author: CLARK, Circuit Judge:

text:
    McNeill STOKES and Lewis C. Barbe, Plaintiff-Appellee, v. Peter J. BRENNAN, Secretary of Labor, U.S. Department of Labor, Defendant-Appellant.
    No. 72-2946.
    United States Court of Appeals, Fifth Circuit.
    April 3, 1973.

      John W. Stokes, Jr., U. S. Atty., Charney K. Berger, Asst. U. S. Atty., Beverley R. Worrell, Regional Sol., U. S. Dept, of Labor, Atlanta, Ga., for defendant-appellant.
    J. Ben Shapiro, Jr., Atlanta, Ga., for plaintiff-appellee.
    Before ALDRICH, SIMPSON and CLARK, Circuit Judges.

       Hon. Bailey Aldrich, Senior Circuit Judge of the First Circuit, sitting by designation.

   CLARK, Circuit Judge:

Stokes and Barbe brought this action based on the Freedom of Information Act [the Act] in the District Court for the Northern District of Georgia, seeking temporary and permanent injunctions prohibiting the Secretary of Labor from withholding certain documents and materials. The materials sought include the “ ‘Training Course for Compliance Safety and Health Officers’ including all instructor and student manuals, training slides, training films and other visual aids and materials used in training inspectors of the Occupational Safety and Health Administration.” Stokes and Barbe contend that the material sought is an administrative staff manual and contains a substantive discussion of the provisions of the Occupational Safety and Health Act of 1970, 84 Stat. 1590. After examining the manual in camera, the District Court ordered the Secretary to produce the manual and teaching aids for inspection and copying. This appeal ensued. We affirm.

Though the government’s position in this and other cases involving similar issues might lead one to a contrary conclusion, disclosure of material in government files has now become the rule, not the exception. The Act was intended to increase public access to such records through the imposition of liberal disclosure requirements limited only by specific, narrowly constructed exemptions. The Act is divided into three subsections: the first sets out the types of material which must be disclosed, the second carves out certain restrictions and limitations on the nature of those materials which are required to be revealed, and the third emphatically reiterates the proposition that the Act does not authorize withholding of any information except as specifically stated. Thus, to prevail, the government had to show that the material which Stokes and Barbe sought was not within the purview of the first subsection of the Act, or if it was, that such material was exempted by one of the exclusions set out in the second subsection.

The Administrative — Law Enforcement Dichotomy

Though all parties assumed in the court below that the material sought was an administrative staff manual which affected the public and thus was subject to disclosure unless it was specifically exempted by one of the enumerated exclusions, the government now seeks to contend on this appeal that the material sought is without the purview of that provision. It does not challenge the fact that the material sought is a staff manual and that the material affects a member of the public. It argues, however, that the manual sought is not administrative in nature but rather is a law enforcement manual. It points to the language of the Senate Committee on the Judiciary as support for its proposition :

The limitation of the staff manuals and instructions affecting the public which must be made available to the public to those which pertain to administrative matters rather than to law enforcement matters protects the traditional confidential nature of instruetions to government personnel prosecuting violations of law in court, while permitting a public examination of the basis for administrative actions.

Sen.Rep.No.813, 89th Cong., 1st Sess. 2 (1965). While the distinction which the government would draw is valid in the abstract, there is no basis in fact for applying it to this case.

The Sixth Circuit, after an examination of the legislative history of the Act, concluded that the purpose of the law enforcement exception “was to bar disclosure of the information which, if known to the public, would significantly impede the enforcement process.” Because their reasoning is so apt the following quote is included for the convenience of the reader and in preference to any attempt at paraphrase:

Law enforcement is the process by which a society secures compliance with its duly adopted rules. Enforcement is adversely affected only when information is made available which allows persons simultaneously to violate the law and to avoid detection. Information which merely enables an individual to conform his actions to an agency’s understanding of the law applied by that agency does not impede law enforcement and is not excluded from compulsory disclosure under (a)(2)(C).
Far from impeding the goals of law enforcement, in fact, the disclosure of information clarifying an agency’s substantive or procedural law serves the very goals of enforcement by encouraging knowledgeable and voluntary compliance with the law. Such clarifying information is found in agency rulings made public; it is also found in many cases in manuals and instructions like those sought here which are addressed specifically to agency personnel. It may be found in the criteria for investigative action; in standards for evaluation and so forth. Materials providing such information are administrative in character and clearly discloseable under (a)(2)(C).

Hawkes v. Internal Revenue Service, 467 F.2d 787, 795 (6th Cir. 1972) (footnote omitted).

Secrecy can be justified in such a case as the one at bar only to the extent that it protects policies governing enforcement methods which, if disclosed, would tend to defeat the purpose of inducing maximum voluntary compliance by revealing classes or types of violations which must be left undetected or unremedied because of limited resources.

Our comprehensive in camera, examination of the documents in question fully affirms the district court’s conclusion that there is no support in fact for the government’s contention that disclosure of this entire manual and associated documents would allow an employer to anticipate the matters which compliance officers would or would not cover in their investigations. The general areas of instruction detailed in the manual have already been made public by disclosure of the course outline. An examination of the course material dealing with each of these broad areas reveals that, while certain of the obviously more important guidelines are emphasized, the course focuses on educating new officers as to the scheme of the standards as a whole. No matter how thorough an examination and analysis an employer may make of the manual and course material, he could not use the knowledge gained to insulate himself from the statutory penalties by complying with selected rules while ignoring even the least substantial part of the thrust of the standards as a whole. Rather, disclosure of these more concise explanations of inspection procedures and detailed discussions of the standards to be enforced is likely to lead to more compliance, not less. The material sought in this case is simply not within the ambit of the exception for law enforcement materials.

Since we hold that the manual sought is administrative in nature, we must proceed to examine the government’s alternative argument that the material is excluded from the scope of the Act by two specific provisions. The government contends, first, that the manual is related solely to the “internal personnel rules and practices of an agency”, and second, that the material is “inter-agency or intra-agency memorandums or letters which would not be available by law to a party other than an agency in litigation with the agency”.

The Internal Personnel Rules and Practices Exclusion

An examination of the legislative history of the internal personnel rules and practices exception reveals a definite conflict between the language of the Senate Report and that of the House Report. The Senate Committee stated:

Exemption No. (2) relates only to the internal personnel rules and practices of an agency. Examples of these may be rules as to personnel’s use of parking facilities or regulations of lunch hours, statements of policy as to sick leave, and the like.

Sen.Rep., supra, at 8. The House, on the other hand, explains:

Matters related solely to the internal personnel rules and practices of any agency: Operating rules, guidelines, and manuals of procedure for Gov-eminent investigators or examiners would all be exempt from disclosure.

H.R.Rep.No.1497, 89th Cong., 2d Sess. 10, U.S.Code Cong. & Admin.News 1966, p. 2427 (1966).

Professor Davis, in an article tracing the legislative history of the Act and examining the conflict between the two reports, concluded that the language of the Senate Report most accurately reflects the wording of the statute. Moreover, he observed that the greater weight should be given to the report of the house which acted first, since otherwise that house would be deprived of any voice in the final meaning of the enactment. We find his analysis persuasive. Though the courts addressing the question have not reached uniform results, the better reasoned decisions hold that the Senate Report more accurately interprets the language of the statute. See Hawkes v. Internal Revenue Service, supra; Benson v. General Services Administration, 289 F.Supp. 590 (W.D.Wash.1968), aff’d on other grounds, 415 F.2d 878 (9th Cir. 1969) (where the government apparently did not argue this issue on appeal); Consumers Union of United States v. Veterans Administration, 301 F.Supp. 796 (S.D.N.Y.1969), appeal dismissed as moot, 436 F.2d 1363 (2d Cir. 1971); Long v. Internal Revenue Service, 349 F.Supp. 871 (W.D.Wash.1972). But see Polymers, Inc. v. NLRB, 414 F.2d 999 (2d Cir. 1969), cert. denied, 396 U.S. 1010, 90. S.Ct. 570, 24 L.Ed.2d 502 (1970); cf. City of Concord v. Ambrose, 333 F.Supp. 958 (N.D.Cal.1971); Cuneo v. Laird, 338 F.Supp. 504 (D.D.C.1972), appeal docketed, No. 72-1328, D.C.Cir., April 11, 1972.

We conclude that this statutory exclusion must not be read so broadly as to exempt the manual sought here. Although this manual does include some amount of material which falls within the description of personnel rules and practices, the manual is not solely or even primarily composed of that type of material. It would be a strained, indeed ridiculous application of the statute which would insulate from disclosure the majority of the manual which contains the substance of what the statute commands be revealed because minor, relatively immaterial parts of the manual, such as the introduction and welcome to the course, could be classified as internal personnel rules and practices.

The “Memorandum” Exception

We also find without merit the government's contention that the material involved falls within the exception for inter-agency or intra-agency memorandums. Whatever may be the scope of this exception, with its cryptic limiting phrase “which would not be available by law to a party other than an agency in litigation” (see Environmental Protection Agency v. Mink, 410 U.S. 73, 93 S.Ct. 827, 35 L.Ed.2d 119 (1973)) we think it would be a perversion of the Act to classify the materials sought in this case as within this provision which is designed to encourage the free exchange of ideas among government policy-makers. It was not defined as an exception to compelled disclosure in order to authorize an agency to throw a protective blanket over any type of information it might choose by the expedient of casting it in the form of an internal memorandum. Bristol Myers Co. v. F. T. C., 424 F.2d 935 (D.C.Cir.), cert. denied, 400 U.S. 284, 91 S.Ct. 46, 27 L.Ed.2d 52 (1970). Substance not form determines its availability by the public.

That exemption [(b)(5)] was intended to encourage the free exchange of ideas during the process of deliberation and policy-making; accordingly, it has been held to protect internal communications consisting of. advice, recommendations, opinions, and other material reflecting deliberative or policy-making processes, but not purely factual or investigatory reports. Factual information may be protected only if it is inextricably intertwined with policy-making processes. . . . But courts must beware of “the inevitable temptations of a governmental litigant to give [this exemption] an expansive interpretation in relation to the particular records in issue.”

