Donovan, Raymond J., Secretary of Labor, United States Department of Labor v. Spadea, Samuel, 757 F.2d 74, 3rd Cir. (1985)
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Scribd Government DocsDonovan, Raymond J., Secretary of Labor, United States Department of Labor v. Spadea, Samuel, 757 F.2d 74, 3rd Cir. (1985)
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Scribd Government Docs757 F.
2d 74
118 L.R.R.M. (BNA) 3089, 102 Lab.Cas. P 11,402
DONOVAN, Raymond J., Secretary of Labor, United States
Department of Labor
v.
SPADEA, Samuel, Appellant.
Nos. 84-1732, 84-1766.
United States Court of Appeals,
Third Circuit.
Argued Jan. 15, 1985.
Decided March 18, 1985.
Rehearing and Rehearing In Banc Denied April 12, 1985.
Victor J. Van Bourg (argued), Van Bourg, Weinberg, Roger & Rosenfeld,
San Francisco, Cal., for appellant; David W. Elbaor, Connerton, Bernstein
& Katz, Washington, D.C., of counsel.
Joan M. Roller (argued), Atty. U.S. Dept. of Labor, Marshall H. Harris,
Regional Sol., Philadelphia, Pa., Edward S.G. Dennis, Jr., U.S. Atty.,
Walter S. Batty, Jr., Asst. U.S. Atty., Chief of Appeals, Edward T. Ellis,
Asst. U.S. Atty., Philadelphia, Pa., for appellee.
Before HUNTER, HIGGINBOTHAM, Circuit Judges, and
DEBEVOISE,* District Judge.
OPINION OF THE COURT
JAMES HUNTER, III, Circuit Judge:
This appeal arises from two orders of the United States District Court for the
Eastern District of Pennsylvania. One ordered appellant Samuel Spadea to
comply with a subpoena ad testificandum issued by the Department of Labor
("DOL"). The other held him in civil contempt of court for refusing to do so.
Because we hold that the subpoena is valid and that Spadea's refusal to comply
with it was without just cause, we will affirm the judgments of the district
court.
I. FACTS AND PROCEEDINGS BELOW
2
In the spring of 1984, DOL's Labor-Management Services Administration
("LMSA"), to which the Secretary of Labor had delegated his powers under the
Labor-Management Reporting and Disclosure Act ("LMRDA"), 29 U.S.C.
Secs. 401-531 (1982), began an investigation into the activities of the Iron
Workers District Council of Philadelphia and Vicinity ("District Council"). The
investigation was part of LMSA's Compliance Audit Program, under which it
probed possible violations of LMRDA. District Council Treasurer Samuel
Spadea refused to cooperate with LMSA investigators. Consequently, on March
26, 1984, LMSA's Regional Administrator, Hilary Sheply, issued a subpoena
ad testificandum addressed to Spadea. Although Spadea appeared at the time
and place specified, he refused to testify.
The Secretary of Labor ("the Secretary") therefore brought suit to enforce the
subpoena. The district court entered an order directing Spadea to show cause
why the relief sought by the Secretary should not be granted. After a show
cause hearing on November 26, 1984, the district court rejected Spadea's
challenges to the validity of the subpoena, and ordered Spadea to appear for
questioning that afternoon at the DOL's Philadelphia offices. Spadea made the
required appearance, but once again refused to testify, asserting the Fifth
Amendment privilege against self-incrimination.
The Secretary then petitioned the district court for an order holding Spadea in
civil contempt of court. On December 7, 1984, at the hearing on the
government's motion, the district court asked Spadea the following six
questions, which had been framed by the Secretary:
5Is this your by-laws of the District Council?
6What is the geographical area of the Iron Workers, Philadelphia and Vicinity ...?
7
[W]hat
is the date of the last regularly scheduled officer election in the District
Council?
8[I]s this ... the latest copy of the constitution of the Iron Workers?
9[A]re you an officer of the District Council of Philadelphia and Vicinity?
10
[H]ow
long have you been an officer of the District Council and what is your
position in the District Council?
11
App. at 284, 289, 291, 294, 297, 300.
11
App. at 284, 289, 291, 294, 297, 300.
