eDiscovery: ESI and unreasonable searches and seizures

The question. What deadlines must the federal government meet when performing privilege reviews concerning computer data it has collected in the course of an investigation? On May 17, U.S. District Judge Dora L. Irizarry became the first judge in the 2nd U.S. Circuit to address this question. She ruled in favor of the main defendant in U.S. v. Metter, et al. No. 10-CR-600 (DLI) (E.D.N.Y., May 17, 2012). On June 15, federal prosecutors in New York filed a notice of their intent to appeal the judge's ruling. What is at stake is the viability of a key aspect of the use of electronically stored information as evidence in technology, white collar and other complex criminal cases prosecuted by the government.

The facts. This was a multi-defendant indictment charging them with participation "in a fraudulent scheme to publicly report false and materially overstated sales figures to create artificial demand for, and increase the share price and trading volume of, the common stock" of a corporation. Metter was charged with conspiracies to commit securities fraud and obstruction of justice, securities fraud, obstruction of justice, conspiracy to commit money laundering, and perjury. Metter moved to dismiss for improper venue and to "suppress the evidence obtained pursuant to search warrants executed at his home and [corporate] office, as well as a search of his personal email account." The court denied Metter's motion to dismiss for improper venue but granted his motion to suppress digital evidence concerning "several court authorized search warrants."

The background. Pursuant to granted search warrants the government conducted searches resulting in discovery and seizure of "four computer hard drives, paper documents, and approximately $27,000 in cash" at Metter's home, "61 computer hard drives and 67 boxes of paper documents" at his corporate offices, and his personal email accounts concerning which the government "requested a snapshot of account activity for a particular period of time."

Although the government subsequently created images of the seized computer hard drives, and then returned them to their owners also providing copies of the seized physical documents, the claimed defects arose from the "government's subsequent inactivity with respect to the imaged hard drives and email correspondence" that provide the basis for Metter's motion to suppress. While the court acknowledged that the evidence obtained from Metter's household trash could not be protected because "it is well-established that an individual has no expectation of privacy in his trash," the court found it objectionable that the government planned to "produce all of the imaged evidence (without reviewing it first) to all defendants and then, at a later time, conduct a privilege review of the imaged evidence."

The court also found it "very troubling" that the government "would take the position that they can come in and seize a computer with probably years' worth of confidential, completely irrelevant material on it and then disseminate it ... to a group of other individuals," which is "completely apart from attorney-client privilege." The court was of the opinion that this was "really a matter of irrelevant personal confidential data." The court exclaimed, "Heaven only knows what's on there. Financial data, personal information, relationship information. That cannot - that can't be permissible." Metter's objections followed this line of reasoning. At the time his motion to suppress had been fully briefed, some 15 months following execution by the government of its search warrants, the government still had failed to conduct any review of the seized and imaged evidence to determine whether any of it "fell outside the scope of the search warrant." Nor was the court certain "when the government would complete its privilege review of the imaged evidence."

The court's reasoning. The government argued that it had promptly returned the original evidence (hard drives), and thus the fact that it had delayed reviewing the imaged versions was not harmful, whether or not the imaged evidence came within the scope of the warrant. The court noted that this was a case of "first impression" in the 2nd Circuit "that may impact electronic discovery in future criminal investigations and cases." The issue for the court was: "How long may the government retain seized and imaged electronic evidence before conducting a review of the evidence to determine whether any of it falls outside the scope of a search warrant?"

The court found "that the government's more than fifteen-month delay in reviewing the seized electronic evidence, under the facts and circumstances of this case, constitutes an unreasonable seizure under the Fourth Amendment." The court justified this conclusion because, among other things, images contain identical information to the originals so the same privacy concerns apply to both original and retained imaged documents where the government engages in long-term retention. The point of departure where the government made its error was when it delayed "in reviewing the imaged evidence to determine whether [what the government] seized and imaged fell within the scope of the categories of information sought in the search warrants."

Recognizing that current law does not provide an "established upper limit as to when the government must review seized electronic data to determine whether the evidence seized falls within the scope of a warrant," the court concluded that in this case the delay was unreasonable as a "blatant disregard for its responsibility" because the government seized and imaged the electronic data retaining it "with no plans whatsoever to begin review of that data to determine whether any irrelevant, personal information was improperly seized."

Adding to the "unreasonable and disturbing" aspects of this case was the fact that "the government repeatedly asserted its intent to release indiscriminately the imaged evidence to every defendant, prior to conducting any review to determine if it contained evidence outside the scope of the warrants." The "release to the co-defendants of any and all seized electronic data without a predetermination of its privilege, nature or relevance to the charged criminal conduct only compounds the assault on [Metter's] privacy concerns. It underscores the government's utter disregard for and relinquishment of its duty to insure that its warrants are executed properly."

This left the court with the final determination to make concerning the "appropriate remedy." The question was whether "wholesale suppression" was required, which depends on whether the government engaged in a seizure that was a "general search" that was "not within the scope of the warrant," and did "not act in good faith." The court concluded that Metter's motion to suppress the electronic evidence seized and imaged pursuant to the home, office, and email warrants must be granted.

Message. The government's conduct and statements may be interpreted to indicate that it had no intention of fulfilling its obligations as promised in a search warrant, thus justifying imposition of the ultimate sanction in the form of an order for general suppression of all electronically stored evidence seized whether in original or imaged format.