Soucie v. David, 145 U.S.App.D.C. 144, 154-155, 448 F.2d 1067, 1077-1078 (1971) (footnotes omitted). See also General Services Administration v. Benson, 415 F.2d 878, 880-881 (9th Cir. 1969). The subject manual is an impersonal, mass-produced statement of established policy designed to be utilized as an educational and reference tool, not for policy-making or deliberative purposes. If this material be a “memorandum” then the term would cover virtually all government documents of any description or nature. Such an interpretation would be at war not only with the plain meaning of the word but also with the spirit and purpose of the Act. Whatever the ultimate scope of this “memorandum” exception may be, we are confident that these materials would remain without its reach. The district court correctly determined that the government failed to carry its burden to justify its action of withholding this material. The order appealed from is in all respects.

Affirmed.

      . 5 U.S.C.A. § 552 (1967).

      . 5 U.S.C.A. § 552(a)(2) provides:
      (2) Each agency, in accordance with published rules, shall make available for public inspection and copying— (O) administrative staff manuals and instructions to staff that affect a member of the public; . . .

      . In adopting the rationale of Hawhes, we embrace the principle stated by Professor Kenneth Davis — “secret law is an abomination. . . .” K. Davis, Administrative Law Treatise 114, 137 (Supp.1970), updating and republishing the author’s article, The Information Act: A Preliminary Analysis, 34 Univ. of Chi.L.Rev. 761 (1967).

      . 5 U.S.C.A. § 552(b) provides:
      (b) This section does not apply to matters that are—
      (2) related solely to the internal personnel rules and practices of an agency;
      (5) inter-agency or intra-agency memorandums or letters which would not be available by law to a party other than an agency in litigation with the agency;

      . Administrative Law Treatise, supra note 3, at 145, 174-75.


source: Caselaw Access Project

author: MOORE, Circuit Judge:

license: Public Domain

text:
    Walter R. CARRINGTON and Ada Raye Carrington, Petitioners-Appellees, v. COMMISSIONER OF INTERNAL REVENUE, Respondent-Appellant.
    No. 72-1644.
    United States Court of Appeals, Fifth Circuit.
    April 23, 1973.

      Scott P. Crampton, Asst. Atty. Gen., Meyer Rothwacks, Richard Farber, Attys., Tax Div., Dept, of Justice, Lee H. Henkel, Jr., Acting Chief Counsel, Chris J. Ray, Atty., Internal Revenue Service, Washington, D. C., for respondent-appellant.
    E. Richard Criss, Jr., Austin, Tex., for petitioners-appellees.
    Before BROWN, Chief Judge, and MOORE and RONEY, Circuit Judges.

       Hon. Leonard P. Moore, Senior Circuit Judge of the Second Circuit, sitting by designation.

   MOORE, Circuit Judge:

This is an appeal by the Commissioner of Internal Revenue (the Commissioner) from a decision of the Tax Court (C. Moxley Featherston, Judge) that there was no deficiency in the Federal income tax for the taxable year 1966 paid by appellees, Walter R. Carrington and Ada Raye Carrington (collectively referred to as Carrington). The tax deficiency assessed was $5,573.71 and was based upon the Commissioner’s increase in Carrington income of $10,959.80, which the Commissioner claimed was an unreported dividend. In his deficiency notice, the Commissioner asserted that “redemption by Cardinal Construction Company of 51 shares of its stock which you had contributed to St. Matthews Episcopal Church was equivalent to a dividend to you of $10,959.80 in 1966.”

The background facts are not complicated. Carrington was a member of the vestry, the governing body, of the Church and a member of a committee created for- the purpose of acquiring a new rectory. Carrington was the sole stockholder of two corporations, Cardinal Construction Company (Cardinal) and Day Realty Company (Day). Cardinal and Day as a partnership (Cardinal-Day Enterprises)- owned a residence suitable for a rectory.

The stipulation of facts states:

The purpose of the various integrated transactions involving the real property described in paragraph 9, above, was to place the property in the hands of St. Matthews Episcopal Church at the maximum tax benefit to petitioners, Walter R. Carrington and Ada Raye Carrington. (Par. 16, Appendix at 26.)

As the Tax Court recognized, there were several ways in which the transaction could have been handled, each with its own tax consequences. Carrington “was entitled to choose the method most favorable to him tax-wise. Gregory v. Helvering, 293 U.S. 465, 469 [55 S.Ct. 266, 79 L.Ed. 596] (1935); Granite Trust Co. v. United States, 238 F.2d 670, 675 (1st Cir. 1956).”

The method selected was as follows:

On December 19, 1966, Carrington transferred fifty-one of the one hundred outstanding shares of Cardinal stock, of which he was the owner, to the Church.

On December 23, 1966, Cardinal-Day conveyed the residence to Cardinal subject to an outstanding mortgage of $30,600.

On December 27, 1966, Cardinal redeemed the fifty-one shares of its stock held by the Church and, as consideration therefor, conveyed the residence subject to the mortgage to the Church. The value (undisputed) of the residence was $41,559.80. The equity ($41,559.80 less the mortgage of $30,600) accounts for the $10,959.80 which the Commissioner claims was dividend income chargeable to Carrington.

Cardinal did not reissue the fifty-one shares and on June 30, 1967, Cardinal was liquidated.

The Commissioner argues that Carrington’s gift of stock “although complete in form, must be disregarded for tax purposes because it was merely an intermediate step in the taxpayer’s overall plan” to transfer the residence to the Church “without the imposition of a dividend tax on the distribution” (Gov’t Br. at 9). In other words, because several steps were required to accomplish the transfer, the Commissioner would regard the redemption as if made while Carrington was the owner of all the Cardinal stock.

There is no doubt that in any “step transaction” situation careful analysis of the transaction as a whole must be made to distinguish between proper tax avoidance and illegal tax evasion.

The Commissioner argues that to arrive at the “substance” of this transac- ' tion we should refuse to recognize the transfer of the Cardinal stock to the Church and the subsequent redemption of that stock eight days later. Having done this, says the Commissioner, the exchange of the fifty-one shares for the rectory may then be regarded as a redemption by Carrington, the sole Cardinal shareholder, which distribution, under United States v. Davis, 397 U.S. 301, 307, 90 S.Ct. 1041, 25 L.Ed.2d 323 (1970) would be included in Carrington’s gross income for 1966.

Kanawha Gas & Util. Co. v. Commissioner, 214 F.2d 685 (5th Cir. 1954) contains a frequently cited exposition of the problems posed by a transaction which has involved a “step transaction”.

In determining the incidence of taxation, we must look through form and search out the substance of a transaction. [citations omitted] .This basic concept of tax law is particularly pertinent to cases involving a series of transactions designed and executed as parts of a unitary plan to achieve an intended result. Such plans will be viewed as a whole regardless of whether the effect of so doing is imposition of or relief from taxation.

214 F.2d at 691

See also Commissioner v. Court Holding Co., 324 U.S. 331, 334, 65 S.Ct. 707, 89 L.Ed. 981 (1945).

It is, of course, elementary that Carrington had “[t]he legal right * * * to decrease the amount of what otherwise would be his taxes, or altogether avoid them, by means which the law permits * * Gregory v. Helvering, supra, 293 U.S. at 469, 55 S. Ct. 266 at 267; Knetsch v. United States, 364 U.S. 361, 365, 81 S.Ct. 132, 5 L.Ed.2d 128 (1960); Rupe Investment Corp v. Commissioner, 266 F.2d 624, 629 (5th Cir. 1959). Thus the mere fact that the transactions here questioned were concededly designed to limit Carrington’s tax liability establishes nothing with, regard to the question of the proper taxation of these transactions.

There have been several cases which have presented situations analogous to that which we face here. In Stuart A. Rogers, 38 T.C. 785 (1962), the taxpayer made a gift to a church of a $10,000 equity in a stand of timber. As an accommodation to the church, the taxpayer arranged the sale of the church’s timber in conjunction with his sale of other timber. In deciding that the taxpayer had received no income from this sale of the church’s timber, the Tax Court said:

The test seems to be simple: Did the donor part with title to the property producing the income ? If he did, then the sale by the donee does not result in taxation to the donor.
* * # * * *
This gift, when delivered and accepted, gave the donee the indefeasible right to the first $10,000 to be realized from the timber stand. * * * The subsequent sale thereof does not cause realization of income by him. 38 T.C. at 789

In Rogers, supra, the Tax Court relied in part on our holding in Campbell v. Prothro, 209 F.2d 331 (5th Cir. 1954). In that case one hundred calves were donated to a charitable organization without actually being separated from the taxpayer’s remaining cattle. Upon the sale of all of these cattle, the proceeds from the sale of the donated cattle were paid to the donee. The Commissioner contended that these proceeds should be treated as income to the taxpayer-donor. Even though there was some doubt in that case as to whether there had been a bona fide gift, this Court held that the taxpayer had not received income. 209 F.2d at 336.

Two cases involving complete liquidations of coi’porations are also instructive of the law in this area. Jacobs v. United States and Winton v. Kelm each involved the donation of corporate stock to charity immediately prior to payment of a liquidating dividend. In both cases the gifts were held to be effective and thus the taxpayers were found to have received no income from the liquidating dividend paid on the donated shares. Apt v. Birmingham concerned a gift of shares to a taxpayer’s wife just seven days prior to the distribution of a liquidating dividend. In that case, too, the Commissioner urged that “under the realities of the situation” there was no gift of stock, but only of the distribution in liquidation. 89 F.Supp. at 368 (emphasis added). In each of these cases the Commissioner’s argument that the gift step of the transaction should be ignored failed to persuade the courts. Other courts have also rejected this argument of the Commissioner in similar cases. Sheppard v. United States, 361 F.2d 972, 176 Ct.Cl. 244 (1966) (donation of interests in racing horse); Humacid Co., 42 T.C. 894 (1964) (contribution of promissory notes); White v. Brodrick, 104 F.Supp. 213 (D.Kan.), appeal dismissed 198 F.2d 751 (10th Cir. 1952) (donation of grain); Elsie SoRelle, 22 T.C. 459, 475-479 (1954) (gifts of land on which crops had been planted); Mamie F. Farrier, 15 T.C. 277, 283-284 (1950) (gift of cattle).

