Tuesday, September 18, 2012

Ninth Circuit Oral Argument on Act of Production Doctrine (9/18/12)

The Record, a California legal publication, reports on oral argument in a case involved the act of production doctrine which says, in effect, that although the contents of documents may not be privileged, a witness under compulsion to produce the documents via subpoena or summons still has a Fifth Amendment privilege as to the testimony inherent in responding to a document summons.  Scott Graham, 9th Circuit Sounds Skeptical on Privilege Claim for Tax Records (The Recorder 9/13/12), here.  The trial court ordered compliance with the IRS summons over the claim of the act of production privilege..  I previously blogged the trial court's decision.  Previous blog:  Summons Production Ordered from Law Firm for Client Documents in Its Possession (4/14/11), here.

The players at oral argument were the panel (Judges Graber, Berzon, and Wallace (a designated district judge)), Jay Weill for the summonsed party and Michael Haungs, DOJ Tax attorney.  Here are some excerpts.
Weill, who was the longtime chief of the Tax Division at the U.S. attorney's office in San Francisco, acknowledged Thursday that the documents themselves aren't privileged, but maintained that the act of culling through the boxes and folders to produce them would be, absent a grant of use immunity. "She's going to have to represent through me that these are the pieces of paper" sought by the IRS, he said, adding that they can't otherwise be authenticated.
Graber and Judge Marsha Berzon suggested a simple solution. "If you simply produce the boxes and folders, is there any chance that anybody's going to have a problem with that?" Berzon asked.
"I have no idea, your honor," Weill said. 
* * * * 
Justice Department attorney Michael Haungs assured the court, "if they give us the boxes and accordion folders, that's fine. That would completely satisfy. We don't expect that anybody has to do any sorting or culling here." 
Graber, Berzon and Senior Judge J. Clifford Wallace sounded sympathetic to Haungs' argument that the existence, location and authenticity of the documents is "a foregone conclusion" under Supreme Court precedent, and therefore producing them would not violate the privilege.

Thanks to Tax Prof Blog, here.

Many attorneys take an aggressive stance in asserting the Act of Production privilege to compulsory process for documents, which are usually key in criminal tax prosecutions.  The tension is that the contents of the documents are subject to the Fifth Amendment privilege -- there was no compulsion in the creation or retention of the documents.  But, as indicated above and in prior blogs, the testimony inherent in complying with a summons is subject to the privilege.  One potential exception is the foregone conclusion doctrine saying essentially that, if the Government proves the existence and possession of the documents is a foregone conclusion, then there is no testimonial value in the compelled party's production of the documents.  Well, "no testimonial value" is a bit of an overstatement; there is little testimonial value.  But, what little testimonial value there is can yield to the Government's need for the documents, otherwise by asserting the Act of Production privilege the witness might shut down the investigation.  (Of course, this is true anytime a privilege is asserted, but that does not mean the privilege does not apply.)  The Government does have a work-around in many cases -- it can obtain some of these documents by search warrant.  (Indeed, some courts would use the search warrant test as to the test for when the Government has shown that the "foregone conclusion" test is met.

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