Federal Court Upholds Property Rights Against Government Intrusion

by Michael B. Kent, Jr.


Last month, a federal appeals court issued an important decision curbing the government’s ability to use a criminal investigation of one party to search and seize property belonging to another. In Snitko v. United States, the Ninth Circuit Court of Appeals held that federal agents violated the constitutional rights of several hundred citizens when they opened and attempted to seize the contents of safe deposit boxes located at a raided facility. The decision helps bolster constitutional protections for private property by keeping governmental investigations within their proper limits.

The case arose out of a criminal investigation into US Private Vaults (“USPV”), a company that rented safe deposit boxes. One of USPV’s primary marketing strategies was its promise to protect the identity of its customers, which attracted a certain criminal clientele in addition to honest users. Over time, law enforcement agencies began to suspect USPV itself of criminal activity, and a federal grand jury eventually returned an indictment against the company.

Based on the indictment, federal agents secured a warrant authorizing them to search USPV’s place of business and seize, among other things, the “nests” of safe deposit boxes located inside. The warrant also authorized a limited inspection of the individual boxes within the nests pursuant to the FBI’s “written inventory policies,” which allow agents to catalogue property for safekeeping until it can be returned to its rightful owner. The warrant expressly stated that the agents were not to conduct a criminal search of the boxes.

Prior to executing the warrant, however, the FBI created a new “written policy” entitled “Supplemental Instructions on Box Inventory,” which was to govern the “inventory” searches of the USPV safe deposit boxes. This policy instructed agents to place any amount of cash over $5,000 in an evidence bag, give it a forfeiture identification number, note the manner in which it was bundled, and record any distinguishing features (like strong odors, evidence of drug residue, and whether a gun was found in the same box as the cash).

The raid resulted in the agents opening over 700 individual boxes and initiating asset forfeiture proceedings against any box containing at least $5,000 in value. Asset forfeiture allows law enforcement agencies to retain property suspected of facilitating or resulting from criminal activity. Under current law, however, forfeiture does not necessarily require judicial oversight and can occur even without a criminal conviction. Indeed, among the USPV box holders whose property was subject to forfeiture were many who undeniably used their boxes for innocent, non-criminal purposes.

After learning of the attempted forfeitures, several boxholders sued the government, seeking the return of their property and alleging that the agents violated their constitutional rights in searching and seizing the box contents. The Ninth Circuit agreed.

As an initial matter, the court held that the “Supplemental Instructions” could not be viewed as falling within the warrant’s reference to “written inventory policies.” Under prior precedent, that reference could only mean the “standardized instructions” that the FBI applied consistently in all cases, not customized instructions designed especially for a single case. “[T]he fact that the Supplemental Instructions were created specifically for the USPV search,” explained the court, “takes this case out of the realm of a standardized ‘inventory’ procedure,” and made the purported inventorying of the boxes little more than a “ruse for a general rummaging in order to find incriminating evidence.”

Additionally, the court held that the agents exceeded the scope of the warrant by using the purported “inventory search” as a pretext for a criminal search of the boxes, which the warrant expressly prohibited. “A look at the record, and the Supplemental Instructions in particular, confirms that the search was criminal in nature,” the court concluded, and “any doubt is put to rest by the fact that the government has already used some of the information from inside the boxes to obtain additional warrants to further its investigation [of USPV] and begin new ones [against others].”

In short, the court found the government’s conduct to resemble the “limitless searches of an individual’s personal belongings … that led to the adoption of the Fourth Amendment in the first place.” For that reason, the searches violated the Constitution, the property had to be returned, and all records of the searches had to be destroyed.

Envisage attorneys help individuals protect their property and other legal rights through a variety of services, including disputes with government agencies. If you have questions about this alert or think we might be of assistance to you, you may contact us at (919) 755-1317.

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