UNITED STATES DISTRICT COURT EASTERN DISTRICT OF CALIFORNIA
January 23, 2009
UNITED STATES OF AMERICA, PLAINTIFF,
JAMES D. BURKE, DEFENDANT.
The opinion of the court was delivered by: Frank C. Damrell, Jr. United States District Judge
MEMORANDUM AND ORDER
This matter is before the court on defendant James D. Burke's ("Burke" or "defendant") motion to suppress over 28 boxes of evidence taken during the search of a Las Vegas residence and nearby storage facility on February 19, 2003. Defendant also moves to dismiss the indictment on the basis that the government allegedly lost or destroyed exculpatory evidence taken during the search. A three-day evidentiary hearing was held in August 2008. Thereafter, the court requested supplemental briefing. Having reviewed the file herein and heard the testimony of witnesses and arguments of counsel, the court DENIES defendant's motion to suppress and defendant's motion to dismiss.
Defendant is charged in the indictment with 33 felony counts, including bankruptcy fraud and money laundering. (Indictment [Docket #6], filed Sept. 8, 2005.) Defendant has pled not guilty to all of these charges.
On February 14, 2002, Truck-A-Way ("TAW"), a corporation controlled by defendant James Burke, commenced a voluntary Chapter 11 bankruptcy proceeding in the Eastern District of California. On March 6, 2002, the Bankruptcy Court issued an order to show cause why the petition should not be dismissed for failure to file the required documents. Subsequently, on May 1, 2002, the TAW bankruptcy proceeding was converted to a Chapter 7 bankruptcy proceeding. On June 13, 2002, a creditor filed a petition for involuntary bankruptcy against James Burke individually. The court granted the petition on January 7, 2003.
In June 2003, James and his wife, Linda Burke, moved out of their home in Vacaville, California at 230 Buck Avenue. (Tr. 3:10; Govt. Ex. 4.) Linda Burke and her two children moved to a residence in Las Vegas, Nevada at 1008 Venetian Hills (the "Las Vegas residence" or the "residence"). (Tr. 3:10; Govt. Ex. 1.) Linda Burke testified that at the time of the move to Las Vegas, she informed defendant that he was not welcome at the residence until he cleared up the legal problems relating to the TAW and his individual bankruptcies. (Tr. 3:10.)
Throughout the bankruptcy proceedings, there were numerous motions filed and orders issued regarding the turnover of documents relating to both bankruptcy proceedings. In November 2002, upon motion of the bankruptcy trustee, multiple orders were entered against the debtor requiring the accounting and turnover of all books and records, as well as permitting the sale of personal property of the bankruptcy estate. These orders were followed by an order from the court filed on January 17, 2003, directing the defendant to file schedules, a statement of financial affairs, and other documents relevant to the bankruptcy.*fn2
Subsequently, on February 19, 2003, J. Russell Cunningham*fn3 ("Cunningham"), counsel for the trustee in the TAW bankruptcy proceeding, filed an "Ex Parte Application for Order Authorizing the Immediate Entry, Search and Seizure of Property" ("the ex parte application") in the bankruptcy court.*fn4 The proposed order submitted by Cunningham purportedly authorized the search and seizure of property allegedly belonging to the bankruptcy estate at the Las Vegas residence, a residence in Palm Desert, California, and unspecified storage lockers. In re. Truck-A-Way, 300 B.R. 31, 33 (E.D. Cal. 2003). According to Cunningham, the ex parte application was necessary because his past experience indicated that James Burke was likely to defy any court order by concealing assets and records belonging to the bankruptcy estate. See id. The bankruptcy court granted the ex parte application without notice and signed Cunningham's proposed "Order Authorizing the Immediate Entry, Search and Seizure of Property" ("the order") without alteration. Id. The order allowed the trustees for the James Burke and TAW bankruptcy estates, along with "their designated professionals," to "[i]mmediately enter" James Burke's residences in Las Vegas and Palm Desert and "[a]ny storage unit reflected in documents" at those locations, "picking or re-keying the door locks if necessary." It also authorized searches of the premises, removal of items that were property of the Burke or TAW bankruptcy estates, and searches of "the persons and personal effects . . . of any person at the premises or who arrives at the premises while the search of the premises is being conducted." Id.
On the same day that the bankruptcy court issued the order, Cunningham flew to Las Vegas to lead the search of the Las Vegas residence. In re. Truck-A-Way, 300 B.R. at 33. Cunningham arrived at the Las Vegas residence to conduct the search personally, along with the trustee for the Burke estate, Thomas Aceituno ("Aceituno"), and two armed deputy U.S. Marshals. Id. Pat Lyon ("Lyon"), counsel for Aceituno as trustee of the Burke estate, arrived later. (Tr. 4:152.) Cunningham, Aceituno, and Lyon seized a computer and paper records from the second floor loft/office area and boxes from the garage and office area. (Tr. 4:152-54.) They also seized keys for a rented storage facility that were located in the kitchen. (Tr. 4:153.) The computer and other materials seized were placed in their vehicles. (Tr. 4:154.)
After searching the residence, Cunningham, Aceituno, and Lyon immediately drove to the storage facility located about a mile from the house. (Tr. 4:157.) They discovered boxes that contained business records relating to TAW. (Id.) They seized the boxes and stored them in their vehicles overnight. (Id.; Tr. 4:162.)
On February 20, 2003, Aceituno had a copy made of the hard drive from the computer seized at the residence. (Tr. 4:166.) Cunningham, Aceituno, and Lyon then shipped the boxes seized via Federal Express from Las Vegas to Cunningham's office in Sacramento, California. (Tr. 4:172-73.) As a result, Cunningham continued to retain the documents and stored them in his office.*fn5
(Tr. 4:174; 5:14.) Cunningham subsequently turned over the seized boxes and documents to the United States Trustee on or about September 30, 2003. (Tr. 5:27, 31.) Jason Lamb, an agent for the Internal Revenue Service, Criminal Division, took possession of the boxes. (Tr. 6:94-95.) The boxes were stored in the evidence warehouse at the Internal Revenue Service Office. (Tr. 6:95.)
