author: SHOOB, District Judge.

text:
    Rafael FERNANDEZ-ROQUE, et al., Petitioners, v. William French SMITH, et al., Respondents. Moises GARCIA-MIR, et al., Plaintiffs, v. William French SMITH, et al., Defendants.
    Civ. A. Nos. C81-1084A, C81-938A.
    United States District Court, N.D. Georgia, Atlanta Division.
    Nov. 25, 1985.

      William C. Thompson, David Webster, Dale Schwartz, Myron Kramer, Deborah Ebel, and Kenneth Hindman, Atlanta, Ga., for plaintiffs.
    Jack D. Novik and Burt Neuborne, New York City, for amicus American Civil Liberties Union.
    Arthur C. Helton, New York City, for amicus Lawyers Committee for Intern. Human Rights.
    Richard K. Willard, Acting Asst. Atty. Gen., Civ. Div., Washington, D.C., Larry D. Thompson, U.S. Atty., Atlanta, Ga., Lauri Steven Filppu, Washington, D.C., Barbara Tinsley, Sharon Douglas Stokes, Nina R. Hickson, Atlanta, Ga., David J. Kline, Washington, D.C., Madelyn E. Johnson, Washington, D.C., for defendants.
   ORDER

SHOOB, District Judge.

In Fernandez-Roque v. Smith, 734 F.2d 576, 582 (11th Cir.1984), the Eleventh Circuit Court of Appeals rejected plaintiffs’ claim to a constitutionally-protected liberty interest in parole arising from the due process clause of the United States Constitution (i.e., a “core” liberty interest). In that case, however, the court expressly reserved decision on two other issues raised by plaintiffs in challenging their detention: (1) whether the class members have a federally-created liberty interest in parole, not arising directly from the Constitution itself; and (2) whether their continued detention under the standards and procedures applied to them violates international law. Id. at 582 n. 10.

BACKGROUND

A brief background of this lengthy, disturbing, and complex litigation will facilitate an understanding of the issues now presented. These consolidated cases are class actions brought on behalf of those Cubans who arrived in the United States in 1980 as part of the “Freedom Flotilla” from Mariel Harbor and who were, are, or will be incarcerated at the Atlanta Federal Penitentiary. Most of the approximately 125,000 to 130,000 “Marielitos” arrived without the proper documents to enter this country legally. Nonetheless, after being screened by U.S. government officials, most of them were immediately paroled into the United States by the Attorney General pursuant to 8 U.S.C. § 1182(d)(5). Approximately 1800 of those not paroled were incarcerated and in 1981 were transferred to the Atlanta Federal Penitentiary.

In 1981, after the Court began to review the legality of plaintiffs’ confinement and ordered the release of certain groups of the detainees, the Attorney General initiated his “Status Review Plan and Procedures” to evaluate the necessity of each class member’s continued detention. Under the Plan, two Department of Justice officials would review each case and declare a detainee “releasable” if they found that he satisfied the Plan’s criteria for release by being nonviolent, likely to remain nonviolent, and unlikely to commit any criminal offenses after his release. If the panel recommended release and a designated representative of the Commissioner of the Immigration and Naturalization Service (“INS”) approved, the detainee was paroled as soon as a suitable sponsor was found. Fernandez-Roque v. Smith, 567 F.Supp. at 1130-31.

Releases under the Status Review Plan ended with the December 14, 1984 announcement that Cuba had agreed to accept the return of a group of 2746 Marielitos, an agreement that was later suspended. Because the Plan has been retired, the only formal guidelines for parole decisions are the general parole regulations at 8 C.F.R. § 212.5; these regulations, however, specify no procedures to be followed in parole determinations. Since this litigation began, all but three to four hundred of the approximately 1800 Mariel Cubans originally incarcerated in the Atlanta Penitentiary have been paroled. The Cuban population at the penitentiary currently exceeds 1800, however, because many class members who were initially paroled into the United States have had their paroles revoked for varying offenses ranging from relatively minor infractions to serious crimes.

Over the course of this litigation, plaintiffs have challenged their continued indefinite detention on several grounds. Plaintiffs as a class have argued unsuccessfully that their detention violates statutory and constitutional *restrictions on the Attorney General’s power to detain excludable aliens. Plaintiffs as a class also have attempted to establish that the Attorney General has abused his discretion by failing to follow his own criteria in making parole decisions, but this Court has declared that issue inappropriate for class action treatment. Until now, however, no court has reached the merits of plaintiffs’ arguments that their continued indefinite detention violates (1) a federally-created liberty interest and (2) international law. Those issues are ripe for decision and are addressed below.

I. Federally-Created Liberty Interest

Before considering the merits of plaintiffs’ claim to a federally-created liberty interest, the Court addresses the government’s threshold arguments that habeas corpus is inappropriate for declaratory or injunctive relief and that plaintiffs have made no factual' showing of prejudice resulting from the alleged inadequacy of the procedures governing their detention. The first argument fails because these consolidated eases do not seek only habeas corpus relief; the complaint filed by Garcia-Mir also requests declaratory and injunctive relief. The second argument, which focuses on certain procedural flaws as being “harmless error,” fails to address the substantive aspects of any liberty interest that may have been created. Further, this second argument ignores the United States Supreme Court’s recognition that certain procedural errors may affect rights so basic that they can never be considered “harmless error.” United States v. Hastings, 461 U.S. 499, 103 S.Ct. 1974, 1980 n. 6, 76 L.Ed.2d 96 (1983). Plaintiffs have alleged procedural errors — including lack of adequate notice of charges and denial of an opportunity to present and cross-examine witnesses — that fall within the category that can never be deemed harmless error. Accordingly, plaintiffs are entitled to have their claim decided on the merits.

The notion of a federally-created liberty interest is not a novel one. On numerous occasions the United States Supreme Court has held that even when a liberty interest does not arise from the independent operation of the due process clause itself, the government may create such an interest by governmental action, such as a statute, regulation, rule, practice, or policy. Before examining the potential sources of the federally-created liberty interests claimed by plaintiffs, the Court will review the standards for determining whether such an interest exists.

It is well-settled that a protected interest does not arise simply because governmental action subjects an individual to a “grievous loss.” Meacham v. Fano, 427 U.S. 215, 224, 96 S.Ct. 2532, 2538, 49 L.Ed.2d 451 (1976). Instead, the relevant inquiry concerns the nature, rather than the weight, of the interest that has been impaired. Id.; see also Greenholtz v. Inmates of Nebraska Penal and Correctional Complex, 442 U.S. 1, 7, 99 S.Ct. 2100, 2103, 60 L.Ed.2d 668 (1979); Board of Regents v. Roth, 408 U.S. 564, 571, 92 S.Ct. 2701, 2705, 33 L.Ed.2d 548 (1972); Morrissey v. Brewer, 408 U.S. 471, 481, 92 S.Ct. 2593, 2600, 33 L.Ed.2d 484 (1972).

Thus, to establish that a protected interest exists, it is necessary to demonstrate a legitimate claim of entitlement; it is not enough that a person has “an abstract need or desire” for the benefit at issue. Roth, 408 U.S. at 577, 92 S.Ct. at 2709. Moreover, as long as the official decisionmaker has unfettered discretion to accord or deny a benefit, no protected interest exists. Olim v. Wakinekona, 461 U.S. 238, 103 S.Ct. 1741, 1747, 75 L.Ed.2d 813 (1983); Meacham, 427 U.S. at 228, 96 S.Ct. at 2540; Montanye v. Haymes, 427 U.S. 236, 243, 96 S.Ct. 2543, 2547, 49 L.Ed.2d 466 (1976); cf. Hewitt v. Helms, 459 U.S. 460, 103 S.Ct. 864, 871, 74 L.Ed.2d 675 (1983). Therefore, governmental action setting forth guidelines that are merely procedural will not suffice to create a protected liberty interest if, in the final analysis, the relevant decision is purely discretionary. Wakinekona, 103 S.Ct. at 1748. On the other hand, that a statute or policy allows for the exercise of discretion does not mean that the statute or policy cannot create a protected interest. See Greenholtz, 442 U.S. at 12-13, 99 S.Ct. at 2106. Summarizing prior case law, the Supreme Court in Wakinekona stated that the government creates a protected liberty interest “by placing substantive limitations on official discretion.” 103 S.Ct. at 1747.

Even in the immigration context, courts have indicated that the government may create liberty interests. See, e.g., Jean v. Nelson, 727 F.2d at 981; Augustin v. Sava, 735 F.2d 32, 37 (2d Cir.1984). In Jean, after the court rejected plaintiffs’ claim to a “core” constitutional right to equal protection in parole decisions, the Court went on to apply the doctrine of federally-created liberty interests in considering whether the Refugee Act of 1980 created a liberty interest in asylum for excludable Haitians. The court in Jean articulated the following standard before finding that no such liberty interest existed:

[W]hen dispensation of a statutory benefit is clearly at the discretion of an agency, or when a statute only provides that certain procedural guidelines be followed in arriving at a decision, then there is no creation of a substantive interest protected by the Constitution. Hewitt v. Helms, 459 U.S. 460, 471, 103 S.Ct. 864, 871, 74 L.Ed.2d 675 (1983); Bishop v. Wood, 426 U.S. 341, 345-47, 96 S.Ct. 2074, 2077-78, 48 L.Ed.2d 684 (1976); Olegario v. United States, 629 F.2d 204, 223-224 (2d Cir.1980), cert. denied, 450 U.S. 980, 101 S.Ct. 1513, 67 L.Ed.2d 814 (1981).

