Elizabeth G. AUSTIN, Appellant, v. UNITED STATES of America, James E. Holshouser, United States Attorney for the Middle District of North Carolina, Appellees, 297 F.2d 356

SOBELOFF, Chief Judge. The appellant, Elizabeth G. Austin, filed a petition in the United States District Court for the Middle District of North Carolina to enjoin the United States Attorney from presenting to a federal grand jury certain evidence allegedly obtained from her in violation of her constitutional rights under the Fourth and Fifth Amendments.

The petition, together with affidavits, stated that on June 5, 1958, two Internal Revenue agents appeared at the office maintained by her and her husband in which they conducted their business as insurance agents and also helped taxpayers in the preparation of income tax returns. These men, it was said, made affirmative representations that they had come to investigate the Austins’ personal income tax returns.

It is further alleged that these representations were merely a “guise,” intended to deceive the Austins into believing that their personal income tax returns were being investigated, but that in reality the agents were “fraudulently” endeavoring to obtain information from Mrs. Austin in order to proseecute her for aiding in the preparation of false income tax returns of others in violation of 26 U.S.C.A. § 7206(2). It was said that because of this deceit, the evidence given to the agents by Mrs. Austin was not voluntarily given.

Further details were set forth in the petition and affidavits with respect to the conduct of the agents and the material turned over to them. Allegedly, the agents, in a threatening manner told Mrs. Austin that she had better go to her home and get her records relating to her preparation of the tax returns of these other persons. This she did, accompanied by the Internal Revenue men, who examined the records on June 5 and 6, 1958. They also requested the appellant to furnish a list of the persons for whom she had prepared tax returns and this was later sent to them.

To substantiate the charge of fraud and deceit, it is maintained in the affidavit attached to the petition, that the agents harassed the appellant’s customers, told them that “Mrs. Austin is not fit to walk the streets,” that “we intend to put her out of business,” that “we intend to check every one of the returns Mrs. Austin prepares as long as she prepares any,” and like statements.

Finally, the appellant insists that not until counsel was retained on September 1, 1959, did she have any idea that the investigation was being made of the returns prepared by her for her customers for any purpose other than to verify her own reported income from these sources. It was prayed that the United States Attorney be enjoined from presenting to a grand jury the evidence obtained in violation of her constitutional rights, both that obtained directly from her and also that obtained through the use of information so supplied by her.

The District Court held no hearing on the facts but, rather, heard argument from counsel as to why the relief asked for should or should not be granted. After argument, the court denied the petition and dismissed the proceeding. Apparently the District Judge was of the opinion that it would be inappropriate to suppress such evidence prior to indictment, and, if the petitioner should be entitled to any relief, it would be available at a later stage. While we do not at this time, before the actual facts have been developed, definitively decide whether Mrs.

Austin’s allegations are sufficient to entitle her to the relief sought, to redress a deprivation of Fourth or Fifth Amendment rights, we do think that enough has been alleged to require a hearing, with findings of fact and conclusions of law. See United States v. Wolrich, 129 F.Supp, 528 (D.C.S.D.N.Y., 1955); United States v. Wheeler, 149 F.Supp. 445 (D.C.W.D.Pa., 1957), reversed on other grounds, 256 F.2d 745 (3rd Cir., 1958). Cf., Smith v. United States, 348 U.S. 147, 151, 75 S.Ct. 194, 99 L.Ed. 192 (1954); United States v. Achilli, 234 F.2d 797, 806 (7th Cir., 1956); United States v.

Martin, 176 F.Supp. 409 (D.C.S.D.N.Y., 1959). The Government, however, argues that even if Mrs. Austin has alleged facts sufficient to warrant inquiry into a possible violation of her constitutional rights, her proper remedy is to object to the admission of the challenged evidence at a trial and not to seek its suppression before indictment. Alternatively, it is asserted that even if an injunction could properly be granted before indictment, action is at this stage of the proceeding discretionary with the District Court. There is a further point which the Government advances.

It pertains to the precise constitutional right involved. Assuming that there is a remedy before indictment for one whose rights have been violated by an illegal search and seizure in contravention of the Fourth Amendment, the Government asserts a distinction in respect to the self-incrimination provision of the Fifth Amendment.

