State v. Reeder ( 2015 )

.-F~I~trE
,/IN CLIRICI OFFICE'
llJIRDE COURT, 8TA1E OF WASHINOTON
i DATE DEC 1 7 2015
~/:?
.~usncy
IN THE SUPREME COURT OF THE STATE OF WASHINGTON
STATE OF WASHINGTON, ) No. 90577-1
)
Respondent, )
) EnBanc
v. )
)
MICHAEL J. REEDER, )
) Filed DEC 1 '1 2015
Petitioner. )
--·----- ..··----------------------·-- )
FAIRfiURST, J.---·Michael J. Reeder appeals a published Court of Appeals
decision affirming his conviction on 14 counts of securities fraud and 14 counts of
theft in the first degree. We granted review of two issues.
First~ Reeder claims that subpoenas duces tecum issued by a special inquiry
judge (SIJ) 1 to financial institutions for Reeder's private bank records violated his
constitutional rights under article I, section 7 of the Washington Constitution.
Suspecting Reeder of securities fraud and theft, the prosecuting attorney sought a
1
At times,. this opinion will refer to the subpoenas duces tecum collectively as "subpoena."
A "subpoena duces tecum'' is a form of subpoena that commands the witness to testify and to bring
documents. See BLACK'S LAW DICTIONARY 1654 (lOth ed. 2014).
State v. Reeder, No. 90577-·1
subpoena from an SIJ to obtain Reeder's private bank records. Reeder moved to
suppress the evidence of his bank records, claiming they were obtained in violation
of his constitutional rights. The trial court denied the motion, and the Court of
Appeals affirmed, finding that the subpoena issued by an SIJ was valid authority of
law under article I, section 7 of the Washington Constitution to obtain Reeder's bank
records from the financial institutions. We affirm.
Second, Reeder asserts that his sentence violates principles of double jeopardy
because the trial court imposed multiple punishments for the same offense. The
Court of Appeals affirmed the trial court's sentence, finding that the State acted
within its discretion to charge Reeder with separate counts for each fraudulent
transaction. We affirm the trial court's sentence because the State presented evidence
supporting 14 separate transactions that were punishable under the securities fraud
and theft in the flrst degree statutes.
I. FACTS AND PROCEDURAL HISTORY
Reeder met William McAllister through a company that provided nonbank
real estate flnancing, Private Mortgage Investors Inc. Between March 2006 and June
2007, McAllister made a series of payments to Reeder for two real estate
investments. During this time, McAllister paid Reeder approximately $1.7 million
through several different checks or transactions.
2
State v. Reeder, No. 90577-1
The first real estate transaction began when Reeder told McAllister that he
had an opportunity to purchase two parcels of land in Snohomish County. In June
2006, Reeder and McAllister formed a limited liability company and opened a bank
account to purchase the two properties. As down payments for the two properties,
McAllister loaned Reeder $200,000 and $150,000 in two separate transactions. Both
McAllister and Reeder signed an agreement documenting McAllister's loans.
According to the agreement, Reeder had already signed the purchase and sale
agreements for the two properties. However, the properties were not purchased or
developed, and Reeder never returned McAllister's money.
The second real estate transaction took place when Reeder told McAllister
that there was an opportunity to purchase property in Bellevue. Reeder knew at the
time he made this representation that the owners of the Bellevue property did not
intend to sell the property. Reeder showed McAllister a property appraisal that
valued the property at $2 million. McAllister relied on Reeder's representations and
made a series of payments totaling $1.4 million. Reeder did not use any of the funds
to buy the property and did not return McAllister's money.
The State obtained Reeder's bank records under RCW 10.27.170 usmg
subpoenas issued by an SIJ. 2 The bank records revealed that Reeder withdrew
2
The State requested that the SIJ issue subpoenas to Bank of AmericaNA; Whidbey Island
Bank; Citibank; Capital One Bank; Experian; TransUnion; Equifax Credit Information Services;
3
State v. Reeder, No. 90577-1
McAllister's money and that he used the funds in casinos and for personal expenses.
On April 8, 2011, Reeder was charged with 14 counts of securities fraud and 14
counts of theft in the first degree. 3 The different counts were based on the separate
payments that McAllister made to Reeder.
In June 2011, Reeder moved to suppress his private bank records, arguing that
they were obtained in violation of his constitutional rights because he believed the
State did not have a valid warrant or judicially issued subpoena as required by State
v..Miles, 160 Wn.2d 236, 249, 156 P.3d 864 (2007). In November 2011, the State,
by letter, informed Reeder that his bank records were obtained through an SIJ
proceeding subpoena and were available for his inspection. Reeder also received
copies of the SIJ subpoenas. 4 Reeder requested release of the documents justifying
the SIJ subpoenas. The State responded that SIJ proceedings are secret under RCW
10.27 .090(3) and that the secrecy and confidentiality of the proceedings are critical
to achieving the purpose of an SIJ proceeding. However, the State recognized that
Northwest Plus Credit Union; HSBC Bank, USA, NA; Wells Fargo Bank, NA; JP Morgan Chase;
U.S. Bank National Association; and Boeing Employee's Credit Union.
3
The State filed an amended information on June 15, 2012.
4
Reeder's attorney did not state that he obtained the subpoenas in question. However, the
prosecuting attorney delivered several boxes of records to Reeder's attorney, and the trial court
judge stated, '·'I am going to take [the prosecuting attorney's] representation at this time that [the
subpoenas] will be made available to you." Verbatim Report of Proceedings (July 2, 2012) at 46.
Since there is not a specific discovery rule regarding the records produced at an SIJ proceeding,
the prosecuting attorney here noted that he compares SIJ proceedings to materials obtained through
a grand jury and provides records of SIJ proceedings to defendants with permission from the court.
!d. at 45; see CrR 4.7; RCW 10.27.090(5).
4
State v. Reeder, No. 90577-1
"due process may require disclosure of facts contained within the information sheets
that provide the legal basis for obtaining the evidence." Clerk's Papers at 476.
The trial court denied Reeder's motion to suppress the records obtained by the
SIJ subpoena. The jury found Reeder guilty of 14 counts of securities fraud and 14
counts of first degree theft and entered special verdicts finding that each offense was
a major economic or serious offense. The court imposed an exceptional sentence.
Reeder appealed the trial court's decision and sentence.
Reeder raised four issues on appeal. State v. Reeder, 181 Wn. App. 897, 907,
330 P.3d 786 (2014). The Court of Appeals affirmed on all four issues, holding that
( 1) Reeder failed to allege facts showing that his trial attorney had a conflict of
interest that deprived him of effective assistance of counsel, (2) the State did not
violate Reeder's right to privacy by obtaining his bank records through the SIJ
proceeding because it obtained the records pursuant to a valid, judicially reviewed
subpoena, (3) the statute of limitations period did not bar some or all of the State's
charges against Reeder, and (4) the State acted within its discretion when it charged
Reeder with separate counts for each transaction and his multiple punishments did
not violate double jeopardy.Jd. at 931.
Reeder petitioned this court for review of three issues. We granted review of
two issues: (1.) whether the State violated Reeder's right to privacy by obtaining his
bank records through the SIJ proceeding and (2) whether Reeder's sentence violated
5
State v. Reeder, No. 90577-1
theprohibitionagainstdoublejeopardy. 5 Statev. Reeder, 181 Wn.2d 1014, 337P.3d
325 (2014). We affirm the Court of Appeals on both issues.
II. ISSUES
A; Did the subpoena issued by the SIJ to financial institutions provide
sufficient authority oflaw under article I, section 7 to obtain Reeder's banlc records?
B. . Did the trial court's sentence violate the constitutional prohibition
against double jeopardy when it sentenced Reeder to several counts of the same
crime?
III. ANALYSIS
A. The SIJ subpoena provided sufficient authority of law
Reeder asserts that the subpoena issued by the SIJ did not provide the
authority of law that is required by article I, section 7 because it was not justified by
probable cause. 6
Article I, section 7 states that "[n]o person shall be disturbed in his private
affairs, or his home invaded, without authority of law." Though similar, the
protections afforded by this provision are broader and qualitatively different than
those protections afforded in the Fourth Amendment to the United States
Constitution. State v. Gunwall, 106 Wn.2d 54, 65, 720 P.2d 808 (1986); City of
Seattle v. McCready, 123 Wn.2d 260, 267, 868 P.2d 134 (1994); State v. Eisfeldt,
5
We did not accept review of the conflict of interest issue.
