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Schulze v. Federal Bureau of Investigation

July 21, 2010

MICHAEL SCHULZE, PLAINTIFF,
v.
FEDERAL BUREAU OF INVESTIGATION, DRUG ENFORCEMENT ADMINISTRATION, UNITED STATES MARSHALS SERVICE AND DEPARTMENT OF JUSTICE, DEFENDANTS.



MEMORANDUM OPINION AND ORDER GRANTING IN PART AND DENYING IN PART DEFENDANTS' MOTION FOR SUMMARY JUDGMENT

Doc. # 54

This is an action for damages and injunctive relief by plaintiff Michael Schulze ("Plaintiff") against defendants Federal Bureau of Investigation ("FBI"), Drug Enforcement Administration ("DEA"), United States Marshals Service ("USMS"), and the Department of Justice ("DOJ") (collectively, "Defendants" or "Defendant agencies"). This action is brought pursuant to the Freedom of Information Act, 5 U.S.C. § 552 ("FOIA"), and the Privacy Act, 5 U.S.C. § 552a ("PA"), and arises out of the alleged failure of Defendant agencies to timely provide Plaintiff with information requested under these Acts. Plaintiff is an inmate of a federal correctional institution and brings this action pro se. Federal subject matter jurisdiction exists pursuant to 28 U.S.C. § 1331. Venue is proper in this court.

JUDICIAL NOTICE

A federal court may "take notice of proceedings in other courts, both within and without the federal judicial system, if those proceedings have a direct relation to matters at issue." U.S. v. Black, 482 F.3d 1035, 1041 (9 Cir. 2007) (internal citation and quotes omitted). Plaintiff's declaration in opposition to Defendants' motion to dismiss references actions in other courts that relate to Plaintiff and that apparently have a relationship to these proceedings. The court therefore judicially notices court decisions in the following proceedings: United States v. Schulze, 156 Fed.Appx. 38, 2005 WL 2150267 (9th Cir. 2005); United States v. Schulze, 2007 WL 2156422 (D.Hawai'i 2007); Schulze v. Maglasang, 2010 WL 1539742 (9th Cir. 2010).

PROCEDURAL HISTORY AND BACKGROUND INFORMATION

Plaintiff alleges that he became the subject of an FBI investigation into methamphetamine trafficking in Hawaii on or about April 22, 1999. Plaintiff alleges that during that investigation, FBI procured the cooperation of Steven P. Olaes ("Olaes") and Shane K. Ahlo ("Ahlo") to function as confidential informants and/or witnesses in the investigation and subsequent trial. Plaintiff alleges FBI investigators improperly recruited and paid Olaes for serving as a confidential informant even though Olaes was serving a term of state-imposed probation at the time and his actions as a confidential informant involved committing illegal acts in violation of the conditions of his probation. Similarly, Plaintiff alleges that DEA intervened to secure the early release of Ahlo in order to secure his cooperation in the investigation that lead to Plaintiff's arrest.

Plaintiff was convicted on February 13, 2003, on one count of conspiracy to possess and distribute methamphetamine and two counts of distribution of methamphetamine. Plaintiff was sentenced to a total term of imprisonment of 360 months. Following his conviction, Plaintiff unsuccessfully challenged the legality and admissibility of a recording of telephone conversations between Plaintiff and Olaes in appeals to the Ninth Circuit and in a motion for new trial before the District Court of Hawaii. See United States v. Schulze 156 Fed. Appx. 38 at *39 - *40 (finding no reversable error in failure to inform Plaintiff of informant's probation status); United States v. Schulze, 2007 WL 2156422 (recounting Plaintiff's appeals and motion for new trial). Plaintiff also brought an action pursuant to Bivins v. Six Unknown Agents, 403 U.S. 388 (1971), against FBI agent Cindy Maglasang and others alleging the defendants in that case presented false evidence during Plaintiff's forfeiture trial. The district court's grant of summary judgment in favor of the defendants in that action was affirmed by the Ninth Circuit in Schulze v. Maglasang, 2010 WL 1539742 (9th Cir. 2010).

Commencing in July 2004, Plaintiff began requesting information from Defendant agencies under FOIA. The information requested falls into the following categories:

! From the FBI: records concerning himself that pertain to the investigation that lead to his arrest and eventual conviction.

