United States v. Hill ( 1994 )

UNITED STATES COURT OF APPEALS
For the Fifth Circuit
___________________________
No. 93-8685
___________________________
UNITED STATES OF AMERICA,
Plaintiff-Appellant,
VERSUS
GARY HILL,
Defendant-Appellee.
___________________________________________________
Appeal from the United States District Court
for the Western District of Texas
____________________________________________________
(April 14, 1994)
Before POLITZ, Chief Judge, and KING and DAVIS, Circuit Judges.
DAVIS, Circuit Judge:
After a grand jury returned an eight-count indictment charging
Gary Hill with racketeering, conspiracy to commit racketeering,
aiding and abetting extortion under color of official right, and
aiding and abetting mail fraud, Hill moved to suppress evidence
seized during two searches of his law office. Because we find that
the district court erred in granting Hill's motion to suppress, we
vacate the district court's order and remand for further
proceedings.
I.
Government agents conducted two searches of the offices of
Hill & Ramos, an El Paso law firm in which Hill was the managing
partner. The first search was conducted in May 1992 pursuant to a
search warrant. The magistrate concluded that the affidavit in
support of the warrant established probable cause to believe that
Hill and his employees were violating 31 U.S.C. § 5324 (Supp. 1993)
by structuring banking transactions to evade currency reporting
requirements imposed on banks by federal law.
The May warrant authorized seizure of a wide variety of
records for the period from January 1986 through May 1992,
including "Bank Statements, Deposit Slips, Canceled Checks,
Withdrawal Slips, Debit Memos, and Credit Memos" and "Cash Receipt
Journal(s), Cash Receipt Book(s), and Cash Disbursement
Journal(s)." In executing the warrant, IRS and FBI agents
apparently seized some items dated before 1986. The agents also
seized, among other items, 2,000 to 3,000 check stubs from the
years covered by the warrant. The warrant did not include the term
"check stubs."
The law firm check book had perforated check sheets. The
checks were located on the right side of the sheet and the
corresponding check stub or register was on the left side. Hill
used check stubs to record -- in addition to deposit and balance
information -- the date, payee, purpose, and tax consequence for
each check. Most of the used check stubs at the law office were
held together in bundles with rubber bands and stored with bank
statements and canceled checks in drawers and boxes. The agents
executing the May warrant looked at the check stubs on top of the
bundle, but did not remove the rubber bands to review the remaining
check stubs. Sometime after the May search, the officers reviewed
the individual check stubs and sent them to specialists for further
analysis.
In November 1992, the government conducted a second search of
the Hill & Ramos offices and seized additional financial records.
The warrant authorizing the November search was issued upon a
showing of probable cause to believe that Hill had violated 18
U.S.C. § 666 (Supp. 1993) (Theft or bribery concerning programs
receiving federal funds). The November warrant authorized the
officers to seize check stubs as well as other financial records.
The affidavit in support of the November warrant relied in part on
information taken from the check stubs seized during the May
search.
In April 1993, a grand jury returned an eight-count
superseding indictment, charging Hill and two other defendants1
with conspiracy to commit racketeering, 18 U.S.C. § 1962(d),
racketeering, 18 U.S.C. § 1962(c), aiding and abetting extortion
under color of official right, 18 U.S.C. §§ 1951 and 2, and aiding
and abetting mail fraud. 18 U.S.C. §§ 1341 and 2.
Hill moved to suppress all evidence seized during the two
searches. As to the items seized during the May search, Hill
argued, inter alia, that the search exceeded the scope of the
warrant because the warrant did not authorize seizure of items pre-
dating 1986, nor did the warrant authorize seizure of check stubs.
The district court suppressed "all items dated before 1986 and all
check stubs." Because probable cause for the second search warrant
was predicated in part on information contained in the check stubs,
the district court also suppressed all evidence seized during the
November search as fruit of the poisonous tree.
1
These two defendants are not parties to this appeal.
3
The government filed a motion for reconsideration, asserting
that the district court erred because the check stubs were within
the scope of the warrant and, in the alternative, the plain view
doctrine applied to the seizure of the check stubs. After a
hearing, the district court reaffirmed its previous order. The
government filed a motion to stay the proceedings and filed this
interlocutory appeal.
II.
The primary question presented in this interlocutory appeal is
whether the district court erred in suppressing certain classes of
records seized during the May search -- the check stubs and the
records pre-dating 1986. Relatedly and depending on the answer to
this question, we must also consider whether the district court
erred in suppressing all evidence seized during the November
search. We review a district court's findings of fact on a motion
to suppress for clear error and its ultimate determination of
Fourth Amendment reasonableness de novo. United States v. Seals,
987 F.2d 1102, 1106 (5th Cir.), cert. denied, 114 S. Ct. 155(1993).
A.
