Reading these cases together, several factors emerge as the benchmarks against which a governmental reporting requirement must be measured under the Fifth Amendment:

First, is the statute under which the report is required to be filed essentially regulatory or fiscal in nature or is it criminal (or in an area so permeated with criminal statutes as to render the statute itself criminal in nature?)

Second, is the statute addressed to the public at large or to a group inherently suspect of criminal activities?

Third, are the disclosures "neutral" or are they "injurious" disclosures which provide or assist in the collection of evidence admissable against the person reporting?

By all of the above standards, the reporting requirements of the Act and Regu lations violate the privilege against self-incrimination and thus are unconstitu tional.

A. The Act is essentially criminal in nature

It is clear from the legislative history that the primary purpose of P.L. 91-508 was to aid in the "war against crime." See, for example, the statements the House Committee on Banking and Currency (2 Cong. & Adm. News 1970, 4395):

"During the last decade, law enforcement agencies have found that the increasing growth of our financial institutions have been paralleled by the increase in criminal activity utilizing these institutions. Petty criminals, members of the underworld, those engaging in "white collar" crime and income tax evaders use, in one way or another, financial institutions in carrying on their affairs. According to law enforcement officials, an effective fight on crime depends on large measure on the maintenance of adequate and appropriate records by financial institutions. H.R. 15073 deals with the problem by requiring the maintenance of records by financial institutions in a manner designed to facilitate criminal, tax, and regulatory investigations and proceedings."

"Criminals deal in money-cash or its equivalent. The deposit and withdrawal of large amounts of currency or its equivalent (monetary instruments) under unusual circumstances may betray a criminal activity, The money in many of these transactions may represent anything from the proceeds of a lottery racket to money for the bribery of public officials." (4396)

The reports required by the statute are not limited to one particular type of crime-i.e., wagering or subversion. They are intended to act as a dragnet covering just about every fiscal activity-from income tax evasion to bribery—which is or may be prohibited by statute. And Congress' primary purpose in requiring the reports was precisely to ferret out such ciminal activity.

Like the wagering tax statutes and the McCarren Act, however, P.L. 91-508 does not itself define or establish criminal activity. It is designed to pinpoint and expose activity which may violate a host of other criminal statutes through the use of reporting requirements.

The criminal nature of the reporting requirements of P.L. 91-508 is further substantiated by the fact that failure to comply is punishable by forfeiture. While civil in nature by virtue of historical accident, "[W]hen the forfeiture statutes are viewed in their entirety, it is manifest that they are intended to impose a penalty only upon those who are significantly involved in a criminal enterprise. It follows from Boyd, Marchetti, and Grosso, that the Fifth Amendment's privilege may properly be invoked in these proceedings." United States v. U.S. Coin and Currency, 401 U.S. 715 (1971).

B. The group to which the statute is directed is inherently suspect of criminal activity

The Court in Byers found that the statute covered so many people (over 10 million motorists) that it perforce was directed to the public at large. In Marchetti and Albertson the Court found the groups to whom the statutes were addressed to be "highly selective" and "inherently suspect." It is meaningless to talk of the numbers of persons required to make reports under P.L. 91-508; there is no data available as to how many transactions each year involve receipt or export of over $5,000. Moreover, all persons who regularly make such transactions through financial institutions for bona fide business and investment purposes are exempt from the reporting requirements. 31 CFR § 103.23 (c). On the other hand, a single transaction may bring many people into the statutory scheme since the regulations require that anyone who "aids, abets, counsels, commands, procures, or re

quests" that monetary instruments be transported is responsible for filing a report if one has not been filed. 31 CFR § 103.23 (a).

The crucial question should be whether any person who files such a report, or anyone names therein, becomes suspect of criminal activity. The answer to that question, given the criminal purposes of the statute and the nature of the information required to be submitted, is "Yes." Unlike Byers, where identification of a driver involved in an accident was required to insure that such drivers could be held civilly liable for their torts, the purpose of the reporting requirements of P.L. 91-508 is to secure information about illegal monetary transactions, or to provide significant links in the chain leading to prosecution for criminal activity. A person engaged in such activity, whether it be income tax evasion, violation of margin requirements, smuggling, or what have you, faces a real and substantial risk of incriminating himself by filing the report. "It both centers attention upon the registrant . . . and compels 'injurious disclosure[s]' which may provide or assist in the collection of evidence admissible in a prosecution for past and present offenses." Marchetti v. United States, supra, p. 52. That is sufficient, under standards enunciated by the Supreme Court, to declare the statute void as a violation of the Fifth Amendment.

C. The disclosures required by the Act are incriminating in nature

Under the Act, reports must state the name of the person filing the report, the origin, route, and destination of the currency transported, the amount involved, and the business, occupation or profession of the person transporting the money, if someone other than the person filing. The information required in the reports, unlike that in Sullivan v. United States, is itself evidence of crime. For example, tax evasion may be proved by showing substantial, recurring understatements of income and the reports would provide invaluable data in that regard.

