Court Opinion

ID: 4424297
Source: CourtListenerOpinion
Date Created: 2019-08-09 15:00:18.56579+00
Date Added: 2024-06-11T07:49:59.846885
License: Public Domain

17‐3258(L)
In re 650 Fifth Ave. & Related Props.

                         UNITED STATES COURT OF APPEALS
                             FOR THE SECOND CIRCUIT
                                  ______________

                                      August Term 2018

                     (Argued: May 1, 2019 | Decided: August 9, 2019)

                                   Docket No. 17‐3258(L)

              IN RE: 650 FIFTH AVENUE AND RELATED PROPERTIES*
                                 ______________

Before:
                      PARKER, WESLEY, and CHIN, Circuit Judges.

       This is a civil action brought by the United States of America seeking
forfeiture of property owned by the Claimants Alavi Foundation and 650 Fifth
Avenue Company. In 2016, we reversed an order of the United States District
Court for the Southern District of New York (Forrest, J.) granting summary
judgment to the Government and remanded for the court to address certain open
matters. On remand, the district court denied the Claimants’ motion to compel
discovery on their statute‐of‐limitations defense, granted summary judgment to
the Government on the merits of the timeliness issue, and denied the Claimants’
motion to suppress evidence seized pursuant to a defective search warrant. At the
jury trial that followed, the court prohibited the Claimants from calling two former
Alavi board members to testify, allowed the Government to play videotaped
depositions of five former board members repeatedly invoking their Fifth
Amendment privilege, and barred the Claimants from arguing that the
Government improperly intimidated these witnesses. The court also ruled in favor
of the Government on dozens of other challenged orders during its adjudication
of the case. The jury ultimately found for the Government, and the court entered
judgment ordering the forfeiture of the Claimants’ property.

*   The Clerk of the Court is directed to amend the official caption as set forth above.
       We hold that the district court abused its discretion by denying the
Claimants’ motion for discovery on their statute‐of‐limitations defense and,
accordingly, erroneously granted the Government’s motion for summary
judgment on the timeliness issue. We REVERSE the court’s discovery order,
VACATE the summary judgment order, and REMAND for discovery.
       We also hold that the district court erroneously denied the Claimants’
motion to suppress by incorrectly concluding that the exclusionary rule’s good‐
faith exception forgave the warrant’s defects and by applying the wrong legal
standard for the inevitable‐discovery exception. We REVERSE the portion of the
suppression order concerning the good‐faith exception and VACATE and
REMAND on inevitable discovery for the court to apply the correct standard.
       In addition, we find that the district court abused its discretion in its orders
forbidding the former Alavi board members from testifying at trial, allowing the
Government to play the videotaped Fifth Amendment invocations, and
prohibiting the Claimants from mounting their preferred defense. We REVERSE
in part and VACATE in part the orders underlying these decisions.
       In light of these holdings, we VACATE the judgment and REMAND for
further proceedings consistent with this opinion.
                                 _________________

             DANIEL S. RUZUMNA, Patterson Belknap Webb & Tyler LLP, New
                 York, NY; JOHN GLEESON, Debevoise & Plimpton LLP, New
                 York, NY (Melissa Ginsberg, Michael N. Fresco, Patterson
                 Belknap Webb & Tyler LLP, New York, NY; Matthew E.
                 Fishbein, Derek Wikstrom, Justin R. Horton, Debevoise &
                 Plimpton LLP, New York, NY, on the brief), for Claimants‐
                 Appellants Alavi Foundation and 650 Fifth Avenue Company.

             MICHAEL D. LOCKARD, Assistant United States Attorney (Daniel
                 M. Tracer, Daniel B. Tehrani, Assistant United States Attorneys,
                 on the brief), for Geoffrey S. Berman, United States Attorney for
                 the Southern District of New York, New York, NY.
                                _________________

                                          2
WESLEY, Circuit Judge:

      This civil‐forfeiture action considers whether the Government may seize 650

Fifth Avenue, a skyscraper in Midtown Manhattan, along with other real property

and various bank accounts located throughout the United States. These assets are

owned by the Alavi Foundation and 650 Fifth Avenue Company (the

“Claimants”), entities that allegedly violated federal law through their

relationships with the Islamic Republic of Iran. After a month‐long trial, a jury

ruled largely in favor of the Government, and the United States District Court for

the Southern District of New York (Forrest, J.) entered judgment for the

Government and ordered forfeiture of the assets. The Claimants appeal from that

judgment and challenge over a dozen pretrial, trial, and posttrial orders.

      The district court committed numerous errors requiring us to reverse or

vacate several of these orders. These errors also require us to vacate the judgment.

      First, the district court abused its discretion by denying the Claimants’

motion to compel discovery of evidence they contend supports their theory that

this action was untimely under the governing statute of limitations, 19 U.S.C.

§ 1621. We reverse the underlying order and remand for discovery. We also vacate

the grant of summary judgment to the Government on the timeliness issue.

                                         3
      Second, the district court erred in denying the Claimants’ motion to suppress

evidence obtained pursuant to a defective search warrant. We reverse the court’s

suppression order to the extent it applied the good‐faith exception to the Fourth

Amendment’s exclusionary rule. The Government’s failure to identify the

warrant’s glaring defects, or its decision to execute the warrant in spite of them,

precludes a finding of good faith. As to its application of the inevitable‐discovery

exception, the court failed to follow the legal standard laid out in our prior

decision. We vacate its order with respect to this exception and remand for the

court to apply the correct legal standard.

      Third, the district court abused its discretion by barring two former Alavi

board members from testifying at trial. We reverse the underlying order. The court

also abused its discretion by allowing the Government to play at trial five

videotapes of former board members repeatedly invoking their Fifth Amendment

privilege against self‐incrimination. We vacate the underlying orders. Lastly, the

court abused its discretion by precluding the Claimants from presenting certain

rebuttal evidence. We vacate the underlying orders.

                                         4
                                   BACKGROUND1

                 The Claimants

       Alavi is a New York not‐for‐profit corporation created in 1973 by

Mohammad Reza Pahlavi, then Shah of Iran.2 The Internal Revenue Service

(“IRS”) has classified Alavi as a charitable organization under § 501(c)(3) of the

Internal Revenue Code.

       In 1974, Alavi acquired property located at 650 Fifth Avenue, New York,

New York. One year later, it borrowed $42 million from Bank Melli, owned by the

Government of Iran, to retire mortgages on the property and construct a 36‐story

skyscraper featuring retail and office space (the “Building”). For various reasons,

Alavi ran into financial trouble in the 1980s.

       Assa Corporation (“Assa Corp.”), which was a party below but is not a party

to this appeal, is a New York corporation formed in 1989. It is wholly owned by

Assa Company Limited (“Assa Ltd.,” and collectively with Assa Corp., “Assa”), a

1 In 2016, we vacated the district court’s order granting summary judgment to the
Government in this action. See In re 650 Fifth Ave. & Related Props., 830 F.3d 66 (2d Cir.
2016). A more complete version of the facts giving rise to this litigation is found in that
opinion.
2Alavi was originally known as the Pahlavi Foundation and later as the Mostazafan
Foundation of New York. We refer to all iterations of the entity as Alavi.

                                            5
corporation formed in Jersey, Channel Islands. In 1993, Bank Melli acquired a

holding company that had come to own Assa. Two years later, Bank Melli

transferred the holding company to private individuals. Despite this transfer, the

Claimants agree that Bank Melli continued to control Assa after 1995, the year the

relevant economic sanctions against Iran took effect.3 Whether Alavi knew this fact

is a disputed question at the center of this lawsuit.

      In 1989, Alavi entered into a partnership agreement with Assa to form 650

Fifth Ave. Co. under New York law. After receiving authorization from the

Charities Bureau of the New York Attorney General’s Office and the New York

Supreme Court, Alavi transferred the Building, valued at $83.2 million at the time

but subject to the Bank Melli mortgage, to the partnership. Assa contributed $44.8

million, which 650 Fifth Ave. Co. used to pay off the Bank Melli mortgage.

Ultimately, Alavi owned 60% of 650 Fifth Ave. Co. and Assa owned 40%.4 650 Fifth

Ave. Co. owned 100% of the Building.

3 While the Claimants conceded this fact below, Assa disputes this post‐1995 control
finding. We address the merits of Assa’s challenge in a companion opinion.
4 Alavi initially owned 65% of 650 Fifth Ave. Co. and Assa owned 35%, but Alavi
subsequently sold a 5% stake in the partnership to Assa.

                                          6
      Today, Alavi is the managing partner of 650 Fifth Ave. Co. The partnership

has no employees, and its primary operational activity is engaging outside

companies to manage the Building.

