State v. Ghim , 360 Or. 425 ( 2016 )

No. 65 October 13, 2016 425
IN THE SUPREME COURT OF THE
STATE OF OREGON
STATE OF OREGON,
Respondent on Review,
v.
DENNY D. GHIM,
Petitioner on Review.
(CC C111491CR; CA A152065; SC S063021)
On appeal from the Court of Appeals.*
Argued and submitted November 10, 2015.
Morgen E. Daniels, Salem, argued the cause and filed
the briefs for petitioner on review. Also on the briefs was
Ernest G. Lannet, Chief Defender, Office of Public Defense
Services.
Rolf C. Moan, Assistant Attorney General, Salem, argued
the cause and filed the brief for respondent on review. Also on
the brief were Ellen F. Rosenblum, Attorney General, Paul
L. Smith, Deputy Solicitor General, and Robert M. Wilsey,
Assistant Attorney General.
Julia E. Markley, Perkins Coie LLP, Portland, filed the
brief for amicus curiae American Civil Liberties Union of
Oregon, Inc. Also on the brief was Kristina J. Holm.
Before Balmer, Chief Justice, and Kistler, Walters,
Landau, Baldwin, Brewer, and Nakamoto, Justices.**
KISTLER, J.
The decision of the Court of Appeals and the judgment of
the circuit court are affirmed.
______________
**  On appeal from Washington County Circuit Court, Gayle A. Nachtigal,
Judge. 267 Or App 435, 340 P3d 753 (2014).
**  Linder, J., retired December 31, 2015, and did not participate in the deci-
sion of this case.
426 State v. Ghim
Case Summary: Defendant moved to suppress bank records that the
Department of Consumer and Business Services (DCBS) had obtained, as a
result of an administrative subpoena, during the course of its investigation into
defendant’s possible sale of unregistered securities. The trial court denied defen-
dant’s motion, and the Court of Appeals affirmed. Held: The court assumed that
defendant had a protected privacy interest in his wife’s bank records. However,
DCBS’s administrative subpoena did not violate defendant’s rights under
Article I, Section 9, because: (1) the subpoena was issued subject to a properly
authorized statutory scheme, and (2) the subpoena was supported by information
independent of DCBS’ initial, improperly served, subpoena, and thus did not war-
rant suppression under the fruit of the poisonous tree doctrine.
The decision of the Court of Appeals and the judgment of the circuit court
are affirmed.
Cite as 360 Or 425 (2016) 427
KISTLER, J.
The question in this case is whether an agency’s use
of an administrative subpoena to obtain defendant’s wife’s
bank records violated Article I, section 9, of the Oregon
Constitution. The trial court denied defendant’s motion to
suppress evidence that the agency uncovered as a result of its
subpoena, and the Court of Appeals affirmed. State v. Ghim,
267 Or App 435, 340 P3d 753 (2014). Relying on State v.
Johnson, 340 Or 319, 131 P3d 173 (2006), the Court of Appeals
held that defendant had no constitutionally protected privacy
interest in the bank records. It followed that the agency’s use
of an administrative subpoena to obtain those records did not
violate Article I, section 9. We allowed defendant’s petition for
review and now affirm, on different grounds, the trial court’s
judgment and the Court of Appeals decision.
I. FACTS
The state charged defendant and his wife with 17
counts of criminal mistreatment, first-degree theft, and
aggravated first-degree theft. Midway through trial, defen-
dant’s wife filed a motion in limine to exclude copies of her
bank records, which the Department of Consumer and
Business Services (DCBS) had obtained by administrative
subpoena, from being admitted into evidence. Defendant
joined in that motion and, throughout the trial, adopted his
wife’s arguments on that issue.1 In summarizing the facts,
we first describe the evidence brought out at the hearing on
that motion—essentially, the circumstances that prompted
DCBS to subpoena the wife’s bank records and how the infor-
mation that DCBS discovered as a result of its investigation
became part of the criminal proceeding against defendant
and his wife. We then describe the motion in limine, the
arguments that the parties made regarding the motion, the
trial court’s rulings, and the Court of Appeals decision.
A.  DCBS investigation
Ruth Johnson is an investigator for DCBS. In
January 2009, Johnson received a call from Von Renchler,
1
Only defendant is a party to this appeal. Because he joined in his wife’s
motion and arguments on this issue, we refer in this opinion to defendant’s wife’s
motion and related arguments as defendant’s motion and arguments.
428 State v. Ghim
who had purchased investment properties from defendant
and his wife. Von Renchler told Johnson that he and his wife
were supposed to be receiving payments on their invest-
ment. However, they had received no payments. According
to Von Renchler, defendant’s wife had said that payments
were being sent to the Von Renchlers’ bank account by wire
transfer, but no funds were transferred to the account.
Afterwards, defendant’s wife gave the Von Renchlers a
check, which her bank refused to honor. Von Renchler told
Johnson that he and his wife felt as if defendant and his wife
were giving them “the runaround.”
