United States v. Giraudo, CR 14–534 CRB

• Decision Date: 21 December 2016
• Docket Number: No. CR 14–534 CRB,CR 14–534 CRB
• Court: U.S. District Court — Northern District of California
• Parties: UNITED STATES of America, Plaintiff, v. Joseph J. GIRAUDO, Raymond A. Grinsell, Kevin B. Cullinane, James F. Appenrodt, and Abraham S. Farag, Defendants.

225 F.Supp.3d 1078

UNITED STATES of America, Plaintiff,

v.Joseph J. GIRAUDO, Raymond A. Grinsell, Kevin B. Cullinane, James F. Appenrodt, and Abraham S. Farag, Defendants.

No. CR 14–534 CRB

United States District Court, N.D. California.

Signed December 21, 2016

Lidia Maher, Thomas Greene, Andrew Jon Nicholson–Meade, Assistant US Attorney, Christina Marie Wheeler, Assistant US Attorney, David J. Ward, Assistant US Attorney, Kevin Hart, E. Kate Patchen, U.S. Department of Justice, San Francisco, CA, Tai Snow Milder, Oakland, CA, for Plaintiff.

Matthew J. Jacobs, Colin Patrick McDonell, Vinson & Elkins LLP, Nanci L. Clarence, Clarence Dyer & Cohen LLP, David W. Fermino, Louis P. Feuchtbaum, William Lewis Taylor, Sideman and Bancroft LLP, Doron Weinberg, Law Offices of Doron Weinberg, Jeffrey L. Bornstein, Aaron Joseph Fischer, Christopher David Hu, Rosen Bien Galvan Grunfeld LLP, Ashley Marie Bauer, Alicia Rita Jovais, Latham & Watkins LLP, San Francisco, CA, for Defendants.

CLARIFYING ORDER

CHARLES R. BREYER, UNITED STATES DISTRICT JUDGE

While investigating Defendants, federal agents decided to bug a courthouse. They also decided that they didn't need a warrant to, yes, bug a courthouse. There can be no doubt that these decisions flouted constitutional and statutory protections alike. But in this criminal case, questions remain about who may suppress what as a result.

I. BACKGROUND

A. Legal Backdrop

Two legal regimes are in play here: one constitutional, one statutory.

1. Fourth Amendment

The government conducts a search under the Fourth Amendment when an effort to obtain information either (1) "violates a subjective expectation of privacy that society recognizes as reasonable," Kyllo v. United States , 533 U.S. 27, 33, 121 S.Ct. 2038, 150 L.Ed.2d 94 (2001) (citing Katz v. United States , 389 U.S. 347, 361, 88 S.Ct. 507, 19 L.Ed.2d 576 (Harlan, J., concurring) (1967) ), or (2) involves a "physical intrusion [into] a constitutionally protected area." United States v. Jones , 565 U.S. 400, 132 S.Ct. 945, 951, 181 L.Ed.2d 911 (2012) (citation omitted). When the government does either without a warrant, it usually violates the Fourth Amendment. But see, e.g. , Chambers v. Maroney , 399 U.S. 42, 51, 90 S.Ct. 1975, 26 L.Ed.2d 419 (1970) (allowing warrantless searches of cars because they are "readily movable"); Warden v. Hayden , 387 U.S. 294, 298, 87 S.Ct. 1642, 18 L.Ed.2d 782 (1967) (allowing warrantless searches for fugitives when officers are in hot pursuit).

A defendant may suppress evidence obtained directly from an unconstitutional search, along with evidence that is "fruit of the poisonous tree." See Wong Sun v. United States , 371 U.S. 471, 488, 83 S.Ct. 407, 9 L.Ed.2d 441 (1963). But that may only happen if the unconstitutional search "violated the Fourth Amendment rights of [the] criminal defendant who seeks to exclude the evidence obtained during it." Rakas v. Illinois , 439 U.S. 128, 140, 99 S.Ct. 421, 58 L.Ed.2d 387 (1978). Put another way, for a defendant to invoke the Fourth Amendment's exclusionary rule, the search must have violated his own reasonable expectation of privacy or involved a physical intrusion into his own constitutionally protected area—not those of someone else.¹ See, e.g. , Lyall v. C i ty of Los Angeles , 807 F.3d 1178, 1185–87 (9th Cir. 2015). That being so, a defendant may not suppress evidence under the Fourth Amendment simply because he was someone "at whom a search was ‘directed.’ " Rakas , 439 U.S. at 132–33, 99 S.Ct. 421. The Supreme Court squarely rejected this "target theory" of the Fourth Amendment in 1978. Id.

2. Title III

Title III of the Omnibus Crime Control and Safe Streets Act of 1968 provides a comprehensive statutory scheme that governs the interception of wire, oral, and electronic communications. United States v. Oliva , 705 F.3d 390, 393 (9th Cir. 2012) ; see 18 U.S.C. §§ 2510 –22. It establishes "special safeguards against the unique problems posed by misuse of wiretapping and electronic surveillance" over and above Fourth Amendment protections. United States v. Calandra , 414 U.S. 338, 355 n.11, 94 S.Ct. 613, 38 L.Ed.2d 561 (1974). For example, to comply with Title III the government must not only satisfy the familiar requirements of probable cause and particularity, but also demonstrate a need for electronic surveillance, conduct it in a way that minimizes invasions of privacy, and comply with a complex web of authorization requirements. See 18 U.S.C. § 2518.

