D.Nev.: FBI internet ruse against USAO advice leads to suppression of entry by deception (R&R adopted)

The USMJ issued her R&R on February 2d, and I posted the next day. Friday, the USDJ adopted the R&R, and the press goes wild, apparently oblivious to the news stories from February 2d. United States v. Phua, 2015 U.S. Dist. LEXIS 50856 (D.Nev. April 17, 2015). Just the summary:

This case tests the boundaries of how far the government can go when creating a subterfuge to access a suspect’s premises. Here, the government disrupted the internet service to the defendant’s hotel room in order to generate a repair call. Government agents then posed as repairmen to gain access to the defendant’s room and conduct a surreptitious search for evidence of an illegal sports betting operation. By creating the need for a third party to enter defendant’s premises and then posing as repairmen to gain entry, the government violated the defendant’s Fourth Amendment rights.

Click the link on the case name for the whole case.

The R&R: United States v. Phua, 2015 U.S. Dist. LEXIS 12626 (D.Nev. February 2, 2015). Interesting holding I won’t try to summarize:

This case raises the difficult question of how far law enforcement and their agents may go in engaging in deceptive conduct to gather evidence of criminal activity in places where citizens have a reasonable expectation of privacy. It involves the ongoing lively debate of “the judicial power to require fair play in federal law enforcement.” Lee v. United States, 343 U.S. 747, 751 (1952). The legal issue in this case concerns the admissibility and use of evidence obtained by deception. The government maintains that the Phuas gave valid consent to the July 4 and 5, 2014, entries into villa 8882, and that their consent was not vitiated because the agents misrepresented their identity and purpose. The Phuas contend that the government’s deception is so egregious that they could not make a free and voluntary, uncoerced choice, and the government can therefore not meet its heavy burden of establishing valid consent. Both sides agree that the facts of this case are unique, and there are no known decisions discussing the ruse used in this case.

In a case of first impression, the court must decide whether the government deception used in this case violated the Phuas’ Fourth Amendment right to a reasonable expectation of privacy in villa 8882. “The Fourth Amendment can certainly be violated by guileful as well as by forcible intrusion into a constitutionally protected area.” Hoffa, 385 U.S. at 301. However, a long line of Supreme Court and appellate cases has held that the Fourth Amendment is not violated when government agents gain entry into a private residence concealing or misrepresenting their identity or purpose as long as their entry is for the purpose contemplated by the occupant. See, e.g., Lewis v. United States, 385 U.S. 206, 210 (1966).

In this case, law enforcement agents and Wood deceived the occupants of villa 8882 about their identity and purpose for seeking entry into the villa. They did not pose as criminals or friends or acquaintances of criminals there to engage in criminal activity, and the first line of cases have no application here. The court also finds that the third line of cases does not apply because the ruse used did not involve falsely claiming an imminent life-threatening emergency. Disrupting DSL service to the occupants of a hotel room who have access to the hotel’s Wi-Fi and cable connections to three different carriers is not a disruption of an essential service that leads an occupant with no choice but to consent to an entry to restore the service. The occupants of the villa had continuous access to Caesars’ Wi-Fi and cable connections to three different carriers. This case does not involve cutting off air conditioning to a hotel room in July during 100+ degree temperatures or depriving the occupants of water or other essential services which render the hotel room uninhabitable. Although the DSL service was disrupted, the Phuas still had internet access via Caesars’ Wi-Fi. In fact, when SAs Kung and Lopez entered villa 8882 on July 5, 2014, both Paul and Darren Phua were working on their laptops, accessing the internet.

As an initial matter, the court finds, that Wood was acting as a government agent when he entered villa 8882 on July 4 and 5, 2014. Wood was interviewed by investigating special agents on July 3, 2014, agreed to cooperate, and actively participated in developing the plan to disrupt DSL service to the villa to enable agents to get inside the villa. The purpose of getting inside the villa was clearly to try to gather evidence of illegality, and more specifically, that the occupants of villa 8882 were engaging in an illegal sports book wagering operation.

Since at least 1974, the United States Supreme Court has held that a warrantless entry and search of premises with the voluntary consent of an occupant who shares, or is reasonably believed to share, authority over the area in common with a co-tenant is constitutionally valid under the Fourth Amendment over the objections of an absent co-occupant. See United States v. Matlock, 415 U.S. 164, 170 (1974). In this case, the evidence is clear that Caesars provided the high roller occupants of its luxury villas with butlers to attend to their every need and request, and a butler was assigned to villa 8882 twenty-four hours a day, seven days a week. The butlers were the individuals Caesars employees were required to contact if entry to the villas for any purpose was required while the occupants were present, and the butlers were unquestionably given authority to admit persons into the villa to deliver goods and services requested by the occupants.

