Confidentiality agreement did not create a separate expectation of privacy in a laptop computer delivered by an employee; overseizure of records was not unreasonable under the circumstances

On the defendants’ omnibus suppression motion (this does not cover all issues, there are too many):

Government did not violate the Stored Communications Act in how it handled e-mails after acquiring them, and, even if it did, that would not be a valid ground for suppression of evidence under Hudson because it had nothing to do with the seizure. Also, there was no Franks violation. This was a mail and credit card fraud scheme involving continuing charges to accounts, and the defense presented a list of perceived defects with the affidavit for the search warrant that probable cause would not exist if the defects were cured. None of them required further elaboration because, on the totality, there was still probable cause on the totality under Gates to show that defendant was on notice that there was great consumer dissatisfaction with his business practices that were of really doubtful validity. Finally, the use of 50 agents to seize the premises and seven tons of documents, including whole file cabinets and personal papers of employees, including a Snickers bar, was not considered unreasonable. The court considered the government’s representation that the employees would testify to the need for a swift securing of the evidence at a large property to prevent destruction of evidence. United States v. Warshak, 2007 U.S. Dist. LEXIS 91741 (S.D. Ohio December 13, 2007) (the court uses “well-taken” so many times referring to the “government’s position” or “not well-taken” as to the defendants’ that it ended up as a “core term” on Lexis):

Having reviewed this matter, the Court does not find Defendants’ position well-taken. Even assuming Defendants’ allegations are true, the fact is that when the agents executed the warrant on March 16, 2005, time was of the essence. The Berkeley facilities are immense, and the agents were justified in quickly securing each location so as to prevent the destruction of any evidence. The fact that some employees may have been rattled by the swift, no-nonsense entry of fifty agents does not justify the suppression of evidence. Berkeley may have not been the lair of a drug kingpin, but the warrants were supported by probable cause for massive consumer fraud.

As such, the Court takes the government’s representation in good faith that its agents would testify as to the propriety of their conduct in executing the warrants. Such representation is more than conclusory, as the government does more than say “the searches were reasonably executed,” but indicates it has agents who will testify as much. The Court finds no hearing necessary on this question. Finally, the fact that irrelevant information and materials were swept up in the large-scale seizure here is a mere by-product of the practical reality faced by the agents who acted quickly as required so as to keep the search and seizure within the bounds of reasonableness. Surely, had the agents camped out at Berkeley and closed the operation for weeks on end, so as to sift out irrelevant information, Defendants very well may have had a basis to argue the search was conducted in an oppressive manner.

Employees who had decided to cooperate and turned over their company laptops to the government did so as individuals. Confidentiality agreements did not create any separate expectation of privacy when probable cause already exists:

The Court finds itself again on the side of the government. The Court sees no convincing evidence the cooperating witnesses were acting as anything more than private individuals in turning over evidence to the government. Even should the cooperating witnesses qualify as “agents,” such that the Fourth Amendment applies, the Court finds no real question that they voluntarily consented to the searches of their laptops. The Court further finds unavailing Defendants’ arguments that the witnesses lacked the authority to do so. The witnesses had common authority over their laptops, as evidenced by their possession and password access. United States v. Matlock, 415 U.S. 164, 171-72 (1974). Defendants’ heavy reliance on the fact they had confidentiality agreements with their employees is misplaced. A company cannot use such a confidentiality agreement to shield itself from government inquiry into evidence of potential illegal behavior, when the government has probable cause based on witness statements that such evidence exists, and the witnesses consent to the search. Defendants’ position simply conflicts with public policy. McGrane v. The Reader’s Digest Association, Inc., 822 F.Supp. 1044, 1046 (S.D. N.Y. 1993)(“Courts are increasingly reluctant to enforce secrecy arrangements where matters of substantial concern to the public-as distinct from trade secrets or other legitimately confidential information may be involved”), Chambers v. Capital Cities/ABC, 159 F.R.D. 441, 444 (S.D. N.Y. 1995)(“agreements obtained by employers requiring former employees to remain silent … concerning potentially illegal practices … can be harmful to the public’s ability to rein in potentially harmful behavior”), Ventura v. Cincinnati Enquirer, 396 F.3d 784, 791 (S.D. Ohio, 2005) (J. Weber) (rejecting efforts to enforce an agreement to withhold evidence of crimes, because “reporting criminal activity to a prosecutor is not actionable”). For all of these reasons, the Court rejects Defendants’ Motion to Suppress the evidence derived from the laptops turned over to the government by cooperating witnesses.