Petitioners Reply Brief — Grosso v. United States

| SUPREME COURT W. & 4 OCT _ Rane

| Oh es DAVIS, eter |

Supreme Court of the Uniled States

OCTOBER TERM, 1967

NO. 12

ANTHONY M. GROSSO, Petitioner

oe . Vv. E : .

UNITED STATES OF AMERICA, Respondent

- On Writ of Certiorari to the United States Court of

_ Appeals for the Third -Circuit

REPLY BRIEF FOR PETITIONER

- JAMES E. MCLAUGHLIN

606 Frick Building

Pittsburgh, Pa. 15219

CHARLES ALAN WRIGHT

2500 Red River Street

_ >» Austin, Texas 78705

1 Attorneys for Petitioner

SMITH BROS. CO. INC., LAW PRINTERS, $20 SECOND AVENUE, PITTSBURGH, PA. 15219 '-

Ct)

Y

Summary of Argument Pee eRra Ss Wks 4 8b o 4 5 dace o 2

Argument:

I, Matters On Which the Parties Ave Agreed 4

II. Matters on Which the Parties Disagree ... 5

A. The Present Vitality of Kahriger and

ee as a ks ais: 0 60.6.9 00 5

B. Accommodation of the Taxing Power !

and the Privilege ...4...........06% 11

_ C.. Disposition of This Case if a Use Re-

) striction Should Be Adopted ..... a

2 The Communications with the ee 20

ec os wens ve Can 22

TABLE OF CITATIONS

: ' © CASES. -

Albertson v. ‘Subveriive Activities Control Board,

382 U.S: 70 (1965) ..........:. re hae ik 16

- Bouie v. City of Columbia, 378 U.S. 347 (1964) .... 618

Chapman v. California, 386 U.S. 18 (1967) ...... 20

Counselman v. Hitchcock, 142 U.S. 547 (1892) . 12

Gillespie v. ‘United States, 368 F.2d 1 (8th Cir.

ack alas 6 cos sacsescscas ee 14,17

Gould v. Argiro, 422 Pa. 433, 220 A.2d 654 (1966) 20

Grosjean v. American Press Co., Inc., 297. U. S. 233.

Teka ees vans cdncesceceses 10

Johnson v. New Jersey, 384 U.S. 719 (1966) ...... 19

Johnson v. United States, 318 U.S. 189 (1943) . 20 °

Kersey Mfg. Co. v. Rozic, 422 Pa. 564, 222 A.2d 713

aa ok apace acs ceccccs ceo 20

Knowlton v. Moore, 178 U. S. 41 (1900) . daa kee die 10

Lewis v. United States, 348 U.S. 419-(1955) .. 2,5,6,11

License Tax Cases, 5 Wall. 462 (1867) ..... “Seas 10

McCray v. Illinois, 386 U.S. 300 (1967)........... 14

McCray v: United States, 195 U.S. 27 (1904) ..... 10

Murphy v. Waterfront. Commission of N ew York

waren, 378 U.S. 52 acaall owe we seve s oO, £8, 15,16

PORTE es

tl te ee

Table of Citations.

| CASES eat

wee PAGE

Raley v. Ohio, 360 U.S. 423 (1959) LaLa aed 18

Shapiro v. United States, 335 U.S. I (1948) ...... 4

Stevens v. Marks, 383 U.S. 234 (1966) -°........ : 13,18

Stovall v. Denno, 388 U.S. 298 (1967) ............ 19

United States v. Chandler, ere Seams Ff

> EE (6 Sica a KEES RADARS Re ee eal we 15 :

United States v. Kahriger, 345 U.S. 22 (1953) . |

ee a ag aie ne ee 2, 5, 6, 11

' United States v. Ross, 374 F. re 227 (6th Cir.

> + ree oe elas | Eee ete ..:14,17

United States v. Sullivan, 274 U. S, 259 ( 1927) .

ieee hoes SEM Eanes oe 4 4, 5, 12

United States v. Whiting, 311 F. 2d 191 i Cir. .

