Corporate legal departments have caught another break on the e-discovery front, thanks to an appeals court ruling that reaffirms the idea that electronic data seized during a criminal investigation can’t be retained unless it’s in the scope of a search warrant.
The ruling also gives a de facto blueprint for both government agents and judges to follow when issuing warrants for electronic information, and that ultimately may be the most important consequence, legal experts say.
The decision, U.S. v. Comprehensive Drug-Testing, was handed down by the California-based Ninth Circuit Court of Appeals on Aug. 26. More commonly known as the BALCO case, the dispute has spawned a long line of litigation stemming from steroid use among professional baseball players.
As Compliance Week previously reported, government agents in the BALCO probe executed a search warrant while investigating whether the Bay Area Lab Cooperative sold steroids to baseball players. Based on the seized data, agents then obtained confidential medical records of other players who tested positive for steroids, and then used that data to get more search warrants. Government lawyers reasoned that they should be allowed to retain and use information not included in their original search warrant because it came into “plain view.”
In a 9-2 opinion that upholds lower court rulings, however, the appeals court disagreed. “This was an obvious case of deliberate over-reaching by the government in an effort to seize data as to which it lacked probable cause,” Chief Judge Alex Kozinski wrote in the majority opinion. Accepting the plan-view doctrine would give prosecutors too much incentive to seize as much electronic data as possible despite limitations set in a search warrant, he said.
David Taylor, a former federal prosecutor who now heads the white-collar defense practice at law firm Perkins Coie, says the decision will force the Department of Justice to adjust how it conducts searches for electronic data. The case is also significant because of the wide scope of electronically stored information (ESI), which is “probably the most important single category of evidence in most white-collar investigations,” he says.
Whisler
Brian Whisler of law firm Baker & McKenzie and a former federal prosecutor for the Eastern District of Virginia says the decision also reaffirms the idea that searches of electronic data aren’t the same as searches of a building, where something in plain sight is fair game. “It’s understandable that the courts would be a lot more conservative on their approach here … and I think the courts are very sensitive about that, particularly in regard to electronic records, which are not, per se, illegal.”
ESI Guidelines
And because the BALCO case has winded its way all over the federal courts in California, the Ninth Circuit also decided to establish specific protocols it expects government agents and judges to follow from here forward.
“This was an obvious case of deliberate over-reaching by the government in an effort to seize data as to which it lacked probable cause.”
—Chief Judge Alex Kozinski
The court acknowledged two conflicting interests. First, since relevant data is almost always intermingled with irrelevant data, the government must often “over-seize” electronic data to find what it wants. On the other hand, the court also recognized that over-seizing data runs the risk of turning every warrant for ESI into a general warrant, whether investigators have probable cause to do so or not.
To strike a balance between those considerations, the court set forth the following rules for judges to follow in issuing warrants:
Magistrates should insist that the government waive reliance on the plain-view doctrine in digital evidence cases.
Segregation and redaction must be either done by specialized personnel or an independent third party. If the segregation is to be done by government computer personnel, the government must agree in the warrant application that the computer personnel will not disclose to the investigators any information other than that which is the target of the warrant.
Warrants and subpoenas must disclose the actual risks of destruction of information, as well as prior efforts to seize that information in other judicial settings.
BALCO RULING
The following excerpt is from United States vs. Comprehensive Drug Testing.
We see no evidence of bad faith or pretext here.
Nor does the seizure of intermingled documents demonstrate
“a callous disregard for the constitutional rights of the
movant.” Ramsden, 2 F.3d at 325 (stating the first factor
weighing in favor of equitable jurisdiction over a motion for
return of property). In this analysis, we focus on the Fourth
Amendment and note that “[a]s always under the Fourth
Amendment, the standard is reasonableness.” United States v.
Hill, 322 F. Supp. 2d 1081, 1088 (C.D. Cal. 2004) (Kozinski,
Circuit J., sitting by designation). Reasonableness can be
especially difficult to define in the computer context, given
the well-known “difficulties of examining and separating
electronic media at the scene.” Hill, 322 F. Supp. 2d at 1090.
Fortunately, our prior precedent reveals that agents can avoid
the opposing errors of leaving behind essential information
and sweeping up excessive evidence.
In United States v. Beusch, 596 F.2d 871 (9th Cir.
