Opinion
No. 5:02mcl
August 14, 2002
REPORT AND RECOMMENDATION OF THE UNITED STATES MAGISTRATE JUDGE
Pursuant to the provisions of 28 U.S.C. § 636(b)(1) and (3) and the Amended Order for the Adoption of Local Rules for Assignment of Duties to United States Magistrate Judges dated January 15, 1994, Defendants' Motion to Dismiss (Docket Entry #6) was referred to the Honorable Caroline M. Craven for the purpose of making a report and recommendation. The Court, having considered the motion, the response, Petitioner's supplemental brief, and the evidence presented at the hearing, recommends the dispositive portion of Defendants' Motion to Dismiss be GRANTED. It is further recommended the Court decline to exercise anomalous jurisdiction over Petitioner's Federal Criminal Rule 41(e) Petition for Return of Property and Suppression of Evidence Seized Under Search Warrant Issued November 1, 2001 (Docket Entry #1).
I. FACTUAL BACKGROUND
Dr. Dennis Flores ("Petitioner") sued in this Court under Federal Rule of Criminal Procedure 41(e) for the return of property and suppression of evidence seized by agents of the government. The matters in dispute arise out of a search warrant issued on November 1, 2001 and executed on November 6, 2001, at Petitioner's office. Petitioner filed suit, seeking the return of his original documents and a prohibition of their use against him in any civil or criminal proceeding.
II. PROCEDURAL BACKGROUND
On February 26, 2002, the United States of America (the "Government") filed a Motion to Dismiss this case, asserting, among other things, the action should be dismissed for lack of subject matter jurisdiction and for failure to state a claim upon which relief can be granted. See FED. R. Civ. P. 12(b)(1) and 12(b)(6). On June 12, 2002, the Court issued an Order which specifically addressed only the non-dispositive portion of the Government's motion, wherein the Government argued the Magistrate Judge has no authority to consider the matter before her even though the matter was specifically referred to the Magistrate Judge by Judge Folsom.
This case is a "miscellaneous" case as indicated by the "mc" number in the style.
The dispositive portion of the Government's motion contests this Court's jurisdiction under Rule 41(e).
On July 18, 2002, the Court conducted a hearing on the dispositive portion of Defendants' motion, namely whether the Court should exercise anomalous jurisdiction under Rule 41(e). Specifically, the Court considered whether Petitioner has established the prerequisite showings, including a showing of irreparable harm, such as to warrant the exercise of anomalous jurisdiction by the Court. Petitioner argues (1) he does not need to invoke this Court's anomalous jurisdiction because this Court has jurisdiction pursuant to 28 U.S.C. § 1331, and (2) he has established the prerequisite showings such as to warrant the exercise of anomalous jurisdiction by this Court. The Court will discuss each alternate argument below.
III. JURISDICTION PURSUANT TO 28 U.S.C. § 1331
A. Linn v. Chivatero
Petitioner relies on Linn v. Chivatero, 714 F.2d 1278 (5th Cir. 1983), for the proposition that he does not need to invoke this Court's anomalous jurisdiction. Specifically, Petitioner asserts this Court has jurisdiction over this action under 28 U.S.C. § 1331 (federal question jurisdiction).
Linn holds that, in civil actions where a party seeks recovery of property for alleged violations of the Fourth Amendment, federal question jurisdiction exists pursuant to 28 U.S.C. § 1331 in view of Congress' removal of the amount-in-controversy requirement in 1980. Id. at 1281. "The development of the doctrine of anomalous jurisdiction was necessitated, at least in part, by the amount-in-controversy requirement for federal question jurisdiction." See, e.g., Hunsucker, 497 F.2d at 36. The Fifth Circuit, however, declined to address the issue of whether the doctrine of anomalous jurisdiction survives the repeal of the amount-in-controversy requirement of section 1331.
