Surreptitious recordings outside the San Mateo courthouse of persons talking amongst themselves were entitled to a reasonable expectation of privacy because they talked such that others could not overhear them except with planted recording devices. United States v. Giraudo, 2016 U.S. Dist. LEXIS 100486 (N.D. Cal. Aug. 1, 2016), supplemental opinion, 2016 U.S. Dist. LEXIS 176813 (N.D.Cal. Dec. 21, 2016) (posted here):
2. Objectively Reasonable Expectation of Privacy
“Courts in this Circuit have looked to a number of factors to determine whether a reasonable person would possess an expectation of privacy in an oral conversation.” See Reynolds v. City & Cty. of San Francisco, No. C 09-0301 RS, 2012 U.S. Dist. LEXIS 47875, 2012 WL 1143830, at *5 (N.D. Cal. Mar. 30, 2012), aff’d, 576 F. App’x 698 (9th Cir. 2014). These factors include (1) “nature of the location where the conversation was seized,” see United States v. Gonzalez, Inc., 412 F.3d 1102,1116 (9th Cir.2005) (holding that officers of company had a reasonable expectation of privacy in the small office over which they exercised full access); (2) whether the conversation could be overheard with the naked ear, Kemp v. Block, 607 F. Supp. 1262, 1263-64 (D. Nev. 1985); (3) whether the conversation took place out in the open, see Siripongs v. Calderon, 35 F.3d 1308, 1320 (9th Cir. 1994) (holding that a telephone conversation conducted in the middle of a police department was not protected); and (4) whether the conversation involved business or private matters, see Medical Lab. Mgmt. Consultants v. Am. Broad. Co., Inc., 306 F.3d 806, 814 (9th Cir.2002) (concluding that plaintiff’s discussion of business rather than private affairs does not create a reasonable expectation of privacy in the conversation). See Reynolds, 2012 U.S. Dist. LEXIS 47875, 2012 WL 1143830, at *5.
The parties also request that the Court consider the factors set forth in Kee v. City of Rowlett, 247 F.3d 206, 213-15 (5th Cir. 2001), a case they present as a leading authority on this issue and one that has been cited approvingly by at least one Ninth Circuit judge. See Gonzalez v. Spencer, 336 F.3d 832, 836 (9th Cir. 2003) (Fletcher, J., dissenting). The Kee factors examine the volume of the conversation; the proximity or potential of other individuals to overhear the conversation; the potential for communications to be reported; the affirmative actions taken by the speakers to shield their privacy; the need for technological enhancements to hear the communications; and the place or location of the oral communications as it relates to the subjective expectations of the individuals who are communicating. See Reynolds, 2012 U.S. Dist. LEXIS 47875, 2012 WL 1143830, at *5.
For the following reasons, the Court concludes that both the factors collected in Reynolds and the Kee factors indicate that Defendants had an objectively reasonable expectation of privacy in the conversations recorded by the stationary microphones here.
i. Nature of Location Where Conversations Were Recorded
In determining whether Defendants “had a reasonable expectation of privacy over the intercepted [conversations], it is important to assess the nature of the location where these conversations were seized.” See United States v. Gonzalez, Inc., 412 F.3d 1102, 1116 (9th Cir. 2005), amended on denial of reh’g, 437 F.3d 854 (9th Cir. 2006). In Gonzalez, the Ninth Circuit—affirming the suppression of wiretap evidence—concluded the conversations at issue occurred in an area well-known to the defendants that typically contained only about 25 other persons, and thus defendants had a legitimate expectation of privacy. Id. at 1116-17. Here, only about six to sixteen people typically attended the trustee sales, and they were largely a group of regular bidders. April 5 Tr. at 31:21-32:4. The location at issue here thus supports a reasonable expectation of privacy. See Gonzalez, 412 F.3d at 1116.