The government argues first that the check stubs were within
the scope of the warrant even though the express term was not used
in describing the property to be seized. The government contends
that the May 1992 search warrant authorizes the seizure of one or
more categories of records listed in the warrant that subsume the
term "check stubs."
4
In analyzing whether the May search warrant authorized seizure
of the check stubs, we start from the bedrock premise that under
the Fourth Amendment, no warrants shall issue except those
"particularly describing the . . . things to be seized." This
constitutional requirement of particularity seeks to prevent
general exploratory rummaging and seeks to ensure that the
executing officer is able to distinguish between those items which
are to be seized and those which are not. E.g., Marron v. United
States, 275 U.S. 192 (1927).
To satisfy the particularity requirement, the warrant must
"'be sufficiently definite so that the officer executing it can
identify the property sought with reasonable certainty.'" See,
e.g., 2 Wayne R. LaFave, Search and Seizure -- A Treatise on the
Fourth Amendment § 4.6(a), at 235 (2d ed. 1987) (citation omitted).
In identifying the property to be seized, the agents are "required
to interpret the warrant," but are "not obliged to interpret it
narrowly." United States v. Stiver, 9 F.3d 298, 302-03 (3d Cir.
1993), cert. denied, 114 S. Ct. 1115 (1994).2 Stated differently,
the particularity requirement requires the search warrant to
describe the property to be seized with reasonable specificity, but
2
In Stiver, the search warrant authorized seizure of, among
other things, "all drug paraphernalia." While executing the
warrant, the officers answered the defendant's telephone and took
orders from his customers for illegal drugs. The court held that
the officers did not exceed their authority under the warrant by
answering the telephone. The court explained that the officers
were "'required to interpret'" the portion of the warrant
authorizing seizure of "all drug paraphernalia," and were "'not
obliged to interpret it narrowly.'" Stiver, 9 F.3d at 302-03
(citing United States v. Lucas, 932 F.2d 1210, 1215-16 (8th Cir.),
cert. denied, 112 S. Ct. 399 (1991)); see also Hessel v. O'Hearn,
977 F.2d 299, 302 (7th Cir. 1992).
5
not with elaborate detail. E.g., United States v. Somers, 950 F.2d
1279, 1285 (7th Cir. 1991), cert. denied, 112 S. Ct. 1959 (1992).
It follows that evidence seized pursuant to a search warrant
is not necessarily suppressible merely because the "nomenclature
assigned to these items by the defendant might differ from the
description contained in the warrant." United States v. Word, 806
F.2d 658, 661 (6th Cir. 1986), cert. denied, 480 U.S. 922 (1987).
For example, in Word, the search warrant authorized seizure of
specific documents relating to the defendant's medical practice.
The defendant complained that the search of his office violated his
Fourth Amendment rights because agents seized documents not
expressly enumerated in the search warrant. The court rejected the
defendant's argument because the government persuaded the court
that the items seized were functionally equivalent to other items
specifically listed in the warrant.3 Thus, the question whether
the evidence seized falls within the scope of the warrant
ultimately turns on the substance of the item seized "and not the
label assigned to it by the defendant." Id. at 661.
In this case, the record is uncontradicted that in accounting
systems, both check stubs and cash disbursement journals serve
3
Among the items the warrant authorized the agents to seize
were "prescription pads, correspondence, patient logs, appointment
books, patient payment records, [and] medical records." The
defendant complained that the agents exceeded the scope of the
warrant by seizing, among other items, "day sheets," "spiral
notebooks for [patient] sign-in," "patient hospital admission
records," and "patient encounter forms." The court declined to
suppress the evidence because it accepted the explanation offered
by government witnesses that day sheets were used as payment
records, that spiral sign-in notebooks were used as appointment
books, that hospital admission records were the equivalent of
medical records and that encounter sheets contained information
regarding billing, patient diagnosis, and treatment history.
6
virtually identical functions. Both serve to maintain a running
balance in an account and to trace the disposition of cash out of
that account. See Walter B. Meigs & Robert F. Meigs, Accounting --
The Basis for Business Decisions 52-53, 237, 247, 305 (7th ed.
1987) (R. 307-320). Like check stubs, a cash disbursement journal
provides a chronological record of all cash payments. Id. Both
also function as a contemporaneous record of transactions. With
respect to each transaction, both the cash disbursement journal and
a check stub include the date of the transaction, the debit and
credit changes in the account, and a brief explanation of the
transaction. Id. The check stubs seized in this case contained
the date of the payment, the name of the payee, a brief explanation
of the payment, balance and deposit information, and a space for
indicating the tax deductibility of the payment.
