Opinion · Supreme Court of the United States
Consolidated Rendering Co. v. Vermont
28 S. Ct. 178
- Type
- Opinion
- Court
- Supreme Court of the United States
- Jurisdiction
- Federal
- Date
- 1908-01-06
- Topic
- general
cited with approval by the Advisory Committee in the note to the 1964 amendment of Rule 34 | in the grand jury context
Citator
- Cited by
- 70 opinions
CONSOLIDATED RENDERING CO.v. VERMONT,207 U.S. 541(1908)
28 S.Ct. 178
CONSOLIDATED RENDERING COMPANYv. THE STATE OF VERMONT, BY CLARKE C.
FITTS, ATTORNEY GENERAL.
ERROR TO THE SUPREME COURT OF THE STATE OF VERMONT.
No. 364.
Argued December 3, 4, 1907.
Decided January 6, 1908.
THIS writ of error brings up for review a judgment of the
Page 543
Supreme Court of the State of Vermont, affirming a judgment of
the County Court of the County of Chittenden, adjudging the
plaintiff in error, a corporation, hereinafter called the
company, in contempt and fining it $3,000, for the collection of
which it was ordered that execution should issue.
The company in due form was served in Vermont with a notice to
produce certain described books and papers before the grand jury
sitting at Burlington, in that State. The notice was given
pursuant to the provisions of a statute passed by the General
Assembly of the State, October 9, 1906. No. 75 Laws, p. 79. That
statute provided for the service upon a corporation doing
business in the State, whether organized under its laws or those
of another State or country, of a notice to produce books and
documents before any court, grand jury, etc., which contained any
account or information concerning the subject of inquiry before
the tribunal, acting under the authority of the State, and which
books, etc., have at any time been made or kept within the State
of Vermont, and were within the custody or control of the
corporation in that State or elsewhere at the time of the service
of the notice upon it. Such corporation, when notice to the above
effect is served upon it, is, by the statute, directed to produce
the books and papers as required. The notice is to be issued from
the court or tribunal before whom the papers are required to be
produced, and a general description of what is required is to be
given in the notice. If the corporation, without reasonable
cause, neglects or refuses to comply, "it may be punished as for
contempt by the court having jurisdiction of the premises to
punish for the contempt. Execution may issue for the collection
of such fine as may be imposed for such contempt."
This company was doing business at Burlington, Vermont, under
a certificate from the Secretary of State, certifying that it had
complied with all the requirements of the law authorizing it to
do business in the State. On the seventeenth of October, 1906,
the grand jury was in session at Burlington,
Page 544
and had been investigating a complaint which had been made
against certain individuals who were members of the Vermont
Cattle Commission, the complaint being that such persons, or one
of them, had unlawfully sold diseased meat for food purposes at
Burlington. In order to continue the investigation the grand jury
had caused a notice, under the above statute, to be served upon
the company, directing it to produce certain books and papers,
described in such notice, before the grand jury on the
seventeenth of October, 1906. On the day named a person,
representing the company, appeared before the grand jury and
produced some books of account and other data, but failed to
produce others which were described in the notice, and which it
was therein directed to produce. The grand jury reported the
facts to the County Court, stating in the report that the company
had kept books which would have shown material facts for the
purpose of the investigation, but had not produced them, as
required in and by the notice, and that they were necessary for
the further pursuit of the inquiry. The Attorney General at the
same time filed a petition to the court containing, in substance,
the same facts, and asked that the company should be proceeded
against for contempt. The County Court thereupon, on the
nineteenth of October, 1906, made an order to show cause why the
company should not be punished as for a contempt in failing to
produce such books and papers. Upon the return of the order the
company appeared by counsel and made a motion to dismiss the
proceeding on the ground that the memoranda and papers called for
in the notice were not legal and material evidence before the
grand jury, and also because it was sought by the notice to
produce, and by the other proceedings to compel the company to
bring into the State of Vermont, before the grand jury, papers
which might tend to criminate the company and render it liable to
criminal prosecution, contrary to the provisions of theFourth,
FifthandFourteenthAmendments to the Constitution of the
United States. Accompanying this motion to dismiss was the affidavit of
counsel, in which he stated that
Page 545
the papers and memoranda which the company had failed to produce
before the grand jury would, if produced in evidence before the
jury, tend to criminate the company and render it liable to
criminal prosecution. The company also answered and admitted that
it had kept at Burlington, in Vermont, such papers as were
described in the notice to produce, but that on August 20, 1906,
all such books and papers were sent to the main office of the
company at Boston, Massachusetts, for the purpose of examination
and verification, and that after it was made, and long before the
service of the notice, such papers or memoranda as were not
produced before the grand jury had been destroyed at Boston. The
State took issue upon the averments of the answer.