Moreover, unlike the income tax returns in Sullivan, the statute does not permit a person to comply with the requirement that a report be filed yet claim the privilege with regard to information provided therein. The Act and Regulations provide severe penalties not only for failure to file a report, but also for any material misstatements or omissions contained therein. Moreover, such penalties are imposed in any person who "aids, abets, commands, procures or requests" that money be transported if the report filed by any other person so involved with the transaction contains such misstatements or omissions. Thus, if the person filing the report claimed the privilege with respect to information contained therein, it could be obtained from any other party to the transactions.

In short, the inquiry authorized by P.L. 91-508 is "in an area permeated with criminal statutes, where response to any of the form's questions in context might involve the petitioners in the admission of a crucial element of a crime." Albertson v. SACB, supra, p. 79.

IV.

THE COMPULSORY DISCLOSURE OF FINANCIAL TRANSACTIONS AND THE WHOLESALE, UNLIMITED FISHING EXPEDITIONS INTO BANK RECORDS AUTHORIZED BY THE ACT AND REGULATIONS CONSTITUTE A MASSIVE AND INEXCUSABLE INVASION OF THE CONSTITUTIONAL RIGHT OF PRIVACY

In this section we argue that the reporting and recordkeeping requirements of the Act and Regulations constitute an unconstitutional invasion of privacy. We begin with a short analysis of the tort law of privacy, which is closely related to privacy in its constitutional dimension. We conclude by showing that financial affairs in general and bank records in particular have long been regarded as protected by the right of privacy, and by showing that the Act and Regulations do violence to that protection.

A. The privacy tort: the public disclosure of private facts

The tort of invasion of privacy is relatively new, having been given its first impetus by the seminal article by Warren and Brandeis, The Right to Privacy, 4 Harv. L. Rev. 193 (1890). As the law of privacy has grown, it has developed into four distinct and separate kinds of invasions. Professor William Prosser has detailed these branches in perhaps the leading modern summary of the privacy tort. Prosser, Privacy, 48 Calif. L. Rev. 383 (1960). He calls the third branch (the one relevant to this case) "the public disclosure of private facts." Id. at 392.

The most famous example of this sort of invasion of privacy is Melvin v. Reid, 112 Cal. App. 285 (1931). In Melvin the plaintiff had for several years been a notorious prosititue, and had been tried, though acquitted, for murder. After her acquittal she decided to reform, gave up her occupation, became rehabilitated, married, made friends, and took a respectable position in society. Some eight years later the defendants published a movie entitled "The Red Kimono", which depicted true events in the plaintiff's earlier life as a prostitute. The film used the plaintiff's maiden name and was advertised as depicting her actual life story. This, of course, caused her great injury, and she brought suit for damages.

The Court candidly recognized that no California case had yet established the right of privacy. Yet the Court reversed the sustaining of a demurrer, holding that a cause of action was stated, and finding a right of privacy inherent in Article One, Section One of the California Constitution, which protects the right of "pursuing and obtaining safety and happiness." The Court assumed that the events depicted in the movie were true, but spoke of privacy as the right "to be let alone." 112 Cal. App. at 289.

Thus the privacy tort was born in California in the context of the public disclosure of private facts, and its focus has remained there ever since. Indeed, the most frequently quoted formulation of the tort in California comes from Coverstone v. Davies, 38 Cal. 2d 315, cert. denied sub. nom. Mock v. Davies, 344 U.S. 840 (1952), in which the California Supreme Court stated that “[t]he gravaman of the tort is ordinarily the unwarranted publication by defendant of intimate details of plaintiff's private life." See also Briscoe v. Readers' Digest Assn., 4 Cal. 3d 529 (1971); City of Carmel-by-the-Sea v. Young, 2 Cal. 3d 259 (1970); Werner v. Times-Mirror Co., 193 Cal. App. 2d 111 (1961); Smith v. National Broadcasting Co., 138 Cal. App. 2d 807 (1956)

The facts disclosed may well be true, and need not be necessarily embarrassing or incriminating (see, e.g., Brex v. Smith, 104 N.J. Eq. 386, 146 A. 34 (1929) (bank records held private as against prosecutor's demand to inspect)); they must simply be private and not subject to disclosure due to some overriding interest which could create a privilege.

B. Governmental involvement: the constitutional dimension of invasion of privacy

It is fast becoming recognized that where governmental action invades privacy, especially where the disclosure of "private facts" is involved, the invasion becomes one of constitutional significance. The constitutional right of privacy is even newer than the tort of invasion of privacy, but it is nonetheless firmly fixed in federal law.