727 F.2d at 981.

Although most of the cases cited above concerned statute's or regulations as sources of liberty interests, a broad variety of governmental actions may give rise to a liberty interest. Dudley v. Stewart, 724 F.2d 1493, 1497-98 (11th Cir.1984) (quoting Parker v. Cook, 642 F.2d 865, 867 (5th Cir. Unit B 1981)). In Parker the court explained that the “substance” of the governmental action controls:

Since states rarely if ever explicitly label their creations as “liberty interests,” we must look to the substance of the state action to determine whether a liberty interest has been created. And whether this substance is embodied in a constitution, statute, regulation, rule, or practice is of no significance____

642 F.2d at 867.

In presenting their liberty interest arguments, plaintiffs suggest that their class members be considered as falling within

two analytically distinct groups. One group consists of plaintiffs who, upon their arrival in the United States in 1980, were identified as being mental incompetents or as having committed serious crimes in Cuba and who, consequently, have been in detention ever since (the “First Group”). The other, larger group is composed of those class members who, after being screened by U.S. government officials and determined not to have been mentally incompetent or to have committed serious crimes in Cuba, were paroled into the United States as “Cuban/Haitian entrants” and whose paroles have been or will be revoked (the “Second Group”). According to plaintiffs, distinguishing between these two groups is important because plaintiffs advance different arguments in support of each group’s claim to a federally-created liberty interest.

A. The “First Group”

With respect to the “First Group” — those class members continuously detained as incompetents or serious criminals since their arrival — plaintiffs maintain that the federal government has created a liberty interest in parole by virtue of (1) the Attorney General’s Status Review Plan and Procedures (the “Plan”); (2) executive policies for detained Mariel Cubans; and (3) the 1967 Protocol Relating to the Status of Refugees (the “Protocol”). For the reasons set forth below, the Court finds that no liberty interest has been created for members of the First Group.

First, the Court addresses the Status Review Plan as a possible source of a liberty interest. 8 U.S.C. § 1182(d)(5) authorizes the Attorney General, “in his discretion,” to parole unadmitted aliens into the United States. Plaintiffs argue that the Attorney General “determined not to use the broad parole standards in [that subsection], but considerably constricted his substantive discretion” by issuing the Status Review Plan. Plaintiffs’ November 30, 1984 Brief at 8. According to plaintiffs, the Plan created a protected liberty interest because it contained mandatory procedural requirements and placed substantive limitations on the discretion of the decisionmaker. Id. at 12.

The Plan appears to place at least some “substantive limitations on official discretion,” limitations that arguably might give rise to a liberty interest. See Olim v. Wakinekona, 103 S.Ct. at 1747. On the other hand, the Eleventh Circuit Court of Appeals has described the Attorney General’s discretion over parole as “remarkably broad,” Garcia-Mir v. Smith, 766 F.2d at 1484 (citing Jean, 121 F.2d at 977), and has rejected the argument that the Plan limits the broad discretion delegated to the Attorney General under 8 U.S.C. § 1182(d)(5). 766 F.2d at 1485. As in Jean, because “dispensation of a statutory benefit is clearly at the discretion of an agency,” the Court must conclude the Plan cannot be a source of a liberty interest.

As another ground for establishing a liberty interest for members of the “First Group,” plaintiffs rely on an “executive pronouncement” issued by the White House on June 7, 1980:

The President has directed the Attorney General to take the following actions:
First, Cubans identified as having committed serious crimes in Cuba are to be securely confined. Exclusion proceedings will be expedited to the maximum extent consistent with constitutional requirements for due process of law.
Second, exclusion proceedings will also be started against those who have violated American law while waiting to be reprocessed or relocated. The Justice Department will investigate all serious violations of the law, and the Justice Department will bring prosecutions where justified. Those responsible for the disturbances at Fort Chaffee are confined and will be confined until fair decisions can be made on criminal prosecution or exclusion from this country or both. Similar measures will be taken in the event of any future disturbances.

(Emphasis supplied by plaintiffs.)

An initial problem with plaintiffs’ argument is that the language emphasized concerns only those plaintiffs who committed crimes after their arrival in the United States. It is not clear that this language applies to any or all members of the First Group — those plaintiffs detained as being mental incompetents or -as having committed serious crimes in Cuba. Even if the language were applicable, however, the policies expressed do not place the “substantive limitations on official discretion” necessary to give rise to a liberty interest. Accordingly, this argument fails.

Plaintiffs also rely on Article 31 of the 1967 Protocol Relating to the Status of Refugees as a source of a liberty interest for members of the First Group. Plaintiffs maintain that the Protocol applies to them as applicants for political asylum. The Eleventh Circuit Court of Appeals, however, rejected plaintiffs’ class-wide asylum claim in Garcia-Mir v. Smith, 766 F.2d at 1492-93. Because the Court cannot determine which class members can still be considered applicants for asylum, the Court finds that class-wide treatment of this issue is not appropriate. See id. at 1487 n. 11. Thus, the Court will not address the merits of this argument. In sum, the Court finds no federally-created liberty interest in parole for those plaintiffs who have been in continuous detention since 1980 for being mental incompetents or for having committed serious crimes in Cuba.

B. The “Second Group”

After their arrival in the United States, the members of the Second Group, along with the vast majority of Mariel Cubans, were screened by the Immigration and Naturalization Service and were released on parole. Since November 1980, when INS developed certain parole revocation policies applicable only to Mariel Cubans, the criteria for revocation of parole have changed from time to time. See Declaration of John A. Simon, Exhibit 15 to Plaintiff’s November 30, 1984 Brief. Until May 1982, the general policy was to revoke a Mariel Cuban’s parole if he or she had no means of support, no fixed address, and no sponsor, or if he or she had been convicted of a felony or a serious misdemeanor. Id. Beginning in May 1982, the general policy provided for revocation of the parole of any Mariel Cuban “(1) who has been convicted in the United States of a felony or a serious misdemeanor and who has completed the imprisonment portion of the sentence; or (2) who presents a clear and imminent danger to the community or himself.” Id.

In March 1983, a supplemental parole revocation policy was established only for those Mariel Cubans who had been released from the Atlanta Penitentiary to the custody of the Public Health Service or to “special placement” half-way houses. Id. This supplemental policy placed other conditions — such as curfews, travel restrictions, and mandatory participation in certain programs — on the parole of these Cubans; violations of these conditions were additional grounds for revocation of parole. Id.

Over the past five years, parole revocations have sent a continuous stream of Mariel Cubans into the Atlanta Penitentiary, presumably in accordance with the guidelines described above. Plaintiffs maintain that under these parole revocation guidelines, “there is no provision whatsoever for prior notice, hearing, interview or even input from the parolee” before parole is revoked. Plaintiffs’ November 30, 1984 Brief at 22. Plaintiffs challenge the government’s parole- policies and procedures by contending that the members of the Second Group have a federally-created liberty interest in their continued parole by virtue of (1) the Attorney General’s Status Review Plan; (2) the general parole regulations at 8 C.F.R. § 212.5(d)(2); (3) the creation of a special “Cuban/Haitian entrant” status for Mariel Cubans; and (4) the Presidential invitation to Mariel Cubans to come to this country.

The Court concludes that neither the Status Review Plan nor the general parole regulations provides a liberty interest for plaintiffs. The Court does find, however, that those Mariel Cubans who were not mental incompetents and who had not committed serious crimes in Cuba came to the United States because they were invited by the President of this country. This invitation by the President gave rise to a protected liberty interest in continued parole that cannot be impaired without due process of law. The Court’s reasoning is set forth below.

First, just as the Status Review Plan created no liberty interest for members of the First Group, it cannot be a source of a liberty interest for those plaintiffs in the Second Group. For similar reasons, the Court finds that the parole regulations at 8 C.F.R. § 212.5(d) provide no liberty interest because they appear to place even fewer substantive restrictions on official discretion than did the Status Review Plan. To hold otherwise would be inconsistent with the Eleventh Circuit’s decision in Garcia-Mir v. Smith, 766 F.2d at 1485.

The special “Cuban/Haitian entrant” status presents a closer question. In June 1980, the executive department announced that

the President has decided to seek special legislation regularizing the status of Cuban-Haitian entrants. This legislation will allow them to remain in the United States and will make them eligible for certain benefits, but it will not provide the status or benefits accorded to those admitted as refugees or granted political asylum.

Exhibit 32 to Plaintiffs’ November 30, 1984 Brief (Statement of Ambassador Victor Palmieri, U.S. Coordinator for Refugee Affairs, June 20, 1980). On July 3, 1980, it became the government’s policy that Cuban/Haitian entrants, who were defined as all Cubans who arrived in the United States from April 21,1980 to midnight October 10, 1980, and all Haitians who were in INS proceedings as of midnight, October 10, 1980, were to be “paroled or granted extended voluntary departure or stay of deportation, as appropriate,” instead of being processed under the ordinary exclusion or deportation procedures. See INS Telexes, Exhibits 33-37 to Plaintiffs' November 30, 1984 Brief. Under the proposed legislation, Cuban/Haitian entrants would have been entitled to convert to permanent resident alien status after two years.

The legislation “regularizing” the status of Cuban/Haitian entrants, however, has yet to be enacted by Congress. Thus, any liberty interest created by this special status must arise from the executive branch’s policies and practices in implementing the Cuban/Haitian entrant status. In the Court’s view, this issue is so intertwined with the invitation issue that the Court will consider them together.

With respect to the invitation issue, plaintiffs have presented documentary evidence of various actions by the executive branch to demonstrate that the President invited to this country “tens of thousands” of Cubans who had not committed serious crimes in Cuba and who were not mentally incompetent. Those executive actions commenced in April 1980, after approximately 10,800 Cubans claiming status as political refugees sought sanctuary in the Peruvian embassy in Havana. See United States v. Frade, 709 F.2d 1387, 1389 (11th Cir.1983). President Carter’s response is described in Pollgreen v. Morris, 496 F.Supp. 1042 (S.D.Fla.1980), as follows:

Recognizing “that special circumstances exist[ed],” President Jimmy Carter on April 14,1980, determined that those persons in the Peruvian embassy “who otherwise qualify may be considered refugees even though they are within their country of nationality or habitual residence.” Further, declaring “that an unforeseen emergency refugee situation exists” President Carter concluded that “grave humanitarian needs” and the “national interest” justified the admission of up to 3500 of the refugees to this country and the appropriation of up to $4.25 million to aid in their resettlement pursuant to the Refugee Act of 1980. 45 Fed.Reg. 28079 (April 14, 1980).

Id. at 1047 (footnote omitted) (emphasis supplied by the Pollgreen court).