After speaking with Von Renchler, Johnson became
concerned that defendant and his wife were selling unreg-
istered securities, which DCBS is charged with regulat-
ing. Johnson arranged to meet with the Von Renchlers
and asked them to bring their records, including copies of
checks that they had written to or received from defendant’s
wife, so that Johnson could begin her investigation. At the
meeting, the Von Renchlers discussed their investment
with defendant and his wife and gave Johnson copies of the
checks that defendant’s wife had sent them. Johnson told
the Von Renchlers that she would “subpoena [defendant’s
wife’s] bank records to take a look to see what happened to
their money, to see if their money had gone where they were
told it was going to go.” She explained that, if the money had
gone where it was supposed to go, then she would speak with
defendant and his wife, talk to them about what they were
doing, and deal with any issues administratively.
Pursuant to ORS 59.315 and ORS 192.596, Johnson
issued three subpoenas to the banks on which defendant’s
wife had written checks to the Von Renchlers.2 Johnson sent
copies of the subpoenas by certified mail to defendant’s wife.
In examining the records that she received in response to
the subpoenas, Johnson saw “large deposits coming into
[defendant’s wife’s bank] account,” which allowed Johnson
2
As discussed below, ORS 59.315(1) authorizes DCBS to subpoena wit-
nesses and to require the production of books, papers, and other documents
“[f]or the purpose of an investigation * * * under the Oregon Securities Law.” ORS
192.596(1) authorizes financial institutions to disclose their customers’ finan-
cial records to state agencies pursuant to a statutorily authorized administrative
subpoena.
Cite as 360 Or 425 (2016) 429
“to identify [other] individuals that [she] believed were pos-
sibly making investments with [defendant and his wife].”
Johnson then spoke with the persons whom she had iden-
tified from the bank records. She also spoke to property
owners in Washington, where the investment properties
were supposedly located, and she collected information from
government agencies to determine whether the investment
properties existed. Finally, in reviewing the bank records
that she received, Johnson came across questionable finan-
cial transactions involving defendant’s mother, who was the
subject of a guardianship.
During the year in which Johnson pursued her inves-
tigation for DCBS, she did not contact the Von Renchlers’
attorney. When asked why she had not done so, she explained
that the Von Renchlers’ attorney was “dealing with a bad
check [from defendant’s wife], with trying to get payment.”
In her view, that matter “had nothing to do with what [she]
was looking at,” which was “whether we were having a sale of
an unlicensed, unregistered security in the State of Oregon.”
In March 2010, more than a year after Johnson
began her investigation, the Von Renchlers asked Johnson if
telling the police about the bad check they had received from
defendant’s wife would impede her investigation. Johnson
said that it would not, and she added that the Von Renchlers
could mention her name if they filed a police report. They
did, and an officer contacted Johnson regarding her investi-
gation. Before then, Johnson had not had any contact with
any law enforcement agency.
B.  Defendant’s motion in limine
As noted, the state charged defendant and his wife
with 17 counts of criminal mistreatment, first-degree theft, and
aggravated first-degree theft.3 The first day of trial, the state
called 11 witnesses. Most of those witnesses were persons to
3
Before trial, the Von Renchlers recovered their investment from defendant
and his wife. Although the Von Renchlers testified at trial, their transactions with
defendant and his wife did not give rise to any criminal charge. Rather, defen-
dant and his wife’s transactions with other investors gave rise to the theft and
aggravated theft charges, and defendant and his wife’s handling of his mother’s
finances gave rise to the criminal mistreatment charges. As noted below, the
trial court found defendant guilty of two of the 17 counts. The trial court found
defendant’s wife guilty of all 17 counts. Only defendant’s appeal is before us.
430 State v. Ghim
whom defendant and his wife had sold investment properties.
We assume, as the parties do, that, except for the Von Renchlers,
those witnesses were persons whom Johnson had identified as a
result of reviewing the subpoenaed bank records.
The second day of trial, defendant filed a document
captioned “motion in limine,” in which he asked the court “to
exclude from evidence bank records of defendant[’s wife] as
having been seized without proper court process.” Defendant
contended that, “[e]ven if properly obtained under state
administrative process, * * * that information [may not] be
admitted against defendant [in] the criminal proceeding
given privacy protections under Oregon statutory and con-
stitutional provisions.” Although defendant asked the court
to keep the bank records from being admitted, he did not
ask the court to strike the testimony of the 11 witnesses
who had testified the day before, nor did he ask the court to
strike any exhibit offered in connection with that testimony.
The parties addressed defendant’s motion in limine
at three separate points during the trial, and the issues
evolved as the trial progressed. The parties first discussed
the motion shortly after it was filed. That discussion was
fairly cursory. The prosecutor explained that the records
had been obtained pursuant to statutorily authorized
administrative subpoenas and that he was not aware of
any limitation on obtaining bank records that way. Relying
on Canadian authority, defendant responded that he had
a constitutionally protected privacy interest in his wife’s
bank records. He reasoned that an administrative subpoena
lacked the procedural and substantive protections asso-
ciated with a search warrant. He acknowledged, however,
that the victims could choose to disclose their bank records
and that he and his wife “los[t] any privacy protection when
they send a check out to somebody.”
