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United States v. Comprehensive Drug Testing

September 13, 2010

UNITED STATES OF AMERICA, PLAINTIFF-APPELLANT,
v.
COMPREHENSIVE DRUG TESTING, INC., DEFENDANT-APPELLEE.
MAJOR LEAGUE BASEBALL PLAYERS ASSOCIATION, PETITIONER-APPELLEE,
v.
UNITED STATES OF AMERICA, RESPONDENT-APPELLANT.
IN RE: SEARCH WARRANTS EXECUTED ON APRIL 8, 2004 AT CDT, INC.,
IN RE, SEAL 1, PLAINTIFF-APPELLANT,
v.
SEAL 2, DEFENDANT-APPELLEE.



Appeal from the United States District Court for the Northern District of California, Susan Yvonne Illston, District Judge, Presiding, D.C. No. MISC-04-234-SI. Appeal from the United States District Court for the District of Nevada, James C. Mahan, District Judge, Presiding, D.C. No. CV-04-00707-JCM. Appeal from the United States District Court for the Central District of California, Florence-Marie Cooper, District Judge, Presiding, D.C. No. CV-04-02887-FMC.

Per curiam.

FOR PUBLICATION

ORDER AND OPINION

Argued and Submitted December 18, 2008 -- Pasadena, California

Before: Alex Kozinski, Chief Judge, Andrew J. Kleinfeld, Susan P. Graber, Kim McLane Wardlaw, W. Fletcher, Richard A. Paez, Marsha S. Berzon, Consuelo M. Callahan, Carlos T. Bea, Milan D. Smith, Jr. and Sandra S. Ikuta, Circuit Judges.

Concurrence by Chief Judge Kozinski;

Partial Concurrence and Partial Dissent by Judge Bea; Partial Concurrence and Partial Dissent by Judge Callahan; Dissent by Judge Ikuta

ORDER

The revised opinion filed concurrently herewith shall constitute the final action of the court. No petitions for rehearing will be considered.

OPINION

This case is about a federal investigation into steroid use by professional baseball players. More generally, however, it's about the procedures and safeguards that federal courts must observe in issuing and administering search warrants and subpoenas for electronically stored information.

Facts

The complex facts underlying this case are well summed up in the panel's opinion and dissent, and we refer the interested reader there for additional information. United States v. Comprehensive Drug Testing, Inc., 513 F.3d 1085 (9th Cir. 2008). We reiterate here only the key facts.

In 2002, the federal government commenced an investigation into the Bay Area Lab Cooperative (Balco), which it suspected of providing steroids to professional baseball players. That year, the Major League Baseball Players Association (the Players) also entered into a collective bargaining agreement with Major League Baseball providing for suspicionless drug testing of all players. Urine samples were to be collected during the first year of the agreement and each sample was to be tested for banned substances. The players were assured that the results would remain anonymous and confidential; the purpose of the testing was solely to determine whether more than five percent of players tested positive, in which case there would be additional testing in future seasons.

Comprehensive Drug Testing, Inc. (CDT), an independent business, administered the program and collected the specimens from the players; the actual tests were performed by Quest Diagnostics, Inc., a laboratory. CDT maintained the list of players and their respective test results; Quest kept the actual specimens on which the tests were conducted.

During the Balco investigation, federal authorities learned of ten players who had tested positive in the CDT program. The government secured a grand jury subpoena in the Northern District of California seeking all "drug testing records and specimens" pertaining to Major League Baseball in CDT's possession. CDT and the Players tried to negotiate a compliance agreement with the government but, when negotiations failed, moved to quash the subpoena.

The day that the motion to quash was filed, the government obtained a warrant in the Central District of California authorizing the search of CDT's facilities in Long Beach. Unlike the subpoena, the warrant was limited to the records of the ten players as to whom the government had probable cause. When the warrant was executed, however, the government seized and promptly reviewed the drug testing records for hundreds of players in Major League Baseball (and a great many other people).

The government also obtained a warrant from the District of Nevada for the urine samples on which the drug tests had been performed. These were kept at Quest's facilities in Las Vegas. Subsequently, the government obtained additional warrants for records at CDT's facilities in Long Beach and Quest's lab in Las Vegas. Finally, the government served CDT and Quest with new subpoenas in the Northern District of California, demanding production of the same records it had just seized.