Upon the hearing before the court one of the company's agents
testified that the papers had been destroyed in Boston because
they were of no consequence, and there was nothing in them to
incriminate anybody.
The court, for reasons which it stated, found that the papers
wanted were material to the inquiry which the grand jury was
making, and that without their presence it was impossible to
proceed to any effect with the investigation. It further found,
upon all the evidence before it, that the books and papers had
been in possession of the company at the time they were taken
away from the State, and the court said that it failed to find
that the papers were destroyed, and that it also failed to find
that they were not then in the custody and control of the company
so that it could produce them, and that "thus failing to find, we
find them guilty of contempt." This judgment was affirmed by the
Supreme Court of Vermont. 66 A. 790.
The notice to produce was in excess of the authority granted by the statute, and was invalid.
Inflicting a fine upon the plaintiff in error for failure to obeyPage 546an invalid and unauthorized order deprived it of property without due process of law.
The statute is a highly penal one. A corporation failing to comply with a proper and lawful notice is subject to punishment for contempt and may also be enjoined from longer doing business in Vermont. The whole proceeding was a summary one, and the jurisdiction of the court to act depended upon a strict compliance with the statute.
Since the statute was not complied with, all the proceedings here taken were null and void, and the plaintiff in error was adjudged in contempt without due process of law.Thatcherv.Powell, 6 Wheat. 119. See alsoEx parte Fisk,113 U.S. 713;Ex parte Rowland,104 U.S. 604;Ex parte Ayers,123 U.S. 443;Ex parte Sawyer,124 U.S. 200;Ex parte Burrus,136 U.S. 586;Re Bonner,151 U.S. 242.
Neither statute nor notice to produce afforded the plaintiff in error an opportunity to present in court reasons why the writings demanded should not be produced.
The notice to produce which could be issued under the statute by a non-judicial body in effect pronounced anex partejudgment on the plaintiff in error without hearing or notice and denied due process of law.Hoveyv.Elliott,167 U.S. 409;Holdenv.Hardy,169 U.S. 366,389,390;Rollerv.Holley,176 U.S. 398.
Where thesubpoena duces tecumrequires appearance and the production of documents in a place other than open court, the witness has a right to have the question whether he shall answer or produce passed upon by the court, with opportunity for defense, and an order of the court to produce before he is in contempt.Halev.Henkel,201 U.S. 43,80;InterstateCommerce Com. v.Brimson,154 U.S. 447,479. See alsoCounselmanv.Hitchcock,142 U.S. 547;Brownv.Walker,161 U.S. 591;Interstate Commerce Commissionv.Baird,194 U.S. 25;Ballmanv.Fagin,200 U.S. 186;Nelsonv.UnitedStates,201 U.S. 92.
This statute is an attempt by the State to limit a corporationPage 547in the complete dominion and control of its property situated in another State, although the corporation is not organized under her laws and is not personally within her jurisdiction. The sovereign powers of a State cannot be exercised beyond her borders.Union Refrigerator Co. v.Kentucky,199 U.S. 194;Buckv.Beach,206 U.S. 392;Allgeyerv.Louisiana,165 U.S. 578,592;N.Y., L.E. W.R.R. Co. v.Pennsylvania,153 U.S. 628;Mississippi c. Co. v.Pennsylvania, 2 Black, 485.
The statute attempts to confer judicial functions upon nonjudicial bodies, in violation of theFourteenthAmendment.
The powers bestowed are judicial in their character which cannot be exercised by the legislature itself, much less delegated to a non-judicial body.Kilbournv.Thompson,103 U.S. 168. See alsoIn re Pacific Railway Comm., 32 F. 241, 253.
The statute and notice required the plaintiff in error to produce writings which tended to incriminate it, without extending immunity against criminal prosecution.Counselmanv.Hitchcock,142 U.S. 547;Ballmanv.Fagin,200 U.S. 186.
Even if the notice had contained an order for the plaintiff in error to appear before the grand jury, no question of law in reference to self-incrimination could properly have been raised before that body.Ballmanv.Fagin,200 U.S. 186;Ex parteWilson,39 Tex.Crim. 630.
