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People v. Lynch





APPEAL from the Circuit Court of Cook County; the Hon. RICHARD J. FITZGERALD, Judge, presiding.


Defendant appeals from an order finding her in contempt of court for refusing to comply with an order to produce certain partnership records pursuant to a grand jury subpoena. The issue before this court concerns the availability, under Bellis v. United States (1974), 417 U.S. 85, 40 L.Ed.2d 678, 94 S.Ct. 2179, of the State and Federal constitutional privileges against self-incrimination to partners in family partnerships who are ordered to produce partnership records. We affirm the trial court and hold that Bellis does not create a mandatory exception to the "organized institutional activity" rule and that the availability of the privilege where family partnerships are involved must be decided on a case-by-case basis.

The pertinent facts are not in dispute. Defendant was found in contempt of court for failure to produce certain records of a partnership of which she and her father are the sole partners. Asserting her privilege against self-incrimination under both the United States and Illinois constitutions, defendant refused to produce the records, which had been subpoenaed by the Cook County grand jury. The State filed a petition to compel production, which was granted by the trial court. Upon defendant's refusal to comply with the order, she was found in contempt and was remanded to the custody of the sheriff until such time as she produced the records. The enforcement of the order was stayed pending this appeal.

Defendant is one of two partners in the McVittie Plating Company (McVittie), an Illinois general partnership. The other partner, George Lindquist, is defendant's father, who is apparently inactive in the business. Lindquist and his wife had originally purchased the company from James McVittie in 1947. Defendant succeeded her mother as a partner after Mrs. Lindquist's death.

According to the State's petition and its supplement, the day-to-day operations of the company are directed by Joseph Gergits, McVittie's general manager. The company employs 55 people in four separate divisions. There is a checking account in the partnership name and either of the two partners may withdraw funds upon his or her signature alone. There is also a payroll account, from which another person, Judith Mitchell, is authorized to withdraw funds on her signature only. The company has its own stationery in the partnership name and tax returns are also filed by the partnership itself.

McVittie was the target of a regular grand jury investigation in September 1978 pertaining to possible violations of the Illinois Antitrust Act. (Ill. Rev. Stat. 1977, ch. 38, par. 60-3.) The company was served with a subpoena duces tecum which ordered it to produce various records relevant to its operations and finances. Defendant appeared before the grand jury and refused to produce the documents, invoking the privilege against self-incrimination under the fifth amendment of the United States Constitution and article I, section 10 of the Illinois Constitution of 1970.

The State filed its petition to compel defendant to produce the materials. The October grand jury issued an identical subpoena, and, at the hearing on the State's petition in November, defendant was served with an identical subpoena from the November grand jury. The parties stipulated before the court that defendant's response to the October and November subpoenas would be the same as her response to the first subpoena, which was issued in September. Briefs having been submitted by both parties, the trial court conducted a hearing on November 14, 1978, and found defendant in contempt. The order remanding defendant to the custody of the sheriff until she produced the documents was stayed pending the disposition of her appeal.



Defendant first contends that individuals are protected by the fifth amendment to the United States Constitution from the compulsory production of the books and records of a small, family partnership. Relying on Boyd v. United States (1886), 116 U.S. 616, 29 L.Ed. 746, 6 S.Ct. 524; United States v. White (1944), 322 U.S. 694, 88 L.Ed. 1542, 64 S.Ct. 1248; and Bellis v. United States (1974), 417 U.S. 85, 40 L.Ed.2d 678, 94 S.Ct. 2179, she maintains that, while generally the production of documents and records of a partnership or other organizational entity cannot be prevented by invoking the privilege against self-incrimination the Supreme Court has carved out a "family partnership exception" through its acceptance of the holding in United States v. Slutsky (S.D.N.Y. 1972), 352 F. Supp. 1105. However, an analysis of these cases and the development of the privilege discloses no such absolute rule.

In Boyd, the Supreme Court considered the availability of the privilege against self-incrimination through the production of partnership records. An action had been brought against the partners of E.A. Boyd & Sons, seeking the forfeiture of certain property for alleged fraud against the revenue laws. Acting pursuant to existing Federal statutes, the trial court ordered that the partners be served with notice to produce invoices for the property involved. The documents were produced, the partners noting their objections, and the objections were renewed when the documents were offered into evidence. The Supreme Court held that the law under which defendants were ordered to produce the invoices was repugnant to both the fourth amendment privacy right and the fifth amendment privilege against self-incrimination because it provided that failure to produce documents as ordered constituted a confession of the allegations. Therefore, the court stated, the lower court's order to produce the invoices was an attempt "to extort from the party his private books and papers to make him liable for a penalty or to forfeit his property." 116 U.S. 616, 624, 29 L.Ed. 746, 749, 6 S.Ct. 524, 529.

Although Boyd involved the disclosure of partnership records, the Supreme Court has since noted that Boyd was not based on partnership considerations, having been decided in the early stages of the development of the fifth amendment privilege. At that time the significance of the partnership status was not yet recognized and the documents were considered private papers. Bellis v. United States (1974), 417 U.S. 85, 95 n. 2, 40 L.Ed.2d 678, 687-88 n. 2, 92 S.Ct. 2179, 2186 n. 2.

The "organized, institutional activity" concept was delineated in United States v. White (1944), 322 U.S. 694, 88 L.Ed. 1542, 64 S.Ct. 1248, when the court held that neither the fourth nor the fifth amendment requires the recognition of the privilege against self-incrimination so as to prevent production of documents of a group by a representative of that group. The privilege had been invoked by an assistant supervisor of the local organization of an international union when he appeared before a grand jury but refused to produce documents in accordance with a subpoena directed to the local. The court concluded that the privilege was not available to either the union or the supervisor based on the nature of the union organization and the fact that the documents were not the supervisor's private papers but were, instead, held by him in a representative capacity.

The court in White considered the union to be similar to a corporation in many ways, finding it to be an "organized, institutional activity" rather than a "wholly individual activity." (322 U.S. 694, 701, 88 L.Ed. 1542, 1547, 64 S.Ct. 1248, 1252.) The union's existence was perpetual in fact, if not in law, and it operated under its own constitution, bylaws and rules, with its officers having limited authority. The union had a separate treasury, owned separate real and personal property and could be sued in the union's name. Furthermore, its varied business and operations were not the private ...

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