IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF CALIFORNIA
May 20, 2005
UNITED STATES OF AMERICA, PLAINTIFF,
LEE NOBMANN, DEFENDANT.
The opinion of the court was delivered by: Vaughn R Walker United States District Chief Judge
By order filed August 27, 2004, the court suppressed the fruits of a search conducted by the government pursuant to a facially invalid warrant. Doc #38 (the "suppression order"). The factual background of the case and the search are amply recited in that order; the court will not repeat it here. The government has elected to proceed to trial, but a dispute has arisen over the practical effect of the court's suppression order. The dispute arises in three postures -- defendant seeks the return of the items seized in the unlawful search; he opposes the government's request for a pretrial subpoena for those same items; and he seeks to exclude the items from evidence at trial. (The second of these was rejected on alternative grounds by order filed October 4, 2004. Doc #46.) All three formulations raise the same question of law and fact: What materials are tainted by the government's unlawful search? This question turns on the "fruit of the poisonous tree" doctrine and the exceptions thereto: The "independent source" exception, the "inevitable discovery" exception and the "attenuated basis" exception. See, e g, United States v Smith, 155 F3d 1051, 1060 (9th Cir 1998).
To determine what of the government's evidence falls within the scope of the suppression order, and to determine which (if any) of the exceptions to the fruit of the poisonous tree doctrine apply, the court held an evidentiary hearing on March 28, 2005 (the "hearing"). The single witness at the hearing was Special Agent Leland Wulff ("Wulff") of the criminal investigation unit of the IRS. Wulff has been the lead agent investigating this case from its earliest stage; he applied for the search warrant found defective in the suppression order, he has issued numerous IRS summonses to third parties in connection with this case and he is familiar with the source of most of the evidentiary materials the government proposes to present at trial.
The government proposes to present about 250 exhibits; defendant challenges the admissibility of most of these. At the court's suggestion, the parties have categorized the exhibits in a way that somewhat simplifies the court's treatment of them. The government categorizes its exhibits as "exhibits obtained from searches," "exhibits not obtained from searches" and "exhibits obtained from searches but also * * * disclosed by [former Golden State Lumber CFO] Jim O'Brien or attached to civil depositions." Defendant addresses quite a few separate clusters of exhibits within the second category. But overall, the categories are helpful and the court will organize its analysis around the government's categories, with due regard for the particularized arguments made by defendant. Accordingly, the court proceeds category-by-category, introducing the relevant law and making factual findings as necessary.
I "Exhibits Obtained from Searches"
The government's argument in advocating the admissibility of exhibits that were obtained from the illegal searches (and nowhere else) is that they would inevitably have been discovered by the issuance of IRS summonses to defendant's company, Golden State Lumber, Inc (GSL). The court simply cannot accept this argument. Most obviously, the availability of the IRS summons procedure in any tax fraud case would render the Fourth Amendment a dead letter, for the government could always assert that materials discovered in an illegal search could have (and would have) been obtained by IRS summons instead.
Moreover, as the Ninth Circuit has pointed out, "'[t]he mere fact that the government serves a subpoena, however, does not mean that it will obtain the documents it requests. A subpoena can be invalid for a variety of reasons * * *.'" Center Art Galleries-Hawaii v United States, 875 F2d 747, 754 (9th Cir 1989) (quoting United States v Roberts, 852 F2d 671 (2d Cir 1988)). And in Roberts, the Second Circuit acknowledged that destruction of evidence by the recipient of the summons was yet another possibility that made discovery by summons anything but inevitable.
Indeed, Wulff candidly acknowledged just such a concern in response to a question put to him by the court:
The Court: As I understand your testimony, you did not think [at the time of the illegal search] that a summons directed to Nobmann and Golden State would be effective in producing the documents that you were after, correct?
Tr at 169:23-170:2.
Accordingly, the court must reject the government's inevitable discovery theory with respect to documents obtained from the searches. As there is no other viable argument for the admission of the exhibits listed on Schedule I of the government's post-hearing memorandum, those exhibits are EXCLUDED from evidence and the government is ORDERED to return them forthwith to GSL.