! From the FBI: records concerning confidential informants Olaes and Ahlo that pertains to their role in Plaintiff's investigation and eventual conviction.

! From the DEA: records concerning himself that pertain to the investigation that lead to his arrest and eventual conviction.

! From the DEA: records concerning confidential informants Olaes and Ahlo that pertains to their role in Plaintiff's investigation and eventual conviction.

! From the USMS: records involving the location and/or disposition of the items seized following the forfeiture trial and held or disposed of by the USMS.

Plaintiff filed this action on February 9, 2005. The currently operative First Amended

Complaint ("FAC") was filed on August 12, 2005. The FAC alleges three claims for relief. Plaintiff's first claim for relief alleges violation of the PA as to all Defendants and requests statutory damages from all Defendants in the sum of $950,000. Plaintiff's second claim for relief is alleged pursuant to FOIA and requests injunctive relief against FBI and DEA for the production of records pertaining to confidential informant Olaes. Plaintiff's third claim for relief is alleged against DEA and FBI and requests injunctive relief to compel production of records pertaining to confidential informant Ahlo.

After several extensions of time to file dispostitive motions, Defendants filed the instant motion for summary judgment on July 13, 2007. Doc. # 54. On August 27, 2007, the court granted Plaintiff's unopposed motion to stay proceedings pending his transfer to another federal correctional facility. Proceedings were again ordered stayed on March 10, 2008. The stay was lifted on June 13, 2008, and Plaintiff filed his opposition to Defendants' motion for summary judgment on July 8, 2008. On August 29, 2008, Defendants filed a document that is captioned "Sur-Reply" but which appears to be their reply brief to Defendant's opposition. No hearing on Defendants' motion was calendared and the court finds that decision on the pleadings is appropriate.

PLAINTIFF'S PROPOSED UNDISPUTED MATERIAL FACTS

Defendants' proposed undisputed material facts comprise some 107 pages, a good deal of which consists of asserted legal bases for the non-disclosure of information. For purposes of setting out the proposed undisputed material facts, the court will summarize Defendants' allegations with respect to each agency's response to Plaintiff's FOIA request, what documents were produced, if any, and what exemptions were claimed by each defendant agency.

I. DEA

A. Plaintiff's Request for Information Regarding Himself

Plaintiff requested by way of a letter dated July 21, 2004, information concerning documents held by DEA pertaining to investigations conducted as to himself in Hawaii, California and Nevada. DEA informed Plaintiff that his request would not be processed and that DEA would not confirm or deny the existence of any responsive records. Plaintiff appealed DEA's denial of his FOIA request to the Department of Justice, Office of Information and Privacy ("OIP") on September 22, 2004. After remand and reconsideration, DEA denied Plaintiff's FOIA request on November 17, 2004, citing FOIA exemptions 5 U.S.C. §§ 552(b)(2), (exemption of materials related solely to internal personnel rules and practices of an agency) (b)(7)(C) (reasonably expected to constitute unwarranted invasion of personal privacy), (b)(7)(F) (reasonably expected to endanger life or physical safety of an individual), and PA exemption 5 U.S.C. § 552a (j)(2) (general exemption pertaining to law enforcement agencies). OIP affirmed DEA's denial of Plaintiff's request from DEA for information regarding DEA's investigation of him on January 31, 2005.

Defendants allege DEA conducted a query of the DEA's Narcotics and Dangerous Drugs Information System ("NADDIS"), which indexes information contained in other DEA information systems. DEA alleges a search of the Investigative Reporting and Filing System ("IFRS") using NADDIS disclosed the existence of a total of 12 pages of documents pertaining to DEA's investigation of Plaintiff. DEA applied the above-cited exemption to the material contained in the 12 pages. Although a broader discussion of the application of the exemptions to the material contained in the 12 pages is presented in Defendants' proposed undisputed material facts at B(53) to B(73), the upshot is that, when all exempt material was redacted, no useful information remained. The information contained on the 12 pages was therefore deemed unsegregable and was therefore withheld in its entirety.

