By Ian M. Comisky, Matthew D. Lee, and Bridget E. Mayer
On June 17, 2014, the United States Court of Appeals for the Second Circuit issued a significant Fourth Amendment decision in United States v. Ganias. The decision is premised on the well-established notion that, because of the practical realities involved in searching a computer for filed responsive to a warrant, law enforcement may seize or image computers in their entirety and later search them for responsive documents. In Ganias, the Second Circuit became the first federal court to clarify that the government’s right to seize files outside of the scope of a warrant is limited in that the government may not retain files indefinitely. Rather, pursuant to the Fourth Amendment, individuals have a right to the deletion or return of non-responsive computer files.
Defendant Stavos M. Ganias provided accounting services to American Boiler and Industrial Property Management (“IPM”), two companies owned by James McCarthy. IPM was hired by the Army to provide maintenance and security at a vacant Army facility. In 2003, the Army received a tip that IPM employees were stealing items from the facility and were billing the Army for work done for American Boiler. The Army began an investigation, and obtained a search warrant for Ganias’s office, where the tipster said evidence of the fraud would be found.
At Ganias’s office, investigative agents imaged (made exact copies of) the hard drives of Ganias’s computers. Ganias was assured at the time of the seizure that the Army was only looking for documents related to American Boiler or IPM and that everything else would be purged once the Army had completed its search for relevant documents. The IRS soon joined the investigation and was given copies of the imaged computer files. By December 2004, the Army and IRS had isolated and extracted all computer files relevant to American Boiler and IPM. They did not delete the nonresponsive files, however, believing them to be “the government’s property.”
By 2005, IRS investigators began to suspect from paper documents from Ganias’s office as well as certain bank records that Ganias was not properly reporting American Boiler’s income. As a result, the investigation was expanded to include tax violations by Ganias. On April 24, 2006, over two-and-a-half years after the seizure, after failing to obtain Ganias’s permission to access certain of his personal files that were contained in the original seizure, the government obtained another warrant to search the preserved images. Ganias has altered the original files after the original warrant execution so the evidence obtained was only available because of the government’s retention of the imaged files outside the scope of the original warrant.
Ganias’s Indictment, Conviction, and Appeal
In October 2008, Ganias was indicted for conspiracy and tax evasion. He was convicted of tax evasion after a jury trial on April 1, 2011.
Ganias appealed his conviction claiming that his Fourth Amendment rights were violated when the Government copies his computer hard drives pursuant to a search warrant and then retained files beyond the scope of the warrant for over two-and-one-half years.
The Second Circuit’s Decision
In examining Ganias’s case, the court limited its review to the following question: “whether the Fourth Amendment permits officials executing a warrant for the seizure of particular data on a computer to seize and indefinitely retain every file on that computer for use in future criminal investigations.” It answered the question in the negative.
The Second Circuit began its analysis by recognizing that computer files merit Fourth Amendment Protection from unwarranted intrusion because they may contain intimate details of a person’s thoughts, beliefs and lifestyle. The Fourth Circuit also recognized, however, that because computers can store massive amounts of information, documents often cannot feasibly be sorted on-site and off-site review of an entire computer (or image thereof) is often appropriate, subject to the rule of reasonableness.
The Second Circuit determined that the government’s retention of copies of Ganias’s computer files for two-and-a-half years and subsequent search of those files was unreasonable because the 2003 warrant did not authorized the seizure of Ganias’s personal records, and the government could not retain those filed for a prolonged period of time and then use them in a future criminal investigation. As a result, the Court concluded that the government’s actions were unconstitutional.
In coming to this conclusion, the Court rejected several arguments offered by the government to justify its actions, including arguments that: (1) the imaged files were government property; (2) the 2006 warrant cured any defect in its search of the wrongfully obtained files; (3) the search was proper because the files no longer existed in Ganias’s computers; (4) returning or deleting non-responsive files is impractical; and (5) Ganias failed to bring a motion for return of property.
The Court then turned to the appropriate remedy. The Court initially noted that the government is not necessarily precluded from utilizing unlawfully obtained evidence in a criminal prosecution. Rather, exclusion is only appropriate where: (1) there is a widespread seizure of items outside the scope of the applicable warrant; (2) agents did not act in food faith; and (3) the benefits of deterrence outweigh the costs of suppression. The Court then determined that suppression was appropriate and vacated Ganias’s conviction.
This case has obvious importance given the prevalence of computer seizure in this day and age. Subsequent decisions by the Second Circuit or other courts will hopefully address issues left open in Ganias including how long files may reasonably be retained for off-site review or after off-site review, and whether the government must affirmatively purge non-responsive documents, or simply avoid using them.