Government’s examination of international wire transfers throught the SWIFT system is not unconstitutional, but overproduction under “legal process” may be; motion to dismiss denied

International (and some domestic) wire transfers go throught the S.W.I.F.T. system, and the government accessed the system by subpoena to look for terrorist movement of money, but SWIFT overproduced what was sought. When this was revealed in an article in the N.Y. Times, suit was filed for permitting the government access without valid legal process. On the Fourth Amendment claim, the case survives summary judgment: Miller shows there is no reasonable expectation of privacy in the records, but it was alleged that SWIFT provided more than the subpoenas sought, and that stated a claim. Walker v. S.W.I.F.T., 491 F. Supp. 2d 781 (N.D. Ill. 2007):

SWIFT is an international cooperative consortium based in Brussels, with its principal American place of business in northern Virginia. (Dkt. No. 16 at 1). SWIFT’s services include “supplying secure, standardized messaging services and interface software to 7,800 financial institutions in more than 200 countries.” (2d Am. Compl. P 3). SWIFT routes more than 11 million financial transactions each day, and “virtually every major commercial bank, as well as brokerage houses, fund managers and stock exchanges, uses its services.” (2d Am. Compl. P 14). At issue in this case is SWIFT’s response to subpoenas issued by the Treasury Department under the International Emergency Economic Powers Act, 50 U.S.C. § 1701, et seq, through a program that eventually became known as the “Terrorist Finance Tracking Program.” (2d Am. Compl. PP 2, 13; Article at 8). Plaintiffs allege that SWIFT’s initial response to the government’s requests for information was overbroad, in that SWIFT turned over to government officials “the entire SWIFT database.” (2d Am. Compl. P 14; Article at 8).

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In Count II of their Second Amended Complaint, Plaintiffs argue that SWIFT “violated [their] reasonable expectations of privacy and denied … their right to be free from unreasonable searches and seizures as guaranteed by the Fourth Amendment to the Constitution of the United States.” (Compl. P 47). In United States v. Miller, the Supreme Court held that individuals have no legitimate expectation of privacy regarding financial information “voluntarily conveyed to … banks and exposed to their employees in the ordinary course of business.” United States v. Miller, 425 U.S. 435, 442-43 (1976). The Court concluded that “[s]ince no Fourth Amendment interests of the depositor are implicated …, this case is governed by the general rule that the issuance of a subpoena to a third party to obtain the records of that party does not violate the rights of [the depositor.]” Miller, 425 U.S. at 444. It thus is clear that private citizens have no Fourth Amendment rights in financial records created and shared in the ordinary course of business.

However, it is also apparent that there may be limitations to the scope of Miller‘s holding. In both Miller and its predecessor case, California Bankers Ass’n. v. Shultz, 416 U.S. 21 (1974), the Supreme Court implied in dicta that unfettered government access to the bank records of private citizens could be considered constitutionally problematic.

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Furthermore, Plaintiffs have alleged that SWIFT disclosed more information than was requested by the government subpoenas, as discussed in detail below. This, too, brings the case outside the bounds of “existing legal process.” The majority in Miller specifically distinguished that case from the case of Burrows v. Superior Court, 529 P.2d 590 (Cal. 1974), on the grounds that “the bank records of respondent’s accounts were furnished in response to ‘compulsion by legal process’ in the form of subpoenas Duces tecum” unlike Burrows, where “the bank … provided the statements to the police in response to an informal oral request for information.” Miller, 425 U.S. at 445 n.7. This distinction is included in the Supreme Court’s analysis of whether the subpoena in Miller should have been subject to “more stringent Fourth Amendment requirements than is the ordinary subpoena.” Id.

Based on the foregoing analysis, the court finds SWIFT’s argument that Miller necessarily precludes Plaintiffs’ Fourth Amendment claims to be unpersuasive. On its face, Miller does not preclude Plaintiffs’ Fourth Amendment claims as set forth in the Second Amended Complaint. SWIFT’s motion to dismiss Count II on these grounds is therefore denied.