Good faith exception applied to evidence seized as the result of a warrant with extraterritorial application in violation of a then existing rule

United States of America v. Gabriel Werdene, No 10-3588 (3d Cir., 2/21/2018)




In an opinion dealing with a search warrant from the Eastern District of Virginia that eventually resulted in a change to a Federal Rule of Criminal Procedure, the Court ruled that the Defendant's right against unreasonable search and seizure was violated when under a pre-12/1/2016 version of Fed.R.CrimPro. 41(b), a magistrate approved a warrant authorizing searches of and seizure of data from computers located outside of the magistrate's district. It then ruled that despite the request for and authorization of a search and seizure not allowed any Federal Rule of Criminal Procedure, the evidence should be admitted anyway because the FBI agents who procured the warrant acted in good faith.

Investigating dark web distribution of child pornography, the FBI seized a server for an online forum called Playpen in North Carolina, arrested its Florida owner, and moved the server to a location in the Eastern District of Virginia. It obtained a warrant from a magistrate in that district to monitor communications on the server and then continued to operate the Playpen forum,  using NIT, ("government created malware") to gather IP addresses and other information from computers logging in. (See note 1, infra.)  Mr. Werdene was one of the Playpen users who logged in, commenting on the pornography, and sharing links using the username "thepervert." A separate search warrant for his home was obtained as a result of the investigation, where the FBI seized a USB drive and a DVD containing child pornography. He was charged with a single count of possessing child pornography. He sought suppression of the evidence seized from him because Fed.R.Crim.Pro. 51(b) did not authorize searches of computers outside of the issuing magistrate's district. He pled guilty and was sentenced, reserving the right to appeal the denial of his suppression motion.

Magistrates cannot authorize searches outside of their districts unless specifically authorized by law. 28 U.S.C. §636(a). Rule 41(b), which sets forth the territorial limits of warrants for various searches, did not, at the time of the issuance of the search warrant, authorize searches of computers outside of the issuing magistrate's district. (That was changed with an amendment to Rule 41 on December 1, 2016, following the numerous motions to dismiss filed all over the country as a result of the Playpen investigation.) The Court, like many, if not all courts that have considered this issue, concluded that the warrant should not have issued for any search outside of the Eastern District of Virginia. The Court considered, and rejected, arguments that the government has raised in other districts, such as the search was analogous to one using a tracking device (for which Rule 42(b) does authorize extra-territorial application) (see Note 2, infra), and that the violation of Rule 41(b) was not a violation of the 4th Amendment. ("[T]he Rule 41(b) violation was of constitutional magnitude because 'at the time of the framing . . . a warrant issued for a search or seizure beyond the territorial jurisdiction of a magistrate's powers under positive law was treated as no warrant at all.'") The warrant was void ab initio.

However, like many, though not all, other courts that have considered this issue, the Court concluded that the good faith exception prevented suppression of the evidence obtained from the computers ensnared in the investigation. It rejected Mr. Werdene's argument that the exception cannot apply to warrants that are void ab initio because such warrants do not have the force of law.  The Court ruled that the deterrence effect of the exclusionary rule is not advanced by a blanket rule excluding such warrants form the goof faith exception.

In this Circuit, there are four circumstances on which reliance on a faulty warrant is unreasonable:

1.  the magistrate issued the warrant in reliance on a deliberately or recklessly false affidavit;
2.  the magistrate abandoned his judicial role and failed to perform his neutral and detached function;
3. the warrant was based on an affidavit so lacking in indicia of probable cause as to render official belief in its existence entirely unreasonable; or
4. the warrant was so facially deficient that it failed to particularize the place to be searched or the things to be seized.

The Court found that none of these criteria applied to the E.D.Va. warrant. The Court also found that the FBI's reliance on the warrant was not unreasonable even though it violated an advisory in the U.S. Attorney's manual that suggested that '[a]gents should obtain multiple warrants if they have reason to believe that a network search will retrieve data stored in multiple locations." The advice in the manual was for attorneys, and not FBI agents, who are not expected to understand legal nuances the way that an attorney would.