The Commissioner suggests that United States v. General Geophysical Co. and Crenshaw v. United States in this Circuit should control our decision in this case.

General Geophysical concerned the propriety of a stepped-up basis for certain depreciable assets. Two of Geophysical’s major stockholders redeemed their shares for depreciable assets with a tax basis of $169,290. Later the same day these assets were sold back to the corporation for their fair market value of $746,525. Judge Wisdom’s opinion in that case pointed out that:

The facts of these transactions will not support a holding that the corporation had terminated its ownership * * *. It parted with bare legal title to the property for a few short hours. It made no physical delivery of any of the assets. Its control and use of the property were never interrupted. 296 F.2d at 89

The Court denied the corporation a stepped-up basis for its assets. This case is distinguishable from the instant case not only because the facts establish that there was no bona fide loss of dominion and control by the corporation, but also because the case concerned the question of the proper basis for depreciable assets held by a corporation. Crenshaw v. United States involved a complex financial transaction designed to make the sale of an interest in a partnership under Section 741 of the Internal Revenue Code appear to be a “liquidating dividend” of a partnership interest, which, under Section 736 of the Code- would not be taxed as income. The Court denied the taxpayer the benefits of Section 736 treatment since the final result of that transaction was that the taxpayer received $200,000 in cash and the remaining partners controlled the former partner’s interest in the partnership. We cannot agree with the Commissioner that these cases, either separately or taken together, should control the result of the case before us. Neither General Geophysical nor Crenshaw concerns a gift of property or a redemption of donated stock.

The law which does control the result in this case is clear beyond peradventure. As was said in a case involving the redemption of corporate promissory notes which had been donated only a few days earlier by the corporation’s sole shareholder:

The law with respect to gifts of appreciated property is well established. A gift of appreciated property does not result in income to the donor so long as he gives the property away absolutely and parts with title thereto before the property gives rise to income by way of sale.

Humacid Co., supra, 42 T.C. at 913 See also, Stuart A. Rogers, supra; Campbell v. Prothro, supra; Sheppard v. United States, supra; Mamie F. Farrier, supra. The reasoning of these cases is that the transfer of income producing property (not of income) is not an event in which an appreciation of value is realized. As is well established, “ * * * Congress has not seen fit to tax unrealized appreciation in property value.” Tatum v. Commissioner, 400 F. 2d 242, 247 (5th Cir. 1968) (footnote omitted); Lyon & Eustice, Assignment of Income: Fruit and Tree as Irrigated by the P.G. Lake Case, 17 Tax L.Rev. 295, 380-82 (1962).

From the cases we have examined' we believe that the central inquiry in a case such as this one, which concerns donated property and which the Commissioner has attacked through the “step transaction” doctrine, is: Did the donor part with all dominion and control over the donated property? Thus we must determine whether Carrington retained any control over his gift of fifty-one shares of Cardinal stock to St. Matthew’s Church. If he did not retain any vestige of control, the gift was compíete, and this ease must follow the many analogous eases already discussed. From the stipulated facts we learn that Carrington transferred and “delivered fifty-one (51) of his one hundred (100) shares of stock in Cardinal Construction Company to St. Matthews Episcopal Church, a charitable organization, and he retained ownership of the remaining forty-nine (49) shares.” (Par. 8, Appendix at 24). This alone should suffice to establish that by retaining “ownership” of only forty-nine shares Carrington had completely divested himself of the fifty-one donated shares. Consideration of the facts of the transaction compels a similar conclusion. A gift of stock between competent parties requires donative intent, actual delivery, and relinquishment of dominion and control by the donor. Ellsworth v. Ellsworth, 151 S.W.2d 628, 632 (Tex.Civ.App.1941); Apt v. Birmingham, 89 F. Supp. 361, 370 (N.D.Iowa 1950); 38 C.J.S. Gifts § 46 (1943). Here Carrington, with full intention to do so, gave absolute title to and actually delivered fifty-one shares of Cardinal stock to St. Matthew’s Church. Not only was the title to the donated stock free and clear, but the Church’s shares represented a controlling interest in Cardinal. There is, therefore, no doubt that the Church had full title to the shares and full dominion and control over them. There is neither evidence of, nor suggestion that, there was a prior obligation on the part of the Church to redeem this stock so that Carrington would regain control of Cardinal. We thus conclude that the gift to St. Matthews was complete and effective. Since this was a completed gift, we believe that the Commissioner’s characterization of the transactions involved in this case must be rejected.

The Tax Court noted that the Commissioner had suggested no reason why recasting the distribution of the residence as a dividend to Carrington would reflect the substance of the transaction any more accurately than would giving effect to the form adopted; that Carrington had parted with ownership of his stock; that no gain on a redemption had been realized by him at that point; and that the Church had acquired the rectory directly from Cardinal. Upon the facts and the law we agree with the Tax Court that Carrington realized neither an actual nor a constructive dividend upon the redemption of the Cardinal stock.

The decision of the Tax Court is affirmed.

      . Judge Featherston’s opinion is unofficially reported at T.C. Memo 1971-222 at 950.

      . Id. at 953.

      . The property was actually held for the use of St. Matthews Episcopal Church by the Prostestant Episcopal Church Council of the Diocese of Texas, which holds all real property owned by the Episcopal Church in Texas.

      . See the dissenting opinion of the Hon. Richard T. Rives, U.S.C.J., 209 F.2d 336-337.

      . Jacobs v. United States, 280 F.Supp. 437 (S.D.Ohio 1966), aff’d, 390 F.2d 877 (6th Cir. 1968).

      . Winton v. Kelm, 122 F.Supp. 649 (D.Minn.1954).

      . Apt v. Birmingham, 89 F.Supp. 361 (N.D.Iowa 1950).

      . United States v. General Geophysical Co., 296 F.2d 86 (5th Cir. 1961), cert. denied, 369 U.S. 849, 82 S.Ct. 932, 8 L.Ed.2d 8 (1962).

      . Crenshaw v. United States, 450 F.2d 472 (5th Cir.), cert. denied, 408 U.S. 923, 92 S.Ct. 2490, 33 L.Ed.2d 333 (1972).

      . The question of whether an item is property or income has been often litigated. Helvering v. Horst, 311 U.S. 112, 118, 61 S.Ct. 144, 85 L.Ed. 75 (1940) contains the Supreme Court’s statement of the law in this area. Contests between the Commissioner and taxpayers in this area are common. See, e. g., Tatum v. Commissioner, 400 F.2d 242, 247 (5th Cir. 1968). That question does not concern us here, for the Commissioner has not suggested that the stock was not property, but only that the redemption of stock by the Chureli was, in reality, a dividend to Carrington.

      . See the portions of the following opinions quoted supra. Stuart A. Rogers, 38 T.C. 785, 789 (1962); United States v. General Geophysical Co., supra, 296 F.2d at 89; Humacid Co., 42 T.C. 894, 913 (1964). See also, Winton v. Kelm, 122 F.Supp. 649, 653 (D.Minn.1954); Behrend v. United States, 73-1 U.S.T.C. ¶ 9123.


author: TIMBERS, Circuit Judge:

text:
    UNITED STATES of America, Appellee, v. Allan A. HANDLER, Appellant. In the Matter of the Contempt Citation against Grand Jury Witness, Allan A. Handler, Appellant.
    No. 584, Docket 72-2447.
    United States Court of Appeals, Second Circuit.
    Argued Feb. 23, 1973.
    Decided April 3, 1973.

      Lawrence Stern, New York City, for appellant.
    Michael C. Eberhardt, Sp. Atty., U. S. Dept, of Justice, Joint Strike Force, S. D. N. Y. (Whitney North Seymour, Jr., U. S. Atty., and John W. Nields, Jr., Asst. U. S. Atty., New York City, on the brief), for appellee.
    Before FEINBERG, MULLIGAN and TIMBERS, Circuit Judges.
   TIMBERS, Circuit Judge:

Allan A. Handler appeals from a summary order of civil contempt entered against him as a grand jury witness on December 1, 1972 in the Southern District of New York by Murray I. Gurfein, District Judge, ordering that he be confined pursuant to 28 U.S.C. § 1826(a) (1970) for refusal to answer questions before a grand jury after having been granted immunity under 18 U.S.C. §§ 6002 and 6003 (1970).

The issues on appeal are directed exclusively to the procedure which led to Handler’s current confinement for contempt. He claims a denial of due process at various points in that procedure. We find such claims to have been afterthoughts which even as forethoughts would have been unproductive. We affirm.

I.

On August 22, 1972, a special grand jury was empanelled in the Southern District of New York to investigate gambling activities in violation of 18 U.S.C. § 1955 (1970).

On October 30, Handler, then serving a prison term on a state gambling charge, was subpoenaed to testify before the federal grand jury. He refused to answer any questions, invoking his privilege against self-incrimination.

On October 31, upon application by the government, Judge Weinfeld entered an order granting immunity to Handler under 18 U.S.C. §§ 6002 and 6003, thereby precluding the use against him in any criminal proceeding of his testimony before the grand jury.

On November 1, despite the order granting him immunity, Handler again refused to answer any questions before the grand jury. He continued his refusal on November 2 when, accompanied by counsel, he was brought before Judge Weinfeld.

Handler next appeared before the grand jury on November 22. He again asserted his Fifth Amendment privilege and refused to answer each question asked of him before the grand jury. The government then applied to Judge Gurfein, before whom the grand jury had appeared, to adjudge Handler in contempt and to order him confined in accordance with 28 U.S.C. § 1826(a) (1970).