Later that month, an airlift of disaffected Cubans to Costa Rica began but was abruptly suspended by Castro, who instead announced that departing Cubans could

leave from Mariel Harbor. Consequently, flotillas of small boats began treks from the United States to Mariel to retrieve relatives. Addressing this unprecedented exodus, the President, Vice-President, and State Department issued several official statements over a period of a few weeks. Plaintiffs here have identified various aspects of these statements that signify the executive department’s policy and practice of supporting these Cuban emigrants by assisting those at sea and by taking steps to resettle large numbers of them within the United States.

Most strikingly indicative of an “invitation” was a statement by President Carter at a May 5, 1980 press conference, a statement that was publicized in the Cuban press. See Exhibit 24 to Plaintiff’s November 30, 1984 Brief (articles from Granma, the official Cuban newspaper, May 18, 1980). The President announced that the United States would receive “tens of thousands” of Cubans with “an open heart and open arms.”

Plaintiffs support their characterization of these executive actions as an “invitation” with statements from members of the judicial and legislative branches of government. According to this circuit in United States v. Frade, 709 F.2d at 1395, this “open heart and open arms” statement “was broadly interpreted as governmental approval of the boatlift.” Further, Congressman Gillis Long testified in Frade that he “was of the impression from the President’s [May 5] statement ... that the United States was encouraging and welcoming” the boatlift. Id. at 1394-95.

According to plaintiffs, later actions by the executive branch buttress their argument that an invitation was extended to members of the Second Group. On May 14, 1980, the President issued a policy statement proposing that, as an alternative to the flotilla, Castro permit pre-screening by U.S. officials of all those who wished to leave Cuba and permit an air or sea lift conducted by our government. The court in Frade interpreted this announcement as one that the administration

would continue to welcome legitimate Cuban refugees, but would take firm coordinated action to prevent the two dangers which had emerged from the boatlift: death and injury at sea resulting from passage in unsafe vessels, and entry into the United States of Cuban undesirables forced onto the boats by the Castro regime.

709 F.2d at 1396. Thus, plaintiffs maintain, although the government took steps to stop the Flotilla, the government continued to implement the policy articulated by the President in a May 29, 1980 statement: “the [Mariel Cubans] who are already here will be assimilated into the American population. Their legal status has not yet been determined.” See Exhibit 31 to Plaintiffs’ November 30, 1984 Brief.

As additional evidence that the members of the Second Group were invited by the President, plaintiffs point to the executive branch’s creation of the special Cuban/Haitian entrant status. According to plaintiffs, these class members were not merely paroled as ordinary excludable aliens, but instead were accorded this unique status as an interim step toward permanent resident status.

Plaintiffs further argue that the Presidential invitation, coupled with the creation of the Cuban/Haitian entrant status, places this case squarely within the holding of United. States ex rel. Paktorovics v. Murff, 260 F.2d 610 (2d Cir.1958). The court in Paktorovics held that an excludable alien who was one of thousands of Hungarians invited to the United States by the President in 1956 was entitled to a due process hearing before his parole could be revoked. The court found that plaintiffs acceptance of the Presidential invitation to come to this country changed his status “sufficient to entitle him to the protection of our Constitution.” Id. at 614. According to Paktorovics, the invitation made that case sui generis and distinguished it from Supreme Court cases such as Shaughnessy v. United States ex rel. Mezei, 345 U.S. 206, 73 S.Ct. 625, 97 L.Ed. 956 (1953), a case that stands for the proposition that excludable aliens have no constitutional protection against continued detention pending their exclusion. See Jean v. Nelson, 727 F.2d at 970.

After considering the various executive actions and policy statements discussed above in context of the events that prompted them, the Court agrees with Congressman Long’s assessment and concludes that those Mariel Cubans who were not mental incompetents and who had not committed serious crimes in Cuba came to this country in response to an invitation from the President of the United States.

This invitation, however, was not necessarily unconditional. The government, although not conceding that plaintiffs were invited, argues that any invitation extended was qualified by the requirement that the Cubans be “admitted” into this country in accordance with U.S. immigration law. The government maintains that such an invitation would not affect plaintiffs’ status as excludable aliens, who are entitled “only to the rights and procedures accorded them by Congress or the Executive.” Government’s January 23, 1985 Memorandum at 30. The government’s position is that this is simply a garden variety exclusion case. Even if the President invited plaintiffs to this country, in the government’s eyes they are merely excludable aliens who may be refused parole or have their paroles summarily revoked, and may be detained indefinitely pending exclusion, all in the discretion of government officials and subject to a very narrow standard of judicial review.

The Court notes that the language of the executive policy statements comprising the invitation did not spell out all its parameters and legal ramifications; indeed, the President acknowledged this fact when he announced on May 29, 1980 that “the [Cubans] who are already here will be assimilated into the American population. Their legal status has not yet been determined.” The Court, therefore, must inquire what, if any, qualifications or conditions can reasonably be inferred from the invitation.

At the time the President invited “tens of thousands” of Cubans to our country in May 1980, it was obvious that these persons would arrive without proper entry documents and in far greater numbers than allowed by immigration quotas. In light of these facts, it is nonsensical to suggest that the President invited plaintiffs to the United States to be treated no differently than unadmitted aliens who are caught attempting to steal past our borders. Nor can it be argued with any reason or logic that plaintiffs were invited to face indefinite confinement until Castro agreed to their return to Cuba, just as no one would seriously contend that the more than 120,-000 other Mariel Cubans who came to this country in response to the invitation would be returned to Cuba if Castro agreed to accept them.

The Court, therefore, finds that a necessary component of the Presidential invitation was that the legal status of those Cubans invited would be greater than the status of ordinary excludable aliens, a result evident from the special Cuban/Haitian entrant status accorded this group. Pursuant to the invitation, the “tens of thousands” of Cubans invited were to have been “assimilated into the American population.” See President’s Statements of May 5 and May 29, 1980. The invitation, then, can only reasonably be interpreted as according an interim status to those invited as a step to permanent residency status.

Next, the Court must determine whether this invitation created a protected liberty interest. According to Olim v. Wakinekona, 103 S.Ct. at 1747, the government “creates a protected liberty interest by placing substantive limitations on official discretion.” Applying this standard to the invitation, the Court again notes that the only reasonable interpretation of the invitation is that it is the expression of an executive policy and practice to afford plaintiffs some greater status than that afforded ordinary excludable aliens, over whose liberty the Attorney General has “remarkably broad” discretion. See Jean v. Nelson, 727 F.2d at 977. By elevating these plaintiffs’ legal status over that of ordinary excludable aliens, the invitation limited the Attorney General’s discretion over their parole. Further, these limitations are substantive, not merely procedural; the invitation concerned the substantive right to be “assimilated into American society,” not merely the right to demand that certain procedures be followed by the Attorney General in determining whether these plaintiffs should be detained. Consequently, the Court finds that the invitation did create a protected liberty interest in continued parole for those plaintiffs who were not mental incompetents and who had not committed serious crimes in Cuba.

This holding presents no conflict with Shaughnessy v. United States ex rel. Mezei, 345 U.S. 206, 73 S.Ct. 625, 97 L.Ed. 956 (1953), or with the Eleventh Circuit’s decisions in Jean, Fernandez-Roque, or Garcia-Mir, all of which relied on Mezei. None of those decisions addressed the legal effect of a Presidential invitation or took into account the possibility of a federally-created liberty interest. In the only other case known to the Court that concerned a Presidential invitation, United States ex rel. Paktorovics v. Murff, the court reached a similar conclusion by holding that such an invitation altered an excludable alien’s status “sufficient to entitle him to the protection of our Constitution.” 260 F.2d at 614. In short, recognition of these plaintiffs’ federally-created liberty interest is a narrow holding that does not conflict v/ith Mezei and its progeny.

Given that a liberty interest has been created, the next issue is what due process requires in its protection. The Court must examine both the substantive and the procedural aspects of the liberty interest in making this determination. The substantive aspect ensures that the government may interfere with plaintiffs’ interest in being free on parole only when sufficient justification exists. The procedural aspect guarantees that certain procedural protections will accompany this decision.

This Court previously has identified what substantive and procedural protections must be afforded plaintiffs if they are found to have a “core” liberty interest in parole. Fernandez-Roque v. Smith, 567 F.Supp. at 1128-45. Plaintiffs argue that although the Eleventh Circuit Court of Appeals has held that plaintiffs have no “core” liberty interest in parole, see Fernandez-Roque v. Smith, 734 F.2d at 582, these same protections should apply to plaintiffs’ federally-created liberty interest. This argument is consistent with the Supreme Court’s emphatic statements in Vitek v. Jones that “the adequacy of statutory procedures for deprivation of a statutorily created property interest must be analyzed in constitutional terms.” 445 U.S. 480, 490-91 n. 6, 100 S.Ct. 1254, 1262 n. 6, 63 L.Ed.2d 552 (1980) (quoting Arnett v. Kennedy, 416 U.S. 134, 167, 94 S.Ct. 1633, 1650, 40 L.Ed.2d 15 (1974)). Thus, even though the source of plaintiffs’ liberty interest is not the Constitution itself, the same constitutional standards should govern its protection. The Court agrees that the procedural protections shall be those enunciated at 567 F.Supp. 1129-45.

The substantive standards previously identified by this Court require some modification. When it addressed the substantive aspects of plaintiffs’ liberty interest in parole, this Court held that when immediate exclusion is impracticable, plaintiffs may be detained only if found to be “likely to abscond, to pose a risk to the national security, or to pose a serious and significant threat to persons or property within the United States.” 567 F.Supp. at 1128 (footnote omitted). Given that plaintiffs’ liberty interest is based on an invitation that did not contemplate their exclusion, at least without sufficient justification, this reference to exclusion is no longer appropriate.

In sum, the Court holds that those class members who were not mental incompetents and who had not committed serious crimes in Cuba came to this country in response to an invitation from the President of the United States; that this invitation created for them a protected liberty interest in continued parole; and that because of this liberty interest, each of these class members may be detained only if a finding is made, pursuant to the procedures outlined at 567 F.Supp. 1129-45, that the person is likely to abscond, to pose a risk to the national security, or to pose a serious and significant threat to persons or property within the United States.

