author: DONALD E. O’BRIEN, Chief Judge.

text:
    UNITED STATES of America, Petitioner, v. PREMISES KNOWN AS 1007 MORNINGSIDE AVENUE, SIOUX CITY, IOWA, Respondent.
    No. 85-4008M.
    United States District Court, N.D. Iowa, W.D.
    Dec. 26, 1985.

      William A. Cohan, Denver, Colo., for petitioner.
    Asher Schroeder, Asst. U.S. Atty., Sioux City, Iowa, for respondent.
   ORDER

DONALD E. O’BRIEN, Chief Judge.

This matter comes before the Court on respondent’s resisted Motion for the Return of Seized Property. A hearing was held at which all parties were represented by counsel. After fully considering the evidence at the hearing and the arguments of counsel in the briefs and at the hearing, the Court sustains Respondent’s motion in part and denies the motion in part.

Two warrants are at issue here, the first warrant was issued April 4, 1985 by Judge McManus directing a search of:

Premises known as 1007 Morningside Avenue, Sioux City, Iowa 51106, being further described as a single story chiropractic office building, excluding the attached two-story frame residential dwelling.

The respondent contends this first warrant is invalid for (1) defects on the face of the warrant, (2) lack of probable cause for the search, (3) overbreadth, and (4) lack of particularity.

The second warrant was issued April 5, 1985 by Magistrate Deck while the first warrant was being executed. It directed a search of:

Premises known as 1007 Morningside Avenue, Sioux City, Iowa 51106, being further described as the first floor of a two story frame residential dwelling, and that attached thereto is a single story chiropractic office building, (emphasis added)

The respondent contends that it is invalid on the grounds of (1) pretext, (2) defects on the face of the warrant, (3) lack of probable cause, (4) overbreadth, and (5) lack of particularity.

On April 4, 1985, IRS Special Agent Nathan J. Woodard applied for the first search warrant on the basis of a nine page affidavit alleging probable cause to believe that Respondent Gary Rosenberger had committed violations of the United States Code, 18 U.S.C. Section 371 (conspiracy), 26 U.S.C. Section 7201 and 7203 (tax evasion and willful failure to file a tax return), and 31 U.S.C. Section 5322 (violation of the currency transactions reporting law), all for the years 1978 through present.

The search of the Rosenberger premises was part of a simultaneous search of persons or entities suspected of similar violations at six locations. Counsel for this respondent represents other respondents in the related actions and states that the other premises searched were owned and/or controlled by (1) Norbert Stelten (Minnesota), (2) Walter J. Clifford (Minnesota), Robert and Audrey Hawley (South Dakota), (5) the National Commodity and Barter Association/National Commodity Exchange (N.C.B.A./N.C.E.), Joseph Gorman, and Mel & Cathy Houser (Colorado), and (6) the American Freeman Association/National Currency Exchange (A.F.A./N.Cu.E.) (Oregon). The stated purpose common to the searches and seizures was to search for and seize evidence of a conspiracy to violate the Currency Transactions Reporting laws.

The first warrant on the Rosenberger premises was executed beginning at about 1:00 p.m. April 5, 1985 during Rosenberger’s absence for lunch and the search continued until approximately 6:30 p.m. Rosenberger returned to the premises within a few minutes after the search started and remained until the search concluded.

Attached to the Rosenberger chiropractic office is a dwelling in which a tenant of Rosenberger lives. The attached dwelling was specifically excluded from the first warrant. However, shortly after the arrival of the search party, the agents entered the dwelling and visually searched the first floor. This entry was made as a security sweep.

Later, officers in the search party re-entered the attached dwelling with their guns drawn in response to a thumping noise they heard from the dwelling. The officers noticed some financial records during this second entry. The officers sought and obtained a second warrant for the search of the dwelling based on this information.

The officers’ search yielded approximately 31 boxes of paper and books, i.e. the government estimated that the volume of paper seized would stack to a height of over 25 feet. The Court required the government to file a report after the hearing categorizing the seized property. The government’s report set forth three categories of items seized, together with an estimate of the volume seized under each category:

Financial.........................27%
Intent...........................36%
Items to Return..................37%

The Court ordered the prompt return of the items the government agreed should be returned on August 12, 1985, and this has been accomplished. This Order deals only with the first two categories of items still being held by the Internal Revenue Service.

I. The First Warrant

Defective on its Face?

The respondent continues to press for the return of all seized material. The respondent contends that the first warrant is defective on its face. The respondent argues that the warrant does not describe the premises to be searched and items to be seized and that the sole limitation on the warrant is that the items seized must relate to a time from 1978 through present. He further argues that the warrant does not contain any language informing the executing officers or himself the nature of the criminal activity under investigation; nor that any language on the warrant incorporates the affidavit of Agent Woodard into the warrant for purpose of informing the respondent of the cause of the intrusion or limiting the discretion of the executing officers. The description in a warrant passes muster if it is sufficient to identify the place to be searched and items to be seized. Steele v. United States, 267 U.S. 498, 503-04, 45 S.Ct. 414, 416-17, 69 L.Ed. 757 (1925); United States v. Williams, 687 F.2d 290, 292-93 (9th Cir.1982). The particularity requirement “makes general searches ... impossible and prevents the seizure of one thing under a warrant describing another. As to what is to be taken, nothing is left to the discretion of the officer executing the warrant.” Andresen v. Maryland, 427 U.S. 463, 480, 96 S.Ct. 2737, 2748, 49 L.Ed.2d 627 (1976) quoting Stanford v. Texas, 379 U.S. 476, at 485, 85 S.Ct. 506, 511, 13 L.Ed.2d 431 (1965). “[T]he degree of specificity required is flexible and may vary depending on the circumstances and the type of items involved.” United States v. Apker, 705 F.2d 293, 299 (8th Cir.1983), quoting United States v. Muckenthaler, 584 F.2d 240, 245 (8th Cir.1978). The degree of specificity may also depend on the circumstances and nature of the activity being investigated. United States v. Wuagneux, 683 F.2d 1343, 1349 (11th Cir.1982); cf. United States v. Dennis, 625 F.2d 782, 792 (8th Cir.1980).

The Court finds that there were no substantial defects on the face of the warrant. The warrant sufficiently described the premises to be searched. This description is set forth below:

1) Books, records, receipts, bank statements, and records, money drafts, letters of credit, money orders, and cashier check’s receipts, passbooks, bank checks, and other items of or relating to Gary Rosenberger, Life Science Church of Morningside, and/or P.R. Refining, and/or T.S.L.S.C.A. evidencing the obtaining, secreting transferring concealing and/or expenditure of money;
2) Books, records, receipts, notes, ledgers, and other documents relating to financial transactions of NATIONAL CURRENCY EXCHANGE (N.C.E.) and/or MID-STATES SECURITY EXCHANGE (M.S.E.) and/or HARDWAY COMPANY.
3) Currency, precious metals, jewelry, antiques and/or other items evidencing substantial cash or currency transactions of or by Gary Rosenberger, Life Science Church of Morningside, P.R. Refining, NATIONAL CURRENCY EXCHANGE (N.C.E.) and/or NATIONAL COMMODITY BARTER ASSOCIATION (N.C.B.A.) and/or MID-STATES SECURITY EXCHANGE (M.S.E.) and/or HARDWAY COMPANY and/or T.S.L.C.A.
NOTE: Documentary Evidence is limited to the years 1978 through the present.

