The federal government's long-running investigation into steroid use in Major League Baseball has yielded more than just newspaper headlines and embarrassed sluggers.  Last week, an en banc panel of the Ninth Circuit Court of Appeals reviewing the steroid investigation announced new and enhanced guidelines applicable to all search warrants for electronically stored information ("ESI") in the Ninth Circuit.  U.S. v. Comprehensive Drug Testing, Inc., __ F.3d __, 2009 WL 2605378 (9th Cir. Aug. 26, 2009).  The decision is important to companies and their counsel because ESI now dominates most white collar criminal investigations.  The decision sets clear ground rules that give teeth to the Fourth Amendment and help protect companies and management from government overreaching in this area.

The Balco Investigation and Search

The case arose from the government's investigation of Bay Area Lab Cooperative ("BALCO"), which allegedly provided performance enhancing drugs to professional baseball players and other athletes.  In 2002, Major League Baseball conducted confidential, suspicionless drug testing on all of its players.  When federal investigators learned that ten players had tested positive, they subpoenaed all drug testing records and specimens relating to the program.  The lab that operated the program and the players' union moved to quash the subpoena. 

Before the motion to quash could be heard and despite assurances that the records would be preserved, the government obtained and executed a search warrant at the lab where the drug testing records were maintained.  Although the warrant was limited to the records of the ten players as to whom the government had probable cause, the government seized and promptly reviewed ESI reflecting the drug testing records for hundreds of Major League Baseball players and many other people.  The government subsequently obtained additional warrants to seize other records, as well as the urine samples on which the drug tests were based.  Finally, the government served new subpoenas, demanding production of the same records it had just seized.

The lab that conducted the drug tests and the player's union subsequently moved for orders requiring the government to return all of the seized records and samples, as well as to quash the latest subpoenas.  The various district courts found that the government had ignored restrictions in the warrants regarding the handling of seized items and granted the various motions, ordering the government to return the seized items, and quashing the subpoenas.  The government appealed and a three-judge panel of the court of appeals affirmed some of the orders and reversed others.  The court of appeals then voted to hear the case en banc.

The Decision

The en banc panel affirmed all the orders entered by the district courts.  Refusing to disturb findings that the government had engaged in wholesale violations of the warrant, the Court held that those violations required returning the seized property.  Calling the government's arguments "too clever by half," the Court refused to apply the "plain view" doctrine to justify the government's review and use of the non-responsive data on the ground that doing so would eviscerate the Fourth Amendment.  The Court also affirmed that the Federal Rules of Criminal Procedure authorized the district courts to order the return of the seized data and held that, while it is not per se unreasonable to conduct an investigation using both subpoenas and search warrants, the government's misconduct in connection with the search and seizure justified quashing the subpoenas.

What makes the decision interesting are the ground rules the Court establishes for warrants regarding ESI.  The Court recognized that such rules must balance two competing considerations.  On the one hand, practical realities make traditional on-site searches of ESI impractical.  ESI is ephemeral, readily disguised, easily manipulated and often voluminous.  Relevant data is almost always intermingled with non-relevant data.  Effective searches for ESI frequently can only be accomplished safely and effectively in a controlled environment.  The Court therefore accepted as a reality the government's need to "over-seize" ESI in many cases, for example, seizing an entire laptop when only some of the files on the laptop are likely to be relevant.  On the other hand, the Court also recognized that over-seizing creates a serious risk that every warrant for electronic data will become a general warrant, allowing investigators to romp freely through all of the seized data regardless of whether they have probable cause to do so.  This would render the Fourth Amendment meaningless.

