Voss v. Bergsgaard

• Decision Date: 30 September 1985
• Docket Number: No. 85-1591,85-1591
• Citation: 774 F.2d 402
• Parties: John A. VOSS, John E. Grandbouche, Joseph P. Gorman, Sandra L. Gorman, Marlene Aspinall, Dean Salisbury, Mel Houser, Cathy Houser, and Walter Jess Clifford, Plaintiffs-Appellees, v. Special Agents Larry D. BERGSGAARD, James Molnar, Gregory Myre, Thomas McAndrews, Patrick Henry, Group Manager Jerry Bandy, Donna Beckman, Darryl Watkins, Mike Nelson, John Does A Through Z, Unknown Named Agents of the Internal Revenue Service and/or Alcohol, Tobacco and Firearms, Department of the Treasury, United States of America, Defendants-Appellants.
• Court: U.S. Court of Appeals — Tenth Circuit

Page 402

774 F.2d 402

John A. VOSS, John E. Grandbouche, Joseph P. Gorman, Sandra

L. Gorman, Marlene Aspinall, Dean Salisbury, Mel

Houser, Cathy Houser, and Walter Jess

Clifford, Plaintiffs-Appellees, v. Special Agents Larry D. BERGSGAARD, James Molnar, Gregory

Myre, Thomas McAndrews, Patrick Henry, Group Manager Jerry

Bandy, Donna Beckman, Darryl Watkins, Mike Nelson, John Does

A Through Z, Unknown Named Agents of the Internal Revenue

Service and/or Alcohol, Tobacco and Firearms, Department of

the Treasury, United States of America, Defendants-Appellants.

No. 85-1591.

United States Court of Appeals, Tenth Circuit.

Sept. 30, 1985.

Donald M. Lewis, Sp. Asst. U.S. Dist. Atty. (Robert N. Miller, U.S. Atty. for D. of Colo., with him on briefs), Denver, Colo., for defendants-appellants.

William A. Cohan, P.C., Denver, Colo., for plaintiffs-appellees.

Before McKAY, LOGAN and SEYMOUR, Circuit Judges.

McKAY, Circuit Judge.

At issue in this case is whether certain search warrants were sufficiently particular in their description of items to be seized.

On April 5, 1985, a United States Magistrate authorized the issuance of search warrants presented to him by agents of the Internal Revenue Service, authorizing the search of three locations. Each was supported by the same affidavit of a special agent of the IRS.

The affidavit detailed an investigation of the National Commodities and Barter Association (NCBA) and its National Commodities Exchange (NCE). It described meetings between IRS undercover agents and NCBA officials in which those officials allegedly described how their organization was designed to conduct financial transactions on behalf of its clients in a manner designed to avoid detection by the IRS. The techniques allegedly employed included the conversion of negotiable instruments into cash and precious metals, to be redeemed by clients through the use of warehouse receipts; the use of private account numbers instead of clients' names; the use of fictitious names; the encoding of information prior to storage in computers; the destruction of business records and computer software; and the refusal to surrender client information to the IRS. The affidavit further described the use of an NCBA account by an IRS agent to convert into cash sums of money payable to assumed names.

A large volume of documents was seized at each search site. Shortly thereafter, appellees, members of the NCBA, filed a complaint pursuant to Rule 41(e) of the Federal Rules of Criminal Procedure, seeking the return of all documents and other evidence seized. Appellees alleged, among other things, that the warrants were not supported by sufficient probable cause, and that they failed to describe with sufficient particularity the property to be seized.

After an evidentiary hearing, the district court held that the affidavit set forth sufficient probable cause, but that the warrants were nevertheless invalid on particularity grounds. Subsequently, the government filed with this court an emergency motion for stay pending appeal, which was granted.

At the threshold appellees contend that this court does not have jurisdiction to entertain the government's appeal. Under 28 U.S.C. Sec. 1291, our jurisdiction is limited to appeals from "final decisions of the district courts." The Supreme Court has found that certain orders relating to a criminal case may be sufficiently independent from the main course of the prosecution to warrant treatment as "final decisions." Carroll v. United States, 354 U.S. 394, 403, 77 S.Ct. 1332, 1338, 1 L.Ed.2d 1442 (1957). Appellees concede that, because there is no criminal action pending, had the district court denied their motion such denial would have been appealable under section 1291. See DiBella v. United States, 369 U.S. 121, 131-32, 82 S.Ct. 654, 660-61, 7 L.Ed.2d 614 (1962). They nevertheless argue that the government may not appeal the district court's grant of the Rule 41(e) motion. The appellees point to no case in which the grant of a Rule 41(e) motion was found to be nonappealable when there was no pending criminal action, and there is ample support for the proposition that the grant of such a motion, like its denial, is appealable under section 1291. See United States v. Alexander, 428 F.2d 1169 (8th Cir.1970); United States v. Fields, 425 F.2d 883 (3rd Cir.1970); United States v. Filing, 410 F.2d 459 (6th Cir.1969). We can discern no significant basis for an asymmetrical treatment of the denial and grant of Rule 41(e) motions. As the Sixth Circuit said in Filing:

We do not know how any order could be drawn which would be more final than the one entered by the District Judge, which ordered the Government "to return forthwith to the Defendant all property seized by the search warrant."