On November 29, following submission by the government of a brief in response to the court’s inquiry as to the proper procedure, Judge Gurfein entertained the government’s contempt application. Handler, in the presence of his counsel, was given an opportunity to state why he should not be held in contempt. In addition to a statement by his counsel, Handler himself responded in pertinent part:

“[B]efore I went up to the Grand Jury, two Federal Agents told me that if I testified in the Grand Jury pertaining to this case, the people, whatever it might be, that they felt that I was in some danger and they would move me to a different part of the country, if I wanted to, relocate me.
* * . •» -x- * -X-
All my family ties, and so on, are in that community. Excuse my expression, but I would have to — based on what the Federal Agents told me — I would have to almost be a little paranoid for the rest of my life
Because of this, I don’t want to get myself involved in something like this and look back over my shoulder for the rest of my life based on what the agents told me, that is the reason I didn’t testify.”

Judge Gurfein informed Handler that he had not stated a legal excuse, and that his refusal to testify constituted a wilful contempt. Handler was then given one further opportunity to answer questions. He persisted in his unwillingness to testify. Judge Gurfein adjudged him in contempt. He was ordered confined until such time as he is willing to testify; but his confinement is not to exceed the expiration of the grand jury term plus extensions, and in no event is it to exceed sixteen months. An order so providing was entered on December 1, 1972.

II.

Handler’s first challenge to his civil contempt confinement is that he was not given prior notice of the nature of the proceedings against him. The essence of his contention is that at no time was he formally apprised that he was being charged with civil contempt, nor was he ever notified of the specific charge against him. We reject this claim as factually incorrect.

Handler’s reliance on Parker v. United States, 153 F.2d 66 (1 Cir. 1946), is misplaced. There the court said that “[t]he respondent is entitled to due notice of the nature of the proceeding against him — whether of criminal or civil contempt.” 153 F.2d at 70. Nowhere in that opinion or in any other case that has come to our attention, however, has it been said that “due notice” means formal notice. See, e. g., In re Guzzardi, 74 F.2d 671, 673 (2 Cir. 1935) (“[I]t is of at least some practical consequence to the respondent in such a proceeding to know whether he is charged with crime .... We do not say that this mast be known at the outset; it is enough if it becomes manifest in season . . . .”) (L. Hand, J.). (emphasis added). Here, there can be little doubt that Handler had actual notice of the nature of the proceedings against him. As early as November 2 (the date of his third refusal to testify), Handler’s counsel informed Judge Weinfeld as follows:

“Your honor, I represent the defendant and have gone over the situation with him. He persists in his position and refuses to testify in spite of the grant of immunity. I have informed him that if he does not, your Honor has the power to punish him for contempt and to give him a sentence up to possibly eighteen months or maybe more, and the defendant is still adamant in his refusal to testify.”

Following Judge Weinfeld’s inquiry directed to Handler himself, he confirmed that he was aware that a wilful contempt was being committed.

Two important conclusions may be drawn from that exchange. First, it is clear that Handler had actual knowledge of the specific acts for which he was exposing himself to contempt. Second, counsel’s reference to “eighteen months” indicates an awareness of the applicability of Section 1826(a) — the federal civil contempt statute. The record also establishes beyond question that Handler knew that any punishment would be remedial only, in that it would cease immediately upon his agreeing to testify.

It should also be borne in mind that, since Section 1826(a) • specifically provides for summary contempt procedure, certain concessions to ideal process necessarily must be made. “The same considerations which justify the holding of civil contempt proceedings, absent the safeguards of indictment and jury ., warrant reasonable expedition of such proceedings. . . . ” United States v. Weinberg, 439 F.2d 743, 746 (9 Cir. 1971). See also Shillitani v. United States, 384 U.S. 364, 370-71 (1966).

In the light of Handler’s actual knowledge of the nature of the contempt proceedings against him, we hold that he was not denied due process by the failure to provide formal notice.

III.

Handler’s next claim goes to the conduct of the contempt hearing itself. In particular, he argues that, not only did the court fail to require any proof of the legitimacy of the grand jury investigation or of the materiality to that investigation of the questions asked of Handler, but that the court in fact refused to entertain the government’s offer of such proof. His contention that such conduct of the contempt hearing constituted a denial of due process is based largely on his reading of United States v. Dinsio, 468 F.2d 1392 (9 Cir. 1972), and In re Verieker, 446 F.2d 244 (2 Cir. 1971). We find both eases readily distinguishable. We hold that Handler was not denied a fair hearing.

Section 1826(a) provides for confinement of a recalcitrant witness where the refusal to testify is “without just cause shown.” (emphasis added). That language seems rather clearly to place on the witness the burden of coming forward with “just cause”. In Gelbard v. United States, 408 U.S. 41 (1972), for example, the Court held that the government is required to respond to an allegation by a recalcitrant grand jury witness that the questions asked were based on information obtained by an illegal wiretap. Cf. Bacon v. United States, 466 F. 2d 1196 (9 Cir. 1972). Similarly in Dinsio, the witness' refusal to submit finger and palm print exemplars to a grand jury was based on specific constitutional objections to the request. In the present case, on the other hand, Handler completely failed to make a prima facie showing of “just cause”.

Vericker more directly addresses itself to the specific issue raised by Handler. There immunity had been granted under 18 U.S.C. § 2514 (1970) which provides for transactional immunity for witnesses in cases involving certain offenses. We reversed the civil contempt judgment on the ground that there was nothing in the questions asked to indicate that the grand jury was investigating any crime within the permissible grant of immunity. Here no such claim has been made; and, under the less restrictive provisions of Sections 6002 and 6003, none apparently could be made. In Vericker, moreover, we made the point which we regard as dispositive here:

“[T]he decisions are virtually unanimous in holding or assuming that the witness may challenge whether the subject matter of a grand jury investigation is consonant with the statutory authorization for the grant of immunity and that, upon such a challenge, the Government must make at least a modest showing that it is.” 446 F.2d at 247 (emphasis added).

Handler having failed to assert a challenge of that sort, we hold that he was not denied a fair hearing by the court’s failure to require the government to prove legitimacy or materiality.

IV.

Handler claims that in two other respects the procedure which led to his confinement denied him due process of law: the denial of a jury trial on the contempt charge, and the absence of counsel at the hearing at which immunity was granted. We find no merit in either claim.

The question whether there is a right to trial by jury on a civil contempt charge was settled in Shillitani v. United States, supra, 384 U.S. at 370-71, where the Court said, “[t]he conditional nature of the imprisonment — based entirely upon the contemnor’s continued defiance — justifies holding civil contempt proceedings absent the safeguards of indictment and jury, . . . provided that the usual due process requirements are met.” We find unpersuasive the distinction between Shillitani and the instant case suggested by Handler. While it is true that Shillitani did not involve an order of confinement with a specified maximum term, it is also true that in the instant case the “keys to the jailhouse” are as much in the contemnor’s pocket as in Shillitani — the confinement, in other words, is equally conditional. We hold that Handler was not entitled to a jury trial on the civil contempt charge. Bacon v. United States, 446 F.2d 667, 668 (9 Cir. 1971), vacated on other grounds, 408 U.S. 915 (1972).

Similarly, Handler’s contention that he was denied assistance of counsel at the October 31 hearing at which he was granted immunity rests on a misplaced reliance on United States v. Sun Kung Kang, 468 F.2d 1368 (9 Cir. 1972). There the court reversed a civil contempt order which was entered after' the district court had refused to grant an indigent defendant’s request for representation by appointed counsel at the contempt proceeding. In the instant case, the only point at which Handler was without counsel was at the benign stage where immunity was granted. We have found no authority, and we perceive no reason, to support Handler’s claim that the absence of counsel at the time immunity was granted constituted a deprivation of any constitutional right. While the better practice would be to have a witness represented in such a hearing, the record shows that Handler was informed on October 30 of his right to be represented by counsel at the grand jury proceedings and that he was accompanied by counsel at all times following the grant of immunity.

We have carefully considered all of Handler’s claims and we find them— separately and in the aggregate — to be without merit.

      . Those sections provide :
      “§ 6002. Immunity generally
      Whenever a witness refuses, on the basis of his privilege against self-inerimination, to testify or provide other information in a proceeding before or ancillary to—
      (1) a court or grand jury of the United States,
      (2) an agency of the United States, or
      (3) either House of Congress, a joint committee of the two Houses, or a committee or a subcommittee of either House,
      and the person presiding over the proceeding communicates to the witness an order issued under this part, the witness may not refuse to comply with the order on the basis of his privilege against self-incrimination ; but no testimony or other information compelled under the order (or any information directly or indirectly derived from such testimony or other information) may be used against the witness in any criminal case, except a prosecution for perjury, giving a false statement, or otherwise failing to comply with the order.
      “§ 6003. Court and grand jury proceedings
      (a) In the case of any individual who has been or may be called to testify or provide other information at any proceeding before or ancillary to a court of the United States or a grand jury of the United States, the United States district court for the judicial district in which the proceeding is or may be held shall issue, in accordance with subsection (b) of this section, upon the request of the United States attorney for such district, an order requiring such individual to give testimony or provide other information which he refuses to give or provide on the basis of his privilege against self-incrimination, such order to become effective as provided in section 6002 of this part.
      (b) A United States attorney may, with the approval of the Attorney General, the Deputy Attorney General, or any designated Assistant Attorney General, request an order under subsection (a) of this section when in his judgment—
      (1) the testimony or other information from such individual may be necessary to the public interest; and
      (2) such individual has refused or is likely to refuse to testify or provide other information on the basis of his privilege against self-incrimination.”

      . “§1826. Recalcitrant witnesses
      (a) Whenever a witness in any proceeding before or ancillary to any court or grand jury of the United States refuses without just cause shown to comply with an order of the court to testify or provide other information, including any book, paper, document, record, recording or other material, the court, upon such refusal, or when such refusal is duly brought to its attention, may summarily order his confinement at a suitable place until such time as the witness is willing to give such testimony or provide such information. No period of such confinement shall exceed the life of—

        (1) the court proceeding, or
      (2) the term of the grand jury, including extensions,
      before which such refusal to comply with the court order occurred, but in no event shall such confinement exceed eighteen months.”