Although the Fifth Circuit again questioned the very existence of anomalous jurisdiction in In re Grand Jury Proceedings, 115 F.3d 1240, 1246 (5th Cir. 1997), the court discussed the equitable factors and concluded the district court's attempt to exercise anomalous jurisdiction, "if it exists, was inappropriate." Therefore, the Court is of the opinion the doctrine of anomalous jurisdiction still exists in the Fifth Circuit.
B. Discussion
One court has already considered and rejected Petitioner's argument. In In re Search Warrant Issued July 14, 1987, 684 F. Supp. 1417, n. 2 (N.D. Tex. 1988), the court distinguished Linn as a civil action which sought an injunction compelling the return of property and foreclosing the use of information taken from the documents. In considering the specific argument before the Court, the district court in the Northern District of Texas further stated (1) Linn did not expressly deal with Rule 41(e), and (2) the court had not located authority which would undermine the propositions that a district court acts upon a Rule 41(e) motion pursuant to its anomalous jurisdiction and that principles of equity apply. Id. Additionally, the court cited, among other things, In re Grand Jury Proceedings, 724 F.2d 1157, 1160 (5th Cir. 1984)(dictum), decided after Linn.
In In re Grand Jury Proceedings, the Fifth Circuit, without mentioning Linn, quoted with approval the Richey holding that actions for return of property made prior to the initiation of any civil or criminal proceedings flow from the seizure of that property, "`are governed by equitable principles, whether viewed as based on F.R.Crim.P. 41(e) or on the general equitable jurisdiction of the federal courts." Id. at 1160, citing Richey, 515 F.2d at 1243.
The court in the Northern District concluded that, in the absence of any authority for the proposition that the 1980 amendment to 28 U.S.C. § 1331 stripped FED. R. CRIM. P. 41(e) of equitable considerations, Rule 41(e) requires the petitioner to satisfy the irreparable injury and other equitable requirements adopted by the Fifth Circuit in Richey.
C. Recommendation
This Court agrees. Petitioner argues Linn makes clear the equitable requirements for finding anomalous jurisdiction need not be met in a case which seeks to prevent the government from keeping or using information obtained by a search and seizure which is alleged to have violated the Constitution. However, almost fifteen years after the court in the Northern District of Texas' decision, Petitioner has similarly not presented nor has the Court located any additional authority supporting the proposition that the 1980 amendment to 28 U.S.C. § 1331 stripped Rule 41(e) of equitable considerations.
In fact, the most recent Fifth Circuit cases concerning Rule 41(e) have discussed and applied the Richey factors or similar equitable considerations. See In re Grand Jury Proceedings, 115 F.3d at 1246 (applying the Richey factors); see also Industrias Cardeon, Ltda. v. U.S., 983 F.2d 49 (5th Cir. 1993)("Actions seeking the return of property are governed by equitable principles whether based on Rule 41(e) or on the equitable jurisdiction of the federal court."), citing Richey, 515 F.2d at 1243. Neither decision mentions the applicability of 28 U.S.C. § 1331.
The Court is also concerned with the implications of a footnote in Richey, indicating the district court had also declared it was without jurisdiction under 28 U.S.C. § 1331 to enter a declaratory judgment as to the validity of the seizure since to do so would be to entertain a suit against the sovereign without its consent in violation of the doctrine of sovereign immunity. The Fifth Circuit did not address this ruling of the district court.
This Court is bound to follow the law of this circuit, which continues to adhere to imposition of equitable requirements. Therefore, the Court will determine whether Petitioner has satisfied the equitable requirements for anomalous jurisdiction adopted by the Fifth Circuit.
IV. ANOMALOUS JURISDICTION
The doctrine of anomalous jurisdiction is based on the court's inherent power to police the actions of officers of the court. Hunsucker v. Phinney, 497 F.2d 29, 32-34 (5th Cir. 1974), cert. denied, 420 U.S. 927 (1975). Anomalous jurisdiction should be exercised with caution and restraint and subject to equitable principles. Id. at 34. In Richey, the Fifth Circuit stated actions for the return of property prior to the initiation of any civil or criminal proceedings flowing from the seizure of that property are "governed by equitable principles, whether viewed as based on F.R.Crim.P. 41(e) or on the general equitable jurisdiction of the federal courts." Id. at 1243.