II "Exhibits not Obtained from Searches"
Defendant makes a global argument that exhibits not obtained from the searches but nonetheless obtained through the information provided by former GSL CFO Jim O'Brien ("O'Brien") are tainted: "O'Brien was not an 'independent source'; he was inextricably involved as the source of the warrants; the whole case is now centered on whatever evidence he might give." Def Br (Doc #61) at 4:10-11. But O'Brien cannot logically be tainted by the fact that his information was used to procure the invalid warrant used in the illegal search; the taint of an illegal search does not flow backwards to contaminate the source of the information in the affidavit supporting the warrant purportedly authorizing the search.
As the Supreme Court has stated, the purpose of the independent source doctrine is to "put the police in the same, not a worse, position that they would have been in if no police error or misconduct had occurred. Nix v Williams, 467 US 431, 443 (1984) (citing Murphy v Waterfront Commission, 378 US 52, 79 (1964); Kastigar v United States, 406 US 441, 457, 458-459 (1972)). The court finds that without the search of GSL, the government still would have had O'Brien's interviews and the materials he turned over; the court further finds that O'Brien's information generally would have legitimately led the investigating agents to the materials cataloged on Schedule II of the government's post-hearing memorandum. The court further finds that, in general and subject to the exceptions discussed below, the illegal search aided the government in obtaining the materials on Schedule II. Accordingly, the court concludes that the items on Schedule II are not tainted by the illegal search.
Defendant raises particular objections to items on Schedule II; the court will address them individually. Many can be disposed of summarily:
* Exhibits 1-49: Defendant concedes their admissibility over a Fourth Amendment objection.
* Exhibits 50-55, 58, 59: The court rejects defendant's argument that summonses based on O'Brien's information are not an independent source for these exhibits.
* Exhibits 107-111: Defendant concedes their admissibility over a Fourth Amendment objection.
* Exhibits 112, 114, 133, 134, 137, 139, 140-170, 172-173, 176, 178, 181-187, 191, 193, 214: The court rejects defendant's argument that summonses based on O'Brien's information are not an independent source for these exhibits.
* Exhibits 131, 132, 135, 188: Defendant concedes their admissibility over a Fourth Amendment objection.
* Exhibits 199, 200: Defendant concedes their admissibility over a Fourth Amendment objection.
* Exhibits 216: Defendant concedes its admissibility over a Fourth Amendment objection.
Several other exhibits on Schedule II pose particular difficulties. Exhibit 70 appears to be miscategorized; Wulff testified that he believes it was obtained from the search. Tr at 81:22-82:6. (Indeed, the government also lists it on Schedule I.) The court finds that Exhibit 70 was obtained from the search. Accordingly, it must be excluded under the rationale for Schedule I above.
Defendant contends that Exhibits 101-107 should be excluded because they were obtained by summons from GSL's accountant, John Baggett ("Baggett"), whose identity became known to the government because he was present when the agents executed the illegal search. The court rejects defendant's contention that Baggett's identity -- and hence the records he provided under summons -- is tainted. Wulff testified that GSL's original tax returns, which Wulff had requested from the IRS service center, would have disclosed Baggett's identity in any event. Tr at 106:17-21. Irrespective of how Baggett's identity came to be known, the government surely still would have issued summonses to him as the accountant for defendant's corporation. The court finds that the government inevitably would have discovered Baggett's identity and would have taken the same course of summonsing GSL records from him. Accordingly, these exhibits are admissible.
Defendant seeks to exclude Exhibit 190 on the ground that the "knowledge of that exhibit had to be from GSL records." Def Br at 12:2-3. This is not consistent with Wulff's testimony at the hearing: He testified that it was obtained by a summons issued on the basis of information from O'Brien. Tr at 52:23-53:5; Tr at 152:17-25. The court finds that Exhibit 190 was obtained by an IRS summons issued based on information provided by O'Brien before the illegal search. Accordingly, it is admissible.
Exhibits 202-204 are transcripts of consensual monitoring of conversations between defendant and Kathryn Emery ("Emery"). Defendant asserts that Emery's identity only became known to the government because of the illegal search, making these exhibits fruit of the poisonous tree. Because this argument was raised by defendant for the first time in the simultaneous post-hearing briefing, the court does not have the benefit of the government's position on this issue. The court is tentatively inclined to believe that United States v Ceccolini, 435 US 268 (1978), and its progeny provide the framework for analyzing this issue. Both the law and the facts require further briefing: Ceccolini calls for the application of a multi-factor attenuation analysis, and there was essentially no testimony at the hearing about the nature of these exhibits or the source of Emery's identity. The court therefore RESERVES DECISION on the admissibility of these exhibits and asks the parties for further briefing, which may include affidavits that supplement the testimony at the hearing.
