# Petition for Writ of Certiorari — Dornau v. United States > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385608_0224%3A1 ## Record - **Collection:** Supreme Court brief - **Document type:** Petition for Writ of Certiorari - **Published:** January 1, 1974 - **Citation:** 419 U.S. 872 ## Text | ‘ 4 7 “ 4 gsrePuerci cease TIL PALL MUUAE ’ rf Met 1S 1974 gr Pe ke Be OS IN THE SUPREME COURT OF THE UNITED STATES OCTOBER TERM, 1973 n. €3- 1390 PETER DORNAU, Petitioner, Ve UNITED STATES OF AMERICA, Respondent, PETITION FOR A WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT EPHRAIM LONDON 575 Madison Avenue New York, New York 10022 Counsel for Petitioner On the Petition FRANKLIN S. BONEM (4047) EPHRAIM LONDON q f > { F g z f Kk i TROTY SR ST sh PPT HRP TRAIT REE ne RA PRATT ii ’ BPE ERLE, ee ETRE ee oe a LO OPEN PL EN VLEN LOOSE LES LD SE GT, INDEX Page Opinions Below .cccccrcccccccece 2 PUTIBEICIIONs Bcc cor ecoresecncec 2 Questions Presented .....e-eeeee00- 3 The Constitutional Provision and Statutes Involved ..cceccccecccscce 4 Statement of the Case ...2-cecccece 6 Reasons for Granting the Writ 1, The Second Circuit's Interpreta- tion of the Immunity Provision of the Bankruptcy Act Is in Con- flict with the Fifth Circuit's Interpretation of the Same Pro- . Vererorvnrr? creat eee 16 2. The Case Presents an Important Question under the Fifth Amend- ment of the Constitution and the Decision Below on the Constitu- tional Question Is Inconsistent with the Prior Decisions of This ee ere aaa eae ea 19 Appendix A: Opinion and Order of the District Court for the Southern District OF New York. e.ssecscs Anil “ Le Mah OMEN an ALO IE a ii INDEX Page Appendix B: Opinion of the Court of Appeals for the Second Circuit A-18 Appendix C: Judgment of the Court of Appeais entered January 24, 1974 A-30 TABLE OF CASES AND OTHER AUTHORITIES Cases: Adams _v. Maryland, 347 U.S. 179,. o 1,42 23 Arndstein v. McCarthy, 254 U. a the 24 Arsenault v, Massachusetts, 393 U.S, eeu es er eee eee ee eee se oe eeeee8e 21 Berger v. California, 393 v.G 384.. 23 Brown v. Walker, 161 U.S. a Carroll v. United States, 354 U.S, OO" SDGR WOW n eee ee OOS bh owe oO 25 Counselman vy, Hitchcock, 142 U.S, ieee eee ere Creer 7 Emspak v. United States, 349 U.S. bee ee ee ee ad mane 23 INDEX nd Page Eskridge v. Washington State Board, 357 U.S. REO 066 668886866640 #40 8 20 Fowler v. Vincent, 366 F.Supp. 1224 (S. D. N. a } oevevevenfheeeeeee#e#gewe#eoee#e#e#ee#e#eee# @ 22 Garrity v. New Jersey, 385 U.S. Gus see eeaeet sees eo 6eense bees be aee 22 Ivan V. v. City of New York, 407 is S. 203 -_ e + es ee * se e 7 ° ee * es eee e ° e 21 Johnson v. Zerbst, 304 U.S. 458... 23 Kastigar v. United States, 406 U.S. 441 eoeeeeee#se5oegereee#ee#eereereeee#e#ee#e#e##e#e#ee id, 13, Katz v. United States, 389 U.S. |) Pr rar eer eae ae ae a 22 Kitchens v. Smith, 401 U.S. 847.... 21 Linkletter v. Walker, 381 U.S. Ee a ee Ae ae ee ee ee ar ae 20 McConnell v. Rhay, 393 U.S. 2 .... 20 O'Connor v. Ohio, 385 U.S. 92..... 20 People v. Dinora, 13 Ill. App. 3d 99, 200 N, i. 2d 797. eoeeeeee5eoee#eee#eeese#ee# e 23 iv INDEX Piccirillo v. New York, 400 U.S. 548 *eeoeene fe e#eteeeee* e# © @© © @©& © © # @ Price v. Georgia, 398 U.S. 323.... Roberts v. Russell, 392 U.S. 293... Robinson v. Neil, 409 U.S. 505 .... Simmons v. United States, 390 U.S. 377 SS A. oe Oe Oe i) ee Oe OO ee Oy, . . . 7 . . . - . . * Slochower v. Foard of Education, Ce ee) ee cece eenees Smallwood v. Gallardo, 275 U.S. Pe Sy eS ee ee a ee ee ee Smith v. United States, 337 U.S. 137 7 i. o a FC me oe re a +. . . . - . > 2 2. &. Be ®@ Spev2ck v. Klein, 385 U.S. 511 .... Ullman v. United States, 350 U.S, 422 re ff © © . . . . . . i oh oe oe . . a co . . . United States v. Brewster, 408 U.S. 501 . . . -_ . . * « . . . . . . . . . . . . * « . . United States v. Calandra, U.S. », 42 U.S. Law Week 4104...... 22 22 18 23 22 18 25 12 ee INDEX Page a United States v. Filiberti, 366 4 F. Supp. 1062 (D, Conn, ) eeoeoeeveereee 17, 26 : i United States v. Findley, 439 F.2d i 976 tlet Civ}. 20s ss ete ee United States v. Goodwin, 470 F.2d 893 (5th Cir.), cert. denied, 411 U.S. 4 wo oe he eee ee Oak oe oe 4 > United States v. Hill, 473 F.2d 759 eo) ae a a ee ee 26 t United States v. McDaniel, 482 F.2d SUR t C66 Sic sce sh see een ee United States v. Monia, 317 U.S. 424 ° . ° aa . . . . . . . o . . ° . . a . o . a . . 