      . On November 22, upon the government’s request that Handler be placed in custody for civil contempt, Judge Gurfein expressed concern whether confinement could be ordered “without papers and without a notice and specifications.” He adjourned the proceeding to allow the government to submit a brief addressed to the requirements of due process in a summary civil contempt proceeding.

      . The sixteen months limitation, rather than the statutory maximum of eighteen months, 28 U.S.C. § 1826(a), was arrived at by Judge Gurfein as a “rough approximation” of the estimated two months “good time” credit against his state sentence which Handler had lost as the result of his involvement in the instant case.

      . At the hearing on November 29, the following exchange took place:
      “[Special Atty] Shaw: Your Hon- or, I think I should put on the record that I myself have had occasion to review the Grand Jury proceedings involving the Grand Jury operation and I can represent to the Court that each of the questions asked of Allan Handler as read by Mr. Lorber here directly related to subjects of that Grand Jury investigation and that the questions do certainly fall within the scope of the immunity that was granted.
      The Court: I don’t think you need any statement of materiality. If you did, you would have to have the foreman testify as to what the matters were that were pending before the Grand Jury.”

      . At the argument of this appeal, we raised the question as to precisely how Handler claims to have been prejudiced by the absence of counsel at the immunity hearing. We granted leave to file a supplemental brief with respect to this issue. Handler argues in his post-argument brief that he was prejudiced by the in camera sealing of the government’s application for immunity, the supporting affidavit and letter, and the grant of immunity — all at a time when he was without counsel. We are not persuaded that any prejudice resulted. Nothing in the immunity statute suggests that Handler would have been entitled to view the sealed papers even if counsel had been present, or that counsel could have challenged the sealing itself. The only point at which substantive objections might have been interposed was at the contempt hearing itself, Bursey v. United States, 466 F.2d 1059, 1073 (9 Cir. 1972), at which time Handler’s counsel was present and had access to the rather conclusory information contained in the sealed documents. Further, a motion to unseal the documents was not made until two weeks after entry of the contempt order. The documents since have been included in the record on appeal. In short, in addition to the other deficiencies in Handler’s denial of counsel claim, we hold that he has failed to show prejudice.

      . In ruling as we do, we emphasize at the same time the remedial nature of Handler’s confinement. The importance of that fact is the recognition of Handler’s continuing right to petition the district court for release if it appears that he is no longer able to comply with the order to testify, or if the public necessity that led to the grant of immunity and the order to testify should cease to exist. Cf. Shillitani v. United States, supra, 384 U.S. at 371-72 (ordering the release of the witness because the grand jury term had expired). That is a matter within the province of the district court, not ours.


author: HOLLOWAY, Circuit Judge.

text:
    Hal SIMMONS, Administrator of the Estate of Melvin D. Anderson, Deceased, Appellant, v. UNITED STATES of America, Appellee.
    No. 72-1020.
    United States Court of Appeals, Tenth Circuit.
    Argued and Submitted May 18, 1972.
    Decided April 2, 1973.

      Kendall O. Schlenker, Albuquerque, N. M. (James M. Parker, Jay R. Payne, and Charles I. Wellborn, Albuquerque, N. M., on the brief), for appellant.
    Wesley J. Filer, Atty., Dept, of Justice, Washington, D. C. (Scott P. Crampton, Asst. Atty. Gen., Meyer Rothwacks., and John P. Burke, Attys., Dept, of Justice, Washington, D. C., and Victor R. Ortega, U. S. Atty., Albuquerque, N. M., of counsel, on the brief), for appellee.
    Before SETH and HOLLOWAY, Circuit Judges, and LANGLEY, District Judge.

       Honorable Edwin Langley, Chief Judge of the Eastern District of Oklahoma.

   HOLLOWAY, Circuit Judge.

This appeal involves the validity of a claim by the government for excise taxes imposed on a transfer of marihuana alleged to be due under the Marihuana Tax Act provisions in 26 U.S.C.A. § 4741 (1954). Appellant Simmons raises only one issue here — the constitutionality of the excise tax provisions. He argues that in view of the self-incrimination principles pronounced in Leary v. United States, 395 U.S. 6, 89 S.Ct. 1532, 23 L.Ed.2d 57, the marihuana excise tax provisions are no longer valid and are not now sustained by the United States v. Sanchez, 340 U.S. 42, 71 S.Ct. 108, 95 L.Ed. 47. We do not agree and affirm the trial court’s judgment which rejected these contentions.

The principal facts are as follows. Carmen Paz sued for injunctive relief and to quiet title on property she claimed as her own against a federal tax lien based on a claim for marihuana excise tax against her husband, Melvin D. Anderson. The government answered and counterclaimed against her and also cross-claimed against Anderson. The government sought to foreclose its tax lien against funds and properties of Anderson and his wife and requested a deficiency judgment against him for any amount unsatisfied. The principal claim asserted by the government was based on an assessment of marihuana excise tax in the amount of $483,200 and interest thereon, claimed to be due from Anderson. Anderson moved to dismiss the claims against him, asserting the unconstitutionality of the marihuana excise tax.

The trial court granted summary judgment for the government on the marihuana excise tax liability. From the papers and from some evidence taken the court found that Carmen Paz and Melvin D. Anderson were married at all material times; that certain properties were their community property and that one business property had been validly assigned to Carmen Paz and that no cause was shown to set aside that assignment. The trial court found that there was no genuine issue of material fact as to the claim for marihuana excise tax against Anderson assessed in the sum of $483,200, plus interest. And the court concluded that the tax was a valid civil tax that could be collected from the interests of Carmen Paz and of Anderson in their community property.

Judgment was entered for the marihuana tax and other liabilities totaling $567,393.58 against the estate of Anderson, who had died prior to entry of judgment. The judgment also provided for foreclosure of the tax liens and for entry of a deficiency judgment of any amount of the indebtedness of Anderson remaining unsatisfied after disposition of proceeds. Anderson’s Administrator Simmons appeals, raising only the constitutionality of the marihuana excise tax. We turn to his contentions on appeal.

Appellant Simmons argues primarily that since the Leary decision on self-incrimination principles, the excise tax liability of $100 per ounce imposed by 26 U.S.C.A. § 4741(a)(2) may no longer be sustained as a valid civil tax as was held in United States v. Sanchez.

The Leary case involved a conviction on a third count charging that the defendant knowingly transported, concealed and facilitated concealment of marihuana without ■ having paid the transfer tax imposed by 26 U.S.C.A. § 4741, 68A Stat. 560 (1954) (repealed 1970), thereby violating 26 U.S.C.A. § 4744(a)(2), 70 Stat. 567 (1956) (repealed 1970). The Court concluded that obtaining the required order form and payment of the $100 per ounce tax for a valid acquisition of the marihuana would have involved a substantial risk of self-incrimination. It was held, therefore, that Leary properly invoked the privilege against self-incrimination, which was a complete defense to this charge, and the conviction was reversed. While the Leary opinion discussed United States v. Sanchez in other contexts, it in no way vitiates the Sanchez holding or the reasoning which sustained the $100 per ounce tax as a valid tax.

The Sanchez ease was a suit for recovery of the $100 tax under the antecedent statute, § 7(a) (2) of the earlier Marihuana Tax Act, 50 Stat. 551. Collection was resisted on the ground that the statute levied an unconstitutional penalty and not a tax. The Court held that imposition of the heavy liability was a legitimate exercise of the taxing power, despite its collateral regulatory purpose and effect and its severity as opposed to the $1. tax rate on transfers to registered persons. The Court stated, 340 U.S. at 45, 71 S.Ct. at 110:

“Second. The tax levied by § 2590(a)(2) is not conditioned upon the commission of a crime. The tax is on the transfer of marihuana to a person who has not paid the special tax and registered. Such a transfer is not made an unlawful act under the statute. Liability for the payment of the tax rests primarily with the transferee; but if he fails to pay, then the transferor, as here, becomes liable. It is thus the failure of the transferee to pay the tax that gives rise to the liability of the transferor. Since his tax liability does not in effect rest on criminal conduct, the tax can be properly called a civil rather than a criminal sanction. The fact Congress provided civil procedure for collection indicates its intention that the tax be treated as such. Helvering v. Mitchell, 1938, 303 U.S. 391, 58 S.Ct. 630, 82 L.Ed. 917. Moreover, the Government is seeking to collect the levy by a judicial proceeding with its attendant safeguards. Compare Lipke v. Lederer, 1928, 259 U.S. 557, 42 S.Ct. 549, 66 L.Ed. 1061; Tovar v. Jarecki, 7 Cir., 1949,173 F.2d 449.”

We recognize that Sanchez did not involve self-incrimination principles and that Leary and the three self-incrimination cases foreshadowing it significantly extended the application of those principles. However we cannot agree with appellant that the collection of the tax amounts to a punishment or penalty for exercise of the privilege against self-incrimination and feel that the privilege is not involved in this suit. Therefore we conclude that the rationale of Sanchez is unimpaired and still sustains the tax as a valid civil liability.

In Anderson’s situation the $100 tax was the only rate involved if he acquired the marihuana, regardless of his actions. We must assume that he was not a lawful dealer or possessor of marihuana under federal and state law, for otherwise the self-incrimination claim would have no substance as a good faith defense. As an unlawful possessor of marihuana, Anderson was not entitled under the statute and the Treasury Regulations to register and thereby qualify to pay the tax at the $1. rate. He could either pay the $100 per ounce transfer tax and give incriminating information, see Leary v. United States, supra 395 U.S. at 26, 89 S.Ct. 1532, or he could refuse to do so and remain liable for the tax at the $100 rate. The liability was the same whether Anderson voluntarily paid the tax or whether he failed to do so and was subjected to the liability by a collection suit as occurred here.