6
"Probable cause exists if the affidavit in support of the warrant sets forth facts and
circumstances sufficient to establish a reasonable inference that the defendant is probably involved
in criminal activity and that evidence of the crime can be found at the place to be searched." State
v. Thein, 138 Wn.2d 133, 140, 977 P.2d 582 (1999).
6
State v. Reeder, No. 90577-·1
163 Wn.2d 628, 634, 185 P.3d 580 (2008). Article I, section 7 necessarily includes
those legitimate expectations of privacy protected by the Fourth Amendment. State
v. Garcia-Salgado, 170 'Wn.2d 176, 183, 240 P.3d 153 (2010).
The analysis of article I, section 7 breaks down into two parts-"'private
affairs"' and "'authority of law."' In re Pers. Restraint ofMaxfield, 133 Wn.2d 332,
339,945 P.2d 196 (1997). If a private affair is not disturbed, then there is no violation
of article I, section 7. Miles, 160 Wn.2d at 244. If a valid privacy interest has been
disturbed, then we must determine whether the disturbance was justified by authority
of law. Id.
1. Private affairs
Article I, section 7 protects '"those privacy interests which citizens of this
state have held, and should be entitled to hold, safe from governmental trespass."'
Maxfield, 133 Wn.2d at 339 (quoting State v. Myrick, 102 Wn.2d 506, 511, 688 P .2d
151 (1984)). To determine whether a privacy interest exits under article I, section
7, we must examine whether a particular expectation of privacy is one that a citizen
of this state should be entitled to hold. McCready, 123 Wn.2d at 270. Part of this
inquiry focuses on what kind of protection has been historically afforded to the
interest asserted, and part of it focuses on the nature and extent of the information
that may be obtained as a result of government conduct. Miles, 160 Wn.2d at 244.
. 7
State v. Reeder, No. 90577-1
In Miles, the court found that private bank records held by a third party could
potentially reveal sensitive personal information. I d. at 246. Bank records can reveal
where the person has traveled, the person's reading habits, and the person's financial
condition. I d. at 246-4 7. After noting that bank records were historically protected,
the court held that bank records are considered private affairs protected by the
constitution. I d. at 247 ("Little doubt exists that banking records, because of the type
of information contained therein, are within a person's private affairs."). Reeder's
bank records are private affairs under article I, section 7. 7 The State invaded Reeder's
private affairs by obtaining his bank records from a third party.
2. Authority of law
Since the State invaded Reeder's private affairs by obtaining his bank records
from financial institutions, this case turns on whether a subpoena issued by an SIJ
pursuant RCW 10.27.170 is sufficient authority of law to support such an invasion.
a) SIJ proceedings
The legislature created the SIJ proceeding to provide an additional
investigatory tool for the prosecuting
. attorney. 22 WASH.
. STATE JUDICIAL COUNCIL,
TWENTY-SECOND BIENNIAL REPORT 18 (1969-1970) (hereinafter JUDICIAL
REPORTS). An SIJ "is a superior court judge designated by a majority of the superior
court judges of a county to hear and receive evidence of crime and corruption." RCW
7
The State does not contest that bank records are protected by article I, section 7.
8
State v. Reeder, No. 90577-1
10.27.020(7)" We have held that an SIJ is a neutral magistrate. State v. Neslund, 103
Wn.2d 79, 88, 690 P.2d 1153 (1984). An SIJ has the authority to issue subpoenas
for testimony or evidence when there is "reason to suspect crime or corruption."
RCW 10.27.170.
The SIJ proceeding was created by the Criminal Investigatory Act of 1971,
chapter 10.2 7 RCW. LAws OF 1971, 1st Ex. Sess., ch. 67. The enactment of chapter
10.27 RCW was intended to reorient the grand jury system as it relates to modern
society. JUDICIAL.REPORTS, supra, at 17. Chapter 10.27 RCW was "enacted on behalf
of the people of the state of Washington to serve law enforcement in combating
crime and corruption." RCW 10.27.010. Under chapter 10.27 RCW, 8 a grand jury in
washington "consists of twelve persons, is impaneled by a superior court and
constitutes a part of such court." RCW 10.27.020(6). The grand jury hears,
examines, and investigates evidence concerning criminal activity and corruption. Id.
The grand jury may issue indictments after a hearing and upon a finding of probable
cause. RCW 10.27.150.
In contrast to a grand jury, an SIJ cannot issue subpoenas once a defendant is
charged with a crime. State v. Manning, 86 Wn.2d 272, 275, 543 P.2d 632 (1975).
SIJ s also cannot issue indictments and do not make the decision of whether to
8
This opinion cites to the current version of chapter 10.27 RCW. RCW 10.27.070 through
. 100 and . 120 through . 150 were amended in 2010 to remove gender based terms. LAws OF 2010,
ch. 8, §§ 1019-1026.
9
State v. Reeder, No. 90577-1
prosecute. Neslund, 103 Wn.2d at 86; JUDICIAL REPORTS, supra, at 18. Like a grand
jury, the SIJ proceedings are secret and confidential. RCW 10.27.090(3). The
records from an SIJ proceeding or a grand jury are available only to the attorney that
instituted the hearing, and such attorney may introduce the evidence collected at the
proceeding at any other grand jury or trial. RCW 10.27 .090( 4). The court may make
available evidence presented before an SIJ to a criminal defendant if on "proper
application and upon a showing of good cause" the court determines that "doing so
is in the furtherance ofjustice." 9 RCW 10.27.090(5)(a).
b) Judicially reviewed subpoenas provide sufficient authority oflaw
'to obtain banking records from financial institutions
Reeder argu.es that because bank records are private affairs under article I,
section 7, the only authority of law that can justify the invasion is a warrant based
on probable cause. 10
9
According to the Washington Association of Prosecuting Attorneys' (WAPA) model
policy for using SIJ proceedings, it is recommended that the prosecuting attorney obtain an order
from the SIJ authorizing disclosure as required by the prosecuting attorney's discovery obligations
in the event the investigation results in criminal charges. WAPA Model Policy for Using Sp~cial
Inquiry Judge Proceedings, http://www.waprosecutors.org/ docs/2012%20SIJ %20 Model%20
Policy_1.pclf. The prosecuting attorney's discovery obligations are set forth in CrR 4.7 and require
the prosecuting attorneys to disclose, among other things, transcripts from grand juries when
authorized by the court and any documents that the prosecuting attorney intends to use at trial that
were obtained from or belonged to the defendant. CrR 4.7 (a)(1)(iii), (v).
10
Reeder notes that Michigan has a similar SIJ statute. The Michigan statute requires the
judge to "have probable cause to suspect that any crime" has been committed before such judge
may make an order directing an inquiry into the complaint. MICH. COMP. LAws § 7 67.3.
Washington's SIJ proceedings, chapter 10.27 RCW, are based on Michigan's statute. Manning, 86
Wn.2d at 273~74. However, unlike chapter 10.27 RCW, the Michigan statute is considered
investigatory in nature because the judge is permitted to issue an indictment. Jd. at 274~ 75.
10
State v. Reeder, No. 90577-1
Our cases have found that the authority of law to collect private records
encompasses.more than a warrant based on probable cause. See Gunwall, 106 Wn.2d
at 68-69 ("[T]he 'authority of law' required by Const. art. 1, § 7 in order to obtain
records indudes authority granted by a valid, (i.e., constitutional) statute, the
common law or a rule of this court."); Maxfield, 133 Wn.2d at 342 ("'authority of
law includes legal process such as a search warrant or subpoena'" (internal quotation
marks omitted) (quoting Gunwall, 106 Wn.2d at 68-69)); see also Miles, 160 Wn.2d
at 247. Permitting the disturbance of private affairs pursuant to a constitutional
statute represents the framers' intent to give both the legislature and the courts the
ability to provide the law authorizing the disturbance of a citizen's private affairs.
Charles W. Johnson & Scott P. Beetham, The Origin of Article I, Section 7 of the
Washington State Constitution, 31 SEATTLE U.L. REv. 431, 449 (2008).