II. International Law

Plaintiffs also argue that their continued detention under the procedures applied to them violates customary international law and the U.N. Protocol Relating to the Status of Refugees. Because expert testimony is an acceptable method of determining international law, see Restatement of the Foreign Relations Law of the United States (Revised) § 133 (Tent. Draft No. 1, 1980), the Court conducted an evidentiary hearing and heard expert testimony from Professor Louis Henkin of Columbia University and Professor Harold G. Maier of Vanderbilt University.

Even the government admits that customary international law of human rights contains at least a general principle prohibiting prolonged arbitrary detention. The government maintains, however, that international law does not apply here because 8 U.S.C. § 1227(a) and the “highest levels of government” approve plaintiffs’ indefinite detention. Defendants’ Memorandum in Support of Motion for Denial of Writ of Habeas Corpus on the Issues of International Law at 9. Thus, the Court first must determine whether plaintiffs can resort to international law in challenging their detention.

In The Paquete Habana, 175 U.S. 677, 20 S.Ct. 290, 44 L.Ed. 320 (1900), the Supreme Court described the basic principles governing the application of customary international law in United States courts:

International law is part of our law, and must be ascertained and administered by the courts of justice of appropriate jurisdiction as often as questions of right depending upon it are duly presented for their determination. For this purpose, where there is no treaty and no controlling executive or legislative act or judicial decision, resort must be had to the customs and usages of civilized nations, and, as evidence of these, to the works of jurists and commentators who by years of labor, research, and experience have made themselves peculiarly well acquainted with the subjects of which they treat. Such works are resorted to by judicial tribunals, not for the speculations of their authors concerning what the law ought to be, but for trustworthy evidence of what the law really is.

Id. at 700, 20 S.Ct. at 299 (emphasis added). Thus, according to The Paquete Habana, plaintiffs can rely on customary international law only if “there is no treaty and no controlling executive or legislative act or judicial decision.” Id.

The Court finds no “controlling legislative act” that would preclude the application of customary international law here. The statute that the government argues is “controlling” — 8 U.S.C. § 1227(a), which is denoted “Immediate deportation of aliens excluded from admission or entering in violation of law” — does not expressly address indefinite detention. Although that statute does not restrict the Attorney General’s discretion in detaining excludable aliens, it expresses no clear intent by Congress to authorize a type of detention that would contravene customary international law. Relying on the principle that, whenever possible, statutes should not be construed to violate international law, courts have demanded such an expression of clear intent before concluding that Congress intended to supersede international law. See Murray v. The Schooner Charming Betsy, 6 U.S. (2 Cranch) 102, 118, 2 L.Ed. 208 (1804); Commodity Futures Trading Commissioner v. Nahas, 738 F.2d 487, 493 (D.C.Cir.1984).

The Court, however, finds that a “controlling executive act” may exist here. Plaintiffs argue that for an act of the executive to be considered “controlling,” “it must involve an act taken by the President acting under his constitutional authority or expressly sanctioned by him.” Plaintiffs’ March 12, 1985 Brief at 24 (citing Restatement (Revised) § 131 comment c (Tent. Draft No. 1, 1980)). The Court, however, has carefully reviewed the authority cited by plaintiffs and has found no such distinction in the revised Restatement between acts of the President and acts of senior executive officials such as the Attorney General, who has directed plaintiffs’ indefinite detention. Plaintiffs have cited no other authority supporting their proposed construction of the phrase “controlling executive act.” Absent such authority, this Court is reluctant to hold that the Attorney General’s involvement in plaintiffs’ detention cannot be considered a “controlling executive act,” especially since Congress has delegated to the Attorney General broad discretion over the detention of unadmitted aliens. See 8 U.S.C. § 1227(a). Ac cordingly, the Court concludes that plaintiffs have not established that customary international law applies in this case.

It should be noted, however, that the indefinite detention of plaintiffs, without periodic hearings establishing that the continued detention of each class member is reasonably necessary for early deportation or for the protection of society from one proven to be dangerous, appears to violate customary international law. Relying on several international human rights agreements, plaintiffs established that customary international law prohibits prolonged arbitrary detention. Plaintiffs’ expert, Professor Henkin, testified that “arbitrary” detention under international law is determined according to what is reasonable and fair under the circumstances, specifically by reference to the purpose, length, and conditions of detention. He stated that in the immigration context, international law recognizes only two legitimate purposes of detention: (1) to deport and (2) to protect society from those who pose a danger to it.

Adopting Professor Henkin’s view, if the Court were applying customary international law here, the Court would hold that customary international law requires the type of periodic, individualized hearings mentioned above. As already noted, however, the President has the authority to ignore our country’s obligations arising under customary international law, and plaintiffs have failed to establish that the Attorney General does not share in that power when he directs the detention of unadmitted aliens. Accordingly, customary international law offers plaintiffs no relief in this forum. Any relief in this area must come from the President, the Attorney General, or Congress.

SUMMARY

In sum, the Court holds that those plaintiffs who were not mental incompetents and who had not committed serious crimes in Cuba have a federally-created liberty interest in continued parole because they came to this country in response to an invitation from the President of the United States. Consequently, each of these class members is entitled to a hearing, pursuant to the procedures outlined at 567 F.Supp. at 1129-45, at which his continued detention must be justified by a finding that he is likely to abscond, to pose a risk to the national security, or to pose a serious and significant threat to persons or property within the United States. The Court further holds that this liberty interest does not extend to those plaintiffs who were mental incompetents or who had committed serious crimes in Cuba.

The Court also holds that even though plaintiffs’ continued indefinite detention appears to violate the customary international law prohibition of prolonged arbitrary detention, plaintiffs have failed to establish that customary international law applies in this case.

The government is DIRECTED to file within thirty days from the date of this order a plan providing those plaintiffs who have been determined to have a federally-created liberty interest the hearings to which that interest entitles them. Plaintiffs shall have fifteen days thereafter to respond, and the hearings shall begin no later than sixty days from the date of this order.

      . This Court did not reach these issues in its 1983 order addressing plaintiffs’ claim to a "core" liberty interest. See Fernandez-Roque v. Smith, 567 F.Supp. 1115, 1128-29 n. 5 (N.D.Ga.1983), rev’d, 734 F.2d 576 (11th Cir.1984). Nor were these issues presented to or addressed by the Court of Appeals in a later appeal in the same consolidated cases. See Garcia-Mir v. Smith, 766 F.2d 1478 (11th Cir.1985).

      . For an extensive description of the Status Review Plan, see Fernandez-Roque, 567 F.Supp. at 1130-31.

      . This Court rejected this argument, finding that the relevant statute, 8 U.S.C. § 1227(a), imposed no limitations on the Attorney General's authority to detain excludable aliens. The Eleventh Circuit Court of Appeals agreed. Fernandez-Roque v. Smith, 567 F.Supp. at 1124-25, rev'd on other grounds, 734 F.2d at 580 n. 6.

      . Relying on Jean v. Nelson, 727 F.2d 957 (11th Cir.1984) (en banc), the Eleventh Circuit Court of Appeals rejected this argument in Fernandez-Roque, 734 F.2d at 582.

      . Fernandez-Roque, 567 F.Supp. at 1143-44.

      . As will be evident below, recognizing that the government’s initial screening of some of the class members may have been inaccurate, the Court has focused on those plaintiffs who in fact were not mental incompetents and who in fact had not committed serious crimes in Cuba.

      . 19 U.S.T 6223, T.I.A.S. No. 6557.

      . On February 12, 1985, the Attorney General purported to terminate the Status Review Plan. Although the government no longer follows the procedures set forth in the Plan, plaintiffs argue that the Plan remains in effect because it was not effectively repealed pursuant to the Administrative Procedure Act (APA). Although this issue was briefed for the the Court of Appeals in Garcia-Mir, the issue was not addressed in the resulting opinion. See 766 F.2d 1478. Consequently, the parties have raised the same arguments before this Court.
      Plaintiffs concede that if the Plan need not have been repealed pursuant to the APA, the issue whether the Plan creates a liberty interest is moot. Plaintiffs' March 27, 1985 Brief at 6. The Court need not decide this issue because it finds that even if the Plan remains in effect, it does not create a liberty interest. The Court expresses no opinion concerning the APA issue.

      . 727 F.2d at 981. In Jean the Court of Appeals found that because the relevant statute, 8 U.S.C. § 1158(a), authorized the Attorney General to grant asylum to refugees “in his discretion," that statute created no liberty interest in asylum. Id. at 981-82; see also Note, The Right to Appointed Counsel in Asylum Proceedings, 85 Colum.L.Rev. 1157, 1173-76 (1985).

      . The Court does not address the merits of this argument and, therefore, expresses no opinion on whether an individual plaintiff raising this argument in an individual habeas corpus action might be successful.

      . As noted above, of the estimated 125,000 to 130,000 Mariel Cubans who arrived in the 1980 “Freedom Flotilla,” only approximately 1,800 were detained on their arrival because of alleged serious criminal conduct in Cuba or because of mental problems.

      . While the paroles of some class members have been revoked for convictions of crimes such as murder, armed robbery, and aggravated assault, other class members have been sent to the Atlanta Penitentiary for convictions of less serious crimes — such as driving under the influence — even though they had completed serving their sentences for those crimes. Still others have had their paroles revoked for simply being charged with a crime, or for parole violations that are noncriminal. Because these class members had been living freely in American society, often when they entered the penitentiary they left behind wives and children who are American citizens.

      . In addressing the "Second Group," the Court makes clear that no class members who were mentally incompetent or who had committed serious crimes in Cuba were invited by the President. Consequently, even if a class member initially was paroled into the United States, he could not claim the liberty interest if it could be determined that he in fact had been a mental incompetent or had committed any serious crimes in Cuba. Conversely, if it came to light that a class member had been inaccurately classified as one who had been a mental incompetent or had committed a serious crime in Cuba, that class member could assert this liberty interest.

      . Although Congress has not passed this legislation, it appears that the executive branch is allowing the vast majority of Cuban/Haitian entrants to apply for permanent resident status. See The Wall Street Journal, November 13, 1985, at 1 col. 1.

