UNITED STATES of America, Plaintiff-Appellee, v. Mark Roy ANDERSON, Defendant-Appellant
Docket: 94-50521
Court: Court of Appeals for the Ninth Circuit; March 29, 1996; Federal Appellate Court
Mark Roy Anderson appeals the denial of his motion for a Kastigar hearing, arguing that his prior testimony and document production in a state proceeding should not be used against him in his federal prosecution. He claims this testimony was protected under California Corporations Code § 25531(e) or, lacking immunity, was compelled by a threat of contempt, thus necessitating a Kastigar hearing to ensure the government could demonstrate independent sources for the evidence used against him.
The case originates from a 1986 civil action initiated by the California commissioner of corporations against multiple defendants, including Anderson, to enforce compliance with California securities laws. Following a preliminary injunction issued on January 14, 1987, Anderson was subpoenaed for documents and testimony but initially refused, citing his Fifth Amendment rights. In response to a contempt order, Anderson's attorney communicated on June 1, 1987, that he would waive the Fifth Amendment privilege, agreeing to provide the requested testimony and documents. Subsequently, a stipulation was signed on June 4, 1987, confirming Anderson's compliance, which led to the dismissal of the contempt order conditionally, pending his adherence to the stipulation.
The Ninth Circuit, affirming the district court's decision, confirmed its jurisdiction under 28 U.S.C. § 1291 and concluded that the denial of the Kastigar hearing was appropriate given Anderson's prior waiver of his Fifth Amendment rights.
Anderson was indicted on multiple counts of mail fraud and sought a Kastigar hearing to require the government to show that evidence used in his federal prosecution was not derived from his state testimony and document production. He argued that his testimony was protected under California Corporations Code § 25531(e) and that it was compelled by the threat of contempt. The district court denied the hearing, ruling that Anderson's testimony was not immunized because § 25531(e) was not self-executing and he did not testify under a court order overriding his privilege claim. The court determined that Anderson waived his Fifth Amendment privilege through a letter from his counsel dated June 1, 1987. Anderson appealed this denial.
The standard of review for the district court's decision is for abuse of discretion, while the determination of whether his testimony was immunized and whether the waiver of his Fifth Amendment rights was compelled are reviewed de novo. Anderson claims the court erred by not granting the Kastigar hearing based on his assertion of immunity or compulsion. The government counters that Anderson did not meet the burden to show his testimony was compelled by a grant of immunity and that he explicitly waived his Fifth Amendment rights in the June 1 letter. The court concluded that Anderson had waived his privilege and that this waiver was not compelled by immunity or contempt threats. Anderson's claims for a Kastigar hearing were based on two Fifth Amendment arguments: alleged statutory immunity and compelled testimony, with the burden on the government to prove evidence used was independent of any immunized statements if immunity was established.
Anderson argues that, without immunity, his testimony and document production were compelled by a threat of contempt, violating his Fifth Amendment rights and necessitating a Kastigar hearing. The Fifth Amendment protects against the use of compelled statements and guarantees the right to remain silent unless immunity is granted. Compelled testimony obtained through threats of severe sanctions infringes on this privilege. The inquiry into a Fifth Amendment violation continues regardless of whether a defendant waived their right, focusing instead on whether the witness's free will was overridden by coercive circumstances. If compelled statements violate the Fifth Amendment, a Kastigar hearing is warranted, requiring the government to show that subsequent evidence is not tainted by these statements.
The government contends that a letter from Anderson's counsel dated June 1, 1987, constitutes a waiver of his Fifth Amendment privilege. Typically, the privilege must be explicitly claimed; failure to assert it may result in a waiver of future claims. Waiver can occur inadvertently, and the trial judge is not required to ascertain if the waiver was knowing and voluntary. In this case, Anderson's counsel confirmed in the letter that he waived his Fifth Amendment rights regarding testimony and document production, indicating a deliberate decision to proceed without asserting the privilege after initial claims.
Mr. Anderson, along with his counsel, expressed a strong willingness to cooperate with the receiver to resolve the ongoing matter. He indicated this by waiving his Fifth Amendment privilege against self-incrimination, following which he signed a stipulation to attend a second deposition and comply with document subpoenas. During the deposition, Anderson testified and produced documents without invoking his Fifth Amendment rights, leading to the conclusion that he had waived this privilege.
Anderson argues that his waiver was compelled by the automatic grant of immunity under California Corporations Code § 25531(e) or by a court order related to contempt of a preliminary injunction. However, the document clarifies that Anderson misinterpreted the legal framework surrounding compliance with administrative subpoenas and the granting of immunity.
The relevant statutes allow the commissioner to issue subpoenas and seek court orders to enforce them when compliance is refused. If a subpoena is not obeyed, the commissioner can petition the superior court to compel compliance, which may lead to contempt proceedings if disobeyed. However, the commissioner cannot compel testimony that violates the privilege against self-incrimination; only the superior court can compel such testimony if a valid privilege is claimed. In such cases, if the court compels testimony, the witness may receive immunity under § 25531(e).
Corporations Code § 25531(e) provides immunity to parties who have validly claimed their privilege but are subsequently compelled to testify. In People v. Skelton, the court held that a defendant who cooperated without claiming privilege cannot invoke immunity under this statute, emphasizing that claiming privilege is necessary to qualify for immunity.
