Appeals Court: FBI's Safe-Deposit Box Seizures Violated Fourth Amendment

Cases like this are exactly why the Fourth Amendment was adopted in the first place, wrote federal Judge Milan D. Smith Jr.

The FBI violated the Fourth Amendment when its agents rifled through the contents of more than 700 safe-deposit boxes in the aftermath of a March 2021 raid, a panel of federal appeals court judges ruled unanimously on Tuesday.

In doing so, the judges at the 9th Circuit Court of Appeals confirmed what innocent victims of the raid and their attorneys have been arguing for years: that the FBI overstepped the bounds of its warrant issued in the case and failed to follow proper protocol when federal agents cracked open safe-deposit boxes, ran the contents past drug-sniffing dogs, and tried to seize some of the money and other valuables found in the boxes.

The 9th Circuit's ruling pivots on a detail of the case that Reason first highlighted more than a year ago: the existence of so-called "supplemental instructions" for the handling of the safe-deposit boxes seized at U.S. Private Vaults in Beverly Hills.

The warrant authorizing the raid expressly forbade federal agents from engaging in a "criminal search or seizure of the contents of the safety [sic] deposit boxes." Under typical FBI procedure, the boxes should have been taken into custody until they could be returned to their rightful owners. But those "supplemental instructions" drawn up by the special agent in charge of the operation told agents to be on the lookout for cash stored inside the safe-deposit boxes and to note "anything which suggests the cash may be criminal proceeds."

It is "particularly troubling," wrote Judge Milan D. Smith Jr. in Tuesday's ruling, that the government was unable to provide any "limiting principle to how far a hypothetical 'inventory search' conducted pursuant to customized instructions can go."

Elsewhere in the ruling, Smith theorized that if a government agency were "given the discretion to create customized inventory policies" for "each car it impounds and each person detained, the ensuing search stops looking like an 'inventory' meant to simply protect property and looks more like a criminal investigation of that particular car or person, i.e, more like a 'ruse.'"

"If there remained any doubt whether the government conducted a 'criminal search or seizure,' that 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 investigations and begin new ones," Smith wrote.

"The Ninth Circuit today held that the FBI violated the Fourth Amendment rights of hundreds of people by breaking into their safe deposit boxes to try to forfeit everything worth taking," Robert Frommer, an attorney with the Institute for Justice, a libertarian legal nonprofit that represented some of the plaintiffs in the case, tells Reason. He said the case should bring renewed attention to a congressional proposal to reform federal forfeiture laws in order to "stop federal cops from continuing to act like robbers."

A spokesperson for the FBI declined to comment on the ruling and referred the matter to the U.S. Attorney's Office, which did not respond to Reason's request for comment.

The FBI's ruse in the U.S. Private Vault's case seemed to unravel after the district court in August 2021 made public certain details of the raid's planning stages that the FBI had tried to keep hidden. Those documents, including depositions with agents involved in plotting the raid, revealed that the FBI had planned to use civil forfeiture proceedings against the contents of the safe-deposit boxes but did not provide that information to the magistrate judge who issued the warrant for the raid. (Full disclosure: Reason submitted an amicus brief in the case arguing that the depositions and other documents should be made public.)

District Court Judge R. Gary Klausner later ruled that "there can be no question that the government expected, or even hoped, to find criminal evidence during its inventory." However, Klausner upheld the FBI's conduct as being within the bounds of the Fourth Amendment because the improper conduct was not the sole reason why the FBI opened the safe-deposit boxes and searched through their contents.

The Ninth Circuit said Tuesday that Klausner was wrong to reach that conclusion and remanded the case back to the district court.

In the ruling, Smith wrote that the arrangement called to mind the various "writs of assistance" used by the British authorities to conduct nearly limitless searches of private property prior to the Revolutionary War.

"It was those very abuses of power, after all, that led to the adoption of the Fourth Amendment in the first place," Smith concluded.

And it is cases like this one that should remind all Americans why the Fourth Amendment still matters today.