The government initially argued that Defendants could not have a reasonable expectation in an outdoor area like the public auction site at the San Mateo County Courthouse—the government has subsequently abandoned that position in the face of opposing legal authority. See Gov. Opp’n (dkt. 144) at 10 (admitting that “it is possible to have a private conversation in a public place”). Numerous controlling cases indicate that a defendant can have a reasonable expectation of privacy in a location accessible to the public. See, e.g., Katz, 389 U.S. at 351-52 (defendant had a reasonable expectation of privacy in a public telephone booth because he shut the door behind him); McIntyre, 582 F.2d at 1224 (police officer had a reasonable expectation of privacy in statements made in his office, even though his office doors were open and a records clerk sat fifteen feet away); cf. Siripongs v. Calderon, 35 F.3d 1308, 1320 (9th Cir. 1994). Kee expressly acknowledges that “two federal judges may have a reasonable expectation of privacy in a hushed conversation on the courthouse steps.” See Kee, 247 F.3d at 215 n.18.
ii. Volume of the Conversations and Whether They Could Be Overheard by Nearby Individuals
The volume of oral communications is relevant to whether the speaker has a reasonable expectation of privacy, as is the proximity or potential of other individuals to overhear the conversation. See Kee, 247 F.3d at 213-14; Reynolds, 2012 U.S. Dist. LEXIS 47875, 2012 WL 1143830, at *5. The key inquiry here, however, “is not whether it is conceivable that someone could eavesdrop on a conversation but whether it is reasonable to expect privacy.” See United States v. Smith, 978 F.2d 171, 179 (5th Cir. 1992) (citing Florida v. Riley, 488 U.S. 445, 453-54, 109 S. Ct. 693, 102 L. Ed. 2d 835 (1989) (O’Connor, J., concurring)). The evidentiary record here confirms that Defendants did not speak at a volume loud enough for an undercover agent or an FBI cooperator to overhear them. Feb. 11 Tr. at 155:7-12 (reflecting that the lead FBI agent testified that “the key observation made in the early part of the case” was that the cooperator and undercover agent “could not hear” Defendants’ conversations).
Turning to “proximity or potential” to be overheard, the extensive record here indicates that a passerby could not have overheard Defendants’ private conversations. Trained undercover agents were unable to do so. See Feb. 11 Tr. at 155:7-12. The government did not produce expert testimony on whether any of the bystanders who were identified in video surveillance near the stationary microphones could have overheard the sensitive conversations between Defendants that were recorded on those microphones. The Court repeatedly invited such expert testimony. See April 5 Tr. at 73:20-24 (calling for “a technical person who would say, standing at this place, at this location, this number of feet from the microphone, this conversation could be overheard”); id. at 79:11-13 (“And you’re asking me to conclude that these people who are walking by heard the conversation. There is no way I can do it without some scientific evidence.”).
The Court thus finds no evidence in the record establishing that bystanders overheard the conversations surreptitiously recorded on the twenty-eight days in question; it does, however, find ample evidence in the record that bystanders could not overhear those conversations. See, e.g., Feb. 11 Tr. at 155:7-12. This factor thus supports a reasonable expectation of privacy. See Kee, 247 F.3d at 213; Reynolds, 2012 U.S. Dist. LEXIS 47875, 2012 WL 1143830, at *5.
iii. Potential for Individuals to Report Conversations
Kee lists “[t]he potential for communications to be reported” as a factor relevant to determining whether an expectation of privacy is reasonable. See Kee, 247 F.3d at 214. This factor is of limited relevance here because the Supreme Court has recognized that the “risk of being overheard by an eavesdropper or betrayed by an informer or deceived as to the identity of one with whom one deals is probably inherent in the conditions of human society.” See Hoffa v. United States, 385 U.S. 293, 302, 87 S. Ct. 408, 17 L. Ed. 2d 374 (1966).