12
Spadea, again asserting the Fifth Amendment privilege against selfincrimination, refused to answer each of these questions. The district court ruled
that none of the questions was likely to elicit incriminatory responses, and
directed Spadea to answer. When he refused to do so, the district court held him
in civil contempt of court, and ordered that he be committed into the custody of
the United States Marshal at Philadelphia until he answers the questions.
II. VALIDITY OF THE SUBPOENA
A.
13
LMRDA empowers "the Secretary or any officers designated by him" to issue
subpoenas for the purpose of investigating possible violations of the Act. 29
U.S.C. Sec. 521(b). Spadea argues that the district court erred in enforcing the
subpoena because the officer who signed it, Hilary Sheply, was not duly
designated by the Secretary. This argument is premised upon the fact that in
May 1984, after the subpoena was issued but before the district court's
enforcement order, DOL underwent an internal reorganization. Prior to this
time, the Secretary's powers under both LMRDA and the Employee Retirement
and Income Security Act ("ERISA") had been delegated to LMSA. See United
States Department of Labor, Secretary's Order 9-77 (Sept. 14, 1977). On May 3,
1984, after the LMSA's ERISA powers had been transferred to another agency,
LMSA was dismantled, and the Secretary's enforcement powers under LMRDA
were redelegated to the newly-created Office of Labor-Management Standards
("OLMS"). See United States Department of Labor, Secretary's Order No. 3-84
(May 3, 1984). Before this reorganization, the Secretary's subpoena power
under LMRDA had been delegated to LMSA Regional Administrators. See
United States Department of Labor, Labor-Management Services
Administration Order No. 5-5, (Sept. 30, 1981). After the reorganization, the
subpoena power was redelegated to OLMS Area Administrators. See United
States Department of Labor, Office of Labor-Management Standards Order No.
4-1 (August 16, 1984).
14
Thus on March 26, 1984, the date that Sheply issued the subpoena, he was duly
authorized to do so as Regional Administrator of LMSA. Spadea does not
contest this. Rather, his argument is that the subpoena was invalid at the time
that the district court enforced it. In essence, he argues that the subpoena
expired when OLMS supplanted LMSA and when the subpoena power was
redelegated to OLMS Area Administrators. This argument is without merit.
Congress has delegated subpoena power under LMRDA to the Secretary. This
congressional delegation of power did not lapse merely because the Secretary
redelegated it from one instrumentality of his Department to another. "The acts
of administrative officials continue in effect after the end of their tenures until
revoked or altered by their successors in office. Any other general rule would
pose an undue burden on the administrative process." United States v. Wyder,
674 F.2d 224, 227 (4th Cir.), cert. denied sub nom. Mallory v. United States,
457 U.S. 1125, 102 S.Ct. 2944, 73 L.Ed.2d 1340 (1982). Accord Donovan v.
National Bank of Alaska, 696 F.2d 678, 682-83 (9th Cir.1983). We hold,
therefore, that neither the replacement of LMSA with OLMS nor the
displacement of the subpoena power from Regional to Area Administrators
affected the validity of this subpoena.
B.
15
Spadea also argues that the district court erred in enforcing the subpoena
because it was issued for an improper purpose. LMRDA empowers the
Secretary to conduct investigations "to determine whether any person has
violated or is about to violate any provision of [the Act]" except Title I, and to
issue subpoenas to facilitate such investigations. 29 U.S.C. Sec. 521(a), (b).
The subpoena served upon Spadea states that its purpose is to determine
"whether any person has violated or is about to violate any provisions of the
Labor-Management Reporting and Disclosure Act, ... except Title [I] or
amendments made by the Act to other statutes." App. at 3 (citations omitted).
The subpoena is, therefore, squarely within the statutory powers of the
Secretary.
16
Nevertheless, Spadea argues that the subpoena was issued for an improper
purpose because LMSA's primary objective was to uncover possible criminal
violations of LMRDA. He urges us to recognize a general, albeit
nonconstitutional, rule that administrative subpoenas issued to develop criminal
cases are unenforceable. But the cases Spadea relies upon, Powell v. United
States, 379 U.S. 48, 85 S.Ct. 248, 13 L.Ed.2d 112 (1964), Donaldson v. United
States, 400 U.S. 517, 91 S.Ct. 534, 27 L.Ed.2d 580 (1971), and United States v.
