Steinberg v. United States

LARAMORE, Judge.

This case brings before our court the question of the constitutionality of section 2(a) of Public Law 769, 68 Stat. 1142, 5 U.S.C.A. § 740d, which reads as follows:

“There shall not be paid to any person who has failed or refused, or fails or refuses, prior to, on, or after the date of enactment of this Act, upon the ground of self-incrimination, to appear, testify, or produce any book, paper, record, or other document, with respect to his service as an officer or employee of the Government or with respect to any relationship which he has had or has with a foreign government, in any proceeding before a Federal grand jury, court of the United States, or congressional committee, or to the survivor or beneficiary of such person, for any period subsequent to the date of such failure or refusal of such person or the date, of enactment of this Act, whichever is later, any annuity or retired pay on the basis of the service of such person as an officer or employee of the Government.”

Plaintiff, a former employee of the Internal Revenue Service, retired on February 28, 1951, and thereby became entitled to, and did receive an annuity under the Civil Service Retirement Act, 5 U.S.C.A. § 691. As a result of an investigation into the operations of the Internal Revenue Service, plaintiff was subpoenaed to appear before a Federal *591Grand Jury sitting in the Southern District of New York on September 2, 1954. On the advice of counsel, plaintiff appeared before the Grand Jury and after identifying himself invoked the protection of the Fifth Amendment to the Constitution of the United States. Subsequently, the plaintiff and others were indicted by the Grand Jury, were tried, and plaintiff was found not guilty of the offenses charged.

On August 17, 1955, plaintiff was advised by the defendant that his annuity was temporarily suspended. This suspension was eventually made permanent, effective September 2, 1954, the date of plaintiff’s appearance before the Grand Jury. This action was taken pursuant to section 2(a) of Public Law 769, supra.

Plaintiff has brought this action claiming that the provision of Public Law 769 which denies to him the benefits of the Civil Service Retirement Act because he chose to invoke the Fifth Amendment does violence to his rights as a citizen of the United States under the Constitution. He therefore prays this court to declare that part of the act unconstitutional and order payment of all moneys due and owing plaintiff since the suspension of his annuity. The defendant has entered a counterclaim for all annuity payments made subsequent to plaintiff’s appearance before the Grand Jury less a credit in the amount of plaintiff’s retirement contributions together with interest thereon as provided by 5 U.S. C.A. § 740e. Both parties have moved for summary judgment.

The right of a Federal employee to an annuity is not born of a contractual relationship between the Government and the employee, but is more in the nature of a gratuity granted in appreciation for long and faithful service. Congress may in its wisdom modify the payments upward or downward without impairing the obligation of a contract. Dodge v. Board of Education, 302 U.S. 74, 58 S.Ct. 98, 82 L.Ed. 57; MacLeod v. Fernandez, 1 Cir., 101 F.2d 20, certiorari denied Toste v. MacLeod, 308 U.S. 561, 60 S.Ct. 72, 84 L.Ed. 471. Although an annuity is paid for past, as distinguished from present services, the legal relationship between the parties is in all material respects parallel since a current Federal employee neither has a vested nor a contractual right to continued employment. Even so the Supreme Court has said “that constitutional protection does extend to the public servant whose exclusion pursuant to a statute is patently arbitrary or discriminatory,” Wieman v. Updegraff, 344 U.S. 183, 73 S.Ct. 215, 219, 97 L.Ed. 216. Thus we are squarely met with the question as to whether or not it is arbitrary and discriminatory for the Federal Government to exclude persons from its annuity rolls who have availed themselves of the protection provided for in the Fifth Amendment.

House Report 2488, 83d Cong., 2d sess., declaring the purpose of Public Law 769 reads:

“The purpose of this legislation is to prohibit Federal annuities or retired pay to persons who commit offenses which in effect constitute breaches of faith in matters involving (1) the improper use of their authority, power, influence, or privileges as officers or employees of the United States or of the municipal government of the District of Columbia, or (2) the violation of criminal statutes relating to treason, sabotage, subversive activities, and perjury and other offenses related to their official duties.”

It is to be noted from the above that the purpose of this act was to prohibit Federal annuities to persons who commit offenses which in effect constitute breaches of faith in matters involving the conduct of its officers and employees. The “offense” in the case at bar was the action of plaintiff in invoking the Fifth Amendment. This, rather than an offense, is a constitutional guarantee. Thus does the taking of the Fifth Amendment constitute a breach of faith for which Congress can enact legislation *592providing for a sanction against improper practices of its officers and employees? See United Public Workers v. Mitchell, 330 U.S. 75, 67 S.Ct. 556, 91 L.Ed. 754. We think not.

The Fifth Amendment is the source of our constitutional rule that serious criminal charges in Federal cases must be made by an indictment of a Grand Jury and that no person shall be considered guilty until convicted by his peers.

The Supreme Court has held in Slochower v. Board of Education, 350 U.S. 551, 557-558, 76 S.Ct. 637, 641, 100 L.Ed. 692, that:

“ * * * The privilege against self-incrimination would be reduced to a hollow mockery if its exercise could be taken as equivalent * * * to a confession of guilt * * *. The privilege serves to protect the innocent who otherwise might be ensnared by ambiguous circumstances.”

Congress in enacting section 2(a) of Public Law 769 has given a meaning to the Fifth Amendment which presumes guilt. This is so because Congress has linked the innocent with the guilty in exacting a form of punishment. We are compelled, by reason of the Supreme Court decisions, to hold that such a law is an indiscriminate classification of the innocent with the guilty and must fall as an assertion of arbitrary power, Wieman v. Updegraff and Slochower v. Board of Education, supra.

Furthermore, an act of Congress applying to:;persons such as plaintiff which inflicts punishment without a judicial trial is a bill of attainder prohibited by the Constitution. United States v. Lovett, 328 U.S. 303, 66 S.Ct. 1073, 90 L.Ed. 1252; Cummings v. State of Missouri, 4 Wall. 277, 18 L.Ed. 356; Ex parte Garland, 4 Wall. 333, 18 L.Ed. 366. In this case the punishment inflicted by the act was the denial of his annuity without due process. A bill of attainder is a legislative act which inflicts punishment without a judicial trial. If the punishment be less than death, the act is termed a bill of pains and penalties which within the meaning of the Constitution is a bill of attainder, Cummings v. State of Missouri, supra. Notwithstanding that plaintiff had no vested or contractual right to his annuity, we believe that Congress in prescribing a punishment for persons who exercised a constitutional right has acted beyond the scope of the Constitution. Congress may repeal laws which it has passed but Congress even with Presidential approval cannot repeal a constitutional provision, nor exact a penalty as a condition to the exercise of a constitutional privilege. If Congress feels that the privilege is outmoded in the conditions of this modern age, then the thing to do is amend the Constitution, not to shave it by Congressional enactments.

Courts have the duty to uphold the acts of Congress where possible and much as we regret holding an act unconstitutional, we have no alternative here.

Section 2(a) of Public Law 769, supra, must not stand as a bar to the payments of plaintiff's annuity. Plaintiff’s motion for summary judgment is granted, and defendant’s cross-motion denied, and the counterclaim is dismissed. The amount of recovery will be determined pursuant to Rule 38(c), 28 U.S.C.A.

It is so ordered.

LITTLETON, Judge, concurs.