On July 2, 2007, defendant filed a motion to dismiss the indictment on the basis that the government destroyed exculpatory evidence and joined a motion filed by co-defendant Linda Burke to suppress all evidence taken during the February 19, 2003 search. On March 10, 2008, during a status hearing on the pending motions in the case, the court asked counsel for the defendant to address the issue of standing through the filing of a supplemental declaration. On April 14, 2008, Linda Burke pled guilty to a violation of 31 U.S.C. § 5324(a)(3), Structuring Financial Transactions. One week later, the defendant filed a supplemental declaration addressing his interest in the properties searched on February 19, 2003.
Between Friday, August 22, 2008, and Wednesday, August 27, 2008, the Court heard three days of testimony on the motions filed in this case. At the conclusion of the hearing, the Court asked the parties to submit further briefing on the issue of standing and on defendant's motion to dismiss in light of the testimony given.
A. Motion to Suppress
Defendant moves to suppress the evidence seized during the search executed on February 19, 2003. The government asserts that defendant James Burke cannot object to the search because he lacks a legitimate expectation of privacy in the Las Vegas residence and storage locker that were searched and in the particular items seized during that search.
It is well establish that remedies for violations of constitutional rights are only "afforded to a person 'who belongs to the class for whose sake the constitutional protection is given.'" United States v. Salvucci, 448 U.S. 83, 86 (1980) (quoting Hatch v. Reardon, 204 U.S. 152, 160 (1907)). Specifically, "Fourth Amendment rights are personal rights which, like some other constitutional rights, may not be vicariously asserted." Rakas v. Illinois, 439 U.S. 128, 133 (1979) (quoting Alderman v. United States, 394 U.S. 165, 174 (1969)); see Katz v. United States, 389 U.S. 347, 351 (1967) ("[T]he Fourth Amendment protects people, not places."). Therefore, the exclusionary rule, which allows the suppression of evidence obtained where a party's constitutional rights have been violated, may only be asserted by a person whose rights have been violated; "[a] person who is aggrieved by an illegal search and seizure only through the introduction of damaging evidence secured by a search of a third person's premises or property has not had any of his Fourth Amendment rights infringed." Rakas, 439 U.S. at 134. Rather, a disputed search and seizure must have infringed upon an interest of the defendant "which the Fourth Amendment was designed to protect." Id. at 140. The Court has made clear that, in this context, the Fourth Amendment protects against government intrusion in those places where a person has a legitimate expectation of privacy. Id. at 143.
To demonstrate a legitimate expectation of privacy that gives rise to Fourth Amendment protections, the defendant must establish that (1) he manifested a subjective expectation of privacy in the object of the challenged search; and (2) society is prepared to recognize that expectation as legitimate.*fn6
California v. Ciraolo, 476 U.S. 207, 211 (1986); United States v. Shryock, 342 F.3d 948, 978 (9th Cir. 2003); United States v. Nerber, 222 F.3d 597, 599 (9th Cir. 2000). "The defendant has the burden of establishing, under the totality of the circumstances, the search or seizure violated his legitimate expectation of privacy in a particular place." United States v. Davis, 932 F.2d 752, 756 (1991) (citing Rawlings v. Kentucky, 448 U.S. 98, 104-05 (1980)).
1. Search of the Residence
a. Subjective Expectation of Privacy
After a review of the credible evidence presented by the parties, the court finds that defendant has not borne his burden of demonstrating that he had an actual, subjective expectation of privacy in the Las Vegas residence searched, and more particularly, in the boxes and computer seized from the residence and sought to be suppressed by this motion.
The determination of whether a defendant has a subjective expectation of privacy in a particular place may be based upon statements made by the defendant, Rakas, 448 U.S. at 105, as well as his actions, United States v. Haydel, 649 F.2d 1152, 1155 (5th Cir. 1981). Where a defendant unequivocally disclaims ownership of the place searched, he gives up any expectation of privacy. United States v. Decoud, 456 F.3d 996, 1007 (9th Cir. 2006) (citing Abel v. United States, 362 U.S. 217, 241 (1960) (holding that one who has voluntarily abandoned property cannot subsequently complain about its search and seizure); United States v. Nordling, 804 F.2d 1466, 1469-70 (9th Cir. 1986) (stating that a defendant relinquishes any expectation of privacy after disclaiming interest in the property); United States v. Cella, 568 F.2d 1266, 1283 (9th Cir. 1977) (explaining that denying ownership of property when questioned constitutes abandonment of that property)).
In this case, the credible evidence demonstrates that until the filing of this motion, defendant James Burke consistently denied interest in the residence searched and in the property within the residence. Defendant admitted that at the time of search he told Aceituno that he didn't live at the house. (Tr. 1:41:19-21). A letter handwritten by defendant, dated February 19, 2003, provides:
Linda called -- trustee named Aceituno there & Police, demanding to search the house -- I asked for what -- she said records or something. I told her that everything there is yours & kids personal property and your business interest records -- he shouldn't even be there.
I asked her to put Aceituno on the phone. Aceituno answered. -- I asked him what he was doing there -- he said "I'm here to search your home for anything that belongs to your or Truck-A-Way's estate." I told him I don't live there -- he said "Yeah, that's what your wife said." I told him that any records in the house is a property of Linda & kids & their business interest records. . . . Linda confirmed she told him I no longer lived there & everything in the house was hers/kids. . . . Linda is very upset -- doesn't want anyone in her house searching for ??? (Govt. Ex. 20; Tr. 1:43-45.) Thus, in addition to statements made verbally to Aceituno, defendant explicitly stated in the foregoing memorialization he drafted subsequent to the search that he did not live at the residence, that the residence was Linda's home, and that everything in the house was Linda's and children's personal property.
Moreover, prior to the search, defendant disavowed ownership in the boxes stored in the garage and the house. Linda Burke testified that James Burke specifically told her that the boxes at issue "are yours and the kids. These are for your interest solely." (Tr. 3:24.)