23 United States v. Ponto, 454 F.2d 657 (7th Cire)... eer, es ee United States v. Rothfelder, 474 F.2d 606 (6th Cir.), cert. denied, 413 U.S. Se ae eee ee ee ee ee ee 26 United States v. Seiffert, 463 F.2d 1089 (OTS Peee eee ee eee re eee 26 United States v. Sisson, 399 U.S. 267 -_ ° - ° . . . e . ° e e ° * . e . ° * . e . _ . 25 vi t INDEX Page United States v. Weller, 401 U.S. Coe 4s 8 8 8 oe eee oesee#e#e#*# «e# # # @# 25 ; ; Will v. United States, 389 U.S. 90 .. 25 Witherspoon v. Illinois, 391 U.S. ; 510 . . . . . o . . * . . . _ . . . . s 7. . ss * os . 20 Constitution of the United States: 71 Deena. « + 6 «ss 6 2 6 ee 4 tatutes: & Section 7(a) of the Bankruptcy Act, 11 U.S.C. 825(a).......- Criminal Appeals Act, 18 U.S.C. 83731 . . . . . . . . . . . o . J . . . . . o 6 Legislative History: H.R. Rep. No. 1549, 91st Cong., bet Bees. Ties asecccdvces F IN THE SUPREME COURT OF THE UNITED STATES OCTOBER TERM, 1973 No. PETER DORNAU, Petitioner, Vv. UNITED STATES OF AMERICA, Respondent, PETITION FOR A WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT Petitioner Peter Dornau respectfully prays for a writ of certiorari to review the judgment of the United States Court of Appeals for the Second Circuit. OPINIONS BELOW The opinion and order of the Dis- trict Court for the Southern District of New York dismissing an indictment of the Petitioner, is reported at 359 F.Supp. 684 and is set forth in Appendix A. The opin- ion of the Court of Appeals reinstating the indictment is not yet reported and appears in Appendix B. JURISDICTION The judgment of the Court of Appeals for the Second Circuit was entered January 24, 1974 (App. C) and its mandate has not issued. On February 12, 1974, Mr. Justice Marshall extended the time to file this petition to March 15, 1974, This Court's jurisdiction is invoked under 28 U.S.C. 61254(1). QUESTIONS PRESENTED 1. Whether the federal government, in its preparation and conduct of a criminal trial to take place after the amendment of Section 7(a) of the Bankruptcy Act (which prohibits direct or indirect use of compelled testimony secured in bankruptcy proceedings), may use evidence obtained from the defend- ant's testimony secured under Section 7(a) before the date of the amendment, 2. Whether Section Ha) of the Bankruptcy Act, if it allows the federal gov- ernment to use evidence obtained from testi- mony compelled from the defendant, violates the Fifth Amendment privilege against self- incrimination, 3. Whether the United States can appeal, in a Ae et ne instituted before the effective date of the current Criminal Appeals Act, from an order of dismissal based on a finding of immunity under the Bankruptcy Act. THE CONSTITUTIONAL PROVISION AND STATUTES INVOLVED Fifth Amendment of the Constitution: No person *** shall be compelled in any criminal case to be a witness against himself, nor be deprived of life, liberty, or property, without due process of law;***, Section 7 of the Bankruptcy Act, 1l U.S.C. §25, prior to 1970 amendment: (a) The bankrupt shall *** (10) *** submit to an examination ***; but no testi- mony given by him shall be offered in evidence against him in any criminal pro- ceeding ***, (b) Where the bankrupt is a corpo- ration, its officers *** or such of them as may be designated by the court, shall per~ form the duties imposed upon the bankrupt by this title. Section 7(a) of the Bankruptcy Act, 11 U.S.C. §25(aj, as amended October 15, 1970, effec- tive December 14, 1970: The bankrupt shall *** (10) *** sub- mit to an examination ***; but no testimony, or any evidence which is directly or indir- ectly derived from such testimony, given by him shall be offered in evidence against him in any criminal proceeding xan, | : The underscored words are the words added by the amendment, DAPI i ee. ee bere hee oo eee mM gpgS PPLE LR Oy NEO Say oy tes There tee nrctacemmmnns A-2 METZNER, District Judge: A hearing was held on defendants’ motion to dismiss the indictment because allegedly it was founded on testimony given by defendants in bankruptcy proceedings in Florida pursuant to a grant of immunity. Section 7a(10) of the Bankruptcy Act (11 U.S.C. 6 25). The