Cactil, LLC v. United States

District Court, S.D. California·Decided September 10, 2024·No. 3:24-cv-01270·Unknown

Opinion

CACTIL, LLC d/b/a Case No.: 3:24-cv-01270-LL-AHG MYCHARGEBACK.COM, ORDER: Petitioner, v. (1) DENYING WITHOUT PREJUDICE MOTION TO UNSEAL UNITED STATES OF AMERICA, WARRANT APPLICATION (ECF Respondent. No. 3);

(2) GRANTING MOTION TO UNSEAL SEALED LODGED PROPOSED DOCUMENTS (ECF No. 10); and

(3) DENYING AS MOOT MOTION TO FILE DOCUMENTS UNDER SEAL (ECF No. 4)

[ECF Nos. 3, 4, 10]

On July 22, 2024, Petitioner initiated this civil action under Federal Rule of Criminal Procedure 41(g), seeking the return of a website domain that was seized by the Federal Bureau of Investigation on June 25, 2024, pursuant to a seizure warrant signed by the undersigned Magistrate Judge in a related sealed criminal matter. ECF No. 1. Among other relief sought in the 41(g) petition, Petitioner seeks to unseal the application for the seizure warrant in the sealed criminal matter. ECF No. 3 (“Motion to Unseal Warrant Application”). See also ECF No. 17 (separate memorandum in support of the Motion to Unseal Warrant Application). Additionally, to initiate this action, Petitioner was required by the Clerk of Court to file its Memorandum in Support of the 41(g) Petition and the attached exhibits under seal to protect against the disclosure of materials that are subject to the sealing order in the related criminal matter. See ECF Nos. 4, 5. Those materials are currently lodged under seal at ECF No. 5 in accordance with the Court’s instructions. Following the required protocol for lodging the materials under seal, Petitioner also filed a Motion to Seal along with the lodgment. ECF No. 4. However, Petitioner does not agree that the Memorandum or its exhibits disclose any sealed information and has thus filed a separate Motion to Unseal those materials. ECF No. 10 (“Motion to Unseal Sealed Lodged Proposed Documents”). Respondent the United States of America (the “United States” or the “Government”) opposes the motion to unseal the warrant application on the basis that there is no qualified right of public access to pre-indictment search warrant materials. ECF No. 20 at 25-27. Further, the Government argues that the fact its investigation in the underlying criminal matter is still ongoing is enough to establish a compelling interest in maintaining the warrant application under seal, and that permitting Petitioner to use Rule 41(g) as a discovery tool to uncover information regarding the factual basis of the criminal investigation into its company would exceed the bounds of the Court’s civil equitable jurisdiction over the 41(g) petition in this action. Id. at 27-28. The Government did not take a position on the propriety of unsealing the Memorandum in Support of the 41(g) Petition. See generally ECF No. 20. On September 5, 2024, pursuant to an Order of the Court that the Government provide more detail regarding its asserted compelling interest in maintaining the warrant application under seal, and whether providing a redacted version of the application would adequately serve that compelling interest, the United States filed a Supplemental Brief in support of its opposition to Petitioner’s Motion to Unseal Warrant Application. ECF No. 27. For the reasons explained more fully below, the Court (1) DENIES the Motion to Unseal Warrant Application (ECF No. 3) without prejudice; (2) GRANTS the Motion to Unseal Sealed Lodged Proposed Documents (ECF No. 10); and (3) DENIES as moot the Motion to Seal (ECF No. 4). It is well-settled that the public has no pre-indictment right of access to search warrants and affidavits under the First Amendment. Times Mirror Co. v. United States, 873 F.2d 1210, 1211 (9th Cir. 1989). Courts recognize that the integrity and independence of pre-indictment criminal fact-finding proceedings are placed at risk by public disclosures, and the process of disclosing information to a neutral magistrate to obtain a search warrant “has always been considered an extension of the criminal investigation itself.” Id. at 1213, 1214. Therefore, the information disclosed to the Magistrate Judge in a search warrant application is entitled to the same confidentiality as other aspects of the criminal investigation, and the Court’s granting of a sealing order is “necessarily . . . highly deferential to the government’s determination that a given investigation requires secrecy and that warrant materials be kept under seal.” Id. at 1214. Despite this well-established principle that the public has no right of access to pre- indictment search warrants, many courts distinguish between the public right of access inquiry that arises under the First Amendment, and the inquiry into whether the individual whose property is subject to the warrant should be afforded a right of access to pre- indictment warrant materials. See, e.g., In re Searches & Seizures, No. 08-SW-0361 DAD, 2008 WL 5411772, *3 (E.D. Cal. Dec. 19, 2008) (differentiating between the Ninth Circuit’s determination in Times Mirror Co. that the media has no qualified First Amendment right of access to pre-indictment warrant materials and “the entirely different question of a property owner’s abiding interest in challenging the reasonableness of the government’s invasion of his property and/or privacy” grounded in the Fourth Amendment) (internal quotations and citation omitted); In re Ares Armor, 206/208 N. Freeman St., Oceanside, 687 F. App’x 622, 624-25 (9th Cir. 2017) (assuming without deciding that the target of an ATF investigation had a qualified pre-indictment Fourth Amendment right to examine the search warrant affidavit, but declining to unseal the application on the basis that the ATF met its burden to show a compelling governmental interest in keeping the names of the agents under seal to protect their safety and privacy); In re Search Warrants Issued Aug. 29, 1994, 889 F. Supp. 296, 299 (S.D. Ohio 1995) (finding that cases such as Times Mirror Co. “dealing with the alleged right of the media or the public to access sealed warrant documents [under the First Amendment] do not control the outcome of this case[,]” which “involves the right of the person whose home has been searched to see the documents which were used to obtain the search warrant and directly involves his rights under the Fourth Amendment[,]” and noting that such a distinction between First Amendment and Fourth Amendment rights is impliedly acknowledged in the Times Mirror Co. opinion itself by virtue of its rationale that “the privacy interest of the person whose home has been searched would be jeopardized if the public had access to the records.”) (citing Times Mirror Co., 873 F.2d at 1218). Courts recognizing this important distinction between the public’s First Amendment right of access to pre-indictment warrant materials and the right of access held by the target of a criminal investigation have explained that the latter right is rooted in the Warrant Clause of the Fourth Amendment, allowing an individual to inspect the probable cause affidavit leading to the warrant. See In re Searches & Seizures, 2008 WL 5411772, at *3; In re Search Warrant for 2934 Anderson Morris Road, 48 F. Supp. 2d 1082, 1083 (N.D. Ohio 1999). This Fourth Amendment right to pre-indictment access, however, is not absolute. Id.; In re Searches & Seizures, 2008 WL 5411772, at *4. The target of an investigation’s qualified right of pre-indictment access to search warrant affidavits related to the investigation can be overcome where a compelling governmental interest is demonstrated requiring that the materials be kept under seal, and there is no less restrictive means, such as redaction, capable of serving that interest. Id. The burden of proving a compelling interest falls on the government. Id. General assertions concerning the integrity of the early st

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