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UNITED STATES DISTRICT COURT EASTERN DISTRICT OF LOUISIANA HEEBE, ET AL. v. UNITED STATES OF AMERICA * * * * * * CIVIL ACTION NO: 10-3452 SECTION “C” (5)

UNITED STATES’ POST-HEARING MEMORANDUM NOW INTO COURT comes the United States of America, appearing through the undersigned Assistant United States Attorney, who submits for the Court’s consideration the following post-hearing memorandum: RELEVANT PROCEDURAL BACKGROUND This case’s history is set forth in the government’s original response to the petitioners’ motion to return seized property. See Rec. Doc. 14. As set forth there, petitioners sought Rule 41(g) return of property, alleging agents exceeded the scope of a warrant in searching 2000 Belle Chasse Highway. Rec. Doc. 3. Petitioners sought oral argument. Rec. Doc. 5. The Court ordered the matter be converted to an equitable civil action, named the government as defendant, ordered a government response, and that the matter would be decided without oral argument. Rec. Doc. 6.

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The government responded to the petitioners’ motion. Rec. Doc. 14. This Court ordered the government to immediately return all original seized property of tenants other than River Birch, Inc., copies of all documents that constitute “property shared” between River Birch, Inc. and other tenants, and to complete a “clean team” review and return all privileged documents to the petitioners. Rec. Doc. 23. The government complied with the Court’s Order and additionally filed a motion for reconsideration of the Court’s ruling. Rec Docs. 32, 33. The petitioners filed a memorandum in opposition to the government’s motion for reconsideration. Rec. Doc. 42. A hearing on the motion for reconsideration was held on February 24, 2011. Rec. Doc. 64. At the conclusion of that hearing, this Court asked both the petitioners and the government to submit memoranda supporting their respective positions. Hearing Transcript, p. 221. ARGUMENT For the reasons put forth at the hearing and also previously submitted by the government, the government in this matter acted with neither a callous disregard for the petitioners’ constitutional rights nor caused irreparable harm to the petitioners. The government was authorized to search 2000 Belle Chasse Highway, the offices of River Birch. The government has consistently maintained that the premises of 2000 Belle Chasse Highway contained the offices of River Birch. Other businesses, sharing a common address with River Birch and operating within 2000 Belle Chasse Highway were operating within the premises of River Birch’s office and legally fell within the scope of the warrant due to the fact that they were operating in a common, commingled area with River Birch. The government took reasonable steps to limit the execution of the warrant to only the seizure documents and evidence that were relevant to the investigation and within the scope of the search warrant. 2

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The petitioners contend that the search warrant signed by the Magistrate in this case “clearly limited the Government’s search to the offices of River Birch.” Rec. Doc. 42, p. 2. However, the search was authorized for the entirety of 2000 Belle Chasse Highway, the offices of River Birch. The government has continually maintained that the search warrant allowed for the search of 2000 Belle Chasse Highway, the offices of River Birch. The agents reasonably believed that the entire premises was that of River Birch. If other businesses were in fact located and operating at that location, they were doing so in conjunction and commingled with the offices of River Birch. The search warrant and its attachments authorized the search of 2000 Belle Chasse Highway, which contains the office of River Birch Landfill. Rec. Doc. 3-3, pp. 1-2. Attachment B to the search warrant clearly contemplated that documents, computers and other records related to the investigation as put forth in the affidavit that were found at 2000 Belle Chasse Highway were within the scope of the search warrant and therefore were permissibly seized. Rec. Doc. 3-3, p. 3-4. The search warrant in this case was issued for the search of 2000 Belle Chasse Highway, further described in Attachment A as River Birch’s offices. Hearing Transcript, p. 14. The agents have not disputed that other businesses may have operated from the premises of the office but reasonably believed that such businesses operated within River Birch’s office at 2000 Belle Chasse Highway. Agents encountered no clearly defined evidence, either before the search or during the execution of the search at 2000 Belle Chasse Highway, that would have reasonably alerted them that they were searching beyond the premises of River Birch’s offices. Id. at 37. In fact, the agents reasonably believed that all of 2000 Belle Chasse Highway was commingled with River Birch. Id. at 37-38. Evidence was found and seized throughout the premises of 2000 Belle Chasse Highway

