Opposition — American Law Ass'n v. Merkel

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| No. 80-2032. {4 4 8,80

NOGA L. STEVAS

Int the Supreme Court of the United States

OCTOBER TERM, 1980

AMERICAN LAW ASSOCIATION, PETITIONER

V.

JOHN MERKEL, ETC., &T AL.

ON PETITION FOR A WRIT OF CERTIORARI TO

THE UNITED STATES COURT OF APPEALS FOR

THE NINTH CIRCUIT

MEMORANDUM FOR THE RESPONDENT IN OPPOSITION

LAWRENCE G. WALLACE

Acting Solicitor General

Department of Justice

Washington, D.C. 20530

(202) 633-2217

TABLE OF AUTHORITIES

Page

Cases:

Branzburg v. Haves, 408 U.S. 665 .....seeeeees 5

Buckley v. Valeo, 424 U.S. 1 wc cece ec ee ee eees 5

Doe v. Bolton, 410 UiS. 179 oo... cece cece eee 4

Grand Jury Proceedings Witness Bardier,

og a gore A» GOR or eae 5

Kurshan v. Riley, 484 F. 2d 952 .......eeeeeees 3

EAE LD, FI, GEO Wes 1. ccccvcepdvnevvovers 5

NAACP v. Alabama, 357 U.S. 449 wo. ccc eens 5

Nebraska Press Ass'n v. Stuart, 427 U.S.

PE ied Gd Stoo ce uab 4k pee cae see Meee ea oes 4

North Carolina v. Rice, 404 U.S. 244 ........ 3.5

Preiser v. Newkirk, 422 U.S. 398 ......eeeees aS

ROOM. WORE FD U.S TAS sc cccceveesvecseces 4

SEC ¥. Laird, Fb F.. ZA VIGZ nc vcvieccccsevs 34

Southern Pacific Terminal Co. v. ICC,

BU EO hbike Cac ckecerreerereereniaees 4

Special April 1977 Grand Jury, In re,

581 F. 2d 589, cert. denied, 439 U.S.

1046 ...... LOO ee ye TEE Pewtendabspec 3

United States v. Arthur Andersen & Co.,

623 F. 2d 720. cert. denied, No. 80-311

SEE Bs TOON wHkds Oo s Whe chdNN VN Pies ccs. 3

United States v. Deak- Perera Int'l Banking

Ci. BI F BOF ewes hoe tica cue Oadoeceses 3

Cases—Continued:

United States v. Frumento, 552 F. 2d 534 ...... 4

United States v. Hankins, 565 F. 2d 1344,

clarified on other grounds and rehearing

denied, 581 F. 2d 431, cert. denied,

Ps TE Te haw aCe ae es caee a PUhss bec evets 3

United States of America, Etc., In re,

Se FO RE oc bi pe pererivestdocccccenes 4

United States v. New York Telephone Co.,

SO At PE hie bia oWebnwedhetct Cacene'vewess 4

United States v. Olson, 604 F, 2d 29 ......00ee. 3

United States v. Patmon, 630 F. 2d 458 .....4.. 3

Weinstein v. Bradford, 423 U.S. 147 wo cece 4

Constitution and statutes:

United States Constitution, First

SUE oe oa dis ovale eid'c beens 6 aie

Internal Revenue Code of 1954 (26 U.S.C.):

EE atte, k's os Rv Ake bd Cees 2

SN ES Cg CC ale 6 0.80 ca atine aes aba 2

NE FEE: U's-o-a te é/0'e 6 ve PARE Leo od be 2

IS U.S.C. SHE esse bb ccccpevvescbviscvecsvcegene 2

Iu the Supreme Court of the United States

OcTOBER TERM, 1980

No. 80-2032

AMERICAN LAW ASSOCIATION, PETITIONER .

Vv.

JOHN MERKEL, ETC., ET AL.

ON PETITION FOR A WRIT OF CERTIORARI TO

THE UNITED STATES COURT OF APPEALS FOR

THE NINTH CIRCUIT

MEMORANDUM FOR THE RESPONDENT IN OPPOSITION

Petitioner seeks review of an order of the court of appeals

dismissing as moot its appeal from the district court's denial

of its motions to quash certain subpoenas issued by a fed-

eral grand jury.

