-

ernment or by private parties.” (Ns. omitted.) ];

Campbell v. Eastland, 307 F.2d 478, 487 (Sth Cir.

1962), cert. denied 371 U.S. 955 [“A litigant should

not be allowed to make use of the liberal civil discovery

proceedings applicable to a civil suit as a dodge to

avoid the restrictions on criminal discovery. . . .”].)

The instant case varies from these cases only in

that, to Petitioner’s knowledge, the California Attorney

General has not yet filed his own criminal charges.

The Attorney General is cunningly attempting to rush

discovery to completion here before criminal proceed-

ings are brought by him. There is no question he

intends to bring criminal proceedings or have them

brought even though, as Petitioner believes, the evidence

will exonerate him of all accusations of criminal con-

duct.

| In Perry v. McGuire, 36 F.R.D. 272 (S.D.N.Y.

1964), plaintiff sought discovery against a defendant

who faced criminal charges on the basis of the same

facts alleged in the civil suit. In holding that civil

discovery should be stayed pending determination of

the criminal proceedings, the Court stated (at p. 273):

“Assuming that the complaint sets forth a valid

cause of action in fraud and deceit [citation],

it seems clear that to require defendant . . . to

respond to over 100 interrogatories at this time

7

would be oppressive and would infringe on his

constitutional rights. [Citations.] [4] The same

must necessarily be true as to the noticed deposi-

tions of defendant... .”

In Paul Harrigan & Sons v. Enterprise Animal Oil

Co., 14 F.R.D. 333 (E.D. Pa. 1953), plaintiff filed

a civil antitrust suit on the heels of defendants’ indict-

ment based on the same allegations. Postponing dis-

covery against defendants, the Court held (at p. 335):

“(T]he information sought to be elicited by the

plaintiff in these interrogatories may well provide

proof to the Government from which it may estab-

lish the criminal charges against the indicted de-

fendants. To compel discovery under such circum-

stances would contravene rights guaranteed by the

Fifth Amendment to the individual defendants.”

To the same effect is National Discount Corp. v.

Holzbaugh, 13 F.R.D. 236 (E.D. Mich. 1952), where,

during the pendency of a civil action and after oral

examination of defendant had begun, a criminal indict-

ment based on the same facts was returned. The Court

granted defendant’s motion terminating the deposition,

stating (at p. 237):

“To require the defendant .. . to submit

himself to the plaintiff for further oral examination

in this civil action, wherein . . . the fabric

of the fraud is identical with the fraud embraced

by the allegations contained in the criminal pro-

ceeding now pending against him ... would

be oppressive and, at least, an indirect invasion

of his constitutional rights.”

Obviously, the threatened invasion of Petitioner’s

due process and Fifth Amendment rights is even greater

entities

where the civil action is brought by a governmental

agency rather than a private party. In the instant

case the Attorney General claims he is duty-bound to _

refer any information relative to possible criminal con-

duct to other agencies, and he is apparently doing

so. If there is such a duty, the California courts could

not even protect Petitioner’s rights (as was done in

Securities & Exch. Com’n vy. Gilbert, 79 F.R.D. 683,

687 (S.D.N.Y. 1978)), by ordering one agency not

to furnish another with information procured in the

course of civil discovery.

A case identical to the instant one in all critical

respects is United States v. Hankins, supra, 565 F.2d

1344. In a nominally civil tax investigation, a certified

public accountant was ordered to produce documents

and present himself for oral examination. He argued

that the investigation had assumed a predominantly

criminal aspect. The Internal Revenue Service had made

no recommendation for criminal prosecution, but un-

equivocally stated the accountant would probably be

prosecuted should evidence of criminal conduct on his

part be discovered.

On these facts the Court stated (at p. 1351):

“(T|he Government argues that Smith can be

compelled to appear, take the witness stand, and

either answer the questions the Government asks,

or plead his Fifth Amendment protection on a

question-by-question basis. . . . [W]e disagree.

Were Smith the target of an investigation for

robbing a bank, he would unquestionably have the

right to stand on his silence. There is no significant

difference between Smith as a suspected partici-

ili as

pant in a tax fraud and Smith as a suspected

bank robber.”

The order requiring appearance for oral examination

was reversed in Hankins. So it should be here.

Il

Petitioner, at the Focus of a Criminal Investigation,

May Not Be Compelled by Law Enforcement Of-

ficers to Testify After He Has Been Advised of

His Right to Remain Silent and Has Exercised That

Right.

Custodial interrogation of a suspect by law enforce-

ment officers is inherently coercive. Interrogation must

cease if the suspect at any time invokes his right

to remain silent (Miranda v. Arizona, 384 U.S. 436

(1966); Michigan v. Mosley, 423 U.S. 96, 104 (1975)

[suspect’s right to cut off questioning must be “scru-

pulously honored”|). As we demonstrate below, Peti-

tioner is a suspect in an essentially criminal investi-

gation; he has invoked his right to remain silent under

custodial interrogation by law enforcement officers in-

vestigating the subject matter of the potential criminal

charges against Petitioner; he cannot be forced, under

the guise of civil deposition proceedings and the threat

of civil and penal sanctions, to submit to further custo-

dial interrogation.

