People v. Avant, 33 N.Y.2d 265 (1973)

The state cannot compel a public contractor to waive their Fifth Amendment right against self-incrimination by threatening to disqualify them from future contracts, and an indictment based on such compelled testimony must be dismissed, although re-indictment is possible with independently obtained evidence.

Summary

Avant, public contractors, were subpoenaed by a grand jury investigating city purchasing practices. They signed a limited waiver of immunity, fearing disqualification from future contracts under General Municipal Law § 103-b. They were subsequently indicted. The Court of Appeals held that the waiver was unconstitutionally coerced, as the threat of losing future contracts was akin to the threat of losing employment, violating their Fifth Amendment rights. The indictment was dismissed, but the court clarified that re-indictment was permissible if based on evidence independent of the compelled testimony.

Facts

The defendants, public contractors, had a snow removal contract with the City of Albany in 1969-1970.
In 1971, they were subpoenaed to appear before the Albany County Grand Jury regarding the city’s purchasing practices.
They executed a limited waiver of immunity related to their snow removal contract and surrendered requested records.
Subsequently, they were indicted for grand larceny and knowingly offering a false instrument for filing.

Procedural History

Defendants moved to dismiss the indictments, arguing that General Municipal Law § 103-b compelled them to furnish incriminating evidence.
The trial court agreed and dismissed the indictments.
The Appellate Division reversed, finding a distinction between public employees and contractors.
The New York Court of Appeals granted leave to appeal.

Issue(s)

Whether the threat of disqualification from future public contracts constitutes unconstitutional coercion, violating the Fifth Amendment privilege against self-incrimination when a contractor is compelled to waive immunity before a grand jury.
Whether an indictment based on testimony obtained through such unconstitutional coercion must be dismissed.

Holding

1. Yes, because the threat of losing future contracts is a significant infringement on constitutional rights, similar to the threat of job loss for public employees.
2. Yes, because calling a target of an investigation before a grand jury violates their constitutional privilege against self-incrimination, mandating dismissal of the indictment.

Court’s Reasoning

The Court of Appeals relied heavily on the Supreme Court’s decision in Lefkowitz v. Turley, which invalidated General Municipal Law §§ 103-a and 103-b. The Supreme Court found no “difference of constitutional magnitude between the threat of job loss to an employee of the State, and a threat of loss of contracts to a contractor.” The court reasoned that compelling testimony under threat of penalty (loss of contracts) violates the Fifth Amendment.
The court distinguished between the right of the State to compel public servants or those with a special duty to the State to account for their activities, and the impermissibility of using compelled testimony in subsequent criminal prosecutions (citing Gardner v. Broderick and Garrity v. New Jersey).
The court applied the rule from People v. Steuding, stating that a prospective defendant or target of a grand jury investigation cannot be called and examined, and if they are, their privilege against self-incrimination is violated, requiring dismissal of the indictment.
However, the court clarified that this does not grant automatic immunity. Re-indictment is permissible if sufficient evidence, independent of the compelled testimony, is presented (citing People v. Laino). The court noted that at the time, New York law required an affirmative claim of the privilege against self-incrimination to obtain full transactional immunity.
The court emphasized that while the municipality could still call upon the contractors to account for their public trust, all subsequent proceedings must fully recognize their constitutional rights. “Rather, the State must recognize…that answers elicited upon the threat of the loss of employment are compelled and inadmissible in evidence.”