The statute, since it contains no immunity clause, is in plain contravention of article X of the Vermont constitution, which is substantially the same as theFifthAmendment to the United States Constitution.Counselmanv.Hitchcock,142 U.S. 547;Emery's Case,107 Mass. 172;State ex rel. AttorneyGeneralv.Simmons Co.,109 Mo. 118;In re Cullinan, 82 A.D. (N.Y.) 445. See alsoEx parte Clarke,103 Cal. 352;Ex parte Cohen,104 Cal. 524;Lamsonv.Boyden,160 Ill. 613;Ex parte Carter,166 Mo. 604;Smithv.Smith,116 N.C. 386;Peoplev.Forbes,143 N.Y. 219;Peoplev.O'Brien,176 N.Y. 351;Loganv.Railroad Co.,132 Pa. 403,408;United Statesv.LeadCo., 75 F. 94.Page 548
For the same reason, the statute is in conflict with theFourteenthAmendment which prohibits the infringement of fundamental rights by state action, whether legislative, executive or judicial. The right to be protected against self-incrimination is a fundamental right so protected.Boydv.United States,116 U.S. 605,631.
The statute and notice to produce authorized an unreasonable search and seizure of the private books and documents of the plaintiff in error.Boydv.United States,116 U.S. 616;Halev.Henkel,201 U.S. 43. See alsoIn re Pacific RailwayComm., 32 F. 241;Ex parte Clarke,103 Cal. 352;Lesterv.People,150 Ill. 408;Ex parte Brown,72 Mo. 143;Statev.Davis,117 Mo. 614;Corsonv.Hawley,82 Minn. 204,214;Newberryv.Carpenter,107 Mich. 567.
The statute provides no compensation for the time, trouble and expense imposed upon a corporation in a foreign State or country of collecting and sending the documents demanded to the State of Vermont. Such a requirement is, in substance, a taking of property without just compensation, and, furthermore, the taking is not in Vermont, but outside her limits, where the expense is incurred and the labor performed.Chicago c. Ry. Co. v.Illinois,200 U.S. 561;Mo. Pac. Ry. Co. v.Nebraska,164 U.S. 403;Chicago Ry. Co. v.Chicago,166 U.S. 226.
The statute is confined in its operation to corporations. An arbitrary classification is thus established, and the plaintiff in error is deprived of the equal protection of the law secured by theFourteenthAmendment. The classification created by this statute is a purely arbitrary one and in conflict with the principles laid down by this court inGulf c. Ry. v.Ellis,165 U.S. 150.
Where evils sought to be remedied are incident to individuals as well as corporations, laws applicable only to corporations are clearly unconstitutional.Johnsonv.Goodyear Mining Co.,127 Cal. 4;Quarries Co. v.Bough,80 N.E. 529(Ind. 1907);Ballardv.Mississippi Cotton Oil Co., 81 Mississippi,Page 549507, 569. See alsoConnollyv.Union Sewer Pipe Co.,184 U.S. 540.Mr. Clarke C. Fitts, Attorney General of the State of Vermont, for defendant in error:
Where a witness is within the jurisdiction of the court issuing the subpoena, he may be compelled to produce books and papers, if they are within his control, though the physical location thereof may at the time be without the jurisdiction.Bankv.State Bank, 3 Cliff. 201; Wigmore on Evidence,2200.
The plaintiff in error resided in Maine, but it was doing business in Vermont, and was present in Vermont.Railroad Co. v.Koontz,104 U.S. 11,12;Blakev.McClung,172 U.S. 258,261;Insurance Casev.Francis, 11 Wall. 210.
The question whether the notice in its scope goes beyond the statute and as to whether the books and papers called for would be legally admissible is one for the state court alone.
It is within the established power of the State to prescribe the evidence which is to be received in the courts of its own government.Adamsv.New York,192 U.S. 599;Fong Tingv.United States,149 U.S. 698,729.
The requirement of the production of books and papers did not compel the company to incriminate itself.Adamsv.New York,192 U.S. 597.
Law in its regular course of administration through courts is due process, and when secured by a law of the State, the constitutional requirement is satisfied, and due process is so secured by laws operating on all alike.Leeperv.Texas,139 U.S. 462; Kent's Commentaries, vol. 2, p. 13;Marchantv.Railroad Co.,153 U.S. 390.
A corporation may be punished for contempt as well as an individual person.Peoplev.Railroad Co., 20 How. Pr. (N.Y.) 358.
