High-profile FBI search violates the Fourth Amendment

A unanimous panel of the Ninth Circuit Court of Appeals reversed a district court’s judgment that the government did not violate the Fourth Amendment when it conducted warrantless “inventory searches” of safe deposit boxes owned by multiple individuals at a Beverly Hills facility. The panel remanded the case with instructions to order the destruction of any records related to the search of the plaintiffs’ property, the only remedy remaining to the plaintiffs after the government had already returned the seized property itself. The opinion in Snitko v. United States (No. 22-56050) provides a good example of a conservative federal appellate panel enforcing important constitutional protections for property owners which would apply in the criminal or, as here, civil forfeiture context.

US Private Vaults (USPV) operated a Beverly Hills safety deposit rental business. USPV differentiated itself by not requiring customers to provide any form of identification or personal information. The facility included high-tech security measures such as iris scanning and 24/7 armed guards. The protection of customer anonymity was USPV’s major marketing strategy. As the panel noted, it was unsurprising that USPV quickly became a favorite for criminals looking to store the proceeds of drug trafficking, illegal gambling, and prostitution rings. USPV quickly attracted the attention of law enforcement. Prior search warrants targeting individual boxes resulted in the seizure of contraband.

After years of targeting individual boxes, however, the government concluded that the only way to solve the “real problem” was to target USPV itself, which they believed to be involved in money laundering. An investigation confirmed that USPV’s owners were aware that criminals used its services to launder money and had committed some unrelated crimes themselves. In March 2021, a federal grand jury returned an indictment against USPV for conspiracy to money launder, distribute controlled substances, and structure financial transactions. A week later, the government obtained a search warrant for all of USPV’s safety deposit boxes, among other items.

Critically, in likely recognition that the government lacked individualized suspicion for many of the boxes it anticipated seizing, the warrant application disclaimed any desire to search the boxes’ contents. To avoid accusations of theft or damage to the contents, however, the government told the magistrate that it would need to “inventory” the contents of the boxes after seizure. The government averred that it would attempt to notify the box owners and would otherwise follow its standard written inventory search policies. The warrant eventually granted specified that the government would not be permitted to search or seize the box contents and could only follow the written inventory policy.

Prior to execution of the warrant, a government lawyer drafted “Supplemental Instructions on Box Inventory,” which were not included in the warrant application. The government would later acknowledge that these instructions, not the general written inventory policy, were the operative instructions followed by the agents on the ground. Pursuant to the Supplemental Instructions, agents were directed to perform some tasks which sound like a pure inventory – catalogue the items in each box, label the boxes, etc. Other tasks sound far more investigatory – separately bag large amounts of cash in an evidence bag and assign it a “forfeiture identification number,” take notes on how cash is bundled, take notes regarding any strong odors emitting from items, record the results of a drug sniff on the items, among others.

After seizure, several non-criminal plaintiffs filed claims with the FBI for return of their property. The government refused, informing the plaintiffs that it intended to civilly forfeit their property. In June 2021, the plaintiffs sued for return of their property and for a temporary restraining order halting the forfeiture proceedings. The district court granted the restraining order application, noting that the forfeiture notice to the plaintiffs, “put bluntly, provide[d] no factual basis for the seizure of Plaintiffs’ property.” While the litigation was pending, almost all the seized property was returned to the plaintiffs. The government then argued that the suit was moot. Under Ninth Circuit precedent, however, the plaintiffs could still seek an order requiring the government to return or destroy all records of the search. The government prevailed at trial, with the district court finding that the Fourth Amendment was not violated. The trial court relied on the inventory search doctrine, which it believed the government had complied with.

The Supreme Court created the inventory search doctrine in 1976 in the context of a vehicle seized from the roadside based on numerous unpaid tickets. The Supreme Court reasoned that it was acceptable for police to “inventory” the contents of a seized vehicle so long as the inventory was performed pursuant to a standardized policy. The standardized policy disconnects the inventory from any investigatory motive the police might have because, the argument goes, they would conduct the same inventory regardless of the level of suspicion they have regarding any particular seized vehicle. The doctrine would later be expanded to individuals booked into jail, but has largely remained confined to impounded vehicles.

All three panel judges agreed that the district court’s Fourth Amendment ruling was erroneous because the existence of the Supplemental Instructions took the USPV search outside of the realm of a true inventory search. The FBI had a standardized inventory policy, which was presumably what government lawyers had referenced in the warrant application and what the warrant itself commanded the government to follow. The district court recognized that the Supplemental Instructions were different from the standardized ones, but felt this was acceptable because agents followed both sets of instructions. The panel held that, regardless whether the Supplemental Instructions conflicted with the standardized ones or not, once a customized set of instructions is created the inventory ceases to be pursuant to a standardized policy and is therefore not an inventory search, but an investigative search requiring a warrant.

Two of the three judges would have gone farther, holding that the district court abused its discretion in several other Fourth Amendment holdings, including that the government did not exceed the bounds of the search warrant. The judges chastised the trial court for finding that the government was excused from applying for warrants for individual boxes because their anonymous nature supposedly made it impossible to identify the owners. That finding was clearly erroneous as it ignored (1) that the government had obtained warrants for individual USPV boxes in the past, (2) that the government contacted owners to notify them of forfeiture proceedings, (3) that the government did in fact obtain additional warrants for some boxes after the raid was complete, and (4) that it was inconsistent with the government’s own representations in the warrant affidavit that it would attempt to contact box owners after the seizure based on the items located therein and on its awareness that USPV recommends to box owners that they include a note with their phone number in the box so that USPV can contact them in the event of non-payment of rental fees. The third judge on the panel wrote a one-sentence concurrence stating he did not join this part of the opinion simply because he found it unnecessary to the resolution of the case.

Judge Milan Smith wrote a lengthy concurrence arguing that this case highlights the potential dangers of the inventory search doctrine if not cabined to the limited areas of impounded vehicles and prisoners being booked into jail. The doctrine, he argues, relied heavily on the lesser expectation of privacy in vehicles and their inherent mobility. A safety deposit box clearly comes with a strong expectation of privacy, and is not mobile. The government interests which excuse a warrant application in the context of an impounded vehicle simply do not exist for a safety deposit box. A vehicle seizure is most often unplanned, where the search here was planned for months in advance. Moreover, the government cannot disclaim an improper investigatory motive in the case of a search warrant executed at a stationary location where it comes into possession of the property at a time and place of its own choosing. The government often comes into possession of a vehicle because it is blocking traffic, posing a danger to the public, or otherwise needs to be urgently moved. In that circumstance, it is far more reasonable to allow the government to inventory the vehicle’s contents to avoid accusations of theft or damage to property.

Snitko is a strong rebuke of government conduct which violated Fourth Amendment rights, and of a district court which was too ready to accept government explanations for why it should not have to comply with the Constitution’s warrant requirement.