Defendant's disavowal of residency and ownership interest in the property was also confirmed in court filings made subsequent to the search. Approximately ten months after the search, Linda Burke retained an attorney for herself and her two children regarding the search. (Tr. 3:36.) Defendant was present at the initial meeting with Linda Burke and the attorney, and he provided the attorney with the handwritten document he had drafted subsequent to the search. (Tr. 3:37.) Defendant is listed as a plaintiff on the complaint filed in the United States District Court for the District of Nevada*fn7 and in the subsequent filings made in opposition to motions filed by the defendants in the lawsuit. (Exs. 2-4 to Govt.'s Supp. Briefing Re. Standing ("Supp. Standing") [Docket # 125], filed Apr. 30, 2008.)*fn8 These filings represent that James Burke was residing in California, not Nevada, and that he did not own the residence where Linda Burke and the children were living. (Ex. 2 to Supp. Standing at 3; Ex. 3 to Supp. Standing at 3; Ex 4. to Supp. Standing at 2.) The filings also represent that James Burke "was not a resident of Nevada, nor did he own any real property in Nevada, and in particular did not own or have an ownership interest in the property located at 1008 Venetian Hills Lane in Las Vegas, Nevada." (Ex. 3 to Supp. Standing at 3.) Moreover, the filings made on behalf of defendant specifically provided that the residence was not "in any way owned, controlled or occupied by JIM BURKE." (Id.)
With respect to the computer seized during the search, the computer was located in the second floor office-area loft. (Tr. 3:22-23; Govt. Ex. 19.) There were no doors or other means to close off the space. (Tr. 3:23.) Linda Burke purchased the computer. (Tr. 3:25.) It did not require a password to log on, and both Linda Burke and her daughter had full access to everything on the computer. (Tr. 3:25-26.) Furthermore, defendant had his own lap top that he brought when he came to visit. (Tr. 3:26.) Beyond defendant's unequivocal denial of ownership in the house and the property within the house, defendant failed to evince any conduct that demonstrates an expectation of privacy in the computer; rather, the evidence demonstrates that anyone who had access to the computer also had full access to all its contents.
In light of the foregoing evidence, the court finds that defendant James Burke did not have a subjective expectation of privacy in the residence or in the property seized at the residence. Prior to the search, at the time of the search, and months after the search, defendant expressly denied living at the residence and having any ownership interest in the residence or in the boxes stored in the garage and the house. His explicit statements and conduct relinquished any expectation of privacy in the place searched and the property seized. His contradictory and self-serving testimony made years after the search during the course of the criminal prosecution is not credible. As such, the court could deny defendant's motion to suppress on this basis alone. See Decoud, 456 F.3d at 1007; United States v. Sangineto-Miranda, 859 F.2d 1501, 1510 (6th Cir. 1990) (denying defendant's motion to suppress because his conduct demonstrates that he did not have a subjective expectation of privacy in the place searched).
b. Reasonable Expectation of Privacy
However, assuming arguendo and for the sake of completeness that defendant could demonstrate a subjective expectation of privacy in the residence searched and the specific evidence at issue -- namely, the computer and boxes of documents -- such an expectation was not reasonable under the facts in this case.
In determining whether a defendant's expectation of privacy is reasonable and one that society is prepared to recognize as legitimate, the court must take into account all the circumstances. See United States v. Fultz, 146 F.3d 1102, 1105 (9th Cir. 1998). Relevant factors in this inquiry include (1) an ownership interest in the property; (2) legitimate presence at the time of the search; (3) the right to exclude others from the property; (4) the precautions taken to maintain privacy; and (5) the exercise of control and/or supervision over the place searched or items seized. See United States v. Perez, 689 F.2d 1336 (9th Cir. 1982); see also Fultz, 146 F.3d at 1105 ("A person has an expectation of privacy in his or her private, closed containers."); United States v. Quinn, 751 F.2d 980, 981 (9th Cir. 1984) ("Dual ownership remains significant under the expectation of privacy standard.") However, "no one circumstance is talismanic." Haydel, 649 F.2d at 1154. "Moreover, a person's expectation of privacy may depend on the nature of the intrusion." Shryock, 342 F.3d at 978 (citing Minnesota v. Carter, 525 U.S. 83 (1998)).
"[P]roperty ownership is clearly a factor to be considered in determining whether an individual's Fourth Amendment rights have been violated." Salvucci, 448 U.S. at 91 (noting that ownership is merely a factor in the court's inquiry); see Quinn, 751 F.2d at 981.
Defendant's statements and the conduct of the relevant parties weighs against a finding that defendant had an ownership interest in the Las Vegas residence. As set forth above, defendant has expressly disavowed any ownership interest in the residence and the property seized prior to, during, and subsequent to the challenged search. Moreover, independent evidence corroborates the truth of these statements. Linda Burke testified that when she moved to Las Vegas with the kids, she did not want defendant to move with her until he cleared up the legal problems. (Tr. 3:10.) The lease agreement for the residence was signed only by Linda Burke. (Tr. 3:11; Govt. Ex. 1.) This stands in contrast to lease agreements for previous residences in which James and Linda Burke lived where both signed the rental agreements. (Tr. 3:13; Govt. Exs. 4-5.) The down payment for the Las Vegas residence was paid from a bank account for which Linda Burke was the only signatory. (Tr. 3:14; Govt. Ex. 3.) Linda Burke was responsible for the rental payments on the residence and also made payments from an account for which she was the only signatory. (Tr. 3:13-15.) The water bills, cable bills, gas bills, and power bills*fn9 were in Linda Burke's name and were paid from her account. (Tr. 3:15-18.)
Defendant argues that because he and Linda Burke were not legally separated at the time of the search, he has an ownership interest in all of her property based upon principals of community property. While neither the parties nor the court were able to find any case law examining the role of marriage or community property principals in a Fourth Amendment context, the prenuptial agreement signed by the parties undermines defendant's argument.*fn10 Specifically, the prenuptial agreement provides that "Each of the parties shall separately retain all rights and interests . . . in all property of any kind which he or she now owns or hereafter acquires . . . and said property shall be known herein as 'Separate Property.'" (Govt. Ex. 10; Tr. 3:19.) The agreement also provides that James Burke shall pay expected living expenses to Linda Burke to administer and that Linda Burke is entitled to one half of all James Burke's net after tax income as separate property. (Govt. Ex. 10.) Finally, the prenuptial agreement states that the parties shall maintain separate a savings, checking, or brokerage account and place their separate property into such account. (Id.) In the event of legal separation or divorce, each party's separate property was to belong solely to the respective party. (Id.)