EE ocean a eae ah ee RR LEO ACE 14

Yarsunas v. Boros, 423 Pa. 364, “223 A.2d 696

Ce cna ok Ga ees eee wR aA Ree = 20

STATUTES ¥

OURS. FRR ie ciess: Se ask hb hs 6a 17

DUE a esc akk a Seek bce e ben osc 13

SE ds isa xX WAR RA wR aeEs 17

gg ee a ee 13

Ce a es Ee ne ge as Gad 13

ah ae Oe Seer rrreerresis TE 4

RRR per toarays +e Cae webaaneee - =:

Se ge i eer lee ee aa ias _

Act of Jan. 18, 1815, c. 23, § 1, 3 Stat. ee 10

MISCELLANEOUS

_ Federal’ Offenders in: the United: States District -

Courts ..... Sie cnn ak | SCP ee Se 19

‘Lipton, Record Keeping and the Privilege Against

Self-Incrimination, N.Y.U. .14th Ann. Inst. on

Federal Taxation 1331, (1956): .............. 12 |

_, Mansfield, The Albertson ‘Case: Conflict. between

the. Privilege against Self-Incrimination and

' the Government’s Need for Information, 1966 .

Sup. Ct. Rev. 103 Sineasaawne settee eee e eens 7, 8

NO. 12

IN THE

Supreme Court of the United States |

OCTOBER TERM, 1967

ANTHONY -M. GROSSO, Petitioner ~

> | }

a , ..

UNITED STATES OF AMERICA, Respondent

On Writ of Certiorari to the United States Court of

_ Appeals for the Third Circuit

> |

REPLY BRIEF FOR PETITIONER |

It is always with reluctance that ‘counsel impose a

reply brief upon this Court, but in this case there have

been televant developments since petitioner submitted

his original brief in November, 1966.*. In particular, it

is thought that it miay be helpful to the Court to identify

those matters on which the parties, as shown by their

various briefs, now agree, and thus to isolate those

issues on which the parties continue to disagree:

“Counsel were advised by the Clerk that the Brief

for the Petitioner on Reargument (hereafter Pet. Rearg.

Br.) “should merely cover the additional questions

raised by the Court’s order,” and the brief filed in Au-

ste is so limited.

Summary of Argument.

‘SUMMARY OF ARGUMENT

mols The parties agree that the “required records” doc-

- trine has no direct bearing on this case, and that the

excise tax here in question cannot be paid without filing

. Form 730, the prescribed form for that tax. They fur-

- ther agree that this case is not controlled by United

States v. Sullivan. Finally, they agree that the power

of the government to tax and the privilege of the in-

- dividual not to incriminate himself are both important

_ COR titutional provisions, and should be read in such a

way that one does not destroy the other.

The parties disagree on the continued vitality of

United States v. Kahriger and Lewis v. United States.

Although those decisions are not directly in. point with

regard to the excise tax, the rationale the United States

now finds in those cases would be, but the rationale —

that there is no compulsion since gambling is a volun-

tary act — is thought unsound by petitioner. The argu-

ment advanced by the United States that a tax of this

kind on gambling is valid, but that a tax on. robbers or

- kidnappers‘ would-not be since the latter are not a busi-

ness, ignores the reality of organized crime and puts an

unjustified limitation on the taxing aed by paper’

ing to limit it to businesses.

The parties disagree also on how the accommoda-

tion should be made between the taxing power and the ©

privilege _ against self-incrimination. The use-restric-

tion proposed by the United States is only one possible’

way of making this accommodation, it’is an undesirable

way of doing it, and in any event the choice is properly

for Congress rather than this Court. Even if the Court

could. Pa adopt the use-restriction, petitioner con-

—

Summary of Siieiniit

. tends. that sienna would be required in the present

case since such a restriction did not. exist when peti-

tioner failed to pay the tax here involved, and at that

time he was correct in supposing that payment of the ©

tax could be used to incriminate him. |

Finally the parties continue to disagree on whether

reversal is required because of the communications be-

tween the trial judge and the jury outside ‘of the pres-.

ence of defendant and his counsel.

ie

OE Oe tra Hee Oe hee pee - -~

Argument.

ARGUMENT 7

1. Matters On Which The Parties Are Agreed

On the two questions on which the Court asked |

discussion in its order granting reargument the parties —

_ are in complete agreement. Petitioner and the“United

States agree that the. “required records” doctrine of

Shapiro v. United States, 335 U.S. 1 (1948), has no di-

rect bearing here since the resent case involves reports

_ that are ‘required to be filed with the government as

distinguished from records that are required to be kept

incident to a tax or regulatory program (Pet. Rearg.

Br. 5-20; Govt. Rearg. Br. 8-12). Petitioner and the

United States also agree that the obligation to pay the

excise tax imposed by 26 U.S.C. § 4401 can be satisfied

only by filing Form 730, the required tax return (Pet.

Rearg. Br. 21-25; Govt. Rearg. Br. 37-41). It is for the

Court, ‘of course, to decide if the parties are right on

these points, and we are prepared to discuss these ques-

tions at oral argument if the Court should wish us to

do so, but for the present there is no issue on these mat-

ters.

