John K. Maciver Inst. for Pub. Policy, Inc. v. Schmitz

• Decision Date: 21 March 2018
• Docket Number: No. 17-1790,17-1790
• Citation: 885 F.3d 1004
• Parties: The JOHN K. MACIVER INSTITUTE FOR PUBLIC POLICY, INC., Plaintiff-Appellant, v. Francis D. SCHMITZ, et al., Defendants-Appellees.
• Court: U.S. Court of Appeals — Seventh Circuit

885 F.3d 1004

The JOHN K. MACIVER INSTITUTE FOR PUBLIC POLICY, INC., Plaintiff-Appellant,

v.Francis D. SCHMITZ, et al., Defendants-Appellees.

No. 17-1790

United States Court of Appeals, Seventh Circuit.

Argued November 8, 2017

Decided March 21, 2018

Rehearing and Rehearing En Banc Denied April 23, 2018^*

E. Dean Greim, Todd Peterson Graves, John Benton Hurst, Dane C. Martin, Attorneys, GRAVES GARRETT, LLC, for Plaintiff-Appellant.

Joel D. Bertocchi, Attorney, HINSHAW & CULBERTSON LLP, Chicago, IL, Defendants-Appellees Francis D. Schmitz, John T. Chisholm, Bruce Landgraf, and David Robles.

Douglas Knott, Samuel J. Leib, Brent A. Simerson, Attorneys, LEIB KNOTT GAYNOR LLP, Milwaukee, WI, for Defendant-Appellee Robert Stelter.

Before Wood, Chief Judge, and Flaum and Hamilton, Circuit Judges.

Wood, Chief Judge.

This appeal requires us once again to delve into the intricacies of the Wisconsin "John Doe proceeding," a unique creature of Wisconsin law with some similarities to a grand jury investigation. A putative class of individuals and entities assert that they were swept up in a John Doe investigation that ran roughshod over their federal rights. They sued the members of Wisconsin’s (former) Government Accountability Board and the Milwaukee County District Attorney’s Office, complaining about actions the defendants took between 2012 and 2014 in connection with a multicounty John Doe proceeding. The investigation had focused on suspected illegal campaign coordination between certain issue-advocacy groups and a candidate for elected office. Plaintiff, the John K. MacIver Institute for Public Policy ("MacIver"), is one of those advocacy groups. The defendants obtained search warrants from the state judge presiding over the John Doe proceeding for MacIver’s electronic records; they then executed those warrants through internet service providers without giving notice to MacIver.

MacIver filed suit in the federal district court for the Western District of Wisconsin, alleging that the defendants’ conduct violated the Stored Communications Act ("SCA"), 18 U.S.C. §§ 2703(a) – (c), 2711(3). MacIver seeks damages, a preliminary injunction, and the return of its seized property. The district court dismissed the complaint and MacIver has appealed. Although the parties have briefed a wide variety of issues relating to the SCA and the John Doe process, we conclude that we need reach only one of them: the SCA’s good-faith defense. We conclude that the defendants are entitled to this defense and thus affirm the judgment of the district court.

I

A

John Doe proceedings "have been in use in Wisconsin since its days as a territory." State ex rel. Two Unnamed Petitioners v. Peterson , 363 Wis. 2d 1, 67, 866 N.W.2d 165 (2015), decision clarified on denial of reconsideration sub nom. State ex rel. Three Unnamed Petitioners v. Peterson , 365 Wis. 2d 351, 875 N.W.2d 49 (2015). Noting that it is a unique device now codified under Wisconsin Statute § 968.26, this court "ha[s] likened John Doe proceedings to grand jury investigations," except that they are conducted under the supervision of a judge, not the grand jury. See Archer v. Chisholm , 870 F.3d 603, 613 (7th Cir. 2017). A John Doe proceeding "serves two important purposes." Peterson , 363 Wis. 2d at 67, 866 N.W.2d 165. It is both "an investigatory tool used to ascertain whether a crime has been committed" and a special procedure "designed to protect innocent citizens from frivolous and groundless prosecutions." Id. (quoting State ex rel. Reimann v. Cir. Ct. for Dane Cnty. , 214 Wis. 2d 605, 621, 571 N.W.2d 385 (1997) ).

"John Doe proceedings are conducted through the authority of the presiding judge," In re Doe Petition , 310 Wis. 2d 342, 359, 750 N.W.2d 873 (2008), opinion modified on denial of reconsideration sub nom. In re Doe , 314 Wis. 2d 67, 756 N.W.2d 34 (2008), whose duty it is to determine, upon consideration of evidence collected during the proceeding, whether probable cause exists to issue a criminal complaint. See State v. Washington , 83 Wis. 2d 808, 821, 266 N.W.2d 597 (1978). A John Doe judge "serves an essentially judicial function." Id. at 823, 266 N.W.2d 597. Importantly, "[t]he John Doe judge does not act as ‘chief investigator’ or as a mere arm of the prosecutor. Rather, the John Doe judge serves as a check on the prosecutor and on the complainant to ensure that the subject(s) of the investigation receive(s) due process of law." Peterson , 363 Wis. 2d at 69, 866 N.W.2d 165 (citation omitted). At the conclusion of the proceeding, the judge determines whether probable cause exists; if it does, the judge may order a written criminal complaint. Id . at 68, 866 N.W.2d 165.

