Court Opinion

ID: 9489923
Source: CourtListenerOpinion
Date Created: 2023-08-05 13:27:53.652619+00
Date Added: 2024-06-11T17:53:48.051365
License: Public Domain

BENAVIDES, Circuit Judge,
concurring in part and dissenting in part:
I dissent only from the majority’s decision to affirm the district court’s denial of Blocker’s motion to suppress.
My view of this case can be summarized as follows: (1) Gober was an agent of the FBI; (2) Gober searched AJL’s records; (3) the FBI needs a warrant or an exception to the warrant requirement to search; and (4) there was no warrant and no exception was available to the FBI because Blocker’s implied consent to search under the Mississippi administrative scheme did not encompass an FBI agent desirous of finding criminal activity. As a result, the Fourth Amendment was violated, and the error was not harmless.
Blocker contends that Gober was acting as an agent of the FBI when Gober gathered the evidence that resulted in his prosecution. As set forth by the majority, to make such a determination, this Court, in the past few years, has assumed the adequacy of a test formulated by the Ninth Circuit in United States v. Miller, 688 F.2d 652, 657 (9th Cir.1982): (1) whether the Government knew of or acquiesced in .the intrusive conduct; and (2) whether the private party intended to assist law enforcement efforts or to further his own ends. E.g., United States v. Jenkins, 46 F.3d 447, 460 (5th Cir.1995). Prior to applying the Miller test, this Court had opined that “[p]reknowledge and acquiescence [of the government] make a search by a private party a search by the government.” United States v. Clegg, 509 F.2d 605, 609 (5th Cir.1975). Thus, “[a]ny evidence which, for Fourth Amendment reasons, would have been excluded had it been gathered by the *738government pro se would, of course, have to be excluded if gathered by the only nominally private party.” Id. We explained that the evidence would be excluded to deter the Government from knowingly using a private party to do that what it is prohibited from doing. Id.
In the case at bar, the district court did not cite the above case law or any other authority in its discussion regarding whether Gober was an agent of the FBI. The district court did opine, however, that the following facts were most important to its conclusion that Gober was not an agent:
Gober was counseled that he was to conduct his examination as he always had; that is, it was emphasized that he was to do precisely that which he would do in the normal course of any examination, nothing more, nothing less and nothing different. And Gober testified credibly that the fact of his relationship with the FBI did not influence the course of his examination or affect the form of his examination. He conducted his examinations the same way after he commenced his relationship with the FBI as he had before. In Gober’s words, his examination “would have been no different whatsoever” had he not been involved with the FBI. Indeed, there is no proof that Gober ever went beyond that which was necessary for an administrative examination of Andrew Jackson Life’s financial condition. Gober and Agent Breedlove also testified quite convincingly that no one with the FBI or the United States Attorney’s office ever directed Gob-er as to what to do. They never told him what to look for or what they hoped to find. In fact, they never even told Gober what their investigation might concern, or what they might be interested in. Further, it is uncontroverted that Gober received his assignments from the MID and neither he, nor the FBI or United States Attorney’s office had any control in directing him to any particular company, including Andrew Jackson Life. Finally, though Gober received compensation from the FBI, it is clear that the compensation was for his time away from work and from his family, and not for his “services” or for the information he provided.
The district court’s conclusion that Gober was not an agent is largely based on the finding that Gober’s actions were not directed or influenced by the FBI. Simply because he conducted the examination as he always had does not answer the question at issue.1 The relevant inquiry is (1) whether the Government knew of or acquiesced in the intrusive conduct; and (2) whether the private party intended to assist law enforcement efforts or to further his own ends.
In regard to the first factor, the evidence at the hearing established that, prior to examining the records of AJL, Gober contacted the Government and agreed to provide any evidence of criminal activity he discovered. Thus, it is clear that the Government knew about the intrusive conduct, i.e., the examination of the insurance company’s records. Indeed, the district court found that “Gober agreed [with the Government] that if he were to again encounter what he believed to be evidence of criminal conduct by Mississippi insurers or MID, he would furnish such information to the FBI.” As such, the Government knew of and acquiesced in the intrusive conduct.
The next question is whether Gober intended to assist law enforcement efforts or to further his own ends. In regard to this factor, the district court made findings that would support either conclusion. The district court found that “from the beginning of their [Agent Breedlove and Gober’s] relationship, Gober was desirous of providing the FBI with any evidence of criminal activity which he might uncover during the course of his examinations and, in fact, that is what he agreed to do.” This finding unquestionably indicates that Gober intended to assist law enforcement efforts. However, the district court also found that “Gober’s purpose at Andrew Jackson Life was not to search for evidence of criminal activity, either as an agent of the state government or the federal *739government. Instead, Ms purpose was to perform a financial examination of AJL in Ms capacity as an examiner for MID, and that is precisely what he did.” Curiously, the court found that Gober desired to (and agreed to) provide the FBI with any evidence of criminal activity discovered during the examination but that Ms purpose was not to search for evidence of criminal activity.2