The suggestion is made that while the remedial procedure by way of injunction may be invoked for a Fourth Amendment violation in advance of an indictment, such remedy at that time does not apply to the Fifth. ' While there may be language in lower court opinions lending some support to the Government’s position, the Supreme Court has explicitly stated that if evidence is taken by Government officials in violation of a person’s Fourth or Fifth Amendment rights, he is entitled to institute proceedings in anticipation of indictment, to restrain the use of the evidence against him. Perlman v.

United States, 247 U.S. 7, 38 S.Ct. 417, 62 L.Ed. 950 (1918),is a case in point. There the petitioner sought to enjoin the United States Attorney from using certain exhibits as a basis for an indictment against him, contending that the proposed use would violate the Fourth and Fifth Amendments to the Constitution. The Government argued in the Supreme Court, as it does here, that Perlman was raising the issue prematurely. This contention, however, was rejected and the case was decided on the merits.

The Court restated the Government’s position with its reply, as follows: “In other words, that Perlman was powerless to avert the mischief of the order but must accept its incidence and seek a remedy at some other time and in some other way. We are unable to concur.” 247 U.S. at page 13, 38 S.Ct. at page 419. Another case in which it was argued that the presentation of documents to the grand jury would violate both the Fourth and Fifth Amendments, and the petitioner sought their return before indictment, was Burdeau v. McDowell, 256 U.S. 465, 41 S.Ct. 574, 65 L.Ed. 1048 (1921).

There too the Court decided the case on the constitutional issues, drawing no distinction between the standing of Fourth Amendment rights and Fifth Amendment rights, and declining to hold that the questions were prematurely raised. Also, in Cogen v. United States, 278 U.S. 221, 225, 49 S.Ct. 118, 73 L.Ed. 275 (1929), Justice Brandéis, writing for the Court, expressly recognized that an independent equity proceeding to suppress evidence taken in violation of constitutional rights could be brought before indictment, and, in such case, the decision of the District Court was a final, appeal-able order.

Other cases permitting reto tions to suppress evidence on constitutional grounds before indictment are: Go-Bart Importing Co. v. United States, 282 U.S. 344, 51 S.Ct. 153, 75 L.Ed. 374 (1931); Foley v. United States, 64 F.2d 1 (5th Cir., 1933); Turner v. Camp, 123 F.2d 840 (5th Cir., 1941); In re Fried, 161 F.2d 453 (2nd Cir., 1947); Grant v. United States, 282 F.2d 165 (2nd Cir., 1960). The above cases conclusively demonstrate the lack of merit in the Government’s argument that Mrs. Austin, assuming the truth of the allegations, may have no remedy before indictment.

The Government’s further argument, that the suppression of evidence in advance of indictment is a matter for the District Judge’s discretion, is equally untenable. None of the above cases contains the slightest suggestion that the relief is discretionary. The Government in support of this argument, relies upon cases holding that courts do not ordinarily restrain criminal prosecutions. The short answer is that this is not an action to restrain a criminal prosecution. The Eighth Circuit, in Goodman v.

Lane, 48 F.2d 32, 34 (1931), exposed the fallacy of such an argument: “[1] Appellee advances the proposition that equity has no jurisdiction to stay criminal proceedings; cites authorities to that effect; admits that there are exceptions to the general rule; but contends that the case at bar is not within the exceptions. All this may be conceded, but it is not decisive, because the present case is not one in which equity is invoked to stay criminal proceedings.

The relief here asked, apart from return of the property, is that the defendant be enjoined from making use of certain evidence in any criminal proceedings against appellant. This is quite different from staying criminal proceedings. The relief asked is somewhat broader in scope, but of the same character as that asked in the usual motion in criminal cases to suppress evidence. The jurisdiction of equity to prevent the use in evidence of property illegally seized and/or to order a return thereof is well established. * *»

Finally, we cannot agree that there is a difference between evidence seized in violation of the Fourth Amendment and evidence obtained contrary to the self-incrimination provision of the Fifth, with respect to the right to bring a proceeding to suppress evidence prior to indictment, assuming that the allegations here really involve the Fifth Amendment rather than the Fourth.