Although the rules have since changed significantly, at the time relevant to this case a judge overseeing a John Doe proceeding could subpoena witnesses, take testimony under oath, and, most relevant here, issue search warrants. Wis. Stat. § 968.26(2)(c) (2009), amended by 2015 Wis. Act 64 (eff. Oct. 25, 2015) (granting authority to subpoena witnesses and take testimony); State v. Cummings , 199 Wis. 2d 721, 733–35, 546 N.W.2d 406 (1996) (discussing authority to issue search warrants). Additionally, some or all of the proceeding could be conducted in secret, so that the subjects of the investigation would be unaware of it. Wis. Stat. § 968.26(3) (2009), amended by 2015 Wis. Act 64 (eff. Oct. 25, 2015).

B

MacIver is a Wisconsin-based conservative non-profit organization. As noted above, the defendants all worked either for the Wisconsin Government Accountability Board ("the Board"), an entity that now has been disbanded, or the Milwaukee County District Attorney. Francis Schmitz was a special investigator for the Board. Kevin Kennedy was the Board’s Director and General Counsel, and Jonathan Becker served as Administrator of its Ethics and Accountability Division. Shane Falk was a Staff Attorney with the Board. John Chisholm was the Milwaukee County District Attorney. Bruce Landgraf and David Robles were Milwaukee County Assistant District Attorneys. Finally, Robert Stelter was an investigator for the Milwaukee County District Attorney’s Office.

On August 10, 2012, Robles petitioned the Milwaukee County Circuit Court to commence a John Doe proceeding to investigate alleged campaign-finance violations. The petition, anticipating that sensitive documents would be sought and collected, requested a secrecy order. On August 23, the chief judge of the circuit court assigned and forwarded the John Doe petition to Reserve Circuit Court Judge Barbara Kluka. On September 5, Judge Kluka was appointed by the Chief Justice of Wisconsin to preside over the John Doe proceeding in Milwaukee County, a step that was necessary because she was a reserve judge. Judge Kluka authorized the commencement of the proceeding and entered the requested secrecy order. In July and August of 2013, the investigation expanded into Columbia, Iowa, Dodge, and Dane counties, leading to the Chief Justice’s appointment of Schmitz as special prosecutor for the entire investigation.

While presiding over the John Doe proceedings, Judge Kluka issued search warrants for electronic records of MacIver and other advocacy groups. MacIver alleges that in the end the investigators seized nearly five years’ worth of its stored electronic communications. The secrecy orders had their intended effect: MacIver was not notified when the warrants were executed.

The recipients of the subpoenas, however, obviously knew that something was afoot. Some of them filed motions to quash their subpoenas in October 2013. Because of a conflict of interest (unspecified), Judge Kluka recused herself from the proceedings, which were reassigned to Judge Gregory Peterson. On January 10, 2014, Judge Peterson granted the motions to quash. He concluded that the targets had done nothing wrong, as Wisconsin law did not prohibit coordination between campaign committees and outside groups when the purpose of such coordination was to finance issue advocacy. Eventually this issue reached the Wisconsin Supreme Court, which upheld Judge Peterson’s decision on July 16, 2015. The court ordered that the John Doe proceedings be closed and that the defendants "return all property seized in the investigation ... and permanently destroy all copies of information and other materials obtained through the investigation."

On December 2, 2015, the Wisconsin Supreme Court reformulated the portion of its ruling pertaining to the disposition of the seized materials. The modified order required Schmitz to retrieve all original documents relating to the John Doe proceeding and file them with the Clerk of the Wisconsin Supreme Court. All other copies had to be destroyed, but the copies on file with the Clerk would remain "in the event that the investigation would be allowed to proceed at some future date" or "for use in related civil proceedings...." The court ordered that this file-and-destroy process be completed by November 2, 2016.

C

MacIver filed the present action on August 1, 2016, on behalf of a putative class of plaintiffs whose information was seized in the John Doe proceeding. MacIver alleges that the defendants "sought, obtained, and executed" search warrants for electronic communications without notice in violation of the SCA. Under MacIver’s theory, the John Doe proceeding that issued the search warrants was not a "court of competent jurisdiction" under the SCA, thus making the lack of notice a statutory violation. In addition to damages, MacIver seeks declaratory relief and an injunction (1) prohibiting the defendants from obtaining any new records or disclosing the records they have, and (2) requiring the defendants to provide MacIver with copies of all seized records.

In fact, the defendants have represented to this court that they do not have custody of any of the documents. The Wisconsin Supreme Court has the originals under seal, and the district court has copies, also under seal and out of their...