Note 1. A district court, in a prosecution in another district arising from the same investigation and search warrant, considering a motion to dismiss due to outrageous government conduct, said of the entire investigation, "[T]he government's investigation had disturbing consequences: while investigating child pornography, the government facilitated the distribution of child pornography and did so in way that did not allow the pornography it distributed to be retrieved or cabined. Thus, the child pornography distributed by the government might live on and be redistributed in the internet ether for an indeterminate period. Furthermore, the Court is concerned by [the defendant's] allegations that traffic to Playpen increased after the government took over operation of the site." United States v. Allain. 1:15-cr-10251-ADB (D.Mass. 9/29/2016), https://www.gpo.gov/fdsys/pkg/USCOURTS-mad-1_15-cr-10251/pdf/USCOURTS-mad-1_15-cr-10251-0.pdf 

Note 2. In his concurring opinion, Judge Nygaard wrote that he would not have considered the tracking device argument because in the district court the government conceded that none of Rule 41's exceptions to the bar on extraterritorial scope of a search warrant applied. The Government argued that it could raise the issue on appeal because as the prevailing party, it could advance any reason in support of affirmance. Judge Nygaard would have held the Government bound to concessions it made in the district court.

Image from PC Magazine, "Inside the Dark Web," 2/4/2015, https://www.pcmag.com/article2/0,2817,2476003,00.asp

Insider trading defendant's sentence vacated for further factual proof that he “acted in concert with” or “provided inside information” to his tippee's stockbroker.

US v. Metro, --- F.3d ---, 2018 WL 844823 (3d Cir Feb. 14, 2018)

The Third Circuit vacated the sentence in an insider trading case due to insufficient factual findings in support of the district court’s decision to attribute others’ insider-trading gains to the defendant. Metro used his position at a law firm to give inside information to his close friend Tamayo. Tamayo then called his personal stockbroker Eydelman and gave him Metro’s information. Eydelman then made these trades for Tamayo, as well as for himself, friends, family members, and other clients. In all, Metro’s tips led to illicit gains of over $5.6 million. While Metro personally gained $168,000, the district court found him responsible for $5.6 million.

In insider trading cases, the offense level is enhanced by a defendant’s gain and the gains realized by other individuals whom a defendant “acted in concert with” or “provided inside information” to. U.S.S.G. § 2B1.4, cmt. background. Criminal liability is not co-extensive with sentencing accountability. Although Metro pled guilty to “conspiring with ‘Tamayo, Eydelman, and others’ to violate the securities laws,” his plea only established he learned about Eydelman after the insider trading activity ended and he argued the same at sentencing. “When the scope of a defendant’s involvement in a conspiracy is contested, a district court cannot rely solely on a defendant’s guilty plea to the conspiracy charge, without additional fact-finding, to support attributing co-conspirators’ gains to a defendant.” “Before attributing gains to a defendant under § 2B1.4’s gain analysis, a sentencing court should first identify the scope of conduct for which the defendant can fairly be held accountable for sentencing purposes under § 1B1.3.” The Third Circuit rejected the government’s position that United States v. Kluger, 722 F.3d 549 (3d Cir. 2013) essentially imposed strict liability on tippers.

A Traffic Stop Followed by a Summons is not an Intervening Arrest for Sentencing Guidelines Purposes

In United States v. Ley, __ F.3d __, 2017 WL 5618617 (3d Cir., Nov. 22, 2017), the Third Circuit held that a traffic stop, followed by the issuance of a summons, is not an intervening arrest for the purpose of calculating a defendant’s prior convictions under USSG § 4A1.2(a)(2).   Defendant John Francis Ley received two speeding tickets on two consecutive days.  After writing each ticket, the police released Ley and informed him that the matter would proceed via summons.  No arrest was made and Ley was sentenced for both matters on the same day. The District Court, however, held that the issuance of the summons constituted an intervening arrest for the purposes of the Guidelines and each ticket therefore merited an individual criminal history point.  Ley appealed.  Looking at the ordinary meaning of both “arrest” and “summons,” as well as the Supreme Court’s history of distinguishing arrests from other interactions with law enforcement, the Third Circuit, joining three other circuits and splitting with the Seventh, held that “a traffic stop, followed by the issuance of a summons, is not an arrest.”  The court also rejected the government’s argument that defendant waived the issue by failing to object to a supplemental PSR addendum.

Court upholds search under "plain feel" doctrine and expands generic robbery definition

In United States v. Graves, No. 16-3995 (3d Cir. Dec. 13, 2017), the Court affirmed Shaun Graves's 100-month sentence for a single count of unlawful firearm possession.  In doing so, the Circuit rejected Graves's claims that he was subject to an unreasonable investigatory search.  More significantly, the Court held that Graves's two prior North Carolina robbery convictions qualified as "crimes of violence" under the Sentencing Guidelines, see U.S.S.G. 4B1.2(a)(2), because they were not broader than generic robbery, as defined by an overwhelming majority of states.