Under the circumstances here it would be impossible to describe the exact identity of each document and piece of evidence which could be seized. Describing the generic classes of documents set reasonable parameters for the search here. Dennis, supra, 625 F.2d at 792. The description in the warrant here is limited to items likely to provide information concerning Rosenberger’s taxable income for the years involved. Cf. Marvin v. United States, 732 F.2d 669, 674 (8th Cir.1984). While the Eighth Circuit has criticized a warrant that did not set forth the citation to the statute the respondent was suspected of violating, In re Grand Jury Proceedings, 716 F.2d 493, 499 (8th Cir.1983), the Circuit did not state that it was an absolute requirement. This Court is unaware of any constitutional or other requirement that the statute be cited or referred to in the warrant itself so long as the items to be seized are otherwise defined with sufficient particularity. In the first paragraph of the description of items to be seized, the description of “other items” is limited to evidence of “obtaining, secreting, transferring, concealing and/or expenditure of money.” As thus limited the Court believes the description of “other items” was sufficiently specific. Further, the officers here acted in objective good faith reliance upon a warrant issued by a detached and neutral judicial officer in seizing evidence related to taxable income. See United States v. Leon, - U.S.-, 104 S.Ct. 3405, 3420, 82 L.Ed.2d 677 (1984); Massachusetts v. Sheppard, 104 S.Ct. 3424, 3428-29, 82 L.Ed.2d 737 (1984).

The Court believes the generic descriptions of the other documents (i.e. Books, records, receipts, etc.) was sufficient to describe the classifications of items to be seized, greater specificity under the circumstances was virtually impossible. See Sovereign News Co. v. United States, 690 F.2d 569, 576-77 (6th Cir.1982) (Magistrate entitled to describe business records generically, since greater specificity regarding these items is virtually impossible). The Court concludes that the “first warrant” was not defective on its face.

Probable Cause

The respondent next contends that the affidavit fails to establish probable cause for the issuance of a search warrant, under the “totality of circumstances” test set forth in Illinois v. Gates, 462 U.S. 213, 103 S.Ct. 2317, 76 L.Ed.2d 527 (1983). Respondent contends that no factual basis is established for several of Woodard’s assertions.

A grudging or negative attitude by reviewing courts towards warrants is inconsistent with the Fourth Amendment’s strong preference for searches conducted pursuant to a warrant. “Courts should not invalidate warrants by interpreting affidavits in a hypertechnical rather than a common-sense manner.” United States v. Ventresca, 380 U.S. 102, 109, 85 S.Ct. 741, 746, 13 L.Ed.2d 684 (1965); See Illinois v. Gates, 462 U.S. 213, 236, 103 S.Ct. 2317, 2340, 76 L.Ed.2d 527 (1983). The Court’s opinion is that a judicial officer can properly rely on the statements of an IRS special agent indicating that (1) a person has not filed tax returns since 1976, (2) that he had gross receipts of “no less than $85,880.37 in 1979, $162,210.76 in 1980, and $111,-395.75 in 1981” (Woodard Affidavit, p. 3) where the affidavit recites that the gross receipts were determined from bank records and other third parties, and (3) can properly rely on the same affiant’s statements that net profits were calculated based on a table of averages for medical and health services professions which averages indicate the taxpayer owed $5,521.00, $17,726.81, and $8,920.00 for the years 1979, 1980 and 1981 respectively. The above information alone provides sufficient support for a finding of probable cause to conduct a document search for information concerning the taxpayer’s income. Further, there is sufficient support in the affidavit based on Agent Woodard’s investigation and experience to state in general terms the way the N.C.E., N.C.B.A., M.S.E., T.S.L.S.C.A., and P.R. Refining are used by tax evaders to conceal income from the IRS. Further, the affidavit revealed a basis to suspect Rosenberger’s involvement with the N.C.E., N.C.B.A., and M.S.E. The affidavit states that Dr. Rosenberger is a member of the Life Science Church. While Agent Woodard does not explain where he learned of Rosenberger’s involvement in the Life Science Church, it is a matter of record based on previous lawsuits involving Rosenberger in this district and circuit that he is a member of the Life Science Church and that his participation in this church is conducted in a manner to avoid payment of federal income tax. See eg. United States v. First Nat. Bank through O’Hara, 727 F.2d 762 (8th Cir.1984). The judicial officers issuing both warrants are federal judicial officers of this district. This Court will not hold the IRS to the hypertechnical requirement of supporting a statement which concerns a fact already of record in this district.

Special Agent Woodard stated that he has conducted investigations of tax protesters since 1973, and understands and recognizes the devices and techniques utilized in concealing income. (Woodard Affidavit, pp. 1-3). Special Agent Woodard also sets forth communications with several confidential informants, all of whom had financial dealings with the respondent and who observed how he conducts his financial affairs. (Woodard Affidavit, pp. 5-8). It is true that the statement in the affidavit that Mr. Rosenberger is a self-proclaimed member of the Posse Comitatus is unsupported. (Woodard Affidavit, p. 3) However, even though there are unsupported statements in the affidavit that does not make the whole affidavit worthless. Applying the “totality of circumstances” test of Illinois v. Gates, supra, 462 U.S. 213, 238-39, 103 S.Ct. 2317, 2340-41, the affidavit is sufficient, even with the unsupported statements excised, to provide probable cause for a search for violations of the internal revenue laws.

Overbroad and Particularity

The respondent next contends that the warrant authorizes the seizure of essentially all the personal property and business records of the Rosenbergers from January I, 1978 to present and that the search warrant was overbroad and lacking in particularity. It is true that the search as executed was overbroad and that certain First Amendment material was seized that was not particularized in the description. At the hearing the Government conceded that some items seized should be returned, and in fact has already returned an estimated 37% of the material seized.

The items seized to show “intent” to violate tax laws include files on such things as homemade weapons, and the Life Science Church, but the bulk of this category is tax protest literature such as files on Posse Comitatus, old issues of the newspapers “Your Heritage News”, the “Justice Times” and the “Justice Journal”, plus other miscellaneous literature on the Sixteenth Amendment, common law liens, the N.C. B.A., law course material on how to sue public officials and other books, pamphlets, tax protest tapes, bumper stickers, legal research files and additional documents too numerous to mention.

As mentioned, the Government contends that all the literature seized was seized to show intent. Agent Woodard contends he had authority to seize these items under the warrant’s provision for the seizure of “other items”. (Tr. p. 42). The Court finds that the material seized to show intent was by and large First Amendment material. In Zurcher v. Stanford Daily, 436 U.S. 547, 564, 98 S.Ct. 1970, 1980, 56 L.Ed.2d 525 (1978) the Supreme Court stated,

Where the materials sought to be seized may be protected by the First Amendment, the requirements of the Fourth Amendment must be applied with ‘scrupulous exactitude’.

Id.

[T]he constitutional requirement that warrants must particularly describe the “things to be seized” is to be accorded the most scrupulous exactitude when the “things” are books, and the basis for their seizure is the ideas which they contain. See Marcus v. Search Warrant, [Of Property At 104 East Tenth St., Kansas City, Mo.] 367 U.S. 717 [81 S.Ct. 1708, 6 L.Ed.2d 1127 (1961)]; A Quantity of Books v. Kansas, 378 U.S. 205 [84 S.Ct. 1723, 12 L.Ed.2d 809 (1964) ].

Stanford v. Texas, 379 U.S. 476, 485, 85 S.Ct. 506, 511, 13 L.Ed.2d 431 (1965).

In this instance, the search as executed was overbroad. This Court sees no material distinction between the First Amendment material seized here to show “intent”, and the First Amendment material in Stanford seized for the “ideas” they contain. Therefore, this Court concludes that the warrant must describe, with “scrupulous exactitude” the First Amendment material to be seized. The description “other items” even as limited in the warrant does not meet the descriptive test of “scrupulous exactitude”. United States v. Apker, 705 F.2d 293, 301 (8th Cir.1983). There was no opportunity for Judge McManus and Magistrate Deck to consider whether first amendment material could be validly seized because the affidavit did not present facts in support of such a seizure. Further, they simply did not issue a warrant for the seizure of such items. Because the First Amendment material is not described in the warrant, it was not subject to seizure. The seizure was overbroad and the Government must return all First Amendment material.