Defendants do not dispute this. In fact, in their briefs, and in questioning during the evidentiary hearing, defense counsel emphasized, that the butler who admitted Wood and Lopez on July 4, 2014, initially gave them permission to enter and restricted their access to the pantry area. Questioning by defense counsel also emphasized that the high roller occupants of the luxury villas have a “heightened expectation” of privacy and security. Defense counsel elicited testimony that one of the butler’s responsibilities is to ensure the privacy of the occupants is respected and that the occupants are not disturbed unless they wish. The villas are not accessible to the general public, have additional security features ordinary guest rooms do not, and permission to enter is required from a butler before an occupied villa may be entered. The Defendants do not claim that the butlers lacked authority to allow the agents to enter on either July 4 or 5, 2014. Rather, the Defendants claim that the agents exceeded the scope of the consent they obtained while delivering the laptop on July 4, 2014, and that the DSL disruption deception rendered the consensual entry invalid because it was not the result of a free and uncoerced choice.

The court finds the ruse to disrupt the DSL connection in villa 8882 on July 4, 2014, was unsuccessful because Wood and/or his employees assisting him had an incorrect wiring diagram and disconnected the DSL to the wrong villa. Fortuitously, however, Paul Phua requested a laptop computer to be delivered to his room on July 4, 2014. Phua told the butler who contacted Caesars VIP Luxury Services who contacted Wood to provide the laptop. Wood, in turn, contacted investigating agents. A plan was developed for Wood to deliver the laptop with SA Lopez posing as a TMS technician. Wood and Lopez contacted the butler for villa 8882 to make arrangements to gain entry to the villa to deliver the laptop. Wood testified that when a villa is occupied, Caesars requires an employee or contractor to contact the butler to obtain permission to enter a villa to provide a service. Wood received permission from the butler to deliver the laptop. Wood and Lopez went to the butler’s pantry entry because Wood was aware Caesars Palace limited access to the villas to this area. The butler admitted Wood and Lopez to deliver the laptop.

It is clear, and the court finds, that the butler unequivocally restricted Wood and Lopez to the pantry area. Both Wood and Lopez attempted to gain access to the interior of the villa by stating access was needed to ensure the laptop was properly connected. However, the butler clearly told Wood and Lopez that the residents did not want to be disturbed, wished to maintain their privacy, and that neither could enter the interior of the villa. The butler left the pantry area while Wood worked on the laptop to set it up. Against the butler’s unequivocal instructions that they not enter the villa, Wood and Lopez entered the interior. After a brief interval, the butler intercepted them, denied them access to the media room or other areas inside the interior of the villa, and directed them back to the pantry.

The court finds Wood was clearly invited to the villa to deliver a laptop at Phua’s request. However, it is equally clear that Wood and Lopez were restricted to the pantry area and told not to invade the occupants’ privacy by leaving the pantry, even after Wood claimed it was needed in order to ensure the laptop was running and connected to the internet. Wood did not disclose that he was acting as a government agent. SA Lopez deceived the butler about his identity by posing as a TMS employee there to assist Wood. Lopez also deceived the butler concerning his purpose in accompanying Wood to deliver the laptop. SA Lopez’s purpose in entering the villa was unquestionably to try to obtain evidence of any illegality occurring inside the villa. The court concludes that Wood and Lopez exceeded the scope of the consent they were given to enter villa 8882 on July 4, 2014, when they left the butler’s pantry area. When they entered the interior of the villa, they violated the occupants’ Fourth Amendment rights.

On July 5, 2014, Paul Phua requested that the butler make arrangements to have the DSL connection inside the villa immediately repaired or restored. The female butler on duty that day admitted SAs Lopez and Kung posing as TMS technicians present to correct the problem. Lopez and Kung had been instructed by Wood how to appear to be legitimate technicians and how to act like they were fixing the problem they created. Lopez and Kung entered the interior of the villa, misrepresenting that their presence was required to diagnose and restore the DSL connection. They misrepresented their identities, and they misrepresented the purpose for which they were there.

The agents’ sole purpose in entering villa 8882 was to obtain evidence of illegality. They were not legitimate technicians there to fix a DSL disruption. The DSL had been disrupted precisely so that the agents could enter on the ruse of being legitimate technicians there to fix a problem the agents had themselves created. The court also finds it was not necessary to enter villa 8882 to restore the DSL connection the agents had caused to be disrupted with the assistance of Wood TMS. The DSL connection was disconnected in a room near Wood’s office at Caesars and could have been, and eventually was, restored from the same location. The agents deceived the occupants both as to their identity and purpose posing as Wood TMS technicians there to restore the DSL connection so they could learn what they could learn to further their investigation.

The court finds that the plan to disrupt the DSL services was created when investigators interviewed Caesars’ outside DSL contractor Mike Wood at his initial interview on July 3, 2014. The agents asked Wood for advice about how best to generate a call for service that would allow law enforcement officers to enter one or more of the villas to gather evidence. Disruption of cable and DSL service was discussed. Before the DSL disruption ruse was employed, agents considered disrupting cable connections to the villas. AUSA Frayn advised investigators they could not disrupt the cable to the villas without Caesars’ consent. The rationale for this legal advice was that Caesars provided the service to guests free of charge and could terminate the service if Caesars decided to do so. If Caesars’ decision to cut off the cable to the villas resulted in one or more calls for service, government counsel took the position, and so advised investigators, that they could employ the ruse of acting as repairmen to enter the villas requesting service to gather information to further their investigation. The advice government counsel provided investigators was that, if Caesars consented to the cable disruption, and if the occupants requested someone to restore the cable, the occupants would be consenting to the entries.