      . These statements are reprinted in 80 Department of State Bulletin, Number 2039 (June 1980) (Exhibit 20 to Plaintiff's November 30, 1984 Brief). Plaintiffs rely on these statements of policy in arguing as follows:
      On April 23, 1980, the Department of State issued a statement indicating our country’s deep sympathy for those seeking freedom from Castro’s regime, while urging that the boatlift stop but that the airlift be reinstated. See Exhibit 20. On April 27, 1980, the President called on Castro to allow evacuation of the growing number of disaffected Cubans in an orderly, safe and humane way, ordered the Coast Guard and Navy to assist those at sea, asked the Cuban-American community not to go to Mariel, and advised Cuba that if it wanted to expel its people the United States would contribute to this effort, but in an orderly, safe and humane evacuation process. Exhibit 20. At the time this statement was made, 6,053 Cubans had already arrived at Key West. Exhibit 21, p. 5.
      On May 1, 1980, the Navy was ordered to help move the “Flotilla”. Exhibit 21, p. 4, n. 19.
      On May 2, 1980, the White House issued a statement concerning its plan to handle the increasing number of Cuban refugees; it stated that it would add processing centers and could handle daily flows of 2,500-3,000 refugees; that the Coast Guard expanded its capability to assist the Flotilla and that resettlement assistance was being developed. Exhibit 20.
      Plaintiffs’ November 30, 1984 Brief at 26. References to Exhibit 21 to Plaintiffs Brief are to a special report of the Council for Inter-American Security, entitled “The 1980 Mariel Exodus: An Assessment and Reappraisal.”

      . The President’s statement was in response to the following question from a representative of the League of Women Voters. The full text is as follows:
      Q. In light of thousands of illegal and legal immigrants arriving daily, a problem which is reaching critical proportions, what does your administration intend to do about enforcing current immigration laws and providing funds and programs for dealing with these newcomers, who are presently a great burden on local communities?
      THE PRESIDENT. The entire subject or issue or problem of the Cuban refugees has been greatly aggravated by the inhumane approach by Fidel Castro. We, as a nation, have always had our arms open to receiving refugees in accordance with American law. We now have more than 800,000 Cuban refugees in our country, who are making outstanding new American citizens, as you know.
      I have a responsibility to administer the law, because I’ve taken an oath to do so, and to administer it in a fair and equitable way. It's important for me, for instance, to treat the Cuban refugees with the same degree of compassion and understanding and with the same commitment to the law as we do the refugees from Haiti and from other countries. We are the most generous nation on Earth in receiving refugees, and I feel very deeply that this commitment should be maintained.
      Ours is a country of refugees. Many of those in this room have either parents or grand-parents who were refugees who came here looking for a new life of freedom, a chance to worship as they pleased, or a chance to combine their own talents to build a growing and dynamic country. Those of us who have been here for a generation or six or eight generations ought to have just as open a heart to receive the new refugees as our ancestors were received in the past.
      I have organized within the White House, under a senior assistant, Jack Watson, a combined group of departments who are working on this special inflow of Cuban refugees. In the last few days we have received more than 10,000 from Cuba. We’ve now opened up a staging area at Eglin Air Force Base in the northwestern part of Florida, and we’re receiving these refugees now, primarily into the Key West area.
      As you know, there are almost 400 of those who have been issued visas by our country who are hiding from mob violence instigated by Castro himself, and we’re trying to get those freed by Castro to come on into our country. These are primarily former political prisoners. So, those 400 plus literally tens of thousands of others will be received in our country with understanding, as expeditiously as we can, as safely as possible on their journey across the 90 miles of ocean, and processed in accordance with the law.

      So, I don’t know how else to answer your question except to say we're doing the best we can. I think the local and State officials in Florida have been extraordinarily forthcoming. We do have a need to go back to the Congress for additional funds to care for this unexpected influx of refugees. You can help here; the League can help. But we’ll continue to provide an open heart and open arms to refugees seeking freedom from Communist domination and from economic deprivation, brought about primarily by Fidel Castro and his government.

      (Emphasis added.)

      . In fact, on the day after the President’s May 5, 1980 "open heart and open arms” statement, column 1 of the front page of The New York Times contained the following headline:
      PRESIDENT SAYS U.S. OFFERS ‘OPEN ARMS’ TO CUBAN REFUGEES
      WARM RECEPTION IS PROMISED

      . See Frade, 709 F.2d at 1394-95.

      . The government maintains that the executive statements and policies discussed above cannot "be interpreted to mean that the President or the government ever invited to the United States any Cuban with a criminal background or any Cuban who could not or would not comply with our immigration laws.” Government's January 23, 1985 Brief at 30. Plaintiffs do not contend, however, that the President invited anyone who had committed serious nonpolitical crimes in Cuba. Thus, the Court is concerned only with the government’s position that no Cuban was invited who could not or would not comply with U.S. immigration law.

      . The Paktorovics decision preceded the development of the doctrine that non-"core” liberty interests can be created by government action. See Note, The Right to Appointed Counsel in Asylum Proceedings, 85 Colum.L.Rev. 1157, 1171 (1985) (discussing Paul v. Davis, 424 U.S. 693, 96 S.Ct. 1155, 47 L.Ed.2d 405 (1976)). If Paktorovics were to be decided today, it appears likely that the court would rely on this doctrine in reaching the same conclusion.

      . Quoting a Seventh Circuit case, the Supreme Court in Olim v. Wakinekona addressed the substantive element of a liberty interest:
      "A liberty interest is of course a substantive interest of an individual; it cannot be the right to demand needless formality." Process is not an end in itself. Its constitutional purpose is to protect a substantive interest to which the individual has a legitimate claim of entitlement.
      103 S.Ct. at 1748 (footnote omitted) (quoting Shango v. Jurich, 681 F.2d 1091, 1100-01 (7th Cir.1982)). See also Harrah Independent School District v. Martin, 440 U.S. 194, 197, 99 S.Ct. 1062, 1063, 59 L.Ed.2d 248 (1979) ("the Due Process Clause ... not only accords procedural safeguards to protected interests, but likewise protects substantive aspects of liberty against impermissible governmental restrictions”) (construing fourteenth amendment’s due process clause).

      . The Supreme Court reiterated this holding last term in Cleveland Board of Education v. Loudermill,-U.S.-, 105 S.Ct. 1487, 1492-93, 84 L.Ed.2d 494 (1985).

      . Presently at issue is the detention of plaintiffs. The liberty interest created by the invitation also appears broad enough to impose limitations on the exclusion of plaintiffs from this country. That issue, however, is not before the Court at this time.

      . Even if the Status Review Plan were to be re-activated, "hearings” under the Plan would not provide the due process to which the liberty interest entitles these plaintiffs who were invited. The government has never taken the position that the panels conducting reviews under the Status Review Plan were impartial. Thus, their proceedings bore more resemblance to an interview than to a hearing.

      . The Court will not address the merits of plaintiffs’ argument that relies on the Protocol because it has determined above that claims based on plaintiffs’ status as applicants for asylum are no longer appropriate for class-wide treatment. See Garcia-Mir v. Smith, 766 F.2d at 1492.

      . Professor Henkin is co-director of the Columbia University Center for the Study of Human Rights. He also serves as chief reporter for the American Law Institute’s Restatement of the Foreign Relations Law of the United States (Revised) and as president of the United States Institute of Human Rights. He has authored several books and articles in the field of international law, including How Nations Behave: Law and Foreign Policy (1979); The Rights of Man Today (1978); and Foreign Affairs and the Constitution (1972); and he is considered an authority in the field of international law.

      . Professor Maier has been Director of the Transnational Legal Studies Program at Vanderbilt University since 1973. He has served as a consultant and counselor on international law to the U.S. State Department, and he has testified before Congressional committees concerning immigration and other international issues. Professor Maier is also the author of numerous works in the field of international law.

      . This Court previously has held that the statute itself, 8 U.S.C. § 1227(a), does not restrict the Attorney General’s authority to detain excludable aliens indefinitely, and the Eleventh Circuit Court of Appeals has agreed. See Fernandez-Roque v. Smith, 567 F.Supp. at 1124-25, rev'd on other grounds, 734 F.2d at 580 n. 6. As noted above, neither this Court nor the Court of Appeals has considered whether international law places any restrictions on plaintiffs’ detention. See 567 F.Supp. at 1128 n. 5; 734 F.2d at 582 n. 10.

      . Among the various international instruments on which plaintiffs rely are the 1948 Universal Declaration of Human Rights (Articles 9 and 13(1)), the 1966 International Covenant on Civil and Political Rights (Article 9(1)), the 1969 American Convention on Civil Rights (Articles 5(3), 7(1), and 7(3)), and the 1950 European Convention for the Protection of Human Rights (Article 5(1)). Other Courts have regarded the same or similar international agreements as sources of rules of customary international law. See Filartiga v. Pen-Irala, 630 F.2d 876 (2d Cir.1980); Fernandez v. Wilkinson, 505 F.Supp. 787 (D.Kan.1980), aff’d on other grounds, 654 F.2d 1382 (10th Cir.1981).

      . Plaintiffs find further support for their contention in the revised Restatement, which provides that “[a] state violates international law if, as a matter of state policy, it practices, encourages, or condones ... prolonged arbitrary detention." Restatement (Revised) § 702(e) (Tent. Draft No. 3, 1982).


source: Caselaw Access Project

author: CARRIGAN, District Judge.

license: Public Domain

text:
    Larry A. PAYNE et al., Plaintiffs, v. John R. BLOCK, et al., Defendants.
    Civ. A. No. 84-C-1071.
    United States District Court, D. Colorado.
    Nov. 26, 1985.

      Scott E. Isaacson, David, Graham & Stubbs, Denver, Colo., for plaintiffs.
    Janis E. Chapman, Asst. U.S. Atty., for defendants.
   ORDER

CARRIGAN, District Judge.

Plaintiffs brought this action for declaratory and injunctive relief, compensation for wrongfully withheld funds, and punitive damages. By order of August 17, 1984, I granted a preliminary injunction in favor of the plaintiffs, which remains in effect. The plaintiff has now moved for partial summary judgment on the issue of liability pursuant to Fed.R.Civ.P. 56(c). The parties have briefed the issues, and oral argument would not assist in resolving them.

