Case summaries and commentary on recently decided criminal law cases in the Third Circuit provided by Federal Defenders and CJA Panel Attorneys.
Wednesday, June 03, 2015
Fifth Amendment Privilege Against Self-Incrimination Inapplicable to Corporate Custodian Under Collective Entity Doctrine
In In re: In the Matter of the Grand Jury Empaneled on May9, 2014, 2015 WL 2262650, No. 15-1264 (3d Cir., May 15, 2015), a clinical blood
laboratory in New Jersey had been charged with bribing area doctors to refer
their patients to the lab for blood testing. Two of the defendants, a medical
doctor and his incorporated medical practice, were charged with accepting said bribes.
A grand jury subpoenaed the custodian of records for the medical practice seeking
to obtain documents related to, inter
alia, the medical practice’s patient list and corporate records. The
medical practice initially maintained a staff of six; however, due to financial
difficulties arising as a result of the instant matter, the doctor was forced
to terminate the staff. Consequently, the doctor ultimately served as the sole
owner and employee of the medical practice, as well as its custodian of
records. The doctor moved to quash the grand jury subpoena, arguing that compelled
disclosure of the corporate records would violate his Fifth Amendment privilege
against self-incrimination. He also argued that the subpoena was overbroad. The
district court denied his motion, ruling that a corporation may not assert the
Fifth Amendment privilege. The court also ruled that the subpoena was not
overbroad. Nonetheless, the defendants,
i.e., the doctor and the medical practice, refused to comply with the subpoena.
The district court ultimately found the defendants in civil contempt.
The Third Circuit ruled that the district court’s refusal to
quash the subpoena was not an abuse of discretion. The court applied the “collective
entity” doctrine, as enunciated in Bellis v. United States, 417 U.S. 85 (1974),
and Braswell v. United States, 487 U.S. 99 (1988), to determine that, as a representative
of a collective entity, the corporate custodian acts on behalf of the
corporation, which may not assert the Fifth Amendment privilege itself. The
Third Circuit adopted the Supreme Court’s reasoning in rejecting the “act-of-production”
doctrine, which focused on the communicative nature of compelled disclosures
and their potential to personally incriminate the corporate custodian. The Third Circuit concluded that a corporate
custodian may not enjoy the benefits of incorporation without also enduring its
The Third Circuit also determined that, as a grand jury
traditionally possesses broad investigatory powers, a grand jury subpoena is
valid if it merely identifies materials which could reasonably contain
information that is relevant to the government’s investigation. The Third
Circuit concluded that the district court properly had ruled that subpoena at
issue was sufficiently specific.