After a careful review of the suppression hearing, it is clear that Gober both intended to assist law enforcement and further Ms own interests. Gober testified regarding how he “would repeatedly try to get [the FBI agents] to make comments or offer direction.” Indeed, he became frustrated after the agents refused to offer him the requested gMdance. Additionally, Gober candidly admitted that, at the time he was conducting the examination of AJL and its affiliates, although he did not know whether the Government later would hire him as a contract employee, he “was hoping that” would happen.3 Though part of Gober’s motivation in reporting the alleged criminal activity was to sMeld himself from any allegations of wrongdoing, see maj. op. at 723, Ms actions went far beyond that. In light of Gober’s testimony, it is most apparent that he intended to help the FBI m their investigation.
In United States v. Bazan, 807 F.2d 1200, 1203 (5th Cir.1986), cert. denied, 481 U.S. 1038, 107 S.Ct. 1976, 95 L.Ed.2d 816 (1987), this Court encountered a somewhat similar scenario involving mixed motives on the part of the alleged Government agent. In that case, the private party may have had a personal reason to conduct the search in addition to any desire he may have had to assist law enforcement officers. 807 F.2d at 1204. We determined that it was unnecessary to ascertain the private party’s “true” motive for entering the ranch because “an informant’s personal motive to conduct a search is not at all inconsistent with an intention to aid a police investigation.” Id. We explained that when the Government does not offer “any form of compensation for [the informant’s] efforts, personal motives in fact are likely to be mixed with the desire to help authorities.” In conclusion, tMs Court held that when the Government has not offered any form of compensation, has not imtiated the idea of searching, and lacked specific knowledge that the informant intended to search, the informant has not acted as a Government agent. Id. In the instant case, although the Government did not imtiate the idea that Gober would conduct the search,4 the Government had specific knowledge that Gober would conduct the search, and the Government compensated Gober for his time.
Our cases indicate that compensation is an important consideration in determining whether the private party became an agent of the Government. See United States v. Ramirez, 810 F.2d 1338, 1342 (5th Cir.), cert. denied, 481 U.S. 1072, 107 S.Ct. 2469, 95 L.Ed.2d 877 (1987); Bazan, 807 F.2d at 1204. In the case at bar, this factor is rather *740troublesome in that the district court found that “though Gober received compensation from the FBI, it is clear that the compensation was for his time away from work and from his family, and not for his ‘services’ or for the information he provided.” Nevertheless, it is undisputed that Gober received compensation from the Government. The broad language in Bazan that “the government has not offered the informant any form of compensation for his efforts” could be read to mean that any form of compensation (whether for services or not) would be sufficient to weigh as a factor in favor of the conclusion that the party was acting as an agent.5 In any event, in light of the evidence adduced at the hearing, I am persuaded that the court’s finding that Gober was not compensated for his services or for the information he provided is clearly erroneous.
The evidence established that Gober received $4,8916 from the FBI for his time spent prior to February 7, 1992, the date the search warrant was executed. Gober testified that this money was not for “services,” but rather for his “time.” Gober explained as follows:
Prior to February 7 any amounts that I received — I think “services” is an improper term. If I had to miss time from work as the investigation grew — there was more and more time needed of me. If I was asked to spend a great deal of time with them, I would say, “The only way can I [sic] do it and not be away from my family the whole time is for me to take a half day off from my work or take one day off.” If I did so, I wasn’t paid because, as you said earlier, I was on contract. So if I took a half day off, I would miss a half day’s work. All they did was reimburse me for exactly what I missed by not being at work. It was — services, I guess, is the improper term.
The FBI paid Gober $37.50 an hour, which is precisely the rate he was paid for his contract work for MID. Although the district court found that Gober was paid for time away from work and from his family (and not for his services), there was no reason for the United States Government to pay $37.50 an hour to Gober, a contract employee of MID, but for the information and services that he provided the Government. Gober undoubtedly was compensated for his services and for the information he provided.
