State v. Ghim

• Decision Date: 13 October 2016
• Docket Number: CC C111491CR,SC S063021,CA A152065
• Citation: 381 P.3d 789,360 Or. 425
• Parties: State of Oregon, Respondent on Review, v. Denny D. Ghim, Petitioner on Review.
• Court: Oregon Supreme Court

360 Or. 425

381 P.3d 789

State of Oregon, Respondent on Review,

v.Denny D. Ghim, Petitioner on Review.

CC C111491CR

CA A152065

SC S063021

Supreme Court of Oregon.

Argued and submitted November 10, 2015.

October 13, 2016

Morgen E. Daniels, Salem, argued the cause and filed the briefs for petitioner on review. Also on the briefs was Ernest G. Lannet, Chief Defender, Office of Public Defense Services.

Rolf C. Moan, Assistant Attorney General, Salem, argued the cause and filed the brief for respondent on review. Also on the brief were Ellen F. Rosenblum, Attorney General, Paul L. Smith, Deputy Solicitor General, and Robert M. Wilsey, Assistant Attorney General.

Julia E. Markley, Perkins Coie LLP, Portland, filed the brief for amicus curiae American Civil Liberties Union of Oregon, Inc. Also on the brief was Kristina J. Holm.

Before Balmer, Chief Justice, and Kistler, Walters, Landau, Baldwin, Brewer, and Nakamoto, Justices.^**

KISTLER, J.

The question in this case is whether an agency's use of an administrative subpoena to obtain defendant's wife's bank records violated Article I, section 9, of the Oregon Constitution. The trial court denied defendant's motion to suppress evidence that the agency uncovered as a result of its subpoena, and the Court of Appeals affirmed. State v. Ghim , 267 Or.App. 435, 340 P.3d 753 (2014). Relying on State v. Johnson , 340 Or. 319, 131 P.3d 173 (2006), the Court of Appeals held that defendant had no constitutionally protected privacy interest in the bank records. It followed that the agency's use of an administrative subpoena to obtain those records did not violate Article I, section 9. We allowed defendant's petition for review and now affirm, on different grounds, the trial court's judgment and the Court of Appeals decision.

I. FACTS

The state charged defendant and his wife with 17 counts of criminal mistreatment, first-degree theft, and aggravated first-degree theft. Midway through trial, defendant's wife filed a motion in limine to exclude copies of her bank records, which the Department of Consumer and Business Services (DCBS) had obtained by administrative subpoena, from being admitted into evidence. Defendant joined in that motion and, throughout the trial, adopted his wife's arguments on that issue.¹ In summarizing the facts, we first describe the evidence brought out at the hearing on that motion—essentially, the circumstances that prompted DCBS to subpoena the wife's bank records and how the information that DCBS discovered as a result of its investigation became part of the criminal proceeding against defendant and his wife. We then describe the motion in limine , the arguments that the parties made regarding the motion, the trial court's rulings, and the Court of Appeals decision.

A. DCBS investigation

Ruth Johnson is an investigator for DCBS. In January 2009, Johnson received a call from Von Renchler, who had purchased investment properties from defendant and his wife. Von Renchler told Johnson that he and his wife were supposed to be receiving payments on their investment. However, they had received no payments. According to Von Renchler, defendant's wife had said that payments were being sent to the Von Renchlers' bank account by wire transfer, but no funds were transferred to the account. Afterwards, defendant's wife gave the Von Renchlers a check, which her bank refused to honor. Von Renchler told Johnson that he and his wife felt as if defendant and his wife were giving them “the runaround.”

After speaking with Von Renchler, Johnson became concerned that defendant and his wife were selling unregistered securities, which DCBS is charged with regulating. Johnson arranged to meet with the Von Renchlers and asked them to bring their records, including copies of checks that they had written to or received from defendant's wife, so that Johnson could begin her investigation. At the meeting, the Von Renchlers discussed their investment with defendant and his wife and gave Johnson copies of the checks that defendant's wife had sent them. Johnson told the Von Renchlers that she would “subpoena [defendant's wife's] bank records to take a look to see what happened to their money, to see if their money had gone where they were told it was going to go.” She explained that, if the money had gone where it was supposed to go, then she would speak with defendant and his wife, talk to them about what they were doing, and deal with any issues administratively.

