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

• Decision Date: 26 August 2009
• Docket Number: No. 05-55354.,No. 05-10067.,No. 05-15006.,05-10067.,05-15006.,05-55354.
• 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, 2004AT CDT, Inc., In re, Seal 1, Plaintiff-Appellant, v. Seal 2, Defendant-Appellee.
• Court: U.S. Court of Appeals — Ninth Circuit

579 F.3d 989

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, 2004AT CDT, Inc.,

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

No. 05-10067.

No. 05-15006.

No. 05-55354.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted December 18, 2008.

Filed August 26, 2009.

Argued by Joseph Douglas Wilson, Assistant United States Attorney, San Francisco, CA, who was joined on the briefs by Erika R. Frick, Assistant United States Attorney, San Francisco, CA, for the United States.

Argued by Elliot R. Peters, Keker & Van Nest LLP, San Francisco, CA, who was joined on the briefs by David J. Silbert, Keker & Van Nest LLP, San Francisco, CA, and Ethan Atticus Balogh, Coleman & Balogh LLP, San Francisco, CA, for the Major League Baseball Players Association.

David P. Bancroft, Sideman & Bancroft LLP, San Francisco, CA, and Jeffrey C. Hallam, Sideman & Bancroft LLP, San Francisco, CA, for Comprehensive Drug Testing, Inc.

Peter Buscemi, Morgan, Lewis & Bockius LLP, Washington, DC, for amicus curiae Chamber of Commerce of the United States.

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

Appeal from the United States District Court for the District of Nevada, James C. 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: ALEX KOZINSKI, Chief Judge, ANDREW J. KLEINFELD, SUSAN P. GRABER, KIM McLANE WARDLAW, W. FLETCHER, RICHARD A. PAEZ, MARSHA S. BERZON, CONSUELO M. CALLAHAN, CARLOS T. BEA, MILAN D. SMITH, JR. and SANDRA S. IKUTA, Circuit Judges.

Opinion by Chief Judge KOZINSKI; Partial Concurrence and Partial Dissent by Judge CALLAHAN; Partial Concurrence and Partial Dissent by Judge BEA; Dissent by Judge IKUTA.

KOZINSKI, Chief Judge:

This case is about a federal investigation into steroid use by professional baseball players. More generally, however, it's about the procedures and safeguards that federal courts must observe in issuing and administering search warrants and subpoenas for electronically stored information.

Facts

The complex facts underlying this case are well summed up in the panel's opinion and dissent, and we refer the interested reader there for additional information. United States v. Comprehensive Drug Testing, Inc., 513 F.3d 1085 (9th Cir.2008). We reiterate here only the key facts.

In 2002, the federal government commenced an investigation into the Bay Area Lab Cooperative (Balco), which it suspected of providing steroids to professional baseball players. That year, the Major League Baseball Players Association also entered into a collective bargaining agreement with Major League Baseball providing for suspicionless drug testing of all players. Urine samples were to be collected during the first year of the agreement and each sample was to be tested for banned substances. The players were assured that the results would remain anonymous and confidential; the purpose of the testing was solely to determine whether more than five percent of players tested positive, in which case there would be additional testing in future seasons.

Comprehensive Drug Testing, Inc. (CDT), an independent business, administered the program and collected the specimens from the players; the actual tests were performed by Quest Diagnostics, Inc., a laboratory. CDT maintained the list of players and their respective test results; Quest kept the actual specimens on which the tests were conducted.

During the Balco investigation, federal authorities learned of ten players who had tested positive in the CDT program. The government secured a grand jury subpoena in the Northern District of California seeking all "drug testing records and specimens" pertaining to Major League Baseball in CDT's possession. CDT and the Players tried to negotiate a compliance agreement with the government but, when negotiations failed, moved to quash the subpoena.

The day that the motion to quash was filed, the government obtained a warrant in the Central District of California authorizing the search of CDT's facilities in Long Beach. Unlike the subpoena, the warrant was limited to the records of the ten players as to whom the government had probable cause. When the warrant was executed, however, the government seized and promptly reviewed the drug testing records for hundreds of players in Major League Baseball (and a great many other people).