This court has also found that if a subpoena, rather than a warrant, is the
authority of law, such subpoena must be justified by some reason besides the
statutory authority granting the power to issue the subpoena. Miles, 160 Wn.2d at
248. In Miles, this court held that an administrative subpoena issued under the
Securities Act of Washington (Securities Act), 11 was insufficient authority of law to
obtain a person's private bank records. Id. at 252. After noting that a warrant or
judicially issued subpoena could provide authority of law, the court found that the
11
Chapter 21.20 RCW.
11
State v. Reeder, No. 90577-1
Securities Act did not provide the protections afforded by either process. !d. at 24 7.
The Securities Act gave subpoena authority to the director of the Securities Division
of the Washington State Department of Financial Institutions. Id. at 243. Under the
Securities Act, the director or any officer has the authority to '"subpoena witnesses,
compel their attendance, take evidence, and require the production of any books,
papers, correspondence, memoranda, agreements, or other documents or records
which the director deems relevant."' !d. at 243 (quoting RCW 21.20.370(1)). The
Securities Act further provided that the director could exercise his or her subpoena
authority at his or her. discretion. !d. The court in Miles held that there must be some
.
further justification to invade a person's private affairs than just the statute
authorizinga subpoena and that subpoenas, especially for a criminal investigation,
must be subject to judicial review to reduce mistaken intrusions of people's private
affairs. Id. at 248-50.
Here, the Court of Appeals held that the subpoena issued by the SIJ provided
sufficient authority of law to obtain Reeder's bank records. Reeder, 181 Wn. App.
at 917. The court reasoned that "a neutral magistrate determined that evidence
presented by the petitioner established a reasonable suspicion that Reeder had
committed a crime and reason to believe the records described in the subpoena would
provide material evidence of that crime." Id.
12
State v. Reeder, No. 90577-1
The Court of Appeals correctly held that the subpoena provided sufficient
authority of law to obtain bank records held by financial institutions. The subpoena
was issued pursuant to the SIJ's power under RCW 10.27.170, a presumably
constitutional statute. 12 Unlike the statute in Miles that authorized the director to
issue a subpoena based on his or her discretion, RCW 10.27.170 requires that the
SIJ issue a subpoena only if there is "reason to suspect crime or corruption."
Moreover, under RCW 10.27.170, a subpoena is issued by an SIJ who is a superior
court judge and neutral magistrate. Neslund, 103 Wn.2d at 88; RCW 10.27.020(7).
Amicus curiae Washington State Attorney General's Office (AGO) notes that
the court in Miles identified a warrant or a subpoena as two separate procedures to
satisfy the authority of law requirement, demonstrating that either are sufficient.
However, if a subpoena is the authority, it must be justified by some reason and it
must be subject to judicial review. The court in Miles did not specify that probable
cause is required, only that the subpoena must be based on some reason. A subpoena
issued by an SIJ to obtain bank records held by financial institutions is proper
authority of law to invade one's private affairs under article I, section 7 because it is
based on some reason and is subject to judicial review.
12
Cases reviewing RCW 10.27.170 have not questioned whether this prov1s10n is
constitutional. Statutes are presumed constitutional. Sch. Dists. ' All. for Adequate Funding of
Special Educ. v. State, 170 Wn.2d 599,605-06,244 P.3d 1 (2010).
13
State v. Reeder, No. 90577-1
c) Reason to suspect crime or corruption is sufficient to justifY
issuance of a subpoena by an SIJ
Since a judicially reviewed subpoena issued pursuant to a constitutional
statute can be authority of law under article I, section 7, we must determine whether
"reason to suspect crime or corruption" is a sufficient justification for a subpoena
issued by an SIJ for private bank records. RCW 10.27.170. Because Washington
case law has not specifically addressed this issue, the Court of Appeals analogized
SIJ subpoenas to subpoenas issued by federal grand juries. Reeder, 181 Wn. App. at
916.
Like the Washington grand jury system set forth in chapter 10.27 RCW, the
federal "grand jury occupies a unique role in our criminal justice system." United
States v. R. Enters., Inc., 498 U.S. 292,297, 111 S. Ct. 722, 112 L. Ed. 2d 795 (1991).
The federal grand jury "is an investigatory body charged with the responsibility of
determining whether or not a crime has been committed." ld. The Supreme Court of
the United States has held that a subpoena issued by a federal grand jury does not
need to be justified by probable cause. See id.The Court in R. Enterprises reasoned that "the Government cannot be required
to justify the issuance of a grand jury subpoena by presenting evidence sufficient to
establish probable cause because the very purpose of requesting the information is
to ascertain whether probable cause exists." Id. A showing of less than probable
cause is adequate because the Supreme Court has noted that a subpoena issued by a
14
State v. Reeder, No. 90577-1
federal grand jury intrudes less on one's privacy rights than a search or seizure and,
as such~ does not receive the same Fourth Amendment protections as a search or
seizure. United States v. Dionisio, 410 U.S. 1, 10, 93 S. Ct. 764, 35 L. Ed. 2d 67( 1973) ("The compulsion exerted by a grand jury subpoena differs from the seizure
effected by an arrest or even an investigative 'stop."'). According to the Supreme
Court, a subpoena, unlike a search warrant, does not involve a stigma because it is
served in the same manner as other legal process. Id. Moreover, a subpoena can
generally be alter,ed and remains under the supervision of the court at all times. I d.
A subpoena issued by a grand jury also has a different and lesser effect on the
recipient than a subpoena issued in the context of a prospective criminal trial where
the crime charged and the defendant are identified. R. Enterprises, 498 U.S. at 297.
A .federal grand jury's investigatory powers are not unlimited. See id. at 299.
Grand juries are not entitled "to engage in arbitrary fishing expeditions." Id. A
federal court on motion '"may quash or modify a subpoena if compliance would be
unreasonable or oppressive."' Id. (quoting FED. R. CRJM. P. 17(c)). What is
reasonable depends on context. I d. Since grand juries do not announce the subject
of their investigations, a party that would like to challenge the subpoena may have
little knowledge as to the government's purpose in seeking production of the
requested information. I d. at 299-300. Despite some of the barriers to contesting a
subpoenaJ the Court in R. Enterprises held that a subpoena could be justified by less
15
State v. Reeder, No. 90577-1
than probable cause to achieve the purpose of grand jury investigations. I d. at 297,
299.
Here, the Court of Appeals held that similar to a federal grand jury, the
purpose ofthe SIJ proceeding is to gather evidence about suspected crimes to assist
the prosecuting attorney or a grand jury in determining if probable cause exists to
issue an indictment. Reeder, 181 Wn. App. at 917. The Court of Appeals held that,
like a federal grand jury subpoena, the appropriate level of justification for
subpoenas issued by an SIJ could be something less than probable cause. Id.
Reeder contends that the Court of Appeals erred by examining federal cases
discussing federal grand juries because the protections of the Fourth Amendment
differ from the protections of article I, section 7. In addition, Reeder asserts that SIJ
subpoenas are not analogous to grand jury subpoenas because an SIJ is not
empowered to issue or reject indictments. Subpoenas are simply an investigatory
tool. See Manning, 86 Wn.2d at 274. However, Reeder does not explain why this
difference should require a higher level of justification for subpoenas issued by an
SIJ.
Reeder contends that grand juries are a unique historical device that were
meant to screen unwarranted or malicious prosecutions. Unlike the historical grand
juries, Reeder contends that SIJ proceedings give prosecuting attorneys free rein to
invade a person's private affairs with little justification. However, Reeder's
16
State v. Reeder, No. 90577-1
assertions disregard that grand juries have historically existed for dual purposes-
protecting the individual from the government and examining the situations that are
sti 11 in inquiry stage to discover evidence for the prosecuting attorney. 3 WAYNE R.
LAFAVEET AL., CRIMINAL PROCEDURE§ 8.1(a) (3d eel. 2007).