A. The Attorney General’s Investigation Is Criminal in Nature.

Despite his disclaimers, the investigation undertaken

by the Attorney General in this case is patent'y crim-

inal in nature: er

1. The Internal Revenue Service is conducting a

concurrent criminal investigation, and the Attorney

General has stated his intention to turn %ver any evi-

oo ee

dence gathered in his investigation to other criminal

investigations. Indeed, in a letter to the California

Supreme Court in this proceeding, the Attorney General

States it is well known that Petitioner is the subject

of a pending criminal proceeding. Moreover, there is

evidence the Attorney General is currently distributing

information obtained in this action to other law enforce-

ment agencies to aid in criminal investigation or to

induce institution of criminal proceedings by them.

2. The Attorney General’s charges, though not

framed in an indictment, are nevertheless clearly tan-

tamount to criminal accusations. These charges include

pilfering of Church property (California Penal Code

§508; California Corporations Code §2255), misuse

of Church property (California Penal Code $508; Cali-

fornia Corporations Code §§2254-2255), sale of

Church property below value (California Corporations

Code §2253), destruction of Church records (Cali-

fornia Corporations Code §2255), and diversion of

Church property to personal use (California Penal Code

§508; California Corporations Code §§2253, 2255).

Moreover, the remedies sought by the Attorney General

against Petitioner, including forfeiture of office and

the right to hold future offices, are clearly penal in

nature.

3. The Attorney General has indicated his own

belief in the criminal nature of the proceedings by

advising Petitioner of his Miranda rights (See United

States v. Hankins, supra, 565 F.2d 1344, 1351). The

Attorney General explained he did not want Petitioner

later to complain he was not advised of his rights

when the recorded interrogation is used against him

in a criminal proceeding. Moreover, the Attorney Gen-

eral failed to furnish, as requested by the trial court,

—

a declaration from his Criminal Division stating that

no criminal investigation was contemplated (Exh. H,

p. 6).

4. As we have already shown, the Attorney General

has no legitimate civil grounds for inquiring into the

affairs of the Church. His only remaining purpose

must be in a criminal investigation and prosecution.

The Attorney General’s labelling of the action as

“civii is irrelevant. In Mathis v. United States, 391

U.S. 1 (1968), a person in custody for unrelated

reasons was questioned as part of a “routine tax investi-

gation.” Upholding the necessity for Miranda warnings

this Court held (at p. 4):

“It is true that a ‘routine tax investigation’

may be initiated for the purpose of a civil action

rather than criminal prosecution. To this extent

tax investigations differ from investigations of mur-

der, robbery, and other crimes. But tax investiga-

tions frequently lead to criminal prosecutions, just

as the one here did. In fact, the last visit of

the revenue agent to the jail to question petitioner

took place only eight days before the full-fledged

criminal investigation concededly began. And...

there was always the possibility during his investi-

gation that his work would end up in a criminal

prosecution. We reject the contention that tax

investigations are immune from the Miranda re-

quirements for warnings to be given a person

in custody.”

_, |;

B. The Attorney General’s Criminal Investigation Has Focused

on Petitioner.

More than three months ago the Attorney General

represented that he had conducted an investigation in

1978 which revealed “to a substantial certainty that

Herbert W. Armstrong, the Pastor General of the

Worldwide Church of God, and Stanley Rader, the

Treasurer and General Counsel of the Church, among

others, were guilty of misuse and misappropriation of

millions of dollars of Church assets.” (Response to

Order to Show Cause Re Preliminary Injunction, p.

4, filed on or about April 4, 1979 in Lopez, et al.

v. State of California, Los Angeles Superior Court

No. C 276767.) To this very Court the Attorney

General has stated, “Much of the alleged fraud in

this case consists of transactions between Defendant

Rader or businesses controlled by him” and the Church.

(Opposition to Petition for Certiorari (No. 78-1720),

p. 23).

The Attorney General’s comments in and out of

the courtroom leave no room for doubt Petitioner is

the focus of the Attorney General’s criminal investiga-

tion.

C. The Court-Ordered Deposition, Taken in the Offices of

the Attorney General Under Threat of Civil and Penal

Sanctions, Is a Custodial Interrogation.

The touchstone for invocation of Miranda rights is

custodial interrogation by law enforcement officials.

“The Miranda opinion declared that the warnings

were required when the person being interrogated was

—_

‘in custody at the station or otherwise deprived of

his freedom of action significant in any way.’ ” (Orozco

v. Texas, 394 U.S. 324, 327 (1969).) Under control-

ling standards, Petitioner was subjected to custodial in-

terrogation:

1. Petitioner was interrogated in the offices of the

Attorney General, th State’s highest law enforcement

official. (See Miranda y. Arizona, supra, 384 US.

