Lapides v. United States

215 F.2d 253, 46 A.F.T.R. (P-H) 18, 1954 U.S. App. LEXIS 4740

• Court: Court of Appeals for the Second Circuit
• Decided: July 13, 1954
• Docket: 109, Docket 22866
• Status: Published

Opinions

HINCKS, Circuit Judge.

The appellant, before any criminal proceedings had been instituted against him, obtained from the court below an order requiring the United States District Attorney to show cause at a session of the court to be held on April 22, 1953, why an order should not be made suppressing evidence claimed to have been illegally obtained by the government, restraining the United States Attorney from submitting such illegally obtained evidence to the Grand Jury, and for other relief. The hearing thereon was held on April 22, 1953, as the show cause order provided. On May 5, 1953, on a written Memorandum Decision, the judge ordered that the appellant’s motion, which had initiated the show cause order, be dismissed as having an insufficient basis in law and in fact and as lacking in equity. The dismissal was stated to be “without prejudice.” And it is from this order of dismissal that this appeal is taken.

Appellant’s “motion” was in effect a complaint initiating a civil action seeking suppression of evidence said to have been illegally obtained and to restrain the United States Attorney from presenting such evidence to the grand jury. The suit thus began before any criminal proceedings by the government against appellant had been instituted, and his appeal was therefore not from an interlocutory order entered in the course of a criminal suit. Accordingly, the order denying his motion was a final and appealable order.¹

After entry of this order, and after the appellant had filed his notice of appeal, an indictment against the appellant was filed, as we were told in the arguments on the appeal. The filing of the indictment does not, we think, render the appeal moot. In United States v. Poller, 2 Cir., 43 F.2d 911, at page 912, 74 A.L.R. 1382, after Poller had made a motion to return seized documents, he was indicted; this court held that that fact did not affect the government’s appeal from the order, subsequently entered, granting the motion, saying, “Conceivably it might be held that the proceeding became merged in the indictment, but the result would be to make the appealability of the order depend upon the diligence of the prosecution of the proceeding or of the judge in deciding it, either of which is an unsatisfactory test. It seems to us more reasonable to say that it is the time of its initiation which counts * * *. We hold therefore that it is the beginning of the proceeding which determines the appealability of the order, and that, since this was before indictment, we have jurisdiction of the cause.” See also Centracchio v. Garrity, 1 Cir., 198 F.2d 382, 389, an appeal from an order dismissing a motion like that at bar, where the court said: “And though the finding of a true bill by the grand jury defeated one of the objects of petitioner in his motion to suppress, the petition did not thereby become entirely moot, for petitioner still remained interested in the relief sought in so far as it might be directed to the suppression of the evidence at the trial.”

We come, therefore, to examine the judge’s ruling on the merits. He entered the order to show cause on appellant’s motion, in affidavit form, which alleged that, in reliance on a widely publicized policy of the government not to prosecute tax evaders who, prior to the time at which an investigation had been instituted, voluntarily disclosed their delinquency,² he had through his attorney made a voluntary disclosure of additional income for the five years 1946 to 1950 by letter dated May 15th; that then and thereafter he “had no knowledge” that any investigation of his income tax liability had been commenced by that time; that he had “no information that any investigation was instituted prior to his voluntary disclosure,” and that he was “informed and believed” that his voluntary disclosure made on May 15, 1951 “precipitated the investigation.” The motion further alleged on information and belief “that by virtue of clues and leads which were obtained as a result of my confession which was induced by a broken promise of immunity,”³ the United States Attorney obtained information and records which he proposed, unless restrained, to submit to the grand jury.

