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Tirado v. Commissioner of Internal Revenue

decided: September 7, 1982.

JACQUE TIRADO, A/K/A JACQUE DANTE, PETITIONER-APPELLANT,
v.
COMMISSIONER OF INTERNAL REVENUE, RESPONDENT-APPELLEE



Appeal from a judgment of the United States Tax Court (Theodore Tannenwald, Judge) determining deficiencies in the tax liabilities of appellant Jacque Tirado.

Oakes, Newman and Winter, Circuit Judges. Oakes, Circuit Judge (concurring).

Author: Newman

NEWMAN, Circuit Judge:

This appeal presents a recurring issue concerning application of the exclusionary rule barring use of evidence unlawfully seized in violation of the Fourth Amendment: whether the rule applies to bar use of such evidence in a proceeding different from the one for which the search was conducted. In Pizzarello v. United States, 408 F.2d 579 (2d Cir.), cert. denied, 396 U.S. 986, 24 L. Ed. 2d 450, 90 S. Ct. 481 (1969), we decided that evidence unlawfully seized by agents of the Internal Revenue Service for use in criminal tax proceedings was barred from use in a subsequent IRS civil tax proceedings. In United States v. Janis, 428 U.S. 433, 49 L. Ed. 2d 1046, 96 S. Ct. 3021 (1976), the Supreme Court decided that evidence unlawfully seized by local police officers investigating local wagering offenses was not barred from use in a subsequent federal civil tax proceeding. The Court left open the issue "whether the exclusionary rule is to be applied in a civil proceeding involving an intrasovereign violation." Id. at 456 n.31. In this appeal from a July 26, 1981 judgment of the United States Tax Court (Theodore Tannenwald, Judge), we must decide whether evidence allegedly seized unlawfully by federal narcotics agents for use in a narcotics prosecution is barred by the exclusionary rule in a subsequent federal civil tax proceeding. We thus encounter an alleged intrasovereign violation, which, unlike Pizzarello, has not been committed by officers of the agency bringing the civil proceeding. We conclude that the deterrence rationale of the exclusionary rule is not served by applying the rule to exclude evidence from a proceeding where the evidence was not seized with the participation or collusion of, or in contemplation of use by, agents responsible for the proceeding in which the evidence is presented. We therefore hold that the exclusionary rule is inapplicable to this case and affirm the judgment of the Tax Court.

I.

On August 3, 1972, pursuant to a search warrant, two agents of the Federal Bureau of Narcotics and three officers of the New York City Police Department entered the Manhattan apartment of appellant Jacques Tirado. The five investigators were members of the New York Drug Enforcement Task Force, a joint law enforcement unit drawn from the Federal Bureau of Narcotics, the New York state police, and the New York City police. Their warrant, issued by a justice of the New York Supreme Court, authorized a search of the apartment for "narcotics -- the means of committing a crime or offense, and the means of preventing a crime or offense from being discovered."

In the apartment, in addition to cocaine and various drug adulterants and paraphernalia, the agents discovered and seized the following items relevant to this appeal: $38,865 in cash, rent receipts and notices for the apartment, a lease for the apartment in Tirado's name, a notice to him regarding rental of a safe deposit box at a bank, several bank statements, a savings account passbook, parking tickets concerning two Rolls Royce automobiles, and several safe deposit box keys. Based largely on items seized during the search, the federal agents subsequently obtained search warrants for two safe deposit boxes registered to Tirado from which they seized $25,000 in cash and $10,000 worth of jewelry; they also learned the registration numbers of Tirado's two Rolls Royces. Tirado was indicted and convicted in New York state court of possessing narcotics. His conviction was upheld by the Appellate Division and by the New York Court of Appeals. People v. Tirado, 47 A.D. 2d 193, 366 N.Y.S.2d 140 (1st Dep't 1975), aff'd mem., 38 N.Y.2d 955, 348 N.E.2d 608, 384 N.Y.S.2d 151 (1976).

