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In United States v. Beekman et al., 2 Cir., 155 F.2d 580, at page 584, where the defendants were charged with a violation of the Emergency Price Control Act, 50 U.S.C.A.Appendix, § 901 et seq., the court states the rule as to waiver of privilege by the government thus: "We have recently held that when the government institutes criminal proceedings in which evidence, otherwise privileged under a statute or regulation, becomes importantly relevant, it abandons the privilege.
Summary of this case from United States v. RagenOpinion
No. 246.
April 26, 1946.
Appeal from the District Court of the United States for the Eastern District of New York.
Charles A. Beekman and Benjamin Harris were convicted in the United States District Court of violating the Emergency Price Control Act by making overceiling sales of meat and by failing to keep proper records, and they appeal.
Affirmed in part; reversed in part.
Defendants, Beekman and Harris, were found guilty of violating the Emergency Price Control Act of 1942, 50 U.S.C.A. Appendix, § 901 et seq., by making sales of meat at prices in excess of those prescribed by price regulations and by failing to keep complete and accurate records of sales.
The information contains thirteen counts. The first twelve are the same in their allegations except that they severally relate to different sales of various kinds of meats at prices above the established ceiling prices. Counts 7, 8 and 9 were dismissed on motion of the government. The remaining nine sales counts apply to the defendant Beekman, but only counts 11 and 12 apply to Harris.
Count 13 charges that the defendants wilfully and knowingly failed to keep complete and accurate records of each sale of meat; this count applies to both defendants.
The jury found Beekman guilty on counts 1-6 and 10-13. On counts 1-6 and 10, imposition of sentence was suspended, and he was placed on probation for two years. On count 11, he was sentenced to six months' imprisonment, sentence was suspended and he was placed on probation for two years. On counts 12 and 13, he was sentenced to six months' imprisonment and fined $5,000 on each count, the prison sentences on these two counts to run concurrently.
Harris was found guilty on counts 11, 12 and 13. On count 11 he was sentenced to six months' imprisonment; sentence was suspended, and he was placed on probation for a term of eighteen months. On counts 12 and 13 he was sentenced to three months imprisonment, sentences to run concurrently. There was no provision for the concurrent running of any of the suspended sentences.
The testimony in support of the government's case consisted of evidence given by a number of retail butchers who testified that, when they visited the wholesale meat establishment maintained by the defendant Beekman, they were charged over-the-ceiling prices for the meats which they purchased, and that they had received sales-slips covering only the ceiling prices. Beekman was the owner of the business. There was some controversy as to whether Harris was employed as a salesman or as manager.
Defendants caused a subpoena duces tecum to be served on Grady, the chief clerk of the OPA ration board, directing him to produce all OPA records relating to Puma, Mondello, Barth and Stulgaitis, retail butchers, who had been called as witnesses by the government and had given testimony against defendants. Grady appeared in court and stated under oath that he had not brought the records with him because of an OPA Regulation No. 55, issued April 6, 1944, which reads: "1. All official files, documents, reports, memoranda and other written material, whether in the regional or district offices, in any war price and rationing board, defense-rental area office, or in the National Office of the Office of Price Administration, shall be considered to be in the exclusive control and custody of the Office for the purpose of administering and effectuating the policies of the Emergency Price Control Act of 1942, as amended, and the Second War Powers Act of 1942 [50 U.S.C.A.Appendix, § 631 et seq.]. Officers or employees of the Office of Price Administration shall permit the inspection examination, disclosure or other use of such material only to the extent required or authorized by an applicable regulation or order or in accordance with the provisions of this order. 2. No information obtained under the Emergency Price Control Act, as amended, or under the Second War Powers Act which has been declared to be confidential under the National War Agencies Appropriation Act of 1944 [57 Stat. 522], or which has been deemed and expressly designated as confidential by the Administrator, or with regard to which a request for confidential treatment is made by the person furnishing such information, shall be disclosed or published unless the Administrator has made a determination that the withholding of such information would be contrary to the interests of national defense and security. 3. Any Regional Administrator or District Director may, subject to such instructions as may be issued by the Administrator, authorize the disclosure of information obtained under the Emergency Price Control Act of 1942 or the Second War Powers Act of 1942, which is not governed by section 2 of this order, if he determines that such disclosure will be in the public interest * * * 5. Any officer or employee of the Office of Price Administration who is directed by subpoena, subpoena duces tecum, or other process to disclose any official information or produce any official files, documents, reports, memoranda, or other papers, or copies thereof, shall appear in court in response thereto, but shall, in the absence of express authorization to the contrary, respectfully decline to make any disclosure or produce any such files, documents, or other papers or testify with regard thereto, on the ground that such disclosure is prohibited by this order." This Regulation purports to be based upon § 202(h) of the Emergency Price Control Act, 50 U.S.C.A.Appendix, § 922(h) which reads: "The Administrator shall not publish or disclose any information obtained under this Act that such Administrator deems confidential or with reference to which a request for confidential treatment is made by the person furnishing such information, unless he determines that the withholding thereof is contrary to the interest of the national defense and security."
Counsel for defendants stated to the trial judge: "I wish to prove through the records of Price Panel Boards of the OPA Local Offices which have been subpoenaed here that a number of the witnesses for the Government have been fined by Local Price Panel Boards for violating the ceiling price in selling to consumers. They have either been given monetary fines or their places of business have been closed for periods of from one day to ten days." The following colloquy then ensued:
"The Court: Is there any such thing as a fine?