The trial court did not find defendant’s Canadian
authority persuasive, and it reasoned that, even if DCBS
could not issue an administrative subpoena for the banks’
records, the prosecutor could subpoena the custodians of the
records to appear as witnesses at trial and bring the records
with them. Based on that reasoning, the court tentatively
denied defendant’s motion in limine, and the trial continued.
Cite as 360 Or 425 (2016) 431
At the end of the second day of trial, the parties
returned to the motion in limine. The prosecutor advised
the court that, on examining the subpoenas that DCBS had
issued, he realized that Johnson had served the subpoenas
on defendant’s wife by certified mail rather than personally,
as the bank records statutes require. See ORS 192.596(2)
(authoring banks to disclose a customer’s records in response
to administrative subpoenas but requiring personal service
on the customer). The prosecutor also noted that the motion
in limine was, in effect, a motion to suppress. He argued
that, if defendant had filed a motion to suppress before
trial, as other statutes required, the state could have reis-
sued the subpoenas and served them properly. The prose-
cutor argued that the court could simply deny defendant’s
motion in limine as untimely. In lieu of doing so, however,
the prosecutor suggested continuing the trial and allowing
the state to issue a second set of subpoenas for the bank
records.
The trial court agreed that defendant’s motion in
limine was effectively an untimely motion to suppress. It also
agreed that, if defendant had filed a timely pretrial suppres-
sion motion, the state could have cured any service error.
Rather than deny defendant’s motion as untimely, the court
continued the trial for a month and gave the state the oppor-
tunity to subpoena the records a second time. The prosecu-
tor noted that he expected that defendant would argue that
the second set of subpoenas was the fruit of the poisonous
tree, but he asserted that the state inevitably would have
discovered the records if the service error had been identi-
fied earlier. The trial court agreed.
Defense counsel suggested that the state could get
the custodians of the bank records to recertify the banks
records, “but [proposed that the state should] do it through
a court subpoena so they [the custodians] don’t have to
recopy everything.” After suggesting a second time that
the prosecutor could issue a subpoena duces tecum for the
records that DCBS previously had obtained, defense counsel
explained, “I’m not really concerned about the form of this
subpoena here because my argument is going to be that it
really doesn’t matter, it’s already been tainted.”
432 State v. Ghim
The court continued the case for approximately a
month, and the prosecutor issued subpoenas duces tecum
pursuant to ORS 136.583 on the banks in which defendant
and his wife held accounts.4 The subpoenas were personally
served on defendant and his wife, and the custodians pro-
duced the requested bank records. Those records consisted of
account applications, monthly account statements, notices of
overdrafts, copies of checks written to third parties, deposit
slips, and copies of certified checks deposited in defendant
and his wife’s bank accounts.5
When the trial resumed, the parties returned to
defendant’s motion a third time. By this time, defendant
had filed a memorandum in support of the motion in limine,
which he now characterized as a motion to suppress. The
memorandum argued that, under the Oregon Constitution,
defendant and his wife had a constitutionally protected pri-
vacy interest in her bank records and that “[t]hese subpoe-
nas from the State amounted to search warrants without
probable cause.” In arguing that motion, defendant con-
trasted health care records with bank records. He contended
that, even though medical patients lack a constitutionally
protected privacy interest in their health care records, bank
records are different. In defendant’s view, the account holder
owns the bank records, which by tradition, policy, and stat-
ute have been kept “secret, protected.” The state responded
that, as a matter of property law, a customer has no own-
ership interest in bank records. Rather, the bank creates
and maintains the records so that it can administer its cus-
tomers’ accounts accurately. The trial court agreed with
the state, although it noted that the parties appeared to
acknowledge that Johnson had not followed the statutorily
required procedure for subpoenaing the bank records and
that the state had sought to cure that error by subpoenaing
the records a second time.
4
Both the district attorney and the defense counsel may subpoena witnesses
to appear at a criminal trial. See ORS 136.565 (district attorney); ORS 136.567
(defense counsel). Those subpoenas may require the witness either to bring
books, papers and documents with them to trial or to produce those documents
before trial. ORS 136.580; see also ORS 136.583 (authorizing production of out-
of-state documents if certain requirements are met).
5
Defendant does not contend that the bank records that the custodians
produced differed in any material way from the records that they produced in
response to DCBS’s administrative subpoenas.