CDT and the Players moved in the Central District of California, pursuant to Federal Rule of Criminal Procedure 41(g), for return of the property seized there. Judge Cooper found that the government had failed to comply with the procedures specified in the warrant and, on that basis and others, ordered the property returned. We will refer to this as the Cooper Order.

CDT and the Players subsequently moved in the District of Nevada, pursuant to Federal Rule of Criminal Procedure 41(g), for return of the property seized under the warrants issued by that court. The matter came before Judge Mahan, who granted the motion and ordered the government to return the property it had seized, with the exception of materials pertaining to the ten identified baseball players. We will refer to this as the Mahan Order.

CDT and the Players finally moved in the Northern District of California, pursuant to Federal Rule of Criminal Procedure 17(c), to quash the latest round of subpoenas and the matter was heard by Judge Illston. (The original subpoena, and the motion to quash it that was filed in 2003, aren't before us.) In an oral ruling, Judge Illston quashed the subpoenas. We will refer to this as the Illston Quashal. See Bryan A. Garner, A Dictionary of Modern American Legal Usage 725 (2d ed. 1995).

All three judges below expressed grave dissatisfaction with the government's handling of the investigation, some going so far as to accuse the government of manipulation and misrepresentation. The government nevertheless appealed all three orders and a divided panel of our court reversed the Mahan Order and the Illston Quashal, but (unanimously) found that the appeal from the Cooper Order was untimely. Upon a vote of eligible judges, we took the case en banc. As luck would have it, none of the three judges on the original panel was drawn for this en banc court. Nevertheless, we rely heavily on their work in resolving the case now before us.

Discussion

For reasons that will become apparent, we don't consider the three orders chronologically. Rather, we consider the Cooper Order first, the Mahan Order next and the Illston Quashal last.

1. The Cooper Order

[1] The three-judge panel unanimously held that the government's appeal from the Cooper Order was untimely. Comprehensive Drug Testing, 513 F.3d at 1096-1101, 1128. We agree with the panel and adopt its analysis of the issue, seeing no reason to burden the pages of the Federal Reporter by redoing the work the panel already performed so well. On that basis, we dismiss the government's appeal in No. 05-55354.

[2] This does not end our discussion of the Cooper Order, however, because it has substantial consequences for the remaining two cases before us. As Judge Thomas pointed out in his panel dissent, once the Cooper Order became final, the government became bound by the factual determinations and issues resolved against it in that order. Comprehensive Drug Testing, 513 F.3d at 1130. Specifically, Judge Cooper found that the government failed to comply with the conditions of the warrant designed to segregate information as to which the government had probable cause from that which was swept up only because the government didn't have the time or facilities to segregate it at the time and place of the seizure. Cooper Order at 4. Relatedly, Judge Cooper determined that the government failed to comply with the procedures outlined in our venerable precedent, United States v. Tamura, 694 F.2d 591 (9th Cir. 1982), which are designed to serve much the same purpose as the procedures outlined in the warrant. Finally, Judge Cooper concluded that the government's actions displayed a callous disregard for the rights of third parties, viz., those players as to whom the government did not already have probable cause and who could suffer dire personal and professional consequences from a disclosure of their test results.

The affidavit supporting the first search warrant, the one that sought the drug testing records of the ten suspected baseball players, contains an extensive introduction that precedes any information specific to this case. The introduction seeks to justify a broad seizure of computer records from CDT by explaining the generic hazards of retrieving data that are stored electronically. In essence, the government explains, computer files can be disguised in any number of ingenious ways, the simplest of which is to give files a misleading name (pesto.recipe in lieu of blackmail.photos) or a false extension (.doc in lieu of.jpg or.gz). In addition, the data might be erased or hidden; there might be booby traps that "destroy or alter data if certain procedures are not scrupulously followed," Warrant Affidavit at 3; certain files and programs might not be accessible at all without the proper software, which may not be available on the computer that is being searched; there may simply be too much information to be examined at the site; or data might be encrypted or compressed, requiring passwords, keycards or other external devices to retrieve. Id. at 4. The government also represented that "[s]earching computer systems requires the use of precise, scientific procedures which are designed to maintain the integrity of the evidence."