Filing, 410 F.2d at 461. Accordingly, we hold that the district court's grant of appellees' Rule 41(e) motion is appealable as a final judgment under section 1291.

On the merits the government claims that the district court erred in finding the search warrants to be insufficiently particular in their description of the items to be seized. The warrants authorized the seizure of all books, records or documents relating to the following: NCBE/NCE customer accounts; financial transactions; financial services; the purchase, sale, or storage of precious metals; employees; and marketing and promotions. They further authorized the seizure of books, literature and tapes advocating nonpayment of federal income taxes; publications of tax protestor organizations; and literature relating to communications between persons conspiring to defraud the IRS, or to conceal such fraud.

The district court, in holding that the warrant amounted to an illegal writ of assistance, found that:

It is so pervasive that I think it's invalid, and I so hold. If, indeed, the description of the items to be seized were set forth with particularity, and only with particularity, there would be nothing wrong with this warrant, but what it gave was carte blanche for government agents to take anything that they saw, whether it was nailed down or otherwise, and, indeed, as best I can find from the returns and the pleadings, that's precisely what did happen.

Record, vol. 3, at 68.

The fourth amendment requires that a search warrant describe the things to be seized with sufficient particularity to prevent a "general, exploratory rummaging in a person's belongings." Coolidge v. New Hampshire, 403 U.S. 443, 467, 91 S.Ct. 2022, 2038, 29 L.Ed.2d 564 (1971). This requirement " 'makes general searches ... impossible and prevents the seizure of one thing under a warrant describing another. As to what is to be taken, nothing is left to the discretion of the officer executing the warrant,' " Stanford v. Texas, 379 U.S. 476, 485, 85 S.Ct. 506, 512, 13 L.Ed.2d 431 (1965), (quoting Marron v. United States, 275 U.S. 192, 196, 48 S.Ct. 74, 76, 72 L.Ed. 231 (1927) ).

The particularity requirement ensures that a search is confined in scope to particularly described evidence relating to a specific crime for which there is demonstrated probable cause. The government affidavit supporting the warrants at issue alleged a scheme of tax fraud, and the district court found that probable cause existed. The bulk of the warrant was not restricted to evidence relating to tax fraud however. It authorized government agents to rummage through all of the NCBA's customer files, bank records, employee records, precious metal records, marketing and promotional literature, and more, seeking any information pertaining to any federal crime. Even to describe the warrant as limited to evidence relating to federal crimes is an interpretation generous to the government. The concluding sentence in the warrant refers to the general conspiracy statute, but is not couched in terms that clearly restrict seizure to evidence relevant to the violation of the statute. The sentence simply reads: "All of which are evidence of violations of Title 18, United States Code, Section 371." Even if the reference to section 371 is construed as a limitation, it does not constitute a constitutionally adequate particularization of the items to be seized. In United States v. Roche, 614 F.2d 6, 8 (1st Cir.1980), the court held that a limitation of the search at issue to evidence relating to a violation of 18 U.S.C. Sec. 1341 provided "no limitation at all" because that statute itself is extremely broad in scope (prohibiting all fraud utilizing the mails). Section 371 is even broader in scope (prohibiting conspiracies to violate any federal statute) and, similarly, places no real limitation on the warrant.

An example is illustrative of the dangers inherent in allowing a warrant so broadly drawn as the one here at issue. The first paragraph of the warrant allows for the seizure of all books, records, or documents relating to customer accounts. A generous reading of the warrant would limit these items to those relating to a conspiracy to violate a federal law. But even under this interpretation, hypothetically, evidence in a customer's file indicating a conspiracy on that customer's part to import marijuana, even if unrelated to tax fraud, is within the scope of the warrant and may lawfully be seized. This, despite the fact that the government presented no evidence even suggesting probable cause for believing a drug crime had been committed. ¹

The insufficient particularity of the warrants is further illustrated by some of the items actually seized under their terms, including copies of the Internal Revenue Code, the Federal Rules of Criminal and Civil Procedure, and The Federalist Papers. The warrants allowed precisely the kind of rummaging through a person's belongings, in search of evidence of even previously unsuspected crimes or of no crime at all, that the fourth amendment proscribes.

The warrants' overbreadth is made even more egregious by the fact that the search at issue implicated free speech and...