The parties agree, too, that the present case is not

controlled by United States v. Sullivan, 274 U.S. 259

(1927), and that that case involved a readily distin-

guishable Situation (Pet. Br. 17-19; Govt. Br: 11; Govt. .

Rearg. Br. 24-26). The United States is concerned that

a decision in favor of petitioner in the present case will

- lead to. an attack upon Sullivan, Perhaps-such an at-

tack will come, given the willingness of some defend-

ants to clutch at any. straw, but it _would surely not

succeed. It is an easy thing for the Court, -in deciding

ai ieee

this case,—to explain why’. Sullivan } is distinguishable,

just as the Court did in Albertson v. Subversive Activi-

ties Control Board, 382 U.S. 70, 79 (1965).

Finally, petitioner agrees with the argument of

the United States that an accommodation must be _

sought ‘ketween the power to tax and the privilege ;

again self-incrimination that will not infringe on

either of these important . constitutional provisions.

(Govt. Rearg. Br. 13). Indeed we pointed out.in our

initial submission (Pet. Br. 24) that a holding for peti-

tioner here need not “have a destructive effect on the

fisc.” As will be seen below, the parties do disagree,

however, on what ® proper accommodation of these in- —

terests is. . - °

| °

__ IL Matters On Which The Parties Disagree

A. THE PRESENT VITALITY OF KAHRIGER AND LEWIS

We read the decisions in United States v. Kahriger,

345 U.S. 22 (1953), and Lewis v. United States, 348 U.S.

_ 419 (1955) , as holding that the occupational tax .on.

wagering does not compel self-incrimination since that

tax is prospective only. So read those precedents do

not apply here, since the excise tax looks to the past

rather than the future. The view that the privilege ap- -

plies only with regard to past acts seems unsound (Pet.

' Br. 10-12) but we need not pursue the point er

(3 ince at oral argument in January counsel for the gov-

% oo

ent disclaimed reliange-on that portion of the

riger and Lewis holdings. | a

The United States has now developed mor fully

(Govt. Rearg. Br. 12-26). its argument that.the real

basis of Kahriger and Lewis is that the decision to en-

Argument.

‘gage in gambling is a voluntary decision, and'that such

" @ decision may be treated “as the equivalent of a non-

compelled choice in terms of Fifth Amendment rights”

(Govt. Rearg. Br. 23). Such a rationale, if sound, would

reach the excise tax just as fully as it does the occupa-

tional tax. There are ‘several reasons why such a |

rationale is unsound. ee :

First, the United States recognizes (Govt. Rearg.

_ Br. 26) that Albertson v. Subversive Activities Control

Board, 382 U.S. 70 (1965), makes it difficult to adopt

the rationale it ascribes to Kaftriger and Lewis. Mem-

bership in the Communist Party is voluntary. It could

have been argued as forcefully there as here that if one

joins the Communist Party or remains @ member of it,

kngwing that Congress has. attached the condition of

registration to membership, the decision to join is “a

non-compelled choice in terms of Fifth Amendment

rights.” This Court held, however, that registration.

_ would violate the privilege against self-incrimination.

_ The United States undertakes to distinguish this case

from Albertson on the ground that a registration and

return requirement is valid if it serves a governmental

interest separate and independent from an“interest in

the underlying activity as such (Govt. Rearg. Br. 14-

15). This distinction is. difficult to understang, The

government would be precluded from requiring i -

tion if it had a legitimate inttrest in the activity in-

volved, but would be allowed to’ require the information

_ if it had some other incidental interest for which the

information would be helpful. The information would

be equally incriminating in either case. The proposi-

tion that the government can obtain incriminating in-

formation indirectly but not directly is hardly an ap-

hese mains

serpent ecient neni ee eee EO TED

Argument.

pealing one. And the distinction seems almost purely

verbal. If the governmental interest in the present case.

is stated as collection of revenue, this would be a “separ-

ate and independent” interest, but jfjt is characterized

as putting a tax on gambling, solid it not have to be

- gaid that the government’s interest is in the underlying

activity of gambling? —

A second answer to the “non-compelled choice”

rationale the United States now advances is provided

‘by Professor Mansfield, on whose thoughtful article the

United States has quite properly relied throughout its

most recent brief. Professor Mansfield geys:

It is clear that this argument must be rejected

.and that the privilege cannot be considered for-

feited in these circumstances because of the fact

of choice. Choice is indeed a factor to which the

* law frequently attaches consequences, but it does

so only when this will aid-in achieving some end

defined by policy. It does not tach consequences

to choice without regard to: e objective. The

fact of choice alone can hardly ever be considered a,

sufficient explanation of a legal result. To hold

' that since the defendant made a choice to commit

the primary offense the privilege is lost would be

to abolish the privilege in one of its central appli-

cations, to abolish it in cases in which it had al-

ways historically applied, to defeat its very pur-

pose. The evils intended to be avoided by the privi-

lege would not in fact be avoided. Even though the.