The next issue to be resolved is whether the search was so overbroad that it converted the search into a general search proscribed by the Fourth Amendment requiring that all fruits of the search be returned. The seizure is found to be overbroad in two respects; first, as to the items seized the government earlier agreed to return; second, as to the First Amendment material and other material unrelated to a determination of taxable income that the Court is ordering returned in this Order. As to the remainder of the items seized the Court finds that they do go to tax violations. The Court holds that the search was not an impermissible general search and those items seized that are relevant to suspected income tax violations by Dr. Rosenberger and seized under the terms of the warrant can be retained by the Government.

Even where a search warrant meets both probable cause and particularity requirements, the search itself must be conducted in a reasonable manner, appropriately limited to the scope and intensity called for by the warrant. United States v. Heldt, 668 F.2d 1238, 1256 (D.C.Cir.1981). A good faith attempt to stay within boundaries of an inherently broad search warrant will support a finding that the search, taken as a whole, was reasonable, even though a majority of documents seized might turn out not to qualify for inclusion on more leisurely reflection. Id. at 1269. A flagrant disregard for the limitations of a search warrant might make an otherwise valid search an impermissible general search requiring the return of all evidence seized. Marvin v. United States, 732 F.2d 669, 674 (8th Cir.1984). The fact that a warrant is found to be defective as to one category of items seized does not make the search impermissibly general. The offending items can be severed and the remainder of the warrant upheld as valid. United States v. Gomez-Soto, 723 F.2d 649, 654 (9th Cir.1984). “Generally, the exclusionary rule does not require the suppression of evidence within the scope of a warrant simply because other items outside the scope of the warrant were unlawfully taken as well.” United States v. Tamura, 694 F.2d 591, 597 (9th Cir.1982).

There is no evidence to show the officers acted in bad faith in conducting the search. Considerable material was taken, but considerable material was left behind. (Tr. p. 68, 77-78). The clear inference is that the officers attempted to be selective in carrying out the search, and limit it to its purposes. They had conversations with Dr. Rosenberger about materials that could rightfully be taken. (Tr. p. 69-70). Some of the material was left on his insistence, while other material was taken over his objection. Id. The logistics of the operation made it impossible to sort all the material on site. The Court finds there was no flagrant disregard for the limitations of the search warrant. Marvin, supra, 732 F.2d at 674-75. The holding of the Court in Tamura is persuasive and this Court applies it here:

Under the circumstances of the present case, where the Government’s wholesale seizures were motivated by considerations of practicality rather than by a desire to engage in indiscriminate “fishing”, we cannot say, although we find it a close case, that the officers so abused the warrant’s authority that the otherwise valid warrant was transformed into a general one, thereby requiring all fruits to be suppressed. Tamura, supra, 694 F.2d at 597.

The Court will order the return of the First Amendment material. This material includes all books (excluding books of account), pamphlets, newspapers, magazines, legal research files, any lawsuit files, tapes, and similar material where the basis for their seizure is the ideas which they contain, all as contemplated by Stanford v. Texas, 379 U.S. at 485, 85 S.Ct. at 511. (See p. 1349 of this Order). If the Government is not sure that all such books should be returned, said “questionable” books will be promptly shown to the Court for a final decision.

II. The Second Warrant

The respondent contends that the Government made an illegal entry into the rental unit and therefore any basis for probable cause gained while in the rental unit was tainted and that everything seized from the rental unit must be returned. The Government agents made two security sweeps of the rental unit and the Court finds that the facts justified each entry. The initial entry into the rental unit was made when the agents first arrived in the attached chiropractic office as an appropriate security measure. The second security sweep was made after the officers heard thumping noises from the attached rental unit.

In each instance the officers were justified in making the security sweeps to insure their safety. The officers had a justified fear for their safety in that members of some tax protest groups, including Posse Comitatus, have used deadly force in resistance to law enforcement officers. See United States v. Faul, 748 F.2d 1204 (8th Cir.1984). While the affidavit has no supporting statements for the assertion it makes that Dr. Rosenberger is a member of Posse Comitatus, the officers suspected that he was such a member. When the officers arrived in the chiropractic office, no one was present during business hours. The security sweeps were justified to insure the officers’ safety, hence it was a reasonable search. United States v. Jones, 635 F.2d 1357, 1360 (8th Cir.1980). Once appropriately inside the rental unit on the second sweep, the officers noticed financial records there in plain view. The officers immediately sought and obtained the second warrant from Magistrate Deck. The Court treats the search under the second warrant the same as the first in all other respects and orders the return of any First Amendment material seized in those premises. (See p. 1351 of this Order).

III. Rulings on Related Cases Distinguished

The Court has been provided the rulings on the motions for return of seized property in the related Denver Colorado case, and the Portland, Oregon case. United States v. National Currency Exchange, No. 85-476M (D.Oregon, June 3, 1985); Foss v. Bergsgaard, 774 F.2d 402 (10th Cir.1985)

In Oregon, the district court ruled that the seizure of all items was proper based on the so called good faith exception to the warrant requirement. (Tr. p. 19-20); See United States v. Leon, supra, 104 S.Ct. at 3420; Massachusetts v. Sheppard, supra, 104 S.Ct. at 3428-29. In Colorado, the Tenth Circuit Court of Appeals affirmed the district court’s ruling that the Colorado search constituted an unreasonable general search proscribed by the Fourth Amendment because of the failure to describe with particularity the items to be seized. Both of these cases while related are distinguishable from the instant case.

This case is distinguishable from the Oregon case in that in Oregon the principle basis for the search was suspected violations of the currency transactions reporting requirements of 31 U.S.C. Section 5313. In the instant case, the principle suspected violations are tax code violations. In addition the warrant here does mention suspected violations of 31 U.S.C. Section 5313. Because all material not ordered returned in the instant case is related to the tax investigation of Dr. Rosenberger, the Court finds it unnecessary to reach the issues related to the suspected violation of the currency transactions reporting requirements. The fact that the Government relies principally on suspected tax violations here, rather than currency transactions violations, as in Oregon, makes the Government’s case here stronger than the Oregon case.

In Colorado, the Tenth Circuit found that “The bulk of the warrant was not restricted to evidence relating to tax fraud____” and that a seizure of “all business records” of the N.C.B.A. was unreasonable. Voss, supra, 774 F.2d at 404-05. The search here was primarily related to tax violations, and Agent Woodard testified at the hearing that he had intended to seek a warrant in connection with his criminal investigation of Rosenberger for tax violations independent of the coordinated search effort. In fact, he only learned of the coordinated effort three days before the search warrant was executed. (Tr. p. 54-56). Based on the affidavit, the description in the warrant, and the testimony at the hearing, clearly the focus here was on tax materials and the records concerning the N.C.B.A. and other mentioned organizations were linked to the tax investigation. There is a conflict of authority between the Eight Circuit and Tenth Circuit concerning whether initially all business records may be seized. Unlike the rule of the Tenth Circuit set forth in Voss, the Eighth Gircuit has recognized that in some circumstances all business records of an enterprise may be seized. Marvin, supra, 732 F.2d at 674, citing, United States v. Brien, 617 F.2d 299, 309 (1st Cir.1980) cert. denied, 446 U.S. 919, 100 S.Ct. 1854, 64 L.Ed.2d 273 (1980). Marvin held that items seized outside the scope of the warrant may be ordered returned later without invalidating the entire search.

The crime which Dr. Rosenberger is suspected of committing here is a violation of tax laws. As such, the Government will be permitted to retain only those documents described in the warrant related to the tax violations of Dr. Rosenberger cited in the Woodard Affidavit. Thus, in addition to the First Amendment material, this Court will order the Service to return all documents referring to the N.C.B.A., N.C.E., M.S.E. and/or HARDWAY COMPANY which do not evidence cash transactions with Dr. Rosenberger or the Life Science Church of Morningside and do not assist in making a determination of taxable income. The IRS is directed to return any other documents unrelated to a determination of taxable income. It is my opinion this is consistent with the approach in Marvin and Brien.

This Court’s opinion is that this is an appealable Order because this case meets the two criteria set forth in In re Grand Jury Proceedings, supra, 716 F.2d at 496 in that petitioner is (1) not under indictment and, (2) the primary purpose of his motion is the return of seized records. The Court considers this Order to be a final decision under 28 U.S.C. Section 1291 from which appeal can be taken. Voss, supra, at 404.

