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RESOLUTION TRUST CORP. v. LOPEZ

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA


May 13, 1992

RESOLUTION TRUST CORPORATION, Petitioner,
v.
PEDRO RAMON LOPEZ and TERESA SALDISE, Respondents.

The opinion of the court was delivered by: LOUIS F. OBERDORFER

ORDER

 On May 5, 1992, this Court issued an Order granting the RTC's motion to enforce two subpoenas duces tecum, directing respondents Lopez and Saldise to produce forthwith the tax returns and attached schedules and exhibits described in category 1 of those subpoenas, staying enforcement of the remainder of the subpoenas, staying enforcement of the remainder of the subpoenas for twenty days, and transferring this case forewith to the Southern District of Florida. On May 7, the Clerk of Court effected the transfer to the Southern District of Florida. On May 8, respondents moved here for reconsideration or a stay pending appeal of that portion of the Court's decision which required them to produce the tax returns and the attached schedules and exhibits. The Court conducted a conference call on the motion on May 13, and now issues the following rulings.

 The May 5 Order held that the respondents' tax returns and the associated schedules and exhibits were subject to disclosure under the "required records" doctrine articulated by the Supreme Court in Shapiro v. United States, 335 U.S. 1 (1948). Under Shapiro and its progency, certain records will fall outside the scope of the Fifth Amendment privilege against self-incrimination if they are required to be kept as part of a regulatory scheme, and they "'have assumed "public aspects" which render them at least analogous to public documents.'" FSLIC v. Rodrigues, 717 F. Supp. 1424, 1426 (N.D. Cal. 1988) (quoting Grosso v. United States, 390 U.S. 62, 67-68 (1968)). Respondents now argue that application of this doctrine to income tax returns is contrary to the Seventh Circuit's decision in United States v. Porter, 711 F.2d 1397, 1404 (7th Cir. 1983), as well as Justice Department policy, both of which, according to respondents, mandate that "the required records' doctrine should not be applied to tax returns." Motion for Reconsideration at 3.

 However, after reviewing the materials cited and considering the arguments made by counsel, I remain unpersuaded that income tax returns are protected by the Fifth Amendment privilege. Both the Porter decision and the Justice Department manual discuss "tax records," a term that, in context, applies solely to the personal financial records underlying the filed return. In Porter, the IRS had subpoenaed a taxpayer's cancelled checks and deposit slips that served as the basis for his filed returns, disclosure of which was not at issue. The court held that these papers did not have the requisite "public aspects" for disclosure under Shapiro, and that they thus were protected by the Fifth Amendment. 711 F.2d at 1405. Similarly, while the Justice Department manual does not elaborate on the meaning of "privately kept tax records," the cases cited by it for the proposition that such records are protected all deal with taxpayers' books and other privately kept financial records. *fn1" U.S. Dept. of Justice, Tax Division Manual for Criminal Trials 103 (1973). Respondents' authorities do not squarely address the issue decided in the May 5 Order. Moreover, the only decision cited to the court that squarely addresses the issue of whether tax returns are required records holds that they meet the Shapiro test and must be disclosed. Rodrigues, 717 F. Supp. at 1426-27. This decision is consistent with decisions of other courts, including this Court, which have ordered disclosure of tax returns, albeit without such detailed reasoning. In re Grand Jury Empanelled March 19, 1980, 541 F. Supp. 1 (D.N.J. 1981), aff'd, 680 F.2d 327 (3d Cir. 1982), aff'd in part, rev'd in part on other grounds sub nom. United States v. Doe, 465 U.S. 605, 608 n.3 (1984); OTS v. Zannis, Misc. No. 90-0136, 1990 U.S. Dist. LEXIS 10591 (D.D.C. Aug. 14, 1990).

 At the same time, recognizing respondents' need for appellate review of this issue, the Court will vacate the portion of the May 5 Order which requires disclosure of the tax returns "forthwith," and will stay enforcement of category 1 of the subpoenas until May 25, 1992, the date when the balance of the Order will be enforced. Further, in light of the fact that the case has been transferred, the ruling requiring disclosure of category 1 material -- like the ruling on the thirty-three categories of documents -- will be without prejudice to respondents' seeking reconsideration, or entry of a final judgment and a stay pending appeal, by the transferee court. While the RTC argues that this issue should be severed from the Florida case and any appeal taken here, expeditious handling of this matter can be more easily achieved by a single filing in the Florida court and, if necessary, invocation of emergency procedures in the Court of Appeals there, than by re-transferring a portion of the record between two Court of Appeals, at least one of which will soon be in recess. Accordingly, it is hereby

 ORDERED, that the portion of the May 5 Order which required respondents to produce their tax returns and attached schedules and exhibits "forthwith" is vacated, and enforcement of that portion of the subpoenas will, like the balance of the May 5 Order, be stayed for twenty days from the date of that Order, or until May 25, 1992. It is further

  ORDERED, that the respondents' motion for reconsideration or for entry of a final judgment and a stay pending appeal from this Court is DENIED, without prejudice to the respondents' seeking reconsideration or entry of a final judgment and a stay pending appeal from the transferee court.

 IT IS SO ORDERED.

 DATED: May 13, 1992

 LOUIS F. OBERDORFER

 United States District Judge


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