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which belonged to River Birch. All businesses located at 2000 Belle Chasse Highway had a relationship to Fred Heebe and Jim Ward, the principals of River Birch. Id. at 13. As the government noted in its argument at the hearing, United States v. Ofshe, 817 F. 2d 1508, (11th Cir. 1987), is similar to the facts of the instant case. Transcript Hearing, p. 235. In Ofshe, a search warrant was issued for the search of a business located within a building. Id. at 1514. At the time the agents obtained the search warrant, the agents did not know that the building contained several distinct offices of other businesses within it. Id. at 1510. Only after arriving on the premises, did the agents clearly learn that the building was subdivided into separate offices. Id. However, all businesses shared a common receptionist, a common entrance, and a central mail delivery. Id. at 1514. The Court found that the agents followed the authority of the warrant in executing the search and therefore the search was valid. Id. Of the seven offices in the building, the agents searched six of the seven offices and two safes contained within the premises. Id. The agents did not search an office that they were able to determine was separate and distinct from those within the scope of the warrant. Id. The Court further found that an erroneous description of the premises to be searched did not render the warrant invalid, only that the Fourth Amendment required that the search warrant describe the premises in such a way that the searching officer may “with reasonable effort ascertain and search the place intended.” Id. at 1514, citing United States v. Burke, 784 F.2d 1090, 1092 (11th Cir. 1986). Here, the premises of 2000 Belle Chasse Highway were adequately described so as to allow the searching agents to ascertain and identify the place intended to be searched. The agents in this case, unlike those in Ofshe, were not faced with separately delineated premises of several businesses. There was no delineation of these businesses even by the businesses 4

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themselves, as evidenced by the common address utilized by all of the businesses. Hearing Transcript, p. 77. The businesses did not subdivide the premises of the third floor of 2000 Belle Chasse highway into separate and distinct addresses. All of these businesses shared space on the third floor at 2000 Belle Chasse Highway with River Birch and therefore all were within the scope of the search warrant. Here, all businesses shared common owners, common space, common employees, a common entrance, a common address, and common storage areas. Special Agent Bezet maintained that he had not seen the first floor sign listing other businesses on the third floor on the day of the execution of the search warrant. Hearing Transcript, p. 25. However, even if Bezet had read the sign, the scope of the warrant remained the same, the business of River Birch located at 2000 Belle Chasse Highway. Unlike in Ofshe, there was no reasonable basis for the agents to believe that other businesses were operating in separate and distinct premises apart from River Birch, because there was no evidence of such. The existence of other businesses within the offices of River Birch does not limit the scope of the warrant and allows for the search of shared premises of the businesses, which in this case was the entirety of the premises at 2000 Belle Chasse Highway. Furthermore, as shown by the petitioners, the businesses in question here all maintained one address and one office. Hearing Transcript, pp. 11-16. The businesses themselves identified their address as one common to all and therefore defined the premises of 2000 Belle Chasse Highway as common to all of the businesses. Id. Even if the agents had known that other businesses were potentially operating within 2000 Belle Chasse Highway, they were still reasonable in their belief that such business were within River Birch’s office due to the commingling and common attributes shared by all of the businesses, and therefore they acted within the scope of the warrant and would 5

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not have changed procedures in the execution of the search warrant. Id. at 68. The agents had no knowledge, and reasonably would have had no knowledge, that any particular area of the premises was that of a particular business or that they had just physically gone from one business premise to another within 2000 Belle Chasse Highway. Id. at 70. The agents acted within the law when they made an initial determination as to whether a document was potentially privileged. Agent Bezet testified that the reason why a review team was on-site was because the agents were aware that an attorney maintained an office within 2000 Belle Chasse Highway. Id. at 73. Bezet stated that a review team is not utilized in the routine execution of business searches. Id. at 72. To do so would be unreasonable given the man-power and cost prohibitions associated with such an undertaking. Id. at 73. In this case it was fortuitous that a review team was on scene because agents were able to take potentially privileged documents to them to make a determination as to privilege and relevance; and, in fact, approximately 20 documents were taken to the clean team for a review on scene. Id. at 84. The government was aware that Peter Butler maintained an office at 2000 Belle Chasse Highway. However, the agents believed, and still maintain, that the office was not a separate and distinct law office but rather an office of River Birch from which Peter Butler acted as in-house counsel for River Birch and from which he ran a law practice. A letterhead does not establish a separate and distinct premises. Agents instead relied on what they knew from previous visits and from what they learned in the investigation. The agents who participated in the search were familiar, due to their training, in recognizing privileged documents. Hearing Transcript, p. 156. Agents for both the review team and the investigative team followed proper procedure and their training in cursorily reviewing a document 6

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to determine relevancy and then making a determination as to whether it was privileged. Id., 148149. Such a procedure saves time in the execution of the search warrant and protects the business from the seizure of irrelevant documents, thereby attempting to minimize the impact of the search upon the business. Id. at 163-164. Analogous to the agents’ actions in this case is a minimization procedure when monitoring legally intercepted telephone communications pursuant to a Title III interception. As this Court is well aware, in that procedure monitors actively involved in the investigation legally listen initially to all communications to determine if the communication is relevant to the investigation or if it is subject to a privilege such as an attorney-client or a spousal communication. If the monitors determine, after briefly listening to the communication, that it is not relevant or is privileged, then the monitor will no longer listen to the communication. The monitor is legally able to spot-check the communication to make sure the communication is still not relevant or privileged. Even if the communication is relevant and that of an attorney or a spouse, the communication may still be subject to interception if it falls within an exception to privileges such as the crime-fraud exception. In all cases, it is the monitor who makes the determination, not a separate clean team monitor. Here, this is essentially the same review of documents done by the agents during the search. The agents on the scene looked at documents to make an initial determination as to relevancy and then made a determination as to whether the document was potentially privileged. Some documents that may have had communications from an attorney were determined not to be relevant to the

