In re Superior Court Order Dated April 8, 1983

318 S.E.2d 843, 70 N.C. App. 63, 1984 N.C. App. LEXIS 3604
CourtCourt of Appeals of North Carolina
DecidedAugust 21, 1984
DocketNo. 8318SC590
StatusPublished
Cited by3 cases

This text of 318 S.E.2d 843 (In re Superior Court Order Dated April 8, 1983) is published on Counsel Stack Legal Research, covering Court of Appeals of North Carolina primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In re Superior Court Order Dated April 8, 1983, 318 S.E.2d 843, 70 N.C. App. 63, 1984 N.C. App. LEXIS 3604 (N.C. Ct. App. 1984).

Opinion

JOHNSON, Judge.

NCNB challenges the order on a number of grounds. We dispose first of the constitutional arguments it attempts to bring forward. It is well established that a corporation such as NCNB has only a limited right, not applicable here, to object to process for production of documents on Fourth Amendment grounds. California Bankers Assoc. v. Shultz, 416 U.S. 21, 94 S.Ct. 1494, 39 L.Ed. 2d 812 (1974). Even if we were to find the order affects the constitutional privacy interests of NCNB’s customers, which it does not, United States v. Miller, 425 U.S. 435, 96 S.Ct. 1619, 48 [65]*65L.Ed. 2d 71 (1976), it is clear that NCNB has no standing to contest that any such interests have been violated. Rakas v. Illinois, 439 U.S. 128, 99 S.Ct. 421, 58 L.Ed. 2d 387 (1978), reh’g denied, 439 U.S. 1122, 99 S.Ct. 1035, 59 L.Ed. 2d 83 (1979). NCNB’s constitutional contentions, couched in its argument that the State must show some probable cause to obtain disclosure, must therefore be rejected.

We note that Congress has re-established, since Miller, supra, a certain degree of privacy in bank records, by passage of the “right to Financial Privacy Act of 1978.” 12 U.S.C. § 3401 et seq. (1982). That Act prohibits access by Government authorities to financial records in the manner sought here. 12 U.S.C. §§ 3402, 3403 (1982). The Act applies only to agencies or departments of the United States, however, not the State of North Carolina. 12 U.S.C. § 3401(3) (1982). See Suburban Trust Co. v. Waller, 44 Md. App. 335, 408 A. 2d 758 (1979) (bank disclosure case merely citing federal Act as reflective of policy).

NCNB focuses the bulk of its argument on the lack of statutory authority for issuance of the order. It is true that no statute specifically authorizes issuance of an order to examine bank records. Even though, as we have noted above, neither the bank nor the customer has a constitutionally protected expectation of privacy in the bank records, there is however little effective procedure for law enforcement officials to examine bank records at the investigatory stage of a proceeding. Subpoenas are not available by statute until an action has been commenced. G.S. 15A-802; G.S. 1A-1, Rule 45 (may only issue in a pending cause). Obviously, at the investigatory stage there is insufficient evidence to support a finding of probable cause, and administrative or criminal search warrants cannot be used. G.S. 15-27.2; G.S. 15A-241 et seq. The grand jury does have power to initiate an investigation for which no bill of indictment has been submitted, but only if it finds probable cause for the charges. G.S. 15A-628(a)(4). Accordingly, the only statutory avenue open to the prosecutor in a case such as this is to prepare a bill of indictment without probable cause, submit it to the grand jury and obtain subpoenas in the hope that the witness(es) would provide sufficient probable cause to bring the investigation to a successful close. See G.S. 15A-623, 15A-626, 15A-628. This would necessarily involve the burdensome examination of numerous records, in this case some 3,400, before the [66]*66grand jury. There is apparently no prohibition against resubmitting the same information on a new bill of indictment, other than the roadblocks to investigation outlined above and the obvious expense and delay of again reviewing large numbers of financial records before the grand jury. See G.S. 15A-629.

However, the existence of some statutory procedure does not preclude other procedure. Where the General Assembly has expressly and constitutionally mandated certain procedures, and where the situation before the court constitutes one triggering that procedure, the court of course has no power to do otherwise. In re Greene, 297 N.C. 305, 255 S.E. 2d 142 (1979) (judge could not continue judgment on DUI conviction where statute expressly and unequivocally required sentencing). However, there is nothing in the statutes prohibiting the procedure employed here; nor is the procedure established by the grand jury provisions exclusive.

The courts of general jurisdiction of North Carolina, including the Superior Court, unless specifically denied them by N statute, retain the powers inherent in them at common law. English v. Brigman, 227 N.C. 260, 41 S.E. 2d 732 (1947). They are not restricted solely to those enumerated by statute. Thus, for example, the Supreme Court has held that even though G.S. 15A-957 limited the Superior Court’s statutory authority to transfer venue, the court retained its inherent authority to make transfers beyond those allowed by statute where the interests of justice so required. State v. Barfield, 298 N.C. 306, 259 S.E. 2d 510 (1979), cert. denied, 448 U.S. 907, 65 L.Ed. 2d 1137, 100 S.Ct. 3050, reh’g denied, 448 U.S. 918, 65 L.Ed. 2d 1181, 101 S.Ct. 41 (1980); see also R. Mallard, Inherent Power of the Courts of North Carolina, 10 Wake Forest L. Rev. 1, 20-23 (1974) (other examples of inherent powers).

We have researched the common law and discover in it nothing barring production of records in the manner presented here. Under the English law, first the Star Chamber and later Parliament arrogated to themselves virtually unlimited search powers; in fact, the “general writs” issued thereunder were a primary grievance of the revolting colonists. See Boyd v. United States, 116 U.S. 616, 626-629, 6 S.Ct. 524, 530-532, 29 L.Ed. 746, 749-751 (1886); 1 W. LaFave, Search and Seizure § 1.1 at 1-3 (1978). However, the adoption of the Fourth Amendment altered the [67]*67common law with respect to the rights of persons suspected or accused of crime, not of impartial corporations. A careful reading of Justice Bradley’s exhaustive opinion in Boyd, supra (often described as “the leading Fourth Amendment case,” see LaFave, supra, at 6), makes this clear.

Corporations such as NCNB have never possessed the kind of Fourth Amendment protection accorded to persons and their homes. See Hale v. Henkel, 201 U.S. 43, 26 S.Ct. 370, 50 L.Ed. 652 (1906). Corporations’ special status as creatures of the state exposes them to exhaustive state scrutiny in exchange for the privilege of state recognition. Id. at 74-75, 26 S.Ct. at 379, 50 L.Ed. at 665; United States v. Morton Salt Co., 338 U.S. 632, 70 S.Ct. 357, 94 L.Ed. 401 (1950) (even “official curiosity” may justify inspection).

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In Re Superior Court Order Dated April 8, 1983
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326 S.E.2d 881 (Supreme Court of North Carolina, 1985)

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318 S.E.2d 843, 70 N.C. App. 63, 1984 N.C. App. LEXIS 3604, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-superior-court-order-dated-april-8-1983-ncctapp-1984.