Defendant represents that he has not received copies of Exhibits 224-237, 239 and 241-245, which the government claims are materials from civil legal proceedings between defendant and O'Brien. Wulff testified more or less to this effect, Tr at 155-160, although there was considerable confusion over these exhibits, and the court is not entirely satisfied that Wulff was testifying from personal knowledge about the source of these exhibits. Accordingly, the court holds that these exhibits are admissible, but defendant is granted leave to move to exclude them once he has had an opportunity to review them.
Finally, it appears that the preceding argument also applies to Exhibit 238: It was purportedly obtained from the civil proceeding and Wulff was unable to testify about it from personal knowledge. The stakes are somewhat higher, as Exhibit 238 is purportedly a copy of Exhibit 217, which was seized in the illegal search. If Exhibit 238 was indeed produced in the civil proceeding, it derives from an independent source and is not tainted. Accordingly, the court holds Exhibit 238 admissible, but the government should establish to defendant's satisfaction that Exhibit 238 does indeed come from the civil proceeding. Defendant is granted leave to move to exclude Exhibit 238 once he has had an opportunity to review it.
III. "Exhibits Obtained from Searches but also * * * Disclosed by Jim O'Brien or Attached to Civil Depositions"
The government argues that the exhibits in this final category are admissible because although copies of the exhibits were obtained in the illegal search, the government nonetheless obtained the exhibits through an independent source -- to wit, O'Brien provided enough information for the government to summons copies of the documents in question from a third party. For example, the government contends that Exhibit 95, a GSL check and Bank of Marin credit card statement, although obtained in the illegal search was nonetheless identified in materials provided by O'Brien and summonsed from the Bank of Marin.
The court agrees with the government that if the exhibits in question were identified by O'Brien and were summonsed from third parties, then the government has established an independent source. For many exhibits, Schedule III lists the independent source that identified each exhibit -- usually by a reference to a page from materials supplied by O'Brien. But some exhibits lack a reference to facts in evidence establishing what was the independent source for the identity of the exhibit. Moreover, there are no references at all to facts in evidence that establish that the exhibits were summonsed from the third parties listed on Schedule III. In the face of a Fourth Amendment violation, the government bears the burden of establishing an independent source, and "[t]he government must prove the independent source by a preponderance of the evidence." United States v Crowson, 828 F2d 1427, 1429 (9th Cir 1987). In his opposition, defendant seeks only to put the government to its proof; the court agrees that the government must affirmatively identify the evidence upon which it bases its independent source claims.
Accordingly, the court RESERVES DECISION on the admissibility of the exhibits listed on Schedule III. The government shall submit a supplemental memorandum directing the court to the evidence in the record establishing the independent source of the exhibits listed on Schedule III. This supplemental submission could take the form of a table (much like Schedule III) listing both (1) the evidence establishing an independent source for the identity of the exhibit and (2) the evidence (e g, the portion of Wulff's testimony) establishing how the exhibit was independently obtained.
In sum, the following exhibits are EXCLUDED from the government's case-in-chief and the government is ORDERED forthwith to return them to GSL: Exhibits 60, 62-64, 69, 70-72, 76, 219-220, 222, 223a. The court RESERVES DECISION on Exhibits 202-204 and the entirety of Schedule III (Exhibits 61, 65, 73, 81-100, 115, 117, 123, 138, 174-175, 177, 187, 189, 217-218, 221 and 223b). All of the government's other proposed exhibits are admissible over a Fourth Amendment objection. The government shall submit a supplemental brief addressing the issues identified above by June 3, 2005. Defendant shall file a responsive brief by June 13, 2005, upon which the matter will be deemed submitted. Due to the continuing pendency of this pretrial motion, the court finds that exclusion of time under the Speedy Trial Act from March 28, 2005, to June 13, 2005, under 18 USC § 3161(h)(1)(F) is proper.
IT IS SO ORDERED.
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