Cases examining federal grand juries serve as a helpful companson to
determine if the justification for an SIJ subpoena is sufficient. Like federal grand
juries, grand juries in Washington were created to investigate crime and determine
whether a crime occurred. RCW 10.27.150 ("After hearing, examining, and
investigating the evidence before it, a grand jury may, in its discretion, issue an
indictment."). The legislature intended the SIJ proceedings to supplement the grand
jury system. Such intent is shown by the legislative history of chapter 10.27 RCW
and the legislature including the statutory provisions governing SIJ proceedings in
the same section as those statutory provisions governing grand juries. See JUDICIAL
REPORTS, supra, at 17-18. SIJ proceedings are similar to federal grand jury
proceedings in their purpose and structure. The purpose of an SIJ subpoena is to
assist the prosecuting attorney to obtain evidence that can then be turned over to a
grand jury. Id. Both grand juries and SUs have the authority to issue subpoenas and
to call witnesses. RCW 10.27.140(3). Both also produce evidence available to
prosecuting attorneys in criminal prosecutions. RCW 10.27 .090(4). Like federal
grand juries, the reports and testimony during SIJ proceedings are confidential and
17
State v. Reeder, No. 90577-1
not disclosed to the public unless there is sufficient reason. RCW 10.27.090(3), (5);
FED. R. CRTM. P. 6(e)(2), (3). Whether to disclose grand jury evidence rests in the
discretion of the trial court. State v. Sponburgh, 84 Wn.2d 203, 210, 525 P.2d 238(1974).
Like a federal grand jury, an SIJ's powers are not unlimited. An SIJ
proceeding can be initiated only if there is reason to suspect that crime or corruption
has occurred. RCW 10.27.170. The power of the prosecuting attorney to obtain
evidence through a subpoena is subject to judicial review. The SIJ reviews the
request of the prosecuting attorney for a subpoena to ensure the request is sufficiently
justified. Subpoenas can be quashed on a motion. CrR 4.8(b )(4). Considering the
similarities of SIJ proceedings and federal grand juries, the Court of Appeals did not
err by examining federal cases discussing federal grand juries.
Where SIJ proceedings differ from state or federal grand juries, SIJ
proceedings provide greater protections. An SIJ proceeding cannot be used where
charges have already been filed against a defendant, and an SIJ cannot independently
investigate the alleged crime or issue an indictment. Because an SIJ cannot issue an
indictment, it does not serve an investigative role. See Manning, 86 Wn.2d at 275.
To ensure neutrality, the SIJ is disqualified from a subsequent proceeding involving
the case under investigation. RCW 10.2 7.180. Therefore, a subpoena issued by an
18
State v. Reeder, No. 90577-1
SIJ, like a subpoena issued by a federal grand jury, can be justified by less than
probable cause, and "reason to suspect crime or corruption" is sufficient.
d) Our decision in. Garcia-Salgado does not require a subpoena
issued by an SIJ to be justified by probable cause
Reeder contends that Garcia-Salgado requires probable cause to justify an
invasion into his private affairs. In Garcia-Salgado, the defendant was ordered to
submit to a cheek swab for deoxyribonucleic acid (DNA) pursuant CrR 4.7(b )(2)(vi).
170 Wn.2d at 182. This court found that because a cheek swab to procure DNA is a
search under the Fourth Amendment to the United States Constitution, it must be
supported by a warrant, unless the search meets one of the exceptions to the warrant
requirement. ld. at 184. The court found that a court order could satisfy the warrant
requirement under the Fourth Amendment and article I, section 7 if the order
contains all the elements of a warrant. I d. a 187. After finding that there was not
sufficient evidence of probable cause to support the court order, this court held that
the defendant was searched in violation of the federal and state constitutions. I d. at
188-89.
Reeder asserts that a subpoena issued by an SIJ should be treated as the
equivalent of the court order examined in Garcia-Salgado. In contrast, the Court of
Appeals found that the holding in Garcia-Salgado did not provide any guidance
regarding the justification needed for a subpoena. Reeder, 181 Wn. App. at 918.
19
State v. Reeder, No. 90577-1
The Court of Appeals was correct. The two cases differ in procedural posture
and in the privacy interests at stake. The defendant in Garcia-Salgado was already
charged with a crime, and the court order was used to investigate. 170 Wn.2d at 182.
Under RCW 10.27 .170, an SIJ cannot issue a subpoena to gather evidence against a
defendant already charged with a crime. See State v. Burri, 87 Wn.2d 175, 178, 550
P.2d 507 (1976). The privacy interest at stake was different in Garcia-Salgado. The
DNA cheek swab in Garcia-Salgado was a search under the Fourth Amendment.
170 Wn.2d at 184. The Fourth Amendment does not protect information in bank
records, United ~)tates v. Miller, 425 U.S. 435, 443, 96 S. Ct. 1619, 48 L. Ed. 2d 71( 197 6) (noting that under the Fourth Amendment, there is a lack of any legitimate
expectation of privacy in bank records ). 13
We hold that the subpoena issued by the SIJ for Reeder's bank records
satisfies the authority of law requirement under article I, section 7. Our cases do not
require that the authority of law under article I, section 7 must satisfy the probable
cause requirement of a warrant. Rather, we have recognized that a judicially issued
subpoena can be sufficient authority of law to invade a citizen's private affairs.
13
The dissent argues that the court relies solely on the federal Fourth Amendment precedent
while ignoring article I, section 7. Dissent at 6. We direct the dissent to pages 8-18 of this opinion
for an in-depth analysis of how the subpoena of banking records from a financial institution during
an SIJ proceeding is consistent with this court's interpretation of article I, section 7, despite the
privacy interests individuals have in their banking records.
20
State v. Reeder, No. 90577-1
Justifying a subpoena for bank records held by financial institutions on less than
probable cause aligns with the purpose of the grand jury and SIJ proceedings.
B. Reeder's sentence did not violate double jeopardy
Reeder was charged with 14 counts of securities fraud and 14 counts of theft
in the first degree. Reeder argues that his multiple convictions violate double
jeopardy principles. "Claims of double jeopardy are questions of law, which we
review de novo." State v. Hughes, 166 Wn.2d 675, 681,212 P.3d 558 (2009).
. The double jeopardy clause of the Fifth Amendment and the state
constitutional protection against double jeopardy, article I, section 9, offer the same
scope of protection. State v. Adel, 136 Wn.2d 629, 632, 965 P.2d 1072 (1998). The
Fifth Amendment encompasses three distinct protections. State v. Goeken, 127
Wn.2d 95, 100, 896 P.2d 1267 (1995). First, it "'protects against a second
prosecution for the same offense after acquittal."' I d. (quoting North Carolina v.
Pearce, 395 U.S. 711, 717, 89 S. Ct. 2072, 23 L. Ed. 2d 656 (1969)). Second, "'[i]t
protects against a second prosecution for the same offense after conviction."' I d.
(quoting Pearce, 395 U.S. at 717). Third, "'it protects against multiple punishments
for the same offense."' Id. (quoting Pearce, 395 U.S. at 717). Reeder claims that his
convictions violate the third protection.
When a defendant is convicted for violating one statute multiple times, the
proper inquiry is "what 'unit of prosecution' has the Legislature intended as the
21
State v. Reeder, No. 90577-1
punishable act under the specific criminal statute." Adel, 136 Wn.2d at 634. The
legislature has the power to define what conduct is punishable. Id. The scope of the
criminal act as defined by the legislature is considered the unit of prosecution. I d.
Double jeopardy protects a defendant from being convicted twice under the same
statute for committing just one unit of prosecution. I d. The issue is one of statutory
interpretation and legislative intent. Id. If the legislature fails to state a unit of
prosecution in a criminal statute, any ambiguity must be construed in favor oflenity.
Id. at 634-35.
In Adel, the cot1rt found that a defendant's sentence violated principles of
double jeopardy where he was charged with two counts of simple possession of
marijuana. ld. at 631. Adel was found with marijuana in two places: the ashtray of
his car and the cash register counter of his store. !d. The court began its analysis by
examining the statute and determined that the unit of prosecution was possession of
40 grams of marijuana regardless of where the drug was located. Id. at 637. The
court held that even though Adel had marijuana in two places, his conduct
constituted only one violation of the possession statute, and the court reversed his
conviction. Id.To determine if the State violated double jeopardy principles here, we must
examine the statutes in question.
22
State v. Reeder, No. 90577-1
1. Securities fraud
Washington's security fraud statute, RCW 21.20.010, states:
It is unlawful for any person, in connection with the offer, sale or
purchase of any security, directly or indirectly:
(1) To employ any device, scheme, or artifice to defraud;
(2) To make any untrue statement of a material fact or to omit to
state a material fact necessary in order to make the statements made, in
the light of the circumstances under which they are made, not
misleading; or
(3) To engage in any act, practice, or course of business which
operates or would operate as a fraud or deceit upon any person.