The undisputed facts are as follows. The plaintiffs, Larry A. Payne and Carolyn M. Payne, are farmers operating a dairy farm near Flagler, Colorado. In 1978, they applied for and received an operating loan from the Farmer’s Home Administration (“FmHA”). Since 1978, the plaintiffs have received additional loans from the FmHA. In the summer of 1983, the plaintiffs suffered crop damage from a severe hailstorm. As a result, they had to buy, for their cattle, feed they otherwise would have produced on their own. Further difficulties experienced during the winter of 1983-84 resulted in reduced milk output from their cattle. For these reasons, the plaintiffs became delinquent in payments on their FmHA loans.

In January, 1984, the plaintiffs and a representative of FmHA signed a Farm and Home Plan, a form executed in connection with all FmHA loans. The form required the plaintiffs to estimate, for 1984, the money needed to operate the farm and to meet family living expenses. It also required the plaintiffs to predict farm income for the year and to list debts to be paid, including payments on FmHA loans.

In connection with their loans from the FmHA, the plaintiffs, since 1981, have been assigning their milk income to the FmHA. Under this arrangement, the plaintiffs regularly sell their milk to a buyer. Each month, the buyer must send the first $4,906.00 of the milk sale proceeds directly to the FmHA to be applied to the plaintiffs’ debt. The remainder of the purchase price, if any, is paid to the plaintiffs. Because of the problems described above, the plaintiffs’ milk income has decreased so that after the amount assigned to the FmHA is deducted, there is insufficient income to allow the plaintiffs to pay their budgeted operating and living expenses as provided for in the Farm and Home Plan.

In December, 1983, the plaintiffs requested that the FmHA release to them a portion of the revenues previously assigned to the FmHA sufficient to allow them to pay the budgeted 1984 operating and living expenses set forth in the Farm and Home Plan. This request was denied by the defendant Steve Thruston in a letter dated January 3, 1984. In early February, 1984, the plaintiffs received a pretermination notice from FmHA informing them that the FmHA was going to accelerate their debts and foreclose on their real estate and chattels. This notice gave the plaintiffs an opportunity to request consolidation, rescheduling, reamortization, or deferral. Plaintiffs requested that relief in a letter dated February 28, 1984. All requested relief was denied in a letter from the FmHA dated June 28, 1984. Plaintiffs commenced this action on May 25, 1984.

Plaintiffs first seek a ruling from this court as follows:

“That defendants must release to the plaintiffs from the proceeds of plaintiffs’ farm operation such amounts as are needed to meet operating and living expenses and as are provided for on an applicable farm and home plan, until such time as defendants provide to plaintiffs reasonable notice and a prior hearing, if requested, on the issue of termination of operating and living funds.”

On February 17, 1984, the United States District Court for the District of North Dakota issued an injunction applicable to all FmHA offices and agents in the case of Coleman v. Block, 580 F.Supp. 194 (D.N.D.1984). In that case, the court certified a nationwide class of FmHA farm program borrowers. Plaintiffs assert that they are member of that class, and defendants have not argued otherwise. The Coleman court issued a permanent injunction as follows:

“[T]he defendants, their agents, subordinates, and employees are enjoined from proceeding to liquidate, or to terminate the living and operating allowances previously determined in the administration of any existing loan unless:
1. the defendants shall give any plaintiff against whom defendants propose to proceed at least 30 days notice:
a. That informs the borrower of his right to an informal hearing to contest the liquidation or termination and to establish eligibility for loan deferral pursuant to 7 U.S.C. § 1981a;
b. That provides the borrower with a statement that gives the reasons for the proposed liquidation or termination;
c. That informs the borrower of the factors that determine eligibility for loan deferral; and
d. That informs the borrower of the official who would preside at the informal hearing. The official designated shall not have been actively involved in the initial decision of liquidation or termination.
2. The official presiding at any informal hearing shall present his decision in writing, giving his reasons therefore, which decision shall be furnished to the borrower.
That the defendants, their agents, subordinates and employees, are enjoined from:
—Accelerating the indebtedness of the plaintiffs,
—Demanding voluntary conveyance by the plaintiffs
—Repossessing chattels of the plaintiffs or in any way proceeding against or depriving the plaintiffs of property in which the defendants have a security interest,
unless:
1. defendants shall give any plaintiffs against whom the defendants propose to proceed at least 30 days notice:
a. That informs the borrower of his right to a hearing to contest the proposed action and to establish eligibility for loan deferral pursuant to 7 U.S.C. § 1981a;
b. That provides the borrower with a statement that gives the reasons for the proposed action;
c. That informs the borrower of the factors that determine eligibility for loan deferral;
d. That informs the borrower of the official who would preside at the hearing. The official designated shall not have been actively involved in the initial decision to take the proposed action.
2. The official presiding at any such hearing shall present his decision in writing, giving his reasons therefore, which decision shall be furnished to the borrower.” 580 F.Supp. at 210-11.

In my order granting a preliminary injunction, I refused to accept the defendants’ argument that this case is distinguishable from Coleman• simply because it involves assignment of proceeds of milk sales. I there stated:

“The existence of the income assignment does not modify the FmHA’s obligation to give first priority to meeting budgeted farm home and operating expenses as set forth in the 1984 Farm and Home Plan. The agency cannot over-ride procedural due process rights clearly intended by Congress by so structuring the form of the transaction as automatically to impose losses upon the farmer without any occasion arising for a hearing. This kind of bureaucratic ‘heads I win, tails you lose’ practice implemented by the assignment of income, resulted in gross inequities in this case. Moreover, because of the form of the transaction, the government has placed itself in a position to argue that actual changes in the economic positions of the parties, and in their relative shares of the farm proceeds, may be imposed on the farmers without any semblance of procedural due process. This merely values form over substance.” (August 17,1984 Order at p. 7.)

Defendants have offered no further argument on this issue, and it appears to me that, in substance, this case is indistinguishable from Coleman. Therefore, I find and conclude that the plaintiffs are entitled to the requested order.

Plaintiffs next move for an order stating as follows:

“That defendants must release to the plaintiffs from the proceeds of plaintiffs’ farm operation such amounts as are needed to meet operating and living expenses and as are provided for on an applicable farm and home plan, until such time as defendants provide to plaintiffs reasonable notice of, and the right to apply for, under appropriate regulations, a deferral of loan payments under 7 U.S.C. § 1981a.”

This issue was also decided in the plaintiffs’ favor in Coleman. Furthermore, it is established law in this circuit that 7 U.S.C. § 1981 imposes a duty upon the defendants to implement a deferral program by uniform regulations. Matzke v. Block, 732 F.2d 799 (10th Cir.1984). For these reasons, I find and conclude that the plaintiffs are entitled to this relief.

Plaintiffs’ third requested relief is for an order stating as follows:

“That defendants may not foreclose the plaintiffs’ loans or liquidate their security without first providing the procedural rights specified above.”

This relief follows directly from the conclusion reached above — that the plaintiffs are entitled to due process protections in the liquidation or foreclosure by the FmHA of the plaintiffs’ loan security. Therefore, I find and conclude that this relief should be granted.

Finally, the plaintiffs seek an order stating as follows:

“That such prior seizures from plaintiffs of planned living and operating funds as have occurred through the retention of amounts received by defendants under a milk assignment, or by any other method, were in violation of the plaintiff’s right to due process of law. Such amounts as have been so seized and have not been refunded must be refunded to plaintiffs.”

In their answer brief, the defendants’ sole argument is that the plaintiffs have no property interest in this case that would provide a basis for a claim of denial of due process and therefore that there has been no unconstitutional seizure in this case. This argument was directly addressed and refuted in the Coleman case and is the law of this case. See 580 F.Supp. at 207-08. Therefore, I find and conclude that the plaintiffs are entitled to the requested relief.

Accordingly, it is ordered:

1. That the defendants must release to the plaintiffs from the proceeds of the plaintiffs’ farm operation such amounts as are needed to meet operating and living expenses and as are provided for on an applicable farm and home plan, until such time as the defendants provide to the plaintiffs reasonable notice and a prior hearing, if requested, on the issue of termination of operating and living funds.

2. That the defendants must release to the plaintiffs from the proceeds of the plaintiffs’ farm operation such amounts as are needed to meet operating and living expenses and as are provided for on an applicable farm and home plan, until such time as the defendants provide to the plaintiffs reasonable notice of, and the right to apply for, under appropriate regulations, a deferral of loan payments under 7 U.S.C. § 1981a (1982).

3. That the defendants may not foreclose the plaintiffs’ loans or liquidate the plaintiffs’ security without first providing the procedural rights specified above.

4. That such prior seizures from the plaintiffs of planned living and operating funds as have occurred through the retention of amounts received by the defendants under a milk assignment, or by any other method, were in violation of the plaintiffs’ right to due process of law. Such amounts as have been so seized and have not been refunded must be refunded to the plaintiffs.


author: CRABB, Chief Judge.

text:
    UNITED STATES of America, Plaintiff, v. A RESIDENCE LOCATED AT 218 3RD STREET, NEW GLARUS, WISCONSIN, Defendant, and UNITED STATES of America, ONE SAFETY DEPOSIT BOX LOCATED AT the BANK OF SHOREWOOD HILLS, 810 SHOREWOOD BLVD., MADISON, WISCONSIN, Defendant.
    Nos. 84-M-191, 84-M-193.
    United States District Court, W.D. Wisconsin.
    Nov. 26, 1985.

      Grant Johnson, First Asst. U.S. Atty., Madison, Wis., for plaintiff.
    Charles Giesen, Giesen & Berman, Madison, Wis., for defendant.
   OPINION AND ORDER

CRABB, Chief Judge.

The government appeals from orders of the United States Magistrate entered in these two proceedings requiring the return of certain seized property to its owner, movant David Lewallen.

