Title: State of New Jersey v. Marlene McAllister

State: new-jersey

Issuer: New Jersey Supreme Court

Document:

(This syllabus is not part of the opinion of the Court. It has been prepared by the Office of the Clerk for the convenience of the reader. It has been neither reviewed nor approved by the Supreme Court. Please note that, in the interests of brevity, portions of any opinion may not have been summarized). Harding Township residents George and Renee Uslar were elderly and in poor health. In 1996, the Uslars hired Marlene McAllister to help them run errands, go grocery shopping, and pick up their mail. The couple became suspicious that she was stealing money from their bank accounts and notified the police. Following an investigation, the police arrested McAllister. An inventory search of McAllister s purse revealed a check register that recorded deposits of the couple s money into her accounts. The prosecutor then executed grand jury subpoenas duces tecum on McAllister s banks requesting her account records. The banks complied and the records confirmed the deposits. The grand jury indicted McAllister for theft and forgery. At trial, the State introduced McAllister s check register and the bank records into evidence. The jury convicted McAllister on both counts. McAllister was sentenced to 180 days in prison with three years probation for forgery, a concurrent 90-day prison term with two years probation for theft, and was ordered to pay more than $35,000 in restitution. McAllister appealed her conviction, contending that the State s acquisition of her bank records without a search warrant violated her State constitutional rights. The Appellate Division agreed, holding that the long-standing practice of obtaining bank records with a grand jury subpoena duces tecum without notice to the account holder is contrary to state constitutional norms, but affirmed McAllister s conviction because the error was harmless. This Court granted the State s petition for certification. HELD: Under the New Jersey Constitution, citizens have a reasonable expectation of privacy in bank records. However, existing grand jury subpoena procedures sufficiently protect that expectation. Neither a probable cause standard for grand jury subpoenas nor notice to account holders is a constitutional requirement. Although notice to account holders is not constitutionally required, additional protections may be desirable. The Criminal Practice Committee is directed to make a recommendation on whether the Court should consider additional safeguards for account holders. In the seminal United States Supreme Court opinion concerning an individual s interest in financial records held by a bank, United States v. Miller, the Supreme Court rejected the argument that the records should be suppressed, finding that there was no intrusion into any area in which respondent had a protected Fourth Amendment interest. The Court extended the reach of the Miller doctrine in United States v. Payner, holding that the defendant did not have standing to challenge the admission of the records because he had no protectable Fourth Amendment interest in copies of checks and deposit slips retained by his bank. As Miller and Payner make clear, the Federal Constitution does not recognize an expectation of privacy in bank records and does not give citizens recourse to challenge the federal government s acquisition of their bank records from their banks, even if that acquisition involves egregious misconduct. The prosecution s procurement of McAllister s bank records did not violate the United States Constitution. (pp. 10-13) In contrast to the development of federal law, our state jurisprudence has placed limits on the government s power to obtain bank records. As early as 1929, in Brex v. Smith, a New Jersey court recognized that account holders expect their banks to keep their records confidential, even in the face of a government official s formal request. The State concedes that Brex remains the law and does not suggest that police officers should be able to obtain bank records on demand. (pp. 13-16) 3. When the United States Constitution affords our citizens less protection than does the New Jersey Constitution, we have not merely the authority to give full effect to the State protection, we have the duty to do so. Account holders repose trust and confidence in their banks, a relationship that is eroded by unwarranted government interference. This recognition reflects the long tradition in New Jersey of limiting government access to bank records. Further, the advent of modern technology, coupled with the ubiquity of commercial banking, underscores both the ability of prying government eyes to obtain bank records and the need to protect ordinary citizens financial privacy in ways that promote fairness. The New Jersey Constitution recognizes an account holder s interest in the privacy of his or her bank records. (pp. 17-22) 4. The issuance of a grand jury subpoena duces tecum based on a relevancy standard satisfies the constitutional prohibition against improper government intrusion. (p. 27) 5. Although we conclude that notice is not constitutionally mandated, we believe that further study is warranted to assess whether a notice requirement reflects good policy. Therefore, we refer this matter to the Criminal Practice Committee. We exercise our supervisory authority over grand juries to refer this issue to the Criminal Practice Committee for further study of the benefits and burdens of enhanced protections for bank records. (pp. 29-37) Judgment of the Appellate Division is AFFIRMED in part, REVERSED in part, and defendant s conviction is AFFIRMED. JUSTICE WALLACE, has filed an opinion CONCURRING in the result, in which JUSTICES LaVECCHIA and RIVERA-SOTO join. In deciding this case, it is not necessary to make a constitutional pronouncement that we have a protected reasonable expectation of privacy in bank records. Inasmuch as we all agree that the relevancy standard for the grand jury subpoena for defendant s bank records was met here, we should defer addressing the constitutional issue. CHIEF JUSTICE PORITZ and JUSTICES LONG and ALBIN join in JUSTICE ZAZZALI s opinion. JUSTICE WALLACE filed a separate opinion, concurring in the result, in which JUSTICES LaVECCHIA and RIVERA-SOTO join. Plaintiff-Appellant, v. MARLENE McALLISTER, Defendant-Respondent. Argued January 4, 2004 Decided June 20, 2005 On certification to the Superior Court, Appellate Division, whose opinion is reported at 366 N.J. Super. 