In the Courts

Employee Has No Reasonable Expectation of Privacy on His Workplace Computer

In United States v. Ziegler, No. 05-30177 (9th Cir. Aug. 8, 2006), the Ninth Circuit upheld the lower court's denial of defendant's motion to suppress evidence seized from his workplace computer, holding that under the circumstances he did not have an objectively reasonable expectation of privacy in the computer.

Defendant, an employee of a company that processes on-line electronic payments, filed a motion to suppress evidence seized from his workplace computer, arguing that the FBI violated the Fourth Amendment by directing other company employees to search the computer without a warrant. The Ninth Circuit disagreed, upholding the district court's ruling that the defendant employee did not have an objectively reasonable expectation of privacy in the workplace computer. The circuit court noted that the company's IT department had administrative access to the computer and that the company had a firewall that monitored its employees' computer usage. The court went on to hold that a company's ownership of a workplace computer is not alone sufficient to defeat an employee's expectation of privacy, but that, because of the prevalence of employer monitoring and well disseminated computer use policies, in the 'ordinary case' there will be no reasonable expectation of privacy in workplace computers.

On Remand, Defendants Are Entitled to Be Re-sentenced By the Original Judge

In United States v. Lence, No. 05-30236 (9th Cir. July 27, 2006), the Ninth Circuit held that a defendant whose case was remanded for re-sentencing was entitled to be sentenced by his original sentencing judge.

The defendant, an attorney and CPA, was convicted of 14 counts of bank fraud. At his first sentencing hearing, the judge departed downward from the Sentencing Guidelines and sentenced him to 24 months in prison, which was at the bottom of the allowable sentencing range. Both the defendant and the government appealed the sentence. The Ninth Circuit held that the downward departure was an abuse of discretion, and remanded the case for re-sentencing. Upon remand, the same
sentencing judge imposed a lower sentence of 21 months, commenting that given the authority, he would impose an even lighter sentence. Both parties appealed a second time, and while that appeal was pending the Supreme Court decided United States v. Booker, 543 U.S. 220 (2005), which made the Sentencing Guide-lines advisory. When the case was again remanded for re-sentencing, it was assigned to a different district court judge, who sentenced the defendant to 33 months' confinement. The defendant appealed a third time, arguing that he had the right to be re-sentenced by his original sentencing judge. The Ninth Circuit agreed, remanding his case a third time and directing that it be assigned to the original district court judge.

Tenth Circuit Directs Acquittal Because Prosecutors Used the Wrong Statute

In United States v. Hunt, No. 05-6023 (10th Cir. Aug. 9, 2006), the Tenth Circuit held that when a manager, acting within his formal authority, signs checks with his own name those instruments cannot serve as the basis of a conviction for uttering forged securities under 18 U.S.C. ' 513(a), even if the checks clearly represent embezzlement of the company's funds.

Defendant, a manager of a farming cooperative, was convicted of uttering forged securities and money laundering based on a series of checks he wrote as part of a fraudulent scheme to transfer $2 million from his employer's bank accounts to his private accounts. The manager signed the checks with his own name, and the checks explicitly and correctly identified him as an authorized agent of the cooperative. Although the company had privately placed a number of limits on the defendant's check writing authority, his name appeared on the company's signature cards on file with its bank without placing any limitations on his authority. In the course of the government's investigation into the missing funds, and the subsequent trial, the defendant was accused of a variety of wrongdoing including attempting to alter the carbon copies of the checks, lying to investigators and offering a bribe to a member of the board of the cooperative. At trial, however, the government elected to charge him only with uttering forged securities and with laundering the proceeds from the forgery. On appeal, the defendant argued the checks did not qualify as forged securities.

The Tenth Circuit agreed, holding that because he used his own name and did not exceed the check-writing authority granted him by his employer, he did not utter forged securities within the meaning of 18 U.S.C. ' 513(a). The court also noted that because the money laundering charges depending on the underlying forgery charge, they must also fail. The circuit court opined that the defendant appeared to be guilty of embezzlement, fraud, and obstruction of justice but reversed his conviction and remanded with instructions to enter a judgment of acquittal, acknowledging that appellate courts have the 'unhappy duty' to reverse the conviction of any defendant charged under the wrong statute.

Search Warrants Authorizing the Wholesale Seizure of Electronic Storage Devices Must Be Justified by Affidavit

In United States v. Hill, No. 05-50219 (9th Cir. Aug. 11, 2006) the Ninth Circuit noted that it does not approve of warrants authorizing the removal of all computer storage media so that they can be examined off site when there is no affidavit giving a reasonable explanation as to why the seizure, as opposed to on-site inspection, is necessary.

