Opinion
Nos. 00 M 131 and 00 M 132
October 13, 2003
MEMORANDUM OPINION AND ORDER
This matter is before the Court on Movants' Motion for Return of Seized Property pursuant to Federal Rule of Criminal Procedure 41(e). Because the Movants have failed to show any irreparable injury from the Respondent's possession of the seized property, and for the additional reasons set forth below, the Court denies Movants' Motion.
FACTS
On the morning of March 31, 2000, agents of the Internal Revenue Service ("IRS") Criminal Investigation Division entered the business premises located at 11018-11020-11022 Southwest Highway, Palos Hills, Illinois, to execute two search warrants issued by this Court, numbers 00 M 131 and 00 M 132. These search warrants were executed as part of an ongoing criminal investigation, and because of the investigation's sensitive nature, the affidavits in support of probable cause were put under seal. Pursuant to the warrants, the agents seized a large volume of documents and other items.
Movants claim that the search and seizure was overbroad, that the search warrant was defective, that the agents did not provide Miranda warnings, and various other allegations that the overall search was unconstitutional. As explained infra, whether the search was unlawful is not the critical inquiry under Rule 41(e), as amended in 1989, and therefore the Court will not address these allegations.
Before filing the instant motion, counsel for Movants made a request of the government that they be allowed to review certain documents that had been seized and to obtain photocopies of those documents. The government accommodated this request, and on June 22, 2000, allowed the Movants (or persons associated with the Movants) to meet with IRS agents, review and request documents, obtain copies of documents, and identify others they wanted copied. Indeed, according to the government, which provided the copying receipts, additional copies of requested documents were provided to Movants on June 29, 2000.
At the August 11, 2000 hearing, the government explained that IRS agents were copying and returning the documents to Movants as expeditiously as possible but that, because of the volume of documents seized, the process would take some time. The Court inquired of Movants as to whether there were certain documents or categories of documents that they needed immediately, and directed that they prioritize their lists of documents and submit them to the government so that they could be scanned and made available to the Movants on an ongoing basis. In their Reply Memorandum ("Reply") to the instant motion, Movants did not allege that the government has not been cooperative in this regard.
DISCUSSION
Pursuant to Rule 41(e) of the Federal Rules of Criminal Procedure, Movants request that the government return the seized documents, or alternatively, allow them access to their documents for copying. While their Motion does not specifically request suppression of the seized documents, their accompanying Memorandum in Support of their Motion ("Mov.'s Memorandum"), and their subsequent Reply, clearly request suppression as a remedy. As will be explained, the return of the seized documents — not suppression — is the only viable remedy under Rule 41(e), as amended. In addition, courts have interpreted Rule 41(e) as only allowing the return of seized documents if the movant proves "irreparable injury." In the case sub judice, Movants fail to even allege how they will be irreparably injured by the seizure of their documents, especially considering that the government has allowed them access to the documents for copying. Because the Movants apparently do not understand the import of Rule 41(e) — especially the significance of the 1989 Amendment — the Court will begin its analysis with a discussion of Rule 41(e).
In their Reply, Movants assert that they are entitled to a hearing at which they would attempt to prove the "overbreadth" of the execution of the search warrants. However, because of the limited inquiry required by Rule 41(e), the Court finds that an evidentiary hearing in this matter is unwarranted. The Court notes, in this regard, that there is no factual dispute regarding the documents seized and that the government has provided Movants with copies of such documents upon request. Therefore, Movants request for a hearing is denied.
I. Rule 41(e) of the Federal Rules of Criminal Procedure.
There were two main changes to Rule 41(e) in 1989 that are of significance in this case: (1) in order to obtain relief, the search does not have to be unlawful — there only has to be a "deprivation of property"; and (2) suppression, regardless of whether the search is lawful or unlawful, is no longer a preindictment remedy under Rule 41(e). Each change is explained in turn.
The current text of Rule 41(e) provides for two classes of movants: (1) persons "aggrieved by an unlawful search and seizure," and (2) persons "aggrieved by . . . deprivation of property."
Fed.R.Crim.P. 41(e). Prior to 1989, "Rule 41(e) did not explicitly recognize a right of a property owner to obtain return of lawfully seized property." Id. at Advisory Committee Notes, 1989 Amendment (emphasis added). The 1989 amendments to Rule 41(e) expanded the rule's reach to "person[s] whose property has been lawfully seized." Id. Therefore, Movants did not need to spend eight pages in their Memorandum arguing that the search was unlawful. Whether the search was unlawful or lawful, Movants could still obtain relief under Rule 41(e), because they have been "deprived" of their property. The critical inquiry under Rule 41(e) is whether the government's retention of the property is reasonable, and whether Movants have proved irreparable injury.
