Corporate officer standing to challenge workplace search
Typically, federal agents sweeping through business offices with a search warrant in hand draw no distinction between common areas and individual offices. It is unclear the extent to which a corporate office individually has standing to challenge a search, not of his or her personal office, but of common areas within the corporate offices. The Ninth Circuit recently addressed precisely that question.
In United States v. SDI Future Health, Inc., Docket No. 07-10261 (9th Cir., Jan. 27, 2009), the Court of Appeals reviewed the district court’s order suppressing evidence obtained from a search warrant executed at the offices of SDI Future Health, Inc. (“SDI”). One of the issues on appeal was the extent to which a business employee may have standing to challenge a search of business premises generally; that is, those areas not reserved for the employee's exclusive use.
After a lengthy tax investigation, IRS agents obtained a search warrant based on allegations that SDI had engaged in wide-ranging Medicare fraud and that both SDI and Todd Stuart Kaplan (“Kaplan”), its president and part-owner, and another officer named Brunk, had also committed tax fraud.
The team of agents arrived at the scene and met with one of SDI’s executive officers. Kaplan received a copy of the warrant and he consented to allow investigators to search an off-site storage warehouse used by SDI. More than three years later, SDI, Kaplan and Brunk filed a motion to suppress evidence obtained from the search. The district court found that Kaplan and Brunk had standing to challenge the search of SDI’s business premises. The government sought an interlocutory appeal of the district court’s order and argued, among other things, that Kaplan and Brunk lacked standing to challenge the search and seizure of materials from SDI’s premises.
The Ninth Circuit explained that even though commercial property is treated differently than residential property for Fourth Amendment purposes, individuals may still have a “reasonable expectation of privacy” against police intrusions into their offices. The expectations of privacy in a work environment are a case-by-case determination.
An employee of a corporation, either worker or manager, does not, simply by virtue of his status as such, acquire Fourth Amendment standing with respect to company premises. The Ninth Circuit looked to the Tenth Circuit’s decision in United States v. Anderson, 154 F.3d 1225 (10th Cir. 1998), to deal with situations in which a corporate employee does not work on a regular basis in the area searched. The Anderson factors are: (1) the employee’s relationship to the item seized; (2) whether the item was in the immediate control of the employee when it was seized; and (3) whether the employee took actions to maintain his privacy in the item.
Comparing Anderson with Ninth Circuit precedent, the Court in SDI concluded that, except in the case of a small, family-run business over which an individual exercises daily management and control (as was the case in United States v. Gonzalez, 412 F.3d 1102 (9th Cir. 2005)), an individual challenging a search of workplace areas beyond his own internal office must generally show some personal connection to the places searched and the materials seized. The Court wrote that it would specifically determine the strength of an individual’s personal connection with reference to the following factors: (1) whether the item seized is personal property or otherwise kept in a private place separate from other work-related material; (2) whether the defendant had custody or immediate control of the item when officers seized it; and (3) whether the defendant took precautions on his own behalf to secure the place searched or things seized from any interference without his authorizations. Absent this type of personal connection to, or exclusive use of workplace items, a defendant cannot establish standing for Fourth Amendment purposes to challenge the search of a workplace beyond his internal office. In SDI, the Ninth Circuit reversed the granting of the motion to suppress and remanded the matter for additional fact-finding consistent with the test it had outlined.
(With appreciation to Beth L. Weisser, Esq., for contributing this entry)