               Pleadings, Early Developments, and Summary Judgment

      This action began on December 17, 2008, when the Government filed a

complaint in the United States District Court for the Southern District of New York

(Holwell, J.) seeking the forfeiture of property belonging to Assa and Bank Melli

under 18 U.S.C. § 981(a)(1). The centerpiece of this property is the Building. The

Government alleged that the property was traceable to violations of the

International Emergency Economic Powers Act (“IEEPA”), 50 U.S.C. § 1701 et seq.,

and to money‐laundering transactions in violation of 18 U.S.C. §§ 1956 and 1957.

      In November 2009, the Government amended its forfeiture complaint to add

certain property interests of the Claimants, including their interests in the

Building. Along with the above‐noted statutes, the amended complaint relied on

the Iranian Transactions Regulations (“ITRs”), promulgated by the Department of

                                        7
Treasury’s Office of Foreign Assets Control (“OFAC”).5 The ITRs forbid certain

business activities with entities that the Government of Iran owns or otherwise

controls. See 31 C.F.R. § 560. As relevant here, ITRs effective May 7, 1995 proscribe

the knowing “exportation, reexportation, sale, or supply, directly or indirectly,

from the United States, . . . of any goods, technology, or services to Iran or the

Government of Iran.” Id. § 560.204. The amended complaint alleged that Bank

Melli, Assa, and Alavi are owned and controlled by the Government of Iran and

that all three provided services to Iran in violation of the ITRs.

       In 2013, the district court (Forrest, J.)6 granted summary judgment to the

Government, ordering that Assa and the Claimants forfeit most of the property

interests cited in the amended complaint. In re 650 Fifth Ave. & Related Props., No.

08 Civ. 10934 (KBF), 2013 WL 5178677, at *3 & n.14 (S.D.N.Y. Sept. 16, 2013); see

also In re 650 Fifth Ave. & Related Props., No. 08 Civ. 10934 (KBF), 2014 WL 1516328,

at *1 (S.D.N.Y. Apr. 18, 2014) (ordering forfeiture of additional Claimant property

5In 1995, President Clinton issued executive orders declaring the Government of Iran a
national security threat. The ITRs were promulgated pursuant to this authority. See In re
650 Fifth Ave., 830 F.3d at 80 (citing Exec. Order No. 12,957, 60 Fed. Reg. 14,615 (Mar. 15,
1995); Exec. Order No. 12,959, 60 Fed. Reg. 24,757 (May 6, 1995)).
6In February 2012, the Southern District reassigned the case from Judge Holwell to Judge
Forrest.

                                             8
interests). Shortly thereafter, the Claimants—but not Assa—moved for final

judgment as to their property interests. See In re 650 Fifth Ave., 830 F.3d at 86. The

district court granted this motion, enabling the Claimants to appeal. Id.

       In 2016, we vacated the forfeiture judgment as it pertained to the Claimants.

We remanded for the district court (1) to allow the Claimants to litigate their

defense that the Government’s action was untimely, which the court had rejected

sua sponte, id. at 96–97; (2) to consider whether to suppress evidence the

Government obtained pursuant to what we held was a defective search warrant,

id. at 98–106; and (3) if the case survived these hurdles, to hold a trial on questions

of material fact that we held the court improperly decided on summary judgment,

id. at 93–95.

                Proceedings on Remand

       On remand, the Claimants moved to compel discovery pertinent to the

statute‐of‐limitations issue and to suppress evidence the Government obtained

during its illegal December 2008 search. The district court denied both motions. It

also granted a motion by the Government to preclude two former Alavi board

members from testifying at trial, issued orders permitting the Government to play

five videotaped depositions of former Alavi board members repeatedly invoking

                                          9
their Fifth Amendment privilege against self‐incrimination, and barred the

Claimants from presenting certain evidence to rebut the adverse inferences

suggested by the videotapes.

      The jury returned a verdict for the Government. It found that almost all the

Claimants’ property interests cited in the amended complaint were either

traceable to or derived from the proceeds of an IEEPA violation. The jury also tied

most of Alavi’s property to money‐laundering transactions. After resolving a

handful of posttrial motions, the court entered final judgment for the Government

and ordered the forfeiture of most of the property interests named in the amended

complaint. The Claimants timely appealed.

                                 DISCUSSION

      This appeal raises three issues: (1) whether the district court abused its

discretion by denying the Claimants’ motion to compel discovery on their statute‐

of‐limitations defense; (2) whether the court erroneously allowed the Government

to rely on the good‐faith and inevitable‐discovery exceptions to the exclusionary

rule in denying the Claimants’ motion to suppress; and (3) whether the court

abused its discretion in its orders concerning the former Alavi board members’

Fifth Amendment invocations.

                                        10
      I.     The District Court Abused Its Discretion by Denying the
             Claimants’ Request for Discovery on Their Statute‐of‐Limitations
             Defense.

      The relevant statute of limitations requires the Government to commence a

civil‐forfeiture action “within five years after the time when the alleged offense

was discovered.” 19 U.S.C. § 1621.

                 Relevant Background7

      In 2016, we held that the district court erred in sua sponte denying the

Claimants’ defense that the Government’s action was untimely without affording

them notice or an opportunity to defend themselves. In re 650 Fifth Ave., 830 F.3d

at 97. We emphasized that the record on this issue was “hardly developed at all,”

a fact that made the court’s failure to authorize briefing particularly unjust. Id. The

record was undeveloped, we explained, because “[t]he [district court] had

repeatedly denied [the] Claimants’ attempts to obtain discovery that might show

when the Government learned of the Claimants’ alleged forfeitable offenses.” Id.

7The opinion denying the Claimants’ motion to compel is In re 650 Fifth Avenue and Related
Properties, No. 08 Civ. 10934 (KBF), 2017 WL 775820 (S.D.N.Y. Feb. 28, 2017). The opinion
granting the Government’s post‐remand motion for summary judgment is In re 650 Fifth
Avenue and Related Properties, No. 08 Civ. 10934 (KBF), 2017 WL 8639806 (S.D.N.Y. May
10, 2017).

                                           11
at 97 n.28. We instructed the court on remand to “afford [the] Claimants a

reasonable opportunity to respond before deciding the issue against them.” Id. at

97.

      In December 2016, more than five months before trial, the Claimants moved

to compel discovery in support of their statute‐of‐limitations defense. The district

court denied the motion, holding that the Claimants had waived discovery on this

issue by not seeking it during a discovery period running from 2012 through June

2013. The court acknowledged our finding that it had repeatedly denied the

Claimants’ discovery requests made during that period. But the district court

disagreed; it asserted that it “did not deny [the Claimants’] attempts to obtain

discovery regarding their statute of limitations defense[,] principally because [they

had] never made such attempts during the discovery period.” In re 650 Fifth Ave.,

No. 08 Civ. 10934 (KBF), 2017 WL 775820, at *15. In the district court’s view, our

finding was erroneous because the Claimants “misrepresent[ed] the pre‐appeal

record and status of discovery that preceded the Second Circuit’s opinion.” Id. at

*1; see also id. at *15 (“[The Claimants’] arguments made to the Second Circuit—

and the accompanying record citations—provided a substantially incomplete (and

misleading) picture of discovery in this case.”).

                                         12
                Analysis

      We review a district court’s decision denying discovery for abuse of

discretion. See In re Agent Orange Prod. Liab. Litig., 517 F.3d 76, 102 (2d Cir. 2008).

“A district court abuses its discretion only when the discovery is so limited as to

affect a party’s substantial rights.” Id. at 103 (citation and quotation marks

omitted). The substantial right at issue here is that “[a] party must be afforded a

meaningful opportunity to establish the facts necessary to support [its] claim.” Id.

      1. The sole basis for the district court’s decision was its waiver finding. In

December 2016, the Claimants sought to discover the following materials:

      1. Records, reports, memoranda, correspondence, notes, and other
      documents evidencing and/or related to allegations that Claimants
      and/or Assa were controlled or influenced by, providing services to,
      or acting as a front for Iran and/or Bank Melli, directly or indirectly,
      contained in Government investigative files for which the
      investigation began on or before November 12, 2004, including but
      not limited to documents contained in [a series of enumerated FBI]
      investigative files and their related or cross‐referenced files . . . .

      2. Records, reports, memoranda, correspondence, notes, or other
      documents exchanged among the Government, on the one hand, and
      New York State or other state authorities, on the other hand, in
      connection with investigations of allegations that Claimants and/or
      Assa were controlled or influenced by, providing services to, or acting
      as a front for Iran and/or Bank Melli, directly or indirectly, including
      but not limited to documents to and from [certain state and local
      agencies] . . . .