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investigation and were not seized. Hearing Transcript, p. 148.1

Approximately twenty (20)

documents were identified by the agents as being potentially privileged and were then turned over to the review team that was on scene. Id. at 150. For the Court to determine the relevancy of documents taken during the execution of the search warrant, the Court must review the sealed affidavit to understand the relevancy and therefore the scope of the warrant. Such an ex parte review does not entitle review by the petitioners. Such a review is not unprecedented. In the case of In the matter of the Search of 5444 Westheimer Road Suite 1570, Houston Texas, on May 4, 2006, 2006WL 1881370 (S.D. Tex.), the District Court reviewed the sealed affidavit to the search warrant before ruling that the petitioner was not entitled to a return of seized property and that the Court would not enjoin the government from reviewing seized documents and computer images pending a judicial review. Id. at 3-4. Furthermore, the Court cited In re Grand Jury Proceedings, 115 F. 3d 1240 (5th Cir. 1997), in which the Fifth Circuit Court of Appeals recognized that no Fourth Amendment right exists for a sealed affidavit before indictment. Id. at 4. The petitioners in this matter have continually argued that the government went beyond the scope of the warrant and seized evidence irrelevant to the warrant. However, for the Court to understand what is relevant to the investigation, the Court must review the affidavit to the search warrant to understand on what basis probable cause was found by the Magistrate and to understand why certain documents and other evidence were permissibly seized by the government in this

Such an example is the document reviewed by Detective Gordon Hyde. When attorney Kyle Schonekas saw Hyde with a document bearing his office’s letterhead, Schonekas began “screaming at him (Hyde) like he was yelling at a dog.” Hearing Transcript, p. 147. However, it was determined that the document was not relevant and was not seized. Id. 8

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investigation. “The scope of a lawful search is defined by the object of the search and the places in which there is probable cause to believe that it may be found.” Maryland v. Garrison, 480 U.S. 79 (1987). Such a review is legally permissible and does not subject the affidavit to discovery by the petitioners. Al-Dahir v. Northrop Grumman Information Technology, 2008 WL 4470514, E.D. La., 2008. Furthermore, the agents did not act with callous disregard for the constitutional rights of the petitioners. The agents limited the seizure of documents to only those that they believed were relevant to the warrant. As this Court saw during its inspection of the premises of 2000 Belle Chasse Highway, the overwhelming majority of documents located there were not seized by the government because they were not relevant to the search warrant. The agents also were responsible for calling the petitioners’ computer expert to the scene of the search so as to minimize the impact of the search upon their business and to ensure that they would not cause damage to the servers. By doing so, the agents were very considerate and mindful of the impact that they could have caused upon River Birch and took all appropriate steps to avoid such a negative impact. Hearing Transcript, p. 180. Petitioners suffered no irreparable harm due to the seizure of documents by the agents. As was evident upon the Court’s inspection of the office at 2000 Belle Chasse Highway, the business was functioning and the petitioners have not claimed any impact the search had upon its ability to function. Furthermore, as the Court ordered, Hearing Transcript, p. 238, the petitioners now have copies of all documents seized by the government. The petitioners maintain that they are irreparably harmed by the government’s custody of privileged documents. However, all known privileged documents have been returned to the petitioners. Three (3) boxes seized by the government that were marked by the petitioners as 9

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privileged and confidential are in dispute by the parties. The government maintains that documents in those boxes have been reviewed by the AUSA assigned as the review attorney and that he has retained what he has found to not be privileged.2 The contents of the boxes were copied and

returned to the petitioners, yet they make no claims that any individual document retained by the government is privileged. They only continue to maintain that simply because a box is labeled as privileged and confidential then the total contents must be so. To allow for such claims by the subject of a search warrant would have the effect of easily thwarting any search warrant execution and seizure simply because of the label on a box. The government continues to maintain its position that all of the contents of the three boxes retained by the government are not privileged. As the government offered at the hearing, the government will make available the three boxes for an in camera review by the Court. Furthermore, should there be a criminal case in this matter, the petitioners, as defendants, would have the right to move for suppression by the trial court should the government choose to use any such documents at trial. Therefore, the petitioners have an adequate remedy at law for the government’s use of any documents later found to be privileged. The petitioners in this matter have maintained a continuing reliance upon Maryland v. Garrison, 480 U.S. 79. However, a careful analysis and comparison of the facts and law of