The plan to disrupt cable service to generate a call for service was abandoned because Caesars engineers and Wood concluded it was not feasible. Disruption of the cable was not feasible primarily because it could not be done surreptitiously and it was not possible to disrupt cable to the villas under investigation without disrupting cable service to the other guests. Additionally, the court finds that Caesars was unwilling to disrupt cable service to villa guests without assurances on behalf of the government that Caesars would not be found responsible or liable. The assigned AUSA refused to provide any assurances, and in fact, even declined to talk with Caesars’ lawyer about the proposal to disconnect cable service. The inference the court draws from these findings is that government counsel did not want Caesars to be able to claim that it relied, in any way, on advice from counsel for the government in deciding whether or not to disrupt cable service.

The Defendants’ motion argued that the DSL disruption ruse was conducted against the express legal advice of government counsel. However, the court found the testimony of SA Pham credible that agents were advised they could not disrupt the cable connection without Caesars’ consent and were not told that their DSL disruption ruse was unlawful. The U.S. Attorney’s Office advised SA Pham that the agents could not proceed with their plan to disrupt cable service without Caesars’ consent. Caesars refused to give consent to disrupt the cable service which Caesars provided. Equally important, the agents abandoned the cable disruption plan because it was not feasible.

Wood suggested disrupting the DSL connection and agreed to assist law enforcement officers in the ruse and furthering their investigation. Caesars’ counsel had no objection to the agents’ plan to disrupt the DSL service because Caesars had not directly provided the DSL service. Caesars did not object to its outside contractor, Wood TMS, disrupting the DSL service that Wood had installed and serviced. The USAO was not contacted for legal advice about the plan to disrupt the DSL. The agents believed, based on advice they received about disrupting the cable, as long as Wood TMS, the outside contractor consented, the plan was lawful. FBI general counsel was contacted about the plan to disrupt service and told SA Pham if the USAO agreed, FBI general counsel had no objection to the plan.

The court finds that the occupants of villa 8882 requested restoration of the DSL service and consented to the entry of Lopez and Kung posing as technicians there to restore the DSL service. The occupants were deceived about a number of things. The occupants were not informed that the government disrupted the DSL service. The occupants were not informed that the DSL service was disconnected from a room outside the villa and could be restored from the same location. The occupants were not told that Lopez and Kung were special agents posing as DSL technicians. However, under the totality of the circumstances present here, the court finds the deception did not deprive the occupants of a free and uncoerced choice. To be sure, the occupants would not have consented to allowing Kung and Lopez into the villa if they had known they were law enforcement officers. However, the same can be said about every undercover operation. The Fourth Amendment does not protect the occupants’ misplaced confidence that the agents, posing as technicians, would not reveal what they saw in the areas they were granted access to carry out their ruse.

The ruse that was used here was not based on a health or safety issue in which the occupants would feel they had no choice but to allow entry or risk an imminent life-threatening emergency. The occupants’ consent was not vitiated merely because they would not have given consent to enter the villa, but for the non-disclosures and affirmative misrepresentations which were made.

In this case, the Phuas surrendered their privacy to what they exposed to the view of Lopez and Kung when they admitted them to fix the fake DSL disruption. The Phuas wanted the DSL to work. They were willing to admit technicians to fix the problem. They allowed the agents to go where they thought the agents needed to go to fix the problem. They were tricked. But, they assumed the risk that Kung and Lopez would see what the Phuas exposed to view when they admitted Kung and Lopez, dressed as technicians, into the villa.

The Fourth Amendment may be violated if government agents engage in conduct not contemplated by the residents when they consented to entry. Gouled v. United States, 355 U.S. 138 (1921) is a classic example. In Gouled, the defendant’s business acquaintance, working with federal officers, obtained entry into the defendant’s office pretending he was there to pay a social call. While there, the acquaintance secretly ransacked the office and seized incriminating papers. The Supreme Court found the defendant’s Fourth Amendment rights were violated because, although the defendant had invited the entry, he did not consent to a secret and general ransacking of his office. In this case, Lopez and Kung were allowed into the villa and allowed to enter the areas they claimed they needed to be to restore the DSL connection. Their deception did not vitiate the occupants’ consent. The agents gained entry into the villa concealing or misrepresenting their identity and their purpose.

In this case, the Phuas surrendered their privacy to what they exposed to the view of Lopez and Kung when they admitted them to fix the fake DSL disruption. The court finds that Lopez and Kung did not exceed the scope of the consent they were given on July 5, 2014, when they gained entry to villa 8882 after disrupting the DSL service and posing as technicians present to restore the service.

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