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United States of v. David Warren

July 28, 2011

UNITED STATES OF AMERICA, PLAINTIFF,
v.
DAVID WARREN, DEFENDANT.



ORDER

On June 2, 2011, the undersigned held a hearing on plaintiff's May 3, 2011 motion to compel post-judgment discovery. Lauren Cataldi appeared for plaintiff. David Warren appeared in pro per. Upon review of the motion and the documents in support and opposition, discussion of the parties and good cause appearing therefor, THE COURT FINDS AS FOLLOWS:

FACTUAL AND PROCEDURAL BACKGROUND

This lawsuit, filed by plaintiff on April 23, 1999, was an action to reduce to judgment outstanding federal tax assessments. On April 28, 2000, the undersigned issued findings and recommendations recommending that plaintiff's motion for summary judgment be granted and judgment be entered in favor of plaintiff in the amount of $392,926.25, plus accruals and other statutory additions as provided by law. See Doc. No. 71. On May 18, 2000, the Honorable David F. Levi adopted those recommendations in full and entered judgment accordingly. As of September 2009, plaintiff claims that the entire judgment amount plus interest remains outstanding.

On September 22, 2009 and pursuant to Federal Rule of Civil Procedure 69, plaintiff served interrogatories and requests for production in aid of judgment and execution on defendant. As of the filing of the instant motion, plaintiff claims it has not received any responses to its discovery requests.

In his opposition, defendant asserts that sometime after receiving plaintiff's discovery requests, he became concerned that he would be unable to respond fully and completely and, thereupon, sent a letter to plaintiff asking if his best efforts would be sufficient when responding to the discovery requests. Opp'n at 3. Defendant claims that plaintiff responded by stating that (1) an explanation that defendant could not completely comply was not acceptable; (2) defendant's best efforts would not be acceptable; and (3) defendant should consult with an attorney. Id.

Thereafter and allegedly based on the opinion of unretained counsel who allegedly cautioned defendant that it appeared he was being set up for criminal prosecution, defendant responded on April 29, 2010 to plaintiff's interrogatories and requests for production as follows: "Based on the advice of council [sic], I assert my right under the 5th Amendment of the United States Constitution and respectfully decline to respond." See Opp'n, Ex. E.

In reply, plaintiff asserts it did not receive defendant's blanket objection. Nonetheless, it argues a dispute remains as to defendant's assertion of his right against self-incrimination.

Following the June 2, 2011 hearing on this matter, defendant filed a supplemental opposition to plaintiff's motion to compel. Defendant opposes the requests for production and interrogatories on multiple grounds, including pursuant to the Fifth Amendment. However, because plaintiff's motion to compel challenges only defendant's objection to discovery on Fifth Amendment grounds, the court will consider that objection only.

DISCUSSION

Federal Rule of Civil Procedure 69 provides, in pertinent part: "In aid of the judgment or execution, the judgment creditor ... may obtain discovery from any person-including the judgment debtor-as provided in these rules or by the procedure of the state where the court is located." Fed. R. Civ. P. 69(a)(2). "The discovery contemplated by Rule 69(a) is a distinct phase of the litigation with a narrow focus. It is solely to enforce the judgment by way of the supplemental proceedings." Danning v. Lavine, 572 F.2d 1386, 1390 (9th Cir. 1978). One purpose of such special discovery is "to identify assets that can be used to satisfy a judgment." 1ST Tech., LLC v. Rational Enters. Ltd., 2007 WL 5596692, at *4 (D. Nev. Nov.13, 2007). Another purpose is "to discover concealed or fraudulently transferred assets." Fid. Nat'l Fin., Inc. v. Friedman, 2007 WL 446134, at *2 (D. Ariz. Feb.7, 2007); see also British Int'l Ins. Co., Ltd. v. Seguros La Republica, S.A., 200 F.R.D. 586, 589 (W.D. Tex. 2000) ("British International II") (noting that post-judgment discovery can be used to gain information relating to the "existence or transfer of the judgment debtor's assets").

Generally, the scope of post-judgment discovery is broad. "'[T]he judgment creditor must be given the freedom to make a broad inquiry to discover hidden or concealed assets of the judgment debtor.'" 1ST Technology, 2007 WL 5596692 at *4 (quoting British International II, 200 F.R.D. at 588). Further, due to its broad scope, a party is free to use any means of discovery allowable under the Federal Rules of Civil Procedure. Sec. and Exch. Comm'n v. Tome, 1987 WL 9415, at * 1 (S.D.N.Y. Apr.3, 1987); see also Fed. R. Civ. P. 69 advisory committee's note to 1970 Amendment ("The amendment assures that, in aid of execution on a judgment, all discovery procedures provided in the rules are available[.]"). "A judgment creditor is therefore ordinarily entitled to a very thorough examination of a judgment debtor with respect to its assets, including discovery [of] the identity and location of any of the judgment debtor's assets, wherever located." British Int'l Ins. Co. v. Seguros La Republica, S.A., 2000 WL 713057, at *5 (S.D.N.Y. June 2, 2000) ("British International I") (citations omitted).

A debtor is entitled to assert certain privileges to post-judgment discovery. "What is privileged is defined by the Federal Rules of Evidence; these rules include the privilege against self-incrimination." Campbell v. Gerrans, 592 F.2d 1054, 1057 (9th Cir. 1979); see Hickman v. Taylor, 329 U.S. 495, 507-08 (1947). The Fifth Amendment protection of an individual's right against self-incrimination "applies alike to civil and criminal proceedings, wherever the answer might tend to subject to criminal responsibility him who gives it." McCarthy v. Arndstein, 266 U.S. 34, 40 (1924). "The principle of Fifth Amendment protection has been construed to permit the privilege to be asserted 'in any proceeding, civil or criminal, administrative or judicial, investigatory or adjudicatory.'" Campbell, 592 F.2d at 1057 (quoting Kastigar v. United States, 406 U.S. 441, 444 (1972). As the Campbell court explains, lower courts have repeatedly held that the privilege against self-incrimination justified a person in refusing to respond to interrogatories. 592 F.2d at 1057.

The Fifth Amendment, however, only protects a person from "compelled ... Testimonial Communication that is incriminating." Fisher v. United States, 425 U.S. 391, 408 (1976). Accordingly, the Fifth Amendment is limited to protecting a person from being compelled to produce documents under circumstances where such production amounts to a testimonial communication in a proceeding wherein their legal jeopardy is at stake. See, e.g., id. at 409-10. Notwithstanding, even when documents themselves are not privileged, the "act of production" of the non-privileged documents may be sufficiently testimonial in nature as to make the privilege applicable to their production by an individual. United States v. Doe, 465 U.S. 605, 610-12 (1984). The circumstances may be such that, by selecting and producing the documents themselves, the individual is admitting the papers existed, that they were in his possession or control, and that they were authentic, all of these admissions providing elements of a case against the individual. See United States v. Hubbell, 530 U.S. 27, 36-38 (2000).

Additionally, the Fifth Amendment privilege applies to the business records of a sole proprietor. United States v. B & D Vending, Inc., 398 F.3d 728, 733 (6th Cir. 2004) (quoting Bellis v. United States, 417 U.S. 85, 87 (1974); United ...


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