Opposition Brief — Roberts v. United States

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JAN 29 1988

JR,

CLERK

In the Supreme Court of the

OCTOBER TERM, 1987

JOHN W. ROBERTS, PETITIONER

V.

UNITED STATES OF AMERICA, ET AL.

ON PETITION FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE ELEVENTH CIRCUIT

MEMORANDUM FOR THE RESPONDENTS IN OPPOSITION

CHARLES FRIED

Solicitor General

Department of Justice

Washingion, D.C. 20530

(202) 633-2217

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TABLE OF AUTHORITIES

Cases:

Barney v. United States, 568 F.2d 116 (8th Cir. 1978) .... 5

Couch v. United States, 409 U.S. 322 (1973) ............ 6

DiBellav. United States, 369 U.S. 121 (1962) ........... 2

Gluck v. United States, 771 F.2d 750 (3d Cir. 1985) ...... 5.7

Grand Jury Proceedings, In re, 716 F.2d 493 (8th Cir.

| aaah ig ARE sy Ae eck Reg bE a pie Pa E te ae 3

Hillv. United States, 346 F.2d 175 (9th Cir.), cert. denied,

Se as bm tas 3

Imperial Distributors, Inc. v. United States, 617 F.2d 892

(Ist Cir.), cert. denied, 449 U.S. 891 (1980) ...........

Kurshan v. Riley, 484 F.2d 952 (4th Cir. 1973) ..........

Lawhon vy. United States, 390 F.2d 663 (Sth Cir. 1968) ...

Murphy v. Hunt, 455 U.S. 478 (1982) .................

St. Pierre v. United States, 319 U.S. 41 (1943) ..........

United States v. Aquinas College Credit Union, 635 F.2d

887 (6th Cir. 1980), cert. denied, 450 U.S. 1042 (1981) . 4-5

United States v. Arthur Andersen & Co., 623 F.2d 720

LDH nm Ww

(Ist Cir.), cert. denied, 449 U.S. 1021 (1980) .......... 5,6

United States v. Blue, 384 U.S. 251 (1966) ............. - ea

United States v. Deak-Perera Int’l Banking Corp., 610

fF. fe ot Me. RO none se ere ae 5

United States v. First American Bank, 649 F.2d 288 (Sth

gO ae Re ak ek wil race ae 4,5

United States v. First Family Mortgage Corp., 739 ¥.2d

NII Ti aie Stale nw pia Blah dkms 6

United States v. Kis, 658 F.2d 526 (7th Cir. 1981), cert.

CN er he PEO os esi cece se seicsinuces’s 4,5,6

United States v. Miller, 425 U.S. 435 (1976) ............ 6

United States v. Munsingwear, Inc., 340 U.S. 36 (1950) .. 5

United States v. Premises Known as 608 Taylor Ave., 584

Pee ae POD os cy a oa cde ck tae bea ade kas 3

United States v. Regional Consulting Services, 766 .2d

eek wd ws 3

United States v. Ryan, 402 U.S. S530 (1971) 2.2.22 eee. 6

United States v. Sherlock, 756 F.2d 1145 (Sth Cir. 1985) .. 5

(1)

Cases — Continued: Page

United States v. Silva & Silva Accountancy Corp., 641

F.2d 710 (9th Cir. 1981)... 2... cece ee eee ee eee eee 4

United States v. Sweet, 655 F.2d 54 (Sth 5 oe |.) 6

United States v. Trails End Motel, 657 F.2d 1169 (10th

oe. (|) Eee eerre ye Cre Ty te 4

Vesco v. SEC, 462 F.2d 1350 (3d Cir. 1972) ......-----: 7

Warden v. Hayden, 387 U.S. 294 (1967) ...----. eee ees 3

Weinstein v. Bradford, 423 U.S. 147 SS cg iaeccas us asic 5

Rule:

Fed. R. Crim. P. 4ife) ... . 0... cos snc ccnee ce mnaees 1-2, 3, 4

Hn the Supreme Court of the United States

OCTOBER TERM, 1987

No. 87-906

JOHN W. ROBERTS, PETITIONER

,.