Movants' emphasis on the supposed illegality of the search is an attempt to have the documents suppressed (in addition to having them returned), and shows that they fundamentally misunderstand the purpose of the 1989 Amendment to Rule 41(e). In their Memorandum, Movants cite primarily outdated cases that were decided prior to the 1989 Amendment. Prior to the amendment, Rule 41(e) provided for return of property only if it was illegally seized, and required the automatic suppression of any property returned. See Fed.R.Crim.P. 41(e), at the Advisory Committee Notes, 1989 Amendment. However, under the rule as it currently exists, when there is no indictment pending, movants may only seek the return of property. If movants want the documents suppressed because of the illegality of the search, they should wait for an indictment or information, and then file a motion for suppression pursuant to Rule 12 of the Federal Rules of Criminal Procedure. See Wag-Aero, Inc. v. United States, 837 F. Supp. 1479, 1487 (E.D. Wis.) (stating that Rule 41 no longer provides for issuing a preindictment suppression order), aff'd, 35 F.3d 569 (7th Cir. 1993).
Under the current rule, the movant only needs to allege a "deprivation of property" by the government.
In Movants' largely incoherent Reply, they argue that Wag-Aero does not find that suppression is no longer a preindictment remedy under Rule 41(e). They argue that the sentence in the Wag-Aero opinion which states, "Even if the remedy of suppression is still viable under Rule 41, no indictment is pending, so the issue is not yet ripe.", 837 F. Supp. at 1487, supports their contention that suppression remains an available preindictment remedy. But, as in wag-Aero, there is no indictment pending in their case. (Movants are asking for preindictment relief under Rule 41(e).) Therefore, as Wag-Aero suggests, the issue of suppression is not yet ripe, and Movants' reliance on Wag-Aero, at this juncture, only weakens their case for suppression.
Indeed, the language of 41(e), as amended, is as follows, and belies any claim that the Court, at this juncture, should entertain whether suppression is appropriate:
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 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 also as a motion to suppress under Rule 12.
Fed.R.Crim.P. 41(e) (emphasis added). Furthermore, Rule 41(f) states, "A motion to suppress evidence may be made in the court of the district of trial as provided by Rule 12." Since Rule 41(e) (which is labeled "Motion for Return of Property") only mentions return of documents as a remedy, and Rule 41(f) (which is labeled "Motion to Suppress") states that a motion to suppress may be made pursuant to Rule 12, clearly preindictment suppression is not appropriate under 41(e).
In addition to the language of the rule, the Advisory Committee Notes to the 1989 Amendment specifically explain why suppression is no longer a preindictment remedy under Rule 41(e):
The amendment deletes language dating from 1944 stating that evidence shall not be admissible at a hearing or at a trial if the court grants the motion to return property under Rule 41(e). The language has not kept pace with the development of exclusionary rule doctrine and is currently only confusing.
Fed.R.Crim.P. 41(e), at the Advisory Committee Notes, 1989 Amendment (citations omitted).
Finally, courts interpreting the current Rule 41(e) have concluded that suppression is not a legitimate preindictment remedy. As explained in J.B. Manning Corp. v. United States, 86 F.3d 926, 928 (9th Cir. 1996):
Under the new rule [Rule 41(e) as it currently exists], property returned to the owners can still be admitted as evidence at any hearing or trial. The court can order the government to return property to the owner, and yet still permit the government to introduce the property — or copies of it, in the case of documents — at trial. "Under the rule as it now exists, suppression and return of property are separate and distinct inquiries." Kitty's East v. United States, 905 F.2d 1367, 1372 (10th Cir. 1990).
In addition, the court in Kitty's East noted, "By amending the rule to preclude suppression as a de facto result of returning the property, the Court has made every Rule 41(e) motion into one solely for the return of property. Illegality of a search for purposes of Rule 41(e) and the scope of the exclusionary rule have been separated by the 1989 amendments." Kitty's East, 905 F.2d at 1370 (citations omitted).
Despite the language of the amended rule, the aforementioned cases, and their failure to cite any case post 1989 that allows for preindictment suppression, Movants argue that suppression is still a legitimate preindictment remedy under Rule 41(e). In their Reply, they refer to the phrase "anomalous jurisdiction," but do not define it or explain its significance. They would have the Court believe that "anomalous jurisdiction," whatever it is, allows the Court to issue the preindictment remedy of suppression under Rule 41(e), and cite the relatively recent case of In Re: Grand Jury Proceedings, 115 F.3d 1240 (5th Cir. 1997), for this proposition. If Movants had carefully read this case, however, they would see that the doctrine of "anomalous jurisdiction" is not under Rule 41(e) per se, but rather is a separate concept deriving from the "inherent authority of the court":
A substantial body of precedent establishes that federal district courts have power to order the suppression or return of unlawfully seized property even though no indictment has been returned and thus no criminal prosecution is yet in existence. . . . The theory articulated by most cases is that jurisdiction to order suppression or return prior to indictment exists not by virtue of any statute but rather derives from the inherent authority of the court over those who are its officers.Id., 115 F.3d at 1246 (emphasis added). The Fifth Circuit then continued, "Despite this court's recognition, it has rarely been invoked or discussed since [some 1974 case], and its very existence has been questioned." Id.