                                          13
       3. Records, reports, memoranda, correspondence, notes, or other
       documents reflecting or relating to communications between
       Government agents or employees and [enumerated journalists] who
       authored [enumerated] articles . . . , and all documents identifying or
       relating to investigative steps or other efforts taken in response to
       [enumerated] articles or the allegations raised in them . . . .

J.A. 1216–18.8 The Claimants argue that several of their earlier discovery

requests covered the same materials.

       First, the Claimants made a May 2011 request seeking, among other things,

“[a]ll internal files, records, reports, memoranda, correspondence, notes, or other

documents collected, maintained, or reviewed by the Government relating to the

Claimants, Assa, Iran, and current and former employees, directors, agents, and

representatives of Claimants and Assa, relating in any way to the allegations in

the Complaint.” Id. at 1240. They also sought materials relating to the ownership

and management of Assa. The Claimants argue that the Government produced

some, but not all, of these materials in January 2013.

       Second, the Claimants sought to compel discovery in an April 2013 letter to

the district court. The letter noted that “[t]he Government has . . . failed to make a

8Citations to the joint appendix and exhibits are to filings found on the docket for Havlish
v. 650 Fifth Avenue Co., No. 17‐3278(L) (2d Cir. 2019).

                                            14
complete production of documents [and particularly investigative files] from other

federal agencies, including the IRS, Department of State, and OFAC,” as well as

the FBI’s non‐New York field offices. Id. at 846. It specifically contended that the

Government had not produced the IRS’s records “concerning the 1989 transaction

by which the Fifth Avenue Company was formed.” Id.

      Third, the Claimants made several requests after the discovery period

closed. On July 9, 2013, they reiterated their demand for documents maintained

by the above‐noted federal agencies. On August 8, they asked the district court to

compel the production of documents relating to OFAC’s investigations of the

Claimants. On August 30, they informed the court of their “belie[f] that OFAC

(and the IRS) were aware or should have been aware of [the] Claimants’ alleged

violations of [IEEPA] as early as the mid‐1990s.” Id. at 893. They also reemphasized

their wish to learn about OFAC’s involvement in the investigation, explaining that

this information “directly impact[s] whether the statute of limitations has run.” Id.

      The district court dismissed the requests made during the discovery period.

It framed them as “exceedingly broad and general” catchalls made for different

purposes and faulted the Claimants for failing to “link[] specific categories of

documents to [their] statute of limitations defense.” In re 650 Fifth Ave., No. 08 Civ.

                                          15
10934 (KBF), 2017 WL 775820, at *4. The court also refused to credit the requests

submitted after its June 2013 discovery deadline.

      2. The district court abused its discretion by denying the Claimants’ motion

to compel discovery. As we held in 2016, a principal error in the court’s sua sponte

decision to reject the Claimants’ statute‐of‐limitations defense was that the court

acted on a “hardly developed” record and “without affording the Claimants any—

let alone a full and fair—opportunity to present evidence as to the applicability of

the defense.” In re 650 Fifth Ave., 830 F.3d at 97. These shortcomings are as real

today as they were in 2016. Although we did not instruct the court to authorize

discovery on the timeliness issue, our characterization of the “hardly developed”

record left little room for denying their request. The district court’s bold finding

that this Court was somehow duped by the Claimants on the first appeal—without

serious pushback from the Government—is unsupported by the record.

      To be sure, discovery on remand would have taken time. But the parties had

time. The Claimants moved to compel more than five months before the planned

trial. At that point, the proceedings were already paused because our remand

order left numerous pretrial issues pending before the district court. The court

offered no compelling reason why the Government would have been unduly

                                        16
prejudiced or burdened by the delay, if any, of limited discovery on the Claimants’

potentially dispositive affirmative defense. Similarly, the Government’s brief

barely gives lip service to the notion that it would have been prejudiced or

burdened.

      Instead, the district court relied exclusively on a finding of waiver. The

premise of this finding was not that the Claimants had never sought to discover

materials relevant to the statute‐of‐limitations issue, but that their requests were

either too broad to put the Government on notice of what they wanted or were

made for different purposes. See In re 650 Fifth Ave., No. 08 Civ. 10934 (KBF), 2017
WL 775820, at *3–4. Neither finding stands up to scrutiny.

      The Claimants’ May 2011 request best illustrates the district court’s error.

Subject to any confidentiality rules, the Claimants were entitled to review the

information that formed the basis of a complaint seeking forfeiture of their

property. Had the Government provided those materials, the Claimants likely

could have discerned when the statute of limitations began to run.9 While the

9We do not decide whether the Government’s production in response to this request was
adequate. The district court made no finding to this effect in the order and opinion now
on appeal. We simply observe that the scope of the request fairly includes documents

                                          17
Claimants’ request was broad, the district court clearly erred by deeming it so

“exceedingly broad and general” to justify a finding that the Claimants never

sought the materials at all. See id. at *4. The qualification that the documents must

“relat[e] in any way to the allegations in the Complaint” adequately

communicated to the Government the scope of the discovery that the Claimants

had demanded. J.A. 1240.10

      The district court also faulted the Claimants because they did not alert the

Government that they wished to use this information to support their statute‐of‐

limitations defense. But their request was clearly relevant to this defense, as it went

to the basis for the Government’s allegations. The Claimants were not required to

disclose every use they might find for the evidence they requested. Particularly at

relevant to the statute‐of‐limitations issue, such that the court’s waiver finding was
clearly erroneous.
10 The Government similarly dismisses the Claimants’ request as “extraordinarily
expansive.” Appellee Br. 54. But some of the Government’s own demands were nearly
identical. Compare, for example, a protective order the Government served on the
Claimants in December 2008. It required them to preserve “any documents relating in
any manner or part to the allegations in the Complaint.” D. Ct. Docket No. 08 Civ. 10934,
ECF No. 2 (emphasis added). The Claimants’ May 2011 discovery request asked for
“documents collected, maintained, or reviewed by the Government . . . relating in any
way to the allegations in the Complaint.” J.A. 1240 (emphasis added).

                                           18
the early stages of the litigation when the Claimants made some of these demands,

their request for a broad array of documents relevant to many potential issues in

this complex case was reasonable.11

                                          ***

      The district court denied the Claimants “a meaningful opportunity to

establish the facts necessary to support [their] claim.” See In re Agent Orange, 517

F.3d at 103. We reverse the order denying the motion to compel and vacate the

order granting summary judgment to the Government on the statute‐of‐

limitations issue. On remand, the district court shall ensure that the Government

fulfills its discovery obligations to the extent the law requires.

11That the Claimants’ December 2016 request was framed more narrowly does not alter
this conclusion. By then, their sole need for discovery was to learn information relevant
to the statute‐of‐limitations issue that we had ordered the court to address on remand.

                                           19
        II.   The District Court Erroneously Denied the Claimants’ Motion to
              Suppress Evidence Obtained Under the Defective Search Warrant.

                 Relevant Background12

        In 2006, the FBI’s Counterterrorism Division began investigating the

Claimants and Assa for possible IEEPA violations and money laundering. The

investigation, led by Special Agent George Ennis, involved multiple Assistant

United States Attorneys. A major focus was the relationship among Alavi, Assa,

and Iran, including the formation of 650 Fifth Ave. Co. By 2008, the FBI concluded

that the Government of Iran controlled Alavi and owned both Bank Melli and

Assa.

        On December 17, 2008, the Government filed a complaint seeking forfeiture

of Assa and Bank Melli’s interests in 650 Fifth Ave. Co. The complaint did not

include the Claimants’ interests, but that day the Government named the

Claimants in a protective order requiring them to preserve documents relevant to

the complaint. In re 650 Fifth Ave., No. 08 Civ. 10934 (KBF), 2017 WL 2062983, at *8.

12Unless otherwise noted, we take the following facts, which the district court found by
a preponderance of the evidence, from the order and opinion denying the motion to
suppress. See In re 650 Fifth Ave. & Related Props., No. 08 Civ. 10934 (KBF), 2017 WL
2062983 (S.D.N.Y. May 15, 2017).

                                          20
      Also on that day, the FBI interviewed employees of Assa, Alavi, and 650

Fifth Ave. Co. at 500 Fifth Avenue in Manhattan, where all three entities shared

offices. The FBI served Farshid Jahedi, Alavi’s President, with a subpoena

instructing Alavi to produce by December 30 “any and all documents relating or

referring to” Assa, Bank Melli, and 650 Fifth Ave. Co. from 1989 to present. Id. at

*8–9 (citation omitted). The interviewing agents, in the words of the district court,

“saw a large volume of documents” in the 500 Fifth Ave. offices and learned that

the basement of that building contained two hundred or more boxes of records

dating back thirty years. Id. at *9. The agents believed these documents were

relevant to the investigation.