The term "sale" "includes every contract of sale of, contract to sell, or
disposition of, a security or interest in a security for value." Former RCW
21.20.005(10) (2002) (now codified at RCW 21.20.005(14)). The term "'[s]ecurity'
means any note; stock; treasury stock; bond; debenture; evidence of indebtedness;
certificate of interest or participation in any profit-sharing agreement; ... or, in
general, any interest or instrument commonly known as a 'security.'" Former RCW
21.20.005(12)(a) (2002) (now codified at RCW 21.20.005(17)(a)).
The statute prohibits any misleading acts in connection with the sale of a
security. Because the definition of "sale" includes every sale of a security, it
indicates the legislature's intent for each transaction or sale to constitute the unit of
prosecution. Therefore, the State was correct to assert, and the Court of Appeals was
correct to find, that the unit of prosecution in the securities fraud statute is every
separate sale of a security. Reeder, 181 Wn. App. at 926.
23
State v. Reeder, No. 90577-1
In contrast, Reeder argues that the unit of prosecution in RCW 21.20.010 is
the security. Even though there were many separate payments and
misrepresentations, according to Reeder because there was only one security at
issue, there can be only one count of securities fraud. Reeder also points to the
prosecuting attorney telling the jury to find that the securities fraud offenses were all
part of a continuing impulse or scheme.
Reeder cites State v. Mahmood, 45 Wn. App. 200,206, 724 P.2d 1021 (1986),
to support his argument that his securities fraud sentence violates double jeopardy.
Reeder states that the Mahmood court found that RCW 21.20.010 describes a single
offense.ld. What the Mahmood court held was that under RCW 21.20.010, "making
an untrue statement and omitting to make a material statement are not separate
offenses .... [T]hey may inhere in the same transaction." ld. The Mahmood court
addressed whether the State could charge the separate alternatives listed in RCW
21.20.010(2) as separate crimes. It did not find that the unit of prosecution for
securities fraud was the entire unlawful scheme. As the State notes, by finding that
the alternatives described in RCW 21.20.010(2) can be part of the same transaction,
the court in Mahmood indicated that each transaction is a separate violation of the
securities fraud statute.
24
State v. Reeder, No. 90577-1
Since the State presented evidence that 14 different misleading sales took
place between Reeder and McAllister on several different dates, Reeder's sentence
does not violate the principles of double jeopardy.
2. Theft in the first degree
"A person is guilty of theft in the first degree if he or she commits theft of:
(a) [p]roperty or services which exceed(s) one thousand five hundred dollars in
value." Former RCW 9A.56.030(1)(a) (2005). "Theft" as charged here means
obtaining control "[b ]y color or aid of deception to obtain control over the property
or services of another or the value thereof, with intent to deprive him or her of such
property or services." RCW 9A.56.020(1 )(b). One '"exerts unauthorized control'"
over property when one
[h]a[s] any property or services in one's possession, custody or control
as ... agent ... or competent authority to take or hold such possession,
custody, or control, to secrete, withhold, or appropriate the same to his
or her own use or to the use of any person other than the true owner or
person entitled thereto.
Former RCW 9A.56.010(19)(b) (2006) (now codified at RCW 9A.56.010(22)(b)).
Prosecuting attorneys generally have discretion in deciding whether to aggregate the
crimes or to charge them separately. See State v. Lewis, 115 Wn.2d 294, 299, 797
P.2d 1141 (1990).
Reeder argues that Washington's theft statute does not define the unit of
prosecution for theft in the first degree and, therefore, the statute is ambiguous as to
25
State v. Reeder, No. 90577-1
whether multiple acts of theft that were part of an ongoing plan could be punished
separately. It follows then, Reeder asserts, that the rule of lenity dictates that the
statute be construed in his favor. He also argued that if a criminal impulse is
continuing, it is one crime.
To challenge his theft convictions, Reeder cites State v. Turner, 102 Wn. App.
202, 6 P.3d 1226 (2000). In Turner, the court found that the first degree "theft statute
is ambiguous as to the unit of prosecution for theft by different schemes or plans
against the same victim over the same period of time." ld. at 204. The defendant in
Turner stole from his employer in several ways, and in total there appeared to be 72
individual acts of theft. I d. at 203-04. The State initially charged Turner with one
count of first degree theft for each unlawful act. I d. at 204. The State then amended
the information to charge Turner with four counts of first degree theft. ld. The
different counts were based on the different methods by which Turner allegedly stole
from his employer. ld. The comt held that the charges violated double jeopardy
principles. I d. at 203. The court also noted that the statute makes no mention of
schemes or plans but instead the unit of prosecution is the "exertion of unauthorized
control over the property of the employer, where the property exceeds $1,500 in
value." Id. at 208.
The court's holding and reasoning in Turner does not conflict with the Court
of Appeals decision here. The prosecuting attorney charged Reeder with 14
26
State v. Reeder, No. 90577-1
individual counts of obtaining unauthorized control over the property or services of
another. Unlike the counts in Turner that were based on different schemes, each
count here was based on a separate transaction that occurred at a separate time. !d.
Reeder cites State v. Dash, 163 Wn. App. 63,259 P.3d 319 (2011), to support
his argument that so long as his criminal impulse continued, the transactions were
part of one crime. 14 In Dash, the court stated that "[w]here 'successive takings are
the result of a single, continuing criminal impulse or intent and are pursuant to the
~xecution of a general larcenous scheme or plan, such successive takings constitute
a single larceny regardless of the time which may elapse between each taking."' !d.
at 68 (quoting State v. Vining, 2 Wn. App. 802, 808-09, 472 P.2d 564 (1970))..
However, in Dash, the court was not addressing or interpreting the unit of
prosecution in a particular statute. Rather, the court addressed whether a criminal
scheme as a whole was within the statute of limitations. The defendant in Dash
argued that the jury instructions allowed the jury to convict him without finding that
a criminal act occurred within the statute of limitations. Id. at 67. The Dash court
agreed with the defendant and reversed his conviction because the jury instructions
did not require the jury to make a finding as to when the defendant's criminal
14
Reeder also cites State v. Mermis, 105 Wn. App. 738, 20 P.3d 1044 (2001), to support
his argument that his actions were a single, continuous scheme. In Mermis, the court stated, "If the
impulse continues, the crime is not complete until the continuing impulse has been terminated."
Id. at 745. Like in Dash, the Jovfermis court was discussing whether a criminal impulse terminated
within the statute of limitations. The court was not discussing the unit of prosecution in the theft
statute. Jd. at 746.
27
State v. Reeder, No. 90577-1
impulse terminated and, therefore, it could not be determined whether the jury
convicted the defendant of criminal acts within the statute of limitations. I d. at 71.
The rule articulated in Dash does not affect the issue here, which is whether
individual transactions may be charged separately without violating double jeopardy
principles. There is evidence that Reeder fraudulently obtained control over
McAllister's propertythrough 14 different transactions and, therefore, it was within
the prosecuting attorney's discretion to charge Reeder with 14 individual counts of
theft in the first degree.
We hold that Reeder's sentence did not violate double jeopardy principles
because he was_ not charged multiple times for the same offense. Each count was
based on evidence of 14 distinct times that Reeder's conduct violated each statute.
IV. CONCLUSION
We affirm the Court of Appeals. First, the Court of Appeals was correct to
hold that the subpoena issued by the SIJ for bank records held by financial
institutions was sufficient authority of law under article I, section 7. Authority of
l~w under article I, section 7 can be a judicially issued subpoena so long as it is based
on some reason. The subpoena here was issued by a neutral magistrate and based on
reason to suspect crime or corruption. Second, the Court of Appeals was correct to
hold that Reeder's sentence did not violate principles of double jeopardy. Reeder's
28
State v. Reeder, No. 90577-1
sentence was supported by 14 individual acts that were within each statute's unit of
prosecution.
