U.S. v. Comprehensive Drug Testing, Inc.

• Citation: 513 F.3d 1085
• Decision Date: 24 January 2008
• Docket Number: No. 05-10067.,No. 05-55354.,No. 05-15006.,05-55354.,05-10067.,05-15006.
• Parties: UNITED STATES of America, Plaintiff-Appellant, v. COMPREHENSIVE DRUG TESTING, INC., Defendant-Appellee. Major League Baseball Players Association, Petitioner-Appellee, v. United States of America, Respondent-Appellant. In re Search Warrants Executed On April 8, 2004 at CDT, Inc., Seal 1, Plaintiff-Appellant, v. Seal 2, Defendant-Appellee.
• Court: United States Courts of Appeals. United States Court of Appeals (9th Circuit)

513 F.3d 1085

UNITED STATES of America, Plaintiff-Appellant, v. COMPREHENSIVE DRUG TESTING, INC., Defendant-Appellee.

Major League Baseball Players Association, Petitioner-Appellee, v. United States of America, Respondent-Appellant.

In re Search Warrants Executed On April 8, 2004 at CDT, Inc.,

Seal 1, Plaintiff-Appellant, v. Seal 2, Defendant-Appellee.

No. 05-55354.

No. 05-10067.

No. 05-15006.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted November 15, 2005.

Filed January 24, 2008.

Erika R. Frick, Assistant United States Attorney, San Francisco, CA, argued the cause for defendant-appellant, United States of America; United States Attorney Kevin V. Ryan, Appellate Chief Hannah Horsley, Assistant United States Attorney Barbara J. Valliere, San Francisco, CA; and Assistant United States Attorneys Matthew A. Parrella, Ross W. Nadel, Jeffrey D. Nedrow, Carter M. Stewart, San Jose, CA, were on the briefs.

Elliot R. Peters, Steven A. Hirsch, David J. Silbert, Keker & Van Nest, LLP, San Francisco, CA, argued the cause for defendants-appellees, Comprehensive Drug Testing, Inc. and Major League Baseball Players Association; Ethan A. Balogh, Coleman & Balogh, San Francisco, CA, and David P. Bancroft and Jeffrey C. Hallam, Sideman & Bancroft, LLP, San Francisco, CA, were on the brief.

Appeal from the United States District Court for the Northern District of California; Susan Illston, District Judge, Presiding. D.C. No. MISC-04-234-SI.

Appeal from the. United States District Court for the District of Nevada; James Mahan, District Judge, Presiding. D.C. No. CV-04-00707-JCM.

Appeal from the United States District Court for the Central District of California; Florence-Marie Cooper, District Judge, Presiding. D.C. No. CV-04-02887-FMC.

Before: DIARMUID F. O'SCANNLAIN, SIDNEY R. THOMAS, and RICHARD C. TALLMAN, Circuit Judges.

Opinion by Judge O'SCANNLAIN; Partial Concurrence and Partial Dissent by Judge THOMAS.

ORDER AND SUPERSEDING OPINION

ORDER

The petitions for panel rehearing are GRANTED. The opinion and dissent filed on December 27, 2006, are withdrawn. The superseding opinion and dissenting opinion of Judge Thomas will be filed concurrently with this order.

The petition for rehearing en banc is DENIED as moot. Further petitions for rehearing or rehearing en banc may be filed.

OPINION

O'SCANNLAIN, Circuit Judge:

We must decide whether the United States may retain evidence it seized from Major League Baseball's drug testing administrator, and enforce an additional subpoena, as part of an ongoing grand jury investigation into illegal steroid use by professional athletes.

I

These three consolidated cases arise from the federal investigation of the Bay Area Lab Cooperative ("Balco") and its alleged distribution of illegal steroids to enhance the performance of professional baseball athletes. The investigation began in August 2002 and, over the following several years, produced evidence—including grand jury testimony—establishing probable cause to believe that at least 10 major league baseball players received illegal steroids from Balco. Today we decide the government's appeals from the separate adverse orders of three different district courts: (1) an order by Judge Florence-Marie Cooper in the Central District of California, denying reconsideration of her earlier order requiring the government to return property seized from Comprehensive Drug Testing, Inc. in Long Beach, California ("CDT"),¹ (2) an order by Judge James Mahan in the District of Nevada, requiring the government to return property seized from Quest Diagnostics, Inc. in Las Vegas, Nevada ("Quest"),² and (3) an order by Judge Susan Illston in the Northern District of California, quashing the government's May 6, 2004, subpoenas to CDT and Quest that related to the grand jury sitting in San Francisco, California.

A

As part of its investigation into Balco, the government in November 2003 served a grand jury subpoena on Major League Baseball ("MLB"),³ seeking drug testing information for 11 players⁴ with connections to Balco. One month later, MLB responded that it had no such information.