Linda Burke testified that defendant made clear to her that the purpose of the document was to clarify that she had her own separate property and to protect her and any children she may have. (Tr. 3:19.) Further, at a prior judicial proceeding, defendant testified that he and Linda Burke wanted separate property in their marriage, and that as a result of the prenuptial agreement, they had separate property. (Tr. 1:34, 36- 37.) Defendant also gave deposition testimony regarding the intent to keep the marital property separate, "meaning no community property." (Tr. 1:38-40.) Finally, in a declaration filed by defendant in connection with the bankruptcy proceedings, defendant stated:
I have continually told my wife Linda that the funds and property that are currently being fought over, the assets of hers and the children and not the property of mine or the Truck-A-Way estate.
The credible evidence at the hearing supports that both James Burke and Linda Burke signed a prenuptial agreement that sought to keep property separate and that they adhered to this arrangement. Specifically, Linda Burke maintained her own accounts and paid for all expenses out of this separate account, which per the agreement, was her separate property. Moreover, the statements made by James Burke prior to, during, and subsequent to the search indicate that he viewed the property paid for from Linda Burke's account as her property, even though the money was given to her by him. (See also Tr. 1:55-56) (testifying that the money given to Linda was placed in her account, to which he was not a signatory, and that he did not regulate how she spent that money). As such, under the factual circumstances supported by the credible evidence in this case, defendant did not have an ownership interest in the places searched or the property seized by virtue of his marriage to Linda Burke. Rather, all reliable evidence indicates that shared ownership was exactly what defendant sought to avoid. Therefore, this factor weighs against a finding that defendant had a legitimate expectation of privacy in the residence or any property within that residence.
ii. Legitimate Presence
Legitimate presence at the time of the search is a relevant factor in analyzing whether a defendant has an expectation of privacy. Rakas, 439 U.S. at 148; Perez, 689 F.2d at 1338. However, a defendant's legitimate presence on the premises is insufficient, by itself, to properly raise a challenge under the Fourth Amendment. United States v. Armenta, 69 F.3d 304, 309 (9th Cir. 1995) (citing Olson, 495 U.S. at 97.) Where the defendant is "more than a casual visitor or a mere transient," he may have a legitimate expectation of privacy in another's residence. Sangineto-Miranda, 859 F.2d at 1510; see also United States v. Gamez-Orduno, 235 F.3d 453, 458 (9th Cir. 2000) ("An overnight guest in another's home has a reasonable expectation of privacy.").
The evidence submitted by the parties demonstrates that while defendant was not physically present at the time of the search, he was, at various times, legitimately on the premises. Linda Burke consistently acknowledged that, as her husband and the father of her children, and in order to deal with some of the legal issues surrounding his personal and the Truck-A-Way bankruptcies, defendant went to and from the residence. (Tr. 3:12, 72-73, 91-93.) Generally, he would visit for a couple days on an infrequent basis, approximately three or four days in January 2003 and between three and five days in February 2003. (Tr. 3:35, 94.) Defendant had a key to the residence, and many of his personal items were moved from Vacaville to Las Vegas.
(Tr. 3:56.) He had a closet at the residence approximately half full with clothes and two drawers in a dresser. (Tr. 3:32, 50.) However, Linda Burke testified that defendant's items were in the Las Vegas residence because she packed everything in the move and "things were slowly dispersed" once she arrived. She testified that she "could never get him to come and get everything." (Tr. 3:33.)
However, the evidence does not support defendant's assertion that he lived at the Las Vegas residence. Again, as set forth above, defendant has expressly represented that he did not live at the Las Vegas residence with Linda Burke and the children. Linda Burke also testified that defendant did not live there. (Tr. 3:10, 12.) This testimony was corroborated by Linda Burke's neighbor, Jackie Frye ("Frye"), who testified that in the months leading up to the search she seldom saw James Burke at the residence, maybe a couple times a month. (Tr. 2:77.) Based upon these observations, Frye concluded that defendant did not live at the residence. (Tr. 2:75-76.)
Rather, the reliable evidence supports the conclusion that defendant was a sporadic and infrequent visitor in the months immediately preceding the search. While defendant had a key, he generally called Linda Burke to alert her that he was coming. (Tr. 3:12.) The credible testimony indicates that when he visited, he slept on the couch. (Id.) He would bring a suitcase with clothes and a briefcase. (Id.)
In support of his assertion that he lived at the Las Vegas residence, defendant testified that he had procured a Nevada driver license and was receiving mail at the residence. (Tr. 1:11, 14-15.) However, defendant procured a California driver license as well in the weeks prior to receiving his Nevada license and renewed that California license in 2006. (See Govt. Ex. 18.) In neither instance did defendant provide a mailing address of the Las Vegas residence. (Id.) Further, Linda Burke testified that defendant "seldom" received personal mail at the residence. (Tr. 3:29, 61.) The only consistent mail addressed to defendant at the Las Vegas residence was correspondence from attorneys relating to the bankruptcy proceedings. (Id.; see also Tr. 1:12-19 (defendant identifying only mail received by various lawyers and law firms connected to the pending bankruptcy proceedings)).
Moreover, defendant had multiple locations where he claimed residency, including the Las Vegas residence at issue, (Tr. 1:5), two hotels in Sacramento, (Tr. 1:6), and his brother's residence in Sacramento, which he used for purposes of securing a driver's licence from the Department of Motor Vehicles, (Tr. 1:28). Furthermore, there was testimony that he kept personal belongings and boxes at his daughter's residence in Phoenix, Arizona, and that he may have stayed there. (Tr. 3:31, 77.) There was also testimony that he stayed at Linda Burke's Palm Desert, California condominium in 2003 and kept clothes, toiletries, and records there. (Tr. 3:99.) Defendant had a P.O. Box in Las Vegas, in Palm Desert, and in Arizona. (Tr. 3:29.) It is undisputed that defendant was not on the premises at the time of the search. It is also undisputed that defendant was legitimately on the premises as an overnight visitor at times preceding the search.
