M.D.Fla.: Suspicious activity reports (SARs) don’t violate the 4A under the third party doctrine

Suspicious activity reports (SARs) don’t violate the Fourth Amendment under the third party doctrine. Fid. Nat’l Fin., Inc. v. Bessent, 2025 U.S. Dist. LEXIS 255738 (M.D. Fla. Dec. 9, 2025):

c. Fourth Amendment

Plaintiffs argue that the Rule violates the Fourth Amendment due to its “highly intrusive and standardless demand for information without any connection to illegal activity” in that the Rule “demands sweeping disclosures of sensitive personal information without any rationale connecting the transactions to suspicious or unlawful activity that might render a search reasonable.” Doc. 35 at 24-25.

Plaintiffs’ premise fails, however, because, as discussed, the Rule is properly tailored to suspicious transactions relevant to possible violations of law and to guard against money laundering. See California Bankers Ass’n v. Shultz, 416 U.S. 21, 59-60, 65-67, 94 S. Ct. 1494, 39 L. Ed. 2d 812 (1974) (“[R]eporting requirements are by no means per se violations of the Fourth Amendment. … [O]rganizations engaged in commerce [can] be required by the Government to file reports dealing with particular phases of their activities. … ‘[C]orporations can claim no equality with individuals in the enjoyment of a right to privacy. They are endowed with public attributes. They have a collective impact upon society, from which they derive the privilege of acting as artificial entities. The Federal Government allows them the privilege of engaging in interstate commerce. Favors from government often carry with them an enhanced measure of regulation. Even if one were to regard the request for information in this case as caused by nothing more than official curiosity, nevertheless law-enforcing agencies have a legitimate right to satisfy themselves that corporate behavior is consistent with the law and the public interest.’ We have no difficulty then in determining that the Secretary’s requirements [in the BSA] for the reporting of domestic financial transactions abridge no Fourth Amendment right of the banks themselves. The bank is not a mere stranger or bystander with respect to the transactions which it is required to record or report. The bank is itself a party to each of these transactions, earns portions of its income from conducting such transactions, and in the past may have kept records of similar transactions on a voluntary basis for its own purposes. … [A]s we have noted above, ‘neither incorporated nor unincorporated associations can plead an unqualified right to conduct their affairs in secret.’ The regulations do not impose unreasonable reporting requirements on the banks. The regulations require the reporting of information with respect to abnormally large transactions in currency, much of which information the bank as a party to the transaction already possesses or would acquire in its own interest. To the extent that the regulations in connection with such transactions require the bank to obtain information from a customer simply because the Government wants it, the information is sufficiently described and limited in nature, and sufficiently related to a tenable congressional determination as to improper use of transactions of that type in interstate commerce, so as to withstand the Fourth Amendment challenge made by the bank plaintiffs.”) (internal citations omitted).

The Rule satisfies Shultz. Though significant, it still regulates only a small fraction of the real-estate market—non-financed transactions to entities and trusts (not subject to an exclusion). It seeks discrete, sufficiently described information. And it does so in relation to the Congressional authority to guard against money laundering and other illicit activities and review suspicious transactions relevant to possible violations of law. Contrary to Plaintiffs’ reading, Shultz does not invariably require a monetary threshold under the BSA or elevate the statute’s regulatory focus—any suspicious transactions relevant to potential violations of law—to only high-dollar transactions. Doc. 35 at 26; Doc. 71 at 14-15. Rather, because the Rule is within the agency’s authority, meets the statutory requirements, and is not too indefinite—and not a “grab-everything collection of suspicionless data” as Plaintiffs impute, Doc. 35 at 25-26—it is lawful.