Complete Home & Office Legal Guide/Complete Home and Office Legal Guide (Chestnut) (1993).ISO/stat/ussct/scientol.asc

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/* The church of Scientology has a long history in the courts.
Here is the latest in that continuing series. This opinion
discusses the case and controversy requirement of the U.S.
constitution. The case also provides an interesting look into the
attorney-client privilege. */

SUPREME COURT OF THE UNITED STATES

NOTE: Where it is feasible, a syllabus (headnote) will be
released, as is being done in connection with this case, at the
time the opinion is issued. The syllabus constitutes no part of
the opinion of the Court but has been prepared by the Reporter of
Decisions for the convenience of the reader. See United States v.
Detroit Lumber Co., 200 U. S. 321, 337.

Syllabus

CHURCH OF SCIENTOLOGY OF CALIFORNIA v. UNITED STATES et al.
certiorari to the united states court of appeals for the ninth
circuit No. 91-946. Argued October 6, 1992; Decided November 16,
1992

Pursuant to its jurisdiction under 26 U.S.C. 402(b) and 7604(a),
the District Court ordered a state-court Clerk to comply with a
summons issued by the Internal Revenue Service (IRS) for the
production of, inter alia, two tapes in the Clerk's custody
recording conversations between officials of petitioner Church of
Scientology (Church) and their attorneys.  Although the Church
filed a timely notice of appeal, its request for a stay of the
summons enforcement order was unsuccessful, and copies of the
tapes were delivered to the IRS while the appeal was pending. The
Court of Appeals dismissed the appeal as moot, ruling that no
controversy existed because the tapes had already been turned
over to the IRS. Held: Compliance with the summons enforcement
order did not moot the Church's appeal.  Delivery of the tapes to
the IRS did not mandate dismissal by making it impossible for the
Court of Appeals to grant the Church "any effectual relief."  See
Mills v. Green, 159 U.S. 651, 653.  Although it is now too late
to prevent, or to provide a fully satisfactory remedy for, the
invasion of privacy that occurred when the IRS obtained the
information on the tapes, the Court of Appeals does have power to
effectuate a partial remedy by ordering the Government to return
or destroy any copies of the tapes that it may possess.  Even if
the Government is right that under 7402(b) and 7604(a) the
jurisdiction of the district court is limited to those matters
directly related to whether or not the summons should be
enforced, the question presented here is whether there was
jurisdiction in the appellate court to review the allegedly
unlawful summons enforcement order.  There is nothing in the
Internal Revenue Code to suggest that Congress sought to preclude
such review, and, indeed, this Court has expressly held that IRS
summons enforcement orders are subject to appellate review.  See
Reisman v. Caplin, 375 U.S. 440, 449.  Although several Courts of
Appeals have accepted the Government's argument in IRS

enforcement proceedings, the force of that line of authority is
matched by a similar array of decisions reaching a contrary
conclusion in proceedings enforcing Federal Trade Commission
discovery requests.  There is no significant difference between
the governing statutes that can explain the divergent
interpretations, nor any reason to conclude that production of
records relevant to a tax investigation should have mootness
consequences that production of other business records does not
have.  Pp.3-9. Vacated and remanded.

Stevens, J., delivered the opinion for a unanimous Court.

             [November 16, 1992]

Justice Stevens delivered the opinion of the Court.

Two tapes recording conversations between officials of the Church
of Scientology (Church) and their attorneys in July 1980 have
been the principal bone of contention in this, and two earlier,
legal proceedings.

In an action filed in the Los Angeles County Superior Court, the
Church contended that the defendant had unlawfully acquired
possession of the tapes.  Pending resolution of that action, the
state court ordered its Clerk to take custody of the tapes and
certain other documents.

In 1984, in connection with an investigation of the tax returns
of L. Ron Hubbard, founder of the Church of Scientology, the
Internal Revenue Service (IRS) sought access to the Church
documents in the state-court Clerk's possession.  After the Clerk
was served with an IRS summons, he permitted IRS agents to
examine and make copies of the tapes.  Thereafter, in a federal
action initiated by the Church in the Central District of
California, the District Court entered a temporary restraining
order directing the IRS to file its copies of the tapes, and all
related notes, with the federal court.  Those copies were
subsequently returned to the Clerk of the state court.

On January 18, 1985, the IRS commenced this proceeding by filing
a petition to enforce the summons that had previously been served
on the state-court Clerk.  The Church intervened and opposed
production of the tapes on the ground that they were protected by
the attorney-client privilege.  After protracted proceedings,
including review in this Court, see United States v. Zolin, 491
U. S. 554 (1989), on April 15, 1991, the District Court entered
an order enforcing compliance with the summons.  The Church filed
a timely notice of appeal and unsuccessfully sought a stay of
that order.  While the appeal was pending, copies of the tapes
were delivered to the IRS. Thereafter, the Court of Appeals
ordered the Church to show cause why its appeal should not be
dismissed as moot.  After briefing on the mootness issue, the
Court dismissed the appeal.  It explained:

Because it is undisputed that the tapes have been turned over to
the IRS in compliance with the summons enforcement order, no
controversy exists presently and this appeal is moot.  United
States v. Zolin, No. CV 85-0440 (CA9, Sept. 10, 1991). We granted
the Church's petition for certiorari to consider the narrow
question whether the appeal was properly dismissed as moot.  503
U. S. _______(1992).