In support of its contention that check stubs were the
functional equivalent of a cash disbursement journal, the
government presented the testimony of Agent Gonzalez, the IRS
Special Agent who was the affiant on the May search warrant. Agent
Gonzalez, who holds a business degree in accounting, testified that
a cash disbursement journal can take the form of any type of
register or record that traces the outflow of cash in daily
business transactions. Agent Gonzalez also testified that in his
experience investigating white collar crimes, he often observes
service-oriented businesses where check stubs are the only records
that perform this function.4 According to Agent Gonzalez, the
4
Agent Gonzalez's testimony that he would not teach an
accounting student that cash disbursement journals and check stubs
are one in the same does not contradict his testimony that the two
7
check stubs were Hill's only record of cash transaction until the
end of each month. At that time, Hill's accountant transmitted the
data from the check stubs into a computer to generate a printed
cash disbursement journal.
Hill does not argue that check stubs and cash disbursement
journals are functionally dissimilar. Rather, Hill argues that the
government admitted that a distinction exists between check stubs
and cash disbursement journals when it included both terms in the
November warrant. Hill also points out that the agents seized
computerized cash disbursement journals during the May search and
argues that the check stubs would be suppressible if the
computerized cash disbursement journals were seized before the
check stubs. We infer nothing from the inclusion of the term
"check stubs" in the November warrant -- except that the affiant
then knew more about the form of Hill's financial records. Nor did
the seizure of computerized cash disbursement journals divest the
agents of authority to seize functionally equivalent manually
produced records. Hill also makes much of Agent Gonzalez's
testimony that, when he applied for the warrant, he did not know
whether the defendant used check stubs in conducting his financial
affairs. But the affiant's lack of knowledge that Hill used check
stubs in conducting his business has little, if any, relevance to
the question at hand: whether the agents were entitled to seize
those documents if the warrant listed functionally equivalent
documents. See, e.g., United States v. Davis, 589 F.2d 904, 906
(5th Cir.), cert. denied, 441 U.S. 950 (1979).
documents serve the same function.
8
We are persuaded that under the facts of this case, the check
stubs served the same function as a cash disbursement journal and
that a reasonable officer knowledgeable of financial records would
have reached this conclusion. Thus, the check stubs were within
the scope of the warrant authorizing seizure of a cash disbursement
journal. See Word, 806 F.2d at 661; see also Stiver, 9 F.3d at
302-03.
B.
Even if the check stubs were not within the scope of the
search warrant, the check stubs are shielded from suppression under
the plain view exception to the warrant requirement. The plain
view exception applies when an officer lawfully in a location by
virtue of a warrant or some exception to the warrant requirement
seizes an item having an incriminating character that is
"immediately apparent." Horton v. California, 496 U.S. 128, 141-42
(1990). It is not necessary "that the officer know that the
discovered res is contraband or evidence of a crime, but only that
there be a practical, nontechnical probability that incriminating
evidence is involved." United States v. Espinoza, 826 F.2d 317,
319 (5th Cir. 1987) (emphasis in original; quotations and citations
omitted). In other words, the seizure must be supported by
probable cause to believe that the item viewed is either contraband
or will be useful in establishing that a crime has been committed.
Arizona v. Hicks, 480 U.S. 321 (1987).
The district court reasoned that the officers could not obtain
probable cause to believe the check stubs were probative of
criminal conduct without removing the rubber bands and inspecting
9
the stubs individually, which the officers did not do. We
disagree. As soon as the agents saw the check stubs, they were
justified in believing that they were useful as evidence of a money
structuring offense. Agent Gonzalez explained that check stubs
usually reveal the date of the transaction, reveal how money
deposited into an account is spent, and may disclose a purpose for
the payment. According to Agent Gonzalez, such evidence may be
helpful in proving knowledge of currency reporting requirements and
the requisite intent to evade them.
We have no doubt that the officers had probable cause to
believe that the check stubs would be helpful in establishing the
money structuring offense. The agents reached this conclusion from
the information gleaned from the check stub on top of the bundle
and from their general understanding of information ordinarily
included in check stubs. The magistrate judge recognized the
probable relevance of other similar financial records in tracing
the funds that went through Hill's hands. Check stubs are just as
likely to identify the nature of Hill's financial transactions as
the documents named in the warrant. The district court in effect
recognized the relevance of check stubs when it observed that "if
the warrant had simply listed 'check stubs,' there would be no
dispute."