436, 445 [“In each [case before the Court], the defend-

ant was questioned by police officers, detectives, or

a prosecuting attorney in a room in which he was

cut off from the outside world.” (emphasis added) ];

People v. Arnold, 66 Cal.2d 438, 448, 58 Cal.Rptr.

115, 426 P.2d 515 (1967) [“The coercive effect does

not disappear because the instrumentality of interroga-

tion is a prosecuting attorney instead of a police officer

or because the locale of the query is the chamber

of the prosecution rather than the policeman.” J.)

2. Petitioner’s presence was compelled by court-

issued subpoena. (See People v. Arnold, supra, 66

Cal.2d 438, 448 [person “authoritatively summoned”

to district attorney’s office for questioning]; United

States v. Bachman, 267 F.Supp. 593 (W.D. Pa. 1966)

[no custodial interrogation where defendant was not

“under indictment or arrest, subpoenaed or otherwise

deprived of his freedom of action” (emphasis

added) ].)”

While it seems clear that the compulsion of court process

for questioning at the Attorney General’s Office thus constitutes

custody for Miranda purposes, this is apparently an issue of

first impression for this Court.

ae

3. The Attorney General’s giving of the Miranda

warnir.ys itself indicates the coercive nature of the

interrogation. (Beckwith v. United States, 425 US.

341, 348 (1975); United States v. Caiello, 420 F.2d

471, 473 (2d Cir. 1969).)

In sum, the circumstances of Petitioner’s interrogation

were precisely those necessitating the giving of Miranda

warnings. The Attorney General recognized this when

he gave the warnings. Petitioner properly invoked his

right to remain silent and to terminate questioning.

The order that Petitioner once again submit to custodial

interrogation is a travesty. That he should face a con-

tempt citation for exercising his constitutional rights

is an outrage.

Conclusion.

The State of California, acting in the person of

the Attorney General, has completely had its way in

its own courts, The State asserts a general supervisory

power over the affairs of religious organizations, and

the State courts enforce this power. The State employs

civil proceedings as a guise for criminal discovery,

invading Petitioner’s constitutional rights, and the State

courts see no objection to the proceedings. The State

insists it may inform Petitioner of his right to remain

silent and then compel him to testify, and the State

courts order Petitioner to speak.

Petitioner respectfully submits that it falls to this

Court to declare that the First, Fifth and Fourteenth

—26—

Amendments afford meaningful protection of individual

rights. The trial court’s order compelling Petitioner

to testify should be reversed.

aaa RN Ta eee

Respectfully submitted,

ALLAN BROWNE

of

ERVIN, COHEN & JESSUP

Wo. MARSHALL MORGAN

of

MORGAN, WENZEL & MCNICHOLAS

Davip M. HARNEY

of

HARNEY & Moore

Ex.uis J. Horvitz

Marc J. Poster and

ALAN G. MARTIN

of

Horvitz, GREINES & POSTER

A Law Corporation

Counsel for Petitioners.

eee

APPENDIX A.

Clerk’s Office, Supreme Court

4250 State Building

San Francisco, California 94102

July 5, 1979

I have this day filed Order Hearing Denied.

In re: 2 Civ. No. 56345, Worldwide Church of God,

Inc. vs. Superior Court, Los Angeles.

Respectfully,

G. E. BISHEL

Clerk

similis

APPENDIX B.

California Corporations Code Section 9505:

“A nonprofit corporation which holds property

subject to any public or charitable trust is subject

at all times to examination by the Attorney Gen-

eral, on behalf of the State, to ascertain the con-

dition of its affairs and to what extent, if at

all, it may fail to comply with trusts which it

has assumed or may depart from the general pur-

poses for which it is formed. In case of any

such failure or departure the Attorney General

shall institute, in the name of the State, the pro-

ceedings necessary to correct the noncompliance

or departure.” |

saimiliiekis

APPENDIX C.,

Notice of Ruling on Motion for Order Compelling De-

ponent Stanely R. Rader to Answer Questions

Propounded at Deposition.

Superior Court of the State of California, for the

County of Los Angeles. »

The People of the State of California, Plaintiff,

v. Worldwide Church of God, Inc., a California non-

profit Corporation, et al., Defendants. No. C 267-

607.

PLEASE TAKE NOTICE that plaintiff's Motion

for Order Compelling Deponent to Answer Questions

Propounded at Deposition and Motion for Sanctions

came on regularly for hearing on May 7, 1979 in

Department 80 of the above entitled court, Judge Thom-

as T. Johnson presiding. After considering moving

and opposing papers, declarations in support thereof,

and hearing oral argument thereon, the court granted

the motion and ordered that Stanley R. Rader make

himself available on May 29, 1979 at 10:00 a.m. in

the offices of the Attorney General located at 3580

Wilshire Boulevard, Suite 500, Los Angeles, California ©

90010 for the purposes of completing his deposition.

DATED:

GEORGE DEUKMEBEJIAN, Attorney General

LAWRENCE R. TAPPER

LAUREN R. BRAINARD

Deputy Attorneys General

LAUREN R. BRAINARD

Deputy Attorney General

Attorneys for Plaintiff