In opposition to the appellant’s motion, the United States Attorney on April 22, 1953, the day fixed for the hearing set by the show cause order, filed two affidavits, both by Special Agents of the Intelligence Division of the Bureau of Internal Revenue, purporting to be based on actual knowledge. One alleged that, because of newspaper publicity occurring on April 14, 1951 to the effect that the appellant had been arrested on a charge of contriving a lottery and maintaining a place of gambling, on April 16, 1951 the affiant had been assigned to make a preliminary investigation of the appellant’s tax returns for the years 1946 through 1950. This affiant further alleged that on April 23, he consulted the Assistant District Attorney in charge of the State case against the appellant, obtaining from him some information about the case; that on April 26, 1951 he requisitioned the appellant’s tax returns receiving them from the Collector of Internal Revenue on April 27, 1931; further that he checked records of Dun and Bradstreet relative to the appellant where he received further information; that on May 15, 1951 the investigation was transferred to the other Special Agent whose affidavit alleged that his assignment to investigate began on May 15, 1951 and that the file on the case was physically received by him on the next day.

These affidavits thus posed, as the crucial issue, the timeliness of the disclosure made in appellant’s behalf on May 15, 1951, viz.; whether or not the disclosure was made before a departmental investigation had been initiated. And so far as the record shows this issue was submitted for decision solely on the affidavits the contents of which are summarized above. On this submission of the issue we are all agreed that the record did not support an order granting the appellant’s motion. For even if it were so that the appellant, when he made his disclosure on May 15, 1951, did not know, notwithstanding the publicity as to his arrest, that a federal tax investigation had already been initiated, and even if in April, 1953, when he brought the motion initiating this proceeding, he thought that his disclosure had precipitated the departmental investigation, it would not follow that his disclosure was timely. Only if, in fact, no investigation had been begun, was his disclosure timely. United States v. Levy, D.C.Conn., 1951, 99 F.Supp. 529. The mere fact that the Department did not inform him and that he did not know that an investigation had been begun was irrelevant. Any holding to the contrary contained in the case of In re Liebster, D.C., E.D.Pa., 1950, 91 F.Supp. 814, we cannot approve. And so we are in complete agreement that if, on the record submitted, the judge below had gone no further than to deny the motion, we should have unanimously affirmed, thus leaving the matter pending in the District Court for such further proceedings as might be had therein.

But was the judge below justified in ordering a final dismissal of the motion even though his order was, as expressly stated, “without prejudice”? (This qualification was obviously made not to indicate a lack of finality in dismissing the pre-indictment motion but rather in recognition of the appellant’s right to move de novo in any criminal case which might thereafter be instituted to suppress the evidence obtained through his disclosure and to quash the indictment on the ground of the immunity from prosecution claimed to flow from his disclosure.) Or should the judge below have gone no further than to deny the motion leaving it still in court for further hearing on the contested issue as to the timeliness of the disclosure?

As to this, a majority of the court holds that on the record as presented to us there is no showing that the dismissal ordered was erroneous. By the show cause order which issued on his own application the appellant was on notice that his application would be heard on April 22, 1953 and that his proofs in support thereof would then be taken. Nothing in said order suggested that the hearing thus set was to be a preliminary hearing only. It was noted in the caption of the judge’s memorandum-decision of May 4, 1953, that the motion was argued on April 22, 1953, the parties then appearing. So far as appears, the parties were then content to make a final submission of the issue as to the timeliness of the disclosure on the affidavits and counteraffidavits. That apparently is just what was done: the record fails to disclose the offer or receipt by either side of any evidence extraneous to the affidavits. We note that the government’s affidavits were verified not until April 22 ; apparently they were filed at the opening of the session or a few hours before. If the appellant was surprised by these affidavits, of course he could have applied for a continuance to give him opportunity to meet their contents either by reply affidavits or by competent evidence. The record fails to show that any such application was made, still less that it was denied.

