Saturday, February 27, 2010

Fifth Amendment Privilege for Document Production - Authentication

The Ninth Circuit's decision Friday in United States v. Bright, 596 F.3d 683 (9th Cir. 2010) has an interesting discussion of the application of the Fifth Amendment to compulsory production of documents pursuant to summons or subpoena (in Bright, an IRS summons). The case swirls around the practical application of United States v. Hubbell, 530 U.S. 27 (2000). The take away from Hubbell, consistent with the trend in earlier Supreme Court jurisprudence, is that the taxpayer has a valid Fifth Amendment privilege that can be asserted to document production where the nature of the duces tecum document request is a fishing expedition rather than a finely tuned request for documents the Government knew or has reason to know the taxpayer has or, I suppose, should have. Like much of life, that line is necessarily blurred between the extremes. This is commonly referred to as the Act of Production doctrine which says that there are testimonial aspects to the act of producing documents and the act of production is subject to a Fifth Amendment privilege.  So the compelled party wanting to avoid production of potentially incriminating documents asserts the Fifth Amendment hoping the Government won't move to compel, but then, should the Government move to compel, hopes the Government will be unable to meet the Hubbell requirement of prior knowledge of the existence of the documents.  Implicit in this, perhaps as I note, is also some indication that the Government can authenticate the documents independent of any testimonial aspects of the act of production.  (I am not sure of the autentication, but it makes sense to me and the Bright court talks about it; I discuss it below.)

At this point, let me say that other courts have struggled with the implementation of Fifth Amendment jurisprudence in related contexts. Thus, the D.C. Circuit in United States v. Ponds, 454 F.3d 313 (D.C. Cir. 2006) said that the Government's burden is something like the reasonable particularity burden for search warrants. If the Government cannot make the showing that the Government had that level of knowledge when the compulsory process was issued, then the taxpayer can assert the Fifth Amendment privilege to avoid production.  (If the Government does have that level of knowledge, I do think it is much more civilized for the Government to flush out the documents with a subpoena or summons than to grab them by search warrant.)

Now going back to Bright, the setting was the district court's imposition of contempt on the Brights (husband and wife) as to their assertion of the Fifth Amendment for requests for documents related to foreign bank, credit card or similar accounts. The IRS already had some proof of the existence of two of them but not the other two. The IRS fashioned the summons broadly to cover all foreign accounts rather than just the two it knew about and identified in the summons.

The Court held:
We conclude that the foregone conclusion exception does apply to documents related to the two credit cards expressly named in the summonses. The exception, however, does not apply to documents concerning the two additional credit cards named during contempt proceedings, and the production of those documents is therefore privileged under the Fifth Amendment.
Now here is the interesting part because, at least in my mind, "foregone conclusion" is not the same thing as authenticating the documents which the compelled party would necessarily do by producing them. (And, by the way, isn't that concern what the Fifth Amendment is all about.) The Court said (case citations omitted):

The government did not need the Brights to authenticate such documents, because the records could be independently authenticated by banking officials. Nor did the government need to prove that it had previously authenticated the same documents or that it had used these same bank officials in the past; it needed to show only that it could do so without the taxpayer's assistance, including without information gleaned from the documents. n4
n4 At oral argument, the Brights suggested for the first time that when the IRS issued the summonses, the government believed that it could not authenticate the documents through bank officials because there were no tax treaties between the United States and the jurisdictions in which the banks were located. However, the Brights conceded that the government can authenticate relevant documents through the American card servicing company. Moreover, this argument was not raised in the district court or preserved in the Brights' briefs and is now waived.
That is interesting. I think that is the right answer since the issue is the testimony implicit in the compelled production. The Government must have some some way to authenticate in a proceeding where the compelled party's guilt or innocence might be in issue; the Government cannot rely nor can a judge or jury ultimately rely upon the implicit testimony of authentication in the compelled party's act of production.  So how does the Government authenticate even if it meets the threshold requirement of reason to believe that the documents exist? In Bright, the footnote quoted indicates that the Government had some way to do it through the credit card servicing company.  I am not sure exactly how that would work, and the court did not struggle with it because of the concession and, in any event, it had been waived (in the Ninth Circuit's analysis). In any event, the Ninth Circuit did note a problem of authentication where the foreign account did not in any way implicate persons (such as U.S. credit card processing companies and the foreign banks are not willng to or required to cooperate, including produce documents or authenticate.  Sometimes, where there is a good treaty (e.g., the double tax treaty with the more develeoped countries), there might be a way to authenticate, but for the Tax Havens (including Switzerland) are not going to cooperate (sometimes even with an otherwise good tax treaty).

What do the readers of this blog think about this requirement that the Government show the ability to authenticate? This is not a rhetorical question, so I hope someone will response, even if it is to tell me I have gone off track (if that happens, please say enough to put me back on track).

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