Opinion
May 2, 1967.
April 16, 1968.
Criminal law — Operation of lottery — Constitutional law — 5th and 14th Amendments — Self-incrimination — Federal occupational tax on gamblers — Evidence seized by federal agents — Use in state court — Inadmissibility.
1. Where federal authorities seized evidence pursuant to a search warrant issued to uncover goods used in violations of §§ 4411, 4412 and 7203, of the Internal Revenue Code of 1954 (which impose an occupational tax on gamblers, requires such persons to register with the Internal Revenue Service and makes failure to do either a criminal offense) and this evidence was turned over to state authorities and admitted in evidence against defendants in their state trials for operating a lottery and conspiracy to operate a lottery, in which they were convicted; and subsequently the Supreme Court of the United States decided in Marchetti v. United States, 390 U.S. 39 (1968), that §§ 4411 and 4412 violate the self-incrimination clause of the 5th Amendment, it was Held that the admission of the federally seized evidence in the state court trial in this case violated the defendant's 5th and 14th Amendments rights.
2. Evidence whose use in a federal court would violate the 5th Amendment equally violates the 5th Amendment when admitted in a state prosecution. [411]
3. The 5th Amendment privilege against self-incrimination is contained within the 14th Amendment concept of due process and is thus applicable to the states. [410]
4. In view of the fact that the convictions in this case have not yet become final by virtue of the grant by the Supreme Court of the reargument petition the rule announced in Marchetti v. United States, 390 U.S. 39, is applicable to this case regardless of whether it has retroactive application. [411]
Mr. Justice COHEN dissented.
Argued May 2, 1967. Before BELL, C. J., MUSMANNO, JONES, EAGEN, O'BRIEN and ROBERTS, JJ. Order affirmed by an equally divided Court, January 18, 1968. Reargument granted February 20, 1968.
Reargued March 12, 1968. Before BELL, C. J., MUSMANNO, JONES, COHEN, EAGEN, O'BRIEN and ROBERTS, JJ.
Appeal, No. 136, March T., 1967, from order of Superior Court, April T., 1965, No. 295, affirming judgments of Court of Quarter Sessions of Allegheny County, March T., 1963, No. 343, in case of Commonwealth of Pennsylvania v. Henry Katz, Gilbert Katz, Martin Katz et al. Judgment of court of quarter sessions reversed.
Same case in Superior Court: 209 Pa. Super. 142.
Indictments charging defendants with operating a lottery and conspiracy. Before GRAFF, P. J., specially presiding.
Verdicts of guilty and judgments of sentence entered. Defendants appealed to Superior Court which affirmed judgments, opinion per curiam, dissenting opinion by SPAULDING, J., in which HOFFMAN, J., joined. Petition for allocatur granted.
Martin M. Sheinman, with him Hubert I. Teitelbaum, and Morris, Safier Teitelbaum, for appellants.
Edwin J. Martin, Assistant District Attorney, with him Robert W. Duggan, District Attorney, for Commonwealth, appellee.
Appellants, Raymond Bykowski and Walter Rachuba, were convicted by a jury in Allegheny County of operating a lottery and conspiracy to operate a lottery. Post-trial motions in arrest of judgment and for a new trial were dismissed and sentence imposed. An appeal followed to the Superior Court which, with two judges dissenting, affirmed the convictions. See Commonwealth v. Bykowski, 209 Pa. Super. 142, 225 A.2d 252 (1966). Allocatur was granted by this Court; after argument, the courts below were affirmed, this Court being equally divided. Appellants then filed a petition for reargument, urging us to re-examine our decision in light of two subsequently rendered decisions of the Supreme Court of the United States — Marchetti v. United States, 390 U.S. 39, 88 S.Ct. 697 (1968) and Grosso v. United States, 390 U.S. 62, 88 S.Ct. 709 (1968). This request was granted.
We conclude that these two decisions of the Supreme Court have changed the parameters of our previous decision and that, given this new learning, appellants must prevail. The evidence employed to procure the convictions under review was obtained by Allehgeny County authorities from federal authorities. The federal authorities in turn seized the evidence pursuant to a search warrant issued, according to the face of the warrant, to uncover goods used in "violation of Sections 7203, 4411, and 4412 of the Internal Revenue Code of 1954." Section 4411, see 26 U.S.C.A. § 4411, imposes a special occupational tax of $50 on persons engaged in certain gambling activities; section 4412, see 26 U.S.C.A. § 4412, requires that each person liable for such tax shall register with the Internal Revenue Service; and section 7203, see 26 U.S.C.A. § 7203, makes, inter alia, failure to comply with either § 4411 or § 4412 a criminal offense carrying a fine of not more than $10,000 and/or a maximum sentence of imprisonment for one year.