UNITED STATES OF AMERICA, ET AL.

ON PETITION FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE ELEVENTH CIRCUIT

MEMORANDUM FOR THE RESPONDENTS IN OPPOSITION

Petitioner contends that the court of appeals had

jurisdiction over his appeals from an order dismissing his

action for the return of property and the suppression of

evidence and an order enforcing three IRS summonses. !

1. As part of an IRS investigation of petitioner,

Special Agent Randy Taylor visited the accounting firm of

Chapel & Ward, and requested access to documents

relating to petitioner. Chapel & Ward voluntarily gave

Agent Taylor workpapers, books and other records (Pet.

App. B11). The IRS made copies of those documents and

returned to the accountants all original documents except

a computer printout and a workpaper that belonged to the

accountants (id. at A3). Petitioner then filed an action in

the district court pursuant to Federal Rule of Criminal

' Petitioner Roberts was the only appellant in the court of appeals

(Pet. App. BI, C2), even though several of his controlled companies

were also plaintiffs in the action for the return of property and the

suppression of evidence (id. at B6).

(1)

2

Procedure 41(e) to have the copies delivered to him and to

suppress any use of the information by the IRS. The

district court dismissed, holding that petitioner had no

legitimate expectation of privacy in the records in the

hands of his accountants and that petitioner’s constitu-

tional rights had not been violated (Pet. App. B15, B20).

In a separate action brought by petitioner, the district

court ordered enforcement of three IRS administrative

summonses that required the production of bank records

relating to petitioner and required accountants Chapel and

Ward to give testimony pertaining to petitioner’s tax

liabilities (Pet. App. C12-C15). Both the district court (id.

at C9) and the court of appeals (id. at C1) denied motions

for a stay of the district court’s enforcement order. Before

briefs were filed in the court of appeals, all three sum-

moned parties complied with the IRS summonses (/d. at

A2).

The court of appeals dismissed petitioner’s two appeals

(Pet. App. Al-A4). The court held that it had no jurisdic-

tion over petitioner’s appeal from the order dismissing his

Rule 41(e) action because an order denying the suppres-

sion of evidence is interlocutory. The court dismissed peti-

tioner’s appeal from the order enforcing the IRS sum-

monses on the ground of mootness; all summoned parties

had complied with the summonses.

2. The court of appeals correctly dismissed petitioner’s

appeal from the order dismissing his Rule 41(e) action, It

is well settled that the dismissal of a Rule 41(e) action is

immediately appealable “[o]nly if the [action] is solely for

return of property and is in no way tied to a criminal pros-

ecution in esse * * *.” Dibella v. United States, 369 U.S.

121, 131-132 (1962). Petitioner’s action failed the first part

of the two-part DiBella test because it sought the suppres-

ae,

3

sion of evidence and was thus not solely for the return of

property (Pet. App. A3-A4).

Petitioner maintains (Pet. 31-35) that there is a conflict

in the circuits over the precise meaning of the first part of

the DiBella test. Petitioner notes that some circuits inquire

into the motive underlying a Rule 41(e) action to deter-

'mine whether its “primary” purpose was to obtain the

return Of property (in which case its dismissal is ap-

pealable) or to suppress the government’s use of evidence.

See, e.g., United States v. Premises Known us 608 Taylor

Ave., 584 F.2d 1297, 1300 (3d Cir. 1978). Petitioner con- ‘

tends that these decisions conflict with the Fourth Circuit’s

opinion in United States v. Regional Consulting Services,

766 F.2d 870 (1985). The Fourth Circuit, however,

recognized no such conflict. It carefully noted in Regional

Consulting Services that the Rule 41(e) movants in that

case did not prove that “the primary purpose of their mo-

tion” (766 F.2d at 873 n.6) was the return of records. Thus

we believe that no conflict in the circuits has arisen with

respect to the first part of the DiBella test.