Where a foreign corporation is doing business in another State, it is proper to punish a contempt by a fine as well against the corporation itself as the subordinate agents found withinPage 550its jurisdiction.United Statesv.Railroad Co., 6 F. 237.
The company insists that the proceedings were in violation of the Constitution of the United States. The objections made before us were: (1) That the notice to produce was in excess of the authority granted by the statute, and was therefore invalid; (2) that neither the statute nor the notice afforded the company an opportunity to present in court reasons why the writings demanded should not be produced; (3) that the effect of the statute is to limit a corporation in the complete dominion and control of its property situated in another State, although the corporation is not organized under the laws of the State of Vermont, and is not personally within her jurisdiction; (4) that the statute attempts to confer judicial functions upon non-judicial bodies, in violation of theFourteenthAmendment to the Constitution of the United States; (5) that the statute and notice required the company to produce writings which tend to incriminate it, without extending immunityPage 551against criminal prosecution; (6) that the statute and notice authorized an unreasonable search and seizure of the private books and documents of the company; (7) that the statute provided no compensation for the time, trouble and expense imposed upon a corporation in a foreign State or country of collecting and sending the documents demanded to the State of Vermont; and lastly (8) that the statute is confined in its operation to corporations, thus making an arbitrary classification, by which the company is deprived of the equal protection of the law secured by theFourteenthAmendment.
The first objection made by counsel for the company is not of a Federal nature. Whether the notice to produce was broader than the statute provided for is a question of the construction of the state statute, and of the notice, and the decision of the state court is final on that question.
Counsel insisted before us in discussing the second objection that the failure to give an opportunity to be heard why the books should not be produced deprived it of due process of law guaranteed under theFourteenthAmendment. Without discussing the question whether this matter comes within the meaning of due process of law, we may say that the objection to the statute is not borne out by its text. The company had under its provisions, and by the fourth section, full opportunity to show cause before the court why it did not produce the papers, and the Supreme Court of Vermont has held in this case that any objection to the production of the papers made before the grand jury would have raised the question before that body, which it would have been its duty to report to the court for its action. Upon such question the company would have been entitled to be heard, and it was in fact heard before the court previous to any decision by the court regarding the right of the company to withhold the papers. So long as a hearing is given before any proceeding is concluded to enforce the production of the papers, due process of law is afforded.Simonv.Craft,182 U.S. 427;Wilsonv.Standefer,184 U.S. 399,Page 552415;New Orleans Waterworks Co. v.Louisiana,185 U.S. 336,349.
The third objection is without force. It is argued that the statute in this particular denies due process of law to the company, because it authorized the infliction of a fine by the court for failure to perform an act outside the State, ordered by a non-judicial body, and without notice and opportunity for hearing. The last reason has already been answered by showing that a hearing is provided for before any punishment of the company for disobedience to the requirements of the notice to produce can be enforced. There can surely be no illegality in providing that a corporation doing business in the State and protected by its power may be compelled to produce before a tribunal of the State material evidence in the shape of books or papers kept by it in the State, and which are in its custody and control, although for the moment outside the borders of the State. The statute is in no sense a provision as to how the company shall perform its duties and obligations in other States. It directs the company doing business in the State and present therein, by its officers or some of them, to do something which it is entirely competent to do, the purpose of which is to enable the tribunal making the investigation under a state statute to perform its duty.
Fourth. There is no provision in the Federal Constitution which directly or impliedly prohibits a State, under its own laws, from conferring upon non-judicial bodies certain functions that may be called judicial. It is said that the statute, in providing for the production of books and papers, includes not only the court and grand jury, but any tribunal or commission authorized by the State. There is nothing, as we have said, in the Federal Constitution which prevents it.
The fifth objection is also without merit, even upon the assumption that in such a case as this the company could take the objection through the witness. The court simply held that it could not determine whether the objection as to incrimination was valid until the books were produced for inspectionPage 553by the court, though before they were to be used in evidence. If, after that inspection, any portion were found of that character, the court held that such portion would be excluded. As, however, the company failed and refused absolutely to produce any of the books, with some unimportant exceptions, it was adjudged to have failed to show any reasonable cause for such refusal to comply with the requirements of the notice, and it was fined for the contempt. Obviously the company could not by its refusal to produce the books thereby entirely conclude the court from any examination whatever into the sufficiency of the excuses for such non-production. Otherwise the company could disobey at its pleasure and so prevent any inquiry into the merits of the excuses. The statute might as well not exist if this were to be permitted.