      On December 18, 2008, Ennis worked with the U.S. Attorney’s Office to

prepare a warrant and supporting affidavit (the “Ennis affidavit”) covering these

materials. Elsewhere on that day, FBI agents surveilling Jahedi observed him

depositing torn documents, which the FBI later learned were responsive to the

subpoena, into a public waste bin. Before Ennis learned of this fact, “the search

warrant [application] was essentially complete.” Id. at *9.

      Ennis completed the warrant and application materials early on December

19. After both Ennis and a supervisor at the U.S. Attorney’s Office reviewed the

                                         21
warrant and the Ennis affidavit, the Government presented the warrant to a

magistrate judge in the Southern District, who approved it. As we held in our 2016

decision, and as the Government conceded, the warrant was constitutionally

deficient because “[o]n its face, [it] . . . plainly lacked particularity as to the crimes

at issue.” See In re 650 Fifth Ave., 830 F.3d at 100. The warrant referenced “the

supporting affidavit(s)” in “boilerplate language” in its statement of probable

cause. Id. at 84. But the “[Ennis] affidavit was neither attached to the warrant nor

incorporated by deliberate and unequivocal language.” Id. at 101. The warrant also

failed to “particularize categories of computerized information for which there

was probable cause to seize, or the temporal scope of the materials that could be

seized.” Id. at 100.13

13   The warrant covered:
         (1) “[a]ny and all . . . documents or records concerning or relating to the
         ownership of, rental of, mortgaging of, or investing in [Assa, 650 Fifth Ave.
         Co., Alavi, or Bank Melli Iran],”
         (2) “[a]ny and all documents concerning or relating to financial books and
         records, bank accounts, disbursements, money transfers or employment
         records of [Assa, 650 Fifth Ave. Co., Alavi, or Bank Melli Iran] or any of the
         officers and employees of these entities,” and, most broadly,
         (3) “[a]ny and all computers; central processing units; external and internal
         drives; external and internal storage equipment or media; computerized
         data storage devices; hard disks or floppy disks; CD‐ROMs[;] . . . and

                                              22
       The Government executed the warrant the day the magistrate approved it.

Although the district court made no finding to this effect, no one on the search

team, including the agent who led the team, appears to have reviewed the Ennis

affidavit. See J.A. 2015, 2044. Ennis did not brief the search team or participate in

the search. The FBI seized over two hundred boxes of materials and several

computers. The district court did not discuss the contents of the boxes or

computers, nor is this information clearly discernable from the record.

       In November 2009, the Government added the Claimants’ interests to the

Assa forfeiture litigation by filing an amended complaint. The amended complaint

relied in part on information the Government learned as a result of the unlawful

search.

                 Analysis

       On appeal from an order ruling on a motion to suppress evidence, we

review a district court’s legal conclusions de novo, its factual findings for clear

       related or connected computer or data storage equipment” located on the
       premises to be searched.
Id. (citation omitted, line breaks added).

                                             23
error, and its decisions on mixed questions of law and fact de novo. United States v.

Bershchansky, 788 F.3d 102, 108 (2d Cir. 2015).

      The Fourth Amendment protects “[t]he right of the people to be secure in

their persons, houses, papers, and effects, against unreasonable searches and

seizures” and prohibits the issuance of warrants without “probable cause,

supported by Oath or affirmation, and particularly describing the place to be

searched, and the persons or things to be seized.” U.S. Const. amend. IV.

      We previously found the warrant deficient for its lack of particularity. See

In re 650 Fifth Ave., 830 F.3d at 100–01. Thus, the question here is not whether the

Fourth Amendment right was violated, but whether a remedy for that wrong is

required. The Fourth Amendment “contains no provision expressly precluding

the use of evidence obtained in violation of its commands.” Herring v. United States,

555 U.S. 135, 139 (2009) (quoting Arizona v. Evans, 514 U.S. 1, 10 (1995)). Instead,

courts have crafted “an exclusionary rule that, when applicable, forbids the use of

improperly obtained evidence at trial.” Id.14

14 “It is well‐established that the Fourth Amendment’s exclusionary rule applies in
forfeiture cases.” In re 650 Fifth Ave., 830 F.3d at 98.

                                         24
      In determining whether the exclusionary rule applies, courts must consider

several principles. “First, the exclusionary rule is not an individual right and

applies only where it ‘result[s] in appreciable deterrence.’” Id. at 141 (quoting

United States v. Leon, 468 U.S. 897, 909 (1984)). “In addition, the benefits of

deterrence must outweigh the costs.” Id. “To the extent that application of the

exclusionary rule could provide some incremental deterrent, that possible benefit

must be weighed against its substantial social costs.” Id. (brackets omitted)

(quoting Illinois v. Krull, 480 U.S. 340, 352–53 (1987)). Accordingly, “[t]o trigger the

exclusionary rule, police conduct must be sufficiently deliberate that exclusion can

meaningfully deter it, and sufficiently culpable that such deterrence is worth the

price paid by the justice system.” Id. at 144.

      This reasoning has given rise to a number of “exceptions” to the

exclusionary rule. The district court held that two of them apply here.

                    1. Good‐Faith Exception

      The good‐faith exception recognizes that “the deterrence benefits of

exclusion vary with the culpability of the law enforcement conduct at issue.” Davis

v. United States, 564 U.S. 229, 238 (2011) (citation, brackets, and quotation marks

omitted). “When the police exhibit deliberate, reckless, or grossly negligent

                                          25
disregard for Fourth Amendment rights, the deterrent value of exclusion is strong

and tends to outweigh the resulting costs.” Id. (citation, brackets, and quotation

marks omitted). Conversely, “when the police act with an objectively reasonable

good‐faith belief that their conduct is lawful, or when their conduct involves only

simple, isolated negligence, the deterrence rationale loses much of its force.” Id.

(citations and quotation marks omitted). Among other scenarios, the exception

applies when the government acts in “objectively reasonable reliance on a

subsequently invalidated search warrant.” Leon, 468 U.S. at 922. Exclusion’s

deterrent benefits fade in such cases, because “[t]he error . . . rests with the issuing

magistrate, not the [government],” and “‘punishing the errors of judges’ is not the

office of the exclusionary rule.” Davis, 564 U.S. at 239 (quoting Leon, 468 U.S. at

916) (brackets omitted).

      There are, however, at least four scenarios where reliance on an invalid

warrant is unreasonable:

      (1) where the issuing magistrate has been knowingly misled; (2)
      where the issuing magistrate wholly abandoned his or her judicial
      role; (3) where the application is so lacking in indicia of probable
      cause as to render reliance upon it unreasonable; and (4) where the
      warrant is so facially deficient that reliance upon it is unreasonable.

                                          26
United States v. Clark, 638 F.3d 89, 100 (2d Cir. 2011) (quoting United States v. Moore,

968 F.2d 216, 222 (2d Cir. 1992)). The fourth scenario “depend[s] on the

circumstances of the particular case.” Leon, 468 U.S. at 923. It applies, for example,

when a warrant “fail[s] to particularize the place to be searched or the things to be

seized.” Id. The animating concern is whether the “warrant [is] so facially deficient

. . . that the executing officers cannot reasonably presume it to be valid.” Id.

       That language fits this case like a glove. This warrant is facially deficient. It

does not even arguably include a reference to the Claimants’ alleged crimes or a

temporal scope for the items to be seized. See Ex. 3824–25; see also, e.g., In re 650

Fifth Ave, 830 F.3d at 100 (“On its face, the warrant . . . plainly lacked particularity

as to the crimes at issue.”).15 No reasonable officer could have presumed that this

glaringly deficient warrant was valid.

15 In United States v. Rosa, 626 F.3d 56, 64 (2d Cir. 2010), we applied the good‐faith
exception when officers seized evidence pursuant to a defective warrant after they failed
to attach an affidavit. The Government references our warning that “[n]ot every facially
deficient warrant . . . will be so defective that an officer will lack a reasonable basis for
relying upon it.” Id. at 66. But as that sentence continues, “the defective warrant in this
case certainly did not have the glaring deficiencies of [those in other cases].” Id. The
warrant here was glaringly deficient.

                                             27
      The Ennis affidavit might have cured at least some of the warrant’s defects.

But as we found in 2016, the Ennis affidavit was “neither attached to the warrant

nor incorporated by deliberate and unequivocal language.” In re 650 Fifth Ave., 830

F.3d at 101. And there is no evidence that anyone on the search team reviewed the

Ennis affidavit before the search or heard from Ennis during the operations

briefing.