Garrison to the facts of this case reveal that the agents in this case had a legally objective and reasonable belief that they were searching within the scope of the warrant. Given the authority to search 2000 Belle Chasse Highway and the lack of separate, distinct and clearly demarcated office
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Several documents were found by AUSA McMahon to be privileged and were returned in a sealed envelope by the undersigned in open court to the petitioners. The documents were returned after the conclusion of the hearing and is not reflected on the transcript. However the government did inform the Court in open court that it was returning the documents to the petitioners. 10

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spaces wholly unrelated to River Birch, as was the case in Garrison, the agents searched the entirety of 2000 Belle Chasse Highway in good faith and seized items they reasonably believed were within the scope of the search warrant. In Garrison, the Supreme Court held that “Just as the discovery of contraband cannot validate a warrant invalid when issued, so it is equally clear that the discovery of facts demonstrating that a valid warrant was unnecessarily broad does not retroactively invalidate the warrant.” Id. at 85. Here, even if the warrant was overbroad by naming only River Birch, the warrant and the search was not invalid due to objective reasonable belief of the agents at the time of the execution of the search warrant that they were searching the offices of River Birch. Objective facts available to the searching agents at time they sought the warrant and the execution of the search, including the physical layout of the third floor of 2000 Belle Chasse Highway, were not such that would have led agents to execute the search of 2000 Belle Chasse Highway in a different manner. Additionally, had the agents been mistaken in their belief that the third floor contained only the offices of River Birch, such a mistake does not invalidate the search. This Court must look to whether the failure of the agents to realize the overbreadth of the warrant was objectively reasonable and understandable. Garrison at 88. Looking at the objective facts known to the agents at the time, such a possible mistake did not invalidate the search. As previously noted by the government in its filings, the Court should take into consideration that despite several attorneys for River Birch and its principals being on-scene, who reviewed the search warrant, as well as numerous employees being present, not one informed the agents that they were searching beyond the scope of the warrant. This is an important fact because it was something noted by the Supreme Court in Garrison as an important step the defendant in that case could have 11

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taken at the time of the execution of the search warrant to alert the agents of different premises. Id. at pp. 81, 88. Moreover, the attorneys for River Birch called and spoke to both the United States Attorneys Office and the Magistrate Judge who signed the search warrant during the execution of the search warrant. Hearing Transcript, pp. 207-213. If the attorneys for River Birch honestly believed at that time that the agents were going beyond the scope of the warrant, then they should have informed the agents at that time. They failed to do so because even they did not believe that the agents were exceeding the scope of the warrant at that time. The attorneys cannot claim they did not know of the other entities because they represented another entity in an unrelated matter. Hearing Transcript, p. 156. Without this information, and without seeing any significant

independent information of the actual existence of the other separate and distinct offices, the agents justifiably maintained a reasonable belief that they were searching within the scope of the warrant. Sufficient probability, not certainty, defines the reasonableness of the agents in their belief they were searching within the scope of the warrant. Garrison at 87. The agents had sufficient and reasonable belief that they were searching in accord with the warrant when searching the entirety of 2000 Belle Chasse Highway. To make an informed decision in this case, the Court must not confuse businesses with premises. The search warrant allowed for the search of the premises of 2000 Belle Chasse Highway, further described as the offices of River Birch. The existence of other businesses within 2000 Belle Chasse Highway did not invalidate the search warrant and the agents acted in accordance with the scope of the warrant and seized evidence related to the probable cause finding by the Magistrate Judge. As stated above, the government has never contested that records of other businesses were located within the premises. The existence of these records, which were located throughout the 12

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premises, did not establish a separate and distinct business premises and did not limit the scope of the warrant because the warrant allowed for the search of all of 2000 Belle Chasse Highway. CONCLUSION For the foregoing reasons, and for reasons previously put forth by the government, the government requests this Court to reconsider its original Order and find that agents did not exhibit any callous disregard for rights of the petitioners nor cause any irreparable harm and that they acted reasonably and within the scope of the warrant. Respectfully submitted, JIM LETTEN UNITED STATES ATTORNEY

s/Gregory M. Kennedy GREGORY M. KENNEDY Assistant United States Attorney Louisiana Bar Roll Number 20896 Hale Boggs Federal Building 500 Poydras Street, Second Floor New Orleans, Louisiana 70130 Telephone: (504) 680-3102 Email: Greg.Kennedy@usdoj.gov CERTIFICATE OF SERVICE I hereby certify that on March 21, 2011, I electronically filed the foregoing with the Clerk of Court by using the CM/ECF system which will send a notice of electronic filing to all counsel of record. s/Gregory M. Kennedy GREGORY M. KENNEDY Assistant United States Attorney

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