The leading case from the United States Supreme Court is Griswold v. Connecticut, 381 U.S. 479 (1965). There the Court established the right of privacy as of constitutional dimension, striking down a state law prohibiting the use of contraceptive devices or the giving of advice concerning them as a violation of the right of privacy of married couples.

It is overly optimistic to read Griswold as establishing the constitutional status of the right of privacy generally, since the Court was concerned with an intrusion into a very sensitive and intimate sphere of human feelings and emotions. But within that limitation courts have begun widely to recognize the Griswold privacy concept, even outside the sphere of marriage." In Doc v. McMillan, 442 F.2d 879 (D.C. Cir. 1971), for example, the Court of Appeals issued an injunction pending appeal restraining the publication of tests and disciplinary records of named students in the District of Columbia schools The plaintiffs' role claim was of invasion of the constitutional right of privacy. In issuing the injunction pending appeal the Court of Appeals called the contention "worthy of serious consideration on the merits." Id. at 881. See also Nader v. General Motors, 25 N.Y. 2d 560, 225 N.E. 2d 765 (1970) (finding a right of privacy in District of Columbia law).

Most importantly, even though the notion that privacy is a constitutional right is relatively new, it has already been applied to the public-disclosure-of-privatefacts category of privacy cases where governmental agencies have been involved. In York v. Story, 324 F.2d 250 (9th Cir. 1963), the plaintiff went to a city police

11 In Henley v. Wise, 303 F.Supp. 62 (N.D. Indiana 1969), in striking down an obscenity statute, the Court observed that while "only the right to marital privacy is covered by Griswold, it is clear that this right stems from the greater right to individual privacy." 303 F.Supp. at 67.

department to complain of an assault. Over her protests that no bruises would show, and without summoning an available policewoman, one of the defendant police officers inveigled plaintiff into submitting to being repeatedly photographed in the nude by insisting that the pictures were “necessary" for his investigation. Then he and other defendants circulated the nude photographs among the personnel of the police department.

Plaintiff sued in the federal court, claiming an invasion of her constitutional right of privacy. Since she sued under 42 U.S.C., Sections 1979 and 1983, protecting only "rights. secured by the Constitution", the constitutional stature of the right invaded was essential to her claim The Court held that her complaint stated a cause of action for the invasion of a constitutional right of privacy found in the Due Process Clause of the Fourteenth Amendment.

In Dietemann v. Time, Inc., 284 F. Supp. 295 (C. D. Cal. 1968) (Carr, J.), aff'd. 449 F.2d 245 (1971), plaintiff sued the owners of Life magazine, claiming an invasion of privacy for surreptitiously making pictures and recordings in his house with the cooperation of local police but without his consent. The District Court held the plaintiff entitled to damages both under California and federal law, saying as to the latter ground:

"The acts of defendant also constituted an invasion of plaintiff's right of privacy guaranteed by the Constitution of the United States which would entitle him to relief under Section 1983, Title 42, United States Code." 284 F. Supp. at 932.

And in United States v. Kalish, 271 F. Supp. 968 (D.P.R. 1967), a criminal indictment obtained due to a misunderstanding against an obviously innocent defendant had been dismissed. The police insisted on a right to retain the defendant's photograph and fingerprints in their rogue's gallery. But on application of the defendant the Court ordered them expunged and destroyed, holding that their retention would violate the defendant's constitutional right of privacy. 271 F. Supp. at 970.

C. The constitutional protection of the privacy of financial information and bank records.

A citizen's financial affairs have long been regarded as one of the most traditional and important subjects protected by the right of privacy. For example, the public broadcasting of debt has long been held to be an invasion of privacy in the category of the public disclosure of private facts. The Trammel v. Citizens News Co., Inc., 285 Ky. 529, 148 S.W.2d 708 (1941), for example, a creditor bought newspaper space to publish the fact of the plaintiff's debt. The complaint was held to state a cause of action for the invasion of privacy. There are many similar cases. See, e.g., Biederman's of Springfield v. Wright, 322 S.W.2d 892, 896 (Mo. 1969) ("the giving of undue publicity to private debts"), and cases cited therein.

A most recent and telling example of the judicial protection of the privacy of financial information is City of Carmel-by-the-Sea v. Young, 2 Cal. 3d 259 (1970), in which the California Supreme Court struck down as unconstitutional a 1969 statute requiring the disclosure of certain financial holdings by public officials. The statute (Government Code §§ 3600-3704) required every public officer and each candidate for state or local office to disclose investments in excess of $10,000. While recognizing the obvious salutary purposes of the statute, the Court invalidated the statute in its entirety as "an overbroad intrusion into the right of privacy”, id. at 262, and said:

66

the protection of one's personal financial affairs . . . against compulsory public disclosure is an aspect of the zone of privacy which is protected by the Fourth Amendment and which also falls within that penumbra of constitutional rights into which the government may not intrude absent a showing of compelling need and that the intrusion is not overly broad." Id. at 268.