To the extent this factor applies here, the record establishes that Defendants largely restricted their conversations to their alleged co-conspirators, reducing the likelihood that their conduct would be reported—although obviously not eliminating that risk. See April 5 Tr. at 40-52 (noting Grinsell’s testimony that he would keep a close eye on the people near him, speak in a lower voice or stop talking when strangers approached, and generally do “everything possible to make sure nobody else heard [his] conversation[s]”). The Court thus finds that this factor supports a reasonable expectation of privacy. See Kee, 247 F.3d at 214.
iv. Whether the Conversations Involved Private Affairs
The Ninth Circuit has noted that “the covert videotaping of a business conversation among strangers in business offices does not rise to the level of an exceptional prying into another’s private affairs.” See Med. Lab. Mgmt. Consultants v. Am. Broad. Companies, Inc., 306 F.3d 806, 819 (9th Cir. 2002). Again, this factor is of limited relevance—Defendants do not challenge the video surveillance collected by the FBI. To the extent Med. Lab. Mgmt. Consultants is relevant, the Court notes that the FBI did not record conversations between strangers here; the trustee sales were typically attended by a group of regular bidders and alleged co-conspirators. See April 5 Tr. at 31:21-32:4; cf. 306 F.3d at 819.
v. Affirmative Steps Taken to Protect Privacy
Finally, Kee stresses the importance of “the affirmative actions taken by the speakers to shield their privacy.” See Kee, 247 F.3d at 214. The Court has developed an extensive record on this factor and concludes that it supports a reasonable expectation of privacy.
As stated above, Defendants’ relationship with the FBI’s cooperator “soured” directly prior to the FBI’s implementation of the electronic surveillance program disputed here. See Feb. 11 Tr. at 56:16-23. An agent stated that it became “typical behavior” for Defendants and the alleged co-conspirators to hold conversations “separate[ly] from [the] informant and from [the] undercover agent.” Id. at 145:16-146:5, 148:11-25, 153:2-11. The lead FBI agent said “the key observation made in the early part of the case” was that the cooperator and undercover agent “could not hear” Defendants’ conversations. Id. at 155:7-12.
The record indicates that Defendants would “routinely would walk away from a larger group, stand close to the individuals with whom [they] [were] speaking, cease conversations when others approached, try to speak out of earshot of other people, or speak quietly or whisper.” Def. Exs. 66-69 ¶ 7. The lead FBI investigator described Defendants as “talking among themselves,” “talking together,” and “separately speak[ing]” around this time period. See Def. Ex. 9 (12:34 pm; 1:07 pm; 1:16 pm). Defendants and other alleged co-conspirators whispered in each other’s ears during numerous conversations. See Def. Ex. 9 (1:59 pm; 12:23 pm – 13:10 pm). They would also break off into small groups to confer. See Def. Ex. 41 (12:59 pm); Def. Ex. 42 (12:34 pm; 13:05 pm). Defendant Grinsell, for example, testified that he would keep a close eye on the people near him, speak in a lower voice or stop talking when strangers approached, and generally do “everything possible to make sure nobody else heard [his] conversation[s].” See April 5 Tr. at 40-52.
Grinsell explained Defendants’ behavior, testifying that it was critical for bidders to shield certain sensitive conversations from eavesdroppers at the auctions because bidders were surrounded by competitors. See April 5 Tr. at 40:14-20 (“There were private conversations going on while the auctions were being conducted.”). If a bidder “talked openly about what they were going to bid, the condition of the property or anything else, it would work contrary to their interests in getting the property.” Id. at 43:19-44:1. It was thus “difficult” and “rare” to overhear another bidder’s conversation. Id. at 43:12-25.
Given this evidence that Defendants began keeping their conversations private, the Court asked the government to produce witnesses who had been able to overhear Defendants discussing bid-rigging after the falling out with the cooperator. The government declined to call any such witnesses. The Court thus concludes that Defendants took extensive, successful steps to protect their privacy, and this factor weighs heavily in favor of a reasonable expectation of privacy. See Kee, 247 F.3d at 214.
IV. CONCLUSION
With continuing advances in technology, private conversations may become anachronistic rituals reducing intimate encounters to silent exchanges of notes. But that day has not arrived. Until it does, our Fourth Amendment protections should be defined by traditional circumstances. The Court concludes that Defendants had (1) a subjective expectation of privacy in the conversations recorded by the stationary microphones at the San Mateo County Courthouse, and (2) that expectation was objectively reasonable. The Court thus GRANTS the motion to suppress all stationary recordings to the extent permitted under the standing analysis set forth above.