B. Plaintiff's Request Regarding Information on Olaes and Ahlo

Plaintiff submitted his FOIA requests for information held by DEA concerning third party witnesses Olaes and Ahlo on September 22, 2004. DEA informed Plaintiff by a letter dated October 1, 2004, that no search for records concerning either Olaes or Ahlo could be released unless Plaintiff produce either a notarized Privacy Waiver signed by the third parties or certificates of death. Plaintiff appealed DEA's decision to OIP on October 11, 2004, and the DEA's denial was affirmed by OIP on December 15, 2004 as to Olaes and on December 27, 2004 as to Ahlo. OIP informed Plaintiff that records or portions thereof were properly withheld by DEA because the release of those records would constitute an unreasonable invasion of personal privacy within the meaning of FOIA exemption (b)(7)(C).

Plaintiff produced no Privacy Waivers as to either Olaes or Ahlo and consequently DEA did not search for responsive documents. The basis of Plaintiff's appeal was his contention that the weighing of the individuals' privacy interests against the public's interest in DEA's conduct relating to the use of paid informants.

II. FBI

A. Production of Documents Held by FBI Pertaining to Plaintiff

On May 11, 2004, Plaintiff mailed a request to FBI Headquarters ("FBIHQ") for all records pertaining to himself. Plaintiff was informed there were no responsive records held by FBIHQ and, after appeal and affirmation of FBI's response, Plaintiff was informed by letter dated September 21, 2004, that FBIHQ did not search databases maintained by regional field offices. Plaintiff was further informed that the Hawaii field offices did maintain records that would be responsive to Plaintiff's request. Plaintiff made requests by mail to the Las Vegas and Honolulu field offices for information concerning himself on October 13, 2004. On May 20, 2005, Plaintiff was informed that the Honolulu field office had initially identified and reviewed 230 responsive pages and released 21 responsive pages to Plaintiff. Plaintiff was informed that the remaining 209 pages were determined to be exempt from disclosure pursuant to PA exemption (j)(2) and FOIA exemptions (b)(2), (b)(6), (b)(7)(A), and (b)(7)(C). Plaintiff filed an administrative appeal concerning the 209 withheld pages with DOJ/OIP on June 14, 2005.

The Honolulu Field Office ultimately identified two main files that contained documents responsive to Plaintiff's FOIA request. File 51-HN-17645 pertains to an FBI jury panel investigation in the state of Hawaii of persons who were in the pool of potential jurors at Plaintiff's criminal trial. File 51-NH-17645 contains a total of 231 pages of documents. FBI ultimately determined that all 231 pages would be released to Plaintiff following appropriate redaction.

File number 245C-HN-16329 pertains to a FBI Narcotics investigation of multiple subjects, including Plaintiff. Pursuant to Plaintiff's request for information, supervisory personnel at the Honolulu field office advised that, even though Plaintiff was investigated, charged, tried and convicted, the investigation is still underway with respect to other subjects and other matters remain that are currently under adjudication. Defendants allege:

The AUSA has advised that there are currently several prosecutions which are being adjudicated in connection with this FBI narcotics investigation and that release of any information from this FBI investigative file to [P]laintiff, other than public source information, could reasonably be expected to interfere with pending criminal law enforcement proceedings in the United States District Courts concerning other subjects of this investigation. A review of all the documents concerning [P]laintiff in Honolulu main file 245C-HN-16329 has not located any documents which contain public source information that could be released to [P]laintiff. Inasmuch as any release of non-public information in this file could reasonably be expected to interfere with these pending criminal law enforcement proceedings in the United States District Courts concerning other subjects of this investigation, all of the documents concerning plaintiff in this Honolulu investigative file are being withheld from disclosure to [P]laintiff pursuant to Privacy Act Exemption (j)(2) and FOIA Exemption (b)(7)(A).

Doc. # 54-1 at 34:14 - 26.

B. FBI Records Concerning Ahlo and Olaes

On September 22, 2004, Plaintiff sent letters to FBI's Hawaii field office requesting records pertaining to third parties Ahlo and Olaes. On October 15, 2004, FBI informed Plaintiff that his request would not be processed as to Ahlo without a notarized Privacy waiver or proof of death. The same notice was sent to Plaintiff regarding Olaes on October 7, 2004. In both cases, FBI cited privacy exemptions (b)(6) and/or (b)(7)(C). Plaintiff appealed in both cases, claiming that Privacy Waivers or proofs of death were not required because public interest in FBI's practice of using paid informants is sufficient to overcome the privacy interests of the paid informants. FBI's refusal to process Plaintiff's request in the absence of privacy waivers or proofs of death was affirmed by DOJ/IOP on March 15, 2005, as to the request for information on Ahlo and on March 14, 2005, as to the request for information on Olaes.

