Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

United States v. Stanack Sales Co.

decided: January 5, 1968.

UNITED STATES OF AMERICA
v.
STANACK SALES CO., INC., SAMUEL ACKERMAN, HOWARD ACKERMAN, STANLEY ACKERMAN. STANACK SALES CO., INC., APPELLANT. UNITED STATES OF AMERICA V. STANACK SALES CO., INC., SAMUEL ACKERMAN, HOWARD ACKERMAN, STANLEY ACKERMAN. HOWARD ACKERMAN, APPELLANT. UNITED STATES OF AMERICA V. STANACK SALES CO., INC., SAMUEL ACKERMAN, HOWARD ACKERMAN, STANLEY ACKERMAN. STANLEY ACKERMAN, APPELLANT



Biggs, Freedman and Seitz, Circuit Judges.

Author: Biggs

Opinion OF THE COURT

BIGGS, Circuit Judge.

The appellants, Stanack Sales Co., Inc. (Stanack), Howard Ackerman, secretary-treasurer of Stanack and Stanley Ackerman, the brother of Howard and a salesman for Stanack, were each charged*fn1 and convicted by a jury on two counts*fn2 of violating 21 U.S.C. § 331(f) which makes it unlawful to refuse to permit a drugfactory inspection as authorized by 21 U.S.C. § 374.*fn3

Stanack Sales Co. is a family corporation in the business of repackaging prescription drugs. The bases for the prosecutions and convictions here before us were certain events which occurred on November 19, and 23 in 1964. At approximately 10 A.M. on November 19, Food and Drug Inspector Bernard Scharf appeared at appellants' premises to carry out an inspection as authorized by 21 U.S.C. § 374.*fn4 It appears that Scharf's visit was merely routine as nothing on the record suggests that Scharf suspected appellants of any violation of the Food, Drug and Cosmetic Act. 21 U.S.C. § 301 et seq. As required by statute, Scharf presented his credentials to Stanley Ackerman, who was the only Ackerman then on the premises, and also gave him a written notice of inspection.*fn5

Stanley Ackerman permitted Scharf to enter the establishment and began the inspection at which time Howard Ackerman arrived. An examination of the drugs on the Stanack shelves caused Scharf to suspect that Stanack Company and the Ackermans were guilty of misbranding prescription drugs and brought a request from Scharf to inspect the company's records as to the receipt and distribution of the drugs.*fn6 Although it appears that there was some friction between the Ackermans themselves as to whether the inspection should be permitted, Howard Ackerman informed Scharf that the requested information appeared only on records which contained financial data which Scharf had no authority to inspect. Scharf then suggested that the Ackermans either cover-up the sheets containing the financial data or themselves copy for Scharf's use the shipping and receiving data. The suggestion was refused.

It is disputed whether Scharf informed the appellants that such a refusal constituted a violation of the law. Scharf was permitted to take labels from the premises, however, which he scrutinized upon returning to his office and concluded that the labels provided insufficient disclosure as provided by law.*fn7 On the following Monday, November 23, Inspector Scharf, accompanied this time by another Food and Drug Inspector, Symanski, returned to Stanack Sales to try again to obtain access to the receipt and distribution records and, it is asserted, to obtain samples*fn8 of the drugs on hand. The requests were again refused; this time on the ground that the Ackermans were too busy. These refusals of November 19 and 23 constituted the grounds for the criminal informations, convictions and appeals presently before us.

After the trial below had been concluded and after the appellants filed their initial brief in this court, the Supreme Court decided two cases which have substantial bearing on these proceedings. In Camara v. Municipal Court, 387 U.S. 523, 87 S. Ct. 1727, 18 L. Ed. 2d 930 (1967), the Supreme Court held that a homeowner could refuse to permit a search of his premises pursuant to an administrative regulatory code unless the administrative inspector first procured a search warrant and that the homeowner could not be prosecuted for such a refusal. Frank v. State of Maryland, 359 U.S. 360, 79 S. Ct. 804, 3 L. Ed. 2d 877 (1959), was pro tanto overruled. On the same day the Supreme Court applied the new protection to business establishments. See v. City of Seattle, 387 U.S. 541, 87 S. Ct. 1737, 18 L. Ed. 2d 943 (1967). If the only issue presented in the cases before us was a refusal by the appellants*fn9 to allow the drug inspectors entry onto their premises, the decision, supra, case we are presented with two additional questions. First, is there a special exemption from Fourth Amendment protection as to business records? To put it simply, had Inspector Scharf merely stood outside the premises and asked to see records of distribution and receipt could the appellants have lawfully refused? Second, assuming such a refusal to be lawful, did the appellants waive their right to refuse inspection of their records by allowing Inspector Scharf to inspect their factory?

The Supreme Court in See v. City of Seattle, supra, answered the first question by stating: "The [administrative] agency has the right to conduct all reasonable inspections of such documents [corporate books and records] which are contemplated by statute, but it must delimit the confines of a search by designating the needed documents in a formal subpoena. In addition, while a demand to inspect may be issued by the agency, in the form of an administrative subpoena, it may not be made and enforced by the inspector in the field, and the subpoenaed party may obtain judicial review of the reasonableness of the demand prior to suffering penalties for refusing to comply." 387 U.S. at 544-545, 87 S. Ct. at 1740. See also Essgee Co. of China v. United States, 262 U.S. 151, 155-157, 43 S. Ct. 514, 67 L. Ed. 917 (1923); Wilson v. United States, 221 U.S. 361, 376, 31 S. Ct. 538, 55 L. Ed. 771 (1911).

It appears from the record before us that Scharf proceeded generally under the statute, without a carefully delimited subpoena and only with a written notice of inspection filled out and served by Scharf himself.*fn10 We conclude that unless the appellants waived their rights under the Fourth Amendment their convictions cannot constitutionally stand.*fn11 We turn our attention to the question of waiver.

It is clear that the constitutional protection against unreasonable search and seizure can be waived. Perlman v. United States, 247 U.S. 7, 38 S. Ct. 417, 62 L. Ed. 950 (1918). However, the waiver must be clear and intentional. Cipres v. United States, 343 F.2d 95, 97 (9 Cir. 1965), cert. denied, 385 U.S. 826, 87 S. Ct. 58, 17 L. Ed. 2d 62 (1966). We should hesitate to find a waiver, particularly where circumstances make it unclear whether the area searched was covered by the consent. Karwicki v. United States, 55 F.2d 225 (4 Cir. 1932). The facts in Karwicki are most apposite and establish that no waiver may be found in the case at bar.*fn12,*fn13

Accordingly, the judgments below will be reversed and the ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.