29
State v. Reeder, No. 90577-1
WE CONCUR:
/
30
State v. Reeder (Michael J), No. 90577-1
(Gordon McCloud, J., dissenting)
No. 90577-1
GORDON McCLOUD, J. ( dissenting)-Petitioner Michael Reeder argues
that the State may not search an individual's personal banking records without
probable cause. In support of this argument, he relies primarily on this court's
decision in State v. Garcia-Salgado, 170 Wn.2d 176, 184, 240 P.3d 153 (2010),
which held that probable cause must support a court order to submit to a DNA
(deoxyribonucleic acid) cheek swab. The majority rejects this argument in an
analysis predicated on two erroneous conclusions: first, that the Fourth Amendment
to the United States Constitution does not limit federal grand jury subpoenas;
second, that article I, section 7 of the Washington State Constitution affords greater
privacy protections for DNA than for financial records. The first conclusion
conflicts with United States Supreme Court precedent; the second conflicts with this
court's precedent.
Perhaps because it proceeds from these flawed premises, the majority opinion
results in a holding that is both sweeping and confusing: personal banking records
1
State v. Reeder (Michael J), No. 90577-1
(Gordon McCloud, J., dissenting)
are "private affairs" protected by article I, section 7, 1 but the State may search them
pursuant to a special inquiry judge (SIJ) subpoena based only on '"reason to suspect
crime or corruption, "' 2 provided that the subject of the search has not yet been
charged with any crime, 3 because the Fourth Amendment does not protect personal
banking records. 4
Because SIJ subpoenas function similarly to federal grand jury subpoenas,
and because this case presents a question of first impression in Washington, 5 I agree
that we should look to Fourth Amendment case law to inform our analysis. 6 But we
1
Majority at 8.
2
Majority at 14 (quoting RCW 10.27.170).
3 Majority at 19-20.
4 Majority at 20.
5
The majority cites three cases for the principle that "the authority of law to collect
private records encompasses more than a warrant based on probable cause." Majority at
11 (citing State v. Gunwall, 106 Wn.2d 54, 68-69, 720 P.2d 808 (1986); State v. Maxfield,
133 Wn.2d 332, 342, 945 P.2d 196 (1997); State v. Miles, 160 Wn.2d 236, 247, 156 P.3d
864 (2007)). But the only one of these cases that actually addresses a subpoena-Miles-
held that the subpoena was not valid "authority of law" under article I, section 7. 160
Wn.2d at 240, 247-48 (striking down statute that authorized state Securities Division to
issue "administrative subpoena[s ]"). Thus, this court has approved judicial subpoenas, like
the one at issue in this case, only in dicta. There is no precedent from this court defining
the permissible scope of such subpoenas.
6
There are very few United States Supreme Court cases that directly address Fourth
Amendment limits on federal grand jury subpoenas. The few cases that do directly address
these limits hold that the Fourth Amendment prohibits any grand jury subpoena "too
sweeping ... 'to be regarded as reasonable."' United States v. Dionisio, 410 U.S. 1, 11,
2
State v. Reeder (Michael J), No. 90577-1
(Gordon McCloud, J., dissenting)
may do so only to the extent that federal precedent is consistent with the limits of
Washington's more protective article I, section 7. We may not rely on federal
precedent to conclude that article I, section 7 does not protect a privacy interest in
one's personal banking records. Nor may we rely, as the majority does, on federal
precedent addressing grand jury subpoenas in circumstances fundamentally different
93 S. Ct. 764, 35 L. Ed. 2d 67 (1973) (quoting Hale v. Henkel, 201 U.S. 43, 76, 26 S. Ct.
370, 50 L. Ed. 652 (1906), overruled in part on other grounds by Murphy v. Waterfront
Comm 'n ofN. Y Harbor, 378 U.S. 52, 66-67, 84 S. Ct. 1594, 12 L. Ed. 2d 678 (1964)); see
also United States v. R. Enters., Inc., 498 U.S. 292, 111 S. Ct. 722, 112 L. Ed. 2d 795(1991) (interpreting Federal Rule of Criminal Procedure 17(c), which provides that "[o]n
motion made promptly, the court may quash or modify the subpoena if compliance would
be unreasonable or oppressive"). Reeder argues that this federal standard is inconsistent
with article I, section 7 because "[u]nlike the Fourth Amendment, article I, § 7 protects
citizens against all warrantless searches, regardless of whether they are reasonable." Suppl.
Br. ofPet'r at 12 (citing State v. Eisfeldt, 163 Wn.2d 628, 634-35, 185 P.3d 580 (2008)).
Thus, he implicitly argues that Washington's constitution prohibits SIJ subpoenas in all
circumstances.
Reeder is correct that this court has sometimes distinguished article I, section 7
protections on the basis that "[u]nlike in the Fourth Amendment, the word 'reasonable'
does not appear in any form in the text of article I, section 7 of the Washington
Constitution." State v. Morse, 156 Wn.2d 1, 9, 123 P.3d 832 (2005). We have relied on
this difference to reject two federal exceptions to the warrant requirement: (1) the "good
faith" exception (where an officer mistakenly but "reasonably" believes no warrant is
necessary), id. at 9-1 0; and (2) the "private search doctrine" (where an individual consents
to a search by a "private actor" who later informs police about what the "search" revealed).
Eisfeldt, 163 Wn.2d at 635-38. But that distinction is not relevant here. Our state
constitution clearly authorizes grand juries. WASH. CONST. art. I, § 26 ("No grand jury
shall be drawn or summoned in any county, except the superior judge thereof shall so
order."). Thus, as a matter of textual logic, the "authority of law" contemplated in article
I, section 7 must include grand jury and other analogous subpoena powers. Because I agree
with the majority and the Court of Appeals in this case that SIJ subpoena powers under
RCW 10.27.170 are basically analogous to a grand jury's subpoena powers, I agree that
federal precedent on the grand jury's subpoena power can inform our analysis.
3
State v. Reeder (Michael J), No. 90577-1
(Gordon McCloud, J., dissenting)
from those present in this case (i.e., United States v. R. Enters., Inc., 498 U.S. 292,
111 S. Ct. 722, 112 L. Ed. 2d 795 (1991), discussed infra).
Instead, we should rely on federal case law addressing circumstances
analogous to those presented here: subpoenas for electronic communications and
other digital data, issued to third party service providers. When I consult those cases,
I conclude that an SIJ subpoena is insufficient "authority of law" under article I,
section 7 of Washington's Constitution to support the search of an individual's
personal banking records. I therefore respectfully dissent.
I. THE MAJORITY'S ANALYSIS CONFLICTS WITH FEDERAL PRECEDENT
HOLDING THAT THE FOURTH AMENDMENT LIMITS GRAND JURY
SUBPOENAS AND STATE PRECEDENT HOLDING THAT PERSONAL BANKING
RECORDS ARE FULLY PROTECTED PRIVATE AFFAIRS
As noted above, the majority's analysis proceeds from two erroneous
conclusions. First, the majority concludes that federal grand jury subpoenas may
issue on less than probable cause "because the Supreme Court has noted that a
subpoena issued by a federal grand jury intrudes less on one's privacy rights than a
search or seizure and, as such, does not receive the same Fourth Amendment
protections." Majority at 14-15 (citing United States v. Dionisio, 410 U.S. 1, 10, 93
S. Ct. 764, 35 L. Ed. 2d 67 (1973)). Second, the majority concludes that the privacy
interest at stake in this case-the privacy interest in one's personal banking
4
State v. Reeder (Michael J.), No. 90577-1
(Gordon McCloud, J., dissenting)
records-is "different" from [i.e., lesser than] the privacy interest in one's DNA
sample (addressed in Garcia-Salgado, 170 Wn.2d at 184). Majority at 20.
Contrary to the majority's first conclusion, Dionisio does not hold that grand
jury subpoenas are "[do] not receive the same Fourth Amendment protections."
Majority at 15. Instead, that case holds only that subpoenas to appear before a grand
jury are not "seizures" for purposes of Fourth Amendment protections. Dionisio,
410 U.S. at 9. While the Dionisio Court upheld a grand jury's authority to subpoena
a voice exemplar, it did not do so because grand jury subpoenas are free from Fourth
Amendment constraints. It did so because the voice (unlike private records) is
"constantly exposed to the public" and thus triggers no reasonable expectation of
privacy. Id. at 14. In reaching that conclusion, the Dionisio Court expressly noted
that "a grand jury subpoena is [not] some talisman that dissolves all constitutional
protections." !d. at 11. And it explained that grand jury subpoena powers are limited
at least by the First, Fourth, and Fifth Amendments." Id. at 11-12; see also United
States v. Miller, 425 U.S. 435,444,96 S. Ct. 1619,48 L. Ed. 2d 71 (1976) (subpoena
for bank records does not violate rights of the investigation target "[s ]ince no Fourth
Amendment interests of the [target] are implicated" (emphasis added)).