Bank records in particular have long received judicial protection of their privacy.1 One old example with startling similarities to this case is Brex v. Smith, 104 N.J.Eq. 386, 146 A. 34 (1929), in which the Court enjoined a local

12 There can be little doubt that a customer of a bank can reasonably expect that his bank records are private. As it was forcefully put in Peterson v. Idaho First Nat'l Bank, 83 Idaho 578, 367 P.2d 284, 290 (1961): "It is inconceivable that a bank would at any time consider itself at liberty to disclose the intimate details of its depositors' accounts. Inviolate secrecy is one of the inherent and fundamental precepts of the relationship of the banks and its customers or depositors."

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prosecutor from fulfilling his desire to probe into the bank accounts of a designated group for unstated investigatory purposes. The facts were succiently put: "This application is in effect a demand by the prosecutor that all the bank accounts of all the members of the Newark police department . . . be submitted to him for examination. The only reason given is "to assist him in some investigation he is making." Presumably, he thinks there may have been in some instances improper reception of money." 146 A. at 35 (emphasis in original) 13 The Court rightly regarded this demand as an invasion of the privacy of the policemen and enjoined it, saying that the prosecutor could proceed by the ordinary course of subpoena or grand jury investigation. 146 A. at 36-37.

13

The proposition that a depositor's bank records are protected by the constitutional right to privacy long antedates even Griswold v. Connecticut, supra. In Zimmerman v. Wilson, 81 F.2d 847 (3d Cir. 1936), Internal Revenue agents had demanded plaintiff's bank books from their banker and broker, without any showing of reason, suspicion or probable cause. The Third Circuit ordered the entry of an injunction against the disclosure, holding that disclosure under the circumstances would violate not only the Fourth Amendment's prohibition of unreasonable searches and seizures but also the plaintiff's right of privacy :

. . . . We regard the search here asserted as a violation of the natural law of privacy in one's own affairs which exist in liberty loving peoples and nations-for no right is more vital to 'liberty and the pursuit of happiness' than the protection of the citizen's private affairs, their right to be let alone. And that right extends to the records of his transactions from the unreasonable inspection and examination thereof by unwarranted governmental search. If due protection of this natural right be denied him by the courts, his other rights and his citizenship lose their value." Id. at 849.14

Bank records, therefore, are among the most longstanding and traditional islands of privacy in American law. Without an adequate showing of particularized need they are protected from examination at the will of the government. Since the Act and Regulations forthrightly abolish that protection on no more than an assertion of a "high degree of usefulness," the Act and Regulations must be restrained.

V.

THE ACT AND REGULATIONS EMPOWER THE SECRETARY TO ROAM AT WILL THROUGH BANK RECORDS OF INDIVIDUALS AND ORGANIZATIONS, THUS THOROUGHLY UNDERMINING THE RIGHT OF ASSOCIATION AL PRIVACY GUARANTEED BY THE FIRST AMENDMENT

The broad discretion given to the Secretary by the Bank Secrecy Act and the regulations which implement it empowers him to obtain information which the Supreme Court has assidously protected from disclosure in a number of cases because of the harmful effect of such disclosure on the First Amendment's guarantee of associational privacy.

A. Discretionary powers granted to the Secretary

Section 221 of the Act provides that "transactions involving any domestic financial institution shall be reported to the Secretary at such time, in such manner and in such detail as the Secretary may require if they involve the payment, receipt, or transfer of U.S. currency, or such other monetary instruments as the Secetary may specify, in such amounts, denominations, or both, or under such circumstances as the Secretary shall by regulation prescribe." (Emphasis added.)

13 The desire to engage in fishing expeditions into bank accounts is obviously nothing new. The Newark prosecutor's reason for wanting the bank records bears an almost eerie resemblance to the explicit reasons for the same desire set forth in the Act and Regulations under attack here. "The Congress finds that adequate records have a high degree of usefulness in criminal, tax, and regulatory investigations and proceedings." Act, Section 101, 12 U.S.C.A., Section 1811. That statement of purpose appears frequently throughout the Act and Regulations.

14 The outcome of the Zimmerman case is particularly apropos here, because it illustrates the critical constitutional difference between a search without any showing of reason and a search with a showing of probable cause. On remand the government was able to show proper cause for the inspection and the District Court permitted inspection, Zimmerman v. Wilson, 25 F.Supp. 75 (1938). This result was affirmed by the Third Circuit on the express ground that the evidence adduced by the government on remand showed probable cause. Zimmerman v. Wilson, 105 F.2d 583, 586 (3d Cir. 1939). See also Arend v. De Masters, 181 F.Supp. 761, 764-65 (D.Neb. 1960).