Hill argues that the district court was nevertheless justified
in suppressing the check stubs because Agent Gonzalez should have
known the Hill & Ramos law firm utilized check stubs in maintaining
its financial records and carelessly omitted them from the warrant
application. This argument -- that an officer can not seize
10
evidence of criminal conduct he should have expected to find but
failed to list in the warrant application -- is inconsistent with
the Supreme Court's holding in Horton, 496 U.S. 128. In Horton, a
warrant authorized officers to search the home of an armed robbery
suspect. The warrant authorized a search for only the stolen
property. Although the affiant officer had probable cause to
believe that weapons used in the armed robbery were also located in
the home, the officer did not list the weapons on the search
warrant application. While the officer was executing the warrant,
he found the weapons in plain view and seized them as evidence of
the suspected robbery.
The Court held that the warrantless seizure of the weapons
found in plain view during the lawful search for the stolen
property was permissible even though the discovery of the weapons
was not inadvertent. The Court rejected the plurality opinion in
Coolidge v. New Hampshire, 403 U.S. 443 (1971), that the plain view
exception only has application if the discovery of the evidence is
inadvertent. The Court's reasoning applies with equal force to this
case:
[E]venhanded law enforcement is best achieved by the
application of objective standards of conduct, rather
than standards that depend upon the subjective state of
mind of the officer. The fact that an officer is
interested in an item of evidence and fully expects to
find it in the course of a search should not invalidate
its seizure if the search is confined in area and
duration by the terms of a warrant . . .. If the officer
has knowledge approaching certainty that the item will be
found, we see no reason why he or she would deliberately
omit a particular description of the item to be seized
from the application for a search warrant.5
5
The Court also adopted Justice White's reasoning from his
concurring/dissenting opinion in Coolidge:
11
Horton, 496 U.S. at 138.
The defendant in Horton made the identical argument that Hill
makes here: the inadvertence requirement is necessary to prevent
the police from conducting general searches or from converting
specific warrants into general warrants. The Court rejected this
argument because the relevant interests are protected by the
requirement that no warrant issue unless it "'particularly
describ[es] the place to be searched and the persons or things to
be seized.'" Id. at 139 (citations omitted). On the facts
presented, the Court concluded that "the scope of the search was
not enlarged in the slightest by the omission of any reference to
the weapons in the warrant." The Court held that the seizure of
the weapons was proper under the plain view exception. Id. at 141.
The check stubs in this case are closely analogous to the
weapons seized in Horton. Agent Gonzalez had probable cause to
search the Hill & Ramos offices for check stubs as well as the
other financial records. Apparently, Agent Gonzalez carelessly
Let us suppose officers secure a warrant to search a
house for a rifle. While staying well within the range
of a rifle search, they discover two photographs of the
murder victim, both in plain sight in the bedroom.
Assume also that the discovery of the one photograph was
inadvertent but finding the other was anticipated. The
Court would permit the seizure of only one of the
photographs. But in terms of the 'minor' peril to Fourth
Amendment values there is surely no difference between
these two photographs: the interference with possession
is the same in each case and the officers' appraisal of
the photograph they expected to see is no less reliable
than their judgment about the other. And in both
situations the actual inconvenience and danger to
evidence remain identical if the officers must depart and
secure a warrant.
Coolidge, 403 U.S. at 516 (White, J., concurring in part and
dissenting in part).
12
omitted check stubs from the warrant application. During a lawful
search for the items listed in the warrant, the agents encountered
the check stubs in plain view, which they immediately recognized as
relevant to their investigation. We conclude that Horton lays to
rest all of Hill's arguments that the officers were not entitled to
seize the check stubs under the plain view exception to the warrant
requirement.
C.
The district court suppressed all documents seized during the
May search that pre-dated 1986 because the documents were outside
the scope of the warrant. We agree with the district court that
documents generated before 1986 are outside the scope of the
warrant. On remand Hill should identify which documents he seeks
to suppress on this ground so the parties can address these
documents specifically and the court can rule on the motion.
D.
The district court suppressed the evidence seized during the
November search because probable cause for the warrant was premised
in part on information obtained from the check stubs. Because we
hold that the agents lawfully seized the check stubs while
executing the May warrant, we vacate the order suppressing the
evidence seized during the November search as fruit of the
poisonous tree.
On remand, the district court should address the remaining
arguments raised by Hill in his second motion to suppress. See
United States v. Floyd, 992 F.2d 498, 500 (5th Cir. 1993).