Based upon the totality of the evidence, the court does not find that defendant lived at the Las Vegas residence or had a continued expectation of privacy in the residence in his absence. Defendant visited only a handful of times in the months preceding the search, alerting Linda Burke that he would be visiting. He often brought clothes and personal effects with him, and Linda Burke asked him to remove his personal effects and possessions that she brought to the residence. These facts, coupled with the fact that he stored clothes, toiletries, and records at other residences, indicates that he did not treat the Las Vegas residence as his home nor could he reasonably do so. While among all factors, defendant comes closest to the factor of legitimate presence; nevertheless, looking at the totality of the circumstances, it is far short of establishing a legitimate expectation of privacy in the residence generally.*fn11 Cf. United States v. Fields, 113 F.3d 313, 320 (2d Cir. 1997) (holding that the defendant had a reasonable expectation of privacy on the premises where he paid $125 per week for the privilege of using the apartment, made use of it on 40 or 50 occasions, could bring guests, and could come and go as he pleased even if the owner was not present).
iii. Control and Supervision
The remaining factors that the Supreme Court and the Ninth Circuit have found relevant -- namely the right to exclude others from the property, the precautions taken to maintain privacy, and the exercise of control and/or supervision over the place searched or items seized - focus on the affirmative measures taken by a defendant to ensure his privacy interests. Where a defendant has taken reasonable steps that manifest an expectation that his or her property remain free from public examination, an expectation of privacy may be reasonable. See Davis, 932 F.2d at 757 (holding that the defendant had a legitimate expectation of privacy in another's apartment where he had a key, could come and go as he pleased, and took the precaution of storing things in a locked safe to assure privacy).
In this case, defendant has failed to demonstrate that he took sufficient steps to exercise control and maintain privacy in the boxes of documents or the computer seized. As an initial matter, defendant unequivocally disclaimed ownership of all the boxes at issue in this case, stating that they were the property of Linda Burke and his children. Second, Linda Burke paid the rental payments and other household costs from her separate property. Cf. Davis, 932 F.2d at 757 (finding that the defendant exercised partial or joint control over the premises by assuming an ongoing obligation to pay the rent). Third, defendant left the boxes in a residence to which he did not have unrestricted access or control. The computer was similarly left in a room with no doors or locks and was not password protected. Fourth, there is no evidence that he had the right to exclude anyone from the premises. Fifth, he was only at the residence a handful of times prior to the search. As such, he was not actively supervising, monitoring, or ensuring the safety or privacy of the boxes or the computer. Indeed, defendant admitted that he was uncertain if there were in fact boxes in the house at the time of the search, (Tr. 1:69); this uncertainty is hardly consistent with the type of control and precautionary measures that evince an expectation of privacy. Therefore, this factor weighs against an expectation of privacy in the specific places searched and items seized.
iv. Nature of the Intrusion
Finally, the court notes that the nature of the intrusion, specifically the pending bankruptcy proceedings which precipitated the search at issue, renders defendant's position troubling. A debtor who has filed for bankruptcy "is not automatically stripped of any and all reasonable expectations of privacy with respect to property of the estate." In re. Kerlo, 311 B.R. 256, 266 (C.D. Cal. 2004); In re. Barman, 252 B.R. 403, 414 (E.D. Mich. 2000). However,
[D]ebtors who have filed for bankruptcy relief must have a significantly reduced expectation of privacy in their "houses, papers, and effects" that society is prepared to recognize as reasonable. The reduced expectation of privacy is a natural consequence of the substantial and detailed disclosures that are inherent in the bankruptcy process.
Barman, 252 B.R. at 414.
To the extent that defendant had an interest in the documents stored in the boxes or in the computer, it would appear that he should have disclosed their contents in the bankruptcy proceedings. The records at issue included "business records, . . . legal pleadings, . . . tax returns, . . . license plates [related to the defendant's trucking business], . . . airplane logbooks [related to a personal asset], . . . corporate seal, . . . unused letterhead, . . . [and] checks." (Tr. 2:117.) Whether located in bankers boxes or stored on computers, the bankruptcy court's order required defendant to disclose such information. (Tr. 3:110.) It is therefore troubling that defendant seeks to assert a legitimate expectation of privacy in documents that he was required by law to expose to the public.
v. Totality of the Circumstances
Viewing all the circumstances as a whole, the court holds that even if defendant could demonstrate a subjective expectation of privacy in the residence or the specific property seized, this expectation of privacy is not one that society is prepared to recognize as legitimate. Most importantly, defendant's express statements unequivocally disavowed an interest in the residence and the property seized from the residence. These statements were not simply made once, but rather repeated orally and in writing and were consistent with defendant's positions prior to, during, and subsequent to the search. Defendant memorialized his position that the residence and the property therein was the sole property of Linda Burke and the children subsequent to the search and allowed statements recounting this position to be filed on his behalf in a federal district court. He also testified under oath on numerous occasions that he and his wife intended and acted to keep their property separate throughout the marriage. It is hardly surprising that defendant seeks to recant such statements only now, years after the search and when the contrary position would better serve his interests in the face of a criminal prosecution.
Moreover, defendant's conduct supports his prior statements that he did not have an expectation of privacy in the house or the property therein. He stayed at the Las Vegas residence sporadically and would contact his wife before coming. Even though some of defendant's personal items were moved from California to Las Vegas, defendant would often bring a suitcase of clothes in his car and his own lap top. While he received some legal mail at the Las Vegas residence, he had numerous P.O. Boxes and used various addresses for different purposes. Furthermore, despite the fact that he was an infrequent visitor and that the computer and boxes at issue were kept in relatively open spaces, defendant did nothing to safeguard the particular items seized from examination.
Finally, the court again notes that the search at issue took place after defendant had filed for bankruptcy protection on behalf of himself and Truck-A-Way. The particular items seized, the boxes filled with documents and the computer, likely contained documents that defendant was required by law to expose to the public. While the court acknowledges that filing for bankruptcy does not strip an individual of all Fourth Amendment protection, under the facts of this case, the court notes that this is but another factor that weighs against a finding that society would deem defendant's expectation of privacy in the places searched and the items seized as legitimate.
The defendant relies primarily on two cases in arguing that he has a legitimate expectation of privacy. See Davis, 332 F.3d 1163, 1167 (9th Cir. 2003); see also Fultz, 146 F.3d 1102.
However, both Davis and Fultz are factually and legally distinguishable from this case.