      The district court excused this problem by finding in general terms that the

search team leader and some members of her team were familiar with the FBI’s

investigation into the Claimants. In effect, the court found that the warrant’s

glaring defects were of no moment because “the agents on site here knew what

they were looking for and, importantly, why.” In re 650 Fifth Ave., No. 08 Civ. 10934

(KBF), 2017 WL 2062983, at *23 n.34.

      This finding is both clearly erroneous and irrelevant. Ennis prepared the

affidavit on December 18, the day before the search. Even if some members of the

search team were familiar with the investigation, they were not familiar with the

contents of the affidavit. General notions of the targeted property and alleged

crimes are not a substitute for a warrant demonstrating that a judge authorized

the seizure of particular items for particular reasons.

                                         28
       The court also clearly erred in finding that “the need for expeditiousness”

following the FBI’s discovery that Jahedi had destroyed documents “was the

primary reason the search warrant was likely not identified as deficient.” Id. at *10.

The finding is plainly inapplicable to Ennis, as the court found that “[b]efore Ennis

learned of the destruction of documents, the search warrant was essentially

complete.” Id. at *9. In fact, the Ennis affidavit makes no mention of the destruction

of documents.

       Nor does the record support the district court’s expediency finding with

respect to the other agents and attorneys who reviewed and executed the warrant.

If anything, the record suggests that the Government did not rush through these

processes. As numerous FBI agents and AUSAs testified, and the district court

found, “[t]he evidence does not support any material deviation from typical

procedures.” Id. at *29.16 For example, the court found that “[t]ypically, and as

occurred here,” Ennis reviewed the materials to “ensure accuracy” and then sent

16See also, e.g., id. at *10 (“[T]he conduct here did not deviate in any material way from
reasonable, typical practice” for obtaining search warrants at the FBI’s New York office.);
id. at *29 (“[T]he . . . facts make clear that the procedures used to execute the warrant were
entirely typical . . . .”); id. at *31 (“[T]he U.S. Attorney’s Office and FBI used routine
procedures in connection with a very large investigation.”).

                                             29
them to a supervising AUSA, who reviewed and approved the application. Id. at

*10. Similarly, the agent who led the search team reviewed the warrant before

executing the search and testified that it “did not appear unusual to her—or

different from other search warrants she had been involved in executing.” Id. at

*16. Some fault may lie with the magistrate for failing to ensure that the Ennis

affidavit was attached to the warrant. (The magistrate’s involvement is not clear

from the record.) But the lion’s share of the blame lies with the Government for

neglecting to catch these errors or executing the warrant in spite of them.

      Under all these circumstances, the Government’s reliance on this warrant

was not “objectively reasonable.” See Leon, 468 U.S. at 922. To the contrary, the fact

that these glaring deficiencies survived the Government’s typical process for

drafting, reviewing, and executing warrants indicates “grossly negligent

disregard for Fourth Amendment rights.” See Davis, 564 U.S. at 238 (quotation

marks omitted). In the presence of gross negligence, “the deterrent value of

exclusion is strong and tends to outweigh the resulting costs.” Id.

      Applying the exclusionary rule on these facts would advance its deterrent

rationale. The Government drafted an exceptionally broad and facially defective

warrant, multiple trained officers and attorneys failed to address this problem, and

                                         30
a team without particularized knowledge of the proper scope of the search seized

over two hundred boxes of evidence and several computers. Prohibiting the

Government from reaping the spoils of its deficient procedures would deter it

from making the same mistakes in the future.

      The cost to the Government of improving its review process would be

minimal. A simple checklist could have solved the failures to incorporate a

supporting affidavit and identify the alleged crimes. The Fourth Amendment

protection would mean little if officers acting under facially deficient warrants

were free to ransack troves of private property without clear ground rules laid

down by a judge.

      The Government may not rely on the good‐faith exception.

                    2. Inevitable‐Discovery Exception

      The inevitable‐discovery exception allows the Government to rely on

unlawfully seized evidence if it can prove that it would have inevitably obtained

the evidence absent the constitutional violation. In re 650 Fifth Ave., 830 F.3d at 102.

District courts applying the exception must “determine, viewing affairs as they

existed at the instant before the unlawful search, what would have happened had the

unlawful search never occurred.” Id. (quoting United States v. Eng, 971 F.2d 854,

                                          31
861 (2d Cir. 1992)). “[P]roof of inevitable discovery involves no speculative

elements but focuses on demonstrated historical facts capable of ready verification

or impeachment . . . .” Id. (quoting Eng, 971 F.2d at 859). The Government’s burden

is to “prove that each event leading to the discovery of the evidence would have

occurred with a sufficiently high degree of confidence for the district judge to

conclude, by a preponderance of the evidence, that the evidence would inevitably

have been discovered.” Id. (quoting United States v. Vilar, 729 F.3d 62, 84 (2d Cir.

2013)).

      Courts resolve claims of inevitable‐discovery under a two‐step process.

      First, the court must evaluate the progress of the investigation at the
      time of the government misconduct to determine whether an active
      and ongoing investigation was in progress at [that time]. At this step,
      the government must establish that the investigation was not
      triggered or catalyzed by the information unlawfully gained by the
      illegal search but, rather, that the alternate means of obtaining the
      challenged evidence was, at least to some degree, imminent, if yet
      unrealized at the time of the unlawful search.

      Second, the court must, for each particular piece of evidence, specifically
      analyze and explain how, if at all, discovery of that piece of evidence
      would have been more likely than not inevitable absent the unlawful
      search.

Id. at 103 (cleaned up, emphasis in original).

                                          32
      Prior to the first appeal, the district court made cursory findings that the

Government would have obtained the massive volume of unlawfully seized

evidence through civil discovery and the protective order. Id. We vacated that

decision on appeal, holding that it was insufficient under the standard articulated

above. Id. at 103–04. Our opinion carefully explained that, on remand, “the

Government must make a detailed showing of each of the contingencies involved

and the [district court] must find each contingency satisfied with respect to each

item of seized evidence.” Id. at 106 (citation, quotation marks, and brackets

omitted).

      The district court did not follow our instructions. Its opinion does not list or

even summarize the contents of the over two hundred boxes of documents and

several computers at issue. Nor does it explain how the Government would have

discovered “each particular piece of evidence . . . absent the [unlawful] search.” Id. at

103 (emphasis in original). What sweeping findings the court did provide are

either inadequate or unsupported by the record.

      First, the court found that “[t]he facts developed in detail at the evidentiary

hearing allow this [c]ourt to easily conclude that prior to the search, a majority of

the facts that were later included in the [amended] complaint . . . had already been

                                           33
developed.” In re 650 Fifth Ave., No. 08 Civ. 10934 (KBF), 2017 WL 2062983, at *32.

The court did not explain what these facts were or why they allowed it to draw

this conclusion. Its observations “that the investigation was very active” and

involved “a number of interviews occurring prior to the search,” id., are no basis

for concluding that the Government would have inevitably learned these facts.

      Moreover, the district court’s findings do not support its conclusion that “a

substantial number of the allegations in the [a]mended [c]omplaint referenced

documents that the Government possessed [prior to the search].” See id. at *20.

Because the amended complaint cited some lawfully obtained materials, the court

apparently reasoned that it could ignore the fact that the amended complaint also

relied on unlawfully obtained materials. But the court did not identify these

materials, categorize them, or explain their importance to the amended complaint.

In fact, the court appears to have based its finding that the lawfully obtained

evidence was sufficient on little more than the assertions of the Government’s

witnesses. See id. at 19–20. The court’s most substantial discussion of the amended

complaint was a “see, e.g.” citation to a smattering of paragraphs from that

document—examples taken wholesale from the suppression‐hearing testimony of

Special Agent Ennis, see J.A. 1713–30—asserting without further discussion that

                                        34
the Government already possessed the unspecified information contained within

them.17 These scattered stars offer no basis for charting the constellation of facts

that shaped the Government’s case.

      Second, the district court found that the December 17 subpoena served on

Jahedi “materially covers the relevant documents.” Id. at *9. This is clearly

erroneous. The subpoena covered “any and all documents relating or referring to

[Assa], Bank Melli . . . , and 650 Fifth Ave. Co. from January 1, 1989 to the present.”