These special safeguards kick in when the government "intentionally intercepts" or "endeavors to intercept ... any wire, oral, or electronic communication." 18 U.S.C. § 2511(1)(a). Oral communication means a communication "uttered by a person exhibiting an expectation that such communication is not subject to interception under circumstances justifying such expectation."² 18 U.S.C. § 2510(2). And intercept means "the aural or other acquisition of the contents of any wire, electronic, or oral communication through the use of any electronic, mechanical, or other device." 18 U.S.C. § 2510(4).

Besides imposing criminal sanctions and civil liability on violators, Title III prohibits any "part of the contents of" unlawfully intercepted communications and "evidence derived therefrom" from being used as evidence at trial (or most any other legal proceeding). 18 U.S.C. § 2515. Any "aggrieved person ... may move to suppress" such evidence.³ 18 U.S.C. § 2518(10)(a). And "aggrieved person" means "a person who was a party to any intercepted wire, oral, or electronic communication or a person against whom the interception was directed." 18 U.S.C. § 2510(11).

B. Procedural Posture

On August 1, 2016, the Court held that the government had "utterly failed to justify a warrantless electronic surveillance program that recorded private conversations spoke in hushed tones by," among others, "judges, attorneys, and court staff" outside the San Mateo County Courthouse. Order on Mot. to Suppress (dkt. 149) at 1. It also held that Defendants had "standing" to challenge "all recordings" made after the date that they became "targets" of the electronic surveillance program but admittedly glossed over whether this latter holding rested on the Fourth Amendment, Title III, or both. See id. at 11. Confusion ensued, so the Court offered to clarify. See Nov. 21 Hr'g Tr. (dkt. 187) at 28–29. The parties provided further briefing. See Def. Br. (dkt. 188); Gov't Resp. (dkt. 189); Reply (dkt. 190).

II. DISCUSSION

Under the Fourth Amendment, Defendants may not suppress stationary audio recordings that did not capture their own voices. See Alderman v. United States , 394 U.S. 165, 175–76, 89 S.Ct. 961, 22 L.Ed.2d 176 (1969). The same is true for any further evidentiary fruits that the recordings yielded.⁴

Id. at 171–175, 89 S.Ct. 961. Doing so requires the government to have "overheard conversations of a [defendant] himself or conversations occurring on his premises."⁵ Id. at 176, 89 S.Ct. 961. So Defendants are right to stress that they have standing "under Title III," Def. Br. at 1, and why the real fight here is about the statute, not the constitution.

The Court, as is in vogue, begins with the statutory text. See Sebelius v. Cloer , ––– U.S. ––––, 133 S.Ct. 1886, 1893, 185 L.Ed.2d 1003 (2013).⁶ An "aggrieved person" under Title III includes not just "a party" to an intercepted communication, but also anyone "against whom the interception was directed." 18 U.S.C. § 2510(11). So, for a start, Title III must accord standing to people other than those who were parties to unlawfully intercepted communications, lest Section 2510(11)'s second clause do no work. See Williams v. Taylor , 529 U.S. 362, 404, 120 S.Ct. 1495, 146 L.Ed.2d 389 (2000) (reminding courts to "give effect, if possible, to every clause and word of a statute"). For that reason, the Ninth Circuit has made clear that the "definition of aggrieved person is broader than any person whose ... communication is intercepted."⁷ Noel v. Hall , 568 F.3d 743, 748 n.7 (9th Cir. 2009). The question here, then, turns on whether Defendants were people "against whom the interception was directed." 18 U.S.C. § 2510(11).

Because Title III elaborates no further, the Court should look to the "ordinary meaning" of those words. See, e.g. , Schindler Elevator Corp. v. U.S. ex rel. Kirk , 563 U.S. 401, 407, 131 S.Ct. 1885, 179 L.Ed.2d 825 (2011). It is hard to imagine the phrase "against whom the interception was directed" not covering "the target of the surveillance," United States v. Oliva , 705 F.3d 390, 395 (9th Cir. 2012), even if that person were not a participant in the captured conversation or the owner of the premises where it occurred.⁸ Many courts agree. See, e.g. , id. ; United States v. Scurry , 821 F.3d 1, 7 (D.C. Cir. 2016) ; United States v. Terry , 572 F.3d 430, 431–32 & n.2 (7th Cir. 2009) ; United States v. Apple , 915 F.2d 899, 905 (4th Cir. 1990) ; United States v. Civella , 648 F.2d 1167, 1171 (8th Cir. 1981). Accordingly, the most natural reading of the statute suggests that a person has standing under Title III if (1) "he was a party to an intercepted communication," (2) "the intercepted communications took place on his premises," or (3) "the government's efforts were directed at him," Apple , 915 F.2d at 905. Accord Oliva , 705 F.3d at 395.

The government disagrees, citing forty-five year old dicta in Alderman . See Gov't Br. at 2. That case noted that "Congress or state legislatures may extend the exclusionary rule" beyond the constitutional floor but, based on a Senate Committee Report, said that Title III had not done so. Alderman , 394 U.S. 165, 175 & n.9, 89 S.Ct. 961, 22 L.Ed.2d 176 (1969) ; see also S. Rep. 90–1097 (provision defining "aggrieved person" was "intended to reflect existing law"). Alderman , however, was a Fourth Amendment case concerning events that happened before Congress passed Title III, see id. at 167–70, 89 S.Ct. 961 & n.4, and so its musings on the statute are just...