defendant did make a choice in committing the

primary offense, once he did so he was confronted

with the dilemma whether. to incriminate himself

“Argument.

i _" or run the risk of punishment for failure to do so.

ae It is the evils and abuses that inhere in this dilemma

oe. that the privilege is intended to avoid, and these

evils and abuses are not eliminated simply because

of the defendant’s antecedent choice. This is true.

i even though the defendant had no right to choose

, as he did, no right to commit the primary offense.

- The privilege is designed to provide protettion even .

for those who have chosen to commit crime.

e Mansfield, The. Albertson case: Conflict between the

|. Privilege against Self-Incrimination and the: Govern-

ment’s Need for Information, 1966 Sup. Ct. Rev, 108,”

130-131. | ees

; Finally, as we have suggested briefly before (Pet:

i _ Br. 14), every criminal has -a freé choice whether to

commit a crime. Every. such~gérson knows that there ©

_ are laws on the books by which citizens may be sub-

_ poenaed and required to testify. - Yet the “voluntary”

_ nature of his choice to become a criminal has never.

been thought to defeat his privilege against being com-

} . pelled to testify as to his crimes.

To this the United States offers two answers. First,

“it rejects the analogy because “unlike the witness called

- upon to testify before a grand jury or an investigative

body, who cannot generally choose‘to appear or not,

the prospective gambler can choose to- gamble or not —

_ to gamble” (Govt. Rearg. Br. 23 n. 21). This misses.

, the point.’ The choice is whether to engage in the pri-

- mary activity, ‘whether it be gambling, white slavery,

or whatever. There is no choice whether to tell about

one’s conduct, whether asked on a Form 730 or by a

_ grand jury, except to thetéxtent that the Fifth Amend-

Argument.

ment provides a choice. The Fifth Amendment should

be as applicable in one case as in the other. 7 ice

Second, the United States argues at some length

that a decision that gamblers must register and file re-

turns does not mean that the same requirements could —

-be imposed on kidnappers or robbers (Govt. Rearg. Br.

16-22). The essence of the argument is that gambling.

is a business, kidnapping and robbery are not, and that

» Congress would therefore not have constitutional au-

thority to tax kidnapping and robbery. We —

- with every part of this argument.

The suggestion that crimes such as kidnapping and

robbery — or murder, prostitution, and the like — are —

“never conducted as’ a “business,” in the sense that

gambling is, is a noyel one. It is more than a mere play

- ‘on words to remind the Court of “Murder, Inc.” and to

note that on ‘the pages of the United States Reports

there is a reference to “commereial larceny.” Murphy

oa Waterfront Commission of New’ York Harbor, 378

. . US. 52; 95 (1964) (concurring opinion). Every news-

. «6, paper réader today is aware of the existence of organ-

jzed crime, and knows that*the most serious kinds of

- crimes are within its scope. gt

‘Even more surprising, however, is the assumption

in this argument of the United States that an occupa-

tional tax or an excise tax can only be laid on those —

activities that have the characteristics of a business.

‘This would be a far more drastic limitation on the tax-

ing power than that for which petitioner here contends.

‘The Constitution imposes no such limit, and it has

long been understood that “the taxing power: con-

ferred by the Constitution knows no. limits xcept those .

Yt ae lS Cae lt OY Sa ti a

10 | ;

oo, Argument.

expressly stated in that instrument * * *.” McCray v.

United States, 195 U.S. 27, 59 (1904) ;. License . Tax

_ Cases, 5 Wall. 462, 471 (1867). Over the years Congress |

has many times imposed taxes on matters that have

none of the characteristics ef a business. A tax was

placed on “household furniture kept for use” by the

Act of Jan. 18,1815, c. 23, § 1, 3 Stat. 186. The tax on

the making of firearms, 26 U.S.C. § 5821(a), is ex-

pressly made inapplicable to “any person who is en-

" gaged within the United States in the business of manu-

facturing firearms.” 26 U.S.C. § 5821(b):(1). Taxes on

the transmission of wealth from the dead to the living

here been upheld, e.g., ” Knowlton v. Moore, 178 U.S. 41,

56 (1900), though it can hardly be said that anyone is

in the business of dying. .