The government also obtained a warrant from the District of Nevada for the urine samples on which the drug tests had been performed. These were kept at Quest's facilities in Las Vegas. Subsequently, the government obtained additional warrants for records at CDT's facilities in Long Beach and Quest's lab in Las Vegas. Finally, the government served CDT and Quest with new subpoenas in the Northern District of California, demanding production of the same records it had just seized.

CDT and the Players moved in the Central District of California, pursuant to Federal Rule of Criminal Procedure 41(g), for return of the property seized there. Judge Cooper found that the government had failed to comply with the procedures specified in the warrant and, on that basis and others, ordered the property returned. We will refer to this as the Cooper Order.

CDT and the Players subsequently moved in the District of Nevada, pursuant to Federal Rule of Criminal Procedure 41(g), for return of the property seized under the warrants issued by that district court. The matter came before Judge Mahan, who granted the motion and ordered the government to return the property it had seized, with the exception of materials pertaining to the ten identified baseball players. We will refer to this as the Mahan Order.

CDT and the Players finally moved in the Northern District of California, pursuant to Federal Rule of Criminal Procedure 17(c), to quash the latest round of subpoenas and the matter was heard by Judge Illston. (The original subpoena, and the motion to quash it that was filed in 2003, aren't before us.) In an oral ruling, Judge Illston quashed the subpoenas. We will refer to this as the Illston Quashal. See Bryan A. Garner, A Dictionary of Modern American Legal Usage 725 (2d ed.1995).

All three judges below expressed grave dissatisfaction with the government's handling of the investigation, some going so far as to accuse the government of manipulation and misrepresentation. The government nevertheless appealed all three orders and a divided panel of our court reversed the Mahan Order and the Illston Quashal, but (unanimously) found that the appeal from the Cooper Order was untimely. Upon a vote of eligible judges, we took the case en banc. As luck would have it, none of the three judges on the original panel was drawn for this en banc court. Nevertheless, we rely heavily on their work in resolving the case now before us.

Discussion

For reasons that will become apparent, we don't consider the three orders below chronologically. Rather, we consider the Cooper Order first, the Mahan Order next and the Illston Quashal last. Throughout, we take the opportunity to guide our district and magistrate judges in the proper administration of search warrants and grand jury subpoenas for electronically stored information, so as to strike a proper balance between the government's legitimate interest in law enforcement and the people's right to privacy and property in their papers and effects, as guaranteed by the Fourth Amendment.

1. The Cooper Order

The three judge panel unanimously held that the government's appeal from the Cooper Order was untimely. Comprehensive Drug Testing, 513 F.3d at 1096-1101, 1128. We agree with the panel and adopt its analysis of the issue, seeing no reason to burden the pages of the Federal Reporter by re-doing the work the panel already performed so well. On that basis, we dismiss the government's appeal in No. 05-55354.

This does not end our discussion of the Cooper Order, however, because it has substantial consequences for the remaining two cases before us. As Judge Thomas pointed out in his panel dissent, once the Cooper Order became final, the government became bound by the factual determinations and issues resolved against it by that order. Comprehensive Drug Testing, 513 F.3d at 1130. Specifically, Judge Cooper found that the government failed to comply with the conditions of the warrant designed to segregate information as to which the government had probable cause from that which was swept up only because the government didn't have the time or facilities to segregate it at the time and place of the seizure. Cooper Order at 4. Relatedly, Judge Cooper determined that the government failed to comply with the procedures outlined in our venerable precedent, United States v. Tamura, 694 F.2d 591 (9th Cir.1982), which are designed to serve much the same purpose as the procedures outlined in the warrant. Finally, Judge Cooper concluded that the government's actions displayed a callous disregard for the rights of third parties, viz., those players as to whom the government did not already have probable cause and who could suffer dire personal and professional consequences from a disclosure.

The affidavit supporting the first search warrant, the one that sought the drug testing records of the ten suspected base-ball players, contains an extensive introduction that precedes any information specific to this case. The introduction seeks to justify a broad seizure of computer records from CDT by explaining the generic hazards of retrieving data that are stored electronically....