U.S. v. Horowitz

• Decision Date: 09 December 1986
• Docket Number: No. 85-5253,85-5253
• Citation: 806 F.2d 1222
• Parties: UNITED STATES of America, Appellee, v. Richard I. HOROWITZ, Appellant.
• Court: U.S. Court of Appeals — Fourth Circuit

Page 1222

806 F.2d 1222

55 USLW 2383

UNITED STATES of America, Appellee, v. Richard I. HOROWITZ, Appellant.

No. 85-5253.

United States Court of Appeals Fourth Circuit.

Argued May 8, 1986.

Decided Dec. 9, 1986.

Jacob A. Stein (John A. Pirko; Stein, Mitchell & Mezines on brief) for appellant.

Brenda Gruss (Justin W. Williams, Acting U.S.Atty.; Janet D. Webb; Thomas H. McQuillan, Third Year Law Student on brief) for appellee.

Before WINTER, Chief Judge, and RUSSELL and PHILLIPS, Circuit Judges.

DONALD RUSSELL, Circuit Judge:

The defendant, Richard I. Horowitz, appeals from the trial court's denial of his pre-trial motion to suppress evidence obtained by authorities pursuant to an authorized search of the premises of Electro-Methods, Inc. (EMI), a Connecticut corporation which contracted for defendant's services. The defendant was employed by Pratt & Whitney Aircraft (Pratt) as supervisor of pricing in its Government Products Division in North Palm Beach, Florida. In this role the defendant oversaw preparation of sealed bids which Pratt submitted to the Air Force for supplying spare parts for the F-100 jet engine. EMI was among several companies competing with Pratt for the Air Force contract.

In 1978, unbeknownst to Pratt, the defendant, while still employed by Pratt, established an independent consulting firm, Sandrich Associates, Inc., which was operated from his Florida home and which advised clients on government contracting and on pricing of aircraft parts. Two of these clients were Perry Oceanographics and Lenzar Optics. The defendant's primary client, however, was EMI, which was owned by Alfred Stanger. Stanger also owned Turbo Tech, Inc., which represented Fabrique Nationale and N.V. Philips in their efforts to compete with Pratt for the Air Force F-100 spare parts contracts. The defendant, until 1982, failed to report the existence of his consulting contracts to Pratt on the conflict of interest statements Pratt annually required of its employees.

In his role as "consultant" to EMI, the defendant sold to Alfred Stanger confidential Pratt pricing information which EMI used to underbid Pratt on the Air Force contracts. Stanger paid the defendant as much as $5,000 per month for his so-called "consulting services", reaching a total of $260,000. In 1982, Stanger installed a computer terminal and telephone modem in the defendant's Florida home to facilitate communication between the defendant and EMI's Connecticut office. The defendant transmitted the pricing information to EMI's computer terminal where the information was then stored on EMI's tapes.

On June 8, 1983, agents of the FBI executed a search warrant at EMI, having alleged in an affidavit probable cause to believe that Pratt pricing information was held by EMI on computer magnetic storage devices. The warrant authorized the agents to search a one-story industrial-commercial building housing EMI and to seize property listed on an attached schedule including computer magnetic storage devices, computer keypunch cards and computer print-outs containing Pratt pricing material. The agents, to prevent erasure of on-line tapes and discs (tapes), seized all of the tapes in EMI's computer room, including stored back-ups, and later examined them on outside compatible computer terminals with the aid of an expert. The contents of a tape could not be discerned from visual inspection but required specialized programming to review and record the information contained on the tapes. The agents looked specifically for a file designated RER which they believed contained the price data and for files containing messages between Stanger and the defendant.

In a subsequent proceeding brought by the government to suspend EMI from bidding on Air Force contracts, the defendant filed two sworn affidavits before the Air Force Debarment, Suspension and Review Board stating that he did not supply EMI with secret Pratt pricing information. Those affidavits conflicted with the evidence seized at EMI and the defendant was indicted on two counts of making false statements to the board in violation of 18 U.S.C. 1001 (1982 & Supp. III 1985). Prior to trial, the defendant challenged the admissibility of the seized evidence on fourth amendment grounds. The trial judge denied his motion to suppress the evidence for lack of standing to contest the search and the defendant was convicted. On appeal the defendant challenges only the court's denial of his motion to suppress.

The defendant can contest the search and seizure on fourth amendment grounds only if "the disputed search and seizure has infringed an interest of the defendant which the fourth amendment was designed to protect." Rakas v. Illinois, 439 U.S. 128, 140, 99 S.Ct. 421, 428, 58 L.Ed.2d 387 (1978). The Supreme Court has articulated the appropriate inquiry to be whether the individual had a reasonable expectation of privacy in the area searched, not merely in the items found, Rawlings v. Kentucky, 448 U.S. 98, 104-106, 100 S.Ct. 2556, 2561-62, 65 L.Ed.2d 633 (1980) and the burden is upon the defendant to prove his reasonable expectation of privacy. Rakas, 439 U.S. at 130, n. 1, 99 S.Ct. at 424, n. 1.

The defendant claims he had a reasonable expectation of privacy in the seized tapes storing the information he supplied to EMI. He alleges that for purposes of his fourth amendment challenge the search at issue was not the search of EMI's building but was the search of the "intangible space where images and sounds are recorded in a computer memory disc or tape." Appellant's brief at 12. The defendant relies on Supreme Court decisions finding reasonable expectations of privacy in one's office, Mancusi v. DeForte, 392 U.S. 364, 88 S.Ct. 2120, 20 L.Ed.2d 1154 (1968), and in other areas beyond the home, United States v. Chadwick, 433 U.S. 1, 97 S.Ct. 2476, 53 L.Ed.2d 538 (1977) (footlocker transported by rail), to support his novel argument that certain tapes seized on EMI's premises constituted his "electronic file cabinet," an extension of his private home office, and that the government agents violated his reasonable expectation of privacy in the tapes by playing them without obtaining a second search warrant. The government contends that the tapes were EMI's electronic records properly seized and later inspected pursuant to the search warrant. The government argues that the defendant had no reasonable and legitimate expectation of privacy in either the tapes or in EMI's premises.

The factors we must use to determine whether the defendant retained a reasonable expectation of privacy in the computer tapes can be stated generally as an analysis of the defendant's interest in and control of the area searched, his subjective expectation of privacy in the area as evidenced by his efforts to ensure that privacy, and society's willingness to recognize his expectation as reasonable. See Rakas v. Illinois, 439 U.S. 128, 99 S.Ct. 421, 58 L.Ed.2d 387 (1978); United States v. Manbeck, 744 F.2d 360 (4th Cir.1984), cert. denied, 469 U.S. 1217, 105 S.Ct. 1197, 84 L.Ed.2d 342 (1985); United States v. Dart, 747 F.2d 263 (4th Cir.1984); United States v. Torch, 609 F.2d 1088 (4th Cir.1979), cert. denied, 446 U.S. 957, 100 S.Ct. 2928, 64 L.Ed.2d 815 (1980). We agree with the trial court that the defendant had no reasonable expectation of privacy either in EMI's premises or in the tapes seized and played by the government.

The defendant claims that he had a privacy interest in the tapes storing the information he had transmitted to EMI because they constituted his workplace in that he maintained an ongoing relationship with EMI and a continuing interest in the material on the tapes, his work...