Harrisburg Police Officer Dennis Simmons stopped, handcuffed, and frisked Graves based on suspicion that he had participated in a nearby shooting.  Prior to the stop, Simmons observed Graves walking in a high crime neighborhood at night with another man, both of whom matched descriptions of the shooting suspects.  And when Simmons first saw Graves from his unmarked car, Graves lifted his hands above his head in a manner befitting "a drug dealer or someone who sells something illegal in the street," or someone inviting a physical challenge.  In the course of patting down Graves, Simmons felt several small hard objects in his Graves's pockets.  Based on his training and experience, Simmons suspected those items might be crack-cocaine.  Simmons removed the objects from Graves's pants and discovered they were a bullet and several packets of Depakote, a legal antidepressant.  Simmons and backup officers then placed Graves in a police vehicle, advised him of his Miranda rights, and questioned him.  Graves admitted that he had a firearm in his boot, which Simmons had missed in his patdown search.

The Court concluded that Officer Simmons had reasonable suspicion to stop and frisk Graves.  (Simmons's use of handcuffs, and the probable cause to arrest Graves after the patdown, were not challenged.)  Graves's presence in a high crime neighborhood, physical similarity with the suspect in a recent nearby shooting, and purportedly suspicious reaction to Simmons's unmarked vehicle established a reasonable basis to believe that Graves was armed.  Further, the Court held that, although Simmons was ostensibly searching for a weapon, he was permitted to search the inside of Graves's pocket upon detecting several objects that felt like illegal drugs.  Under the "plain feel" doctrine, because Simmons was still in the process of determining whether Graves was armed, he was free to remove this contraband from Simmons's pocket, despite knowing that it could not be a firearm.  Simmons would have been prohibited from searching Graves's pocket only if he had already completed the patdown for weapons.

Next, the Court affirmed Graves's sentence by concluding that North Carolina robbery qualifies as a predicate crime of violence under the career offender guideline.  In North Carolina, robbery can be committed by using or threatening de minimis force -- for example, by merely swiping a person's hand away from his or her belonging.  Presumably, this offense would not qualify as a crime of violence under the career offender guideline's force clause, U.S.S.G. 4B1.2(a)(1), because it can be committed without violent force capable of causing physical pain or injury to another.  United States v. Chapman, 866 F.3d 129, 132 (3d Cir. 2017).  The Court, however, determined that Graves's prior offenses qualify as crimes of violence because they are not broader than generic robbery, one of the offenses enumerated in U.S.S.G. 4B1.2(a)(2). 

To reach this result, the Court first had to settle upon the generic definition of robbery.  Graves urged the court to adopt the version in the Model Penal Code ("MPC"), a source the Circuit previously identified as "an ideal starting point" for generic-crime analysis.  United States v. Marrero, 677 F.3d 155, 165 (3d Cir. 2014).  Under the MPC's robbery definition, Graves's sentence would have to be vacated: unlike in North Carolina, where robbery may committed with minimal force, the MPC limits robbery to thefts involving the infliction or threatened infliction of serious bodily injury.  Graves's convictions, then, were broader than MPC robbery.

The Court, however, determined that the Model Penal Code ("MPC") does not control robbery's generic definition.  Instead, the Court embraced the government's argument: that the generic version should be the one adopted by the majority of the states.  Indeed, for the first time in its crime-of-violence jurisprudence, the Court held that state legislation is the "most important factor" for identifying a crime's generic definition.  That was especially so here, where a supermajority of 38 states, including North Carolina, do not condition a robbery conviction upon the use or threatened use of violent force.  The Court did note in a footnote that state statutes may not be dispositive where the states are closely divided on a crime's definition or legislative history indicates that Congress or the Sentencing Commission favored a particular generic result.  But in cases, such as this, where the MPC has been embraced by only a small minority of states, the majority state definition will control.     
     
Graves's sentencing holding may have long-term implications.  Most obviously, under Graves, many, if not most, prior robbery convictions will qualify as crimes of violence under the career offender guideline.  Graves also undermines defendants' reliance on the MPC for generic definitions of crimes, at least where the MPC diverges from the majority of state legislation.  All in all, Graves will make it harder for defendants in the Circuit to avoid career offender enhancements.    

Double Jeopardy Claim Falls Short on Deferential Habeas Review

In the habeas matter of Wilkerson v. Superintendent Fayette SCI, Nos. 15-1598 & 15-2673, the Third Circuit defers to a state court determination that the defendant’s conviction of both an attempted murder count and an aggravated assault count based on the same altercation did not violate the Double Jeopardy Clause.