The sound view, it is submitted, is that except for

the constitutional. requirements. of apportionment of

direct taxes and uniformity of indirect taxes, there is

no activity and no transaction that is beyond the power .

of Congress to tax. A particular tax may fall, however,

, because of other constitutional protections. A .tax on

the business of selling advertising would be a legitimate

excise tax, but if it is so devised as to limit, the circula-

tion of information to which the public is entitled under

the First and Fourteenth Amendments, the power to

tax must give way to those constitutional protections.:

Grosjean y. American Press Co., Inc., 297 U.S. 233, 250

(1936). A tax on the acquisition of property by Ne-

- groes would fall, not because Congress cannot tax non-

business conveyances, but because equal protection. no-

tions inherent in the Due Process Clause of the Fifth ,

Amendment make classification in racial terms invalid..

-An excise tax on robberies would be bad, not because

—_

a. ;

oe Congress cannot tax ‘such criminal transactions, but

because there would be no way to pay the tax without

- self-incrimination..

For the reasons given petitioner disagrées with the

United States, and believes that Kahriger and Lewis

have no continuing vitality.

B. ACCOMMODATION \ OF THE TAXING POWER AND THE

As noted siti, we agree with the United States

that an accommodation can and should be made be-

tween the power to tax and the privilege against self-

incrimination. We disagree on how to do this. The

United States. argues alternatively that: its reading of —

Kahriger and Lewis provides a suitable accommoda-

tion, or that a use-restriction on tax returns would do

so. We have. indicated why the former should be re- ©

jected, and shall indicate here why the Court should

_ not adopt the lat

ter }

It is true, as §. United States'says, that voluntary

compliance accompanied by some degree of disclosure

is the bedrock of our tax structure (Govt. Rearg. Br.

13). Indeed this is.one of the strongest arguments

against the tax here in question. “It will be a sad day

for the revenues if the good will of the people toward

their taxing system is frittered away in efforts to ac-

complish by taxation moral reforms that cannot be

accomplished by direct legislation.” United States v..

_ Kahriger, 345 U.S. 22, 36 a (Jackson, J., concur-

ring).

_ It is significant that the income tax is successfully :

administered though the privilege seweet. self-incrimi-

2 ‘ os > )

CaN Sa NR er les 4 ae wae See " + ee . + "

-

. Me : .

ie \ : |

aes | Argument. rea ae,

nation: is fully respected. The taxpayer may claim the

privilege:on his return if the return call for incriminat-

ing answers, United States v. Sullivan, 274 US. 259,

263 (1927), and the Treasury Department recognizes

that the taxpayer's records are within the constitutional

_ privilege. —? , ord Keeping and the Privilege

Against Self tion, N.Y.U. 14th Ann. Inst. on.

Federal Taxfticn | 1331 (1956). The income tax applies

to money illegally obtained, and the record in this case

shows that petitioner has paid a substantial income tax

each ver. ; :

As the example of the income » tax shows, the United

States, can satisfy its need for revenue without t abridg-

ieee and neatest solution would ni -to do without.

the taxes on wagering. The figures offered by the

United States (Govt. Rearg. Br. 18 n. 17) .show that .

. these taxes produce at most.a net revenue of $5 million

_ per year. It wouN be better to do without five million

' dollars per year than to jeopardize the good will of the

- people toward their tax system by | a statute that ap-

pears disingenuous.

If Congress is seriously titeenaiil in obtaining

revenue from this source, there are ways it can do so

without infringing the privilege against self-incrimina-

tion. Indeed the government’s brief points tout the

possibility of using a:less specific and more neutral —

for the wagering excise tax. (Govt. Rearg. Br. 40).

a neutral form is sufficient for the income tax, es is

. no apparent reason why it would not suffice for this

‘excise tax. It is harder to see how a neutral form could

-. be provided for the occupational tax on wagers, but this,

.

vt Atere we

‘SS 13

_ Argument. ‘

~

though a*convenience for. enforcing the excise tax, is

hardly essential to it.

Or if Congress really wants these revenues it can —

do what it has done more than 40 times and provide

immunity for prosecution to those who pay the tax.

Congress was willing to do’ without prosecution under —

the Mann Act in order to get information from persons

harboring alien women in houses of. prostitution. 18

US.C. § 2424(b). If there is a real possibility of ob- .

taining $5 billion in annual revenue (Govt. ‘Rearg. a.

17 n. 16), Congress might think this justified interfer-

_ing—with state prosecution of gamblers. Congress

makes a similar chpice whenever it enacts an immunity

statute broad enough to bar a state prosecution of a

person, as in such statutes as 18 U.S.C. §§ 1406, 3486(c).