1979), this court addressed a motion to suppress seized evidence
consisting of ledgers containing items covered by the
search warrant intermingled with items not covered by the
search warrant. Id. at 876-77. The Beusch court concluded
that no Fourth Amendment violation occurred when agents
seized “single files and single ledgers, i.e., single items which,
though theoretically separable, in fact constitute one volume
or file folder.” Id. at 877.
The Beusch court expressly limited its reach, however:
“[T]he reasons we have given for allowing [such] seizure may
not apply to sets of ledgers or files, but because that is not the
case here, we find it unnecessary to discuss it further.” Id.
Three years later, the court addressed the seizure of sets of
files. See Tamura, 694 F.2d 591. In Tamura, the court
reviewed the conduct of officers executing a search warrant,
which authorized seizure of three specific categories of
records from a Los Angeles office. Id. at 594. In that case,
agents seized—without any limiting effort—files unrelated to
the items mentioned in the search warrant. Id. at 595. The
Tamura court condemned such “wholesale seizure for later
detailed examination of records not described in a warrant.”Id.
Unfortunately, the Tamura court did not answer a more difficult
question: “Because seizable materials are seldom found
neatly separated from their non-seizable counterparts, how
much separating must police do at the scene to avoid taking
items that are neither contraband nor evidence of criminal
activity?” Hill, 322 F. Supp. 2d at 1088. As the Hill court
noted, the answer turns upon “reasonableness,” id., a standard
that offers little guidance to government agents. Understandably,
the Tamura court sought to give more concrete advice
to help agents remain within the bounds of the Fourth Amendment.
The court suggested:
In the comparatively rare instances where documents
are so intermingled that they cannot feasibly be
sorted on site, we suggest that the Government and
law enforcement officials generally can avoid violating
fourth amendment rights by sealing and holding
the documents pending approval by a magistrate of
a further search, in accordance with the procedures
set forth in the American Law Institute’s Model
Code of Pre-Arraignment Procedure.
Source
United States vs. Comprehensive Drug Testing (Balco) (Dec. 27, 2006).
The government’s search protocol must be designed to uncover only the information for which it has probable cause, and only that information may be examined by the case agents.
The government must destroy or (if the recipient can lawfully possess it), return non-responsive data, keeping the issuing magistrate informed about when it has done so and what it has kept.
Alexis
“For lack of a better phrase, there seemed to be a sense of frustration by the court as to what the obligations and responsibilities and duties were between the parties,” says Anthony Alexis, a partner at the law firm Mayer Brown. He expects that many lawyers will cite aspects of the opinion in related cases, although he’s less certain that other circuits will adopt the Ninth Circuit protocol.
Whisler—who, coincidentally, was lead prosecutor in the dog-fighting conviction of NFL quarterback Michael Vick—says the habit of courts setting their own guidelines “makes it even trickier for government investigations.” For example, he says, he has encountered several judges who established their own processes to segregate data and to require government agents to come back to the court for permission if they want to expand their search.
Whisler is more hopeful that judges in other circuits will hear about the Ninth Circuit’s five-point protocol for BALCO, and adopt some or all of those ideas themselves. That’s especially likely with sensitive issues such as searches of electronic data, he says.
Even the Virginia-based Fourth Circuit—widely considered the philosophical opposite of the Ninth—shares the same concerns as raised in BALCO, “particularly when it comes to limiting the government’s ability to make wholesale searches once they get into a computer,” says Whisler.
But while many courts set guidelines as part of a decision, they tend to address the specific case in front of them rather than speak in broad terms, Taylor says. Indeed, the two dissenting judges in BALCO said they were troubled that the majority went beyond the specific case to establish broader rules, he adds.
Taylor
Nonetheless, the decision is both “helpful and important,” Taylor says. “There’s been a lot of confusion in guesswork in trying to apply the traditional rules in electronically stored information, and I think it helps to have clear guidelines for everyone.”
In addition, he says, the guidelines will further help the Justice Department understand the rules of the Ninth Circuit, which is one of the largest and most important courts in the country. “It will certainly help defense counsel to know what to look for in overseeing and responding to searches by the DoJ,” he says.
The Department of Justice has until Nov. 24 to decide whether to appeal the decision to the Supreme Court. It has not said what it will do.
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