In sum, the evidence clearly demonstrates that Gober intended to assist law enforcement, was compensated for his time spent providing the Government with evidence, and the Government knew of and acquiesced in the search.7 In fact, the FBI most certainly encouraged Gober by providing him with a device for the surreptitious recording of conversations he had with Blocker. And Gober recorded all conversations to satisfy the Government’s concerns regarding allegations of selective recording. The Government should “not be permitted to stand by or blink then-eyes and accept the benefit” of Gober’s activities. United States v. Mekjian, 505 F.2d 1320, 1328 (5th Cir.1975) (explaining that the evidence was admissible because the Government had not encouraged or cooperated with the private individual conducting the search). Based on this Circuit’s precedent and the factors employed by the Ninth Circuit in Miller,81 conclude that Gober was acting as *741an agent of the Government.9
On the other hand, the majority opines “that [w]e need not decide whether Gober was acting as an agent of the Federal Government because even assuming, arguendo, that Gober was not only an agent of MID but was also acting on behalf of the FBI, we believe that no Fourth Amendment violation occurred as Gober’s inspection did not intrude upon any reasonable expectation of privacy that AJL or Blocker might have had in AJL’s records.” Maj. op. at 726-27.10 Although the majority expressly states that it does not determine whether Gober was acting as an agent of the FBI, it agrees “that the evidence establishes that the FBI knew of and acquiesced in Gober’s audit of AJL’s records and that Gober intended to assist the FBI in its law enforcement efforts.” Maj. op. at 726. That, of course, satisfies the Miller test that this Court has been applying to determine whether a person has acted as an agent of the Government.
Having determined that Gober was acting as an agent of the FBI, and recognizing that the Fourth Amendment applies to commer-
cial premises, Marshall v. Barlow’s, Inc., 436 U.S. 307, 98 S.Ct. 1816, 56 L.Ed.2d 305 (1978), I believe that Gober must either have a warrant to search AJL or an exception to the warrant requirement must apply. It is undisputed that Gober did not have a warrant. Instead, he was searching pursuant to an established exception to the warrant requirement for administrative inspections. By engaging in a business that is heavily regulated, Blocker “in effect consent[ed]” to the administrative inspection under this regulatory scheme. Id. at 313, 98 S.Ct. at 1821. The section of the scheme that supplied Gob-er authorization to search provided in pertinent part that “[tjhe Commissioner of Insurance shall carefully examine the’ affairs of each domestic company as to its financial ability and condition as often as once in three (3) years.... Such examination shall be made by the commissioner, or by his accredited representatives, and such companies shall pay the proper charges incurred in such examination_” Miss.Code Ann. § 83-1-25 (emphasis added).11 Clearly, the statute authorizes only the commissioner or his accredited representative to search AJL.12 It *742does not authorize an FBI agent to do so. The Government offers no other exception to the warrant requirement justifying an FBI agent’s search.
Although Blocker consented to Gober’s search as an accredited representative of the commissioner, he did not consent (impliedly or otherwise) to Gober’s search as an FBI agent. I do not see this as breaking any new ground for the Fourth Amendment. Simply put, Gober exceeded the scope of the implied consent under the express language of the statute by allowing an agent of the FBI to search the records. Of course, as the majority emphasizes, the district court found that Gober’s physical search of AJL would have been no different if Gober had not been an agent of the FBI. This analysis ignores, however, the district court’s findings that from the beginning Gober was desirous of providing the FBI with any evidence of criminal activity and that Gober entered into an agreement with the FBI to turn over any such information that he encountered during his examination. In other words, Gober wore two hats.
In United States v. Bosse, 898 F.2d 113 (9th Cir.1990), the Ninth Circuit addressed an analogous Fourth Amendment claim. There, the defendant had an application pending for a state license to deal in automatic machine guns, and an agent of the California Department of Justice inspected the defendant’s premises as part of the licensing process. Unbeknownst to the defendant, the person who accompanied the California state agent during the search was an Alcohol, Tobacco, and Firearms (ATF) agent. The only representation made regarding the ATF agent was when the state agent explained that the ATF agent “is with me.” A search warrant was later obtained by the ATF apparently based on the ATF agent’s observations during that search. The Ninth Circuit opined that “[a] ruse entry when 'the suspect is informed that the person seeking entry is a government agent but is misinformed as to the purpose for which the agent seeks entry cannot be justified by consent.” Bosse, 898 F.2d at 115. The Ninth Circuit explained that the ATF agent’s silence constituted a deliberate representation that his purpose was that declared by the California agent and a deliberate misrepresentation of his true purpose. Thus, the ATF’s furtive entry into the defendant’s home was illegal.