"Mr. Schmalholz: There are two things. There are fines under the New York State War Emergency Act. I don't think that applies here. The Price Panel — the Local Board may call in violators at the retail level and tell them that they have information, evidence, or otherwise that they have sold to consumers over the ceiling, and in that event, after 30 days — or, I will put it this way — within 30 days the person — the consumer overcharged has the right to sue the seller, and after 30 days the administrator of the Office of Price Administration has a legal right to sue the seller. What happens is that they go to the Price Panel, and the Price Panel may settle or dispose of those matters, and the money goes to the treasury.
"The Court: Well, it is a settlement? They have no power to fine anybody?
"Mr. Schmalholz: No, they have not.
"The Court: And they have no right to close a business either, except under court order.
"Mr. Schmalholz: Or to suspend them under the rationing regulations.
"The Court: Yes, but what I am talking about is they have no right to impose a fine?
"Mr. Schmalholz: It is a settlement by the administrator of a civil damage action. It is not criminal at all."
The trial judge then held that the records were confidential and that the OPA officer need not respond to the subpoena duces tecum.
J. Vincent Keogh, of Brooklyn, N.Y., (Vine H. Smith and Maurice Z. Nungard, both of Brooklyn, N.Y., of counsel), for plaintiff-appellee.
William J. Grace, of Brooklyn, N.Y. (I. Maurice Wormser, of New York City, and William J. Grace, of Brooklyn, N.Y., of counsel), for defendants-appellants.
Before L. HAND, SWAN, and FRANK, Circuit Judges.
1. Beekman was convicted on ten counts, Harris on three. The conviction on counts 12 and 13, on which actual prison sentences were imposed, are, of course, appealable. As to the remaining counts, the judgments suspended execution of sentence on some, and suspended imposition of sentence on others, but placed defendants on probation in either event. Since the decision in Korematsu v. United States, 319 U.S. 432, 63 S.Ct. 1124, 87 L.Ed. 1497, it has been settled that a defendant may appeal from a judgment of conviction which suspends imposition of sentence and places the defendant on probation, as well as from a judgment which imposes sentence and suspends execution thereof. Berman v. United States, 302 U.S. 211, 58 S.Ct. 164, 82 L.Ed. 204.
2. The government argues that the trial court properly ruled that the OPA records, concerning the four government witnesses, Puma, Mondello, Barth, and Stulgaitis, need not be produced pursuant to a subpoena duces tecum. Two reasons are advanced: (a) That, assuming that those records would have disclosed that those witnesses had been in some way punished by OPA, such evidence was "not admissible for any purpose" and was "collateral"; (b) that, in any event, under the statute and Regulations, these records were inadmissible because they were "confidential."
We accept neither of those reasons. It needs no lively imagination to perceive that persons who have been disciplined by such a government agency, and who are still in a business subject to its supervision, might be facile witnesses against other alleged offenders. Consequently, records which show that they had thus been disciplined bear importantly on their bias. It follows that such evidence is admissible, not "collateral." Wigmore, Evidence, §§ 1020, 1022. We have recently held that when the government institutes criminal proceedings in which evidence, otherwise privileged under a statute or regulation, becomes importantly relevant, it abandons the privilege. United States v. Andolschek, 2 Cir., 142 F.2d 503; cf. United States v. Krulewitch, 2 Cir., 145 F.2d 76, 156 A.L.R. 337.
See also Bowles v. Ackerman, D.C., 4 F.R.D. 260.
Accordingly, the trial judge should have read the records to determine whether they contained data showing previous disciplining of these witnesses. The ruling in United States v. Ebeling, 2 Cir., 146 F.2d 254, 256, 257, is not applicable; for here defendants' counsel could not ask that the documents be sealed and made part of the record for appeal purposes, since the trial judge held they need not be produced in court. As these four witnesses gave important testimony affecting the charges under counts 1, 2, 3, 5, 6, 11 and 12, the convictions on those counts cannot stand.
3. There is nothing to show that the requested OPA records contained anything about the government witnesses Amesti or Kolster. Their testimony is sufficient to support the conviction of Beekman on counts 4, 10, and 13. Counts 4 and 10 do not relate to Harris, and these witnesses gave no testimony affecting him on count 13. Consequently, the judgment against Harris cannot stand.
4. We see no error in the refusal of the judge to hold objectionable the reference of government counsel in his summation to the significance of defendants' failure to call as witnesses two bookkeepers (Beekman's daughter and one Friedman). It is sometimes said that no inference can be drawn against a party for failure to call a witness equally available to both parties, and some courts have indicated that it is error for counsel to comment on such failure. We agree with Wigmore's criticism of that rule. Even if that rule were to be followed, it would not apply where there is likelihood of bias on the part of the person not called as a witness in favor of one party, for then that person is not, in a true sense, "equally available" to both parties; and, except in unusual circumstances, a party's employees come within that category.
Wigmore, Evidence, § 288: "Yet the more logical view is that the failure to produce is open to an inference against both parties, the particular strength of the inference depending on the circumstances. To prohibit the inference entirely is to reduce to an arbitrary rule of uniformity that which really depends on the varying significance of facts which cannot be measured." Cf. United States v. Cotter, 2 Cir., 60 F.2d 689, 692.
5. There is no merit in the contention that the information should have been dismissed on the ground that it fails to allege that the OPA Administrator certified the facts to the Attorney General pursuant to § 905 of the Act. See United States v. Tantleff, 2 Cir., 1946, 155 F.2d 27.
Reversed and remanded as to Harris on all counts.
Reversed and remanded as to Beekman on counts 1, 2, 3, 5, 6, 11 and 12; affirmed as to Beekman on counts 4, 10 and 13.