By reciting these hazards, the government made a strong case for off-site examination and segregation of the evidence seized. The government sought the authority to seize considerably more data than that for which it had probable cause, including various computers or computer hard drives and related storage media, and to have the information examined and segregated in a "controlled environment, such as a law enforcement laboratory." While the government did not point to any specific dangers associated with CDT, which is after all a legitimate business not suspected of any wrongdoing, it nevertheless made a strong generic case that the data in question could not be thoroughly examined or segregated on the spot.

Not surprisingly, the magistrate judge was persuaded by this showing and granted broad authority for seizure of data, including the right to remove pretty much any computer equipment found at CDT's Long Beach facility, along with any data storage devices, manuals, logs or related materials. The warrant also authorized government agents to examine all the data contained in the computer equipment and storage devices, and to attempt to recover or restore hidden or erased data. The magistrate judge, however, wisely made such broad seizure subject to certain procedural safeguards, roughly based on our Tamura opinion. Thus, the government was first required to examine the computer equipment and storage devices at CDT to determine whether information pertaining to the ten identified players "c[ould] be searched on-site in a reasonable amount of time and without jeopardizing the ability to preserve the data."

The warrant also contained significant restrictions on how the seized data were to be handled. These procedures were designed to ensure that data beyond the scope of the warrant would not fall into the hands of the investigating agents. Thus, the initial review and segregation of the data was not to be conducted by the investigating case agents but by "law enforcement personnel trained in searching and seizing computer data ('computer personnel')," whose job it would be to determine whether the data could be segregated on-site. These computer personnel-not the case agents-were specifically authorized to examine all the data on location to determine how much had to be seized to ensure the integrity of the search. Moreover, if the computer personnel determined that the data did not "fall within any of the items to be seized pursuant to this warrant or is not otherwise legally seized," the government was to return those items "within a reasonable period of time not to exceed 60 days from the date of the seizure unless further authorization [was] obtained from the Court." Subject to these representations and assurances, Magistrate Judge Johnson authorized the seizure.

A word about Tamura is in order, and this seems as good a place as any for it. Tamura, decided in 1982, just preceded the dawn of the information age, and all of the records there were on paper. The government was authorized to seize evidence of certain payments received by Tamura from among the records of Marubeni, his employer. To identify the materials pertaining to the payments involved a three step procedure: Examining computer printouts to identify a transaction; locating the voucher that pertained to that payment; and finding the check that corresponded to the voucher. Tamura, 694 F.2d at 594-95. The government agents soon realized that this process would take a long time unless they got help from the Marubeni employees who were present. The employees, however, steadfastly refused, so the agents seized several boxes and dozens of file drawers to be sorted out in their offices at their leisure.

We disapproved the wholesale seizure of the documents and particularly the government's failure to return the materials that were not the object of the search once they had been segregated. Id. at 596-97. However, we saw no reason to suppress the properly seized materials just because the government had taken more than authorized by the warrant. For the future, though, we suggested that "[i]n the comparatively rare instances where documents are so intermingled that they cannot feasibly be sorted on site,... the Government [should] seal[ ] and hold[ ] the documents pending approval by a magistrate of a further search, in accordance with the procedures set forth in the American Law Institute's Model Code of Pre-Arraignment Procedure." Id. at 595-96. "If the need for transporting the documents is known to the officers prior to the search," we continued, "they may apply for specific authorization for large-scale removal of material, which should be granted by the magistrate issuing the warrant only where on-site sorting is infeasible and no other practical alterative exists." Id. at 596.

No doubt in response to this suggestion in Tamura, the government here did seek advance authorization for sorting and segregating the seized materials off-site. But, as Judge Cooper found, "[o]nce the items were seized, the requirement of the Warrant that any seized items not covered by the warrant be first screened and segregated by computer personnel was completely ignored." Brushing aside an offer by on-site CDT personnel to provide all information pertaining to the ten identified baseball players, the government copied from CDT's computer what the parties have called the "Tracey Directory" which contained, in Judge Cooper's words, "information and test results involving hundreds of other baseball players and athletes engaged in other professional sports."