In Davis, law enforcement conducted a warrantless search of an apartment for which defendant was not on the lease and found a closed gym bag under the bed where the defendant slept. 323 F.3d at 1163. The Ninth Circuit clarified that the question before the court was not whether the defendant had a legitimate expectation of privacy in the contents of the searched apartment generally, but whether he could reasonably believe that the contents of his gym bag located within the apartment would remain private. Id. The court found that although the defendant did not have exclusive control over the bed, he was more than an occasional guest. Id. at 1167. Under the totality of the circumstances, the Ninth Circuit held that the defendant had a legitimate expectation of privacy in the closed gym bag because he had a reasonable belief that the closed bag would remain private under the bed in an apartment where he sleeps and keeps his belongings. Id. at 1167-68. Conversely, in this case, the defendant was nothing more than a sporadic and infrequent visitor in Linda Burke's house. More importantly, unlike in Davis, the defendant expressly disclaimed any interest, subjective or otherwise, in the Las Vegas residence and the items stored therein. Finally, unlike the closed gym bag under the bed in Davis, much of defendant's property in this case was in an open office alcove or shared garage available and obvious to anyone with access to those locations. On these facts, it is not apparent that the defendant had a reasonable expectation of privacy, particularly in light of the pending bankruptcy proceedings in which the evidence at issue should likely have been disclosed to the public.
The Ninth Circuit's decision in Fultz is similarly distinguishable. 146 F.3d at 1105. In Fultz, the police searched the appellant's cardboard boxes, which were stored in the garage of a house where he was staying intermittently. Id. at 1106. The homeowner told the police that the boxes were stored in a segregated area of the garage and did not belong to her. Id. at 1104-06. The court concluded that the relevant question was not whether the owner of the house "had access to the garage, but whether she had mutual use and joint access to or control over the boxes." Id. at 1106. Unlike Fultz, defendant Burke did not have a reasonable subjective expectation that the items and boxes of records stored at the residence would remain private. Defendant did not own the boxes because, according to both the testimony of Linda Burke as well as defendant's own notes, they were the property of Linda Burke. Moreover, many of the documents and other items taken during the search of the residence, such as the computer, were not segregated and under the claimed ownership and control of defendant, but were left in unrestricted locations available to anyone with access. And, again, the search at issue must be considered in the context of the ongoing bankruptcy proceedings.
Therefore, after weighing all the credible evidence, the court holds that defendant James Burke had neither a subjective nor reasonable expectation of privacy in the Las Vegas residence generally or in the specific boxes and computer seized from the residence that are at issue in this motion. Accordingly, defendant's motion to suppress evidence seized from the Las Vegas residence is DENIED.
2. Search of the Storage Facility
a. Subjective Expectation of Privacy
Similarly, the court also finds that defendant has not borne his burden of demonstrating that he had an actual, subjective expectation of privacy in the Las Vegas storage facility or the specific boxes sought to be suppressed by this motion.
Defendant expressly denied any interest in the boxes stored in the storage facility. Prior to the search, Linda Burke testified that she specifically questioned James Burke regarding the boxes at issue:
Q: Can you explain the Court your understanding of whose boxes these were? . . .
A: Primarily I was to go through the garage where most of the boxes were. Some of them had different names on them Vista, Blue Ridge, different companies marked on the boxes. When I moved from Buck to Las Vegas, those boxes came with me and Jim actually helped move all of that with his son-in-law, Johnny.
He made it clear that those were my boxes because I had interest in these companies. I asked him very specifically, "Are these any of the boxes that were asked for you to hand over for the bankruptcies?"
And he said, "No. These are yours and the kids. These are for your interest solely." (Tr. 3:23-24; see also Tr. 3:58-59.) Under the separate property clauses set forth in the prenuptial agreement, the understanding that these boxes were solely her property made sense to Linda Burke. (Tr. 3:24.) Linda Burke further testified that defendant told her to keep these boxes in the garage, but that when she protested that there wasn't enough room, she opened up a storage facility. (Tr. 3:25, 58.) The storage facility was rented solely in her name, and she was responsible for the rental payments. (Govt. Ex. 2; Tr. 1:62.)
Under these facts, the court finds that the defendant did not have a subjective expectation of privacy in the boxes seized from the storage facility. While he had access to and knowledge of what was in the boxes, defendant expressly stated that the contents of those boxes were Linda Burke's property, not his, and as such, purportedly not subject to the ongoing bankruptcy proceedings.
b. Reasonable Expectation of Privacy
However, assuming defendant could demonstrate a subjective expectation of privacy in the items seized, that expectation was not reasonable.
The Ninth Circuit has recognized that a defendant's "expectation of privacy in a commercial storage area is lower than that in a residential area." United States v. Sarkisian, 197 F.3d 966, 986-87 (9th Cir. 1999) (citing Carter, 525 U.S. 83 ("[p]roperty used for commercial purposes is treated differently for Fourth Amendment purposes than residential property."); New York v. Burger, 482 U.S. 691, 700 (1987) (the "expectation of privacy in commercial premises . . . is different from, and indeed less than, a similar expectation in an individual's home"); see United States v. Silva, 247 F.3d 1051, 1056 (9th Cir. 2001) (holding that the defendants' possession of a key, though indicating permission to enter the shed, was insufficient to establish a legitimate expectation of privacy in the shed). However, as with a residence, the court looks to the totality of the circumstances in determining whether a defendant has a legitimate expectation of privacy in a storage area. Id.
The circumstances developed by the reliable evidence in this case demonstrate that defendant did not have an ownership interest in the storage facility or the boxes seized and did not have unrestricted access to the facility. Again, as set forth above, defendant expressly denied ownership of the boxes stored in the storage facility, and such denial of any ownership interest is consistent with the text and intent of the prenuptial agreement as evidenced by both the terms of the agreement and defendant's prior testimony regarding the agreement. Further, defendant did not purchase the lease nor did he make the rental payments for the storage facility. (Tr. 3:26, 29.) Furthermore, defendant's access to the facility was also not unrestricted. The keys to the storage facility were kept in Linda Burke's Las Vegas residence. (Tr. 3:30.) As set forth above, defendant stayed at the residence intermittently, but generally called before coming.