The defendant, who conditionally pled guilty to child pornography charges, challenged the validity of a warrant pursuant to which evidence was seized from electronic storage media taken from his home. His appeal raised the issue of whether it was reasonable under the Fourth Amendment for the police to take all of the electronic storage media from his home to be searched at a police laboratory, rather than carrying out the search in his home and seizing only whatever evidence could be found on-site. The Ninth Circuit adopted the reasoning of the lower court, which noted that the police found no computer in the defendant's home with which to peruse the storage media, and that the police were not obliged to bring with them equipment capable of reading the storage media. The circuit court also held that although the warrant in this case authorized the wholesale seizure, the warrant was flawed because the officers did not justify the need for the broad seizure to the magistrate. The court noted that there 'must be some threshold showing before the government may seize the haystack to look for the needle.' Nonetheless, the circuit court declined to suppress the fruits of the search, holding that the officers' actions were motivated by practicality and that the exclusionary rule does not require the suppression of evidence within the scope of the warrant simply because items outside the scope of the warrant were unlawfully seized.

Employee Has No Reasonable Expectation of Privacy on His Workplace Computer

In United States v. Ziegler, No. 05-30177 (9th Cir. Aug. 8, 2006), the Ninth Circuit upheld the lower court's denial of defendant's motion to suppress evidence seized from his workplace computer, holding that under the circumstances he did not have an objectively reasonable expectation of privacy in the computer.

Defendant, an employee of a company that processes on-line electronic payments, filed a motion to suppress evidence seized from his workplace computer, arguing that the FBI violated the Fourth Amendment by directing other company employees to search the computer without a warrant. The Ninth Circuit disagreed, upholding the district court's ruling that the defendant employee did not have an objectively reasonable expectation of privacy in the workplace computer. The circuit court noted that the company's IT department had administrative access to the computer and that the company had a firewall that monitored its employees' computer usage. The court went on to hold that a company's ownership of a workplace computer is not alone sufficient to defeat an employee's expectation of privacy, but that, because of the prevalence of employer monitoring and well disseminated computer use policies, in the 'ordinary case' there will be no reasonable expectation of privacy in workplace computers.

On Remand, Defendants Are Entitled to Be Re-sentenced By the Original Judge

In United States v. Lence, No. 05-30236 (9th Cir. July 27, 2006), the Ninth Circuit held that a defendant whose case was remanded for re-sentencing was entitled to be sentenced by his original sentencing judge.

The defendant, an attorney and CPA, was convicted of 14 counts of bank fraud. At his first sentencing hearing, the judge departed downward from the Sentencing Guidelines and sentenced him to 24 months in prison, which was at the bottom of the allowable sentencing range. Both the defendant and the government appealed the sentence. The Ninth Circuit held that the downward departure was an abuse of discretion, and remanded the case for re-sentencing. Upon remand, the same
sentencing judge imposed a lower sentence of 21 months, commenting that given the authority, he would impose an even lighter sentence. Both parties appealed a second time, and while that appeal was pending the Supreme Court decided United States v. Booker , 543 U.S. 220 (2005), which made the Sentencing Guide-lines advisory. When the case was again remanded for re-sentencing, it was assigned to a different district court judge, who sentenced the defendant to 33 months' confinement. The defendant appealed a third time, arguing that he had the right to be re-sentenced by his original sentencing judge. The Ninth Circuit agreed, remanding his case a third time and directing that it be assigned to the original district court judge.

Tenth Circuit Directs Acquittal Because Prosecutors Used the Wrong Statute

In United States v. Hunt, No. 05-6023 (10th Cir. Aug. 9, 2006), the Tenth Circuit held that when a manager, acting within his formal authority, signs checks with his own name those instruments cannot serve as the basis of a conviction for uttering forged securities under 18 U.S.C. ' 513(a), even if the checks clearly represent embezzlement of the company's funds.

Defendant, a manager of a farming cooperative, was convicted of uttering forged securities and money laundering based on a series of checks he wrote as part of a fraudulent scheme to transfer $2 million from his employer's bank accounts to his private accounts. The manager signed the checks with his own name, and the checks explicitly and correctly identified him as an authorized agent of the cooperative. Although the company had privately placed a number of limits on the defendant's check writing authority, his name appeared on the company's signature cards on file with its bank without placing any limitations on his authority. In the course of the government's investigation into the missing funds, and the subsequent trial, the defendant was accused of a variety of wrongdoing including attempting to alter the carbon copies of the checks, lying to investigators and offering a bribe to a member of the board of the cooperative. At trial, however, the government elected to charge him only with uttering forged securities and with laundering the proceeds from the forgery. On appeal, the defendant argued the checks did not qualify as forged securities.

The Tenth Circuit agreed, holding that because he used his own name and did not exceed the check-writing authority granted him by his employer, he did not utter forged securities within the meaning of 18 U.S.C. ' 513(a). The court also noted that because the money laundering charges depending on the underlying forgery charge, they must also fail. The circuit court opined that the defendant appeared to be guilty of embezzlement, fraud, and obstruction of justice but reversed his conviction and remanded with instructions to enter a judgment of acquittal, acknowledging that appellate courts have the 'unhappy duty' to reverse the conviction of any defendant charged under the wrong statute.