Shortly after the searches of Tirado's apartment and safe deposit boxes, the federal agents involved in the narcotics case met with an agent of the Internal Revenue Service and disclosed to him the results of the searches. The IRS then used this information to reconstruct Tirado's income for 1972 and to issue a Notice of Deficiency based on its calculations. Tirado petitioned the Tax Court to redetermine the deficiency on the ground that the deficiency was based wholly on information illegally obtained or derived from the search of his apartment. As subsequently refined, his claim was that the items seized were beyond the scope of the warrant.*fn1 In an opinion filed on April 10, 1980, Judge Tannenwald ruled that the language of the warrant was sufficiently broad to authorize seizure of all the items Tirado sought to suppress; the ruling did not reach the Government's alternative argument that the exclusionary rule was inapplicable to this case. Tirado v. Commissioner, 74 T.C. 14 (1980). The Court subsequently sustained the deficiency determination and entered a judgment for the Commissioner, from which Tirado appeals. We agree with the Tax Court's conclusion -- that it was proper to base the deficiency determination on the seized information -- but reach it by a different path, holding the exclusionary rule inapplicable in the circumstances of this civil tax proceeding. We therefore have no occasion to determine the legality of the various seizures involved.*fn2

II.

The Supreme Court has made it plain that the principal, if not the only, justification for excluding illegally seized evidence from governmental proceedings is to deter future governmental misconduct. United States v. Janis, supra, 428 U.S. at 446; see Stone v. Powell, 428 U.S. 465, 486, 49 L. Ed. 2d 1067, 96 S. Ct. 3037 (1976); United States v. Calandra, 414 U.S. 338, 347-48, 38 L. Ed. 2d 561, 94 S. Ct. 613 (1974).*fn3 The exclusionary rule "is calculated to prevent, not to repair"; its purpose is "to compel respect for the constitutional guaranty in the only effectively available way -- by removing the incentive to disregard it." Elkins v. United States, 364 U.S. 206, 217, 4 L. Ed. 2d 1669, 80 S. Ct. 1437 (1960). Current doctrine does not, however, take this principle to its furthest implication, which would require the exclusion of evidence whenever even a remote prospect of deterrence exists. Since use of the exclusionary rule impairs the search for truth even as it aids observance of constitutional limitations, standards for use of the rule must balance public needs against the claims of individual liberty.

The fact that evidence was seized in violation of the Fourth Amendment does not mean that it will be suppressed for every purpose in every proceeding. The Supreme Court has restricted application of the exclusionary rule to those circumstances where its deterrent effect would most likely be "substantial and efficient," United States v. Janis, supra, 428 U.S. at 453, and has cautioned that any extension of the rule beyond its core application -- normally, barring use of illegally seized items as affirmative evidence in the trial of the matter for which the search was conducted -- must be justified by balancing the "additional marginal deterrence" of the extension against the cost to the public interest of further impairing the pursuit of truth. United States v. Janis, supra, 428 U.S. at 453-54; see Stone v. Powell, supra, 428 U.S. at 493-94; United States v. Calandra, supra, 414 U.S. at 351-52.*fn4 As the Court has said in the slightly different context of the standing required to assert the exclusionary rule, "Unbending application of the exclusionary sanction to enforce ideals of governmental rectitude would impede unacceptably the truth-finding functions of judge and jury." United States v. Payner, 447 U.S. 727, 734, 65 L. Ed. 2d 468, 100 S. Ct. 2439 (1980).