indictment against these defend- ants contains 45 counts, The first 29 counts concern only defendant Fred Dornau and charge him with defrauding the government by filing false invoices (18 U.S.C. 8 287). Count 30 charges this same defendant with uttering and publishing as true a forged gov- ernment contract (18 U.S.C. & 494). Counts 31 through 41 charge both Fred Dornau and his brother Peter Dornau with mail fraud (18 U.S.C. & 1341). Counts 42 through 45 ee ee A-3 charge both defendants with wire fraud (18 U.S.C. 6 1343). On March 2, 1973 this court granted defendants’ motion to inspect the grand jury minutes for the purpose of determining whether the indictment may have been imper- missibly based on the testimony the defend- ants gave under the grant of immunity. __F. Supp.____ (S. D.N. Y. 1973). Subse- quently, the court denied the government's motion for reargument in which it had re- quested that the court review the grand jury minutes in camera, or, in any event, post- pone any hearing until after the completion of the trial. F. Supp. » supra. The defendants were given until May 3 to exam- ine the grand jury minutes and to move to dismiss the indictment if they were of the opinion that their immunity had been violated. > —_ Toe _— . icpecep « . SO I TEED LAE PORE CD NTT EINES IEE CE IS Ne RS 1) ear er wep May 30 had already been fixed as the trial . date, | After reading the minutes, defend- ants moved for a hearing in order to deter- mine whether the government had made any use of the privileged testimony of either of the defendants or of any evidence directly or indirectly derived therefrom, The hear- \ ing was then held at which time the inquiry was broadened to include evidence the gov- ernment proposed to use on the trial. This course was dictated by language in the Kastigar case, discussed more fully later in this opinion. At the conclusion of the hea ring defendants moved to dismiss the indictment. ~ The immunity granted by Section 7a(10) of the Bankruptcy Act is similar in language and scope to the immunity granted ~ : a A-5 by 18 U.S.C. 6 6002. It is commonly called use or derivative use immunity, The start- ing point for the discussion of the issues here is the decision in Kastigar v. United States, 406 U.S. 441 (1972), which dealt with Section 6002. There the Court held that the scope of any immunity grant must be co- extensive with a witness' Fifth Amendment privilege against compulsory self-incrimina- tion, and that use immunity satisfies this requirement. The important point then to be considered in cases like this is whether the government's testimony would have ex- isted if the defendant had been permitted to refrain from testifying on the asser: ion of his Fifth Amendment privilege. In defining the protection use immunity would afford a witness, the Court in Kastigar said: "Immunity from the use of —_— a CE DLOOP SEINE RPE ADE NBT BBO PONE CAT I OT Be RMA a A-6 compelled testimony, as well as evidence derived directly and in- directly therefrom, affords this protection. It prohibits the prose- cutorial authorities from using the compelled testimony in any respect, : and it therefore insures that the ; testimony cannot lead to the inflic- A tion of criminal penalties on the witness.'' 406 U.S. at 453, Poa Se be 1s . The denial of use for any purpose, of course, includes using it as an "investigatory lead" (Id. at 460), Finally, the Court stated: "One raising a claim under this statute need only show that he testified under a grant of immunity in order to shift to the government the heavy burden of proving that all of the evidence it proposes to use was derived from She ys $ ‘ legitimate independent sources," : (Emphasis supplied) Id. at 461-62, On the hearing the government pro- duced three witnesses. They were FBI Agent Sniegocki who was based in New York in 1968 and 1969 and who conducted the in- vestigation in conjunction with this indictment; it tpee ¥ Ar A-7 FBI Agent Smith of Fiorida who conducted a separate investigation of possible crimes ah committed in connection with the bankruptcy on proceedings; and Mr. Kulleseid, a former 4 @ Assistant United States Attorney, who han- of dled this case through its presentation to es the grand jury. be At the conclusion of the oral