As previously pointed out, the Supreme Court cases have drawn no such distinction, but have permitted independent equity proceedings to enjoin use of evidence before a grand jury where it had allegedly been obtained in breach of both constitutional amendments. Perlman v. United States, supra; Burdeau v. McDowell, supra. Rule 41(

e) of the Federal Rules of Criminal Procedure, 18 U.S.C.A. is said to be a restatement of existing law with regard to motions to suppress evidence, and if this be so, it would seem, in light of the above cited decisions of the Supreme Court, to encompass illegally obtained evidence whether the illegality involves the Fourth or the Fifth Amendment. Moreover, the Court of Appeals for the Second Circuit has expressly, in In re Fried, 161 F.2d 453, 458-459 (2nd Cir., 1947), decided that Rule 41(

e) applies to evidence taken contrary to the Fifth Amendment. Judge Learned Hand said in his concurring opinion, 161 F.2d at page 465: “I agree that now, in spite of much professional opinion to the contrary, it has become settled law, as my brother Frank says, not only that the victim may reclaim documents and other property seized in violation of the Fourth Amendment, but that, when these are contraband and need not be returned to him, he may in advance of trial and even of an indictment, secure from a court an order preventing their use as evidence.

Although, so far as I know, the same rule has not as yet been extended to confessions procured in violation of the Fifth Amendment, I feel too much the force of consistency not to take this added step. True, judges are not to be reformers, but law which depends upon irrational distinctions is rightly discredited, for one alternative or the other is patently wrong. Since I cannot see any rational basis here for distinguishing between the two Amendments when the situation is so nearly the same, I am content to accept this innovation. * * * ” See also Grant v. United States, 282 F.2d 165 (2nd Cir., 1960).

On the other hand, if Rule 41(e), because of its language, applies only to the Fourth Amendment, there is still no reason why the independent equity proceeding, recognized by the Supreme Court to exist in decisions antecedent to the promulgation of Rule 41(e), for the suppression of evidence taken in violation of the Fifth Amendment, is not still available. For, even if the rule does not in terms extend to Fifth Amendment rights, it certainly does not overrule the authoritative case law. In

summary, we are of the opinion that an individual claiming that evidence was taken from him in violation of either his Fourth or Fifth Amendment rights may bring a proceeding, whether it is styled a “Rule 41(

e) motion,” or an “independent equity proceeding,” prior to indictment to have his claim adjudicated. Unless his allegations clearly show that, even if true, he would be entitled to no relief, he should be given a hearing, and the court should make findings of facts and conclusions of law. Reversed and remanded. . See, where the allegations concerned Fifth Amendment rights: Centracchio v. Garrity, 198 F.2d 382 (1st Cir., 1952); Biggs v. United States, 246 F.2d 40 (6th Cir., 1957). .

It was there said, 278 U.S. at page 225, 49 S.Ct. at page 119: “Motions for the return of papers .and the suppression of evidence made in the cause in advance of the trial, under this rule of practice, must be differentiated from independent proceedings brought for a similar purpose. Where the proceeding is a plenary one, like the bill in equity in Dowling v. Collins, [6 Cir.], 10 F.(2d) 62, its independent character is obvious; and the appealability of the decree therein is unaffected by the fact that the purpose of the suit is solely to influence or control the trial of a pending criminal prosecution.

Applications for return of papers, or other property may, however, often be made by motion or other

summary proceeding, by reason of the fact that the person in possession is an officer of the court. See United States v. Maresca [D.C.], 266 Fed. 713; United States v. Hee [D.C.], 219 Fed. 1019, 1020. Compare Weinstein v. Attorney General [2 Cir.], 271 Fed. 673. Where an application is filed in that form, its essential character and the circumstances under which it is made will determine whether it is an independent proceeding or merely a step in the trial of the criminal case.

The independent character of the sumary proceedings is clear, even where the motion is filed in a criminal case, whenever the application for the papers or other property is made by a stranger to the litigation, compare Ex parte Tiffany, 252 U.S. 32 [40 S.Ct. 239, 64 L.Ed. 443]; [City of Savannah v. Jesup, 106 U.S. 563 [1 S.Ct. 512, 27 L.Ed. 276]; Gumbel v. Pitkin, 113 U.S. 545 [58 S.Ct. 616, 28 L.Ed. 1128]; or wherever the motion is filed before there is any indictment or information agañnst the movant, like the motions in Perlman v. United States, 247 U.S. 7 [38 S.Ct. 417, 62 L.Ed. 950] and Burdeau v.

McDowell, 256 U.S. 465 [41 S.Ct. 574, 65 L.Ed. 1048]; * * * ’’ (Emphasis supplied). . See Note to subdivision (

e) of Rule 41, Federal Rules of Criminal Procedure. . See footnote 1, supra.