Finally there i is the possibility that’ Congress might

enact a restriction on the use of information provided

in connection with these taxes. For the present we as-

sume that such a use-restriction would be constitutional

under the test of Counselman v. Hitchcock, 142 U.S.

547, 585 ( 1892). Compare Murphy v. Water}ront Com-

mission of New York Harbor, 378 U.S. 52, 79 (1964),

with Stevens v. Marks, 383 U.S. 234, 244-245 (1966).

Few things in life come without a price — and the price

of such a use-restriction is higher than the argument .

for the United States would make it appear. The use>~

restriction for which the United States contends would

of course bar admission into evidence of the federal tax

return. Critical. questions would then be raised about

whether the federal return can be used as an investiga-

tory lead, and, if so, whether it was so used in a par-

ticular case: The first — would seem to be an-

a asians ‘ acichana ¥ nip: » 0 2.

_ Argument.

swered, despite the government’s noncommittal view

about it (Govt. Rearg. Br. 35 n. 32), by Albertson. The

Court held insufficient, the purportéd immunity provi—

sion there involved because “it does not preclude the

use of, the admission as an investigatory lead, a use

which is barred by the privilege.” 383 U.S. at 80. The

second question would have to be litigated ‘in every

prosecution, state or federal, of a gambler. This is not

met by the rather debonair argument that this would

~~ occur: “only infrequently, if ever, sin¢e the identity of

those engaged in gambling, is generally not a secret to

* most State and-local law-enforcement officials” (Got.

Rearg. Br..35 n. 32). There is evidence in the reported

caseg that payment of the tax is today used not un-

only as an investigatory lead. E.g.; United States

yy. ». Bose, 374 F.2d 227 (6th Cir. 1967) ; Gillespie v. United

States, 368 F.2d 1 (8th Cir. 1966); United States v.

_ Whiting, 311 F.2d 191 (4th Cir. 1962). Adoption of a

use restriction would -have several possible conse- ©

quences. Prosecutior of gamblers, already sporadic, »

would decrease, because of the difficulty of showing

that the-federal tax payment was not the investigatory

lead. Hither the prosecutor would not have to disclose

the identity of his informants, in which case tle protec-

tion to the defendant would be meaningless, or he would

be required to make such disclosure, in which case there -

| would be great reluctance to prosecute. Cf. McCray v.

-- [Hinois, 386 U.S. 300 (1967). The temptation to law en- .

' forcement officials to lie about whether they used the

tax payment as an investigatory lead would be very

great. A use-restriction may be justifiable in the Mur-

phy context for there “the very fact that a witness is

called in a state crime _—— likely to be based

Argument.

upon knowledge, Or at least a ‘suspicion based on some .

information, that the witness is implicated in illegal

activities, which knowledge and information are -prob-°

ably available to federal authorities.” 378 U.S. at 102

‘concurring opinion). By hypothesis: there is already.

an investigatory lead, else the state would not be in-

' terested.enough in the testimony to provide immunity.

No such circumstances exists with refard tc the person ©

mal wagering -

tax. Congress might well think that the possible reve- -

nues to be expected from taxes on wagers

a procedure that would: (1) bar ktate Vs

prosecution of g@mblers in many cases; (2) makes

prosecutions more time-consuming and difficult in all

‘cases; and (3) invite perjury by law enforcement offi-

' cials in-some cases, and claims of such perjury in many

more cases. _—_—-

_ These considerations lend force to the view we have

advanced throughout this case that if a use-restriction

rule is-to be adopted, it is fOr the Congress, and not for

_ the Court, to adopt it (Pet. Br: 26-27 ; Pet. Rearg. Br.

20). There is more than one. way: in which. Congress

could provide for taxing wagers without requiring self-

3 inerimination, if Congress should choose to do so. The

ie / * choite among’these methods is properly for the Con- -

[on gress. It alone knows how. much it wants this revenue, —

‘and to what ‘extent it is prepared to interfere with the

_ Prosecution of gamblers, and: to exercise its constitu-

tional supremacy, to achieve that end.

- In that respect this case differs markedly from

Murphy. As — by the Second Circuit in United

States v. Chandler, “>... F.2d .... (2d Cir. 1967) -

ae e

16 Fe cee

Argument.