III. USMS Records Pertaining to Items Seized from Plaintiff in Forfeiture Proceedings

USMS alleges that the data system used to keep records of items seized as a result to forfeiture proceedings is the Consolidated Asset Tracking System ("CATS"). The standard method for retrieving seized or forfeited property information from the CATS database is by the use of CATS identification numbers which are unique numbers assigned to each item seized or forfeited. Inquiries regarding seized items that are not submitted with CATS identification numbers may result in return of incomplete information or no information at all. Thus all individuals seeking information from the USMS concerning seized or forfeited items are advised to provide specific item identifying information including the CATS identification number.

Plaintiff submitted a request for information on items seized as a result of forfeiture proceedings (the "seized items") by letter to USMS dated September 30, 2004. USMS alleges the request was submitted without the required certification of personal identity and did not contain sufficient identifying information, including CATS identification numbers to permit a search of the CATS database. Plaintiff was notified of the requirement for certification of personal identity and for identifying data including CATS numbers by letter dated October 19, 2004. USMS instructed Plaintiff to submit the required certification and additional identifying information not later than fifteen days from the date of the letter notifying Plaintiff of the deficiencies in his application. USMS alleges there was no further communication from Plaintiff until the filing of this action.

USMS alleges that Plaintiff's complaint, which was noticed to USMS on October 26, 2005, identified several items of property held by the USMS office in Las Vegas, Nevada. USMS construed plaintiff's complaint as his FOIA request and, based on the additional information contained in the complaint conducted a search for the property listed in the complaint. USMS's search of the CATS database returned 994 pages of documents that were determined to be responsive to Plaintiff's request. USMS provided 100 pages of the 994 pages to Plaintiff without charge after redaction of information pursuant to FOIA exemptions (b)(2) and (b)(7)(C). Plaintiff was notified that additional pages would be provided at a cost of $0.10 per page. On June 17, 2006, Plaintiff authorized payment of the copying fees and also requested information from USMS pertaining to surveillance of him by USMS.

Later, on January 19, 2007, USMS amended its response to Plaintiff to indicate that a total of 697 pages were responsive to Plaintiff's request when duplicates were eliminated from the page count. Thus, the number of pages remaining after the initial 100 pages were provided was 597. Of the 597 pages remaining, 73 pages were referred to other components of DOJ as follows: one page originated with Bureau of Prisons, 30 pages originated with FBI, and 42 pages originated with the Executive Office of US Attorneys ("EOUSA"). The January 19, 2007, letter to Plaintiff stated that USMS was prepared to release a total of 521 pages of which 157 pages were ready for release in their entirety and the remainder were available for release with redactions pursuant to FOIA exemptions (b)(2), (b)(5), and (b)(7)(C). After correcting Plaintiff's mail address, USMS set the 521 pages of documents to Plaintiff plus and additional seven duplicate documents. Plaintiff was asked to send a copying fee of $52.10.

Based on information returned on Plaintiff's first FOIA request, USMS derived additional information from which they determined that additional information responsive to Plaintiff's request for records pertaining to Plaintiff's criminal (prisoner) files might be located. The districts of Nevada and Hawaii were advised to conduct searches for information pertaining to Plaintiff's FOIA request that might be found in the Prisoner Population Management/Prisoner Tracking System ("PPM/PTS") and the Warrant Information Network ("WIN"). Ultimately, USMS notified Plaintiff by letter dated June 21, 2007, that an additional 3,001 pages had been located that were responsive to Plaintiff's request. Of these 3,001 pages, 98 pages originated with other agencies and were referred to those agencies for direct response to Plaintiff. USMS released the remaining 2, 903 pages to Plaintiff, of which 893 pages were released in their entirety and the remaining 2,010 pages were released with redactions pursuant to FOIA exemptions (b)(2) and (b)(7)(C).

PLAINTIFF'S PROFFERED DISPUTED MATERIAL FACTS

Plaintiff opposition to Defendants' motion to dismiss is based primarily on Plaintiff's contention that Defendants have misrepresented a number of their proposed undisputed material facts and have omitted other facts that are material to the court's decision. To some extent, Plaintiff's proposed disputed material facts are intertwined with legal contentions the facts are alleged to support. Below, the court summarizes ...


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