Pursuant to ORS 59.315 and ORS 192.596, Johnson issued three subpoenas to the banks on which defendant's wife had written checks to the Von Renchlers.² Johnson sent copies of the subpoenas by certified mail to defendant's wife. In examining the records that she received in response to the subpoenas, Johnson saw “large deposits coming into [defendant's wife's bank] account,” which allowed Johnson “to identify [other] individuals that [she] believed were possibly making investments with [defendant and his wife].” Johnson then spoke with the persons whom she had identified from the bank records. She also spoke to property owners in Washington, where the investment properties were supposedly located, and she collected information from government agencies to determine whether the investment properties existed. Finally, in reviewing the bank records that she received, Johnson came across questionable financial transactions involving defendant's mother, who was the subject of a guardianship.

During the year in which Johnson pursued her investigation for DCBS, she did not contact the Von Renchlers' attorney. When asked why she had not done so, she explained that the Von Renchlers' attorney was “dealing with a bad check [from defendant's wife], with trying to get payment.” In her view, that matter “had nothing to do with what [she] was looking at,” which was “whether we were having a sale of an unlicensed, unregistered security in the State of Oregon.”

In March 2010, more than a year after Johnson began her investigation, the Von Renchlers asked Johnson if telling the police about the bad check they had received from defendant's wife would impede her investigation. Johnson said that it would not, and she added that the Von Renchlers could mention her name if they filed a police report. They did, and an officer contacted Johnson regarding her investigation. Before then, Johnson had not had any contact with any law enforcement agency.

B. Defendant's motion in limine

As noted, the state charged defendant and his wife with 17 counts of criminal mistreatment, first-degree theft, and aggravated first-degree theft.³ The first day of trial, the state called 11 witnesses. Most of those witnesses were persons to whom defendant and his wife had sold investment properties. We assume, as the parties do, that, except for the Von Renchlers, those witnesses were persons whom Johnson had identified as a result of reviewing the subpoenaed bank records.

The second day of trial, defendant filed a document captioned “motion in limine ,” in which he asked the court “to exclude from evidence bank records of defendant['s wife] as having been seized without proper court process.” Defendant contended that, “[e]ven if properly obtained under state administrative process, * * * that information [may not] be admitted against defendant [in] the criminal proceeding given privacy protections under Oregon statutory and constitutional provisions.” Although defendant asked the court to keep the bank records from being admitted, he did not ask the court to strike the testimony of the 11 witnesses who had testified the day before, nor did he ask the court to strike any exhibit offered in connection with that testimony.

The parties addressed defendant's motion in limine at three separate points during the trial, and the issues evolved as the trial progressed. The parties first discussed the motion shortly after it was filed. That discussion was fairly cursory. The prosecutor explained that the records had been obtained pursuant to statutorily authorized administrative subpoenas and that he was not aware of any limitation on obtaining bank records that way. Relying on Canadian authority, defendant responded that he had a constitutionally protected privacy interest in his wife's bank records. He reasoned that an administrative subpoena lacked the procedural and substantive protections associated with a search warrant. He acknowledged, however, that the victims could choose to disclose their bank records and that he and his wife “los[t] any privacy protection when they send a check out to somebody.”

The trial court did not find defendant's Canadian authority persuasive, and it reasoned that, even if DCBS could not issue an administrative subpoena for the banks' records, the prosecutor could subpoena the custodians of the records to appear as witnesses at trial and bring the records with them. Based on that reasoning, the court tentatively denied defendant's motion in limine , and the trial continued.

At the end of the second day of trial, the parties returned to the motion in limine . The prosecutor advised the court that, on examining the subpoenas that DCBS had issued, he realized that Johnson had served the subpoenas on defendant's wife by certified mail rather than personally, as the bank records statutes require. See ORS 192.596(2) (authoring banks to disclose a customer's records in response to administrative subpoenas but requiring personal service on the customer). The prosecutor also noted that the motion in limine was, in effect, a motion to suppress. He argued that, if defendant had filed a motion to suppress before trial, as other statutes required, the state could have reissued the subpoenas and served them properly. The prosecutor argued that the court could simply deny defendant's motion in limine as untimely. In lieu of doing so, however, the prosecutor suggested continuing the trial and allowing the state to issue a second set of subpoenas for the bank records.

The trial court...