Accordingly,

IT IS THEREFORE ORDERED that the Motion to Suppress Evidence and for Return of Seized Property is sustained in part, and denied in part. The Government must return the following material:

1) All First Amendment material, where the basis for their seizure is the ideas they contain, including all books (excluding books of account), pamphlets, newspapers, magazines, legal research files, any lawsuit files, tapes, and similar material.
2) All documents referring to the N.C. B.A., N.C.E., M.S.E. and/or Hardway Co. which do not evidence cash transactions with Gary Rosenberger or the Life Science Church of Morningside and do not assist in making a determination of taxable income. All other documents seized which are unrelated to a determination of taxable income. Excepted from this Order to return seized property is the contraband referred to in footnote 13.

IT IS FURTHER ORDERED that all documents not included in the above two numbered paragraphs were properly seized and the Motion to Return any document related to taxable income is denied.

IT IS FURTHER ORDERED that the property be returned within fifteen (15) days of the filing date of this Order.

IT IS FURTHER ORDERED that the Motion to Proceed In Forma Pauperis is denied without prejudice to its being reurged at a later time.

      . A Motion to Proceed In Forma Pauperis was prepared and filed by the Respondent without the aid of his retained attorney. At the hearing Mr. Cohan stated that he had no position with respect to the Motion to Proceed In Forma Pauperis. Dr. Rosenberger stated that he filed it in the event the expense of litigation would be such that he could not proceed on appeal due to expenses and costs of an appeal bond. The Court finds that this motion is unrelated to any matter of immediate importance and is therefore premature. This motion is denied without prejudice. It can be reurged at a later time and the Court may set an evidentiary hearing if the government contests the motion.

      . Respondent Rosenberger is a chiropractor.

      . Papers which the Government contend go to the element of intent.

      . Items the Government admits should be returned.

      . [T.S.L.C.A. refers to Tri-State Life Science Church Association]

      . The respondent has a strong argument that he is not subject to the currency transactions reporting laws. The Court believes the evidence sought concerning the suspected violation in the affidavit of currency transactions reporting laws is the same as that seized for suspected violation of income tax laws. Therefore it is unnecessary to further address respondent's argument concerning the currency transactions reporting laws.

      . In In re Grand Jury Proceedings, the affidavit itself "set forth no basis whatsoever for suspecting that the voiding of bonds was illegal or improper.” Id. at 500. The Court believes the affidavit here did set forth probable cause to suspect a violation of 26 U.S.C. Sections 7201 and 7203. In re Grand Jury Proceedings is therefore distinguishable. Further that case did not establish a wrought iron requirement that the statute suspected of being violated be referred to in the warrant itself.

      . Whether the search was properly limited in scope to the items described in the warrant is an issue developed later in this Order.

      . For the full terms behind these abreviations refer to pages 1346, and 1347.

      . An example of items that were returned include patient files, cassette tape recordings containing health and nutrition information, a cookbook and much more.

      . A few items were seized that allegedly show intent but were not First Amendment materials. The Court will further address these in footnote 13.

      . The distinction between Stanford and the instant case is that in Stanford state law made membership in the Communist Party per se illegal and evidence of membership was seized. Membership in a tax protest organization, however, is not per se illegal. The distinction between Stanford and this case only bolsters respondent’s position that the "intent” material here was (a) legitimate First Amendment material (b) not as directly related to proof of a violation of tax laws, and (c) therefore the description of this material was required to be stated with “scrupulous exactitude".

      . The Government also seized some photocopies of currency and related material. These items were seized as contraband because it is illegal to possess photocopies of currency. The government will not be required to return this material. This seizure was reasonable as the seizure of items in plain view. See Coolidge v. New Hampshire, 403 U.S. 443, 91 S.Ct. 2022, 29 L.Ed.2d 564 (1971).

      . The majority in Voss stated that "to the extent that the above cases [including Brien ] can be read as allowing the seizure of all of an organization's records when there is probable cause to believe the organization is pervasively criminal, whether or not those records are relevant to an alleged crime, we decline to follow them.” Voss, supra 774 F.2d at 406. Judge Logan concurred in the Voss result but disagreed with the majority's disapproval of Brien. Judge Logan stated, “The Fourth Amendment’s particularity requirement must be applied with a 'practical margin of flexibility.’ The description of the property to be seized need be only as specific as the circumstances and nature of the activity under investigation permit.” Voss, supra, 774 F.2d at 406. (Citations omitted). This Court believes the Eighth Circuit will continue to follow the approach followed in Brien.


source: Caselaw Access Project

author: DAVIDSON, District Judge.

license: Public Domain

text:
    DeMARION JANITORIAL SERVICES, INC., Plaintiff, v. UNIVERSAL DEVELOPMENT CORPORATION, Defendant.
    No. EC 84-02-GD-D.
    United States District Court, N.D. Mississippi, E.D.
    Dec. 26, 1985.

      Howard Gunn, Aberdeen, Miss., for plaintiff.
    J. Robertshaw, Robertshaw, Terney & Noble, Greenville, Miss., for defendant.
   OPINION

DAVIDSON, District Judge.

This is an action seeking damages for breach of contract brought by the plaintiff DeMarion Janitorial Services, Inc., (DeMarion) wherein the plaintiff alleged that the defendant Universal Development Corporation, Inc. substantially and materially breached a janitorial services contract entered into by the parties by tendering payments under the contract in an untimely manner. The defendant Universal Development Corporation, (Universal), denies that it breached the contract and by way of counter-claim alleged that it is entitled to damages for the cost of certain janitorial services that Universal provided after DeMarion abandoned the premises in Vicksburg, Mississippi. After a bench trial, the court proceeds to make its findings of fact and conclusions of law pursuant to Rule 52(a) of the Federal Rules of Civil Procedure.

I

FINDINGS OF FACT

The parties to this action entered into a written contractual agreement on January 4, 1983 whereby DeMarion agreed to provide janitorial services to a building located at 1500 Walnut Street in the City of Vicksburg, Mississippi. At the time of execution of the contract, the building was owned by the defendant Universal Development Corporation. The contract, which was prepared by Universal, was for a term of thirty-six months commencing on January 1, 1983 and continuing up and through December 31, 1986. The written contract which very specifically set out the services to be performed by DeMarion and the frequency of the same provided that payments of $6,460.00 per month would be made during the thirty-six month term of the agreement “on or about the 15th day of each calendar month in arrears,” (emphasis added).

DeMarion, a Mississippi corporation, since 1972 has been in the business of furnishing janitorial services under contract for commercial and governmental buildings. Universal, an Alabama corporation, is in the business of constructing commercial buildings and leasing them to various tenants including governmental agencies and the General Services Administration. The court has jurisdiction based on diversity of citizenship pursuant to 28 U.S.C., Section 1332(a) as stipulated to by the parties in the pretrial order.

The contract which is the subject matter of the case sub judice related to janitorial services for the building situated at 1500 Walnut Street in Vicksburg, Mississippi, which was owned by Universal and was under a long term lease to the United states (GSA). Prior to entering into the three year contract in January, 1983, the parties to this action had a similar one year contract for janitorial services for the calendar year 1982. The 1982 contract had an identical provision providing for payments “on or about ” the 15th day of the calendar month. The exhibits and testimony reveal that payments under the previous contract were received and deposited by DeMarion from two to twenty-six days after the 15th day of each calendar month.