Cite as 360 Or 425 (2016) 433
The state called Johnson, who confirmed that she
had not served the initial administrative subpoenas person-
ally on defendant’s wife but had sent them instead by certi-
fied mail. Johnson also testified, however, that defendant’s
wife had acknowledged receipt of the subpoenas. Finally,
Johnson testified that, if she had been aware of the service
error, she would have cured the problem by reissuing the
subpoenas. The prosecutor, for his part, represented that, in
the course of pursuing the report that the Von Renchlers had
filed with the police, the district attorney’s office would have
subpoenaed the bank records if Johnson had not already
done so.
The trial court recognized that, under ORS
192.606(5), “[e]vidence obtained in violation of ORS 192.583
to 192.607 [the bank records statutes] is inadmissible in
any proceeding.” The court reasoned that, even though
DCBS had not served the administrative subpoenas per-
sonally on defendant’s wife as ORS 192.596(2) requires
and even though ORS 192.606(5) prohibits the admission
of bank records obtained in violation of the bank records
statutes, ORS 192.606(5) did not prohibit DCBS or the
state from serving a second set of subpoenas on the banks
to obtain the same records. Regarding defendant’s fruit-of-
the-poisonous-tree argument, the trial court agreed with
the state that the Von Renchlers’ complaints to both DCBS
and the police had led to those agencies’ efforts to investi-
gate defendant and his wife’s sales of investment properties,
that the Von Renchlers’ complaints were independent of any
information that was later learned as a result of Johnson’s
administrative subpoenas, and that the bank records inev-
itably would have been discovered.6 The court accordingly
admitted the records. After considering all the evidence, the
6
In reaching that conclusion, the trial court assumed that, even if the bank
records were inadmissible under ORS 192.606(5), that statute did not preclude
admitting the testimony of the witnesses who had been discovered as a result of
the subpoenaed bank records. Cf. United States v. Ceccolini, 435 US 268, 98 S Ct
1054, 55 L Ed 2d 268 (1978) (holding that, for Fourth Amendment purposes, tes-
timony offered by witnesses discovered as result of illegal search may be attenu-
ated from that illegality). Defendant has not specifically challenged that assump-
tion, although the second memorandum that he filed in support of the motion
in limine asserted generally that all evidence derived from Johnson’s subpoena
should be excluded.
434 State v. Ghim
trial court found defendant guilty of two of the 17 counts and
not guilty of the remaining 15 counts.7
C.  Defendant’s appeal
Before the Court of Appeals, defendant argued two
propositions. First, he contended that, under Article I, sec-
tion 9, he had a protected privacy interest in his wife’s bank
records. Second, he argued that, even though the legisla-
ture had authorized government agencies to obtain bank
records, the resulting statute was unconstitutional “without
either a warrant or probable cause and a warrant excep-
tion.” In arguing the latter point, defendant urged the Court
of Appeals to follow a Washington Supreme Court decision,
which had held that the Washington Constitution prohibited
an agency with both regulatory and criminal investigative
authority from issuing a subpoena that was not subject to
review by a neutral magistrate. See State v. Miles, 160 Wash
2d 236, 247-49, 156 P3d 864 (2007).8 It followed, defendant
contended, that DCBS’s use of an administrative subpoena
to obtain his wife’s bank records violated Article I, section 9,
of the Oregon Constitution.9
7
The trial court found defendant guilty of first-degree theft from the
Woos (count 16) and aggravated first-degree theft from Kang (count 17). Both
the Woos and Kang testified the first day of trial, before defendant filed the
motion in limine to exclude his wife’s bank records. As noted, defendant did
not move to strike either the Woos’ or Kang’s testimony. The state, however,
has not argued that, in light of those victims’ unchallenged testimony, any
error in admitting the bank records was harmless, and we do not consider that
issue.
8
In Miles, a state agency investigating a securities violation subpoenaed a
bank for its customer’s records. The agency did not notify the customer of the
subpoena, and it directed the bank not to tell the customer that it had subpoe-
naed the records. 160 Wash 2d at 241. The agency also asked the bank to respond
quickly to the subpoena because the statute of limitations for prosecuting theft
was about to expire. Id. The court held that the Washington Constitution required
the intervention of a neutral magistrate, especially when an agency is investigat-
ing criminal charges. Id. at 247-49.
9
At one point in his brief, defendant recognized that the bank records stat-
utes “correlate with the bounds of legal and social norms relating to bank records
in Oregon” and thus mark the extent of the privacy that Article I, section 9, pro-
tects. And he acknowledged that “an administrative agency may gain access to
such records in the course of enforcing the rules that the agency is charged with
enforcing.” Although defendant’s argument was not completely clear, he appears
to have concluded, in reliance on the Washington decision in Miles, that an
administrative subpoena issued without the supervision of a neutral magistrate
violated Article I, section 9.
Cite as 360 Or 425 (2016) 435
In the Court of Appeals, defendant did not raise
three issues regarding the second set of subpoenas. First,
he did not argue that the trial court erred in ruling that
the state could issue a second set of subpoenas to cure the
statutory service problem with the first set of subpoenas.
