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In Re Anthony R. Martin-Trigona, Debtor. Anthony R. Martin-Trigona v. Richard Belford, Trustee, and Daniel Meister, Trustee, 732 F.2d 170, 2d Cir. (1984)
In Re Anthony R. Martin-Trigona, Debtor. Anthony R. Martin-Trigona v. Richard Belford, Trustee, and Daniel Meister, Trustee, 732 F.2d 170, 2d Cir. (1984)
2d 170
11 Bankr.Ct.Dec. 1010, Bankr. L. Rep. P 69,761,
15 Fed. R. Evid. Serv. 216
This is an appeal from an order of the United States District Court for the
District of Connecticut, Cabranes, J., holding appellant Anthony R. MartinTrigona in civil contempt for his refusal to comply with a court order requiring
him to answer questions put to him by counsel for the trustee of his estate in
bankruptcy during an examination pursuant to Bkrtcy.R. 2004 after a grant of
immunity under 18 U.S.C. Sec. 6003 (1982). Judge Cabranes ordered appellant
incarcerated until he is ready and willing to testify in full. We stayed the order
of incarceration pending the outcome of this appeal. We now vacate the stay
and affirm the order below.
BACKGROUND
On June 23, 1983, shortly after Judge Cabranes transferred to the district court
all matters concerning appellant's estate in bankruptcy pending in the United
States Bankruptcy Court for the District of Connecticut, counsel for the trustee
sought to question appellant pursuant to Bkrtcy.R. 205.1 Appellant refused to
answer several questions, claiming his Fifth Amendment privilege against selfincrimination. The examination was continued until July 1, 1983. On that date,
appellant's prior counsel, M. Hatcher Norris, invited opposing counsel to apply
for a grant of immunity and strongly implied that appellant would testify if
immunity were forthcoming.
The United States Attorney subsequently applied for immunity under 18 U.S.C.
Sec. 6003, stating that appellant's testimony was "necessary to the public
interest." On November 3, 1983 Judge Cabranes granted the application for
immunity. Examination of appellant was continued until January 3, 1984.2
Appellant again refused to testify at the hearing held on January 3 on the basis
of the privilege against self-incrimination. Judge Cabranes ordered appellant to
answer the questions put to him by trustee Belford's counsel. Appellant refused.
As a result, Judge Cabranes held appellant in civil contempt and ordered him
incarcerated until he was prepared to testify in full. Martin-Trigona appealed
and on January 4 we granted his motion for a stay of incarceration pending the
disposition of this expedited appeal.
DISCUSSION
6
Appellant's initial argument is that the immunity statutes, 11 U.S.C. Sec. 344
(1982);3 18 U.S.C. Secs. 6001-6005 (1982),4 are inapplicable to civil
proceedings. In support of his position he cites two footnotes appearing in
Pillsbury Co. v. Conboy, --- U.S. ----, 103 S.Ct. 608, 74 L.Ed.2d 430 (1983),
one in the majority opinion and one in the concurring opinion. The majority
opinion footnoted "[w]e need not decide whether United States Attorneys,
when designated by the Attorney General, presently have authority to
should only be a denial of his discharge, not contempt. This point is meritless.
10
"[C]ourts have inherent power to enforce compliance with their lawful orders
through civil contempt." Shillitani v. United States, 384 U.S. 364, 370, 86 S.Ct.
1531, 1535, 16 L.Ed.2d 622 (1966) (citations omitted). District courts acting as
courts of bankruptcy have a long history of issuing contempt citations for
failure to obey their lawful orders. See, e.g., Block v. Consino, 535 F.2d 1165
(9th Cir.), cert. denied, 429 U.S. 861, 97 S.Ct. 165, 50 L.Ed.2d 140 (1976)
(affirming contempt citation for failure to answer questions despite a grant of
immunity); O'Hagan v. Blythe, 354 F.2d 83, 84 (2d Cir.1965); In re
Manufacturers Trading Corp., 194 F.2d 948, 956 (6th Cir.1952); Espiefs v.
Settle, 14 B.R. 280, 286 (D.C.N.H.1981) (debtor may be held in contempt for
failing to testify despite a grant of immunity); In re Parr, 13 B.R. 1010, 1015
(D.C.E.D.N.Y.1981); 1 Collier on Bankruptcy p 2.58 (14th ed. 1974).