The pertinent facts may be summarized as follows: On

January 28, 1980, a grand jury investigation of Karl L.

Dahlstrom, R. Bruce Ripley, Hiram E. Conley, Gaze Durst

and David J. Morris was commenced in the Western Dis-

trict of Washington (Pet. App. 4B). Pursuant to this inves-

tigation, certain subpoenas were issued to various financial

institutions for their records pertaining to transactions of

these individuals and their closely related organizations

(Pet. App. 5B).

2

On April 28 and May 7, 1980, petitioner, an unincorpo-

rated association of which Dahlstrom, Ripley and Conley

were members, moved to quash these subpoenas on the

ground that production of the requested information would

violate the First Amendment rights of its members (A.

28-29).' In an affidavit filed in response to the motions, the

government attorney conducting the investigation stated

that the grand jury was investigating possible violations of

Sections 7201, 7206(1), and 7206(2) of the Internal Revenue

Code of 1954 (26 U.S.C.) and 18 U.S.C. 371 by Dahlstrom

and others, and that the information subpoenaed was rele-

vant to the determination of whether the crimes under

investigation had been committed (A. 64-66).

On May 19, 1980, following a hearing on petitioner’s

motion to quash, a magistrate recommended that the

motions be denied (Pet. App. 1 B-10B), and on May 28, 1980

the district court denied petitioner’s motions to quash (Pet.

App. 11B-12B). On June 2, 1980, the court denied petition-

er’s motion for an injunction barring compliance with the

subpoenas pending appeal (A. 94). On the same date, the

court of appeals denied petitioner’s motion for an injunc-

tion pending appeal, and shortly thereafter, denied peti-

tioner’s motion for reconsideration. The financial institu-

tions thereupon fully complied with the subpoenas. After

compliance, the court of appeals granted the government's

motion to dismiss as moot petitioner’s appeal (Pet. App.

1A-2A). The grand jury subsequently returned an indict-

ment against Dahlstrom, Ripley, Conley, Durst and Morris

(CR 81-116R, Western District of Washington at Seattle),

and the grand jury investigation was terminated.

“A.” refers to the separately bound excerpts of the record filed by

petitioner in the court of appeals.

3

1. Petitioner contends (Pet. 9-16) that the court of

appeals erred in dismissing its appeal as moot even though

the financial institutions’ compliance with the subpoenas

removed the only issue in this case. But, as this Court

recently-observed, “a federal court has neither the power to

render advisory opinions nor ‘to decide questions that can-

not affect the rights of litigants in the case before them.” ”

Preiser v. Newkirk, 422 U.S. 395, 401 (1975), quoting

North Carolina v. Rice, 404 U.S. 244, 246 (1971). Here, the

subpoenas sought production of certain documents. Upon

the district court’s denial of petitioner’s motions to quash,

and subsequent denials by the district court and the court of

appeals of petitioner’s applications for injunctions pending

appeal, those documents were produced. Accordingly, the

court below correctly held that there is no longer a live

dispute between petitioner and the government, and that

the case was moot. See United States v. Arthur Andersen &

Co., 623 F. 2d 720 (ist Cir. 1980), cert. denied, No. 80-311

(Dec. 1, 1980); United States v. Deak- Perera Int'l Banking

Corp., 610 F. 2d 89 (2d Cir. 1979); Kurshan v. Riley, 484

F. 2d 952 (4th Cir. 1973); United States v. Hankins, 565

F. 2d 1344 (Sth Cir.), clarified on other grounds and rehear-

ing denied, 581 F. 2d 431 (1978), cert. denied, 440 U.S. 909

(1979); United States v. Patmon, 630 F. 2d 458 (6th Cir.

1980); United States v. Olson, 604 F. 2d 29 (8th Cir. 1979);

SEC v. Laird, 598 F. 2d 1162 (9th Cir. 1979).