Id. (citation and quotation marks omitted). By contrast, the warrant lacked any

17In re 650 Fifth Ave., No. 08 Civ. 10934 (KBF), 2017 WL 2062983, at *20 (“[A] substantial
number of the allegations in the Amended Complaint referenced documents that the
Government possessed when it seized Assa’s accounts and filed the [original complaint].
(See, e.g., GX 9 ¶¶ 28 (from a search of the Bank Melli president’s residence prior to
December 2008); 32 (received from a confidential source before December 2008); 33 (also
received from the confidential source prior to December 2008); 34 (same); 35 (same); 36
(same); 37 (same); 38 (same); 39 (same); 40 (from a search of the Bank Melli Iran’s
president’s residence prior to December 2008); 43–46 (based on documents also received
before December 2008); 50 (from the confidential source before December 2008); 52
(same); 54 (same); 56 (same); 57 (same); 58 (same); 60 (same); 63 (same); 64 (learned from
Rahi during an interview before December 2008); 77 (from surveillance before December
2008); 81 (learned from Geramian before December 2008); 82 (from a search of the Bank
Melli Iran’s president’s residence before December 2008); 83–88 (same); 89–90 (learned
from an interview of Geramian that occurred before December 2008); 96 (from a search
of the Bank Melli Iran’s president’s residence before December 2008); see generally Tr.
113:9–130:11 (Ennis).”).

                                           35
temporal limitation, meaning it included documents created prior to 1989.18 Also

unlike the subpoena, the warrant covered “[a]ny and all documents concerning or

relating to financial books and records, bank accounts, disbursements, money

transfers or employment records of [Alavi],” as well as “[a]ny and all computers”

and similar electronic storage devices. Id. at *12.

      Third, the district court found that “there has been extensive sharing of

documents and coordination between the Government” and judgment creditors

in related cases, and that the Claimants disclosed unspecified “documents at

issue” to the judgment creditors. Id. at *33. Without further analysis, the court

concluded that “[t]here is simply no significant possibility that such documents

would not have made their way to the Government.” Id. Even if we construe this

finding as applying to all the evidence obtained under the warrant, it is clearly

erroneous and contrary to the law of the case. As we held in 2016 in response to

the same finding:

      The Government . . . sought [the] documents [named in this joint
      discovery request between the Government and judgment creditors]
      from Alavi and 650 Fifth Ave. Co. only after amending its complaint
      to seek forfeiture of their interests. Many of the amended complaint’s

18According to the FBI, some of the documents it seized went back significantly further
than 1989. See id. (noting the materials went back three decades).

                                          36
      allegations against Alavi and 650 Fifth Ave. Co. derived from
      documents seized during the December 19, 2008 search. On this record,
      we cannot confidently conclude that a request for production in the amended
      forfeiture action was not tainted by the challenged search so as to admit a
      finding of inevitable discovery.

In re 650 Fifth Ave., 830 F.3d at 105 (emphasis added).

      Fourth, the court found that “[j]oining Alavi’s interest in the litigation would

have allowed the U.S. Attorney’s Office to have used civil discovery devices. This

Court has a factually based, high level of confidence that this would have

occurred.” In re 650 Fifth Ave., No. 08 Civ. 10934 (KBF), 2017 WL 2062983, at *32.

As above, this is improper speculation. “[P]roof of inevitable discovery involves

no speculative elements but focuses on demonstrated historical facts capable of

ready verification or impeachment . . . .” In re 650 Fifth Ave. 830 F.3d at 102 (quoting

Eng, 971 F.2d at 859).

      One contingency the court did address was whether the Claimants would

have destroyed the materials. It found “with near certainty” that they would not

have done so because “multiple individuals” in the Government were monitoring

“every move regarding [the] documents” and the protective order “required

compliance with preservation obligations.” In re 650 Fifth Ave., No. 08 Civ. 10934

(KBF), 2017 WL 2062983, at *32–33. While the protective order was broad, these

                                          37
nebulous findings prevent us from understanding the basis for the court’s

conclusion or sharing its confidence that the order required the preservation of

“the very same records seized” under the warrant. See id. at *8. Moreover, without

factoring in the possible contingencies, simply identifying the intersection

between the protective order and the seized materials does not solve for inevitable

discovery. As we already held, the “[protective] order imposed no production

obligation on Alavi” or 650 Fifth Ave. Co. In re 650 Fifth Ave., 830 F.3d at 104.

                                         ***

      We recognize that our inevitable‐discovery standard imposes a significant

burden on district courts. Sorting through the 200 boxes of evidence and other

materials the Government illegally obtained will be no easy task. But allowing

district courts to pardon unlawful searches by simply declaring “inevitable

discovery” would undermine the rationales behind the exclusionary rule. Our

well‐established principle that courts must make findings “for each particular

piece of evidence,” Eng, 971 F.2d at 862, ensures that the inevitable‐discovery

exception does not swallow the exclusionary rule.

      In sum, and for the second time, we vacate the district court’s inevitable‐

discovery holding for legal error. Because the unlawfully obtained evidence goes

                                         38
to the heart of the Government’s case and informed the amended complaint, this

error was not harmless. We therefore vacate the trial judgment.19

       III.   The District Court Abused Its Discretion by Precluding Testimony
              from Two Former Alavi Board Members, Allowing the Government
              to Play Videotaped Fifth Amendment Invocations from Several
              Former Board Members, and Precluding the Claimants’ Rebuttal
              Evidence.

                 Relevant Background20

       Numerous former Alavi board members invoked their Fifth Amendment

right against self‐incrimination in response to dozens of deposition questions. The

depositions were captured on videotape. Leading up to the planned 2013 trial, the

Claimants argued that the Government intimidated the witnesses into invoking

the privilege by, among other things, falsely implying that they had criminal

19We have clearly articulated the standard for considering whether the inevitable‐
discovery exception applies. If on remand the district court finds this standard has not
been met, it must suppress the evidence.
20Unless otherwise noted, we take the following facts, which the district court found by
a preponderance of the evidence, from three memorandum orders addressing the
underlying issues. See In re 650 Fifth Ave. & Related Props., No. 08 Civ. 10934 (KBF), 2017
WL 2214869 (S.D.N.Y. May 18, 2017); In re 650 Fifth Ave. & Related Props., No. 08 Civ. 10934
(KBF), 2017 WL 6419035 (S.D.N.Y. May 30, 2017); In re 650 Fifth Ave. & Related Props., No.
08 Civ. 10934 (KBF), 2017 WL 6729444 (S.D.N.Y. June 14, 2017).

                                            39
exposure. They thereby sought to prevent the Government from playing the

videotapes of these depositions at trial.

      But the planned trial never occurred; the court granted summary judgment

to the Government. We reversed that decision in July 2016. In November 2016—

more than six months before the trial underlying this appeal—the following

exchange took place between counsel for the Claimants and the district court:

      MR. RUZUMNA: Also, your Honor, there were a number of
      individuals who asserted their Fifth Amendment right not to testify
      and not to incriminate themselves and refused to be deposed. We
      understand that at least some, if not all, of them have decided that
      they would be willing to testify, and I expect that the government, if
      we intend to call them, would certainly want an opportunity to
      depose those individuals.

      THE COURT: And that could raise a variety of issues, one of which
      the government could say it’s too late.

J.A. 1204. The Government did not seek depositions. Then on March 7, 2017—over

two and a half months before trial—the Claimants informed the Government that

they planned to call two former board members at trial: Hassan Hassani and Ali

Dabiran. They also offered the Government the opportunity to depose both

witnesses prior to trial.

                                            40
       The Government moved to preclude this testimony. The district court

granted its motion, finding that the proposal to call the witnesses was “really a

unilateral reopening of fact discovery.” In re 650 Fifth Ave., No. 08 Civ. 10934 (KBF),

2017 WL 2214869, at *4 & n.12. The court observed that “[t]his case was days away

from trial in 2013,” up to which point the Claimants had not made the witnesses

available to testify. Id. Thus, in the court’s view, “reopening discovery” in this way

would “prejudice the Government and [the judgment creditors in a coordinated

action].” Id. at *4.

       At the same time, the Claimants moved to preclude the Government from

introducing the privilege invocations as evidence; the Government cross‐moved

for permission to call the former board members and receive an adverse jury

instruction. The Claimants again argued that the Government had intimidated the

witnesses into staying silent. They pointed to certain statements and documents

in their possession in 2013, including emails suggesting the FBI’s belief that

everyone at Alavi was guilty of a crime. They flagged, among other things, the

following:

    In a December 2008 email, one FBI agent told other agents that their planned
     interviews with Alavi employees “will be 99% pitch, no wrangling over
     details or listening to denials. The pitch is pretty simple: . . . if you’re not on

                                          41
      board . . . we’ll lock you up.” J.A. 2534.1. The agent also stated that “[o]ur
      goal is to hit everyone at once, destabilize the situation at our main target
      (Alavi Foundation), and produce some [cooperating witnesses].” Id.