See Ghim, 267 Or App at 438 n 3 (so noting). Specifically,
defendant did not argue that either the statutory exclusion
provision in ORS 192.606(5) or Article I, section 9, prohib-
ited the state from serving a second set of subpoenas on the
banks once it learned that DCBS had failed to serve the first
set of subpoenas in compliance with ORS 192.596. Second,
defendant did not argue that the second set of subpoenas
would be valid only if DCBS reissued them; that is, he did
not argue that the second set of subpoenas violated Article I,
section 9, because the prosecutor issued them under ORS
136.583 rather than DCBS reissuing them under ORS
59.315(1). Finally, he did not challenge the trial court’s rul-
ing that the second set of subpoenas was not the product of
the first set of subpoenas. Rather, he took the position in the
Court of Appeals that the use of anything less than a war-
rant or an exception to the warrant requirement to obtain
his wife’s bank records violated Article I, section 9.
As noted, the Court of Appeals resolved defendant’s
argument by holding that a customer has no constitutionally
protected privacy interest in his or her bank records. 267 Or
App at 440-41. It recognized, as defendant argued, that the
legislature has required financial institutions to keep their
customers’ information private, subject to certain excep-
tions. Id. at 441-42 (discussing ORS chapter 192). The court
explained, however, that the administrative subpoenas that
DCBS issued came within one of those exceptions, and it
declined to find in Article I, section 9, a greater degree of
privacy than the legislature had granted in the bank record
statutes. Id. We allowed defendant’s petition for review to
consider whether DCBS’s use of administrative subpoenas
to obtain his wife’s bank records violated Article I, section 9.
II.  ARTICLE I, SECTION 9
On review, defendant raises two related but sepa-
rate issues. The first is whether he has a constitutionally
protected privacy interest in records that the bank created
436 State v. Ghim
and maintained for its own use. The second is whether, if he
has a protected privacy interest in those records, the admin-
istrative subpoenas that DCBS issued were an unreason-
able search within the meaning of Article I, section 9. We
begin with the first issue.
A.  Protected privacy interest
Defendant argues that the fact that the bank cre-
ated and maintained its records for its own use does not
necessarily mean he has no protected privacy interest in
those records. In his view, both the existence and the extent
of his privacy interest turn on three factors: the nature of
the information that the bank collected; “the context of the
disclosure of the information—including the relationship
between the person claiming the privacy interest and the
third party that receives the information”; and “the context
of the conduct by which the state accessed the information.”
Put differently, defendant contends that a person can have a
protected privacy interest in information held by third par-
ties, the extent of which will vary depending on the contex-
tual factors he identifies.
On that issue, the state does not argue on review
that the mere fact that the bank created and maintained
its records for its own use necessarily means that defendant
has no protected privacy interest in those records. Rather,
it recognizes that the question is a contextual one, although
it argues that, in this case, context and history lead to only
one conclusion: customers have no constitutionally protected
privacy interest in their bank records. It necessarily follows,
the state concludes, that any required disclosure of those
records did not constitute a search and that, as a result, the
subpoenas issued by DCBS and the prosecutor did not vio-
late Article I, section 9.
The question whether a person has a constitution-
ally protected privacy interest in information that a third
party collects and maintains for its own use has arisen with
increasing frequency, driven in large part by the ability that
computers provide to store, aggregate, and analyze vast
amounts of data. See, e.g., United States v. Jones, 565 US ___,
132 S Ct 945, 181 L Ed 2d 911 (2012) (Sotomayor, J., concur-
ring) (questioning whether, in light of those technological
Cite as 360 Or 425 (2016) 437
changes, the Court should revisit its Fourth Amendment
cases and recognize a constitutionally protected privacy
interest in bank and phone records); Jane Bambauer, Other
People’s Papers, 94 Tex L Rev 205 (2015) (reasoning that
the type of information and the use that government makes
of it bear on the constitutionality of government action);
Christopher Slobogin, Making the Most of United States v.
Jones in a Surveillance Society: A Statutory Implementation
of Mosaic Theory, 8 Duke J Const L & Pub Pol’y 1 (2012)
(reasoning that justification for searches of third-party data
should be roughly proportional to the intrusiveness of the
search and recognizing the potential legitimacy of legisla-
tive justification).
In this case, the issue arises in the context of records
that a bank maintains of its customers’ transactions with
third parties. Similar issues can arise regarding the phone
numbers a person called, cell phone location, and Internet
search histories, to name only a few. And the answer to the
question whether a person has a constitutionally protected
privacy interest in information held by third parties can
vary, according to the parties’ arguments, depending on
contractual and other restrictions that apply to the third
party’s use and dissemination of the information, gen-
eral societal norms, and the level of generality with which
the government analyzes the data. See State v. Howard/
Dawson, 342 Or 635, 640-41, 157 P3d 1189 (2007) (relying
on the absence of any property interest or subconstitutional
right or relationship that restricted a garbage company’s
handling of trash once the company collected it in holding
that the defendants had no protected privacy interest under
Article I, section 9).