It is undisputed that defendant had access to both the storage facility and the boxes at issue in this motion; however, this is insufficient to confer a legitimate expectation of privacy. See Silvas, 247 F.3d at 1056 (no legitimate expectation of privacy where the defendants were on the premises "solely for commercial purposes at the behest of the unidentified sub-lessor of the shed"). Defendant was listed as a person authorized for access, along with Linda Burke's sister and brother-in-law. (Govt. Ex. 2.) Linda Burke testified that while defendant made clear that the documents were hers, defendant managed any business transactions related to these interests. (Tr. 3:59-60.) As such, he had lawful access to the storage facility and the boxes at issue. However, without more, legitimate presence on the premises does not equate to a legitimate expectation of privacy. Armenta, 69 F.3d at 309.
Moreover, there is no evidence that defendant exercised supervision or control or otherwise took precautionary measures to safeguard his privacy in the boxes. Beyond expressly disclaiming any interest in the boxes, there is no evidence that he retained a key to the facility, had a right to exclude others from the facility, or took any measures to identify the property as his own. Rather, the evidence indicates that in the time period immediately preceding the search, defendant only visited Las Vegas a handful of times and that at the time of the search, he wasn't sure what boxes were at these locations. This evidence is inconsistent with a manifestation that the property would remain private. Cf. Perez, 689 F.2d at 1338 (holding that the exercise of joint control and supervision evinced a reasonable expectation of privacy in the vehicle searched).
Finally, as discussed supra, the nature of the search in the context of the pending bankruptcy proceedings weighs against a finding that defendant had a reasonable expectation of privacy in the boxes at issue. The credible evidence indicates that defendant's use of the storage facility was primarily commercial in nature. These documents are purportedly business records that in all likelihood should have been disclosed, and thus, are subject to an even lesser expectation of privacy.
Therefore, for the foregoing reasons, the court holds that defendant had neither a subjective nor reasonable expectation of privacy in the storage facility and more specifically, in the boxes stored there. Accordingly, defendant's motion to suppress evidence seized from the storage facility is DENIED.
B. Motion to Dismiss
Defendant moves to dismiss the indictment on the grounds that the government lost or destroyed exculpatory evidence in violation of his due process rights. Defendant contends that a three to four inch file of documents went missing during the search and seizure on February 19, 2003. Defendant asserts that the documents included handwritten notes, thoughts on current business or projects, Internet printouts on apartments he was looking to invest in in 2001, tax information, and letters sent and received. (Tr. 6:139-40.) The government asserts that defendant's motion should be denied because (1) there is insufficient evidence as to the existence and destruction of the records; (2) there has been no showing of bad faith on behalf of the government; and (3) there is insufficient evidence that the documents would be admissible or that defendant has been prejudiced.
Where evidence exculpatory to a defendant is lost or destroyed, a defendant's due process rights may be implicated. See Arizona v. Youngblood, 488 U.S. 51, 57-59 (1988); California v. Trombetta, 467 U.S. 479, 486-89 (1984); United States v. Cooper, 983 F.2d 928, 931 (9th Cir. 1993). However, "[w]hatever duty the Constitution imposes on the States to preserve evidence, that duty must be limited to evidence that might be expected to play a significant role in the suspect's defense." Trombetta, 467 U.S. at 488. Therefore, in order to establish a denial of due process, the unavailable evidence (1) must have possessed exculpatory value that was apparent before the evidence was destroyed; and (2) must be of a nature that defendant would be unable to obtain comparable evidence by reasonably available means. Id. at 489. Moreover, the defendant must demonstrate that law enforcement acted in bad faith in failing to preserve the potentially useful evidence. Youngblood, 488 U.S. at 58. "The presence of absence of bad faith turns on the government's knowledge of the apparent exculpatory value of the evidence at the time it was lost or destroyed." Cooper, 983 F.2d at 931.
1. Existence and Destruction of the Records
As an initial matter, there is insufficient evidence that the subject documents were ever in the possession of either the government or the individuals who conducted the search and seizure in February 2003.*fn12 Defendant's certainty that the subject file was located in Las Vegas and seized during the search lacks credibility. Defendant testified that although there were records at the Las Vegas residence, at least four boxes related to the bankruptcy were moved to Phoenix. (Tr. 6:175-76.) He also kept bankruptcy files with him. (Tr. 6:176.) Further, defendant testified that he can't remember what was in every box or every folder that he kept in Las Vegas. (Tr. 6:176.) This is consistent with defendant's testimony that he could not remember that he left any boxes in the residence at the time of the search. (Tr. 6:69.)
This is also consistent with defendant's cavalier handling of other business documents. Defendant Burke testified that he typed at least one of the letters in the subject file at the desk top computer in TAW's office in early 2001. (Tr. 6:143.) When asked about the location of TAW's computer, he testified that the "computer was gone when we shut the company down. I think it was actually my brother's computer that we borrowed at the time." (Id.) However, neither defendant nor his brother know where that computer is. (Tr. 6:143-44.) Burke further testified that had a personal lap top computer up until at least 2003. (Tr. 6:165.) According to defendant's testimony, although he does not recall using the lap top computer to make any of the documents in the file, he has since disposed of this lap top computer. In light of defendants' inability to state with any particularity where files were stored, where boxes were located, or where computers used during the course of his business are, it strains credulity that defendant can state with certainty that this particular file was stored in the Las Vegas residence and seized on February 19, 2003.
Moreover, defendant's contention that the government had possession of the subject file is further undermined by the fact that he did not report any of the documents missing to the government, the bankruptcy court, or this court until July 2007, nearly five years after the documents allegedly were taken. (Tr. 6:160-61.) Between 2003 and 2005, defendant was engaged in ongoing litigation with respect to the bankruptcy. (Tr. 6:166-67.)
Defendant's attorney examined the boxes twice in May or June 2003, (Tr. 6:119-20), Linda Burke's attorneys examined the boxes in June 2005, (Tr. 6:122), defendant and his CPA examined the boxes in July 2005, (Tr. 6:124), Linda Burke's attorneys examined the boxes in March 2006, (Tr. 6:127), and defendant and his attorney examined the boxes in April 2006, (Tr. 6:129). At no point during the litigation surrounding the bankruptcies or after the numerous inspections made by the defendant, his co-defendant wife, and his representatives did anyone raise the issue of a missing file.
