U.S. v. Gonzalez, Inc.

• Decision Date: 22 June 2005
• Docket Number: No. 04-10041.,04-10041.
• Citation: 412 F.3d 1102
• Parties: UNITED STATES of America, Plaintiff-Appellant, v. GONZALEZ, INC. dba Golden State Transportation, Defendant-Appellee.
• Court: U.S. Court of Appeals — Ninth Circuit

412 F.3d 1102

UNITED STATES of America, Plaintiff-Appellant, v. GONZALEZ, INC. dba Golden State Transportation, Defendant-Appellee.

No. 04-10041.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted December 7, 2004.

Filed June 22, 2005.

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

Bruce M. Ferg, (argued); Paul K. Charlton and Christina M. Cabanillas (on the briefs), Office of the U.S. Attorney, Tucson, AZ, for the plaintiff-appellant.

William Kirchner (argued) and Walter Nash (on the briefs), Nash & Kirchner, P.C., Tucson, AZ; Jefferson Keenan (on the briefs) and Michael Piccarreta (argued), Piccarreta & Davis, P.C., Tucson, AZ, for the defendants-appellees.

Appeal from the United States District Court for the District of Arizona, Raner C. Collins, District Judge, Presiding.

Before: D.W. NELSON, KLEINFELD, and GOULD, Circuit Judges.

D.W. NELSON, Circuit Judge:

The government appeals the district court order granting in part defendants' motion to suppress evidence obtained as a result of wiretaps at the Los Angeles headquarters of Gonzalez, Inc., dba Golden State Transportation (GST). We consider below whether the district court erred by: (1) conducting a hearing pursuant to Franks v. Delaware, 438 U.S. 154, 98 S.Ct. 2674, 57 L.Ed.2d 667 (1978); (2) finding that the wiretap issued for the company headquarters failed to meet the statutory necessity requirement; and (3) granting standing to Antonio and Francisco Gonzalez to challenge all conversations intercepted under the invalidated wiretap order. We conclude that each of the district court's rulings was correct, and thus we affirm.

FACTUAL AND PROCEDURAL BACKGROUND

This appeal involves a multi-year investigation into an alleged conspiracy to smuggle aliens into the United States using a public bus company, GST. Although the government received and acted upon reports of alien smuggling at GST as early as May 1996, a sustained federal investigation into the alleged smuggling ring facilitated by GST did not begin until 1999. At that time, GST had bus terminals in nine western states.

Initially, the investigation focused on GST's Arizona operations. During this stage, federal agents employed several traditional investigative methods. For example, agents used pole cameras to conduct about 25,000 hours of video surveillance at the Tucson and Phoenix bus terminals and at a Tucson motel believed to be an alien safe house. In addition, agents in parked cars conducted 2,000 hours of physical surveillance near the two terminals. Undercover agents were widely used to gain an understanding of what occurred inside the terminals and on the buses. Two undercover agents became GST bus drivers, and one of these agents later worked at the Tucson terminal selling bus tickets and handling baggage. Undercover agents also posed as both undocumented aliens on GST buses and as smugglers at GST terminals. Other undercover agents infiltrated an alien-smuggling organization by picking up aliens near the border and taking them to the Tucson terminal. As a result of these successful efforts, agents engaged in, and even recorded, many conversations implicating GST employees in alien-smuggling activities. The government also recruited confidential informants (CIs) from GST's past and current employees, including a current dispatcher at the Tucson terminal and a bus driver. These CIs provided company documents and valuable information to aid the government investigation. Finally, the government also utilized pen registers and trap-and-trace devices to gather information in the Arizona-centered investigation.

After this intensive investigation into the activities at the Phoenix and Tucson terminals, the government applied for a wiretap order of these terminals' telephones (hereafter "Terminal wiretap"). On April 2, 2001, the district court issued an order authorizing the Terminal wiretap. After this authorization, the government conducted immigration stops of approximately thirteen GST buses departing from the terminals to generate chatter among the suspected conspirators. The government intercepted a phone call made by Francisco Gonzalez, the founder and vice president of GST, from the company's headquarters on Blake Avenue in Los Angeles. During this call Francisco discussed the immigration stops of GST buses from the Tucson and Phoenix terminals. On May 4, 2001, the government applied for, and was granted, a 30-day extension of the Terminal wiretap. During this extension the government intercepted an additional telephone conversation between Francisco and a Phoenix terminal employee where Francisco inquired if the terminal had "been bothered anymore," presumably by immigration enforcement.