The record reveals that on November 13, 1984, the United States Magistrate issued a search warrant authorizing a search of “a single-family, ranch style residence and an unattached shed type structure, all located at 218 Third Street, New Glarus, Wisconsin,” and seizure of enumerated kinds of records evidencing either the obtaining and concealment of assets or the expenditures of money by David Lewallen since 1978; indicia of ownership of the property being searched; and photographs of co-conspirators, assets, or controlled substances, particularly cocaine. Supporting the application for the warrant were lengthy affidavits sworn to by Tommy Cauthen, Special Agent, Federal Bureau of Investigation, and by George Paul, Special Agent, Criminal Investigation Division of the Internal Revenue Service, detailing a four year investigation of David Lewallen and setting forth the bases for the affiants’ beliefs that movant had violated 21 U.S.C. §§ 841, 843, 844, and 846, as well as 28 U.S.C. §§ 7201, 7203, and 7206. Affiants swore to instances in which Lewallen was alleged to have sold large quantities of cocaine or to have acquired expensive assets that would suggest he had not reported all of his taxable income for the years 1977-1983. Also, Agent Paul averred as follows:

7. That on Tuesday, 11/06/84,1 contacted the Criminal Investigation Branch of the Internal Revenue Service Center at Kansas City, Missouri. At that time I caused a search to be made of the Internal Revenue Service Records located at the Midwest Service Center in order to determine whether or not David R. Lewallen had filed a Federal Income Tax Return for the tax year 1983. On 11/06/84 I received confirmation from the Midwest Service Center that David R. Lewallen had not filed an income tax return for the year 1983. The Service Center records reflect that Lewallen has filed three requests for extension of time to file his 1983 Federal Income Tax Return. The records of the IRS-Midwest Service Center also reflected that Lewallen’s income tax return for the tax year 1983 was due to be filed by October 15, 1984 and, based upon the search conducted by Internal Revenue Service employees in Kansas City that return was not filed by October 15, 1984 as required and has not yet been filed.

Following issuance of the warrant, agents of the Federal Bureau of Investigation seized items from the New Glarus residence which they listed in a fifteen page inventory filed with the magistrate.

On November 14, 1984, the magistrate issued a second warrant, authorizing the search of “One safety deposit box No. 1083, located at The Bank of Shorewood Hills, 810 Shorewood Boulevard, Madison, Wisconsin.” Supporting the application for this warrant were the same affidavits of Paul and Cauthen filed in support of the New Glarus warrant, supplemented by an affidavit of Dale G. Mueller, Supervisory Special Agent, Federal Bureau of Investigation, detailing information he asserted established probable cause to believe that the safe deposit box contained evidence of criminal activity by its owner, David Lewallen.

Search of the safe deposit box led to seizure of approximately eighteen items, including six large emeralds and several containers of gold coins.

On November 27, 1984, David Lewallen moved for return of the property seized in the execution of the search warrant for the New Glarus property, contending that he was entitled to lawful possession of some of it, that he needed certain papers returned to him to permit him to conduct his personal and business affairs, that the warrant authorizing the search had been issued without probable cause, that the warrant did not describe with sufficient particularity the items to be seized, and that the seizure of some of the items exceeded the authority of the warrant. Later, Lewallen amended the motion to include a request for the return of items seized in the search of the safe deposit box. On January 28, 1985, Lewallen moved for an evidentiary hearing, contending that the affidavit of Agent Paul contained material false statements and deliberate material omissions made by the affiant with either knowledge of their falsity or reckless disregard for their truth, Franks v. Delaware, 438 U.S. 154, 98 S.Ct. 2674, 57 L.Ed.2d 667 (1978), and also that the seizure of the bank records relating to movant violated 12 U.S.C. § 3401 et seq., the Right to Financial Privacy Act.

On April 29, 1985, over the government’s strenuous objections, the magistrate held an evidentiary hearing on Lewallen’s motion. In an order entered April 16, 1985, granting the motion for an evidentiary hearing, the magistrate noted that the government had conceded that paragraph 7 of Paul’s affidavit was inaccurate and that, in fact, Lewallen had filed his 1983 tax return before its October 15, 1984 due date. The magistrate held that when paragraph 7 is excised from the affidavit, “there appears to be insufficient evidence to support a finding of probable cause to believe there was a violation of the laws with respect to the 1983 tax year.” (Order of April 16, 1985, p. 4)

On the basis of the evidence adduced at the evidentiary hearing, the magistrate concluded as a matter of law that Paul’s statement in paragraph 7 had been made with reckless disregard for the truth. He found also that the materials seized in the execution of the warrant for the safe deposit box were taken in violation of § 3420 of the Right to Financial Privacy Act, 12 U.S.C. § 3401 et seq. He ordered the return of those seized materials relating to the 1983 tax year or obtained from the search of the safety deposit box.

As a threshold matter, the government argues that the magistrate should have characterized his order as a report and recommendation pursuant to subsection (b)(1)(C) of 28 U.S.C. § 636, rather than as an order. I agree.

The Federal Magistrates Act, 28 U.S.C. §§ 631-639, sets forth the jurisdiction and powers of magistrates. Magistrates have all the powers and duties imposed upon their predecessors, United States Commissioners, § 636(a)(1); the power to conduct trials of misdemeanors, § 636(a)(3); the power, upon designation by a judge, to hear and determine “any pretrial matter pending before the court,” with certain enumerated exceptions, one of which is a motion to suppress evidence, § 636(b)(1)(A); the authority to conduct evidentiary hearings and submit to a judge proposed findings of fact and recommendations for disposition, of any motions excepted in § 636(b)(1)(A), and of applications for post-trial relief brought by convicted persons and of prisoner petitions challenging conditions of confinement, § 636(b)(1)(B). Also, magistrates may be designated as special masters, § 636(b)(2); may conduct any or all proceedings in a jury or nonjury civil matter upon consent of the parties, § 636(c); and “may be assigned such additional duties as are not inconsistent with the Constitution and laws of the United States,” § 636(b)(3).

The two subsections that might apply to this proceeding are § 636(b)(1) (pretrial matters) and § 636(b)(3) (additional duties). However, a motion for return of seized property is not a “pretrial matter” within the meaning of § 636(b)(1); by its very nature, such a motion is made after seizures that do not lead directly to indictment and trial. Once an indictment is returned, the person aggrieved by the seizure would file a motion to suppress the seized evidence.

Disposition of a motion for the return of seized property is not a mere procedural or administrative function that would fall within the confines of § 636(c); its resolution frequently requires factfinding, credibility assessment, and the exercise of discretion, all of which are functions that Congress has retained in district judges. See United States v. Curry, 767 F.2d 328 (7th Cir.1985); In re Grand Jury Appearance of William C. Cummings, 615 F.Supp. 68 (W.D.Wis.1985). Thus, since motions for the return of property do not fit precisely into either § 636(b)(1) or § 636(b)(3), it could be argued that a magistrate lacks the statutory authority even to hear and make recommendations for the disposition of such motions. However, it is unlikely that Congress would have given magistrates the power to conduct evidentiary hearings and submit proposed findings of fact on motions to suppress illegally seized evidence, but would not have given magistrates the authority to hear and make recommendations on motions to return seized property, when the motions are essentially identical. I conclude that magistrates are empowered by implication to conduct evidentiary hearings and to submit proposed findings of fact and recommendations on motions for the return of seized property.

I will construe the magistrate’s order as a report and recommendation and determine whether to accept or reject his findings, giving de novo consideration to those portions of the report to which the government has made specific objections. 28 U.S.C. § 636(b)(1). The first of these portions is the magistrate’s proposed finding of fact that Agent Paul acted with reckless disregard for the truth in making the statement in paragraph 7 of his affidavit. See Franks v. Delaware, 438 U.S. 154, 98 S.Ct. 2674. Preliminary to this finding, the magistrate found that Agent Paul swore that on November 6, 1984, he had contacted the Criminal Investigation Branch of the Internal Revenue Service Center at Kansas City, Missouri, and learned that same day that Lewallen’s 1983 tax return had not been filed as of its -due date, October 15, 1984; that, in fact, Lewallen had filed his 1983 tax return before October 15, 1984; and that once a tax return has been mailed to the IRS and enters the “pipeline” (a series of stations at which the return is processed), its existence will not show up’ on the computer for a minimum of four weeks, and that the minimum time necessary for confirming the fact and date of filing is ten weeks from the date of filing.

This last finding of fact by the magistrate is not made expressly, but is implicit in his report. It is derived from the testimony of Mark Frank, who stated that he had telephoned the IRS Information Center and the IRS Public Affairs Department on behalf of Lewallen and had been given information about the processing of tax returns. Frank testified also that he was told that employees of the United States Justice Department would be unable to confirm the fact and date of filing any sooner than could members of the public.

From my own review of the challenged affidavit, the transcript of the evidentiary hearing, and the briefs of both parties, I find that the magistrate’s proposed preliminary findings of fact are correct. However, I am unable to find, as he did, that Paul made his averment with reckless disregard for the truth.

The government contends that the magistrate erred in admitting and relying upon the testimony of Mark Frank because it was hearsay. Although the government concedes that hearsay evidence may be admitted and relied upon in an evidentiary hearing on a preliminary question, Rules 104 and 1101(d), Federal Rules of Evidence, it argues that the generally relaxed rules of evidence in force at an evidentiary hearing should not be interpreted as allowing the receipt of hearsay evidence on the crucial fact to be determined at the hearing. The flaw in the government’s argument is that the challenged testimony is not hearsay. Rather, it is an admission by a party opponent, as the magistrate held in allowing it into evidence. See Rule 801(d)(2), Federal Rules of Evidence. Therefore, it was not improper for the magistrate to receive the testimony or to rely upon it.

Lewallen showed that a return filed between October 10 and October 15 could not have been processed or even located by November 6, 1984. From this, two reasonable inferences could be drawn: 1) that Agent Paul did not receive the information he said he did, or 2) that he did receive this information. Lewallen argues that if the latter is true, the finder of fact may presume that as an experienced revenue agent, Paul would have known that the information was unreliable.

