Copied Hard Drive Retention Ruling Deleted by Full 2d Cir.

By Bernie Pazanowski

May 27 — A decision that the government can't indefinitely retain—and later search—copies of electronic files not covered by the warrant under which they were originally seized was undone by the en banc U.S. Court of Appeals for the Second Circuit May 27 ( United States v. Ganias, 2016 BL 169514, 2d Cir., No. 12-240-cr, 5/27/16 ).

Virtually sidestepping the issue whether the government's retention of the files violated the Fourth Amendment, the opinion by Judges Debra Ann Livingston and Gerard E. Lynch said that investigators acted in good faith when they got a second warrant so the evidence needn't be suppressed under United States v. Leon, 468 U.S. 897 (1984).

The good faith holding won't carry much precedential weight because “the facts here were novel,” Professor Orrin S. Kerr, of the George Washington University Law School in Washington, told Bloomberg BNA.

The court's most significant ruling may be that “to assert good faith reliance successfully, officers must, inter alia, disclose all potentially adverse information to the issuing judge,” said Kerr, who wrote an article on the original panel opinion that was cited by the en banc court here.

Kerr was quick to add, however, “even that necessarily only applies when the officers obtain a warrant.”

Dicta-Heavy Opinion

Although the en banc majority refused to decide whether the retention of the electronic files violated the Fourth Amendment, the opinion went out of its way to say it probably didn't.

The court, in more than 20 pages of dicta, suggested that precedent developed for filing cabinets and paper files doesn't necessarily apply to computer files. Computer files are much more complex and have “challenges that materially differ from those in the paper file context,” it said.

Among other reasons why the government might retain computer files, the court even speculated that defendants may need the copies for their own analysis and defense.

But defendants aren't without recourse, the court said. Defendants may seek return of the files under Federal Rule of Criminal Procedure 41(g), which the defendant didn't do in this case, it said.

The majority's reasoning in dicta isn't binding on lower courts in the Second Circuit, but they'll still “probably” take the decision “pretty seriously,” Kerr said.

That's because ten active judges of the Second Circuit “joined all the dicta,” he said.

Hard Drives Copied, Kept

In 2003, the government lawfully copied an accountant's hard drives for off-site review pursuant to a limited warrant. But it retained full forensic copies of the drives—including data not covered by the original warrant—for over two years. In 2006, the government searched the additional data, under a new warrant, for evidence of tax evasion, which was unrelated to the original investigation.

In 2014, a panel of the of the Second Circuit held that the retention and subsequent search violated the Fourth Amendment, requiring suppression of the evidence (95 CrL 449, 7/2/14).

Good-Faith Rules the Day

The en banc court said that under Leon, evidence needn't be suppressed when the government acts “in objectively reasonable reliance” on a search warrant, even if the warrant is subsequently invalidated.

Here, it was objectively reasonable for the investigators to rely on the second warrant in this case, the court said. The magistrate judge who issued it had all the facts regarding the retention of the files, the agents had no reason to believe that they had done anything unconstitutional and the agents acted reasonably throughout the investigation, the court said.

Judge Raymond J. Lohier Jr., joined by Judge Rosemary S. Pooler, concurred, but emphasized that “the only holding in the majority opinion” was the good faith holding.

Dissenting, Judge Denny Chin cited precedent concerning paper files and argued that the evidence should be suppressed because the protections of the Fourth Amendment “are even more important in the context of modern technology.” He also argued that the government's actions weren't excused by good faith.

Stanley A. Twardy Jr., of Day Pitney LLP, Stamford, Conn., argued for the defendant. The U.S. Attorney's Office in New Haven, Conn., argued for the government.

To contact the reporter on this story: Bernie Pazanowski in Washington at bpazanowski@bna.com

To contact the editors responsible for this story: Jessie Kokrda Kamens at jkamens@bna.com and Jeffrey D. Koelemay at jkoelemay@bna.com