Sixth. The objection that the notice authorized by the statute amounted to an unreasonable search and seizure of the private books and documents of the company is also not well founded. InAdamsv.New York,192 U.S. 585, where the question was raised, the court refused to discuss the contention that theFourteenthAmendment made the provisions of theFourthandFifthAmendments to the Constitution of the United States, so far as they related to the right of the people to be secure against unreasonable searches and seizures, and to be protected against being compelled to testify in a criminal case against themselves, privileges and immunities of citizens of the United States of which they could not be deprived by the action of the State, because on an examination of the record the court concluded that there had been no violation of this restriction, either in the unreasonable search and seizure or in compelling plaintiff in error to testify against himself. We are of opinion that there was no violation of such rights in the case before us, and we think it equally unnecessary to decide the question which was left undecided in theAdams case.
The objection is also made that the documents were notPage 554described with the particularity required in the description of documents necessary to a search warrant or subpoena, and that it was not a valid paper and created no obligation to obey the notice, which could form no justification for any proceeding for contempt, and was not due process of law. An examination of the notice to produce shows that the requirements of the notice, while quite broad, yet were limited to such books or papers as related to, or concerned, any dealings or business between January 1, 1904, and the date of the notice, October, 1906, with the parties named therein, who were cattle commissioners of the State of Vermont, and which papers were to be used relative to the matter of complaint pending, and then and there to be investigated by the grand jury, in which the persons named in the notice were charged with having unlawfully sold diseased meat for food purposes at Burlington. The notice also gave in detail the dates and amounts of checks and vouchers which the company was required to produce. The company refused to produce the books (with the exceptions stated), and even if the notice had been too broad, the objection cannot be urged as to the validity of the order adjudging the company guilty of contempt.Halev.Henkel,201 U.S. 43. But unless it can be said that the court or grand jury never has any right to call for all the books and papers, or correspondence, between certain dates and certain persons named, in regard to a complaint which is pending before such court or grand jury, we think the objection here made is not well founded. We see no reason why all such books, papers and correspondence which related to the subject of inquiry, and were described with reasonable detail, should not be called for and the company directed to produce them. Otherwise the State would be compelled to designate each particular paper which it desired, which presupposes an accurate knowledge of such papers, which the tribunal desiring the papers would probably rarely, if ever, have. The notice is not nearly so sweeping in its reach as in the case ofHalev.Henkel, supra.
Seventh. The next objection relates to the claim that thePage 555statute provides no compensation for the time, trouble and expense imposed upon a corporation in a foreign State or country in collecting and sending the documents demanded to the State of Vermont, and that it thereby takes, if enforced, private property for public use without compensation. The prohibition to that effect is found in theFifthAmendment to the Federal Constitution. Here again we meet the question whether that amendment, because of the subsequent adoption of theFourteenthAmendment, applies to a state proceeding, but for the reasons already stated we do not find it expedient to discuss it here. We do not say that in any event a witness is entitled to compensation in order to avoid the above constitutional provision, but the Supreme Court in this case has held that the general law of the State in reference to the compensation of witnesses applied to this statute. The answer which the counsel for the company makes is that neither the statute nor the notice required the attendance of any one as a witness, but was merely an order for production for which no compensation was provided, either by the statute or under the general law. But the papers cannot walk into court of themselves, and when they are brought there by virtue of the notice to produce served on the company, and they are given to some person by the company for the purpose of such production, he has a right to be sworn as to the papers which he produces for the purpose of identification, if nothing else, and the state court has held that he is entitled as a witness to compensation.
Lastly, the objection is urged that there is an arbitrary classification in the statute, which is confined to corporations alone, and the company is thereby deprived of the equal protection of the laws secured by theFourteenthAmendment. There is no improper classification in this regard. It is stated by the state court that prior to the passage of this act there was no adequate provision for compelling the production of books and papers by a corporation, and it was held that the statute was designed for requiring the corporation itself, asPage 556the responsible owner and custodian, to produce the documentary evidence mentioned therein, without the necessity of calling upon bookkeepers, managers or other servants who may, or may not, in fact, have custody or control thereof at the time notice to produce is given, and to place upon the corporation the responsibility of seeing that such evidence called for, if in its control, is produced. There is ample justification for the classification made by the statute.
The judgment of the Supreme Court of the State of Vermont isAffirmed.