11
Appellant argues that 11 U.S.C. Sec. 727(a)(6)(B) (1982) 5 and the relevant
legislative history, S.Rep. No. 989, 95th Cong., 2d Sess. 44 (1978), reprinted in
1978 U.S.Code Cong. & Ad.News 5787, 5830 and H.Rep. No. 595, 95th Cong.,
1st Sess. 333 (1977), reprinted in 1978 U.S.Code Cong. & Ad.News 5963,
6289, indicate that the only sanction which may be imposed on a debtor who
refuses to testify despite a grant of immunity is a denial of discharge. We
disagree. The statute and the legislative history indicate that a debtor may be
denied a discharge as a result of his failure to testify only when he continues to
refuse to testify after a grant of immunity.6 It does not indicate that denial of the
debtor's discharge is the exclusive penalty for failing to testify despite
immunity.7 Furthermore, if the denial of discharge were the only penalty for
refusing to testify, then a witness other than the debtor granted immunity under
section 344 would have no incentive to testify. Obviously, this is not what
Congress intended by section 727(a)(6)(B).
12
Since the civil contempt order was proper, incarceration was an appropriate
remedy. 28 U.S.C. Sec. 1826(a) (1976) provides in pertinent part that:
13
Whenever
a witness in any proceeding before or ancillary to any court ... of the
United States refuses without just cause shown to comply with an order of the court
to testify or provide other information ... the court, upon such refusal ... may
summarily order his confinement at a suitable place until such time as the witness is
willing to give such testimony or provide such information.
14
(emphasis added). The use of the word "any" indicates that Congress intended
this section to apply to bankruptcy proceedings. Even without the statute, a
court may coerce a recalcitrant witness to testify through incarceration. Uphaus
v. Wyman, 360 U.S. 72, 81, 79 S.Ct. 1040, 1046, 3 L.Ed.2d 1090 (1959); In re
Grand Jury Investigation (Braun), 600 F.2d 420, 422 (3d Cir.1979)
("Embedded in Anglo-American law is the inherent power of the judiciary to
coerce obedience to its orders by summarily holding a recalcitrant person--such
as an immunized witness who refuses to testify at a grand jury proceeding or at
a trial--in civil contempt, and then imprisoning him until he complies.").
15
16
17
In Kastigar, the Supreme Court held that use and derivative use immunity as
provided by 18 U.S.C. Sec. 6002 is coextensive with the Fifth Amendment
privilege against self-incrimination and thus the statute is constitutional. 406
19
20
Consino, 535 F.2d at 1168 ("any statute which fairly provides use and
derivative use immunity is sufficient under the Fifth Amendment"). Because
the scope of immunity offered a debtor under the former and present
bankruptcy laws has not changed and because the Supreme Court upheld the
constitutionality of 18 U.S.C. Sec. 6002 in Kastigar, there is no reason to
question the continued validity of Moss.
21
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1
2
issue, in accordance with subsection (b) of this section, upon the request of the
United States attorney for such district, an order requiring such individual to
give testimony or provide other information which he refuses to give or provide
on the basis of his privilege against self-incrimination, such order to become
effective as provided in section 6002 of this part.
(b) A United States attorney may, with the approval of the Attorney General,
the Deputy Attorney General, or any designated Assistant Attorney General,
request an order under subsection (a) of this section when in his judgment-(1) the testimony or other information from such individual may be necessary
to the public interest; and
(2) such individual has refused or is likely to refuse to testify or provide other
information on the basis of his privilege against self-incrimination.
18 U.S.C. Secs. 6004-6005 are not implicated in the instant dispute.
5
Prior to the enactment of the 1978 bankruptcy code, a debtor was granted
automatic use and derivative use immunity for his testimony with one
exception. 1A Collier on Bankruptcy p 7.21 (14th ed. 1978). The sanction for
refusing to testify was an automatic denial of discharge. Id. p 7.21. 11 U.S.C.
Sec. 344, by incorporating 18 U.S.C. Secs. 6001-6005, eliminated the provision
for automatic immunity and preconditioned immunity upon a request by the
United States attorney. Section 727(a)(6)(B) ensures that a debtor who refuses
to testify on the basis of the privilege against self-incrimination where
immunity has not been granted will not be penalized through a denial of
discharge. Conversely, a debtor who has been granted immunity must testify or
be denied his discharge
The only item in the legislative history that even arguably supports the claim
that denial of discharge is the exclusive remedy for an immunized debtor's
failure to testify is the following sentence in the House Report: "Under section
727(a)(6) ... a debtor is only denied a discharge if he refuses to testify after
having been granted immunity." H.Rep. No. 595, 95th Cong., 1st Sess. 332-33
(1977): reprinted in 1978 U.S.Code Cong. & Ad.News 6289. We think it plain
that this sentence reveals the not uncommon faulty sentence structure of failing
to place the adverb "only" immediately adjacent to the words that it modifies.
In contrasting the new statute with the prior practice whereby a debtor could be
denied discharge for refusing to testify, even when claiming the privilege
against self-incrimination, the House Report sought to make clear the modest
change under the new statute that discharge could be denied to a debtor "only ...
if he refuses to testify after having been granted immunity." Id. To read "only"
as modifying "denied a discharge" and thereby making non-discharge the
exclusive sanction for refusing to testify would result in a drastic change from
prior law that is nowhere suggested in the statute or its legislative history