The record in this case sheds little light on those
issues. For example, although the state and defendant ask
us to look to the Internet to find the terms of the agreements
that governed the banks’ obligation to keep his wife’s finan-
cial records confidential, those agreements are not part of
the record. The record does not disclose the extent, if any,
to which defendant’s wife agreed to permit the disclosure of
her financial information to third parties for various pur-
poses and thus may have diminished any right to privacy
she might claim. Similarly, there is no testimony regarding
438 State v. Ghim
the customary use of the information held by the bank or
the extent to which the bank must disclose financial trans-
actions to federal and state regulators charged with ensur-
ing the solvency of the bank, tax collection, or compliance
with limitations on monetary transfers. Accordingly, to the
extent that the state argues that defendant had no protected
privacy interest in the bank records because those records
were subject to state and federal regulatory review, this
record does not disclose the extent, if any, to which regula-
tory review might diminish any right to privacy that defen-
dant had in his wife’s records.
If the right to privacy under Article I, section 9,
presents a contextual question, as the parties argue, this
record contains little evidence that bears on that issue. All
that we can tell from this record is that the Oregon legis-
lature has required financial institutions to keep custom-
ers’ financial transactions confidential, subject to certain
exceptions. See ORS 192.583 to 192.607. One of those excep-
tions is the disclosure of customers’ financial information in
response to administrative subpoenas. ORS 192.596. Given
the limited record before us, we conclude that this case pro-
vides a poor vehicle for deciding whether defendant had a
protected privacy interest in his wife’s bank records.10 We
accordingly assume that defendant has a protected privacy
interest and turn to the second issue that defendant has
raised, whether the administrative subpoenas that DCBS
issued to obtain those records for its civil investigation com-
plied with Article I, section 9.
B.  Administrative subpoenas
In the trial court, defendant argued that DCBS’s
use of an administrative subpoena to obtain his wife’s bank
records violated his Article I, section 9, rights. In his view,
only a warrant or an exception to the warrant requirement,
coupled with probable cause, would justify requiring the
bank to produce his wife’s records. He took the same position
in the Court of Appeals. In this court, defendant has shifted
his position. He now argues that, because the subpoena was
10
We accordingly do not reach defendant’s claim that our decision in Johnson,
340 Or at 336, either has no application in the context of bank records or should
be reconsidered. We express no opinion on that issue.
Cite as 360 Or 425 (2016) 439
a search, “it was subject to the reasonableness requirement
of Article I, section 9.” He contends that “[a] search is rea-
sonable if it is supported by a warrant, justified by an excep-
tion to the warrant requirement, or conducted pursuant to
a properly authorized administrative scheme.” Defendant
notes that DCBS neither obtained a warrant nor sought
to come within an exception to the warrant requirement.
He also contends that DCBS’s subpoenas were not issued
pursuant to a properly authorized administrative scheme,
apparently on the ground that DCBS failed to “comply with
the statute that sets forth the subpoena process required to
access bank records.”
To the extent that defendant argues on review that
only a warrant or an exception to a warrant requirement
will justify requiring a third party to turn over another
person’s records, that argument is difficult to square with
this court’s cases. This court has long recognized that an
administrative subpoena issued as part of a civil investiga-
tion will comply with Article I, section 9, as long as the sub-
poena is “relevant to a lawful investigatory purpose and * * *
no broader than the needs of the particular investigation.”
Pope & Talbot, Inc. v. State Tax Com., 216 Or 605, 614-15,
340 P2d 960 (1959);11 see Dept. of Rev. v. Universal Foods
Corp., 311 Or 537, 545-46 n 6, 815 P2d 1237 (1991) (reaffirm-
ing that, “where certain limits on breadth and relevancy are
satisfied, neither the Fourth Amendment nor Article I, sec-
tion 9, of the Oregon Constitution [is] offended” by a statuto-
rily authorized administrative subpoena); Southern Oregon
Broadcasting Co. v. Dept. of Revenue, 287 Or 35, 40, 597
P2d 795 (1979) (upholding subpoena for taxpayer’s records
11
In Pope & Talbot, the court quoted the following passage to describe the
limits that the state and federal constitutions place on an agency’s use of an
investigatory subpoena:
“ ‘Of course a governmental investigation into corporate matters may be
of such a sweeping nature and so unrelated to the matter properly under
inquiry as to exceed the investigatory power. But it is sufficient if the inquiry
is within the authority of the agency, the demand not too indefinite and the
information sought is reasonably relevant. The gist of the protection is in
the requirement, expressed in terms, that the disclosure sought shall not be
unreasonable.’ ”
Pope & Talbot, Inc., 216 Or at 616 (quoting United States v. Morton Salt Co., 338
US 632, 652-53, 70 S Ct 357, 94 L Ed 401 (1950)) (citations and internal quotation
marks omitted).