The jurisdiction is "anomalous" because there is no specific statutory or constitutional authority on which it is based. Linn v. Chivatero, 714 F.2d 1278, 1281 n. 3. (5th Cir. 1983).
In addition, the Richey court set forth various factors for a court to consider when determining whether to exercise "anomalous" jurisdiction over a petitioner's action, which are as follows: (1) whether the motion for return of property accurately alleged that the government agents in seizing the property displayed a callous disregard for the constitutional rights of the petitioner; (2) whether the petitioner has an individual interest in and need for the material whose return he seeks; (3) whether the petitioner would be irreparably injured by denial of the return of the property; and (4) whether the petitioner has an adequate remedy at law for the redress of his grievance. Id. at 1243 — 1244 (internal citations omitted).
See also G.M. Leasing Corp. v. United States, 429 U.S. 338, 359-60 (1977) (holding the petitioner had not demonstrated "the irreparable injury required to support a motion to suppress, under FED. R. CRAM. P.41(e), on equitable grounds in advance of any proceedings. . . ."), citing Hunsucker, 497 F.2d at 34.
A. Callous Disregard for Petitioner's Constitutional Rights
At the hearing, Petitioner focused on the allegation that he had been the focus of an investigation by the Government for some time prior to the service of the warrant, and the Government had been unable to bring charges against Petitioner. Therefore, Petitioner asserts the Government "grasped the opportunity to seize potentially incriminating documents from his office under the guise of a search of Doctor's Hospital." Specifically, Petitioner established the face of the search warrant described the following premises to be searched: "Doctors Hospital, 520 Hospital Drive, New Boston, Texas, more fully described in Attachment A hereto. . . ." Exhibit A described Doctors Hospital, located at 520 Hospital Drive. Exhibit B described a variety of documents and records of Doctors Hospital and certain individuals, none of which are Petitioner.
Petitioner's Motion for Return of Property and Suppression of Evidence at 3.
Petitioner presented evidence demonstrating Petitioner's office is located at 500 Hospital Drive. The Court will assume for purposes of this motion only that Petitioner has adequately demonstrated the Government agents, in seizing his property pursuant to a warrant having a different address, displayed a callous disregard for the constitutional rights of Petitioner.
This assumption is made only for purposes of the Court's analysis of the equitable factors and shall not be deemed established for any other issue that may come before the Court.
B. Individual Interest In and Need For the Property
The Court also assumes for purposes of this motion that Petitioner has adequately demonstrated his individual interest in and need for the seized property.
C. Irreparable Harm
While the thrust of Petitioner's presentation to the Court was upon the legality of the search and seizure, the Court must determine whether Petitioner has adequately demonstrated that he would be irreparably injured by denial of the return of the property. See G.M. Leasing Corp. v. United States, 429 U.S. 338, 359-60 (1977) (holding petitioner had not demonstrated "the irreparable injury required to support a motion to suppress, under FED. R. CRIM. P. 41(e), on equitable grounds in advance of any proceedings. . . ."), citing Hunsucker, 497 F.2d at 34.
The Government has made several offers to return copies of all the property as well as some of the originals of Petitioner's property which are not needed in the Government's investigation. Petitioner stipulated on the record the offer was made by the Government and rejected by Petitioner. At the hearing, Dr. Porterfield, a nurse practitioner in Petitioner's office, testified regarding the irreparable harm to Petitioner. In cross-examination of the witness, the Government asked Dr. Porterfield what necessary items were seized by the FBI. Dr. Porterfield testified the agents seized, among other things, the following: (1) notes on how to operate the computer; (2) patients' charts;
(3) financial records; and (4) back-up tapes for the computer.