The payments pursuant to the 1983 contract were with one exception mailed from Universal’s office in Birmingham, Alabama to DeMarion’s post office address in the City of Aberdeen, Mississippi. DeMarion’s ledger sheet and testimony, together with cancelled checks introduced into evidence, revealed the receipt of payments and endorsements of the appropriate checks from Universal as follows during the year 1983, to-wit:

Month Service Rendered Received Bank Endorsement
January 2/16/83 2/17/83
February 3/14/83 3/16/83
March 4/15/83 4/17/83
April 5/11/83 5/13/83
May 6/29/83 6/30/83
June 7/22/83 7/26/83
July 8/25/83 8/29/83
August 9/15/83 9/16/83
September 10/18/83 10/20/83

Mr. Marion, the president of DeMarion drove to Birmingham to pick up the check for July, 1983 services on August 25, 1983. The remaining checks under the 1983 contract and all checks under the 1982 contract were mailed to DeMarion at its business address in Aberdeen, Mississippi. When the October check was not received on November 15, 1983, Mr. Marion called the Universal office and requested prompt payment. When the check had not been received on November 21, 1983, Mr. Marion called Universal’s office two times and requested that payment be stopped on Check No. 16327 which employees of Universal stated had been issued and placed in the mail to DeMarion. Mr. Marion requested that a replacement check be issued and furnished to him. Mr. Stump of Universal refused to issue a new check until the previously issued check had been located or he had received authorization to issue a replacement or new check by his superiors at Universal. Mr. Marion, on November 21, 1983, removed all of his equipment and personnel from the 1500 Building and ceased all performance under the terms of the contractual agreement. DeMarion has performed no services at the subject premises since November 21, 1983.

On November 22, 1983 Universal mailed its letter to DeMarion stating that in its opinion the abandonment of the premises by DeMarion constituted a substantial breach of the contract and stated that they had therefore stopped payment on Check No. 16327 which had previously been mailed to DeMarion. Subsequent to November 21, 1983, Universal undertook to provide janitorial services to subject building and the uncontradicted proof was that Universal expended $167,736.47 for the period commencing on November 21, 1983 up to and including March 31, 1985. During the 10% months that DeMarion performed pursuant to the contract it expended $5,593.71 per month or a total of $59,666.24 for labor, supplies, and other expenses related to the contract. DeMarion did not question the reasonableness or necessity of the expenditures made by Universal subsequent to November 21, 1983. The witness from Universal was not cross-examined by DeMarion as to the reasonableness of the expenditures, nor was any objection made to the introduction of exhibits related to subject expenditures. DeMarion did not introduce evidence addressed to Universal’s obligation, if any, to mitigate damages. The building was sold by Universal in March, 1985 with possession being delivered to the third party purchaser on April 1, 1985.

The negotiations between the parties relative to services to be performed including the time, mode, and method of payment transpired prior to the execution of the written contract on January 4, 1983. Mr. Marion, the president of the plaintiff corporation, testified that in his opinion the term “on or about the 15th day of the month” was synonymous with “on the 15th day of the month.” The contract was executed by Mr. Marion, the president of DeMarion Corporation and by Mr. Ward, the president of Universal. DeMarion, although accepting payments after the 15th day of the month on numerous occasions, did protest and request earlier payments.

It was stipulated by the parties that Check No. 16327 dated November 15, 1983 was issued by Universal and that it was properly addressed to DeMarion’s Aberdeen, Mississippi address. The secretary and vice-president of Universal testified that the November 15, 1983 check had been placed in the mail, postage prepaid, to DeMarion’s usual business address, Post Office Box 865, Aberdeen, Mississippi 39730, prior to receiving Mr. Marion’s calls on November 21, 1983. The parties further stipulated that subject check had not been returned by postal authorities to Universal. The check had not been received by DeMarion on November 21,1983. The court finds that the check had been mailed in the ordinary and customary manner by Universal prior to November 21, 1983.

II

CONCLUSIONS OF LAW

A. CLAIM OF PLAINTIFF DEMARION

The issues presented in DeMarion’s claim require this court to interpret the “on or about” language respecting payments to be made under the terms of the written contract entered into by and between the parties to this action. The court further must adjudicate the respective rights of the parties concerning the November 1983 payment for October 1983 services that was placed in the mail but not received by the payee DeMarion.

It is firmly entrenched in the jurisprudence of Mississippi that this court must, in this diversity case, construe the written contract as made by the parties, giving the words of the document their commonly accepted meaning. If no ambiguity exists, this court must accept the plain meaning of the instrument as the intent of the parties and give effect to the instrument accordingly. The court recognizes that contracts are solemn obligations and the court must give them effect as written. Freeman v. Continental Grain Co., 381 F.2d 459 (5th Cir.1967); Humble Oil and Refining Co. v. Standard Oil Co., 363 F.2d 945 (5th Cir.1966); Allen v. Powell, 260 So.2d 182 (Miss.1972); Roberts v. Corum, 236 Miss. 809, 112 So.2d 550 (1959); Hamilton v. Transcontinental Gas Pipeline Corp., 236 Miss. 429, 110 So.2d 612 (1959); Zouboukos v. Costas, 232 Miss. 860, 100 So.2d 781, sugg. of error overruled, 232 Miss. 860, 102 So.2d 121 (1958).

In the case sub judice the pertinent provisions of the contract are stated as follows, to-wit:

In return for the performance of the above services, Universal Development Corporation agrees to pay DeMarion $6,460 per month on or about the 15th day of each month in arrears for the 36 month term of this agreement.

Black’s Law Dictionary, 982 (5th ed. 1979) defines the term “on or about” as follows, to-wit:

A phrase used in reciting the date of an occurrence or conveyance, or the location of it to escape the necessity of being bound by the statement of an exact date or place; approximately; about; without substantial variance from; near.

Courts have recognized “on or about” provisions in contractual documents relative to payment to mean approximately or within a reasonable time from a specified date. In Heath v. Williams, 25 So.2d 706 (Miss.1946), the Supreme Court of Mississippi held that the words “about the first of March” should be construed to be equivalent to “near the first of March.”

The proof in the ease sub judice is to the effect that all negotiations preceded the execution of the written contract and it is particularly noteworthy that the contract did not provide that time was of the essence. The court must conclude that the provisions concerning payment were clearly incorporated into the written document. The Mississippi cases consistently hold that prior or contemporaneous negotiations or statements made by the parties prior to entering into a contract are merged into the contract unless there is evidence to indicate that the contract was not a complete and exclusive agreement or that unilateral or mutual mistake was involved. See e.g. Jackson v. Sam Finley, Inc., 366 F.2d 148, 154-55 (5th Cir.1966). It is the opinion of the court that the words “on or about” are not ambiguous and that it is accordingly the duty of this court to give the words their plain and ordinary construction and meaning. The words “on or about the 15th day of each month” are construed to provide for payment “on approximately the 15th day of the month” or “within a reasonable time from the 15th day of the month.”

The secretary and vice-president of Universal testified that on November 15, 1983, Check No. 16327, payable to DeMarion had been issued and that the same was placed in the mail prior to Mr. Marion’s telephone calls on November 21, 1983, postage prepaid to DeMarion’s usual and customary address in the City of Aberdeen, Mississippi. The presumption of law, recognized in Mississippi, is to the effect that the mailing postage prepaid to a correct address presumes that the addressee received the document so mailed.

This court, as well as the Mississippi Supreme Court, has held that where a letter was mailed in an envelope addressed to the addressee postage prepaid through the United States mail enclosing certain documents, the presumption obtained that the documents were received by the addressee and the addressee had the burden of rebutting the presumption with credible evidence. Perdue Farms, Inc. v. Motts, Inc. of Miss., 459 F.Supp. 7, 29 (N.D.Miss.1978); Threatt v. Threatt, 212 Miss. 555, 54 So.2d 907, 909 (1951). This court has further held that where by the usual course of dealing a creditor has assented to payment by mail and a letter containing a remittance, properly addressed and with postage prepaid is placed in the mail, the payment is effective as of the date of mailing. American River Lines, Inc. v. Central Soya Co., Inc., 524 F.Supp. 246, 248 (N.D.Miss.1981).