Determining when the likelihood of substantial deterrence justifies excluding evidence requires some assessment of the motives of the officials who seized the challenged evidence. This inquiry into the officers' motivation is the fundamental issue in translating the idea of deterrence into practical decisions, for deterrence means modifying individual behavior. "In evaluating the need for a deterrent sanction, one must first identify those who are to be deterred," United States v. Janis, supra, 428 U.S. at 448, those whose "conduct . . . is to be controlled," ibid. If it is not likely to occur to potential wrongdoers as they seize the challenged evidence to care about its use for the particular purpose later in issue, then removing the possibility of that use is unlikely to deter them from unlawful conduct. As we have recently said, "The deterrent purpose of the exclusionary rule would not be significantly advanced by . . . suppress[ing] . . . illegally seized evidence in a [proceeding] in which the offending police officers could not possibly have had an interest at the time they conducted the illegal search." United States v. Rea, 678 F.2d 382, 389 (2d Cir. 1982). Thus, in order to decide whether application of the exclusionary sanction is likely to have a significant deterrent effect, the key question is whether the particular challenged use of the evidence is one that the seizing officials were likely to have had an interest in at the time -- whether it was within their predictable contemplation and, if so, whether it was likely to have motivated them. And if law enforcement officers are already deterred from Fourth Amendment violations by a prohibition against using illegally seized evidence to secure convictions for the offenses they are investigating, the further question is whether some significant incremental deterrence is achieved by prohibiting use of the evidence for additional purposes.

In answering these questions, some estimates must be made. Since we cannot read the minds of the officers and lack the guidance of sound empirical models, we must "rel[y], instead, on [our] own assumptions of human nature and the interrelationship of the various components of the law enforcement system." United States v. Janis, supra, 428 U.S. at 459. The primary consideration is the relationship between the law enforcement responsibilities and expertise of the seizing officials and the type of proceeding at which the seized material is being offered. The closer the nature of the proposed use for the evidence is to the seizing officers' "zone of primary interest," id. at 458, the stronger the inference that the officers had this use in mind when they made the seizure. For example, the Supreme Court concluded in Janis that as a general matter local police looking for evidence of gambling violations are probably not actively motivated by a desire to aid the federal tax authorities in winning a deficiency judgment against the person from whom the evidence is seized; as a result, "informing" them that anything they seized illegally would be excluded from federal tax proceedings would have added little to the already existing deterrent effect of threatening to exclude the material from the gambling prosecution. Other exclusionary rule cases also illustrate this point, confining the rule to a relatively narrow range of proceedings closely related to the goals of the investigation that occasioned the search. Thus, courts routinely prohibit governmental authorities from using illegally seized evidence in the proceedings for which the search was conducted, not only in a criminal prosecution, e.g., Mapp v. Ohio, 367 U.S. 643, 6 L. Ed. 2d 1081, 81 S. Ct. 1684 (1961), but also in the variety of civil proceedings, e.g., Wong Chung Che v. INS, 565 F.2d 166, 168-69 (1st Cir. 1977) (documents seized by immigration officials investigating illegal aliens excludable from subsequent deportation hearing); Knoll Associates v. FTC, 397 F.2d 530, 534-35 (7th Cir. 1968) (documents seized for purposes of FTC investigation excluded from resulting hearing); Smyth v. Lubbers, 398 F. Supp. 777, 786 (W.D. Mich. 1975) (drugs seized from dormitory rooms by state college officials investigating violations of college rules excluded from resulting disciplinary proceeding); Iowa v. Union Asphalt & Roadoils, Inc., 281 F. Supp. 391, 406-09 (S.D. Iowa 1968), aff'd sub nom. Standard Oil Co. v. Iowa, 408 F.2d 1171 (8th Cir. 1969) (business records seized by state attorney general excluded from resulting civil antitrust proceeding).*fn5

When the proceeding at which the seized evidence is offered is different from (normally, subsequent to) the proceeding for which the search was conducted, the exclusionary rule is still applied when there is a close relationship between the search and the secondary proceeding. Frequently the requisite relationship will be found when the search and the secondary proceeding were initiated by the same agency. Thus, a governmental authority is barred from using seized evidence not only in a criminal prosecution that was the purpose of the search but also in a civil suit later brought against the same defendant by the same agency. See, e.g., Pizzarello v. United States, supra (records seized by IRS for purposes of criminal tax prosecution for evading wagering taxes also excluded in subsequent civil tax proceeding); Vander Linden v. United States, 502 F. Supp. 693 (S.D. Iowa 1980) (records seized by IRS agent, participating in joint investigation of narcotics trafficking for purposes of criminal prosecution ...


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