Importantly, in the Seventh Circuit, this Court has only found the concept of "anomalous jurisdiction" mentioned once in passing, and in this one instance, it was not applied. See United States v. Ingrao, No. 88 CR 573, 1991 WL 28238 (N.D. Ill. Jan. 31, 1991). Moreover, in order for it to even apply, the Court would have to find, inter alia, that the movant would "be irreparably injured by the denial of the return of the property." In Re: Grand Jury Proceedings, 115 F.3d at 1246 (citing Richey v. Smith, 515 F.2d 1239 (5th Cir. 1979). As discussed more in depth infra, the fact that the government has allowed Movants to copy any documents they need, belies any claim that they have been "irreparably injured." Indeed, in In Re: Grand Jury Proceedings, the case Movants cite for the "anomalous jurisdiction" concept, the Fifth Circuit noted that "[t]he absence of any showing of necessity or irreparable injury weigh against the exercise of anomalous jurisdiction." 115 F.3d at 1246. Accordingly, the Court declines to apply "anomalous jurisdiction" to suppress the documents seized by the government. II. The Return of Documents Under Rule 41(e).
The other factors courts scrutinize under "anomalous jurisdiction" are whether the government displayed callous disregard for the constitutional rights of the movants; whether the movants have an individual interest in and need for the material; and whether the movants have an adequate remedy at law. In Re: Grand Jury Proceedings, 115 F.3d at 1246. Because of the questionable validity of this doctrine (especially in the Seventh Circuit), and because the movants have not proved "irreparable injury", the Court does not find it necessary to analyze each of these factors in this case.
Movants tend to cite cases which actually do more damage to their positions than good. For instance, not only does In Re: Grand Jury Proceedings weaken Movants' argument for the application of "anomalous jurisdiction," but also specifically notes that "Rule 41(e) specifies that an aggrieved party's preindictment remedy is a motion for the return of property" and that a motion to suppress evidence may be made as provided by Rule 12. 115 F.3d at 1245. Thus, this case also weakens their argument for preindictment suppression under Rule 41(e).
If Movants wish to suppress the evidence seized, they should wait for an indictment, and then file a motion pursuant to Rule 12. Consequently, this Court will not address the legality of the search and seizure.
In order for Movants to obtain a return of the seized documents under Rule 41(e), they must prove that being deprived of actual possession of the seized property causes "irreparable injury." Kitty's East, 905 F.2d at 1370; United States v. A Bldg. Housing a Business Known as Mach. Products Co., Inc., 139 F.R.D. 111, 112 (W.D. Wis. 1990). Several courts have found that, when the government allows the movants to copy needed documents, or returns requested documents, the movants cannot prove "irreparable injury." For instance, a court in the Seventh Circuit has "seriously question [ed] whether, in the absence of seizure of some unique property or privileged documents, a party could ever demonstrate irreparable harm when the Government either provides the party with copies of the items seized or returns the originals to the party. . . ." A Bldg. Housing, supra, 139 F.R.D, at 116-17 (citation omitted). Additionally, the Tenth Circuit held in Kitty's East, supra:
Testimony at the hearing revealed that the government has returned copies of any business documents requested by Kitty's. Under these circumstances, we do not see how the government's retention of original documents aggrieves Kitty's. We conclude, therefore, that Kitty's is not entitled to the return of documents retained by the government.905 F.2d at 1376; see also Standard Drywall, Inc. v. United States, 668 F.2d 156, 157, n. 2 (9th Cir. 1982) (finding that the government's offer to provide movants with copies of all documents seized from their offices, undermines and refutes any claim of irreparable injury).
Finally, in A Bldg. Housing, supra, a case surprisingly cited by the Movants, the court stated:
This is yet another example of Movants using a "canned" brief that cites cases that actually hurt their position. The Court admonishes counsel for Movants to read all cases cited in their respective motions/briefs to make sure that the cases actually support their overriding positions.
[D]efendant is unable to show any irreparable injury arising from the seizure and retention of its business records. It has been allowed to copy all of them. Its real motive in bringing the motion was to have the search declared illegal. That is not the purpose for which Rule 41(e) was enacted.139 F.R.D. at 112. Similar to A Bldg. Housing, the Court finds that Movants are bringing this present motion to have the search declared illegal. In fact, Movants do not even address how they are irreparably injured by the search. Rather, the Movants' Memorandum merely states, "Movant . . . is unable to communicate effectively with its members or to continue functioning without access to its records. Neither Heritage America nor Aegis have been offered reasonable access to the records in question prior to filing this motion." (Mov.'s Memorandum at p. 13.) This statement is clearly disingenuous, considering the government has allowed Movants access to their records.
CONCLUSION
Accordingly, for the reasons set forth above, the Court finds that Movants have not proved that the government's retention of their property is causing them irreparable injury, and therefore, their Motion for Return of Seized Property is, hereby, denied.
IT IS THEREFORE ORDERED that:
Movants' Motion for Return of Seized Property pursuant to Federal Rule of Criminal Procedure 41(e) be, and the same hereby is, DENIED.