Marchetti involved a federal prosecution for violation of §§ 4411 and 4412. Defendant contended that a conviction for failure to comply with either of these two sections would work a violation of his privilege against self-incrimination and the Supreme Court agreed, holding that the assertion of this privilege constituted a complete defense. It is the Supreme Court's rationale for this decision that is most important. Emphasizing the comprehensive state and federal system of gambling regulation and the fact that, once an individual has registered under the federal statute, this information is made available to state prosecutors, the Court obviously bottomed its decision upon a belief that a potential defendant is placed between the Scylla and the Charybdis. Simply, if the individual registers, then this information is available to state prosecutors; if he does not register and pay the tax, then he can be prosecuted for failure to do so in federal court. The impact of this legislative package, according to the Court, was a Fifth Amendment violation.
Information obtained by federal authorities under the wagering tax laws is by statute, see 26 U.S.C.A. § 6107, made available to state prosecutors.
Marchetti v. United States, supra at 52-3, 88 S. Ct. at 705: "[T]he acquisition of a federal gambling tax stamp, requiring as it does the declaration of a present intent to commence gambling activities, obliges even a prospective gambler to accuse himself of conspiracy to violate either state gambling prohibitions, or federal laws forbidding the use of interstate facilities for gambling purposes."
The Supreme Court explicitly rejected the rationale of its prior decisions such as Lewis v. United States, 348 U.S. 419, 75 S.Ct. 415 (1955) that a potential gambler could avoid all problems of self-incrimination by a decision not to engage in gambling activities and that a decision to gamble was therefore a waiver of the privilege. See Marchetti v. United States, supra at 51-2, 88 S.Ct. at 704: "The question is not whether petitioner holds a 'right' to violate state law, but whether, having done so, he may be compelled to give evidence against himself. . . . We cannot agree that the constitutional privilege is meaningfully waived merely because those 'inherently suspect of criminal activities' have been commanded either to cease wagering or to provide information incriminating to themselves, and have ultimately elected to do neither."
What, then, is the impact of Marchetti when evidence seized by federal officers searching for alleged violations of §§ 4411 and 4412 is employed to secure state convictions? Malloy v. Hogan, 378 U.S. 1, 84 S Ct. 1489 (1964) teaches us that the Fifth Amendment privilege against self-incrimination is contained within the Fourteenth Amendment concept of due process and is thus applicable to the states. We therefore believe that if a federal prosecution based upon violations of §§ 4411 and 4412 (and evidence seized to prove these violations) would infringe the accused's privilege against self-incrimination and if this privilege applies to the states, then a state prosecution based upon the same evidence seized by federal officers would equally violate that privilege. Were the rule otherwise, the Marchetti decision and its conclusion that prosecutions for violations of the federal statutes here involved run afoul of the Fifth Amendment could be easily eroded if state prosecutions based upon evidence seized by federal officers searching for violations of the now unconstitutional statutes were permitted. Whether this evidence is used in state or federal court, the evil is identical — an accused's failure to register and pay the tax, as well as evidence seized to prove this failure, becomes the basis of a criminal prosecution violative of the Fifth Amendment. Certainly, after Marchetti, the evidence used to convict appellants could not be constitutionally admitted in a federal court; were we to admit it, we believe that an identical constitutional violation would be committed. We wish it clearly understood, however, that our decision today in no way impinges upon the constitutional validity of state statutes prohibiting gambling. All we hold is that evidence whose use in federal court would violate the Fifth Amendment equally violates the Fifth Amendment when admitted in a state prosecution.
Nor need we decide the possible retroactive application of Marchetti to state prosecutions in which evidence seized by federal officials was admitted and which became final prior to Marchetti. Appellants' convictions have not as yet become final by virtue of the grant by this Court of their reargument petition. In Grosso, the defendant did not assert his privilege against self-incrimination as a defense to all counts in his indictment; yet the Supreme Court held that he could avail himself of the rule announced in Marchetti ( 390 U.S. at 70-1, 88 S.Ct. at 715): "Petitioner has not, however, asserted a claim of privilege either as to the counts which charged willful failure to pay the occupational tax, or as to the allegation that he conspired to evade payment of the occupational tax. Given the decisions of this Court in Kahriger and Lewis . . . [decisions, overruled by Marchetti, which sustained the constitutionality of the challenged statutes], which were on the books at the time of petitioner's trial, . . . we are unable to view his failure to present this issue as an effective waiver of the constitutional privilege."
The Supreme Court has thus decided that the Marchetti decision is available to those whose convictions were not final when Marchetti was decided. That is all that we hold today.
The judgment of the Court of Quarter Sessions of Allegheny County is reversed and a new trial is granted.
Mr. Justice COHEN dissents.