argu- a ments after the hearing had been completed, os . Wa I indicated that neither the grand jury testi- ra eS Vie . I mony nor the prospective proof to be offered #3 ve by the government in support of Counts l ee through 30 flowed directly or indirectly from “the testimony given by Fred Dornau in the oe ots: Sunt Bees Sen bankruptcy proceedings. His compelled testi- mony did not touch the issues presented by these counts. I have been fortified in this conclusion by an in camera examination, consented to by defendants, of certain material FLOR LEDGER ELLY Nie Pil AY A-8 submitted by the government. The motion to dismiss these counts is therefore denied. We come now to Counts 31 through 45 which charge defendants with defrauding investors and lenders involved in Ra-Dor Industries, Inc. Ra-Dor primarily manufac- tured material in conjunction with defense contracts. The investigation of these defend- ants commenced in March 1968 on the com- plaint of the Defense Department that Ra-Dor had filed false claims in relation to govern- tnent contracts held by that corporation, The interviews of witnesses by Sniegocki through December 1968 dealt solely with such an investigation, and the results thereof are contained in Counts 1 through 30. Some- time in the latter part of 1968, the FBI in Florida commenced a separate investigation of Ra-Dor regarding possible violations of A-9 the National Bankruptcy Act. Both of these investigations continued apace with frequent exchanges of information and mutual requests for local help in New York and Florida. Nothing of consequence was done in the New York investigation from December to May 26, 1969, at which time four investi- gative interviews took place within two days. These interviews were concerned with the subject matter contained in Counts 31 through 45. The crucial factor here is that the defendants testified under a grant of immunity in the bankruptcy proceedings in Florida on May 1 and 9. There was another interview on July 15, 1969, and finally two additional interviews on September 10, 1969, It is in- teresting to note that sometime between July 8, 1969 and August 19, 1969, the caption of the investigative reports was enlarged from — A-10 fraud against the government and the Na- tional Baakruptcy Act to include mail and wire fraud as well. Sometime between July 8 and August 4, 1969, the Assistant U.S. Attorney requested the FBI to conduct addi- tional interviews to develop the possible mail fraud and wire fraud counts. It is impossible to pinpoint the exact date when this occtrred. It is clear from reading the files, the testimony of the defendants in the bank- tuptcy proceedings and the evidence in this case, that the interviews which took place beginning on May 26, 1969 did not flow from any compelled testimony by these defendants. The leads to those interviews were furnished to the FBI in Florida by Mr. Bernstein, an attorney for Ra-Dor's creditors in the bank- ruptcy proceeding. That information was _ A-ll then transmitted to New York and received by Sniegocki on April 12, 1969. This infor- mation was accompanied by a request that New York make specific investigations of Univance, Nuclear idle: Mecmaies the attorney for some of Ra-Dor's creditors in New York, and Schnepps, Ra-Dor's attorney in New York, Finally, it is clear that the prospective government witnesses on this trial, Fiala, Billich, Baer and, Ray, were all discovered and interviewed without relation to anything that appeared in the minutes of the testimony. Counsel for the defendants had a month within which to compare the grand jury testimony and the compelled tes- timony and have not furnished the court with any leads as to what may be considered tainted evidence, What causes the problem in this —_—— — india! A-12 case is that Kulleseid, on August 1, 1969, requested the United States Attorney in Florida to furnish him with the transcript of defendants' testimony in the bankruptcy proceedings, The transcript was received here on August 7. The grand jury had met on July 31 and August 4 at which time it heard testimony going only to Counts 1 through 30 of the indictment, The grand jury was then excused until August 28, when, for the first time, it heard some testimony regarding the counts