(quoted in Marchetti Rearg. Br. 27-28), Murphy “dealt ;

-. with the problems of adjustment in federal-state rela-

‘tionships when incriminating testimony is compelled

under a state immunity statute. No such statute, state

_ or federal, is invoked here "e © ©” "The present problem

is not confined to state-federal relationshins, and there

is no statute purporting to provide any degree of im-

munity. Indeed to the extent Congress has spoken it

has said, in 26 U.S.C. § 4422, that it does not want dny

immunity to be given. In Murphy a State wanted in-

formation enough that it was willing, so far as it could,

to grarit immunity under its statutory. procedure. This

Court undertook to devise a rule that would respect the

constitutional privilege. of the witnesses without, on the

' one hand, frustrating the state’s desire,.or, on the other,

disrupting enforcement of federal criminal “7 ae

If it is appropriate for this Court to devise a use-

__ restriction to save an otherwise unconstitutional stat-

ute, then. Albertson would have been a more appropriate

case than is the present case in which to do so. In the

statute involved“in Albertson Congress had attempted

to provide immunity, put had not gone far enough in

this direction to give complete protection from all the —

perils against which the constitutional prohibition was |

designed to guard. It would have been easier for the

Court to take the additional step and restrict the use.

of the fruits of the registration statement there, thus _

carrying out the apparent congressional purpose, than

it is for the Court to devise a use restriction and read

_ it into a statute that gives no hint than Congress in-

tended any restriction of any kind. .

The United States asserts that it is fear of use in

a state prosecution that here creates the basic tension

cs

Argument. .

between . the taxing power and the privilege (Govt.

Rearg. Br. 31)..and that “a person who operates a

wagering business within a single State is in no appar-

_ ent danger of federal prosecution as a result of paying

the occupational and excise taxes and filing the required .

forms” (Govt. Rearg. Br. 31.n. 28). The facts of Ugited

“rey

\

| | States v. Ross, 374 F.2d 227 (6th Cir. 1967), petition for _

_ certiorari pefiding; No. 77, O. T. 1967, raise doubt about.

this. Ross had dutifully bought his wagering tax.stamp

and paid the excise tax on the wagers he took in. Two

_FBI agents, “knowing that the appellant had a Federal

Wagering Tax Stamp, went to his residence to interview

him with res to gambling.” 374 F.2d at 229. He

was not home, but as the agents walked across the rear

of his lot they found in an overturned sgarbage can a

. publication that he had received in the mail from Chi- |

cago in which there were schedules of football games

played during the latter part of December and the early

part of January: He was convicted of using a facility

in interstate commerce ‘to facilitate the carrying on of

gambling, in violation of 18 U.S.C. § 1952, and was fined

$5000 and put on probation ‘for two years. -His convic-

tion was affirmed by the Sixth Circuit. The facts in

‘Gillespie v. United States, 368 F.2d 1 (8th Cir. 1966),

are similar, if somewhat less extreme, but the. convic-

tions there, under § 1084 of the Criminal Code as well’

as § 1952, were set aside because the initial search by

‘State authorities, from which the federal prosecution -

stemmed, was based on an insufficient showing of prob-

do not stand alone, the claim that a pergon who oper}

ates within a single state “is in no apparent danger of

federal prosecution” must be meant in a Pickwickian

~

% : b

able cause. With casds like these on the books, and they

>

‘e ts eran Argument.

If, as we aden the. existing statutory scheme

with regard* to the wagering excise tax compels self-

incrimination, and is unconstitutional for that reason,

_ ,. there are ways by which the statute can be amended to |

‘ collect the: tax without compelling self-incrimination,

but the choice of how this should be done, if at all, is

properly: for the legislative branch of government.

~C. DISPOSITION OF THIS CASE IF A USE RESTRICTION

a SHOULD BE ADOPTED

When this case, and its companion case,.were’ here

last term, the United States made a‘ yery brief argument

for the proposition. that the convictions in these cases

‘should stand even if the Court should hold that the

.. > Statute can be saved only by reading into it a restric-

.. tion on use of the incriminating information. (Govt. Br.

28-29; Govt. Costello Br. 25-26) .-The United States ad-

. heres to that view in its latest brief (Govt. Rearg. Br. -

41 h. 39) though it simply refers to its earlier briefs to

‘support its position.

Petitioner does not believe; as has been indicated, ‘

. that it would be appropriate for this Court to adopt a

use restfiction to save this statute, but contends that

even if it were, reversal would be required in this case.

We will not repeat what we have said before (Pet. Br.

28-29), relying on Raley v..Ohio, 360 U.S. 423, 426

(1959), and Bouie v. City of Columbia, 378 U.S. 347,

352 (1964). We would add to those authorities refer-

. ence to Stevens v. Marks, 383 U.S. 234, 246 (1966). If

as there held, a witness has a constitutional right to

stand on the privilege until it has been fairly demon-

rok | strated to him that an immunity, as broad in scope as

' + the Privilege it nis is available and epeticabis to

wn ef ee neg ee UR elite estate caliente Ae . Neon

19

Argument. °

him,‘and “a declaration that there was a valid. immunity

uttered for the first time on appeal would come too late,”

ibid., the sarhe thing should be true of a, taxpayer con-

victed of “willful failure” to file an incriminating return.