Thus the liability at the $100 rate is not a penalty or punishment for assertion of the privilege against self-incrimination. Rather it is a severe tax burden that Congress may validly impose under the taxing power for the collateral purpose of discouraging unlawful acquisition of marihuana. See United States v. Sanchez, supra 340 U.S. 45-46, 71 S. Ct. 108. Of course since Leary, Anderson need not pay the tax voluntarily and furnish incriminating information and he has a valid defense to prosecution for not voluntarily paying the tax and furnishing incriminating information, by a timely and proper assertion of the privilege. He is not, however, relieved of liability for the civil tax by pleading the Fifth Amendment. We agree with the reasoning of the Court of Claims in Cancino v. United States, 451 F.2d 1028, 1032, 196 Ct.Cl. 568, cert. denied, 408 U.S. 925, 92 S.Ct. 2504, 33 L.Ed.2d 337:

“ . . . While the transferee may not have a duty to voluntarily pay the transfer tax in circumstances where doing so would be self-incriminating, neither can he complain that his Fifth Amendment privilege is infringed if the Internal Revenue Service later collects the tax pursuant to a valid lien. Since the transferee remains civilly liable for the transfer tax, the transferor is also liable and likewise cannot complain about an involuntary collection.”

See also United States v. Alvero, 470 F.2d 981 (5th Cir., filed Jan. 19, 1973).

We feel that this conclusion is also supported by similar decisions reached under the wagering tax statutes. While Marchetti and Grosso sustained the self-incrimination defense against prosecutions under those statutes for failure to furnish incriminating information, the attendant civil tax liability has been upheld. Cole v. Cardoza, 441 F.2d 1337, 1340-1341 (6th Cir.); Washington v. United States, 402 F.2d 3, 5-6 (4th Cir.), cert. denied, 402 U.S. 978, 91 S.Ct. 1641, 29 L.Ed.2d 145, and see United States v. United States Coin & Currency, 401 U.S. 715, 717-718, 91 S.Ct. 1041, 28 L.Ed.2d 434.

We have examined the carefully reasoned opinion in Jensen v. United States, No. C-2938 (D.Colo., unpublished, filed Mar. 27, 1972). The court there concluded that under present law protecting assertion of the privilege against self-incrimination, the $100 tax rate constituted an impermissible burden on assertion of the privilege. However, for the reasons stated we respectfully disagree.

Accordingly we conclude that the trial court properly decided this case and affirm.

      . These excise tax provisions have since been repealed by Public Law 91-513, Title III, § 1101(b)(3)(A), October 27, 1970, 84 Stat. 1292. However the repealing statute had a savings clause providing that civil seizures or forfeitures or injunctive proceedings commenced prior to the effective date of § 1101 shall not be affected by the repeals or amendments or abated by reason thereof.
      The answer, counterclaim and cross-claim of the government, including its claim for the foreclosure of its tax lien against the interests of Melvin D. Anderson in certain properties, and for a deficiency judgment for any amount unsatisfied, was filed October 31, 1969. Anderson moved to dismiss the government’s cross-claim on December 9, 1969, and asserted the constitutional challenge to the marihuana excise tax by that motion. Anderson died prior to entry of judgment and appellant Simmons, his administrator asserts that same contention.

      . Appellant relies also on Marchetti v. United States, 390 U.S. 39, 88 S.Ct. 697, 19 L.Ed.2d 889, and Grosso v. United States, 390 U.S. 62, 88 S.Ct. 709,19 L.Ed. 2d 906, and similar decisions under the Fifth Amendment privilege against self-incrimination.

      . Marchetti v. United States, supra; Grosso v. United States, supra, and Haynes v. United States, 390 U.S. 85, 88 S.Ct. 722, 19 L.Ed.2d 923.

      . In view of the statute and regulations we feel it is clear that there is no practical possibility that Anderson was in a group entitled to register and pay the occupational tax imposed by 26 U.S.C.A. § 4751, 68A Stat. 563 (1954) (repealed 1970) on importers, manufacturers and the like, and on persons dealing in marihuana. See § 4751(5), 68A Stat. 563 (1954) (repealed 1970). Under the pertinent regulations such persons dealing in marihuana and other persons registering must show that under the laws of the jurisdiction in which they are operating or propose to operate, they are legally qualified or entitled to engage in the activities for which registration is sought. Treas.Reg. §§ 152.22 and 152.23; 26 C.F.R. §§ 152.22 and 152.23 (1964). We believe these regulations are valid. See Leary v. United States, supra, 395 U.S. at 24 n. 38, 89 S.Ct. 1532; Minor v. United States, 396 U.S. 87, 93, 90 S.Ct. 284, 24 L.Ed.2d 283; Bingler v. Johnson, 394 U.S. 741, 749-750, 89 S.Ct. 1439, 22 L.Ed.2d 695; United States v. Correll, 389 U.S. 299, 305-306, 88 S.Ct. 445, 19 L.Ed.2d 537 (1967).
      On the other hand, if Anderson had been a dealer within § 4751(5), entitled to register as legally qualified, there would have been no self-incrimination problem.

      . We likewise agree with the Court of Claims that United States v. United States Coin & Currency, 401 U.S. 715, 91 S.Ct. 1041, 28 L.Ed.2d 434, is inapposite since this suit for collection of a civil tax lacks the criminal penalty ingredient present in the forfeiture suit in Coin & Currency,


author: PER CURIAM:

text:
    Ruben HARRIS, Jr., Petitioner-Appellant, v. STATE OF TEXAS, COUNTY OF WALKER and Dr. George J. Beto, Director, Texas Department of Corrections, Respondents-Appellees.
    No. 72-2818.
    United States Court of Appeals, Fifth Circuit.
    March 30, 1973.

      Gerard P. Nugent, Austin, Tex., court appointed, for petitioner-appellant.
    Crawford Martin, Atty. Gen., Guy C. Fisher, Gilbert J. Pena, Asst. Attys. Gen., Austin, Tex., for respondents-appellees.
    Before COLEMAN and SIMPSON, Circuit Judges, and ESTES, District Judge.
   PER CURIAM:

On March 2, 1972, the United States District Court for the Western District of Texas in a habeas corpus proceedings found that the Appellant Harris had been denied due process in a 1969 Texas conviction for robbery by assault because the State failed to disclose evidence favorable to him and ordered Harris discharged from custody subject to the State’s right to try him within a reasonable period of time not to exceed 120 days. On July 12, 1972, Harris filed another application for a writ of habeas corpus on the grounds that he had not been retried within 120 days; in response, the State moved for an extension of time on August 2, 1972, and moved that Appellant’s Application be dismissed on August 4, 1972. After considering the motion along with a transcript of the proceedings in the State Court, the District Court, under 28 U.S.C. 2243, granted the State’s motion for an extension of time on August 10, 1972, and on August 16, 1972 granted the State’s motion to dismiss the Application.

This is not a case of a defendant being denied a speedy trial by delaying tactics by the state. Appellant has made no effort to obtain a speedy re-trial through the available state remedies. On the contrary, Appellant is dissatisfied with the original March 2 order of the District Court entitling him to only a new trial instead of outright release. In its August 10 order the District Court found

“that said Petitioner, REUBEN [sic] HARRIS, JR., is attempting to frustrate and prevent the right of State to re-try the case of State v. Reuben [sic] Harris, Jr., (cause No. 68-458), by employing tactics .of recalcitrance and delay. It is apparent that the State has attempted to comply with this Court’s order dated March 2, 1972, and has been standing ready to re-try Defendant HARRIS since the call of the trial docket on May 1, 1972.”

Appellant will not be permitted to obstruct the State’s efforts to re-try him and then obtain a dismissal for failure of the State to provide him with a speedy trial.

Therefore, the orders appealed from are

Affirmed.

      . “The court shall . . . dispose of the matter as law and justice require.’


author: HEANEY, Circuit Judge.

text:
    Johnnie A. REED, Appellant, v. ARLINGTON HOTEL COMPANY, INC., Appellee.
    No. 71-1726.
    United States Court of Appeals, Eighth Circuit.
    Submitted Oct. 16, 1972.
    Decided March 21, 1973.
    Rehearing and Rehearing Eh Banc Denied April 26, 1973.

      Richard L. Mays, Little Rock, Ark., for appellant.
    Philip K. Lyon, Little Rock, Ark., for appellee.
    Before HEANEY and STEPHENSON, Circuit Judges, and BOGUE, District Judge.

       District of South Dakota, sitting by designation.

   HEANEY, Circuit Judge.

Johnnie A. Reed, a black, brought this suit on behalf of himself and blacks as a class, contending that the defendant, Arlington Hotel, Inc., of Hot Springs, Arkansas, has violated Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e-2(a) (1), through racially discriminatory employment practices.

Reed worked as a bellman at the Arlington Hotel. On February 17, 1969, the chief bellman ordered him and two other black bellmen to help unload a truck. All three refused on the grounds that - such a task was not included as part of a bellman’s duties. Reed and the others were immediately discharged.

On March 7, 1969, Reed filed a charge with the Equal Employment Opportunity Commission alleging a violation of Title VII. On November 19, 1970, Reed received from the E.E.O.C. notice of his right to sue. On December 18, 1970, he filed this action.

During the course of the trial, the hotel entered into a settlement agreement with the E.E.O.C. Two of those employees discharged in the February, 1969, incident accepted the settlement. Reed rejected it because it included no provision for back pay.

While the defendant’s discharge of Reed provided the impetus for the present action, the additional allegations that the hotel has discriminated against all blacks in employment rested upon the hotel’s record of maintaining segregated job categories and discriminatory recruitment policies.

After a trial, the court dismissed both Reed’s individual action for back pay and injunctive relief and the class action.

I. REED’S ACTION

The trial court held that Reed was fired for insubordination. There is substantial evidence to support that conclusion. When Reed protested the order on the grounds that the unloading was not the work of a bellman, he was told he would be fired if he persisted in his refusal. Moreover, it is clear that the assignment was not a racially discriminatory one. The record shows that the unloading was carried out by whomever was available, whether black or white. There is no evidence to support Reed’s contention that he was singled out to do the job because he was black. Employees in all departments did the job from time-to-time, and Reed was in no position to claim special privilege.