Counsel for CDT, contacted by phone, pleaded in vain that "all material not pertaining to the specific items listed in the warrant be reviewed and redacted by a Magistrate or Special Master before it was seen by the Government." Instead, the case agent "himself reviewed the seized computer data and used what he learned to obtain the subsequent search warrants issued in Northern California, Southern California, and Nevada." Judge Cooper also found that, in conducting the seizure in the manner it did, "[t]he Government demonstrated a callous disregard for the rights of those persons whose records were seized and searched outside the warrant."

[3] As previously noted, the government failed to timely appeal the Cooper Order and is therefore bound by its factual determinations and legal rulings. The government also failed to appeal another ruling, by Judge Illston, that ordered return of the Tracey directory and all copies thereof. We will call this the Illston Order. It held unlawful the government's failure to segregate data covered by the warrant from data not covered by it simply because both types were intermingled in the Tracey directory. In reaching this conclusion, Judge Ills-ton necessarily rejected the argument about the scope of the warrant the government made before Judge Mahan. The Ills-ton Order therefore has preclusive effect on the core legal questions resolved in the Mahan Order, viz., the government's failure to segregate intermingled data, as required by Tamura.

[4] Issue preclusion attaches when, as here, "the first and second action involve application of the same principles of law to an historic fact setting that was complete by the time of the first adjudication." Steen v. John Hancock Mut. Life Ins. Co., 106 F.3d 904, 913 n.5 (9th Cir. 1997) (quoting 18 Charles A. Wright, Arthur R. Miller & Edward H. Cooper, Federal Practice & Procedure § 4425 (West Supp. 1996)).

The determinations in the Cooper and Illston Orders are significant because orders the government does appeal contain similar findings as to the government's conduct. The government cannot contest those rulings if it is bound by the identical rulings in the Cooper and Illston Orders.

2. The Mahan Order

[5] Like Judges Cooper and Illston, Judge Mahan determined that "[t]he government callously disregarded the affected players' constitutional rights." Judge Mahan also concluded that the government "unreasonab[ly]... refuse[d] to follow the procedures set forth in United States v. Tamura... upon learning that drug-testing records for the ten athletes named in the original April 8 warrants executed at Quest and at [CDT] were intermingled with records for other athletes not named in those warrants." We can and do uphold these findings based on the preclusive effect of the Cooper and Illston Orders. However, because the matter is important, and to avoid any quibble about the proper scope of preclusion, we also dispose of the government's contrary arguments.

A. Compliance with Tamura

The government argues that it did comply with the procedures articulated in Tamura, but was not required to return any data it found showing steroid use by other baseball players because that evidence was in plain view once government agents examined the Tracey Directory. Officers may lawfully seize evidence of a crime that is in plain view, the government argues, and thus it had no obligation under Tamura to return that property. The warrant even contemplated this eventuality, says the government, when it excluded from the obligation to return property any that was "otherwise legally seized."

[6] Putting aside the fact that Judges Cooper and Illston, whose courts issued the warrants and whose orders are now final, rejected this argument, it is at any rate too clever by half. The point of the Tamura procedures is to maintain the privacy of materials that are intermingled with seizable materials, and to avoid turning a limited search for particular information into a general search of office file systems and computer databases. If the government can't be sure whether data may be concealed, compressed, erased or booby-trapped without carefully examining the contents of every file-and we have no cavil with this general proposition-then everything the government chooses to seize will, under this theory, automatically come into plain view. Since the government agents ultimately decide how much to actually take, this will create a powerful incentive for them to seize more rather than less: Why stop at the list of all baseball players when you can seize the entire Tracey Directory? Why just that directory and not the entire hard drive? Why just this computer and not the one in the next room and the next room after that? Can't find the computer? Seize the Zip disks under the bed in the room where the computer once might have been. See United States v. Hill, 322 F. Supp. 2d 1081 (C.D. Cal. 2004). Let's take everything back to the lab, have a good look around and see what we might stumble upon.