The Government asked Dr. Porterfield if there was any reason why a copy of the charts would not satisfy Petitioner's needs. Dr. Porterfield responded that she knew of no reason why copies would not work. Dr. Porterfield further testified the return of copies would allow the office to operate as well as the originals in some but not all circumstances.
Petitioner has refused the Government's offer to return copies and some originals of his seized property. Petitioner seems to suggest he would be irreparably harmed, even if he received copies of the property, because there will be no future prohibition on their use against him in any future civil or criminal trial. Not only is the Court concerned that the mere threat of indictment is insufficient to show irreparable harm, but the Court is also convinced Rule 41(e) does not allow preindictment suppression of evidence.
Petitioner's emphasis on the lawfulness of the search and seizure raises the question whether Petitioner has focused too narrowly on the aspect of the previous Rule 41(e) provision which rendered inadmissible at trial property that was seized unlawfully. Prior to the 1989 Amendments, Rule 41(e) provided, in pertinent part, as follows:
A person aggrieved by an unlawful search and seizure may move the district court for the district in which the property was seized for the return of the property on the ground that such person is entitled to lawful possession of the property which was illegally seized if the motion is granted the property shall be restored and it shall not be admissible in evidence at any hearing or trial.
Currently, Rule 41(e) provides, in pertinent part, as follows:
A person aggrieved by an unlawful search and seizure or by the deprivation of property may move the district court for the district in which the property was seized for the return of the property on the ground that such person is entitled to lawful possession of the property. . . . If the motion is granted, the property shall be returned to the movant, although reasonable conditions may be imposed to protect access and use of the property in subsequent proceedings. If a motion for return of property is made or comes on for hearing in the district of trial after an indictment or information is filed, it shall be treated as a motion to suppress under Rule 12.
1. Is there currently a cause of action for preindictment suppression of evidence?
Subsequent to Richey, Congress deleted the above-quoted language, dating from 1944, stating evidence shall not be admissible at a hearing or trial if the court grants the motion to return property under Rule 41(e). The advisory committee notes to the 1989 Amendments provide the omitted language did not keep pace with the development of the exclusionary rule doctrine and was confusing. The notes further provide "Rule 41(e) is not intended to deny the United States the use of evidence permitted by the Fourth Amendment and federal statutes, even if the evidence might have been unlawfully seized." Therefore, the exclusionary provision was deleted.
As amended, Rule 41(e) avoids an all or nothing approach whereby the government must either return records and make no copies or keep originals notwithstanding the hardship to their owner. The amended rule recognizes that reasonable accommodations might protect both the law enforcement interests of the United States and the property rights of property owners and holders." 1989 Amendments to FED. R. Civ. P. 41(e).
Of equal importance is In re Grand Jury Proceedings, a post-1989 Amendment case, wherein the Fifth Circuit stated "Rule 41(e) contains no express authorization for this court to rule prior to indictment." Id. at 1245, quoting In re Grand Jury Proceedings, 466 F. Supp. 863 (D.C.Minn. 1979), aff'd as modified by 629 F.2d 548 (8th Cir. 1980) (the potential corporate defendant sought a preindictment motion to suppress in a district court in the district where the trial would be held if a grand jury indicted the company). While the appellees cited the Minnesota Grand Jury case for the proposition that a district court that is not in the district of seizure has jurisdiction to decide a preindictment Rule 41(e) motion, the Fifth Circuit disagreed and stated Grand Jury stands for the opposite proposition. The court further concluded:
Rules 41(e) and (f) together provide that Appellees' only remedy for the search and seizure prior to indictment was to seek a Rule 41(e) motion for the return of property in the District of Colorado — an option they ignored. Nevertheless, Appellees are not left unprotected. If they are indicted, Appellees may move to suppress in the trial court, whatever court that may be.In re Grand Jury Proceedings, 115 F.3d at 1245-46.