The two employees of Universal specifically testified that the November 15 check, the same being No. 16327, was placed in the mail postage prepaid to the correct business address of DeMarion in the usual course of business. DeMarion’s only offer of proof was that it had not received the check. The court holds that the payment for October 1983 services was tendered to DeMarion within a reasonable time after the 15th day of the month pursuant to the contract and the prior dealings of the parties. It is the opinion of the court that Universal had not breached the contractual agreement at the time DeMarion elected to abandon the 1500 Walnut Street Building and that in removing its personnel and equipment from the premises, DeMarion did in fact breach the contractual agreement and acted at its peril. It is the opinion of the court that DeMarion should not recover on its complaint against Universal Development Corporation.

B. UNIVERSAL’S COUNTER-CLAIM AGAINST DEMARION.

The uncontradicted proof was to the effect that after DeMarion removed all of its personnel, supplies and equipment from the building on November 21, 1983, that Universal provided janitorial services to the building for the remainder of the contract term up until the building was sold and possession of the same delivered to a third party purchaser on April 1, 1985. The proof of Universal was that during the period from and after November 21, 1983 it expended $167,736.47 on janitorial services to subject premises. Its payments to DeMarion pursuant to the written contract during the period of time aforesaid would have been $121,680.00. The latter figure includes payments for October, 1983 and up until November 21, 1983 to which DeMarion was unquestionably entitled.

It is significant that DeMarion did not question the amounts expended by Universal to provide subject janitorial services. No witness was called by DeMarion to testify as to what reasonable and necessary services should have been provided to subject premises nor the cost of the same. DeMarion did not object to the introduction of Universal’s exhibits establishing subject expenditures, nor did it cross-examine the witness for Universal concerning the counter-claim. The term “mitigation of damages” was never mentioned by DeMarion during the trial of this matter.

It has been consistently held that the burden is on the party relying on the matter in mitigation or reduction of damages to make proof of the facts that will operate to bring about the mitigation. In an Admiralty case applying Mississippi law, the Fifth Circuit Court of Appeals stated that the burden of proof was on the defendant to show that the plaintiff failed to mitigate damages. It was specifically held that the defendant must demonstrate “(1) that the conduct (of the plaintiff) was unreasonable and (2) that it had the consequences of aggravating the harm.” The party who has committed a wrong does not escape the full consequences of his act if the injured party acts unreasonably after the wrong but such action has no import on the scope of the harm suffered. Tennessee Valley Sand and Gravel Co., v. M/V Delta, 598 F.2d 930, 933 (5th Cir.1979). In Poteete v. City of Water Valley, 207 Miss. 173, 42 So.2d 112 (1949), the trial court gave a jury instruction to the effect that it was the duty of the plaintiffs to mitigate their damages. In reversing this case, the Mississippi Supreme Court stated:

Upon the trial of this case, the city offered not one word of evidence to support the above instruction. It made no showing that it would have been possible for appellants to ditch or levy against the waters alleged to have flowed from the street onto their property, nor what would have been the cost or proximate cost of such ditch or levy. The record is wholly void of any proof to support the instruction.

42 So.2d at 113.

The Supreme Court of Mississippi concluded that the granting of the instruction concerning the duty to mitigate damages was erroneous under a long line of cases to the effect that an instruction should not be granted unless supported by evidence. Id. In Entex, Inc. v. Rasberry, 355 So.2d 1102 (Miss.1978), when an issue was raised as to the reasonableness of bills for the rental of replacement vehicles after an automobile accident, the Mississippi Supreme Court held that it was well settled that there must be proof of such reasonableness or lack thereof and that such proof must be demanded by the party claiming a failure of the duty to mitigate. Id. at 1104. In Pelican Trucking Company v. Rossetti, 251 Miss. 37, 170 So.2d 573 (1965), the court stated:

Without objection by the defendant, the bill from Hertz ... was admitted in evidence. If the defendant had objected on the ground that the plaintiff must show its reasonableness and necessity, such objection should have been sustained, but none was made.

Id., 170 So.2d at 574.

It is the opinion of this court that the counter-defendant DeMarion has totally and wholly failed to meet the burden of proof in this case relative to the mitigation or reduction of damages. It is further the opinion of the court that Universal was obligated to provide janitorial services to its tenants in the Walnut Street Building in Vicksburg, Mississippi and that it is entitled to recover the amount of $46,056.47 from DeMarion. The court arrives at damages in this case by reducing the $121,-680.00 that DeMarion would have been entitled to had it performed its contractual obligations during the contract period from the $167,736.47 that Universal was forced to provide as a result of DeMarion’s breach of its contractual obligations.

The court therefore finds as follows:

(1) That DeMarion’s original claim against Universal is dismissed with prejudice.

(2) That Universal is entitled to judgment of and against DeMarion in the amount of $46,056.47.

A judgment will issue accordingly, taxing the plaintiff with all costs of these proceedings.

      . The payments were increased voluntarily by the parties to 56,760 for the month of May, 1983. There was no written amendment to the contract but the proof was that additional space was added and by agreement the parties agreed to the increased payment for services commencing in May 1983.

      . In U.S.F. & G. Contracting Co. v. Grace, 263 F. 283 (3rd Cir.1920), the Third Circuit Court of Appeals held that a contractual provision providing for payment "on or about” the fifteenth day of each month should be construed to allow the payor a reasonable time after the fifteenth day of the month in which to tender payment.

        Walton v. Denhart, 226 Or. 254, 359 P.2d 890, (1961), the Oregon Supreme Court held that the words “on or about" did not mean "exactly" but meant "approximately.” It was held that a construction contract that provided for payment on or about May 15 should not be interpreted to preclude performance on June 30. The June 30 performance was in such a reasonable time after the date specified in the contract as to preclude the purchaser of a dwelling from withdrawing from the contract.

      . The Fifth Circuit in Jackson v. Finley, supra, citing Mississippi case law specifically stated that a meeting of the minds is not required for a valid contractual provision and that if the contractual language unambiguously indicates an agreement, the fact that this may not correspond to the actual understanding of the parties will not justify the admission of parol evidence to modify the language of the contract. Id. at 155.

      . McCormick’s Handbook on the Law of Evidence, (2 Ed.1970), Section 343 at p. 807-808. 1 J. Wigmore, 1 Treatise on the Anglo American System of Evidence, (3rd Ed.1940) Section 95.

      . The Fifth Circuit Court of Appeals has stated that the so-called duty to mitigate or minimize damages is a misnomer because a victim owes no duty to the person who hurts him. As stated by the Fifth Circuit, “The principle, correctly stated, is that the injured person may not recover damages that do not result proximately from the defendant's breach of duty. Gideon v. Johns-Mansville Sales Corporation, 761 F.2d 1129, 1139 (5th Cir.1985).


author: FUSTE, District Judge.

text:
    Olga SHEPARD and John Doe, Plaintiffs, v. FIRST FEDERAL SAVINGS BANK OF PUERTO RICO and Juan Agosto Alicea, Secretary of the Treasury of the Commonwealth of Puerto Rico, Defendants.
    Civ. No. 85-2070 (JAF).
    United States District Court, D. Puerto Rico.
    Dec. 27, 1985.

      Norberto Medina Zurinaga, Hato Rey, P.R., for plaintiffs.
    Jorge E. Pérez Diaz, Federal Litigation Div., San Juan, P.R., for defendants, Juan Agosto Alicea.
    Antonio R. Escriba, San Juan, P.R., for First Federal Sav. Bank of P.R.
   OPINION AND ORDER

FUSTE, District Judge.

This is an action seeking declaratory judgment and injunctive relief of three (3) laws approved by the Legislature of Puerto Rico, to wit: Law No. 1 of August 12, 1985, Law No. 1 of October 8, 1985, and Law No. 6 of October 16, 1985, (hereinafter referred to as “the Laws”). The two latter laws become effective on January 1, 1986. These laws were enacted to curb the use of bearer certificates of deposit as vehicles of tax evasion and money laundering. They also establish an alternative rate for income taxation of interest on savings.