Bosse explains that a government agent is not permitted to “gain access to records which would otherwise be unavailable to him by invoking the private individual’s trust in his government, only to betray that trust.” 898 F.2d at 115 (quoting SEC v. ESM Government Securities, Inc., 645 F.2d 310, 316 (5th Cir.1981)). Yet that is exactly what happened in the case at bar. FBI Agent Gober gained access to Blocker’s records by representing himself solely as an agent of MID. Cf. United States v. Tweel, 550 F.2d 297 (5th Cir.1977), (holding that the Fourth Amendment is violated when an administrative officer obtains, consent to search by falsely representing that the evidence obtained will be used only in a civil investigation). The FBI should not be able to piggyback a criminal investigation onto an administrative search in order to accomplish what it otherwise would not be able to accomplish.
This case appears complicated by the fact that the person who had the statutory authority to search AJL’s records and the person who was acting as an agent of the FBI were one and the same. I perceive that to be a distinction without a difference. For all intents and purposes, Gober brought an agent of the FBI with him to search AJL just as the state inspector covertly brought an ATF agent with him in Bosse. To me, the fact that the two agents were one and the same person as opposed to two separate individuals, if anything, makes the search more intrusive in that at least if two persons arrive to conduct a search, one would have some warning that there could be two persons from different agencies or dual purposes to the search. One might have some inkling that the scope of one’s consent was exceeded *743and thus have the opportunity to respond accordingly.
I believe that insofar as Gober was acting as an FBI agent he broke the rule when he gained entry under the guise of state authority but had an objective not contemplated by Blocker. After gaining entry, the Government agent’s actions must be limited to “the very purposes contemplated by the occupant.” Lewis v. United States, 385 U.S. 206, 211, 87 S.Ct. 424, 427, 17 L.Ed.2d 312 (1966). I would not presume to think that Blocker had contemplated that Gober (who identified himself only as an agent of MID) had an agreement to turn over any incriminating evidence to the FBI pursuant to a preexisting, cooperative relationship. The bottom line is that Gober was permitted to search based on Blocker’s consent under the administrative statute, which does not authorize a search by the FBI. In my opinion, Blocker did not consent in any way, shape, or form to having an FBI agent search his place of business. Under these circumstances, Blocker had a reasonable expectation of privacy in the corporate records vis-a-vis Gober’s relationship with the Federal Government.
The majority relies heavily on the fact that Gober, as an MID agent, was authorized to conduct the search and did not exceed the scope of his state authority. That is true. My analysis does not touch the search in regard to his state authority. That inspection was legal and the information properly passed on to MID. If MID had furnished the information to the FBI after it had been funneled through proper administrative channels, that would fall within the administrative search exception.13 But that is not what happened. The administrative search exception does not allow the FBI to send one of its own agents with someone who has the authority to conduct an administrative search, which is effectively what happened here. The only search I consider illegal is the one that was conducted by Gober as a federal agent, the fruits of which were used to convict Blocker — that of course being the intended purpose of the FBI agent.
I believe that the controlling precedent does not allow the United States Government to exploit the Mississippi statutory authority vested in a financial examiner to search the premises until the examiner has acquired sufficient evidence to secure a search warrant. Here, the Government knowingly used and paid a contract employee of MID to do what it was prohibited from doing, searching without a warrant.14 Pursuant to the majority opinion, the Government may now effectively circumvent the Fourth Amendment by repeatedly dispatching an administrative agent, one that it had compensated and equipped with a recording device, to search without a warrant. Indeed, there is nothing in the majority opinion that would preclude the FBI from initiating contact with another governmental or administrative agent who has authority to search whomever (or whatever) happens to be the target of a criminal investigation.15
*744Therefore, concluding that Gober was an agent of the Government and that Blocker had a reasonable expectation of privacy in the corporate records vis-a-vis Gober’s relationship with the Federal Government, I would hold that the search conducted by Gober as an agent of the United States Government violated Blocker’s rights under the Fourth Amendment.
That, however, does not end the analysis. A constitutional error may be deemed harmless if the beneficiary of a constitutional error proves beyond a reasonable doubt that the error complained of did not contribute to the verdict. Chapman v. California, 386 U.S. 18, 24, 87 S.Ct. 824, 828, 17 L.Ed.2d 705 (1967). As the court below stated, it was “undisputed that without the information provided by Gober, there would have been no probable cause for issuance of the February 7, 1992 warrant.” Further, the warrant resulted in the seizure of the corporate records that were used to secure Blocker’s convictions. Clearly, the evidence that should have been suppressed contributed to the verdict. The admission of the evidence therefore was not harmless. Because the evidence obtained from Blocker’s search after he was compensated should have been excluded, I would reverse the district court’s denial of Blocker’s motion to suppress and remand the case to allow the district court to determine whether Blocker had standing to challenge the search, an issued raised but never addressed in the district court.