La Salle National Bank, 437 U.S. 298, 98 S.Ct. 2357, 57 L.Ed.2d 221 (1978),
do not establish any such general rule. Powell, Donaldson, and La Salle are
decided under section 7602 of the Internal Revenue Code, which formerly gave
the Commissioner of Internal Revenue investigative powers only for certain
civil purposes. See 26 U.S.C. Sec. 7602 (1982), (amended by Tax Equity and
Fiscal Responsibility Act of 1982 ("TEFRA"), Pub.L. No. 97-248, 96 Stat. 324
(1982)). These cases do no more than establish standards for determining when
an administrative agency that has only civil enforcement powers is engaged in
an investigation aimed at developing a criminal case, and is hence acting
beyond its statutory authority.
17
As the Supreme Court stated in La Salle, the validity of administrative
subpoenas "depend[s] ultimately upon whether they [are] among those
authorized by Congress." 437 U.S. at 307, 98 S.Ct. at 2362. Accordingly, where
Congress has empowered an administrator to investigate criminal violations,
Powell and its progeny are inapplicable, and courts have not hesitated to
enforce administrative subpoenas aimed at developing criminal cases. See, e.g.,
Pickel v. United States, 746 F.2d 176, 185 (3d Cir.1984) (I.R.S. summons
aimed at investigating criminal violations is valid under I.R.C. Sec. 7602 as
amended by TEFRA); S.E.C. v. Dresser Industries, 628 F.2d 1368, 1378
(D.C.Cir.) (La Salle applies solely to statutory scheme of I.R.C.), cert. denied,
449 U.S. 993, 101 S.Ct. 529, 66 L.Ed.2d 289 (1980).
18
In sum, we find no support for the extraordinary proposition that federal courts
have created, or would be free to create, nonconstitutional constraints upon the
power of Congress to authorize investigations into possible violations of federal
laws. The subpoena in this case was issued for a proper purpose, since it is
within the powers Congress has delegated to the Secretary. The district court's
enforcement order will therefore be affirmed.
C. THE FIFTH AMENDMENT
19
Finally, Spadea appeals the district court's order holding him in civil contempt
of court. He argues that, under the Fifth Amendment's Self-Incrimination
Clause, he had just cause for refusing to answer the six questions put to him by
the court. As the Supreme Court held in Hoffman v. United States, 341 U.S.
479, 486, 71 S.Ct. 814, 818, 95 L.Ed. 1118 (1951), "[t]he witness is not
exonerated from answering merely because he declares that in doing so he
would incriminate himself--his say-so does not of itself establish the hazard of
self incrimination. It is for the court to say whether his silence is justified." In
order for the court to find that the privilege against self-incrimination applies, it
must be "evident from the implications of the question, in the setting in which it
is asked, that a responsive answer to the question or an explanation why it
cannot be answered might be dangerous because injurious disclosure could
result." Id. at 486-87, 71 S.Ct. at 818.
20
Spadea asserts that the Hoffman standard is met here because the Secretary's
investigation might uncover evidence of criminal violations of LMRDA.
However, the contempt judgment here was based on his refusal to answer six
particular questions concerning the length of his tenure as a union officer, the
territorial jurisdiction of the District Council, and the like. We agree with the
district court that these questions are facially innocuous and do not appear
likely to elicit incriminatory responses. We are mindful that the Fifth
Amendment privilege may be invoked not only against direct admissions of
crimes, but also against disclosures that might furnish a "link in a chain of
evidence needed to prosecute the claimant...." Id. at 486, 71 S.Ct. at 818.
Hoffman, however, admonishes that "this protection must be confined to
instances where the witness has reasonable cause to apprehend danger from a
direct answer." Id. Again, we agree with the district court that Spadea could
have no such "reasonable cause to apprehend danger" from direct answers to
the particular questions that the court asked. We will therefore affirm the
judgment of the district court.
Honorable Dickinson R. Debevoise, United States District Judge for the
District of New Jersey, sitting by designation