The facts of the present case are not in dispute. These are as follows:

Plaintiff Olga Shepard is the trustee of a trust solely created to avoid the effect of the mentioned laws and to hold and manage as its sole asset two (2) certificates of deposit payable to the bearer in the amounts of $50,000 and $52,300, respectively. Plaintiff John Doe is the true equitable holder of the certificates of deposit. John Doe will not disclose his identity so as to preserve what he understands to be his absolute constitutional privilege against self-incrimination. In order to preserve their rights, the grantor Doe and the trustee Shepard invoke jurisdiction over the present case based on Federal Question. The faltering jurisdictional allegation is that the above-referenced laws are unconstitutional, inasmuch as they violate plaintiffs’ rights guaranteed under the Fifth and/or Fourteenth Amendments to the Constitution of the United States. It is further claimed that the area of regulation by said laws is preempted under Article VI of the Constitution of the United States and by The Federal Home Loan Banks Act, 12 U.S.C. §§ 1421-1459.

Co-defendant First Federal Savings Bank of Puerto Rico, hereinafter referred to as “First Federal”, has presented a responsive allegation requesting that all actions pertaining to it be stayed. First Federal wants to be let alone. It states that the actual controversy is one between the Department of Treasury of Puerto Rico, (“Department”), and plaintiff. The Department has requested the dismissal of the present case based on the statutory language of the Butler Act, 48 U.S.C. § 872.

The matter was heard by the Court on December 3, 1985. Documentary evidence was received. The parties submitted the controversy on the basis of their pleadings, allegations, evidence, and argument. The Court is not convinced of the merits of the declaratory and injunctive relief sought by plaintiffs. The amended complaint governing the controversy will be dismissed based on the following findings and conclusions. Fed.R.Civ.P. 52.

Law Number 1, August 12, 1985:

Plaintiffs seek injunctive relief from the provisions of the above-quoted law and regulations promulgated thereunder. Generally, said law provides a mechanism under which the Department of the Treasury requires all banks and savings and loan institutions issuing bearer certificates of deposit to act as a withholding agent, retaining 20% of the total amount deposited. In the event that the taxpayer does not elect to request an administrative release of the retained monies, he must pay a 20% tax, be it through the mentioned withholding or by direct payment to the Department. In the case of a taxpayer who has not resorted to any of these alternatives by December 31, 1985, the financial institution will automatically withhold 20% of the principal and interest accrued until said date, and remit it to the Department with whatever information it has available on the identity of the owner or bearer of the particular certificate of deposit. See Sections 5(b)(1) and 10(f) of the regulations.

Law No. 1 of October 8, 1985 and Law No. 6 of October 16, 1985

Law Number 1 of October 8, 1985 essentially establishes an alternative tax rate under which to pay taxes on interest income received during a taxable year. In general terms, the law authorizes financial institutions, if the taxpayer consents, to withhold and remit to the Secretary 17% of the interests to be paid out or accrued. The 17% withholding is a flat tax alternative to interest income being taxed as part of ordinary income under the regular tax rates.

The other relevant law, No. 6 of October 16, 1985, establishes the obligation of investment brokers and other financial institutions to report to the Department all monetary transactions over $10,000. Also, the law typifies the penalties that apply if said obligation is not met.

Legislative Background and Intent

The laws under scrutiny were enacted after the U.S. Department of Justice concluded a phase of operation “Greenback”, an investigation which culminated with the arrest of several employees and ex-employees of diverse banking institutions in Continental United States and Puerto Rico. The basic criminal charge against the majority of those indicted in Puerto Rico was their failure to report to the Internal Revenue Service the details of the transactions relating to cash received in their trade or business over $10,000, in violation of 26 U.S.C. 60501 and 26 U.S.C. § 7203. As a result of operation Greenback, it came to be of public knowledge that bearer certificates of deposit constituted not only a loophole through which taxpayers evaded their income tax payment obligations, but also they were being utilized to launder monies which were the product of malum in se activities, such as narcotic and drug trafficking.

At this point in time, the Government of Puerto Rico had to deal with not only the fiscal problems of generating tax revenue to cope with economical demands, but also had to put an end to the undesirable practices mentioned herein. On July 1, 1985, the government announced that all financial institutions would be required to keep a register of the identity of every purchaser of a bearer certificate of deposit. The government’s intention was to implement this policy in a six-month phase-out plan so as to avoid panic among bank depositors. See Report of the Joint Hearing of the Senate and House Finance Committees, August 11, 1985. The inevitable occurred. Confusion, concern, and in extremis attempts to avoid any kind of tax accounted for mass withdrawals of approximately $250 Million in deposits since June 6, 1985 to the time of the approval of Law No. 1 in August, 1985. Seeking to detain the high fuge of capital from Puerto Rico banks, coupled with a legislative intent of promoting a more equitable tax burden among all citizens, the present laws were enacted.

Remedies under the Law

Law No. 1, of August 12,1985, Section 3, provides for administrative and judicial review of procedures initiated by the Department action. The taxpayer adversely affected by an administrative decision under the law may request reconsideration within fifteen (15) days from the date the decision was notified. The Secretary of the Treasury must decide said request for reconsideration during a period of thirty (30) days after the request for reconsideration. After the Department enters its decision in reconsideration, the taxpayer adversely affected may request judicial review before the Superior Court of Puerto Rico; venue being determined by the place of residence of the taxpayer. The Superior Court will determine whether to affirm, reverse, or modify the administrative decision. In the case a taxpayer has not filed a request for release or has not paid the 20% tax by December 31, 1985, the banking institution will automatically withhold 20% of the lump sum of combined principal and interest. The amount withheld is sent to the Department of Treasury. At this stage of the proceedings, the administrative remedy available to the taxpayer is to request for a refund. See sec. 5 of Law No. 1, August 12, 1985. Such request must be filed before the Department within the period of ninety (90) days after the date of payment to the Department of the tax withheld. In this case, when the taxpayer has proven to the Department that the amount represented by the certificate of deposit has been already taxed or its source of income is tax exempt under the dispositions of the Income Tax Law of 1954, he will receive a release from the imposition of the 20% tax and the monies will be refunded with interests paid at the same rate it was accruing in the bank.

Applicability of the Butler Act

Under the above-described legal scenario, plaintiffs request that we enjoin the collection of the 20% tax imposed under Law No. 1 of August 12, 1985 and declare unconstitutional all three (3) quoted laws as they relate to their two certificates of deposit. Co-defendant, Juan Agosto Alicea, Secretary of Treasury, has requested the dismissal under 48 U.S.C. § 872.

Section 872, in its relevant part, establishes that:

[N]o suit for the purpose of restraining the assessment or collection of any tax imposed by the Laws of Puerto Rico shall be maintained in the United States District Court for the District of Puerto Rico.

The case law interpreting Section 872 has consistently held that the U.S. District Court for the District of Puerto Rico should not interfere with the assessment or collection of local taxes, unless there is an irreparable, threatened injury to the taxpayer. Said exception materializes only when a tax statute does not afford an adequate remedy. Smallwood v. Treasury of Porto Rico Tax Appeals, 275 U.S. 56, 48 S.Ct. 23, 72 L.Ed. 152 (1927); Paul Smith Construction Co. v. Buscaglia, 140 F.2d 900 (1st Cir.1944); Boyce et al. v. Buscaglia, 77 F.Supp. 753 (1948); Carrier Corp. v. Perez, 677 F.2d 162 (1st Cir.1982).

The case law has defined the concept of “adequate remedy” as being satisfied if there is a “plain, speedy and efficient remedy” available in the local forum. In Carrier Corp. v. Pérez, as a recent restatement of the law, it is expressed that:

A state remedy is adequate if it meets certain minimal procedural criteria which include an opportunity to raise the desired legal objections with the eventual possibility of Supreme Court review of that claim.