That petitioner’s conviction should be reversed if,

at the time he failed to pay the taxes in question, pay-

ment would have been incriminating and there were no

- restrictions on use of the evidence of payment seems 4

! minimum consequence “of the necessity that constitu-

tional adjudications not stand as mere dictum.” Stovall

v. Denno, 388 U.S. 293, 301 (1967). Indeed we perceive -

nological basis for failing to extend such a holding to

all persons subje@& to this tax who were similarly cii-

cumstanced. To do so would not “seriously disrupt the

administration of our criminal laws” nor require the .

“release of numerous. prisoners.” See Johnson v. New

Jersey, 384 U.S. 719, .731 (1966). Statistics published

by the Administrative Office of the United States Courts,

of which this Court may properly take judicial notice,

suggest that the dimension of the problem is very small.

The following figures are for the combined fiscal years

1964 and 1965, the latest years available, and are taken

from the publication, Federal Offenders in the United

States District Courts 1964, pp. 30-31, and ibid., 1965, —

pp. 84-85.- Of the 1598 persons convicted in federal

courts in those two years of wagering tax violations,

1379. received either @ suspended sentence, a fine, or

probation, and only 219 were given jail sentences. The

jail sentences of 150 offenders were for six months or

less, and 56 other defendants received sentences rang-

’ ing from seven to twelve months. Only 13 persons, then,

were sentenced for more than one year. Of these 11 sen-

tences were for two years or less, one was between two _

Argument.

' and three years, and one was sentenced to nine years. A

decision that the statute as it stands is unconstitutional,

with or without a use restriction to save it for the fu- —.

ture, will not lead to a general jail delivery. ©

-D. THE COMMUNICATION WITH THE JURY |

The United States merely refers (Govt. Rearg. Br.

3 n. 2) to its earlier brief (Govt. Br. 30-34) for its posi-

tion on the separate issue involved in this case about

_ the communications between the trial court and the jury

in the absence of defendant and his counsel. We are also

content to stand on our earlier arguments (Pet. Br:

29-39) save for brief reference to two intervening de-

velopments. , |

The decision in Chapman v. California, 386 U.S. 18, .

24 (1967), that “before a federal constitutional error

can be held harmless, the court must be able to declare

a belief that it was harmless beyond a reasonable doubt”

strengthens petitioner’s position on this aspect of the —

_. ease. The Chapman rule might: not apply if “the objec-

tion did. not appear in thé motion for new trial-or in

the assignments of error’”’ and were presented on appeal

as “a ‘mere afterthought,’” Johnson v. United States,

—318-U.S. 189, 201 (1943), but that is not this case. |

The Court may also wish to take note of three re-

cent decisions of the Supreme Court of Pennsylvania: .

Gould v. Argiro, 422 Pa. 433, 220 A.2d 654 (1966); -

Kersey Mfg. Co. v. Rozic, 422 Pa. 564, 222 A.2d 713

(1966) ; Yarsunas v. Boros, 423 Pa. 364, 223 A.2d 696

(1966). In these three decisions the Pennsylvania court

has adopted the rule, even for civil cases, that communi-

cation between court and jury outside the presence of

on eter meth i Seem See tN ee ate lade oP

. 21

Argument.

counsel requires reversal without more. It-adopted this

attitude because prejudice.is always possible from such

communications but the éxistence of prejudice cannot

- be demonstrated, and because’ experience had shown

.the need for firm guidelines for. tridl judges i in this sensi- -

tive area of jadge:jar? relations. State decisions are,

of course, not authoritative here but these three cases

are of interest as showing that petitioner’s argument on

this issue is not reliance on some ancient technicality —

but on a right regarded by a modern court as funda- -

mental. — a .

to 23.

22 ort.

Conclusion.

Js CONCLUSION ° |

For the reasons set out here, and in petitioner's

earlier briefs, the judgment below should be reversed,

with instructions to dismiss the indictment as to counts

1 to 4 and 6 to 17 and to grant a new trial on counts 20.

‘ Respectfully mibettned,

JaMEs E. MCLAUGHLIN

606 Frick Building

= .. Pittsburgh, Pa. 15219-

CHARLES ALAN WRIGHT

. 2500 Red River Street

Austin, Texas 78705 __

Attorneys for Petitioner

- September, 1967

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