II. CLASS ACTION

Before trial, the defendant took the position that the plaintiff, as an employee discharged before the action was commenced, had no standing to raise the issue of discrimination against blacks generally. The defendant relied on two District Court decisions—Burney v. North American Rockwell Corporation, 302 F.Supp. 86 (C.D.Cal.1969), and Hyatt v. United Aircraft Corp., Sikorsky Aircraft Div., 50 F.R.D. 242 (D.Conn. June 11, 1970). The trial court reserved its ruling on the question until after trial, at which time it held that it was proper for the plaintiff to represent blacks as a class. The court stated:

“* * * [R]eeently the courts [have held] * * * that even an employee who has been discharged, * * * and recognizing that he would not ever go back to work, still has a standing to bring a class action for all those in the same situation * * And I think the courts have appropriately pointed out that if this kind of an individual would be prevented from bringing class actions as the rules permit, there would be a windfall for the employer, and when any such matter was coming up, all they would have to do is discharge the employee * * *. That reasoning is logical. So this Court follows the rule that has been more recently established, that a discharged employee does have standing to bring class action where all of the other criteria of the rules have been met. * * * ”

The trial court’s holding on standing is correct. We have stated that:

“ * * * a single charge of employment discrimination under Title VII found by the EEOC to rest upon reasonable grounds may serve to launch a full scale inquiry into the alleged unlawful motivation in employment practices. * * *”

Parham v. Southwestern Bell Telephone Co., 433 F.2d 421, 425 (8th Cir. 1970). In Parham, we allowed an individual who claimed that he had not been hired because of racial discrimination to bring a class action, attacking employment discrimination generally. It requires no extension of Parham to give a discharged employee the same privilege. As a black and a former employee, the plaintiff was subject to the same racially discriminatory policies as other members of the class. “The very nature of a Title VII violation rests upon discrimination against a class characteristic, * * Parham v. Southwestern Bell Telephone Co., supra at 428.

The trial court’s holding is also in accord with decisions of those Courts of Appeals which have ruled on the matter. Tipler v. E. I. duPont deNemours and Co., 443 F.2d 125, 130 (6th Cir. 1971); Johnson v. Georgia Highway Express, Inc., 417 F.2d 1122, 1124 (5th Cir. 1969). See, Brown v. Gaston County Dyeing Machine Company, 457 F.2d 1377, 1387, n.8 (4th Cir. 1971) (J. Dupree, concurring), cert. denied, 409 U.S. 982, 93 S.Ct. 319, 34 L.Ed.2d 246 (1972); Cf., Graniteville Co. (Sibley Div.) v. Equal Employ. Op. Com’n, 438 F.2d 32, 35 (4th Cir. 1971).

We next consider, on the merits, the trial court’s dismissal of the class action. The court held, in substance, that while the statistics showed that discrimination had taken place, dismissal was appropriate because the defendant’s current hiring practices sufficiently complied with Title VII. We disagree.

The statistics which show segregated departments ' and job classifications establish a violation of Title VII. Under these circumstances, outright dismissal is inappropriate. See, Parham v. Southwestern Bell Telephone Co., supra 433 F.2d at 426.

Thirteen percent of Hot Springs’ population was black in 1970. Yet, at the time that suit was filed, five of the hotel’s eleven departments, providing approximately fifty-eight jobs, were all white and had traditionally been so. Only two department heads were black. The all-white departments included the higher paying job categories found in the front office, accounting and maintenance departments. One department was all black. Another department had seventeen blacks and three whites. While porters and bellmen performed substantially the same duties, they were divided into two separate departments —each one racially segregated. While turnover in some of these segregated departments was relatively low; in others, it was higher. That some departments were integrated does not change the facts that blacks have been substantially deprived of their Title VII rights.

There was testimony which indicated that even in those departments which were not completely segregated, specific positions were limited to persons of one race. For instance, while the maids in the housekeeping department have usually been black, those persons who work in the linen room have always been white. In the food department, the waiters were all black while the food checkers and cashiers were all white.

In addition, the defendant’s recruitment practices at the time suit was brought were racially discriminatory in view of its history of racial segregation. See, Brown v. Gaston County Dyeing Machine Company, swpra; Parham v. Southwestern Bell Telephone Co., supra.

The evidence shows that the hotel had not established uniform recruiting procedures. Sometimes the state employment service was used, but more often recruiting was done by word of mouth. The hotel had also failed to establish objective criteria for evaluating applicants. Recruitment was left to the individual department heads who decided how to publicize a specific job opening and who subjectively determined an applicant’s qualifications for employment. Such unstandardized and subjective procedures lend themselves to arbitrary and discriminatory hiring. See, Brown v. Gaston County Dyeing Machine Company, supra 457 F.2d at 1382, 1383.

The evidence also shows that the defendant did not post notices of job openings in the hotel, and news of them was instead passed along by word of mouth. Under the circumstances, this constituted a discriminatory employment practice. A department head may easily discriminate against black employees by failing to notify them of the opportunities for transfer and promotion in the segregated departments. Furthermore, delays in notification may occur which will effectively preclude the black employees from being considered for a job vacancy. See, Brown v. Gaston County Dyeing Machine Company, supra at 1382, 1383.

It has been suggested that dismissal was appropriate because the defendant hired a few blacks in previously all-white positions during the course of the trial or shortly before it. We reject this contention. The number of blacks hired was insubstantial. Recruiting procedures continued to violate Title VII. Further, even if substantial changes had occurred in the hotel’s hiring policies, outright dismissal would have been inappropriate because such change “ ‘in the face of litigation [is] equivocal in purpose, motive and • performance.’ [Jenkins v. United Gas Corporation, 400 F.2d 28, 33 (5th Cir. 1968)].” Parham v. Southwestern Bell Telephone Co., supra 433 F.2d at 426.

On appeal, it was also suggested that the settlement agreement between the E.E.O.C. and the defendant has mooted this action even though the plaintiff has rejected it. We also reject this contention. Cox v. United States Gypsum Company, 409 F.2d 289, 291 (7th Cir. 1969); Williams v. New Orleans Steamship Association, 341 F.Supp. 613, 617 (E.D.La.1972); Austin v. Reynolds Metals Company, 327 F.Supp. 1145, 1151 (E.D.Va.1970).

“ * * * t0 hold otherwise would be to make the EEOC the final arbiter of an individual’s Title VII grievance whereas Congress has given the federal judiciary the ultimate power to determine Title VII rights. The Commission has not been given the power of adjudication. Hutchings v. United States Industries, Inc., 428 F.2d 303 (5th Cir. 1970); McGriff v. A. O. Smith Corporation, 51 F.R.D. 479 (D.S.C.1971); see also, Employment Discrimination and Title VII of the Civil Rights Act of 1964, 84 Harv.L.Rev. 1109,1249, fn. 301.”

Williams v. New Orleans Steamship Association, supra 341 F.Supp. at 617-618. Dismissal of the class action on the basis of the settlement agreement would be particularly inappropriate in view of Rule 23 of the Federal Rules of Civil Procedure which provides:

“ ‘A class action shall not be dismissed or compromized without the approval of the court, and notice of the proposed dismissal or compromise shall be given to all members of the class in such manner as the court directs.’ See, Banks v. Lockheed-Georgia Company, 46 F.R.D. 442 (N.D.Ga. 1968). * * *”

Id. at 618.

We can, however, consider the settlement agreement in determining the relief that will be granted. Cf., Parham v. Southwestern Bell Telephone Co., supra.

III. REMEDY

In fashioning a remedy, it is our duty to “so far as possible eliminate the discriminatory effects of the past as well as bar like discrimination in the future.” Louisiana v. United States, 380 U.S. 145, 154, 85 S.Ct. 817, 822, 13 L.Ed.2d 709 (1964), quoted in Carter v. Gallagher, 452 F.2d 315, 328 (8th Cir. 1971), cert. denied, 406 U.S. 950, 92 S.Ct. 2045, 32 L.Ed.2d 338 (1972). ‘“The crux of the problem is how far the employer must go to undo the effects of past discrimination.’ ” In the Matter of Bethlehem Steel Corporation, Respondent, Decision of the Secretary of Labor, C.C.H. Employment Practices Guide § 5128 at 3253 (January 15, 1973).

As we have indicated, the hotel has entered into a settlement agreement with the E.E.O.C. In part, this agreement will govern the hotel’s recruitment procedures. The relevant provisions state:

“4. All hiring, assignment, promotions, transfers, dismissals and other conditions of employment, shall be maintained and conducted in a manner which does not discriminate on the basis of race, color, sex, religion, or national origin in violation of Title VII of the Civil Rights Act of 1964.
-X- * * -X- -X- -X-
“9. The Company agrees to take affirmative action to insure that traditional patterns of recruitment, hiring and job assignment which may have been discriminatory are not perpetuated. Such affirmative action shall include, but not be limited to:
“a) notification in writing of this restatement of policy to all supervisory personnel and all others having hiring or job placement authority.
“b) recruitment efforts shall be conducted so as to insure applicants from minority sources are encouraged to apply. To implement this, Respondent agrees to notify, in writing, all routine sources of recruitment, such as public and private employment agencies. All newspaper advertisements for help wanted are to bear the legend ‘AN EQUAL OPPORTUNITY EMPLOYER.’
“10. When using word of mouth recruitment, Respondent agrees that vacancies will be made known to minority employees with a request to publicize such vacancies in their community.
“11. Respondent agrees to recruit for applicants from minority group sources to apply for any vacancies occurring in any currently all-white job categories, such as desk clerk, cashier, telephone operator, porter, parking attendant and office clerical. The selection of the applicant shall be made without discrimination based on race, color, sex, religion or national origin.”

This agreement will go a long way to eliminate discrimination in the hiring of new personnel by formally committing the hotel to a policy of equal opportunity, and by providing the means for informing the black community of that policy and of particular job openings. In addition, if the hotel is to fully comply with Title VII, it must adopt written objective criteria for the evaluation of job applicants.