251 (2004). Joseph F. Connor, Jr., Assistant Prosecutor, argued the cause for appellant (Michael M. Rubbinaccio, Morris County Prosecutor, attorney). Mark H. Friedman, Assistant Deputy Public Defender, argued the cause for respondent (Yvonne Smith Segars, Public Defender, attorney). Russell J. Curley, Deputy Attorney General, argued the cause for amicus curiae Attorney General of New Jersey (Peter C. Harvey, Attorney General, attorney). John D. Caruso argued the cause for amicus curiae Association of Criminal Defense Lawyers of New Jersey (Garces & Grabler, attorneys). JUSTICE ZAZZALI delivered the opinion of the Court. In this appeal, we consider whether account holders have a reasonable expectation of privacy in their bank records, and, if so, the extent of the protection that we should afford that interest. In 1996, an elderly couple employed defendant as a caretaker. The couple became suspicious that she was stealing money from their bank accounts. They notified the police, and, following an investigation, the police arrested defendant. An inventory search of defendant s purse revealed a check register that recorded deposits of the couple s money into defendant s accounts. The prosecutor then executed grand jury subpoenas duces tecum on defendant s banks requesting her account records. The banks complied, and the records confirmed the deposits. The Appellate Division held that the long-standing practice of obtaining bank records with a grand jury subpoena duces tecum without notice to the account holder is contrary to state constitutional norms. The panel concluded that this Court s evolving interpretation of the right to privacy renders bank records the property of the account holder, not the bank. Under the panel s holding, a prosecutor has two options: either demonstrate probable cause before acquiring an account holder s records from a bank, or provide notice to the account holder and an opportunity to object. We hold that, under the New Jersey Constitution, citizens have a reasonable expectation of privacy in bank records. However, we conclude that existing grand jury subpoena procedures sufficiently protect that expectation of privacy. Accordingly, we reject both the application of a probable cause standard to grand jury subpoenas and the imposition of a notice requirement. Nonetheless, although notice to account holders is not constitutionally required, additional protections may be desirable as a matter of policy. Therefore, in the exercise of our supervisory authority, we will request that the Criminal Practice Committee study our grand jury procedures and recommend whether the Court should consider additional safeguards for account holders. Plaintiff-Appellant, v. MARLENE McALLISTER, Defendant-Respondent. JUSTICE WALLACE, concurring in the result. The singular issue in this case is whether the State s acquisition of defendant s bank records by grand jury subpoena was defective because it was not based on probable cause. In rejecting a probable cause requirement in In re Addonizio, Chief Justice Weintraub, writing for the Court, declared that the probable cause required for a search warrant is foreign to [the grand jury] scene. Supra, 53 N.J. at 126. Chief Justice Weintraub explained that the grand juries power to investigate would be feeble indeed if the grand jury had to know at the outset everything needed to arrest a man or to invade his home. Nor would it serve the public interest to stay a probe until the grand jury reveals what it has or what it seeks. Such disclosures could defeat the inquiry and impede the apprehension of the culprit. This is one of the reasons why the law cloaks the grand jury investigation with secrecy. [Ibid.] The Addonizio Court held that the requirement is that the subpoena be sufficiently limited in scope, relevant in purpose, and specific in directive so that compliance will not be unreasonably burdensome. Id. at 128. The majority cites Addonizio approvingly, agrees that relevancy is the standard for a grand jury subpoena of bank records, and finds that requirement was satisfied here. I concur in that conclusion. However, in deciding this case, it is not necessary to make a constitutional pronouncement that we have a protected reasonable expectation of privacy in bank records. We have stated on numerous occasions that a court should not reach and determine a constitutional issue unless absolutely imperative in the disposition of [the] litigation. Bell v. Stafford Tp., 110 N.J. 384, 389 (1988) (quoting Donadio v. Cunningham, 58 N.J. 309, 325-326, (1971); citing Ahto v. Weaver, 39 N.J. 418, 428 (1963); State v. Salerno, 27 N.J. 289, 296 (1958) and American Bank & Trust Co. of Pennsylvania v. Lott, 193 N.J. Super. 516, 521 (App. Div. 1984), aff d, 99 N.J. 32 (1985). Justice Clifford essentially expressed my view when he emphasized that there is the sound, oft-expressed principle that constitutional questions should not be reached and resolved unless absolutely imperative in the disposition of the litigation. State v. Saunders, 75 N.J. 200, 229 (1977) (Clifford, J., dissenting) (citations omitted). Justice Clifford stressed that [w]hile the adjudicative process admits of few unyielding rules, this maxim comes as close as any to being an absolute. Ibid. Inasmuch as we all agree that the relevancy standard for the grand jury subpoena for defendant s bank records was met here, we should defer addressing the constitutional issue. Justices LaVecchia and Rivera-Soto join in this opinion. STATE OF NEW JERSEY, Plaintiff-Appellant, v. MARLENE McALLISTER, Defendant-Respondent. DECIDED June 20, 2005 Chief Justice Poritz PRESIDING OPINION BY Justice Zazzali CONCURRING OPINION BY Justice Wallace DISSENTING OPINION BY