On May 30, 2001, the government applied for a wiretap of GST's Blake Avenue office in Los Angeles, which the district court granted (hereafter "Blake Avenue wiretap"). Special Agent Richard Hill of the U.S. Border Patrol supplied an affidavit in support of this application. A key purpose of the Blake Avenue wiretap was to intercept incriminating evidence linking Francisco, his son Antonio Gonzalez, and others in the Blake Avenue office to the alleged alien-smuggling ring. At the time, Antonio was the president and chief operating officer of GST. According to Hill's affidavit, prior to the Blake Avenue wiretap, the government had intercepted only two telephone calls from Antonio, which merely "indicate[d] that Antonio was aware of law enforcement action in which undocumented aliens were removed from [GST] buses and that he conversed with his father [(Francisco)], brother and managers regarding the corporate activities." In contrast, the government had intercepted "[s]everal calls" from Francisco during which he "discussed the movement of people on his buses and routinely asked about intervention from immigration and local law enforcement."

On either July 13 or 14, 2000, long before the government requested any wiretaps as part of this investigation, one of the government's CIs, a GST bus driver, visited the Blake Avenue office unannounced and engaged Francisco in conversation while wearing a wire. During the conversation, the informant questioned Francisco about a recent company memorandum requiring drivers to check for undocumented aliens on their buses. Francisco insinuated that the memorandum did not refer to the prearranged smuggling of undocumented aliens from Tucson, but rather to unauthorized aliens who may sneak onto GST buses coming over the border. The same CI returned, at the government's request, to the Blake Avenue office to speak with Francisco again that same day. This time the CI more directly questioned Francisco about the smuggling of aliens using GST buses. Neither of these recorded conversations was reported in any of the government's affidavits supporting any of its wiretap requests.

As acknowledged in the Hill affidavit, the government conducted limited investigation into activities at the Blake Avenue office before seeking the Blake Avenue office wiretap. This brief investigation included: five days of pen registers on the office's telephones; an equally brief use of trap-and-trace analysis of the telephones; limited physical surveillance; and a preliminary inquiry attempting to place an undercover agent at one of the company's "Los Angeles offices," which might have included the Blake Avenue office.

Agent Hill's affidavit for the Blake Avenue wiretap stated that "[p]hysical [s]urveillance has been attempted at the headquarters but was not successful" because the building's layout and proximity to a residential neighborhood precluded agents from gathering this evidence. The affidavit also deemed further physical surveillance impractical based on "what may have been a counter-surveillance effort" in which agents were once briefly followed by a vehicle after leaving the surveillance site.

Despite the success of video surveillance earlier in this investigation, the Hill affidavit stated that a pole camera or other video surveillance of the office was not attempted because any effort would fail to "reveal the corporate transactions relating to illegal activities occurring inside" the building.

Agent Hill also claimed in his affidavit that "[u]ndercover agents have been used extensively throughout this investigation," but goes on to make clear that none of these agents infiltrated the Blake Avenue building. Despite the fruitful evidence produced by undercover agents in the terminal investigation, Agent Hill averred that prior to the Blake Avenue wiretap application only a lone attempt was made to infiltrate "one of [GST's] Los Angeles offices." The affidavit does not indicate whether this infiltration attempt was focused, like the earlier efforts, on a terminal in the Los Angeles area or on the Blake Avenue office itself. On the face of the affidavit, the repeated description of this infiltration attempt as being targeted to "one of the Los Angeles offices" as opposed to "the Los Angeles office" or even the "Blake Avenue office" makes it impossible for an issuing court to have concluded that this infiltration attempt was focused on the Blake Avenue office.¹

Based on the record created in the Franks hearing, we do know that one undercover agent was able to speak with Francisco, but could not engage him in a discussion of illegal activity. According to the affidavit, undercover agents had less success speaking to Antonio and had only been able to engage in "minimal contact such as greetings" with him.

To justify the lack of attempts to infiltrate higher-level jobs within GST, including those at the Blake Avenue office, Hill's affidavit stated that GST immediately filled every high-level job with people "closely connected to the Gonzalez family." The evidence produced in the Franks hearing, however, indicated that only one of the 25 people with offices at Blake Avenue was a member of the Gonzalez family and at...