The agreement, however, does not adequately protect the rights of those blacks presently working for the hotel. It is these blacks who have suffered the most from the indignities of segregation and the denial of opportunities for transfer and promotion.

The company has stated that those employed in the porters’ department (all white) and the bellman department (all black) perform substantially the same job, and the separation into two departments is largely based on tradition. Under these circumstances, the hotel must immediately eliminate the distinction between the two departments and permit employees, without regard to race, to perform all the work within either department. Such action will not result in the displacement of any white workers, nor will it significantly interfere with the functioning of the hotel.

The record indicates that the hotel’s other departments are organized according to the distinct services they provide. To immediately merge any of the all-white and all-black departments is not appropriate because it would result in totally disrupting the normal functioning of the hotel. We also do not believe that the immediate transfer of some black employees into previously all-white departments is appropriate because this would result in present white employees losing their jobs. Instead, present employees of both races must be given a preference in the filling of job openings as they arise. Notices of such openings must be posted for a reasonable time, and the opening filled by the employee with the longest service with the hotel who is qualified for the position and who desires it.

Finally, the trial court should retain jurisdiction to see that the settlement agreement and this Court’s decision are carried out.

The plaintiff is entitled to reasonable attorney’s fees, including services for this appeal, to be allowed by the District Court as authorized by 42 U.S. C.A. § 2000e-5(k).

Affirmed in part; reversed in part; and remanded for action consistent with this opinion.

      . Accord, Tolbert v. Daniel Construction Company, 332 F.Supp. 772, 775 (D.S.C. 1971); White v. Gates Rubber Company, 53 F.R.D. 412 (D.Colo.1971). See, Joslin Dry Goods Co. v. Equal Employ. Opportunity Com’n, 336 F.Supp. 941, 948 (D.Colo.1971). But see, Mack v. General Electric Company, 329 F.Supp. 72, 75 (E.D.Pa.1971).


text:
    UNITED STATES of America, Plaintiff-Appellee, v. Ray BURNETT, Defendant-Appellant.
    No. 72-2591.
    United States Court of Appeals, Fifth Circuit.
    March 23, 1973.

      John N. Barnhart, Houston, Tex., for defendant-appellant.
    Anthony J. P. Farris, U. S. Atty., James R. Gough, Asst. U. S. Atty., Houston, Tex., for plaintiff-appellee.
    Before ALDRICH, SIMPSON and CLARK, Circuit Judges.

       Hon. Bailey Aldrich, Senior Circuit Judge of the First Circuit, sitting by designation.

   CLARK, Circuit Judge:

Ray Burnett appeals from his conviction for willful failure to report for and submit to induction into the Armed Forces of the United States, a violation of 50 App. U.S.C. § 462(a). We reverse and remand for a new trial.

Burnett asserts that the local Selective Service Board deviated from the regulations establishing the Order of Call for inductees, that he would not have been called had the Board complied with the regulations, and that as a result the order to report for induction was invalid. It is well established and the Government concedes that a registrant is entitled to be inducted in proper order; and that Burnett’s contention, if proven, would constitute a good defense to the offense charged. See, e, g., United States v. King, 455 F.2d 345 (1st Cir. 1972); United States v. Dudley, 451 F.2d 1300 (6th Cir. 1971); United States v. Baker, 416 F.2d 202 (9th Cir. 1969).

Burnett attempted to establish his defense by producing the names of those whom it appeared, on the facts known to him, should have taken precedence in the Order of Call. Burnett’s name appeared ninth from the bottom of his local board’s monthly Delivery List. Thus, had Burnett been able to point out nine registrants who should have been ordered for induction before him but were not, he would have established that he was improperly placed on the Delivery List. At the time that Burnett was ordered to report, the prescribed Order of Call was (1) delinquents, (2) volunteers under 26 years of age, and (3) draftees over 19 and under 26 years of age. Burnett was in the third category. Within this category the regulation provided that those eligible would be called in the order of their birth dates with the oldest being selected first.

By examining the monthly Delivery Lists prepared subsequent to his own, Burnett ascertained they contained the names of 15 registrants who were under 26 years of age, older than Burnett, classified I-A, and who had been ordered for induction after Burnett. Burnett then offered the delinquency list containing the names of six registrants who by virtue of their delinquent status should have been ordered for induction prior to Burnett, if they could have been located. All of this evidence was excluded by the trial court. In addition, Burnett was precluded from examining the executive secretary of his Draft Board with reference to the Board’s SSS 102 Book which lists in order of birth all the registrants born in the same year. The trial judge only permitted him to elicit the names of six registrants who were older than defendant and who were not called ahead of him, though Burnett contends that the SSS 102 Book contained the names of 13 additional such registrants. Burnett asserts that but for the restrictions placed on the reception of probative evidence by the trial court, he could have adduced proof that 40 men who apparently should have been called prior to him were not.

The Government correctly observes that the actions of draft boards, like those of other officials, are imbued by the law with a presumption of regularity. However, in this case, the court’s stringent rulings effectively blocked the only chance Burnett may have had of neutralizing this presumption by establishing that at least nine of these 40 registrants were required to be called before he was. Not only was Burnett thus thwarted in his proffer of proof, but his adversary, who was the ' custodian of all the information he sought to adduce, claimed the benefit of the court-created presumption that its governmental actions were correct. The presumption of official regularity is a proper shield against reckless harassment of public servants. But shield not shroud it is. Justice will not permit it to become a cloak to hide all official action from court scrutiny. Once the defendant has brought forward the most probative evidence he can reasonably adduce that an apparent irregularity exists, the government then can no longer withhold crucial evidence it possesses and insist on retaining the presumption that its unrevealed cache of truth would demonstrate its actions were proper. See United States v. King, supra; United States v. Dudley, supra; United States v. Baker, supra; Rusk v. United States, 419 F.2d 133 (9th Cir. 1969); Yates v. United States, 404 F.2d 462 (1st Cir. 1968), reh’g denied, 407 F.2d 50 (1st Cir.), cert. denied 395 U.S. 925, 89 S.Ct. 1781, 23 L.Ed.2d 242 (1969).

We do not hold the Government can be required to violate the confidentiality of draft records conferred by law. Our ruling only means that it must meet a prima facie case of irregularity such as Burnett made here with something more probative than the legal fiction of presumed regularity or forego its prosecution.

Another error in this record would equally mandate reversal and since the case must be remanded for another trial it should be reached now. The charge to the jury in this case on the presumption of regularity sails so perilously close to the shoals of a directed verdict of guilt it must not be repeated. The text is set out in the margin. It may be possible for a sophisticated student of the law to draw the fine distinction which the Government asks us to discern — that the charge meant only to advise that the defendant was not entitled to a directed verdict of acquittal —but the probability is that a jury could not. . Even learned counsel with the benefit of calm hindsight and textbook study is unable to suggest why this advice was necessary when its potential for prejudice was so great. We have no hesitancy in holding its impact on the jury’s deliberation requires that the retrial be conducted without its taint.

Burnett contends that the thirty month interval between his indictment and trial in and of itself establishes as a matter of law that he was denied his constitutional right to speedy trial. We disagree. The record shows that at no time during the thirty month period did the defendant seek or request that a trial date be set. The recent decision of United States v. Dyson, 469 F.2d 735 (5th Cir. 1972), relied upon at oral argument, does not mandate a different result. There the court specifically noted in its discussion of the principles set out in Barker v. Wingo, 407 U.S. 514, 92 S. Ct. 2182, 33 L.Ed.2d 101 (1972), that there was no indication that Dyson was even aware of his right to a speedy trial since counsel was not appointed to represent him until four days before trial. Burnett, on the other hand, was represented from the beginning by competent counsel. The only logical conclusion which can be drawn from this state of facts is that Burnett, who was not then confined, had no desire to have his case brought on for trial.

In the alternative, Burnett argues that, even if his right to a speedy trial has not been abridged by the thirty month delay standing alone, the right has been denied nevertheless because of the prejudice which he has suffered from the Government’s delay. Specifically, he contends that the Government, in accordance with its standard policy to retain records for no more than one year, destroyed certain records which could have been relevant to his defense. It is conceded that it was improper to routinely apply this procedure to materials directly related to an issue in pending, untried litigation. The court views this destruction with even more concern because of the fact that some of the very records destroyed apparently were the object of discovery motions by Burnett. Though the Government ultimately gave Burnett some documentation which he sought, it refused to produce all of the written materials demanded, claiming that they were irrelevant, immaterial or privileged. We are unable to determine from the record on this appeal what degree of prejudice, if any, Burnett may have suffered from the destruction and intimate no ruling on the merits of this point. However, if Burnett chooses to pursue this issue on remand, the district court is directed to examine this contention, and determine just what records were destroyed and whether their destruction prejudiced Burnett in his defense. If prejudice is found the teachings of Barker and Dyson would mandate dismissal.

Reversed.

      . Though the language of the indictment asserts that Burnett failed to report for and failed to submit to induction, the record makes it clear that Burnett did indeed report but refused to step forward for induction. Compare Schutz v. United States, 422 F.2d 991 (5th Cir. 1970).

      . It is the general duty of the local board, selective board to induct registrants in a proper order of call. Failure to do so may invalidate the induction order. You are instructed that a presumption of regularity supports an order of induction by the local selective board. You are further instructed, as a matter of law, that the registrant in this case has raised no issue that would, in itself, alter this rebuttable presumption of regularity. The order of call in this case has not been shown to be either an improper punishment or, on the face of the record, a clear violation of the selective Service regulations. The registrant must bring forth sufficient evidence to overcome the presumption of regularity that pertains to his order of call, and if you, the members of the jury, find the registrant has brought forth sufficient evidence to overcome this general presumption of regularity, then, by his evidence the registrant demonstrates under all the facts and circumstances of this case that his order of call by the local selective service board was basically and fundamentally unjust, unfair and wrongful and then, in that event, but only in that event, members of the jury, you may acquit the defendant on the grounds of an improper order of call.