The majority of the court is therefore unable to see merit in the argument made on appeal, for the first time so far as the record shows, that the court below failed to give the appellant a hearing on the issue of the timeliness of the disclosure.⁴ As we read the record, the appellant applied for a hearing, was accorded a hearing, and at the hearing, on learning that the government had knowledge of specific facts which if true completely undermined his position, waived the opportunity to offer evidence, and elected to submit the record of fact on the affidavits with argument as to the law. In so doing he led the judge to say in his memorandum: “That a preliminary investigation * * * began on April 16, 1951 * * * is not in dispute.” Appellant on brief insists that in this the judge was wrong: that the investigation was in truth disputed. But when the appellant submitted his application, as the record shows, without unequivocal denial, by assertion or proof, of the specific affirmative allegations of the government’s affidavits, the judge might properly understand that the government’s assertions of the fact and detail of a prior investigation were indeed undisputed. And we think the judge was right in saying that the appellant’s assertion of no knowledge of the investigation or of his belief that his own disclosure “precipitated the investigation,” created no issues. For the issue as to the timeliness of the disclosure depended, as pointed out above, on the fact of a prior investigation, not on the appellant’s absence of knowledge or belief as to that fact. In this sense, as the judge observed in his memorandum, there was indeed no triable issue framed by the affidavits.

The appellant also asserts on brief that “there is an issue of fact whether the alleged preliminary investigation was an investigation within the meaning of the voluntary disclosure policy.” But the very statement of this contention shows that it is based upon the investigation alleged in the government’s affidavits and posed only a question of law as to the effect of the facts thus alleged. As indicated above, we think the judge was right in his ruling on this question of law and in holding that the disclosure made not until May was not timely in view of the investigation begun in April.

It is not without significance, we think, that the appellant, who claims to be aggrieved because deprived of opportunity to present evidence, not only failed to offer evidence at the hearing or at an adjournment thereof which he might have obtained, but even now on appeal does not point to any facts helpful to him on the issue of timeliness which he could offer if by reversal of the order he were given another bite at the cherry. However that may be, the majority of the court thinks that in the situation disclosed by the record the judge was right in treating the appellant’s case as finally submitted and hence ripe for a final order. And whether or not any issue as to the timeliness of the disclosure was raised by the affidavits, we think the judge was right in ordering a dismissal in reliance on the government’s affidavits which had the hallmark of specificity and inherent credibility.

Order affirmed.

1 . Perlman v. United States, 247 U.S. 7, 38 S.Ct. 417, 62 L.Ed. 950; Burdeau v. McDowell, 256 U.S. 465, 41 S.Ct. 574, 65 L.Ed. 1048; Cogen v. United States, 278 U.S. 221, 225, 49 S.Ct. 118, 73 L.Ed. 275; United States v. Poller, 2 Cir., 43 F.2d 911, 74 A.L.R. 1382; In re Fried, 2 Cir., 161 F.2d 453, 1 A.L.R.2d 996; Centraccilio v. Garrity, 1 Cir., 198 F.2d 382; White v. U. S,, 5 Cir., 194 F.2d 215, certiorari denied 343 U.S. 930, 72 S.Ct. 760, 96 L.Ed. 1340; cf. U. S. v. Sineiro, 3 Cir., 190 F.2d 397.

2 . That such a policy was in effect in May, 1951, is not disputed. We are told, on argument, that the policy has since been discontinued.

3 . The record shows that after May 15, 1951, when the appellant first made his disclosure, the Special Agent in Charge of the Intelligence Unit of the New York office of the Internal Revenue Service by letter dated June 6, 1951 advised the appellant that his disclosure “will be considered voluntary provided there is a full and complete disclosure on the part of the taxpayer and full cooperation.” The record further shows that on July 23, 1951 the same Special Agent wrote the appellant “that after further review of the case, I find that your proposal was not timely, and therefore cannot be accepted.” It is doubtless to this change of the administrative attitude that the appellant refers when he speaks of a “confession which was induced by a broken promise of immunity.” Since the only official promise of immunity was conditional on a disclosure made before the beginning of an investigation, unless it is shown that no investigation began before the disclosure of May 15, 1951, there was no promise at all of immunity. And if no such promise was made, there is no need for us now to rule upon the effect of a hypothetical breach thereof.

4 . On brief, tlie appellant says: “Essentially, this appeal challenges the failure of tile court below to grant the appellant a hearing on the issues raised by the pleadings.” But nowhere in his brief does the appellant point to anything in the record which shows this failure on the part of the court. We conclude that such baseless assertions are the product either of wishful thinking or of afterthought.