Plaintiffs’ argument directed to move the Court to declare that the laws under scrutiny are unconstitutional both on their face and in their application is not convincing. An in-depth analysis of the laws shows that an attack on their merits based on equal rights’ violations, self-incrimination, and/or state impairment of contractual obligations, among others, are weak foundations upon which to pursue the invalidation of the laws. The Supreme Court of the United States has held that a tax assessment or collection which affords ultimately for judicial review is to be held constitutional. Phillips v. Commissioner, 283 U.S. 589, 51 S.Ct. 608, 75 L.Ed. 1289 (1931); Commissioner v. Shapiro, 424 U.S. 614, 629, 96 S.Ct. 1062, 1071, 47 L.Ed.2d 278 (1975).

Plaintiffs’ argument that under Puerto Rico law there is no remedy also lacks merit. Contrary to argument, Section 8 of Puerto Rico Public Law No. 1, of February 25, 1946, as amended by Law No. 12 of August 8, 1974, 32 L.P.R.A. § 3524, does not prohibit the Puerto Rico courts from exercising jurisdiction in cases where an injunction or restraining order is sought to prevent the levying or collection of taxes. Local law provides an exception under which the courts of Puerto Rico can issue injunctive relief to restrain the applicability of any Act under which it is alleged that the Commonwealth of Puerto Rico is depriving any person of any right, privilege or immunity which is “protected by the Constitution or the Laws of the Commonwealth of Puerto Rico or under the Constitution or Laws of the United States of America.” We find no basis for plaintiffs contention that said exception is inapplicable to a constitutional challenge to tax laws enacted by the Legislature of Puerto Rico. As stated in Boyce et al. v. Buscaglia, 77 F.Supp. at 756, “the normal course is to allow tax questions to be decided in the local courts even though they involve constitutional questions.” The exceptions to Butler Act prohibition of federal intervention are not present in this case.

Furthermore, we do not find merit in plaintiffs’ contention that they could not bring their claim to the Puerto Rico courts. Plaintiffs’ argument of federal preemption can be presented before the courts of the Commonwealth of Puerto Rico. First Federal Savings v. Registrador de la Propiedad, 113 D.P.R. 857 (1983), and Llama v. First Mortgage Investors, 113 D.P.R. 865 (1983).

Conclusion

Plaintiffs should appear before the Department of Treasury and exhaust administrative remedies provided by law. If unhappy with the result, they can petition the local judiciary to review the administrative process. If the net result is as predicted here, plaintiffs should pay their 20% tax and be thankful, for they have been given the benefit of a law that is, for all material purposes, a tax amnesty. The 20% tax is lower than the financier’s dream of capital gain tax. 13 L.P.R.A. 3117. Those complaining must be the individuals who kept the same amount of unreported money under a mattress. The owner of the certificate of deposit gets the benefit of a flat tax and the immunity from criminal prosecution if the source is legal. The mattress banker does not.

The requested relief as per amended complaint is DENIED. The case is hereby DISMISSED. Antonio Filardi’s motion for intervention is DENIED AS MOOT. Judgment shall be entered accordingly.

IT IS SO ORDERED.

      . At this time there is no official citation for said law in Laws of Puerto Rico Annotated.

      . To be codified at 13 L.P.R.A. §§ 3011(c), 3022(b)(K), 3024(10), 3035(b)(c)(d), 3143A, 3147(A)(B), 3301A, 3322(a)(2), 3411(a)(13), 3421(A).

      . To be codified at 13 L.P.R.A. §§ 3024(9), 3145(d), 3147A, 3301.

      . The following documents were received in evidence: a) simple copy of Deed of Trust which had deleted the information concerning the grantor. This deed was submitted in response to the inquiries made by the Court regarding this document. Plaintiffs elected not to file a certified copy of the deed of trust showing full content; b) Photostatic copies of Certificates of Deposit with deletions of their due dates, certificate numbers, and interest paid out; c) copy of plaintiffs’ Request for Admissions to co-defendant Juan Agosto Alicea, Secretary of Treasury; d) plaintiffs' Request for Admissions to co-defendant First Federal; and e) Answer by First Federal to said Request for Admissions.

      . Under this alternative, the taxpayer must submit to the Department copy of his Income Tax Returns for the last ten (10) years along with a written communication certifying that the monies object of withholding have already been taxed or that they arise from sources of income which are exempt of taxation. Regulations under Law No. 1, of August 12, 1985 so provide.

      . Law No. 6 of October 17, 1985 does not impose a tax. This law deals with a reporting system under which financial institutions, brokers, and similar entities, declare to the Department the particulars of monetary transactions of over $10,000. We find that Olga Shepard, as trustee of a trust created to defeat "the laws”, has no standing to attack the reporting requirements established by Law No. 6.

      . Operation Greenback took place in May, 1985.

      . On October 13, 1985, the Legislature of Puerto Rico established the maximum taxable rate at 50%. See Law No. 5, of October 13, 1985, amending 13 L.P.R.A. § 3011, applicable to tax years after December 31, 1985, present tax tables will remain in effect up to and including income in excess of $32,000 but not more than $38,000. For income in excess of $38,000, the tax rate will be $12,467.20 plus 50% of the surplus earned over $38,000. Previously, the top tax bracket was $113,655 plus 67.55% for income in excess of $200,000. Bearer certificates of deposit circulated in high numbers. Many law-abiding citizens had taken the law in their , hands. The Puerto Rico community was, however, shocked to learn that bearer certificates of deposit were being utilized for money laundering related to malum in se criminal activities. In approving the laws, the local government has afforded different treatment to the two cases contemplated herein. On the one hand, a certificate of deposit of monies generated by legal activities, i.e., professions, commerce, even though unreported for income tax purposes, is not an illegal activity for purposes of criminal prosecution. In other words, the 20% flat tax is the maximum obligation of such legal taxpayer. On the other hand, if it be proved that the source of monies is related to criminal activities, then the 20% flat rate tax, as well as a potential criminal prosecution, would lie. See Section 3(f) of the regulations.

      . See testimony of the Secretary of the Treasury of the Commonwealth of Puerto Rico at the joint hearing of the Senate and House Finance Committees relating to proposed legislation then known as House of Rep. proposed bill 571 and Senate proposed bill 634, August 11, 1985.

      . See Legislative Exposition of Intent of Law No. 1, August 1, 1985, p. 1. See also footnote 8, supra.

      . Plaintiffs read the law as not granting judicial review. They claim that the Superior Court may refuse to review. Plaintiffs' confused interpretation stems from the fact that Law No. 1, of August 12, 1985, and the accompanying regulations, are no jewel of drafting. We read the law and regulations as granting judicial review in all cases. The Superior Court must entertain the petition. Once entertained, it will affirm the administrative decision if warranted. Otherwise, a writ of revision will issue to reverse or modify said administrative decision.

      . Plaintiffs have alleged that compliance with. Law No. 1 of August 12, 1985 and Law No. 1 of October 17, 1985 violates their Fifth Amendment right against self-incrimination. We cannot agree. The Fifth Amendment argument is moot. Plaintiff admitted at the hearing held on December 3, 1985, that the monies deposited through the certificate of deposit are from legal sources, see footnote 8 of this Opinion. Under Law No. 1, of August 1, 1985, plaintiffs are immune from criminal prosecution or further tax penalties other than the payment of 20%. Sec. 3(f) of the regulations approved under Law No. 1 of August 12, 1985. See, U.S. v. Verkuilen, 690 F.2d 648 (7th Cir.1982); U.S. v. Daly, 481 F.2d 28 (8th Cir.1973), cert. denied, 414 U.S. 1064, 94 S.Ct. 571, 38 L.Ed.2d 469; not recognizing Fifth Amendment rights when a "blanket” assertion is made. As stated in the cases of Fisher v. U.S., 425 U.S. 391, 399, 96 S.Ct. 1569, 1575, 48 L.Ed.2d 39 (1976), and Couch v. U.S., 409 U.S. 322, 93 S.Ct. 611, 34 L.Ed.2d 548 (1973), we adhere to the view that the Fifth Amendment protects against "compelled self-incrimination, where there exists a legitimate expectation of privacy.” This cannot be claimed by having to give out his social security number and name, action which co-defendant First Federal Savings said that already had been realized.