Court Rejects Braswell Claim That Government Questions Violated Braswell (11/5/17)

In  Braswell v. United States, 487 U.S. 99 (1988), here, the Court dealt with the tensions between the Fifth Amendment act of production doctrine, which gives Fifth Amendment protection to the testimonial aspects of the act of production, and the investigative need to obtain corporate records which are per se not subject to the privilege (both because the corporation has no Fifth Amendment privilege and documents generally are not subject to the Fifth Amendment privilege).  Outside the corporate document setting, the tensions are resolved by denying the Fifth Amendment privilege for existing voluntarily produced documents but recognizing the right of the person in possession of the documents to assert the Fifth Amendment privilege as to any testimony inherent in the act of producing the documents.  That is called the act of production doctrine.  If the custodian of corporate documents could assert the Fifth Amendment privilege via the act of production doctrine, investigative agents and courts might be stymied is determining truths.  Braswell resolved the tension by holding that the custodian may not assert the act of production to prevent having to produce the documents, but the Government could not use the testimony inherent in the act of production against the custodian.  (In effect, this is a form of use and derivative use immunity for the testimonial aspects of the act of production.)

In United States v. Stegman, 2017 U.S. App. LEXIS 20598 (10th Cir. 2017), here, the Tenth Circuit denied a Braswell claim of improper use by the prosecutor questioning the agent about the corporate records.  The records had been summonsed in the investigation.  The defendant, the custodian and owner of the corporation, produced the records pursuant to the summons.  In questioning the agent, the Government asked whether the documents were the defendant's ledgers that she controlled.  The defendant argued on appeal that this question violated the Fifth Amendment act of production privilege with respect to her production  of the records.  I quote the Court's opening discussion of Braswell and then the resolution of defendant's claim on appeal:

1. The holding in Braswell 

The Supreme Court granted certiorari in Braswell to address "the question whether the custodian of corporate records may resist a subpoena for such records on the ground that the act of production would incriminate him in violation of the Fifth Amendment." 487 U.S. at 100. The Supreme Court "conclude[d] that he may not." Id. In reaching this conclusion, the Court began by noting that corporations "are not protected by the Fifth Amendment." Id. at 102. More specifically, the Court noted that it "ha[d] long recognized that, for purposes of the Fifth Amendment, corporations and other collective entities are treated differently from individuals." Id. at 104. This collective entity rule, the Court noted, mandated "that without regard to whether [a] subpoena is addressed to the corporation" or "to the individual in his capacity as a custodian, a corporate custodian . . . may not resist a subpoena for corporate records on Fifth Amendment grounds." Id. at 108-09 (citations omitted). The Court then contrasted this with sole proprietorships and noted that sole proprietors are entitled to "show that [an] act of production [of proprietorship documents] would entail testimonial self-incrimination." Id. at 104. 

In a passage relevant to the case at hand, the Court explained the proper and improper uses of corporate records produced pursuant to a subpoena: 

Although a corporate custodian is not entitled to resist a subpoena on the ground that his act of production will be personally incriminating, we do think certain consequences flow from the fact that the custodian's act of production is one in his representative rather than personal capacity. Because the custodian acts as a representative, the act is deemed one of the corporation and not the individual. Therefore, the Government concedes, as it must, that it may make no evidentiary use of the "individual act" against the individual. For example, in a criminal prosecution against the custodian, the Government may not introduce into evidence before the jury the fact that the subpoena was served upon and the corporation's documents were delivered by one particular individual, the custodian. The Government has the right, however, to use the corporation's act of production against the custodian. The Government may offer testimony—for example, from the process server who delivered the subpoena and from the individual who received the records—establishing that the corporation produced the records subpoenaed. The jury may draw from the corporation's act of production the conclusion that the records in question are authentic corporate records, which the corporation possessed, and which it produced in response to the subpoena. And if the defendant held a prominent position within the corporation that produced the records, the jury may, just as it would had someone else produced the documents, reasonably infer that he had possession of the documents or knowledge of their contents. Because the jury is not told that the defendant produced the records, any nexus between the defendant and the documents results solely from the corporation's act of production and other evidence in the case. 

Id. at 117-18 (footnote omitted). 

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3. Analysis 

Stegman argues on appeal that "[t]he prosecutor . . . violated Braswell by asking [the] witness to agree 'that those are Ms. Stegman's ledgers that she controlled.'" Aplt. Br. at 14 (quoting Aplt. App. at 3062-64). In other words, Stegman argues, "[t]he prosecutor blatantly attributed the records to [her], not the corporation." Id. at 33 (emphasis in original). Stegman in turn argues that "[b]ecause inter alia the Government used these ledgers to advance its allegation that [she] used whiteout before disclosing documents to the IRS, the Government cannot prove that this was harmless beyond a reasonable doubt." Id. at 14. 

Contrary to Stegman's assertions, however, we conclude that the prosecutor's questions did not violate Braswell. Specifically, the prosecutor did not ask the witness whether Stegman was the one who the compulsory summons was served upon or the one who delivered the requested ledgers to the government. Rather, the prosecutor asked the witness only who owned or controlled the ledgers and the witness testified simply that he assumed the ledgers belonged to Stegman. Thus, the questions did not violate the prohibition outlined in Braswell. It is also worth noting, as the district court did in overruling Stegman's contemporaneous objection, that nothing about the questions or the response was particularly significant, given the other evidence that was presented at trial establishing that Stegman was in complete control of Midwest and had prepared the ledgers at issue. 

In sum, then, we conclude that the prosecutor's questions and the witness's response did not violate Stegman's Fifth Amendment privilege against self-incrimination.