Accordingly, contrary to Petitioner's assertions, the Court is of the opinion Rule 41(e) currently does not provide a cause of action for preindictment suppression of evidence. Instead, Petitioner may move to suppress should he be indicted.
2. Even before the 1989 Amendments, courts were reluctant to use Rule 41(e) as a vehicle for preindictment suppression.
In Richey, the Fifth Circuit vacated and remanded the district court's decision that it did not have jurisdiction over the matter. On remand, the Fifth Circuit stated the district court may have to decide the nature of the relief to be granted should the appellants prevail. The Fifth Circuit then stated as follows:
Rule 41(e) [prior to 1989 Amendments] directs that the granting of a motion for return of property shall operate also as an order suppressing the use of the evidence in any future hearing on trial. It seems clear, however, that a motion prior to any suggestion of criminal proceedings, as here, is more properly considered simply as a suit in equity rather than one under the Rules of Criminal Procedure. . . . So viewed, return of the property would not necessarily entail suppression for the purposes of further court proceedings. We direct the district court's attention to the approach of Judge Wyzanski in Lord v. Kelley . . . . There, the court ordered the return of the taxpayer's records but refused to order their suppression as evidence in future proceedings.
Richey, 515 F.2d at 1245 (Internal citations omitted).
Petitioner asserts the Fifth Circuit did not explicitly say that, contrary to the holding in Hunsucker, suppression may not be sought before an indictment in returned. In addition, Petitioner contends that to the extent the Grand Jury case attempts to overrule the express holding in Hunsucker, this Court must reject it because it is "established in the Fifth Circuit that one panel of the court may not overrule another panel unless there has been an intervening change in the law, Supreme Court decision, or en banc decision by the court." See Warren v. Miles, 230 F.3d 688, 694 n. 4 (5th Cir. 2000). Even so, there has clearly been an intervening change in the law subsequent to the Hunsucker case, decided in 1974 prior to the 1989 Amendments, which deleted the language stating evidence shall not be admissible at a hearing or trial if the court grants the motion to return property under Rule 41(e).
Another pre-1989 case discussed above, In re Search Warrant Issued July 14, 1987, 684 F. Supp. at 1417, 1420 n. 4 (N.D. Tex. 1988), provides that Rule 41(e) "was not intended to supplant Rule 12 as the principal vehicle for suppression of evidence. See Application of Sentinel Government Securities, 530 F. Supp. 793, 797 (S.D.N.Y. 1982) (absent unique property or privileged documents, consideration of Fourth Amendment must be deferred to Rule 12 motion to suppress)."
Based on the foregoing considerations, the Court is of the opinion that, even prior to the 1989 Amendments, courts in this circuit were reluctant to interpret Rule 41(e) as a vehicle for preindictment suppression of evidence. Since the Court finds Petitioner is only entitled to return of his property, not necessarily to preindictment suppression of evidence, and since the Government is willing to return copies of all documents and certain originals to Petitioner, as will be discussed below, the Court is of the opinion Petitioner cannot demonstrate irreparable harm.
3. Availability of Copies of Needed Documents
Another important issue in the Court's consideration of irreparable harm is whether the Government makes available to Petitioner copies of needed documents. Courts have held that Rule 41(e) movants do not suffer irreparable harm where the government represents it will voluntarily return property. See In re Search Warrant Issued July 14, 1987, 684 F. Supp. at 1421, citing Ex parte Decious, 622 F. Supp. 40, 40-41 (E.D.N.Y.), app. dism'd, 779 F.2d 35 (2d Cir. 1985)(table), cert. denied sub nom. Law Firm of Daniel P. Foster v. United States, 474 U.S. 1061 (1986); Standard Drywall, Inc. v. United States, 668 F.2d 156, 157 n. 2 (2d Cir.), cert. denied, 456 U.S. 927 (1982)(dictum) (questioning whether, in absence of seizure of unique property or privileged documents, party can demonstrate irreparable harm when government provides copies of seized documents or returned originals). The court in the Northern District of Texas added it is difficult to envision that movants can comply with the irreparable injury standard if the government agrees to return originals and/or copies of the documents. The court then required the movants to plead a colorable claim of irreparable injury before it would consider the Rule 41(e) motions.
