Second Circuit Holds That Fourth Amendment Limits Government's Retention of Computer Files

So holds the court today in United States v. Ganias. In this case, Stavros Ganias, an accountant for two companies, IPM and American Boiler, whom the IRS suspected of theft and other crimes. 

In November, 2003, Army investigators obtained a search warrant to search Ganias's accounting business. The agents carrying out the search did not take the computers, but they copied the hard drives of each of Ganias's computers. The court noted that the files copied included information beyond the scope of the warrant, which was limited to files related to the "financial and accounting operations of [IPM] and American Boiler . . . ."

In 2004, the IRS began to suspect that Ganias was misreporting his own income. After further investigations revealed Ganias was misreporting the income of his clients, in February, 2006, the IRS sought to obtain Ganias's personal files that were contained in the data seized in 2003. After Ganias did not reply, the government obtained a new warrant and searched the files it had seized in 2003. The court emphasized that the government had retained these files for two and a half years since the initial seizure.

The Second Circuit concluded that this 2006 search of the files violated Ganias's Fourth Amendment rights. From the court's analysis:

[W]e consider a more limited question: whether the Fourth Amendment permits officials executing a warrant for the seizure of particular data on a computer to seize and indefinitely retain every file on that computer for use in future criminal investigations. We hold that it does not.  

If the 2003 warrant authorized the Government to retain all the data on Ganias's computers on the off-chance the information would become relevant to a subsequent criminal investigation, it would be the equivalent of a general warrant. The Government's retention of copies of Ganias's personal computer records for two-and-a-half years deprived him of exclusive control over those files for an unreasonable amount of time. This combination of circumstances enabled the Government to possess indefinitely personal records of Ganias that were beyond the scope of the warrant while it looked for other evidence to give it probable cause to search the files. This was a meaningful interference with Ganias's possessory rights in those files and constituted a seizure within the meaning of the Fourth Amendment.

The court then addressed the government's arguments for the constitutionality of keeping the information. Following its dismissal of each argument, the court concluded:

Because the Government has demonstrated no legal basis for retaining the non-responsive documents, its retention and subsequent search of those documents were unconstitutional. The Fourth Amendment was intended to prevent the Government from entering individuals' homes and indiscriminately seizing all their papers in the hopes of discovering evidence about previously unknown crimes. . . . Yet this is exactly what the Government claims it may do when it executes a warrant calling for the seizure of particular electronic data relevant to a different crime. Perhaps the "wholesale removal" of intermingled computer records is permissible where off-site sorting is necessary and reasonable, . . . but this accommodation does not somehow authorize the Government to retain all non-responsive documents indefinitely, for possible use in future criminal investigations. (citations omitted).

Notably, this case involves the seizure and retention of personal computer files that were beyond the scope of the initial warrant. The court does not explicitly address situations where files that are within the scope of the original warrant are held for a long period of time, and end up being relevant in another case against the defendant. And the court's repeated reliance in its arguments on the non-responsive nature of the computer files means that this case could be distinguished from situations where responsive files are seized and retained.

The logic of the opinion, however, lends itself to situations where law enforcement officers seize files that are within the scope of a warrant. Even if officers have a warrant to seize particular files, by retaining electronic copies of the files, the officers could probably be characterized as depriving the defendant of "exclusive control over those files," to use the Second Circuit's language. And if interference with this exclusive control for an unreasonable amount of time causes the government's conduct to amount to a search, there seems to be no reason why the Fourth Amendment wouldn't apply to any information the government copies and retains.