Contrary to the majority's second conclusion, article I, section 7 is equally
protective of an individual's privacy interest in personal banking records and his or
5
State v. Reeder (Michael J.), No. 90577-1
(Gordon McCloud, J., dissenting)
her privacy interest in DNA. The majority relies solely on federal Fourth
Amendment precedent to conclude otherwise, 7 but that precedent conflicts with our
case law applying article I, section 7. In Miller, the case on which the majority relies,
the United States Supreme Court held that individuals retain no privacy interest
whatsoever in their banking records since those records are held by a third party.
425 U.S. at 443 ("The depositor takes the risk, in revealing his affairs to another,
that the information will be conveyed by that person to the Government." (citing
United States v. White, 401 U.S. 745, 751-52, 91 S. Ct. 1122, 28 L. Ed 453 (1971)).
But Miller applied a Fourth Amendment doctrine-according to which "the Fourth
Amendment does not prohibit the [government from] obtaining ... information
revealed to a third party" 8-that this court has repeatedly rejected under article I,
section 7. 9 We have consistently held that this third party search exception violates
article I, section 7 protections because under our state constitution, individuals do
not relinquish their privacy rights just by relying on common third party entities to
store information or facilitate communication. State v. Hinton, 179 Wn.2d 862, 874,
7 Majority at 20 (citing Miller, 425 U.S. at 443).
8
Miller, 425 U.S. at 443 (citing White, 401 U.S. at 752; Hoffa v. United States, 385
U.S. 293, 302, 87 S. Ct. 408, 17 L. Ed. 2d 374 (1966); Lopez v. United States, 373 U.S.
427, 83 S. Ct. 1381, 10 L. Ed. 2d 462 (1963)).
9
E.g., State v. Hinton, 179 Wn.2d 862,874,319 P.3d 9 (2014).
6
State v. Reeder (Michael J), No. 90577-1
(Gordon McCloud, J., dissenting)
319 P.3d 9 (2014) ("This court has consistently declined to require individuals to
veil their affairs in secrecy and avoid sharing information in ways that have become
an ordinary part of life."). Indeed, we have even rejected the third party search
exception as applied to curbside garbage. State v. Boland, 115 Wn.2d 571, 57 6, 800
P.2d 1112 (1990) ("It would be improper to require that in order to maintain a
reasonable expectation of privacy in one's trash ... the owner must forgo use of
ordinary methods of trash collection."). And in State v. Miles, we squarely rejected
the exception as applied to bank records. 160 Wn.2d 236, 247-48, 156 P.3d 864(2007). Of particular relevance here, our reasoning in Miles explains that banking
records generally contain a significant amount of "sensitive personal information":
Private bank records may disclose what the citizen buys, how often, and
from whom. They can disclose what political, recreational, and
religious groups a citizen supports. They potentially disclose where the
citizen travels, their affiliations, reading materials, television viewing
habits, financial condition, and more. Little doubt exists that banking
records, because of the type of information contained, are within a
person's private affairs.
!d. at 246-47. Nothing in this analysis suggests that article I, section 7 protects
personal banking records to a lesser extent than it protects DNA or garbage-indeed,
it suggests that our state constitution affords the highest level of protection for
personal banking records.
7
State v. Reeder (Michael J.), No. 90577-1
(Gordon McCloud, J., dissenting)
II. THE MAJORITY RELIES ON INAPPOSITE FEDERAL PRECEDENT To CONCLUDE
THAT THE SIJ SUBPOENA AT ISSUE IN THIS CASE WAS VALID WITHOUT
PROBABLE CAUSE
The majority relies on one United States Supreme Court decision-R.
Enterprises, 498 U.S. 292-to conclude that '"the Government cannot be required
to justify the issuance of a grand jury subpoena by ... establish[ing] probable cause
because the very purpose of requesting the information is to ascertain whether
probable cause exists."' Majority at 14 (quoting R. Enters., 498 U.S. at 297). But
two factors makeR. Enterprises entirely inapposite here.
First, R. Enterprises did not address privacy interests like those at issue in this
case-indeed, it did not really address privacy interests at all. The corporate
defendants in R. Enterprises-all under investigation for allegedly transporting
obscene materials across state lines-challenged a grand jury subpoena for corporate
records and sexually explicit videotapes. In re Grand Jury 87-3 Subpoena Duces
Tecum, 884 F.2d 772 (4th Cir. 1989), rev'd in part by R. Enterprises, 489 U.S. at
297. With respect to the corporate records, the Fourth Circuit Court of Appeals held
that the subpoena was "unreasonable and oppressive"' in violation of Federal Rule
of Criminal Procedure (FRCP) 17 (c) because the government had not met the
"relevancy, admissibility, and specificity" requirements established for trial
subpoenas in United States v. Nixon, 418 U.S. 683, 699-700, 94 S. Ct. 3090,41 L.
Ed. 2d 1039 (1974). R. Enters., 498 U.S. at 296-97. With respect to the videotapes,
8
State v. Reeder (Michael J.), No. 90577-1
(Gordon McCloud, J., dissenting)
the circuit court rejected the defendants' hybrid First Amendment/Fourth
Amendment 10 argument, Grand Jury 87-3, 884 F.2d at 778, but only after noting (in
an earlier ruling) that "[ c]orporations do not have the equivalent privacy rights of
individuals," In re Grand Jury Subpoena: Subpoena Duces Tecum, 829 F.2d 1291,
1299 n.ll (4th Cir. 1987) (emphasis added). The United States Supreme Court
ultimately granted certiorari only as to the corporate records and held that the Nixon
criteria do not apply to grand jury subpoenas. R. Enters., 498 U.S. at 296-97. In
reaching that conclusion, the Court discussed grand jury subpoenas generally and
stated that they do not require a showing of probable cause. I d. at 297. But the
purpose of this discussion was to highlight the difference, from the government's
perspective, between subpoenas issued before and after the decision to charge. See
id. at 300 ("[o]ne simply cannot know in advance whether information sought during
an investigation will be relevant and admissible in a [subsequent] prosecution"). R.
Enterprises contains absolutely no discussion whatsoever of any privacy interests
held by the subject of a grand jury investigation. (In fact, the Court remanded on
what it called "the First Amendment issue." Id. at 303 ("We express no view on this
issue and leave it to be resolved by the Court of Appeals.").)
10
U.S. CONST. amends. I, IV.
9
State v. Reeder (Michael J.), No. 90577-1
(Gordon McCloud, J., dissenting)
Second, the analysis in R. Enterprises is premised on a fact not present here:
the issuance of the subpoena directly to the subject of the investigation. The R.
Enterprises Court held that a person seeking to avoid compliance with a grand jury
subpoena bears the burden of showing that compliance would be unreasonable. !d.
at 301. In reaching that conclusion, the Court acknowledged that "reasonableness"
limits on grand jury subpoenas are meaningless if the target of an investigation does
not know the general subject matter of the grand jury's investigation. Id. at 301-02("[a]fter all, a subpoena recipient 'cannot put his whole life before the court in order
to show that there is no crime to be investigated"' (quoting Marston's, Inc. v. Strand,
114 Ariz. 260, 270, 560 P.2d 778 (1977) (Gordon, J., specially concurring in part
and dissenting in part)). The Court went so far as to suggest that "the Government
[might be required] to reveal the general subject of the grand jury's investigation
before requiring the challenging party to carry its burden of persuasion." Id. at 302.
In this case, Reeder did not know that any SIJ subpoena had issued at all until 13
different financial institutions had already furnished the State with his personal
records. Majority at 3-4.
In short, the facts in R. Enterprises differ so extremely from those present here
that that case is simply not helpful to our analysis. (To the extent that its discussion
of reasonableness limits is relevant at all, it supports Reeder's position.)