. If the FBI had directed Gober's actions, he undoubtedly would have been acting as an agent of the FBI.

. In a footnote, the district court sought to clarify this finding, opining that Gober did not agree to "look for” evidence but agreed only that he would continue to provide information discovered during his examinations that might suggest criminal activity.

. Gober was no longer employed by MID after the search warrant was executed on Februaiy 7, 1992. Indeed, three days after the search warrant was executed, Gober began working as a contract employee for the FBI. Subsequent to that date, the FBI paid Gober a total of $35,000 "to analyze documents, review documents as it relates to insurance accounting.” At the end of his contract with the FBI, according to Gober, he "met with the U.S. Attorney’s office and offered services to them to — [he] had previously with the FBI looked at documents to determine relevancy and so forth, and I was going to, if they needed me, assist the U.S. Attorney’s office in continued analysis and explaining the relevancy of those documents to an insurance company's collapse.” Ultimately, Gober received $78,280 for the services he rendered to the United States Attorney from October 13, 1992 to May 6, 1994. At the time of the suppression hearing, Gober still was providing services to the United States Attorney at the rate of $30 per hour.

.The fact that the Government did not initiate the contact with Gober does not preclude the determination that Gober was acting as an agent of the United States Government. "[I]t is ‘immaterial’ whether the government originated the idea for a search or joined it while it was in progress. United States v. Knoll, 16 F.3d 1313, 1320 (2nd Cir.), cert. denied, — U.S. —, 115 S.Ct. 574, 130 L.Ed.2d 490 (1994) (citing Lustig v. United States, 338 U.S. 74, 69 S.Ct. 1372, 93 L.Ed. 1819 (1949) (plurality)).

. Of course, the Government may pay, for example, a witness's expenses incurred in traveling to testify, and such compensation would not be a factor in- determining whether the person was an agent of the Government.

. The district court stated that Gober was paid approximately $4100. During the hearing, Agent Breedlove initially estimated that Gober had been paid $4100 for his time prior to February 7, 1992. After looking at the FBI receipts, however, Agent Breedlove corrected his testimony and stated that the figure was $4,891. Gober also testified that he received approximately $4,800 from the FBI for that time period.

. Indeed, the district court found that Gober had a preexisting cooperative relationship with the Government, and, as set forth previously, the Government had actual knowledge that Gober was searching AJL’s records and furnishing evidence to the FBI.

. I note that whether the Miller test or our earlier precedent, Clegg, supra, is used, I come to the same conclusion that Gober was acting as an agent of the Government.