The evidence was that during the altercation, the defendant both struck the victim in the head with a gun and shot him in the chest. The Pennsylvania Superior Court upheld consecutive sentences on the theory that the evidence was sufficient to permit a jury to find the striking to support one count and the shooting the other. Despite the jury instructions’ and verdict form’s failure to require each of these discrete findings, the Third Circuit holds that the state court’s reasoning was sound enough to withstand deferential review the AEDPA’s “clearly established Federal law” limitation. “[W]here the jury instructions were merely ambiguous and did not foreclose the jury from rendering multiple constitutionally sound convictions,” the Third Circuit reasons, “the state court was not unreasonable in sustaining those convictions based on the sufficiency of the trial evidence” — or at least not “so unreasonable as to put it ‘beyond any possibility for fairminded disagreement,’” the opinion elsewhere states, quoting Davis v. Ayala, 135 S. Ct. 2187, 2199 (2015).

Note: a defendant had more success last week on a double jeopardy challenge to conviction on multiple firearms counts under Virgin Islands law in United States v. Hodge, No. 15-2621. At the same time, Hodge rejected a variety of additional double jeopardy challenges, including one to multiple mandatory minimums under 18 U.S.C. § 924(c) where the defendant committed multiple crimes of violence during the same criminal episode.

In Wilkerson, the Court also renders several procedural rulings, holding that the defendant’s claim on direct appeal that Pennsylvania’s merger doctrine barred imposition of sentence on both counts sufficed to exhaust his federal double jeopardy claim; that the 14-day deadline for notice of a cross appeal in a federal civil case is not jurisdictional; and that the original, pro se habeas petition’s failure to state a subsequently raised Apprendi challenge rendered this claim untimely because it did not “relate back” to the defendant’s double jeopardy claim.

Court Opens Door for Long-Timers Serving Mandatory Guidelines Sentences

In In re Hoffner, –F.3d–, 2017 WL 3908880, the Court today holds that persons sentenced in the bad ol’ days of the mandatory Guidelines may proceed on challenges under 28 U.S.C. § 2255 to guideline enhancements resting on the same language held unconstitutionally vague in the Supreme Court's landmark decision in Johnson v. United States, 135 S. Ct. 2551 (2015). The Circuit thus limits the sweep of Beckles v. United States, 137 S. Ct. 886, where the high court held earlier this year that Johnson’s constitutional rule, invalidating a 15-year mandatory minimum provided by statute, has no application where a defendant was sentenced pursuant to a higher range under the advisory Guidelines system that came to be in 2005. Today’s green light is of profound significance to many, albeit far from all, defendants sentenced under the “career offender” guideline, which commonly doubles and can even triple the sentencing range.

Formally speaking, the Court rules that Hoffner, a federal prisoner seeking leave to file a second or successive motion under § 2255, had made a "prima facie" showing that the applicable pre-filing requirements were satisfied for claims that Johnson rendered sentences under the mandatory Guidelines unconstitutional inasmuch as predicated on the "residual clause" found at U.S.S.G. § 4B1.2 from 1989 onward (until revised last year by the Sentencing Commission pursuant to Johnson). That is, a prisoner may go forward on a second or successive § 2255 motion where his sentence was enhanced based on a prior conviction for an offense that – in the language held unconstitutionally vague in Johnson – "otherwise involves conduct that presents a serious potential risk of physical injury to another." The prima facie showing entitles Hoffner and many similarly situated prisoners to pursue relief despite the usual bar on successive motions. Those motions will now be resolved in the first instance in the district courts, with the issue likely to return to the Third Circuit in the future.

Congratulations to Lisa Freeland and her colleagues in the Defender’s office in the Western District of Pennsylvania on emerging victorious from the house of horrors that is today’s ‘retroactivity’ doctrine.

Federal Court upholds RICO and wire fraud conviction for New Jersey political party official

In United States v. Ferriero, __F.3d.__, 2017 WL 3319283, 15-4064 (3rd Cir. Aug. 4, 2017), the Third Circuit upheld a RICO violation when a political party official arranged to receive a percentage of fees paid to a vender that he recommended to local offices during the course of his official duties.  The Court held that there is no requirement to prove an agreement to “undermine the integrity of a public action” when the RICO charges stem from the current version of New Jersey’s bribery statute.  The Court also found that a communication can be fraudulent and violate federal wire fraud law when it contains half-truths and omits critical information.  Furthermore, it found that the New Jersey bribery statute is neither overbroad nor unduly vague, and the Supreme Court’s decision in McDonnell v. United States, 136 S. Ct. 2355 (2015), did not impact the present conviction because that case dealt with “officials acts” and not “public issues.”