Recognizing the need for clear rules that strike a balance between these considerations, the Court announced that it was updating its precedents to include the following guidelines for warrants seeking to examine or seize a computer or other electronic storage media:

  1. The government's search protocols must be designed to uncover only that information for which it has probable cause, and only that information may be examined by the case agents.
  2. Segregation and redaction of data must be done by specialized personnel or an independent third party.  If the segregation is to be done by government personnel, the government must agree in the warrant application that the reviewing personnel will not disclose to the investigators any information other than that which is the target of the warrant.
  3. The government must destroy or return the non-responsive data, keeping the magistrate judge informed as to when it has done so and what is has kept.
  4. The government must waive reliance on the plain view doctrine.
  5. Warrants and subpoenas must disclose the actual risks of destruction of information, as well as prior efforts to seize that information in other judicial fora.

What It Means

This decision clarifies and enhances the requirements for government searches of ESI and gives those requirements some teeth – at least in the Ninth Circuit.  While some privacy advocates may complain about the Court's acceptance of over-seizing as an inherent aspect of searches for ESI, the decision at least adopts clear and enforceable procedures to prevent many of the worst government abuses.  The requirement that the government use "taint teams" to review commingled data, the rejection of the plain view doctrine as applied to ESI, and the requirement that the government promptly return or destroy non-responsive ESI all should help prevent government overreaching.

At least for the moment, this case is the law in the Ninth Circuit.  The Department of Justice has requested a stay while it considers whether to ask the Supreme Court to review the decision.  DOJ would have to seek Supreme Court review by November 24.  If it does so, the Supreme Court could reverse the decision.  The case has no direct application outside the Ninth Circuit (California, Oregon, Washington, Alaska, Idaho, Montana, Nevada, Arizona, Hawaii and Guam), but other courts may find it persuasive, especially if presented with evidence of government overreaching.

Government searches pose daunting challenges for companies, which may face the loss of important records and equipment, negative publicity, an intrusive and distracting investigation, and the prospects of criminal prosecution and liability.  To avoid such searches, corporate counsel handling a government investigation should take adequate steps to preserve relevant data and should assure the government that such steps have been taken.  If the government proceeds with a search despite those steps, then corporate counsel should consider the following measures to protect the company from overbroad searches of ESI.

Practical Tips – Protecting ESI in a Government Search
  • Immediately contact experienced legal counsel.  Experienced counsel will protect a company's interests while ensuring that the company does not improperly interfere with the execution of the search warrant.  Experienced counsel will also remove company employees from the line of fire.  No document can substitute for real-time advice from experienced counsel.
  • Obtain a copy of the search warrant and, if available, the supporting affidavit.  Carefully review the warrant to determine where the agents may search and what they may seize.  If agents exceed the scope of the warrant, object.  If the agents persist, do not obstruct the search; simply make your objections clear (preferably in the presence of witnesses), and record with special care any documents or things taken in violation of the warrant.
  • Do not consent to a broader search than called for in the warrant without the advice of experienced counsel.  Be careful not to say or do anything that could be misconstrued as consent.
  • Consider taking the following steps to limit the over-seizing of ESI: (i) if feasible, offer to assist the agents in segregating data covered by the warrant from uncovered data (without consenting to any search beyond that specified in the warrant); (ii) communicate any concerns you have about the overbreadth of the search; (iii) ask for assurances that the agents will take appropriate steps to screen non-relevant data from relevant data; and (iv) request the prompt return of any non-relevant data.  Note that the Comprehensive Drug Testing case governs in the 9th Circuit, but other rules and law may apply in other circuits.
  • Involve the IT department in securing the company's network and other systems.  If consistent with the scope of the warrant, consider disabling employee access to the company's systems from the search site so that individual employees cannot consent to a broader search and the government does not overstep the limits of the warrant.
  • The agents may attempt to take confidential, proprietary, or privileged records.  Object to any inspection or seizure of such records.  If the agents persist, make your objections clear and request that all such records be segregated from other records seized.
  • Keep an inventory of the records and other items seized.  If the agents have prepared an inventory, obtain a copy.
  • Move promptly to seek the return of seized records and other items that the government is not entitled to retain.  Consider what motions, if any, might need to be filed for that purpose. 


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