. Although admittedly an appellant has a difficult burden of showing that the district court clearly erred, it is not insurmountable. See Jenkins, 46 F.3d at 460 (holding that the district court clearly erred in finding that the private party was acting as an agent of the Government).

. The majority opines that the district court’s conclusion that Gober was not a Government agent is "arguably implicit.” Maj. op. at 726. I do not read the district court's conclusion that Gober was not an agent of the Federal Government to be implicit. The Government acknowledges in its brief that the district court found that Gober was not an agent of the FBI. The district court recognized that Blocker's “primary contention ... is that Gober operated in cooperation with, and effectively as an agent for the FBI, using his authority as a financial examiner for the MID as a pretext to gain entry to the premises of [AJL] and access to the financial documents of that company_” (emphasis added). The district court subsequently stated that it was "persuaded that Gober's purpose at [AJL] was not to search for evidence of criminal activity, either as an agent of the state government or the federal government." (emphasis added). In any event, assuming it was an implicit conclusion, I would find it clearly erroneous.

. Blocker does not challenge the validity of the Mississippi administrative scheme.

.The majority cites New York v. Burger, 482 U.S. 691, 107 S.Ct. 2636, 96 L.Ed.2d 601 (1987), for the proposition that, in certain circumstances, warrantless searches of commercial property may be reasonable under the Fourth Amendment. Those circumstances are not present here inasmuch as the statute in Burger specifically authorized police officers to conduct an administrative search. Id. at 694 n. 1, 107 S.Ct. at 2639 n. 1. Unlike in Burger, Blocker could not have "in effect" consented to an FBI agent’s search of his business premises. If the Mississippi statute had so provided, then Blocker would have had the opportunity to challenge the statute as in Burger and Barlow’s. As the Supreme Court explained, "the regulatory statute must perform the two basic functions of a warrant; it must advise the owner of the commercial premises that the search is being made pursuant to the law and has a properly defined scope, and it must limit the discretion of the inspecting officers.” Burger, 482 U.S. at 703, 107 S.Ct. at 2644. "To perform this first function, the statute must be ‘sufficiently comprehensive and defined that the owner of commercial property cannot help but be aware that his properly will be subject to periodic inspections undertaken for specific purposes'." Id. (quoting Donovan v. Dewey, 452 U.S. 594, 101 S.Ct. 2534, 69 L.Ed.2d 262 (1981)) (emphasis added). “In addition, it notifies the [business owner] as to who is authorized to conduct an inspection." Burger, 482 U.S. at 711, *742107 S.Ct. at 2648 (emphasis added). In the case at bar, the statute did not inform Blocker that an FBI agent would search or that the FBI agent was desirous of finding evidence of criminal activity. Thus, the statute failed to perform its function as a warrant notifying the business owner who is searching and the inspector's specific purpose.

. In light of the district court’s finding that “Gober agreed [with the Government] that if he were to again encounter what he believed to be evidence of criminal conduct by Mississippi insurers or MID, he would furnish such information to the FBI,” and Gober’s testimony that he secretly recorded conversations he had with MID officials, one may speculate whether MID. would have passed any incriminating information on to the FBI. (emphasis added). As such, the Government acquiesced not only in Gober’s search of Blocker but also in an investigation of MID itself.

. As the majority notes, maj. op. at 727 n. 8, it is clear that if Gober had not had any contact with the FBI but nevertheless searched with the intention of turning over any incriminating evidence to the FBI, there would be no violation of the Fourth Amendment. The majority thus reasons that whether Gober went to the FBI before or after searching is a distinction without a difference. I cannot agree. If Gober had waited to contact the FBI until after the examination, then the Government could not have known or acquiesced in the search and thus, by definition, Gober would not have been an agent of the Government. Of course, if Gober was not an agent of the Government, the Fourth Amendment was not violated. In my view, this case hinges on whether Gober was acting as an agent of the FBI. Because if he was an agent of the FBI, then he exceeded the scope of Blocker's implied consent under the Mississippi administrative scheme.

.Who initiated the contact (either the Federal Government or the person conducting the search) is simply a consideration in determining whether the person acted as an agent of the Government. Bazan, 807 F.2d at 1204. Here, the majority declares that it is immaterial wheth*744er the person actually was an agent of the Government because the person had the authority to search under the administrative exception to the warrant requirement