[7] This would make a mockery of Tamura and render the carefully crafted safeguards in the Central District warrant a nullity. All three judges below rejected this construction, and with good reason. One phrase in the warrant cannot be read as eviscerating the other parts, which would be the result if the "otherwise legally seized" language were read to permit the government to keep anything one of its agents happened to see while performing a forensic analysis of a hard drive. The phrase is more plausibly construed as referring to any evidence that the government is entitled to retain entirely independent of this seizure. The government had no such independent basis to retain the test results of other than the ten players specified in the warrant.

B. Initial Review by Computer Personnel

[8] The government also failed to comply with another important procedure specified in the warrant, namely that "computer personnel" conduct the initial review of the seized data and segregate materials not the object of the warrant for return to their owner. As noted, Judge Cooper found that these procedures were completely ignored; rather, the case agent immediately rooted out information pertaining to all professional baseball players and used it to generate additional warrants and subpoenas to advance the investigation. Judge Illston found the same. The record reflects no forensic lab analysis, no defusing of booby traps, no decryption, no cracking of passwords and certainly no effort by a dedicated computer specialist to separate data for which the government had probable cause from everything else in the Tracey Directory. Instead, as soon as the Tracey Directory was extracted from the CDT computers, the case agent assumed control over it, examined the list of all professional baseball players and extracted the names of those who had tested positive for steroids. See Comprehensive Drug Testing, 513 F.3d at 1134-35 (Thomas, J., dissenting). Indeed, the government admitted at the hearing before Judge Mahan that "the idea behind taking [the copy of the Tracey Directory] was to take it and later on briefly peruse it to see if there was anything above and beyond that which was authorized for seizure in the initial warrant." The government agents obviously were counting on the search to bring constitutionally protected data into the plain view of the investigating agents.

But it was wholly unnecessary for the case agent to view any data for which the government did not already have probable cause because there was an agent at the scene who was specially trained in computer forensics. This agent did make an initial determination that the CDT computer containing the Tracey Directory could not be searched and segregated on-site, and that it would be safe to copy the Tracey Directory, rather than seizing the entire hard drive or computer. After that copy was made, however, it was turned over to the case agent, and the specialist did nothing further to segregate the target data from that which was swept up simply because it was nearby or commingled. The sequence of events supports the suspicion that representations in the warrant about the necessity for broad authority to seize materials were designed to give the government access to the full list of professional baseball players and their confidential drug testing records.

The government argues that it didn't violate the warrant protocol because the warrant didn't specify that only computer personnel could examine the seized files, and the case agent was therefore entitled to view them alongside the computer specialist. This, once again, is sophistry. It would make no sense to represent that computer personnel would be used to segregate data if investigatory personnel were also going to access all the data seized. What would be the point? The government doesn't need instruction from the court as to what kind of employees to use to serve its own purposes; the representation in the warrant that computer personnel would be used to examine and segregate the data was obviously designed to reassure the issuing magistrate that the government wouldn't sweep up large quantities of data in the hope of dredging up information it could not otherwise lawfully seize. Judge Cooper found that the government utterly failed to follow the warrant's protocol. Judge Illston also found that the government's seizure, in callous disregard of the Fourth Amendment, reached information clearly not covered by a warrant. These findings are binding on the government, but simple common sense leads to precisely the same conclusion: This was an obvious case of deliberate overreaching by the government in an effort to seize data as to which it lacked probable cause.

C. Federal Rule of Criminal Procedure 41(g)

[9] Judge Mahan cured this overreaching by ordering the government to return the illegally seized data. We have long held that Rule 41(g) empowers district courts to do just that. Ramsden v. United States, 2 F.3d 322 (9th Cir. 1993). Though styled as a motion under a Federal Rule of Criminal Procedure, when the motion is made by a party against whom no criminal charges have been brought, such a motion is in fact a petition that the district court invoke its civil equitable jurisdiction. Id. at 324. We agree with the panel that the district court in this case did not abuse its discretion in choosing to exercise that jurisdiction. Comprehensive Drug Testing, 513 F.3d at 1104.

The government argues that Rule 41(g) is inapplicable because it is not designed to be used as a suppression motion. But CDT and the Players Association are not seeking to have evidence suppressed, as they are not criminal defendants. Rather, by forcing the government to return property that it had not properly seized, CDT is preserving the integrity of its business and the Players Association is protecting the privacy and economic well-being of its ...


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