    In a May 2011 conference, the Government took “the position that the
     statute of limitations [for IEEPA and money laundering violations] won’t
     run with respect to the Alavi Foundation until November of 2014.” Id. at
     455. The inference the Claimants drew was that, at the time of the
     depositions, the Government could criminally charge the board members.

      Without discussing this evidence, the district court rejected the Claimants’

intimidation theory. It found that the Claimants “cherry pick[ed] comments taken

out of context” and that “[t]here [was] not a shred of evidence that suggest[ed]

that the agents engaged in any unusual or coercive tactics here.” In re 650 Fifth

Ave., No. 08 Civ. 10934 (KBF), 2017 WL 2214869, at *5. The court later explained

that, although the Government did not ultimately charge the former board

members with crimes, they had possible criminal exposure at the time of their

depositions.

      The court then held that the invocations were relevant under Rule 401 of the

Federal Rules of Evidence and admissible under Rule 403. In a subsequent order,

it held that the Government could play the videotapes at trial. It also authorized

the Government to offer its questions of the witnesses as an exhibit. It promised to

issue a limiting instruction explaining that the questions are not evidence and that

                                        42
the jurors may, but need not, draw an adverse inference from the witnesses’

decisions not to testify.

      The court allowed the Claimants to “argue that the jury should give little to

no weight to [the adverse] inference.” In re 650 Fifth Ave., No. 08 Civ. 10934 (KBF),

2017 WL 6419035, at *4. However, it barred them from introducing “testimony by

FBI agents and exhibits related to the criminal investigation” supporting their

theory that the Government intimidated the witnesses. Id. at *5. In the same vein,

it precluded them from presenting “testimony by counsel for multiple individual

witnesses related to their communications with the Government about the

criminal investigation.” Id. It found this evidence would be irrelevant under Rule

401, and impermissible under Rule 403, because “it would be misleading and

confusing to the jury to suggest that the criminal investigation was not serious and

did not carry real exposure for [the] Claimants or the witnesses.” Id.21

                 Analysis

      The Claimants argue that the district court abused its discretion by (1)

forbidding Hassani and Dabiran from testifying, (2) allowing the Government to

21The court returned to the issue once more in a June 14, 2017 memorandum order
declining the Claimants’ request for additional jury instructions.

                                         43
play the videotapes, and (3) precluding certain evidence the Claimants wished to

present in rebuttal to the videotapes.22 We agree, and each of these errors provides

an independent reason for vacating the judgment.

                     1. The District Court Abused Its Discretion by
                        Precluding the Witnesses from Testifying.

       We review a district court’s decision to admit or exclude evidence for abuse

of discretion. Henry v. Wyeth Pharm., Inc., 616 F.3d 134, 149 (2d Cir. 2010). In

general, a district court should take a liberal view toward applications by civil

litigants23 to withdraw their previously invoked Fifth Amendment privilege. See

United States v. Certain Real Prop. & Premises Known as 4003‐4005 5th Ave., Brooklyn,

N.Y., 55 F.3d 78, 84 (2d Cir. 1995). “[I]f there is a timely request made to the court,

the court should explore all possible measures in order to select [a] means [that]

strikes a fair balance and accommodates both parties.” Id. (citation, quotation

marks, and alterations omitted). “In doing this, it should give due consideration

 The Claimants also ask us to sanction the Government for its purported coercive tactics.
22

We decline to do so.
23The district court found that as former board members, Hassani and Dabiran were
“sufficiently close [to Alavi] to be analogous to . . . a litigant” under the precedent we
discuss. In re 650 Fifth Ave., No. 08 Civ. 10934 (KBF), 2017 WL 2214869, at *5. As the parties
do not challenge this finding, we assume without deciding that it is correct.

                                             44
to the nature of the proceeding, how and when the privilege was invoked, and the

potential for harm or prejudice to opposing parties.” Id. “The court should be

especially inclined to permit withdrawal of the privilege if there are no grounds

for believing that opposing parties suffered undue prejudice . . . .” Id.

      This does not mean that courts must always allow litigants who invoked the

privilege to testify. “Since an assertion of the Fifth Amendment is an effective way

to hinder discovery and provides a convenient method for obstructing a

proceeding, trial courts must be especially alert to the danger that the litigant

might have invoked the privilege primarily to abuse, manipulate or gain an unfair

strategic advantage over opposing parties.” Id. “In such circumstances,

particularly if the litigant’s request to waive comes only at the ‘eleventh hour’ and

appears to be part of a manipulative, ‘cat‐and‐mouse approach’ to the litigation, a

trial court may be fully entitled, for example, to bar a litigant from testifying later

about matters previously hidden from discovery through an invocation of the

privilege.” Id. at 85. How to decide whether a litigant has abused the privilege falls

within the discretion of the district court. “[A]s long as [the court] considers the

relevant factors and acts with moderation to accommodate both a litigant’s valid

Fifth Amendment interests and the opposing parties’ needs in having the litigation

                                          45
conducted fairly, we will not disturb the measures used by [the] court in the

exercise of its discretion.” Id.

       The district court abused its discretion by precluding the testimony of

Hassani and Dabiran. The court made no attempt to “explore all possible

measures” for accommodating both parties, even when the Claimants notified it

more than six months prior to trial—hardly the “eleventh hour”—that they

intended to call witnesses who had previously invoked the privilege.24 The court’s

analysis turned largely on a single factor: that the request came too late and

thereby prejudiced the Government. This limited analysis was a failure to “give

due consideration to the nature of the proceeding, how and when the privilege

was invoked, and the potential for harm or prejudice to opposing parties.” See

4003‐4005 5th Ave., 55 F.3d at 84.

24 The court found that during an undated “very limited reopening of discovery”
following remand, “[t]he parties did not raise depositions of these two witnesses with the
[c]ourt.” In re 650 Fifth Ave., No. 08 Civ. 10934 (KBF), 2017 WL 2214869, at *4. It thus
rejected the Claimants’ challenge “that the Government could have taken the witnesses’
depositions [after their follow‐up notice in March 2017].” Id. To the extent the court failed
to consider the Claimants’ November 2016 statements in open court informing it that they
intended to call the witnesses, this finding is clearly erroneous.

                                             46
       The court’s prejudice finding is difficult to understand. Its premise is that

the “case was days away from trial in 2013,” at which time the Claimants were

content to allow Hassani and Dabiran to sit on the sidelines. In re 650 Fifth Ave.,

No. 08 Civ. 10934 (KBF), 2017 WL 2214869, at *4 n.12. We find it hard to see how

the Government in 2017 would be unfairly prejudiced because it did not have the

benefit of depositions before a 2013 trial that never occurred. After the proceedings

had been paused for years awaiting the outcome of the first appeal, the Claimants

gave the Government more than six months to depose a small group of witnesses.

It chose not to.25

       The court’s error prejudiced the Claimants. One of the key issues at trial was

whether Alavi knew about Assa’s Iranian ownership after 1995. As the district

court found, “[b]oth Hassani and Dabiran were high ranking personnel at the

relevant period of time.” Id. at *5. Their ability to testify about this issue could have

been powerful evidence of Alavi’s knowledge. Without their testimony, the jury

25We also find clear error in the court’s decision to rely on “the backdrop of what are now
a number of separate attempts . . . to reopen discovery.” Id. Even if expressing an
intention to call witnesses were a reopening of discovery, the court’s findings about other
discovery requests would have no bearing on the merits of this request. Moreover, one
of these discovery requests was more meritorious than the court believed. See Part I, supra.

                                            47
was left to draw adverse inferences from Dabiran’s absence and Hassani’s

videotaped Fifth Amendment invocation.

      We reverse the court’s order precluding these witnesses from testifying.

                    2. The District Court Abused Its Discretion by
                       Allowing the Government to Play the Videotaped
                       Depositions.

       “We review for abuse of discretion the district court’s admission into

evidence of a witness’s invocation of the Fifth Amendment . . . .” Woods v. START

Treatment & Recovery Ctrs., Inc., 864 F.3d 158, 170 (2d Cir. 2017). A witness’s Fifth

Amendment invocation may be admissible evidence at a civil trial, and courts may

instruct juries that they can draw an adverse inference from the invocation. See,

e.g., Brink’s Inc. v. City of New York, 717 F.2d 700, 710 (2d Cir. 1983). As is generally

true of proffered evidence, the admissibility of a nonparty’s privilege invocation

is governed by Rules 401 and 403 of the Federal Rules of Evidence. See id. Rule 401

requires only that the evidence makes a consequential fact more or less probable.