                                I

It has long been settled that a federal court has no authority
to give opinions upon moot questions or abstract propositions, or
to declare principles or rules of law which cannot affect the
matter in issue in the case before it.  Mills v. Green, 159 U. S.
651, 653 (1895).  See also Preiser v. Newkirk, 422 U. S. 395, 401
(1975); North Carolina v. Rice, 404 U. S. 244, 246 (1971).  For
that reason, if an event occurs while a case is pending on appeal
that makes it impossible for the court to grant any effectual
relief whatever to a prevailing party, the appeal must be
dismissed.  Mills, 159 U. S., at 653.  In this case, after the
Church took its appeal from the April 15 order, in compliance
with that order copies of the tapes were delivered to the IRS.
The Government contends that it was thereafter impossible for the
Court of Appeals to grant the Church any effectual relief.  We
disagree.

While a court may not be able to return the parties to the status
quo ante " here is nothing a court can do to withdraw all
knowledge or information that IRS agents may have acquired by
examination of the tapes" a court can fashion some form of
meaningful relief in circumstances such as these.

/* That may not necessarily be true. The Court could order all of
those persons who heard the tape be barred from working on the
case. Like the exclusionary rule in criminal matters, the Court
could also limit the use of information received by means of the
"fruit of the poisonous tree. *.

Taxpayers have an obvious possessory interest in their records.
When the Government has obtained such materials as a result of an
unlawful summons, that interest is violated and a court can
effectuate relief by ordering the Government to return the
records. Moreover, even if the Government retains only copies of
the disputed materials, a taxpayer still suffers injury by the
Government's continued possession of those materials, namely, the
affront to the taxpayer's privacy.  A person's interest in
maintaining the privacy of his papers and effects is of
sufficient importance to merit constitutional protection.
Indeed, that the Church considers the information contained on
the disputed tapes important is demonstrated by the long,
contentious history of this litigation.  Even though it is now
too late to prevent, or to provide a fully satisfactory remedy
for, the invasion of privacy that occurred when the IRS obtained
the information on the tapes, a court does have power to
effectuate a partial remedy by ordering the Government to destroy
or return any and all copies it may have in its possession. The
availability of this possible remedy is sufficient to prevent
this case from being moot.

The Government argues, however, that these basic principles are
inapplicable in IRS summons enforcement proceedings because of
the particular nature of the statute governing such proceedings.
Reasoning from the premise that federal courts are empowered to
consider only those matters within their jurisdiction, the
Government argues that in IRS summons enforcement proceedings the
subject-matter jurisdiction of the District Court is limited to
determining only whether the court should compel ". . .
production of the information requested by the summons."  26 U.
S. C. 7402(b), 7604(a).  See n. 4, supra. Once the court has
answered that question and compliance has occurred, there is
nothing more for the District Court to decide and the
jurisdiction of the District Court evaporates.

We think the Government misconceives the inquiry in this case.
The Government may or may not be right that under 7402(b) and
7604(a) the jurisdiction of the District Court is limited to
those
matters directly related to whether or not the summons should be
enforced. Indeed, the scope of the District Court's jurisdiction
under those provisions was the issue over which this Court
deadlocked in United States v. Zolin, 491 U. S. 554 (1989).  The
question presented in the current incarnation of this case is
whether there was jurisdiction in the appellate court to review
the allegedly unlawful summons enforcement order.  On that
question, the Government's elaborate statutory argument is
largely irrelevant.  There is nothing in the statute to suggest
that Congress sought to preclude appellate review of district
court enforcement orders.  To the contrary, we have expressly
held that IRS summons enforcement orders are subject to appellate
review.  See Reisman v. Caplin, 375 U. S. 440, 449 (1964).  Thus,
whether or not there is jurisdiction in the appellate court to
review the District Court's order turns not on the subject matter
of Congress' jurisdictional grant to the district courts, but on
traditional principles of justiciability, namely, whether an
intervening event has rendered the controversy moot.  And, as we
have already explained, this case is not moot because if the
summons were improperly issued or enforced a court could order
that the IRS' copies of the tapes be either returned or
destroyed.

/* Since "some relief" could be granted, the court unanimously
finds that the case remains a "case or controversy" subject to
decision. */


                               II
We recognize that several Courts of Appeals have accepted the
Government's argument in IRS enforcement proceedings, but the
force of that line of authority is matched by a similar array of
decisions reaching a contrary conclusion in proceedings enforcing
Federal Trade Commission discovery requests.  There is no
significant difference between the governing statutes that can
explain the divergent interpretations.  Nor is there any reason
to conclude that production of records relevant to a tax
investigation should have mootness consequences that production
of other business records does not have. Moreover, in construing
these provisions of the Internal Revenue Code, the Court has
considered it appropriate to rely on its earlier cases involving
other statutes, including the Federal Trade Commission Act.  See
United States v. Powell, 379 U. S. 48, 57 (1964) (citing United
States v. Morton Salt Co., 338 U. S. 632, 642!643 (1950)).

We therefore conclude that the appeal was improperly dismissed as
moot.  In so concluding we express no opinion on the merits of
the Church's argument that the Government did not establish an
adequate evidentiary basis to support the District Court's
determination that the tapes fell within the crime-fraud
exception to the attorney-client privilege.  Nor do we express
any opinion about the res judicata contention advanced in the
Government's brief in opposition to the petition for certiorari.
Brief for United States in Opposition 13-14.  We simply hold that
compliance with the summons enforcement order did not moot the
Church's appeal.   The judgment of the Court of Appeals is
vacated, and the case is remanded for further proceedings
consistent with this opinion.

It is so ordered.