The government then reasoned that because CDT⁵ and Quest⁶ had tested urine samples from MLB players during 2003, those entities—rather than MLB—had to possess the samples and testing records in question. Therefore, the government issued subpoenas both to CDT and to Quest, seeking drug testing information for all MLB players. The subpoenas were returnable on February 5, 2004, but the government extended that date to March 4, 2004, after CDT and Quest promised not to destroy or to alter any of the evidence requested.

Despite protracted negotiations, CDT and Quest resisted producing any of the subpoenaed materials, explaining that they would fight production of even a single drug test all the way to the Supreme Court. Following further negotiations, the government, believing that a narrower subpoena might be effective, issued new subpoenas on March 3, 2004, seeking documents related only to eleven⁷ players with Balco connections. These new subpoenas were returnable on April 8, 2004.

Two days before the new return date, the Major League Baseball Players' Association—the union representing athletes who play for Major League Baseball⁸— informed the government that it intended to file a motion to quash the subpoenas. The following day, as promised, CDT and the Players Association filed such a motion in the Northern District of California before United States District Judge Jeffrey White.

B

After learning of the planned motion to quash, the government applied on April 7, 2004, for warrants to search CDT's Long Beach office and Quest's Las Vegas laboratory. The government expected to find testing evidence at both locations and knew that the information at CDT would be needed to obtain all relevant records from Quest, because Quest stored each testing record by code, not name, and CDT possessed the information identifying the code(s) that corresponded to each player in its testing program. Upon a showing of probable cause,⁹ Magistrate Judge Jeffrey Johnson in the Central District of California issued a search warrant for the CDT office,¹⁰ and Magistrate Judge Lawrence Leavitt in the District of Nevada issued a search warrant for the Quest laboratory.¹¹ Affidavits submitted to support the warrants informed both magistrates that the information sought was already the subject of grand jury subpoenas and that a motion to quash was expected.¹² Contrary to the arguments of the Players Association and CDT, the government did not premise its April search warrant affidavits on a claim that the evidence was in danger of being destroyed.¹³

The April 7 warrants authorized the seizure of drug testing records and specimens for ten named Balco-connected players, as well as "[a]ll manuals, pamphlets, booklets, contracts, agreements and any other materials detailing or explaining" CDT's or Quest's "administration of Major League Baseball's drug testing program."¹⁴ The warrants also authorized the search of computer equipment, computer storage devices, and—where an on site search would be impracticable—seizure of either a copy of all data or the computer equipment itself. "[L]aw enforcement personnel trained in searching and seizing computer data" (designated "computer personnel") were responsible for choosing the appropriate course of action to capture the electronic data sought. If seizure of all data or equipment was necessary, "appropriately trained personnel" would review the data, retaining the evidence authorized by the warrant and designating the remainder for return.

On the morning of April 8, 2004, Special Agent Jeff Novitzky (the lead case agent) and eleven other federal agents—including Computer Investigative Specialist Agent Joseph Abboud—executed the search warrant for CDT's Long Beach office, Although CDT personnel were initially cooperative, one of CDT's directors—after speaking with counsel—informed Agent Novitzky that CDT would not assist federal officers in locating the evidence they were authorized to seize and that the agents should "do what they needed to do." When informed that agents might be forced to seize all computer equipment for up to sixty days, the director again contacted counsel, exclaiming that such a seizure would "shut[] the business down."

Throughout the morning and early afternoon, Agent Novitzky spoke several times with CDT's attorney, David Bancroft. Bancroft asked Agent Novitzky not to seize anything while he attempted to work out a beneficial solution, with the United States Attorney's Office in San Francisco. Later, Bancroft told the agent that CDT had only one hard-copy document eligible for seizure. Around noon, both Agent Novitzky and. Assistant United States Attorney Jeff Nedrow spoke with Bancroft and CDT's directors via conference call. Bancroft emphasized that any help CDT provided should not be construed to constitute consent and then informed Nedrow and Agent Novitzky that CDT had two computers op which agents would find information relevant to the search warrant.

During this conference call, Agent Novitzky learned that agents had discovered a hard-copy document with names and identifying numbers for all MLB players, including some of the ten named Balco players. Agent Novitzky faxed the document, which was not the "only document eligible for seizure" to which Bancroft had alluded, to Nedrow for preparation of another search warrant to seize specimen samples from Quest based on the identifying numbers. One of CDT's directors became visibly upset when she noticed the document being faxed. She left the premises, but when she returned, she opened a locked drawer and presented agents with a document that contained drug test results for the ten named Balco players—the document previously described as the only seizable hard-copy document on site.¹⁵

At 2:35 p.m., a CDT director finally identified a computer...