10
State v. Reeder (Michael J), No. 90577-1
(Gordon McCloud, J., dissenting)
III. THE MOST RELEVANT FEDERAL PRECEDENT SUGGESTS THAT THE SIJ
SUBPOENA IN THIS CASE WAS THE EQUIVALENT OF A FULL SEARCH AND, AS
SUCH, COULD NOT ISSUE ABSENT A SHOWING OF PROBABLE CAUSE
Federal precedent distinguishing grand jury subpoenas from search
warrants-and permitting the former to issue on less than probable cause-is
predicated in part on the assumption that the subject of an investigation will have the
opportunity to contest the validity of a subpoena:
Subpoenas are not search warrants. They involve different levels of
intrusion on a person's privacy. A search warrant allows the officer to
enter the person's premises, and to examine for himself the person's
belongings. The officer, pursuant to the warrant, determines what is
seized. Moreover, if evidence or contraband of any sort is in plain sight,
the officer may seize it, even if it is not listed in the warrant. The person
to be searched has no lawful way to prevent execution of the warrant.
In re Grand Jury Subpoenas Dated Dec. 10, 1987, 926 F.2d 847, 854 (9th Cir. 1991)
(citation omitted) (citing Arizona v. Hicks, 480 U.S. 321, 326, 107 S. Ct. 1149, 94
L. Ed. 2d 34 7 (1987) ). In other words, grand jury subpoenas may issue on less than
probable cause only because they do not entail the kind of immediate, unavoidable,
and relatively open-ended intrusion into an individual's zone of privacy that a search
warrant authorizes. 11
11 In re Subpoena Duces Tecum, 228 F.3d 341, 348 (4th Cir. 2000) ("the immediacy
and intrusiveness of a search and seizure conducted pursuant to a warrant demand the
safeguard of demonstrating probable cause to a neutral judicial officer before the warrant
issues, whereas the issuance of a subpoena initiates an adversary process that can command
the production [by the owner] of documents and things only after judicial process is
afforded").
11
State v. Reeder (Michael J.), No. 90577-1
(Gordon McCloud, J., dissenting)
For this reason, "[s]ervice of a forthwith subpoena [cannot] authorize an entry
into a private residence." Id. at 854. The State acknowledged as much at oral
argument in this case, 12 but it insisted that article I, section 7 permits subpoenas for
personal banking records because the Fourth Amendment does not recognize any
privacy interest in documents held by a third party. 13 In other words, the State argued
that this court should import into its case law on investigative subpoenas the very
same third party search exception (discussed in section I supra) that we have
consistently rejected in our cases addressing other exceptions to the warrant
requirement. See Hinton, 179 Wn.2d at 874; Miles, 160 Wn.2d at 245-46 (citing
State v. Gunwall, 106 Wn.2d 54, 67, 720 P.2d 808 (1986)).
That result, which the majority adopts, is illogical. Not only does it conflict
with our precedent rejecting the relaxation of privacy protections in the third party
search context and affirming the significant privacy interests that attach to personal
12
Wash. Supreme Court oral argument, State v. Reeder, No. 90577-1 (Feb. 24,
2015), at 15 min., 15 sec., audio recording by TVW, Washington State's Public Affairs
Network, http://www.tvw.org. (conceding that the govermnent may not search "your
home, your car, your person, your body" absent probable cause). This appears to conflict
with another theory that the State articulated in its briefing and the majority endorses in its
analysis: that "the Fourth Amendment has [no] application in the grand jury context,"
State's Suppl. Br. at 5 (footnote omitted).
13
Wash. Supreme Court oral argument, supra, at 15 min. 15 sec., 20 min. 45 sec.
12
State v. Reeder (Michael J.), No. 90577-1
(Gordon McCloud, J., dissenting)
banking records under article I, section 7, it also inverts the logic of cases upholding
federal grand jury subpoenas. Those cases say that subpoenas are less intrusive than
search warrants in part because the subpoena recipient can object and obtain judicial
review. In re Subpoena Duces Tecum, 228 F.3d 341, 348 (4th Cir. 2000); Grand
Jury Subpoenas Dated Dec. 10, 1987, 926 F.2d at 854. But that protection
evaporates when the subpoena issues secretly to a third party. See In re Grand Jury
Subpoena Served upon Niren, 784 F.2d 939, 941 (9th Cir. 1986) (noting that third
party subpoena recipient "cannot be expected to risk a contempt citation in order to
protect the interests of a powerless [investigation target]"). It makes no sense to rely
on the presence of a disinterested third party intermediary to uphold the subpoena in
this case.
Indeed, federal case law addressing subpoenas for digital communications
held by third parties reaches the opposite conclusion. In United States v. Warshak,
the Sixth Circuit held that provisions in the Stored Communications Act, 18 U.S.C.
§§ 2701-2711, authorizing government agents to obtain e-mail communications
from a third party through an administrative or grand jury subpoena, violate Fourth
Amendment protections. 631 F.3d 266,285-88 (6th Cir. 2010). The court reasoned
that "a subscriber enjoys a reasonable expectation of privacy in the contents of e[-
]mails" stored with a commercial internet service provider and that the government
13
State v. Reeder (Michael J.), No. 90577-1
(Gordon McCloud, J., dissenting)
may not, therefore, use a subpoena to circumvent the Fourth Amendment's probable
cause requirement. Id. at 288. In other words, the court held that when the
government seeks to obtain e-mail from a third party service provider, it undertakes
a full search, which it may accomplish only by means of a warrant supported by
probable cause. I d.; see also In re Application for Tel. Info. Needed for Criminal
Investigation, No. 15-XR-90304-HRL-1(LHK), _ F. Supp. 3d _, 2015 WL
4594558 (N.D. Cal. July 29, 2015) (holding that government must obtain a warrant
to access historical cell site location information), appeal filed, No. 15-16760 (9th
Cir. Sept. 3, 2015); Orin S. Kerr, A User's Guide to the Stored Communications Act,
and a Legislator's Guide to Amending It, 72 GEo. WASH. L. REv. 1208, 1220 n.80
(2004) (noting that "the constitutionality of [the Stored Communications Act's
subpoena provisions] is unclear"). (I note that law enforcement in Washington also
routinely obtains warrants for digital data stored with internet service providers.
E.g., State v. Budd, 186 Wn. App. 184, 189, 347 P.3d 49 (describing detective
serving search warrant on Yahoo! and Google in order to obtain suspect's Internet
protocol address), review granted, 183 Wn.2d 1014, 353 P.3d 641 (2015). There is
nothing inherently onerous about this procedure.)
Unquestionably, the State's conduct at issue in this case also constitutes a full
search. Under article I, section 7, personal banking records are entitled to no less
14
State v. Reeder (Michael J.), No. 90577-1
(Gordon McCloud, J., dissenting)
protection than e-mails or text messages (or garbage, for that matter). Like e-mail
and text messages, those records can reveal a person's habits, associations, religious
beliefs, political views, travel history and plans, and financial condition, among
other things. Miles, 160 Wn.2d at 246-47. Because bank records contain such
sensitive information, this court has held that they trigger a reasonable expectation
of privacy, notwithstanding their retention by third party institutions. Id. at 244-45.
When the State obtained Reeder's personal banking records-affording him no
notice whatsoever-it violated this expectation. It therefore conducted a full search
of his private affairs.
CONCLUSION
Consistent with our case law rejecting the third party search doctrine and
federal case law distinguishing (highly intrusive) search warrants from (less
intrusive) subpoenas, I would hold that the SIJ subpoena in this case violated article
I, section 7 protections. I would hold that issuance of a subpoena to a third party to
obtain the records of the target of an investigation violates article I, section 7
protections where, as here, the article I, section 7 interest at stake is in personal,
private bank records. Under controlling Washington precedent, such personal,
15
State v. Reeder (Michael J), No. 90577-1
(Gordon McCloud, J., dissenting)
private records are entitled to the full measure of privacy that we accord to garbage
and infrared emissions. 14 I therefore respectfully dissent.
14
See State v. Young, 123 Wn.2d 173, 182-84, 867 P.2d 593 (1994) (use of infrared
thermal detection device transformed public police surveillance into "search" requiring a
warrant).
16
State v. Reeder (Michael J), No. 90577-1
(Gordon McCloud, J., Dissenting)
17