with which we are con- cerned. The grand jury was then recessed until October 10 when it’ heard the bulk of the testimony regarding ihe mail fraud and wire fraud counts and voted the indictment, While the seaniinetiin of Kulleseid is not clear as to exactly when he read the transcript, at least it is fair to say that the —_—_——a A-13 government has failed to show that he had not read it before presenting any testimony to the grand jury on Counts 31 through 45, There are portions of the immunized testi- mony which relate to the subject matter of those counts. There are nearly fifty places in the transcript where Kulleseid made markings indicating questions and answers of interest to him. On the hearing he was unable (and I am sure this was a perfectly honest statement in view of the lapse of four years) to explain what the marked testi- mony could have meant to him either for the purpose of interrogating prospective wit- nesses or in presenting the case to the grand jury. In any event, there appears to be no reason why he had to read the tran- script except to make sure his case was complete, or to use the testimony to buttress what he already knew, or to fill in gaps with new information, We have here one of the problems presented by the opinion in Kastigar. How do you make sure that a person who has testified under a grant of immunity will be protected against subsequent criminal charges to the same extent as if he had originally pleaded the Fifth Amendment? This is a matter of great concern and debate. See Note, Standards for Exclusion in Immunity Cases After Kastigar and Zicarelli, 82 Yale L. J. 171 (1972) and The Supreme Court, 1971 Term, 86. Harv. L. Rev. 1, 181 (1972). It is difficult for the court to speculate as to the effect that the reading of the minutes might have had on the conduc: and thinking processes of the Assistant charged with the prosecution of the case, It appears to me that once the sub- ject matter was touched upon in the privileged testimony, and the prosecutor had read it, he could have used it in a variety of ways in this criminal prosecution. The possibility of such use, and the impossibility of clearly showing that the use did not occur, calls for the holding in this case that the defendants were denied the constitutional protection that their silence would have given them. Murphy v. Waterfront Commission, 378 U.S. 52, 79 (1964). The breadth of this ruling is justified by the language in Kastigar that the immu- nized testimony could not be used "in any respect, '"' Support for the conclusion reached here may be found in United States v, McDaniel, 449 F.2d 832 (8th Cir. 1971), * A-16 cert. denied, 405 U.S. 992 (1972). That case relied on Murphy v. Waterfront Com- mission, supra. Both of the cases were concerned with interjurisdictional immunity. However, Kastigar explicitly adopted the same rule of privilege where only one sovereign is concerned, In McDaniel, the court said at 837: "The circumstances of this case, however, are not ordinary, for we are faced with the fact that the United States District Attorney requested and received a transcript of the compelled state testimony. We conclude that this conduct vio- lated the defendant's Fifth Amend- ment rights and constitutes a prima facie 'use' of the testimony which is prohibited by the Murphy exclu- sionary rule," The questicn of whether the remedy for this violation of defendants' constitutional rights should be by way of suppression of evidence or by dismissal was determined by BBP PEELE DNL RDS EDL I NEN ERIE me in favor of the latter course in the prior opinion which initiated these proceedings. F, Supp. , supra. After the hearing and the clarification of the fact issues in- volved, my original views have been con- firmed that in this case dismissal is the only proper remedy. It is impossible to suppress specific evidence in the light of the problem involved, The motion to dismiss Counts 3l through 45 is granted. So ordered. Dated: June 4, 1973 CHARLES M. METZNER U. &S D. J. A-18 APPENDIX B UNITED STATES COURT OF APPEALS For THE Seconp Circuit No. 350--September Term, 1973. (Argued December 6, 1973 Decided January 24, 1974.) Docket No. 73-2204 Unirep States oF AMERICA, Appellant, —against— Perer Dornav, Defendant-