440 State v. Ghim
to determine whether income method for valuing its worth
applied).
Justice Linde explained, in a related context, the
premise that underlies those decisions:
“Besides the historic objection to general warrants, the
function of the guarantee [found in Article I, section 9,] is
to subordinate the power of executive officers over the peo-
ple and their houses, papers, and effects to legal controls
beyond the executive branch itself. One measure of control
is found in a carefully limited judicial warrant; another is
found in legislative enactments defining and limiting offi-
cial authority. Without these controls, executive officers
could define and exert their own authority to search and to
seize however widely they thought necessary.”
State v. Weist, 302 Or 370, 376-77, 730 P2d 26 (1986). As
Weist teaches and Pope & Talbot holds, “legislative enact-
ments defining and limiting official authority” can authorize
an administrative subpoena to obtain evidence for a civil
investigation that otherwise might infringe a constitution-
ally protected privacy interest.12 Indeed, if defendant were
correct that customers have a protected privacy interest
in their bank records that only a search warrant based on
probable cause can reach, the common practice of using a
legislatively authorized subpoena in civil cases to obtain a
party’s bank records would be called into question.13
12
Some courts have reasoned that a subpoena duces tecum is less intru-
sive than a search warrant. As the district court explained in Stanford Daily v.
Zurcher, 353 F Supp 124 (ND Cal 1972):
“[a] subpoena duces tecum * * * is much less intrusive than a search warrant:
the police do not go rummaging through one’s home, office, or desk if armed
only with a subpoena. And, perhaps equally important, there is no opportunity
to challenge the search warrant [before it is executed], whereas one can always
move to quash the subpoena before producing the sought-after materials.”
Id. at 130. The district court accordingly held that the state needed to use a sub-
poena rather than a warrant to obtain a third party’s papers. Id. The Supreme
Court reversed, reasoning that the Fourth Amendment does not prefer a sub-
poena over a warrant. Zurcher v. Stanford Daily, 436 US 547, 98 S Ct 1970, 56 L
Ed 2d 525 (1978).
13
The courts have recognized that subpoenas constitute sufficient state
action to implicate any Article I, section 9, and Fourth Amendment interests
that a party may have in the requested records. See Wayne R. LaFave, 2 Search
and Seizure § 4.13 (5th ed 2012) (discussing government use of subpoenas in a
criminal context). And, as the court explained in Weist, Article I, section 9, is not
limited to criminal prosecutions but applies to civil actions as well. 302 Or at 376.
Cite as 360 Or 425 (2016) 441
On review, defendant appears to recognize that the
position that he took below is too broad. He now acknowledges
that a warrant or an exception to the warrant requirement is
not the only permissible means to obtain bank records. That
is, he recognizes that a subpoena will also be “reasonable”
for the purposes of Article I, section 9, if it is issued pursuant
to a properly authorized administrative scheme. However, he
asserts that DCBS did not issue its subpoenas pursuant to
such a scheme. Additionally and perhaps alternatively, he
argues that both sets of subpoenas failed to comply with the
bank records statutes or that the second set of subpoenas
was the fruit of the first set, which was tainted.
We begin with defendant’s assertion that DCBS
did not issue its subpoenas pursuant to a properly autho-
rized statutory scheme. On that point, the legislature has
prohibited the sale of unregistered securities in Oregon,
ORS 59.055, and it has given DCBS authority to regulate
the offering and sale of securities within this state, ORS
59.235.14 Among other things, DCBS may investigate
“whether a person has violated or is about to violate any
provision of the Oregon Securities Law or any rule or order
of the director” of DCBS. ORS 59.245(1). DCBS may file suit
to enjoin a violation of the Oregon securities laws and may
seek restitution or damages on behalf of persons injured by
a violation of those laws. ORS 59.255(1), (4). Finally, ORS
59.315(1) provides that, “[f]or the purpose of an investiga-
tion * * * under the Oregon Securities Law, the Director of
[DCBS] may * * * subpoena witnesses * * * and require the
production of books, papers, correspondence, memoranda,
agreements or other documents or records which the direc-
tor deems relevant or material to the inquiry.”
The administrative subpoenas that DCBS issued
in this case fell squarely within its statutory authority to
investigate the sale of unregistered securities in Oregon.
Defendant has not explained why DCBS’s subpoenas were
not issued pursuant to a properly authorized administrative
14
In using the phrase “securities,” we refer only to those securities that are
subject to registration in Oregon. Some securities are exempt from registration
in Oregon. See ORS 59.025 (listing exempt securities); ORS 59.049 (defining
when “[f]ederal covered securities” may be offered and sold in Oregon without
registration).
442 State v. Ghim
scheme, nor has he explained why the information that
DCBS sought was not relevant to its investigation into the
sale of unregistered securities. See Pope & Talbot, Inc., 216
Or at 616 (stating that standard).15 We accordingly disagree
with his assertion that DCBS’s subpoenas were not issued
pursuant to a properly authorized statutory scheme.