In any event, petitioner’s motion under Rule 41(e)

specifically requested suppression as a remedy (Pet.

21-22). Petitioner also sought to obtain copies of

documents that Agent Taylor obtained from and then

returned to Chapel & Ward. But a motion to obtain copies

of returned records is nothing more than a motion to sup-

press the contents of those records. See Warden v.

Hayden, 387 U.S. 294, 305 (1967); Imperial Distributors,

Inc. v. United States, 617 F.2d 892, 895-896 (Ist Cir.)

(dismissing appeal), cert. denied, 449 U.S. 891 (1980); Fiil/

v. United States, 346 F.2d 175 (9th Cir.) (dismissing ap-

peal), cert. denied, 382 U.S. 956 (1965). Compare Jn re

Grand Jury Proceedings, 716 F.2d 493 (8th Cir. 1983)

(denial of Rule 41(e) motion appealable because motion

primarily sought return of original documents that were

4

vital to movant’s operation of business). Accordingly,

petitioner’s Rule 41(e) action was primarily, if not solely,

designed to suppress the government’s use of evidence.

The district court’s dismissal of his action therefore was

not appealable under any circuit’s reasoning.

This case does not present any issue concerning the sec-

ond part of the DiBella test (Pet. 34-48). Petitioner does

not challenge the accepted view that the dismissal of a

Rule 41(e) action is appealable only if both parts of the test

are satisfied. Accordingly, because petitioner’s appeal

does not meet the first part of the test, the court of appeals

properly did not reach the question whether petitioner’s

Rule 41(e) action was tied to a criminal prosecution.

3. The court of appeals also correctly dismissed as

Moot petitioner’s appeal from the order enforcing the IRS

administrative summonses. A case becomes moot when

the controversy between the parties ceases to exist so that

the court may not grant effective relief. See, e.g., Sv.

Pierre v. United States, 319 U.S. 41 (1943). In a summons-

enforcement proceeding, the government seeks only to ob-

tain access to the summoned information; the party

challenging the summons hopes to prevent that access.

Once the summoned parties have complied, as in this case,

the government has achieved its objective and there is no

relief that a court can grant the opposing party. For that

reason, all but one of the courts of appeals that have con-

sidered the question have held that compliance with an

IRS summons renders moot an appeal from an order en-

forcing the summons.?

? See, e.g., United States \. Ais, 658 F.2d 526 (7th Cir. 1981), cert.

denied, 455 U.S. 1018 (1982); United States v. Trails End Motel, 657

F.2d 1169 (10th Cir. 1981); United States v. First American Bank, 649

F.2d 288 (Sth Cir. 1981); United States v. Silva & Silva Accountancy

Corp., 641 F.2d 710 (9th Cir. 1981); United States v. Aquinas College

Credit Union, 635 F.2d 887 (6th Cir. 1980), cert. denied, 450 U.S.

The Third Circuit’s decision in Gluck v. United States,

771 F.2d 750 (1985), is the only contrary circuit authority.

In Gluck, the Third Circuit reasoned that a case is not

moot after compliance with a summons because the court

can order the suppression of illegally obtained evidence in

any future civil or criminal proceeding. This reasoning is

faulty. See United States v. Sherlock, 756 F.2d 1145, 1147

(Sth Cir. 1985). As the Seventh Circuit correctly observed

in United States v. Kis, “{i}t would be highly speculative”

to rule on the legality of a summons “for there is no

guarantee that the Government will ever seek to use” the

summoned evidence (658 F.2d at 533). Thus a ruling on

the merits in this case would simply be an “advisory opin-

ion.”” Lawhon v. United States, 390 F.2d 663 (Sth Cir.

1968) (per curiam). Petitioner may obtain a ruling on the

legality of the IRS summonses by way of a suppression

motion in the event that there is a future trial. Cf. United

States v. Blue, 384 U.S. 251, 255 (1966).