13
For the above reasons, the order of the district court is
VACATED and this matter is REMANDED to the district court for
further proceedings.
POLITZ, Chief Judge, dissenting:
The majority concludes that the seizure of the check stubs was
valid either as falling within the scope of the search warrant or
under the plain view doctrine. I cannot agree that either premise
is factually and legally appropriate herein and therefore must
respectfully dissent.
The majority recognizes, as it must, that the May 1992 search
warrant authorized the seizure of multiple records for the period
January 1986 through May 1992, including "Bank Statements, Deposit
Slips, Canceled Checks, Withdrawal Slips, Debit Memos, Credit
Memos, Cash Receipt Journal(s), Cash Receipt Book(s), and Cash
Disbursement Journal(s)." The warrant did not list "check stubs."
This non-inclusion was not inadvertent. Check stubs were not
intended to be included. During the hearing on the motion to
suppress the district court focused directly on that issue and
asked Agent Gonzalez, the responsible agent, why check stubs were
not included in the warrant. That exchange between the court and
the agent is most informative:
THE WITNESS: . . . I didn't have any specific
information that there were check stubs or carbon copies
or anything like that. . . .
. . .
14
THE COURT: I searched all over when I was looking at
this for some place that you said "checks" or
"checkbooks" so that I could make the leap, but I didn't
find that.
THE WITNESS: . . . I didn't--again, I was not informed
at the time of what type of checkbook they would have.
THE COURT: Yeah, you know they had, for instance,
registers with blue covers. Your source couldn't have
told you what type checkbooks they had?
THE WITNESS: Probably it was just an item that I never
inquired about. . . .
THE COURT: Mr. Gonzalez, did you really think about
check stubs when you were doing this?
THE WITNESS: Not specifically check stubs.
The agent did not seek authority to search for and seize check
stubs but between 2000 and 3000 check stubs were nonetheless
seized. On the inventory report on the execution of the warrant
the officers list, inter alia, both "check stubs" and "cash
disbursement journals." I take this to reflect that the officers
executing the search warrant understood that check stubs and cash
disbursement journals were two separate and distinct items. They
obviously continued to think so because in a follow-up search
warrant authorized and executed in November 1992 the records sought
included both "Cash Disbursement Journal(s), and . . . check
stubs."
My colleagues in the majority have made a different factual
finding than that made by the trial judge and have reached a
different legal conclusion. They accept the premise that check
stubs are the functional equivalent of a cash disbursement journal
and, as such, are within the reach of the search warrant. In their
view check stubs are the functional equivalent of a cash
disbursement journal because both contain the same information,
i.e., the date, purpose, and amount of the transaction. One might
suggest that the canceled checks would contain that same
information. Are canceled checks to be deemed the functional
equivalent of a cash disbursement journal and, as such, subject to
seizure under a warrant authorizing the search and seizure of cash
disbursement journals? I surely would hope not.
I am diametrically opposed to the expansion of the scope and
reach of a search warrant by any form of legal semantics. "The
requirement that warrants shall particularly describe the things to
be seized makes general searches under them impossible and prevents
the seizure of one thing under a warrant describing another."6 I
consider the fourth amendment protections to be much too precious
to countenance any type or form of end run. Let the government
representative seeking authority to search advise the neutral
magistrate of the object(s) sought and the basis for the belief
that probable cause of a criminal offense exists. Let the
magistrate decide whether to grant this extraordinary power to
search and seize and the specific scope of that grant. Then let
that search proceed as sought and authorized. That scenario did
not occur here. The agent candidly acknowledged that he did not
seek authority in the May 1992 warrant to search for and seize
check stubs. Notwithstanding, the officers did so. The district
court found and concluded that the officers violated the fourth
amendment. I agree.
6
Marron v. United States, 275 U.S. 192, 196 (1927). See also
Gurleski v. United States, 405 F.2d 253, 257 (5th Cir. 1968), cert.
denied, 395 U.S. 981 (1969).
16
As an alternative ground the majority concludes that the check
stubs were subject to seizure under the plain view doctrine. I do
not agree. Agent Gonzalez again candidly admitted that he could
not tell from what he could see of the bundled check stubs whether
they were relevant to the suspected currency offense. That
relevance was not determined until the contents of the other stubs
were examined later by IRS agents. This admission flies in the
face of the teachings of Arizona v. Hicks7 which requires that a
seizure must be supported by probable cause to believe that the
item in plain view is either contraband or evidence of a crime. I
do not find this requirement satisfied. I would affirm the
district court's suppression order and therefore respectfully
dissent.
7
480 U.S. 321 (1987).
17