The government argues that because the movant failed to show that the Criminal Investigation Division would not have had special access to tax return information, he failed to prove that Paul’s averment was false or based on information he knew to be unreliable. However, Frank did testify that he had asked the IRS employees whether Justice Department officials had access to expedited information about tax returns and was told they did not. This suggests strongly, as does the evidence concerning the “pipeline,” that the system is not susceptible of monitoring by any agency until a return has reached a certain station in the processing. The fact that Agent Paul’s “information” was proven to be wrong does not provide much support for the government’s argument that the Criminal Investigation Department should be assumed to have unique, reliable sources of information about the status of recently filed tax returns.

However, I do not believe the magistrate should have indulged in the presumption that an experienced revenue agent would have known that the information he received was unreliable. Although it seems likely that a revenue agent would have known the difficulties of determining the status of recently filed tax returns and therefore, would have known of the unreliability of the information he was receiving, it is not so clear a proposition as to enable the magistrate essentially to take judicial notice of it as an uncontestable fact.

Setting aside the presumption that an experienced revenue agent would have known that the information he received from Kansas City was unreliable, the magistrate was left with two equally plausible inferences that could be drawn from the facts: that Paul did receive the information he said he did or that he did not. Where two inferences may be drawn from the same facts, the finder of fact may not choose between them. In this instance, the magistrate should have concluded that the movant had not met his burden of proof on the question of the asserted illegality of the search warrants as they related to the 1983 tax year. Therefore, I decline to adopt the magistrate’s proposed conclusions of law as to Paul’s state of mind or his recommendation to hold the warrants invalid because of Paul’s statement.

Citing United States v. Leon, — U.S. -, 104 S.Ct. 3405, 82 L.Ed.2d 677 (1984), the government suggests that whatever their defects, the search warrants at issue here .should not be held invalid because the affiants acted in good faith. In Leon the Supreme Court addressed the question of modifying the Fourth Amendment exclusionary rule so as not to bar the use at trial of evidence obtained by officers acting in reasonable reliance on a search warrant later found to be insufficient. It is unlikely that Leon applies to a situation which does not involve the suppression of evidence; in that case the Supreme Court was concerned with “[t]he substantial social costs exacted by the exclusionary rule for the vindication of Fourth Amendment rights____” Id. 104 S.Ct. at 3413. Even if, as a general rule, Leon did apply to motions for the return of property, that ease would not be applicable in this situation. In Leon, the Supreme Court held that in all but four circumstances evidence obtained in reasonable reliance upon a facially valid search warrant could be admitted into evidence. The first of these circumstances is the situation in which a warrant is issued upon deliberate or reckless material misrepresentations by the affiant. Id. at 3417. Since a reckless material misrepresentation is the basis for the movant’s claim that these search warrants should be invalidated, Leon would not help the government if the magistrate were correct in his proposed finding that Paul had acted with reckless disregard for the truthfulness of his averments.

I turn next to the second issue raised by the government: that the magistrate erred in interpreting 12 U.S.C. § 3420 of the Right to Financial Privacy Act to require the custodian of materials subpoenaed by the grand jury to be the person that physically presents the subpoenaed materials to the grand jury.

On this issue, the magistrate found as fact that at 9:15 a.m. on November 14, 1984, Special Agent Dale Mueller of the Federal Bureau of Investigation, and Ray Shields, an agent of the Internal Revenue Service, presented a grand jury subpoena to Leon Waters, Cashier of the Bank of Shorewood Hills. The subpoena directed Waters to appear on that same date at 10:00 a.m. to the grand jury room of the United States District Court and to bring with him records pertaining to the rental of any safety deposit box by, for, or on behalf of David R. Lewallen. The agents represented to Waters that the subpoena would be satisfied if Waters turned over to the agents copies of the documents sought. In reliance on these representations, Waters made copies of the documents and turned them over to the agents. He did not appear personally before the grand jury.

The subpoenaed bank records were used to obtain a warrant for the search of movant’s safety deposit box at the Bank of Shorewood Hills. The materials were not presented to the grand jury. The district court was never informed that materials responsive to the grand jury subpoena had been disclosed to Agent Mueller.

From these facts, the magistrate conclude that the government had violated 12 U.S.C. § 3420, which provides in pertinent part:

Financial records about a customer obtained from a financial institution pursuant to a subpoena issued under the authority of a federal grand jury—
(1) shall be returned and actually presented to the grand jury;
(2) shall be used only for the purpose of considering whether to issue an indictment or presentment by that grand jury, or of prosecuting a crime for which that indictment or presentment is issued, or for a purpose authorized by Rule 6(e) of the Federal Rules of Criminal Procedure;
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The government contends that the magistrate read the provisions of § 3420(1) too strictly in requiring personal delivery to the grand jury by the custodian of financial records. It argues that the magistrate should have simply interpreted the statute according to its plain meaning and applied a common sense interpretation. A common sense interpretation is that someone other than the custodian will “obtain” the records to return and actually present them to the grand jury. The statute does not require the custodian to do the returning. Although the point is a close one, I am inclined to agree with the government. I do not find the language of the statute to be as clear as the government contends it is, but I have difficulty believing that Congress would have intended to impose on financial institutions the burden of sending personnel to appear before grand juries that might be meeting hundreds of miles from the bank’s location, simply to turn over financial records.

The magistrate read the statute and its legislative history as susceptible of no construction other than a requirement that the custodian return financial records to the grand jury in person. He quoted the legislative history:

The committee did adopt an amendment which requires that use of financial records obtained pursuant to a grand jury subpoena be more strictly limited. The amendment requires that the records be actually presented to the grand jury and used only for the purposes of the grand jury investigation, i.e. indictment and prosecution, [emphasis added]

House Report No. 95-1383; 1978 United States Code Congressional and Administrative News 9307. Also, he noted that a strict construction of § 3420 is consistent with the purpose of the Act, which imposes stringent limitations on government access to the customer records of financial institutions.

I agree with the magistrate that the Act should be construed strictly against the government, but I believe § 3420 may fairly be read as requiring that financial records subpoenaed by the grand jury be used only for the purposes enumerated in the statute to avoid misuse of grand jury subpoenas by prosecutors, rather than as requiring the custodian of the financial records to deliver them personally to a grand jury. The phrase “obtained from a financial institution” implies that the government may gain physical custody of financial records pursuant to a subpoena, subject to the requirement that the materials be returned and actually presented to the grand jury rather than used for other, unauthorized purposes by the prosecutor.

The only other court to have considered this question reached the same conclusion as the magistrate. However, it did not analyze the basis for its conclusion and thus, is not persuasive. See In re Casti glione, 587 F.Supp. 1210 (E.D.Calif.1984). I conclude that a fair reading of § 3420 does not lead to the interpretation urged by the movant that the custodian of financial records must be the person that actually presents those records to the grand jury.

In holding that the requirements of § 3420 may be met by having the custodian turn over subpoenaed documents to an authorized representative of the government, I do not intend to imply that the government’s representative is authorized to do anything other than deliver the documents directly to the grand jury in the same condition in which the representative received them from the custodian. The movant has alleged in this motion and the magistrate has found as fact that agents Mueller and Shields used the documents to obtain a search warrant. My holding today does not address the legality of that action. That issue has not been briefed by the parties either before the magistrate or to this court.

I decline to adopt the recommendation by the magistrate and his proposed conclusions of law with respect to the government’s alleged violation of § 3420, insofar as that violation is defined as being the turning over of subpoenaed financial records by the custodian to an authorized representative of the government for presentation to the grand jury in response to a grand jury subpoena.

ORDER

IT IS ORDERED that the findings of fact proposed by the magistrate in what I construe as his recommendation of July 31, 1985, are ADOPTED as the court’s own, except with respect to finding (7) that relates to Agent Paul’s state of mind. Further, IT IS ORDERED that the conclusions of law proposed by the magistrate are not adopted as the court’s own. His recommendation to order the return of the seized property is DECLINED.

The motions of David Lewallen for the return of property are DENIED.

      . 21 U.S.C. § 841 prohibits the manufacture, distribution, and possession of controlled substances; 21 U.S.C. § 843 prohibits the use of communication facilities in the distribution of controlled substances; 21 U.S.C. § 844 prohibits possession of a controlled substance; and 21 U.S.C. § 846 prohibits attempts or conspiracies to commit any of the offenses defined in sub-chapter I of Chapter 13 of Title 21 (Drug Abuse Prevention and Control). 26 U.S.C. § 7201 makes criminal a willful attempt to evade payment of federal taxes; § 7203 makes criminal a willful failure to file a return, keep records, supply information, and pay taxes; and § 7206 makes criminal a willful filing of a false return or a concealment of goods or commodities with intent to evade the assessment or collection of taxes.

      . Although the government did not appeal from the magistrate’s order setting the hearing, at the outset of the hearing, before any evidence was introduced, it raised oral objections to the holding of the hearing. To accommodate the government, the magistrate adjourned the evidentiary hearing for thirty minutes to allow the government to take an appeal to a judge of the district court. The government chose not to take such an appeal, apparently in the belief that the magistrate's order was not appealable.

      . In its reply brief, the government states that “[c]Iearly, a Justice Department employee stands in a different position [with respect to access to tax records] than an employee of the Internal Revenue Service.” I do not find this proposition as self-evident as the government suggests.

      . The government maintains that the magistrate erred in allocating the burden of production of evidence, thus penalizing the government. The magistrate did state in his report that the burden of production of proof had shifted to the government at the conclusion of the movant’s presentation. The government is technically correct in arguing that the burden of production does not "shift” to the government at the end of the movant’s presentation. However, if the government stays silent, the case (or the hearing) is over, and the trier of fact must decide whether the moving party has proved his case or failed to prove it. Here, the magistrate believed that the movant had adduced a preponderance of evidence that Paul had acted with reckless disregard for the truth and held, merely, that the movant had met his burden of proof.

      . For the purpose only of deciding this motion, I will assume that the return of property would be an appropriate remedy for a violation of the Right to Financial Privacy Act.

      . In a memorandum submitted to the court on November 15, 1985, Lewallen argues that the seized materials should be returned whether they were legally or illegally seized in the first place, simply because they have been in the government's possession long enough for the government to have obtained all the information it needed from the materials. Since this is the first time that this argument has been raised, and the government has not had an opportunity to respond to it, I do not address it in this opinion.