1042 (1981); United States v. Arthur Andersen & Co., 623 F.2d 720

(ist Cir.), cert. denied, 449 U.S. 1021 (1980); United States v. Deak-

Perera Int'l Banking Corp., 610 F.2d 89 (2d Cir. 1979); Barney v.

United States, 568 F.2d 116 (8th Cir. 1978); Aurshan v. Riley, 484

F.2d 952 (4th Cir. 1973). Contrary to petitioner’s suggestion (Pet. 51),

these decisions are not limited to a case where a taxpayer, as

distinguished from a third party, complies with the summons. See,

e.g., United States v. First American Bank, supra; United States v.

Deak-Perera Int'l Banking Corp., supra; Barney v. United States,

supra.

3 Under settled precedent, the district court’s enforcement order in

this case will be vacated because the case became moot before the

court of appeals ruled on the merits. Such an order is required “to pre-

vent a judgment, unreviewable because of mootness, from spawning

any legal consequences[,]” and “clears the path for future relitigation

of the issues between the parties.” United States v. Munsingwear, Inc.,

340 U.S. 36, 40-41 (1950); see also Weinstein v. Bradford, 423 U.S.

147, 149 (1975).

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6

Petitioner’s appeal from the order enforcing the IRS

summonses does not remain justiciable under the doctrine

that claims remain alive if they are “capable of repetition,

yet evading review.” Murphy v. Hunt, 455 U.S. 478, 482

(1982); see United States v. Kis, 658 F.2d at 533. First,

there-is nothing in the record to support a finding that

“there [is] a reasonable expectation that the same com-

plaining party [will] be subjected to the same action again”

(Murphy v. Hunt, 455 U.S. at 482). Even if new sum-

monses are issued and enforced, the affected parties can

obtain full appellate review by obtaining a stay or by

means of a contempt citation. See United States v. First

Family Mortgage Corp., 739 F.2d 1275, 1277-1278 (7th

Cir. 1984); United States v. Kis, 658 F.2d at 533; United

States v. Sweet, 655 F.2d 54, 55 (Sth Cir. 1981). This

Court has recognized that a party’s risking contempt may,

at times, be the only way to obtain full appellate review of

an adverse order.* See, e.g., United States v. Ryan, 402

U.S. 530, 533 (1971). Accordingly, the court of appeals

correctly dismissed as moot petitioner’s appeal in the

summons-enforcement case.

Finally, we believe that this Court’s review of the circuit

conflict on the mootness question is not necessary at this

+ Petitioner cites United States v. Arthur Andersen & Co., 623 F.2d

720 (ist Cir.), cert. denied, 449 U.S. 1021 (1980), for the proposition

that accountants cannot reasonably be expected to risk contempt in a

summons-enforcement case (Pet. 60). In fact, the court noted in

Andersen (623 F.2d at 724) that an accounting firm has a “sufficient

incentive” to protect its client’s interests because unauthorized

disclosures hinder the firm’s ability to obtain information. In any

event, petitioner’s claims can be asserted when evidence its sought to be

used against him and provide no basis for interference with the IRS’s

investigation of third-party records. Cf. United States v. Miller, 425

U.S 435 (1976); Couch v. United States, 409 U.S. 322 (1973).

ee ee

time. As Judge Garth noted in dissent in Gluck (771 F.2d

at 759-760), the Third Circuit’s holding on mootness in

that case conflicts with the prior Third Circuit decision in

Vesco v. SEC, 462 F.2d 1350 (1972). Judge Garth has

urged that this intracircuit conflict be resolved by the court

en banc (771 F.2d at 761). There is substantial summons-

enforcement litigation within the Third Circuit, and the

government is interested in attempting to persuade that

court to agree with the unanimous view of other circuits.

Thus, the Third Circuit may well have an opportunity

soon to reconsider its mootness rule en banc.

lt is therefore respectfully submitted that the petition

for a writ of certiorari should be denied.

CHARLES FRIED

Solicitor General

JANUARY 1988

US GOVERNMENT PRINTING OFFICE 19868 202 05//b0262