Defendant advances a related but separate set
of arguments. He contends that the subpoenas that were
issued in this case were constitutionally “unreasonable”
because “the state did not comply with the statute that sets
forth the subpoena process required to access bank records.”
On that issue, defendant advances three arguments.
Defendant argues initially that the first set of sub-
poenas issued by DCBS failed to comply with the require-
ment in ORS 192.596(2) that the subpoenas be personally
served on his wife. As noted above, however, defendant never
argued in the Court of Appeals that the first set of subpoe-
nas was deficient for that reason. Rather, he argued only
that anything less than a warrant was insufficient. When a
party has lost in the Court of Appeals, that party cannot ask
us to reverse the Court of Appeals decision on a ground that
the party did not raise in that court. See Tarwater v. Cupp,
304 Or 639, 644-45, 748 P2d 125 (1988) (having argued and
lost in the Court of Appeals on the ground that an instruc-
tion was correct, the state could not shift position in the
Supreme Court and argue that the instruction was harm-
less); cf. State v. Suppah, 358 Or 565, 572-73, 369 P3d 1108
(2016) (having won in the Court of Appeals, defendant could
raise an issue on review to uphold the Court of Appeals deci-
sion that he had not raised in the intermediate court).
Defendant advances a second argument under the
bank records statute. He contends that the second set of
subpoenas, which the prosecutor issued pursuant to ORS
15
We also note that defendant has not argued on review that DCBS issued its
administrative subpoenas to obtain evidence for a criminal prosecution, nor has
he explained on review why evidence uncovered in the course of a civil investiga-
tion into the sale of unregistered securities may not be used in a criminal trial for
theft, aggravated theft, and criminal mistreatment. Cf. Nelson v. Lane County,
304 Or 97, 104 n 5, 743 P2d 692 (1987) (plurality) (Article I, section 9, does not
prevent evidence of “another crime” discovered during “a legally authorized and
properly administered administrative inspection” from being used in a criminal
prosecution).
Cite as 360 Or 425 (2016) 443
138.563, sought information for a longer period of time than
ORS 192.603(1) authorizes.16 That argument faces two pro-
cedural hurdles. Defendant failed to argue in either the trial
court or the Court of Appeals that the subpoenas the pros-
ecutor issued sought more information (information over a
longer time period) than ORS 192.603(1) permitted. Beyond
that, in the trial court, defendant expressly invited the pros-
ecutor to use a court subpoena to obtain that information.
As set out above, in the trial court, defendant invited the
prosecutor to issue subpoenas pursuant to ORS 136.565 to
obtain all the records that DCBS had obtained pursuant
to its administrative subpoenas. We decline to reverse the
Court of Appeals and the trial court on the basis of a per-
ceived error that defendant did not raise below and in fact
invited. See State ex rel Juv. Dept. v. S.P., 346 Or 592, 215
P3d 847 (2009) (upholding Court of Appeals decision not to
overturn trial court ruling in similar situation).
Defendant appears to raise a final issue on review
regarding the second set of subpoenas. Defendant argued in
the trial court that the second set of subpoenas was the fruit
of the poisonous tree and appears to pursue that argument
on review. As we understand defendant’s argument, he con-
tends that the state based its decision to issue a second set
of subpoenas on information that DCBS learned as a result
of its issuance of the first set of subpoenas. The initial diffi-
culty with defendant’s fruit-of-the-poisonous-tree argument
is that the state put on evidence, which the trial court cred-
ited, that the second set of subpoenas would have been issued
based on the Von Renchlers’ complaints to DCBS, which were
independent of any information that DCBS learned after
issuing its first set of subpoenas. Beyond that, defendant did
not raise this issue in the Court of Appeals and thus failed
to preserve it. See Tarwater, 304 Or at 644-45 (party cannot
seek to reverse the Court of Appeals decision on a ground
not raised in that court). In these circumstances, we decline
to reach defendant’s fruit-of-the-poisonous-tree argument.
16
ORS 192.603 provides that, when a law enforcement agency requests
account information from a financial institution to assist in a criminal investiga-
tion, the institution shall supply information limited to three months before and
three months after the “date of occurrence of the account transaction giving rise
to the criminal investigation.” ORS 192.603(1).
444 State v. Ghim
Given the factual and legal posture in which this
issue arises, we resolve this case on the following ground:
Even if defendant has a protected privacy interest in his
wife’s bank records, our decisions lead to the conclusion
that the administrative subpoenas issued by DCBS did
not violate defendant’s Article I, section 9, rights. We leave
for another day the question whether and in what circum-
stances a defendant will have a protected privacy interest
in information that a third party maintains, a question that
can arise in differing factual circumstances which can have
a bearing on its resolution. On that basis, we affirm the
Court of Appeals decision and the trial court’s judgment.
The decision of the Court of Appeals and the judg-
ment of the circuit court are affirmed.