Yet Another Government Victory on the Required Records Doctrine (12/19/13)

We have another required records opinion, this time from the Second Circuit.  In re: Grand Jury Subpoena Dated February 2, 2012, 741 F.3d 339 (2d Cir. 12/19/13), here.

I have not studied the opinion but my quick perusal of it saw nothing new in the basic analysis.  The opinion is 30 pages and concludes:

Conclusion

The required records exception to the Fifth Amendment privilege against self‐incrimination still exists. The BSA’s requirements at issue here are “essentially regulatory,” the subpoenaed records are “customarily kept,” and the records have “public aspects” sufficient to render the exception applicable. Because Doe cannot lawfully excuse his failure to comply with the subpoena, the district court was within its discretion to impose sanctions for his noncompliance.

I guess I am little surprised that, given the consistent holdings of the courts of appeals, the courts are still spending significant resources to replow the same ground over and over and over.  Of course, each court of appeals has to reach the an independent conclusion, but once it reaches the conclusion, does it have to say basically the same thing at great length in different words when it could incorporate by reference other holdings that are equally as good?

A couple of other excerpts that I found interesting:

1. On the evolution of the Fifth Amendment privilege to documents via the Act of Production privilege (pp. 8-9):

The privilege has thus evolved since its inception to a broader prophylactic regime that, in certain circumstances, protects individuals from producing documents where they are incriminated by the contents of the documents. See id. As applied, the privilege is practical; it inoculates people from being forced to contribute to their own prosecution while not unduly restricting grand juries’ ability to seek the truth. Doe argues – and the government does not meaningfully contest – that absent an exception, the act of production privilege shields Doe from complying with the grand jury’s subpoena.

2.  On the uses of and access to FBARs, In fn 5 on p. 19:

Doe points out that the Treasury Department’s Financial Crimes Enforcement Network (FinCEN) lists the BSA as one of the tools that it uses to pursue its goals of criminal investigation. It is neither surprising nor persuasive that a law enforcement organization uses a multi‐purposed statute for law enforcement ends. We assume that insofar as the Central Intelligence Agency uses the BSA, it uses it for intelligence and counter‐intelligence purposes, while the Internal Revenue Service uses it for revenue collection purposes. Doe asserts that “[t]he government has never pointed to a ‘regulatory’ act that FinCEN performs with FBAR [Report of Foreign Bank and Financial Account] data.” Doe Brief at 35. However, other agencies also use the data obtained through the challenged reports:  

The Treasury Department shares the information it collects pursuant to the Act’s requirements with other agencies—including the Office of the Comptroller of the Currency, the Consumer Financial Protection Bureau, the 

Federal Reserve Board, the Federal Deposit Insurance Corporation, the National Credit Union Administration, and the Office of Thrift Supervision—none of which are empowered to bring criminal prosecutions. 

Grand Jury Proceedings, No. 4‐10, 707 F.3d at 1271 (quoting Grand Jury Subpoena, 696 F.3d at 434).

3. On ignorance of the BSA requirement, from fn 8 on p. 29:

fn8 Although it is not necessary to our resolution of this case in which Doe has not alleged ignorance of the BSA’s recordkeeping requirements, the government’s brief acknowledges that “an individual who was unaware that he was engaging in a regulated activity would not be able to establish a risk of self‐incrimination in the first place.” Appellee Brief at 38 n.17.

Fifth Circuit Falls in Line and Holds Required Records Trumps Fifth Amendment in Offshore Bank Case (9/22/12)

In In Re: Grand Jury Subpoena, ___ F.3d ___, ____ U.S. App. LEXIS ___ (5th Cir. 2012), here, the Fifth Circuit held that the Required Records Doctrine required the witness to produce the subpoenaed foreign account records required by the Bank Secrecy Act and implementing regulations for FBARs.  This is the third case in the Courts of Appeals and all have reached the same conclusion.  See In re M.H., 648 F.3d 1067, 1079 (9th Cir. 2011); In re Special Feb. 2011-1 Grand Jury Subpoena Dated Sept. 12, 2011, No. 11-3799, 2012 WL 3644842, at *5-6 (7th Cir. Aug. 27, 2012).  I have blogged on those prior cases:  Seventh Circuit Compels Production of Offshore Bank Under the Required Records Doctrine (8/27/12), here; and 9th Circuit Applies Required Records Doctrine to Defeat 5th Amendment Claim for FBAR Recordkeeping (8/19/11), here.  Here are the key excerpts in the analysis:

In Grosso, the Supreme Court identified three “premises” of the Required Records Doctrine: “[F]irst, the purposes of the United States’ inquiry must be essentially regulatory; second, information is to be obtained by requiring the preservation of records of a kind which the regulated party has customarily kept;  [*7]  and third, the records themselves must have assumed ‘public aspects’ which render them at least analogous to public documents.” 390 U.S. at 67-68.   [The court later refers to these premises as prongs.] 

* * *

Another Taxpayer Victory on Required Records Subpoena for Offshore Bank Documents (1/12/12)

In In re Special February 2011-1 Grand Jury Subpoena Dated..., --- F.Supp.2d ----, 2011 WL 6973429  (ND Ill 2011),  the Court quashed a grand jury subpoena for foreign bank account records, holding that the Fifth Amendment privilege (the act of production iteration of the privilege) trumps the required records doctrine.

I won't try to analyze the opinion, because I don't think it necessarily adds critical analysis that has not been considered before.  I will say that it strikes me that this is an issue that can go either way, depending upon the predilections of the court considering the matter.  In terms of numbers (judges weighing in on the issue), the Government is ahead.  And, in terms of appellate victories (one with no dissents from the liberal 9th Circuit), the Government is ahead.  I am not so bold as to predict the ultimate resolution after these cases bounce around for a while.  I think it depends upon the guts -- perhaps better, gut reactions -- of as yet unknown judges (including perhaps justices) that will hear the cases.

But, if I were picking Judges taxpayer friendly guts on this issue, Judges Hughes and Holderman would be at the top of the list (even before they decided these cases).

For prior blogs on the topics, click the labels below.

Addendum:  This case was reversed on appeal.  See Seventh Circuit Compels Production of Offshore Bank Under the Required Records Doctrine (8/27/12), here.

9th Circuit Applies Required Records Doctrine to Defeat 5th Amendment Claim for FBAR Recordkeeping (8/19/11)

The Ninth Circuit today issued an opinion applying the required records doctrine to defeat a Fifth Amendment claim related to the FBAR record keeping requirement. M.H. v. United States (In re Grand Jury Investigation M.H.), 648 F.3d 1067 (9th Cir. 2011), here.

Addendum 8/19/11:  Here is the conclusion (p. 20 of the slip opinoin):

IV

Because the records sought through the subpoena fall under the Required Records Doctrine, the Fifth Amendment privilege against self-incrimination is inapplicable, and M.H. may not invoke it to resist compliance with the subpoena’s command. See Doe M.D., 801 F.2d at 1167 (“Records that are required to be maintained by law are outside the scope of the privilege [against self-incrimination].”). Because M.H.’s Fifth Amendment privilege is not implicated, we need not address his request for immunity. Bouknight, 493 U.S. at 562 (declining to “define the precise limitations that may exist upon the State’s ability to use the testimonial aspects of Bouknight’s act of production in subsequent criminal proceedings”).

The district court’s order is AFFIRMED.

Addendum 8/20/11:  JAT comments on the decision: