Opinion ID: 463221
Heading Depth: 2
Heading Rank: 1

Heading: Suppression of Evidence Under Court's Supervisory Powers

Text: 9 Appellant Frazin seeks to suppress bank records and other information obtained in violation of the Right to Financial Privacy Act of 1978. 12 U.S.C. Secs. 3401-22 (1982 & Supp. II 1984) (the Act). Although the Act provides for exclusive civil penalties for its violation, Frazin argues that the district court should have exercised its inherent supervisory powers ... to dismiss an indictment on the basis of governmental misconduct. United States v. Owen, 580 F.2d 365, 367 (9th Cir.1978) (citations omitted). In evaluating Frazin's claim, we consider first, whether the Act itself authorizes a suppression remedy, and second, if the Act does not authorize such a remedy, whether we may provide one in the exercise of our supervisory powers. We hold against appellant on both issues. 10 There is no dispute over the facts relating to the government's collection of Frazin's financial information and records. The only issue on appeal is whether the district court was correct as a matter of law in refusing to suppress the improperly obtained evidence. We review the question de novo. United States v. McConney, 728 F.2d 1195, 1201 (9th Cir.) (en banc), cert. denied, --- U.S. ----, 105 S.Ct. 101, 83 L.Ed.2d 46 (1984). 11 The Right to Financial Privacy Act of 1978 prohibits financial institutions from providing the government with information concerning their customers' financial records, unless either the customer authorizes the disclosure of such information or the government obtains a valid subpoena or warrant. 12 U.S.C. Sec. 3402. 1 Congress passed the Act in part as a response to United States v. Miller, 425 U.S. 435, 96 S.Ct. 1619, 48 L.Ed.2d 71 (1976). See H.R.Rep. No. 1383, 95th Cong., 2d Sess. 34 (1978) [H.R. Rep. No. 1383], reprinted in 1978 U.S.Code Cong. & Ad.News 9273, 9306; Electronic Funds Transfer and Financial Privacy: Hearings on S. 2096, S. 2293, and S. 1460 Before the Subcomm. on Financial Institutions of the Senate Comm. on Banking, Housing, and Urban Affairs, 95th Cong., 2d Sess. 154 (1978) (statement of Senator Mathias) [Senate Hearings ]. In United States v. Miller, the Supreme Court affirmed a denial of a motion to suppress bank records obtained by an allegedly defective subpoena, on the ground that a bank customer has no constitutionally-protected privacy interest in such records. Miller, 425 U.S. at 440, 96 S.Ct. at 1622-23. The Act fill[s] the void in ... Federal law [left by Miller ] regarding statutory protection against unrestricted access to third-party records. Senate Hearings at 154; see also The Safe Banking Act of 1977: Hearings on H.R. 9086 before the Subcomm. on Financial Institutions Supervision, Regulation & Insurance of the House Comm. on Banking, Finance & Urban Affairs, 95th Cong., 1st Sess. 1600 (1977) (statement of Representative Rolph) (the Act reverses Miller by recognizing a claim of confidentiality for bank customer records) [House Hearings]. 12 Both Congress and the Executive regarded the Act as a compromise between a bank customer's right of financial privacy and the need of law enforcement agencies to obtain financial records pursuant to legitimate investigations. See H.R.Rep. No. 1383 at 34, reprinted in 1978 U.S.Code Cong. & Ad.News 9273, 9306; Donovan v. National Bank, 696 F.2d 678, 683 (9th Cir.1983). Earlier versions of the Act did not provide for penalties, but instead required the Justice Department to give a bank customer 18 days advance notice of a government subpoena, within which period the customer could move to quash the subpoena. The Justice Department opposed the advance notice provision on the ground that it would impede the Department's investigative functions. See Letter from Attorney General Griffin Bell to Representative Fernand J. St. Germain (Sept. 20, 1977) (discussing Justice Department response to H.R. 9086) in House Hearings at 1527-28; House Hearings at 1531-32 (statement of Deputy Assistant Attorney General Baker). Deputy Assistant Attorney General Baker recommended civil penalties as an accommodation between privacy and law enforcement interests. House Hearings at 1550 (statement of Mr. Baker). 13 In the final version of the Act, Congress reduced the notice requirement to 10 days, 12 U.S.C. Sec. 3405, and provided for civil penalties against the government and financial institutions for obtaining or disclosing a customer's financial information without the requisite authorization, 12 U.S.C. Sec. 3417. 2 The remedies are exclusive: The remedies and sanctions described in this chapter shall be the only authorized judicial remedies and sanctions for violations of this chapter. Id. Sec. 3417(d). 14 Although Congress did not explicitly address the availability of a suppression remedy during its consideration of the Act, we find that remedy to be excluded under section 3417(d). Congress deliberately balanced the right of privacy and the needs of law enforcement when it established the protections and the penalties of the Act. See H.R.Rep. No. 1383 at 34, reprinted in 1978 U.S.Code Cong. & Ad.News 9273, 9306; House Hearings at 1531 (statement of Mr. Baker). To imply a suppression remedy under the Act would alter that balance. Moreover, Miller affirmed the denial of a suppression motion. Miller, 425 U.S. at 437, 96 S.Ct. at 1621. The Act responded to both the substantive and the procedural aspects of Miller, by providing not only a right to financial privacy, but remedies for the violation of that right as well. Had Congress intended to authorize a suppression remedy, it surely would have included it among the remedies it expressly authorized.  'In the absence of strong indicia of a contrary congressional intent, we are compelled to conclude that Congress provided precisely the remedies it considered appropriate.'  Scientex Corp. v. Kay, 689 F.2d 879, 883 (9th Cir.1982) (emphasis added by court) (quoting Middlesex County Sewerage Authority v. National Sea Clammers Association, 453 U.S. 1, 15, 101 S.Ct. 2615, 2624, 69 L.Ed.2d 435 (1981)). 15 Because the statute, when properly construed, excludes a suppression remedy, it would not be appropriate for us to provide one in the exercise of our supervisory powers over the administration of justice. Where Congress has both established a right and provided exclusive remedies for its violation, we would encroach upon the prerogatives of Congress were we to authorize a remedy not provided for by statute. United States v. Chanen, 549 F.2d 1306, 1313 (9th Cir.), cert. denied, 434 U.S. 825, 98 S.Ct. 72, 54 L.Ed.2d 83 (1977). The district court properly admitted the financial evidence. 3