In considering the amended motions, the court reiterated its holding that the movants' irreparable injury claims predicated on the threat of unjustified prosecution, the denial of right to counsel during the illegal search, the necessity to undergo the needless expense and embarrassment of extended investigation, the possibility of spurious litigation and wrongful indictment, and the violation of constitutional rights were inadequate. The court concluded the movants had not made a colorable showing of irreparable injury and held, to the extent the movants' allegations do not present Fourth Amendment-related contentions that are properly deferred, the movants were unable to plead irreparable injury in the face of the government's willingness to make available copies of all documents seized and to return certain original documents. Therefore, the court denied the Rule 41(e) motions without prejudice to the filing of Rule 12 motions, if necessary.
The court held, as other courts have held, that where a party is the target of an ongoing grand jury investigation, Fourth Amendment considerations should be deferred, "provided that the Government cooperated by giving copies of items seized or by returning the originals." In re Search Warrant, 684 F. Supp. at 1421, quoting Zadok v. Sergeant, Civil Action No. H-86-1719 (S.D. Tex. 1987) (unpublished order) slip op. at 3, app. dism'd, No. 87-2378 (5th Cir. 1987) (unpublished opinion) (per curiam); see also Application of Sentinel Government Securities, 530 F. Supp. 793, 797 (S.D.N.Y. 1982) (during the pendency of a grand jury investigation, consideration of the movant's Fourth Amendment concerns must be deferred to a motion to suppress under Rule 12, "in the absence of seizure of some unique property or privileged documents").
Although the Fifth Circuit observed in Richey that "where examination of the seized material leads to a criminal prosecution, it may not be sufficient that a motion to suppress the evidence can be filed prior to the criminal trial, " the Fifth Circuit in a more recent case, In re Grand Jury Proceedings, also focused on whether the government offered to provide the movant with copies of seized documents in considering the irreparable injury factor. In re Grand Jury Proceedings, 115 F.3d at 1246, citing In the Matter of Eyecare Physicians of America, 100 F.3d 514, 515 (7th Cir. 1996).
It is undisputed that the Government has repeatedly offered and continues to offer Petitioner copies and/or originals of the seized documents. The Court is of the opinion Petitioner is unable to plead irreparable harm in the face of the Government's willingness to make available all copies of seized documents and certain original documents.
D. Adequate Remedy at Law
Petitioner also fails to demonstrate the lack of an adequate remedy at law for the redress of Petitioner's grievance. Petitioner may move for suppression in the event an indictment or information is filed. The validity of the search may be challenged by Petitioner in a motion to suppress evidence under Rule 12 should an indictment be returned.
V. RECOMMENDATION
Petitioner must demonstrate irreparable injury before his motion for return of property and preindictment suppression of evidence can be considered. Petitioner has failed to meet this burden. Pursuant to this Report and Recommendation, the Court urges the Government to continue to offer Petitioner photocopies of all records that were seized as well as certain originals so that Petitioner may continue to have access to the copies of their records. Based on the foregoing, it is
Even if the undersigned were to recommend the Court exercise anomalous jurisdiction over Petitioner's Rule 41(e) motion, the undersigned would then recommend the Court deny the portion of the motion seeking preindictment suppression of evidence for the reasons contained herein.
RECOMMENDED that the dispositive portion of the Government's Motion to Dismiss (Docket Entry #6) be GRANTED. It is further
RECOMMENDED that the Court decline to exercise anomalous jurisdiction over Petitioner's action for the return of property and for preindictment suppression of evidence.