Therefore, in light of the credible evidence before it, the court finds that there is insufficient evidence that either the government or the individuals who executed the search on February 19, 2003 ever had possession of the alleged exculpatory evidence at issue in defendant's motion.
2. Bad Faith Attributable to the Government
Assuming arguendo that the government or anyone associated with the search and seizure had possession of the subject file,*fn13 defendant has failed to demonstrate that the government acted with bad faith in failing to preserve the evidence.
Defendant argues that bad faith is established by the presence of Lyon at the search. At the time of the search, Lyon represented a creditor in defendant's bankruptcies. (Tr. 5:34.) However, she also served as special counsel for the trustee, Aceituno, in defendant's personal bankruptcy. (Tr. 4:180.) Defendant contends that the potential conflict of interest raised by Lyon's representation is sufficient to demonstrate bad faith.*fn14
The court disagrees. While it is unusual, a principal creditor's attorney can also represent the trustee in a bankruptcy proceeding when there is a special need by the trustee. (Tr. 5:35-36.) Because of her prior connection to the case and relationship with one of Burke's creditors, Lyon's representation of Aceituno was specifically disclosed to the bankruptcy court. (Tr. 4:215.) As such, defendant's innuendo that Lyon's very representation of Aceituno was somehow suspect from the outset is not well taken. There is no evidence that the creditor paid for Lyon's services while she was conducting the search. (Tr. 5:39.) There is no evidence that anyone recalls Lyon taking or destroying evidence. There is no credible evidence that Lyon would have been able to conceal or destroy a three to four inch folder at the time of or subsequent to the search. (See Tr. 6:147) (defendant testifying that the subject file was a "big folder" that was not easily concealed). Further, defendant has failed to demonstrate with any particularity that Lyon had a motive to destroy the documents.
Rather, contrary to defendant's bald assertion in his motion, the exculpatory nature of the subject evidence is far from clear. The documents in the file consist primarily of contemporaneous notes made by defendant, printouts relating to potential investments, and correspondence with the bank. It is unclear how these documents relate to the guilt or innocence of defendant. Defendant argues that this evidence is central to the defense because it would enable him to show what was in his mind at the time he made specific business decisions. (See also 6:158) ("It was what I was doing at the time. I don't know how it relates."). However, this conclusory assertion not only fails to identify with any particularity how the evidence regarding his state of mind would exculpate him,*fn15 but it also fails to substantiate how the exculpatory nature of the documents would be apparent to Lyon, anyone else associated with the search, or the government. See Youngblood, 488 U.S. at 56, n.* (holding that there was no due process violation where the defendant failed to demonstrate the police knew the evidence would have exculpated him); United States v. Rivera-Relle, 333 F.3d 914, 922 (9th Cir. 2003) (holding that no due process violation where it is not clear there was any exculpatory value to the destroyed dispatch tape); United States v. Vera, 231 F. Supp. 2d 997, 1002 (D. Or. 2001) (holding that there was no due process violation where there was no obvious exculpatory value to the evidence apparent to law enforcement or the government generally when it was destroyed); cf. Cooper, 983 F.2d at 931-32 (holding that defendant's due process rights were violated where the evidence's potentially exculpatory value was repeatedly suggested to the government prior to destruction, and law enforcement assured the defendant and his counsel that it was being held as evidence while it was being destroyed).
Therefore, defendant has failed to demonstrate that the loss or destruction of evidence was done in bad faith.
Finally, assuming for the sake of completeness that defendant could demonstrate that the government had possession of the subject evidence and that it was lost or destroyed in bad faith, defendant has failed to demonstrate that he is prejudiced by the unavailability of the file.
First, it is unclear that the documents, if available, would have been admissible at trial. Defendant argues that the documents may have been admissible as an exception to the hearsay rule, pursuant to Federal Rule of Evidence 803(5), as a recorded recollection. For a document to be admissible under Rule 803(5), the party seeking to admit it must show (1) the record concerns a matter about which the witness once had knowledge but now has insufficient recollection to testify fully and accurately and (2) the witness made or adopted the record when the matter was fresh in the witness' memory and the record reflects that knowledge correctly. See Fed. R. Evid. 803(5). In this case, defendant has not shown that he has insufficient recollection to testify fully and accurately. To the contrary, he testified about the specific subjects he stated are covered by the documents in question. (Tr. 6:140-43.)
Defendant also argues that the documents may have been admissible as an exception to the hearsay rule, pursuant to Federal Rule of Evidence 803(6), as business records. Under Rule 803(6), a record is admissible if (1) the writing was made by a person with knowledge at or near the time of the incident recorded; and (2) the record was kept in the regular course of that business. United States v. Miller, 771 F.2d 1219, 1237 (9th Cir. 1985). "The record will not be admissible, however, if the source of information or the method or circumstances of preparation indicate a lack trustworthiness." Id. In this case, defendant has not demonstrated that the notes and memos contained in the file were made during the regular course of business. Rather, he testified that notes were often made on a "white piece of paper," a "sticky pad," or a "lunch bag." (Tr. 6:145.) There is no evidence that these notes were prepared or used during the regular operation of TAW. Moreover, defendant fails to cite any support for his contention that notes jotted on sticky pads or lunch bags bear the requisite characteristics of trustworthiness for purposes of 803(6).
Second, defendant may be able to obtain comparable evidence by other reasonably available means. Defendant testified that a majority of the notes reflected conversations and communications with Steve Shelton at the Civic Bank of Commerce. (Tr. 6:145.) However, Shelton hasn't testified in any of the proceedings, has never been deposed, and has never been subpoenaed. (Tr. 6:144-45.) As such, Shelton's testimony may be an alternative source of the information allegedly contained in the file. Therefore, defendant has failed to demonstrate that he is actually prejudiced by the loss or destruction of the file.
Accordingly, because the credible evidence does not establish that (1) the government or any individual associated with the February 19, 2003 search had possession of or destroyed the file, (2) the exculpatory nature of the file was apparent and destroyed in bad faith, or (3) defendant is prejudiced by the unavailability of the file at trial, defendant's motion to dismiss the indictment is DENIED.
For the foregoing reasons, defendant's motion to suppress and motion to dismiss are DENIED.
IT IS SO ORDERED.