Anderson asserts he met this requirement by initially claiming privilege before being compelled to testify. However, the court finds that Anderson was not compelled under § 25531(e) because he waived his privilege before a hearing could determine its validity, agreeing to comply with subpoenas in exchange for delaying the order to show cause. Thus, the statute was deemed inapplicable.
Anderson's argument that the statutory framework automatically compelled his testimony and granted immunity is rejected. The court clarifies that he could only be found in contempt after the court ruled on his privilege claim, which it did not do. Therefore, he was not compelled to testify under § 25531(e), which requires a court determination of a valid privilege claim before immunity applies.
Ultimately, the court concludes that Anderson was not compelled by the superior court to testify and that his waiver of the fifth amendment privilege was not automatically triggered by the statutory process, negating any claim to immunity under § 25531(e). Anderson's additional claim that he was compelled to waive his privilege under the threat of contempt is also dismissed, as the circumstances did not validate his waiver.
The privilege against self-incrimination must be asserted when self-incrimination is threatened, but this rule does not apply if the privilege's assertion leads to penalties that coerce testimony. A witness can refuse to answer unless protected from the use of compelled statements in future prosecutions; without such protection, compelled answers are inadmissible. The Fifth Amendment restricts self-incrimination obtained through genuine compulsion. If a state threatens severe sanctions for not testifying, it violates the Fifth Amendment, and the key consideration is whether the witness's free will was compromised.
Anderson claims that the threat of contempt for not complying with a court order placed him in a situation similar to cases where defendants were forced to choose between contempt and waiving their Fifth Amendment rights. However, Anderson's argument is based on a misunderstanding of California law. He acknowledges that the commissioner could not compel his testimony and that his privilege claim had not been assessed by the court. The court indicated it would consider any privilege claims that arose, and Anderson would not face contempt until after a compliance order was issued and he failed to comply. His assertion that the enforcement process under California law was automatic is incorrect; individuals can assert their privilege during the enforcement hearing or later, and contempt can only be adjudged after the court compels testimony following an assertion of privilege.
Anderson could not be held in contempt for failing to comply with administrative subpoenas if he made a valid claim of privilege, which required judicial consideration before any enforcement actions. Instead of contesting the privilege, Anderson waived it and complied with the subpoenas, indicating that his testimony was not compelled under threat of contempt, thus making his Fifth Amendment waiver voluntary. The district court affirmed that Anderson's testimony and document production were not immunized or improperly compelled in violation of the Fifth Amendment, leading to the denial of a motion for a Kastigar hearing. The court clarified that Anderson's initial objections to the preliminary injunction did not prevent compliance, and his prior guilty plea was irrelevant to this appeal. The ruling addressed the legal principles surrounding immunity and compelled testimony, emphasizing that any testimony given under state immunity could not be used in federal prosecutions unless the government demonstrated independent sources for the evidence.
A written promise to waive the Fifth Amendment privilege does not alone constitute a waiver, as established in Tennenbaum v. Deloitte. However, Anderson explicitly waived his privilege against self-incrimination by testifying and producing documents without asserting his privilege. He acknowledged this waiver three times, indicating he fully understood the implications, distinguishing his situation from cases where waivers are inferred from ambiguous claims of privilege.
California Corp. Code § 25531(e) mandates that individuals must testify or produce documents even if such evidence may incriminate them, although they cannot be prosecuted for matters they are compelled to testify about after claiming their right against self-incrimination, except for perjury or contempt. § 25531(d) allows a superior court to compel testimony through a subpoena, with noncompliance punishable as contempt.
The superior court has jurisdiction to compel witness attendance under Cal. Gov't Code § 11186, and a petition for compliance must demonstrate that proper notice was given and that the individual has failed to comply with the subpoena. Anderson's assertion that the court ordered him to comply misses the point that he voluntarily agreed to the stipulation. He also argued that the threat of contempt invalidated his waiver, contradicting the earlier claim that such a threat immunized his testimony under § 25531(e).
In Garrity v. New Jersey, the Supreme Court ruled that police officers' testimony was involuntary when they were threatened with job loss for invoking their right against self-incrimination. Similarly, in Koon, statements made by officers under the threat of removal from office were deemed compelled. However, the Constitution does not prohibit all influences on a suspect's admissions. The obligation to testify before a grand jury after being warned of the right to remain silent is not considered compulsion, as established in Washington. Additionally, mere subpoena compliance does not equate to compulsion, as noted in Jenkins. In Minnesota v. Murphy, conditions of probation requiring testimony related to probation status were not seen as threats of revocation for asserting the privilege.
Anderson's claim that the court implicitly ruled against his privilege by signing a stipulated order was rejected. The court pointed out that Anderson had already ceased to assert his privilege, and nothing in the order addressed this claim. It was also clarified that the onus of asserting the privilege lies with the defendant, not the court, following the precedent set in Wagner. Furthermore, Anderson's situation mirrored that in Garner, where the Supreme Court determined that the mere possibility of prosecution for not filing a tax return did not compel a waiver of the privilege against self-incrimination, as a valid privilege claim would prevent such prosecution. The court dismissed Anderson's argument for a preemptive procedure to test the validity of his privilege claim prior to any potential prosecution.