See Fed. R. Evid. 401. Under Rule 403, courts may exclude evidence when, among

other things, “its probative value is substantially outweighed by a danger of . . .

unfair prejudice, . . . misleading the jury, . . . or needlessly presenting cumulative

evidence.” Fed. R. Evid. 403. While this analysis is case specific, the mere fact that

                                           48
a Fifth Amendment invocation is “damning” to a party’s position does not

preclude its introduction. See Brink’s, 717 F.3d at 710. However, invocations that

cross the line to “inflammatory” are more likely to fail under Rule 403. See id.

      There are two issues here. The first is a question of content: whether the court

erroneously allowed the Government to introduce the fact that the witnesses had

invoked the privilege. The second is a question of form: whether the court erred by

allowing the Government to play the five videotapes at length, as opposed to

limiting it to a less dramatic presentation.

      i. On the question of content, we find no error in the court’s decision to allow

the Government to introduce the fact that witnesses had invoked the Fifth

Amendment.26 Subject to Rules 401 and 403, evidence of a Fifth Amendment

invocation can be admissible in civil trials. The invocations here are relevant

because the fact that several former Alavi board members refused to testify makes

it more probable that their testimony would have harmed the Claimants’ interests.

If a jury chooses to draw this inference, the evidence could be significantly

26For the reasons explained in section III.B.1, supra, we find on separate grounds that the
court should not have allowed the Government to play the videotaped deposition of a
witness who later asked to testify.

                                            49
probative of the Claimants’ possible wrongdoing. While a jury might find that the

content of the invocations is damning, the Claimants have offered no compelling

reason that it would be so inflammatory to fail under Rule 403. See id.

      Thus, if this case is retried, the Government may introduce the fact of the

Fifth Amendment invocations into evidence.

      ii. We must also consider whether the form of the Government’s

presentation complied with our evidentiary rules. Under these circumstances, we

find that the Government’s dramatic presentation tipped the Rule 403 scale from

“damning” to “inflammatory.” See id.

      Litigants are generally entitled to present their evidence in the form of their

choosing. But this principle has limits, including Rule 403. See Old Chief v. United

States, 519 U.S. 172, 184–85 (1997). In assessing admissibility under Rule 403, a

piece of evidence’s probative value to be weighed against its risk of unfair

prejudice “may be calculated by comparing evidentiary alternatives.” Id. at 184.

      The district court allowed the Government to play five videotapes of

nontestifying individuals declining to answer question after question during their

depositions. This parade of videotapes, which the Government strategically

spread out across multiple days of trial, was substantially more prejudicial and

                                         50
redundant than probative. The videotapes repeatedly reminded the jury of the

witnesses’ decisions not to testify. And they repeatedly put the Government’s

incriminating questions in the jurors’ minds—questions the parties agreed were

not evidence and that the court allowed the Government to submit as an exhibit.

Substantially less prejudicial and redundant alternatives were available, such as a

stipulation or a scaled‐back showing of the videotapes. Authorizing this

presentation despite these serious risks was not a harmless error.

       While the Government is entitled to submit the Fifth Amendment

invocations into evidence, the district court’s failure to moderate the

Government’s extreme tactic was an abuse of discretion. On remand, the court

shall ensure that the Government presents its evidence in accordance with Rule

403.

                   3. The District Court Abused Its Discretion by
                      Precluding the Claimants’ Rebuttal Evidence.

       Finally, we hold that the district abused its discretion by precluding the

Claimants from arguing that the Government coerced the former Alavi board

members into invoking the privilege.

                                        51
      Evidence demonstrating that the witnesses were intimidated easily satisfies

Rule 401’s relevance standard. Whether the witnesses stayed silent because they

were culpable was a consequential fact. The Claimants’ rebuttal would have made

this fact less likely by suggesting that the witnesses declined to testify for a

different reason: allegedly improper threats of criminal charges. The evidence

cited above belies the court’s finding that “[t]here is not a shred of evidence” to

support this theory. In re 650 Fifth Ave., No. 08 Civ. 10934 (KBF), 2017 WL 2214869,

at *5; see also e.g., J.A. 2534.1 (FBI agents noting in internal emails that the FBI’s

witness interviews during its search “will be 99% pitch” and that the pitch was “if

you’re not on board . . . we’ll lock you up”).

      On Rule 403, the district court’s only arguable finding of prejudice to the

Government was a conclusion that the rebuttal evidence would be inflammatory.

See In re 650 Fifth Ave., No. 08 Civ. 10934 (KBF), 2017 WL 2214869, at *5–6; In re 650

Fifth Ave., No. 08 Civ. 10934 (KBF), 2017 WL 6419035, at *5. The court did not detail

the content of any of the proposed evidence, except by noting in a parenthetical

that one statement was an internal FBI email including the phrase “we’ll lock you

up.” See In re 650 Fifth Ave., No. 08 Civ. 10934 (KBF), 2017 WL 2214869, at *5. We

                                         52
are thus unable to understand how the court balanced the risk of prejudice against

the probative value of the evidence as Rule 403 required it to do.

      The court also found that the Claimants’ intimidation theory ran the risk of

misleading and confusing the jury in violation of Rule 403. But its sole basis for

this conclusion was that there was not “a shred of evidence” in the Claimants’

favor. In re 650 Fifth Ave., No. 08 Civ. 10934 (KBF), 2017 WL 6419035, at *5. As noted

above, that finding was clearly erroneous.

      How the Claimants’ rebuttal evidence ultimately fares under Rules 401 and

403 may turn on the district court’s resolution of other evidentiary matters we have

left open on remand. In particular, the Claimants’ need for this evidence may

depend on the form in which the Government presents the Fifth Amendment

invocations. Thus, we vacate the orders precluding the rebuttal evidence and

remand for the court to reconsider the evidence’s admissibility alongside the

remaining evidentiary issues.

                                  CONCLUSION

      This appeal arises from a complex and hard‐fought litigation. This case is

one piece of several coordinated proceedings in which the Government and

hundreds of judgment creditors have asserted interests in the Claimants’ and

                                         53
Assa’s property. For many years, these cases have required the district court to

decide numerous, difficult questions of law while supervising hundreds of

litigants and their attorneys. This has been no easy task, and we are not blind to

the challenges district courts face in managing tough cases. But the records

underlying this appeal and several others we decide today reveal a troubling

pattern of errors on relatively straightforward issues.27

       If this case returns to trial, a properly informed jury may or may not find for

the Government—a topic on which we have no opinion. But getting to any

outcome requires a fair and procedurally adequate process, something that has

been lacking in this case. There are no shortcuts in the rule of law.

                                             ***

       1. We REVERSE the district court’s order denying the Claimants’ motion

for discovery on the statute‐of‐limitations defense and VACATE its order granting

summary judgment to the Government on the merits of the issue. On remand, the

court shall grant the Claimants’ motion to compel discovery and ensure the

Government’s reasonable compliance.

 See United States v. Assa Co. Ltd., No. 17‐3658 (2d Cir. 2019); Havlish v. 650 Fifth Ave. Co.,
27

No. 17‐3278 (2d Cir. 2019).

                                              54
      2. We REVERSE in part and VACATE in part the court’s order denying the

motion to suppress evidence obtained from 500 Fifth Avenue on December 19,

2008. We reverse with respect to the holding that the Government can rely on the

good‐faith exception to the exclusionary rule. However, we vacate with respect to

the inevitable‐discovery holding. On remand, the court shall require the

Government to submit a chart or similar exhibit documenting how it would have

obtained each particular piece of evidence that the Claimants challenge. At

minimum, this must include materials that informed the drafting of the amended

complaint, as well as materials the Government has already used in this

proceeding or intends to use at trial. If the Government fails to make this showing

with respect to some or all of the evidence, the court must apply the exclusionary

rule and, mindful that the Government relied on these materials in drafting the

amended complaint, consider all other appropriate remedies.28

      3. We REVERSE the district court’s order precluding Hassani and Dabiran

from testifying. If this case returns to trial, the court shall permit the Claimants to

28As we reverse the court’s finding on the good‐faith exception, and the Government has
not argued here that any other exception applies, the only exception the court may
consider on remand is inevitable discovery.

                                          55
call them as witnesses.29 We also VACATE the orders authorizing the

Government’s presentation of the videotaped depositions of former Alavi board

members. While the Government may introduce the fact of the Fifth Amendment

invocations into evidence, it may not repeat the unfairly prejudicial and redundant

presentation from the previous trial. We leave it to the district court to decide

exactly what form the evidence may take. Lastly, we VACATE the orders barring

the Claimants from arguing that the Government intimidated the witnesses into

staying silent.

      4. The remaining issues raised by the parties are MOOT as a result of these

holdings.

      5. In light of these holdings, we VACATE the judgment.

29If the Government wishes to depose Hassani and Dabiran before trial, the court shall
ensure that the Claimants make them available.

                                         56