2. Contrary to petitioner's contention (Pet. 15), the

court’s order in this case does not sufficiently “crystalize” a

conflict with /n re Special April 1977 Grand Jury (appeal of

William J. Scott), 581 F. 2d 589 (7th Cir.), cert. denied, 439

U.S. 1046 (1978), to warrant review by this Court. In Scott,

the court concluded that a challenge to certain federal grand

jury subpoenas by the subject of the investigation was not

moot, even though there had been full compliance prior to

4

consideration of the appeal. As the court saw the matter, the

controversy was capable of repetition yet evading review

because further subpoenas would likely be issued by that

grand jury, and the period of time between the district

court’s order enforcing the subpoenas and compliance by

the subpoenaed parties was too short to allow the action to

be fully litigated.2 The court accordingly affirmed the

denials of the motion to quash. Although we believe that

Scott wrongly concluded that the case was not moot (see

Memorandum for the United States in Opposition in Wil-

liam J. Scott, Attorney General of Illinois v. United States

of America, No. 78-403, 1978 Term, at 2-3 n.3), the court

there did not speak to the basic principles of mootness

applied by the other courts of appeals in cases such as SEC

v. Laird, supra (see page 3, supra). Since it is unclear

whether the Seventh Circuit would hold that the instant

case was not moot, review by this Court is not warranted at

this time.

At all events, Scott is distinguishable on its facts. There,

the grand jury was conducting a continuing investigation

and it was possible to conclude that the issue was capable of

repetition. Here, on the other hand, the grand jury investi-

gation has been terminated. It is therefore unlikely that

there could be a repetitious demand for information per-

taining to petitioner's financial affairs. Moreover, to the

extent that there was ever any threat of harm to petitioner’s

rights, that harm has occurred, and any resolution by this

Court of the asserted conflict “cannot affect the rights of

2Cf. Southern Pacific Terminal Co. v. ICC, 219 U.S. 498 (1911);

Weinstein v. Bradford, 423 U.S. 147 (1975). See also Nebraska Press

Ass'n v. Stuart, 427 U.S. 539 (1976); United States v. New York

Telephone Co., 434 U.S. 159 (1977); Roe v. Wade, 410 U.S. 113, 125

(1973); Doe v. Bolton, 410 U.S. 179 (1973); United States v. Fru-

mento, 552 F. 2d 534, 536-541 (3d Cir. 1977) (en banc); Jn re United

States of America, Etc., 610 F. 2d 1148 (3d Cir. 1979).

5

[the] litigants in” this case. Compare Preiser v. Newkirk,

supra, 422 U.S. at 401-402; vom Carolina v. Rice, supra,

404 U.S. at 246.3

It is therefore respectfully submitted that the petition for

a writ of certiorari should be denied.

LAWRENCE G. WALLACE

Acting Solicitor General

JuLy 1981

3Petitioner’s request (Pet. 17) that the case be decided on the merits is

inappropriate. The court of appeals did not address the merits of

petitioner’s First Amendment argument. The court simply dismissed

the appeal as moot, and it is the mootness question as to which peti-

tioner seeks certiorari.

Moreover, there is no basis for petitioner's claim (ibid.) that the

federal grand jury should be barred, on First Amendment grounds,

from inquiring into the possible existence of criminal activity by its

members. It is true that federal grand juries must “operate within the

limits of the First Amendment” in conducting their investigations.

Branzburg v. Hayes, 408 U.S. 665, 708 (1972). Petitioner has failed,

however, to demonstrate that issuance of the subpoenas under scrutiny

here violated the First Amendment rights of its members. The affidavits

(A. 4-5, 30, 54) fall far short of demonstrating that enforcement of the

subpoenas presented a substantial, objective threat to the First

Amendment rights of its members. Compare NAACP v. Alabama, 357

U.S. 449, 462-463 (1958). See Buckley v. Valeo, 424 U.S. 1, 69-73

(1976); Laird v. Tatum, 408 U.S. 1, 10-16 (1972); In re Grand Jury

Proceedings Witness Bardier, 486 F. Supp. 1203, 1211 (D. Nev. 1980).

Finally, petitioner's suggestion (Pet. 20-23) that the government has

not made a sufficient showing of need for the subpoenaed information

ignores the fact that there was a full hearing on that issue before the

magistrate. In a report and recommendation adopted by the district

court, the magistrate found that the grand jury was conducting a

legitimate investigation into the promotion of possibly illegal tax eva-

sion schemes by named individuals, and that the government had

satisfied its burden of proving that it “has an immediate and compelling

interest in the subject of the investigation and that there is a substantial

connection between the financial records sought and the crimes under

investigation” (Pet. App. 5B-3B).