Virginia Case Examples

Whether civil or criminal in nature, legal cases in Virginia involving computer evidence usually require the parties and/or attorneys to retain a computer forensics examiner or a computer forensics expert.

These cases provide a sample of civil cases where computer forensics expert testimony was utilized in court:

  • FINMECCANICA S.P.A v. General Motors

    2007 WL 4143074

    Only the Westlaw citation is currently available.

    United States District Court, E.D. Virginia,

    Alexandria Division.

    FINMECCANICA S.P.A., et al., Plaintiffs,

    v.

    GENERAL MOTORS CORPORATION, Defendant.

    Opinion

    MEMORANDUM OPINION

    JAMES C. CACHERIS, District Judge.

    *1 This matter is before the Court on Defendant General Motors Corporation’s (“Defendant”) Motion to Transfer Pursuant to 28 U.S.C. § 1404(a) or, in the Alternative, to Dismiss for Lack of Subject Matter Jurisdiction and Failure to Name Essential Parties. For the following reasons, the Court will grant Defendant’s Motion to Transfer and, as a result, will not reach Defendant’s Motion to Dismiss in the Alternative.

    I. Background

    The Finmeccanica Group is an Italian industrial group of companies owned by Finmeccanica S.p.A. (“Finmeccanica”) that manufacture and sell air, rail, and automotive transportation systems and vehicles, energy production facilities, satellites, and defense systems and electronics. Ansaldo Ricerche S.p.A. (“ARI”) is an Italian research organization within the Finmeccanica Group that engages in the design, development, and licensing of these technologies. In May 2000, ARI contracted with the University of Rome “La Sapienza” and the University of Rome 3 (collectively the “University of Rome”), by means of Professors Fabio Crescimbini and Federico Caricchi (“the Professors”), to assist ARI in the design, construction, and testing of electric motors and control systems that would be used in a new electric propulsion system. ARI also contracted with Lucchi R. Electtromeccanica s.r.l., an Italian entity, through its president, Giorgio Lucchi (collectively “Lucchi”), to assist in the development of prototypes of the electric motors. As part of these contracts (collectively, the “ARI contracts”), the University of Rome and Lucchi granted ARI ownership of all technology resulting or arising from their collaboration with ARI, agreed to maintain the confidentiality of such technology and all information and trade secrets provided by ARI (collectively, the “ARI motor technology”), and agreed that ARI was entitled to the patent application filings and any resulting patent rights to the ARI motor technology.

    According to Finmeccanica and ARI (“Plaintiffs”), Defendant obtained access to the ARI motor technology after Dr. James Nagashima (“Dr.Nagashima”), Director of General Motors’s Advanced Technical Center in Torrance, California (the “California facility”), secured the assistance of the Professors and Lucchi in the design and development of an electric motor for use in Defendant’s hybrid vehicles. Defendant launched its own wheel motor design project at a January 2002 meeting between the Professors, Lucchi, and Dr. Nagashima, amongst others, which was held at Defendant’s California facility. The Professors and Lucchi disclosed to Defendant the ARI motor technology, including ARI’s confidential information and trade secrets, and photographs of the ARI motors. Defendant then induced the Professors and Lucchi to file patent applications for the ARI motor technology and to assign any resulting patent rights to Defendant.

    In 2006, Plaintiffs discovered that Defendant had filed with the United States Patent and Trademark Office (“USPTO”) provisional patent applications in August 2003 and non-provisional patent applications in July 2004 disclosing and claiming the ARI motor technology. The Professors and Lucchi, as well as General Motors personnel such as Dr. Nagashima, are the named inventors on these patent applications. In 2005, these applications were published by the USPTO, thus disclosing trade secrets relating to the ARI motor technology. In addition, two of the three pending applications have been allowed by the USPTO and the issue fees have been recently paid. Defendant has also filed international or foreign patent applications that disclose and claim the ARI motor technology.

    *2 On August 10, 2007, Plaintiffs filed a ten count Complaint seeking, inter alia, a declaratory judgment that ARI is the sole and exclusive owner of all rights, title, and interest in the patent applications relating to the ARI motor technology, as well as the resulting patents. Plaintiffs seek, in the alternative, a declaratory judgment that ARI owns a pro rata undivided interest in the patent applications and resulting patents. Additionally, Plaintiffs bring numerous state law claims against Defendant, including: (1) statutory conspiracy to injure business under Va.Code § 18.2-499; (2) conversion; (3) detinue; (4) tortious interference with prospective economic advantage; (5) unjust enrichment; (6) slander of title; (7) tortious interference with contractual relations; (8) misappropriation of trade secrets under the California Uniform Trade Secret Act, Cal. Civ.Code §§ 3246, et. seq.; and (9) unfair competition in violation of California Business and Professions Code §§ 17200, et. seq.

    On October 18, 2007, Defendant filed a Motion to Transfer Pursuant to 28 U.S.C. § 1404(a) or, in the Alternative, to Dismiss for Lack of Subject Matter Jurisdiction and Failure to Name Essential Parties. This matter is currently before the Court.

    II. Standard of Review

    28 U.S.C. § 1404(a) governs motions to transfer, and provides that “for the convenience of the parties and witnesses, in the interest of justice, a district court may transfer any civil action to any other district or division where it might have been brought.” 28 U.S.C. § 1404(a). The decision whether to transfer a lawsuit to another district is committed to the “sound discretion” of the district court. Southern Ry. Co. v. Madden, 235 F.2d 198, 201 (4th Cir.1956). In applying Section 1404(a), a district court must first decide whether the claims might have been brought in the transferee forum. Koh v. Microtek Int’l, Inc., 250 F.Supp.2d 627, 630 (E.D.Va.2003); see also Brown Mfg. Corp. v. CFM Majestic Inc., 16 F.Supp.2d 660, 663 (E.D.Va.2002). Next, the court must determine whether transfer would be for the convenience of the parties and witnesses and in the interest of justice. JTH Tax, Inc. v. Lee, 482 F.Supp.2d 731, 735 (E.D.Va.2007). Specifically, the court must consider: (1) the plaintiff’s choice of venue; (2) witness convenience and access; (3) the convenience of the parties; and (4) the interests of justice. Id. at 736; see also Bd. of Trs., Sheet Metal Workers Nat’l Fund v. Baylor Heating & Air Conditioning, Inc., 702 F.Supp. 1253, 1256-62 (E.D.Va.1998). The movant bears the burden of showing that transfer is proper. JTH Tax, Inc., 482 F.Supp.2d at 736.

    III. Analysis

    Defendant moves to transfer the case to the Central District of California on the grounds that it is the more convenient and appropriate forum. In the alternative, Defendant moves to dismiss the case for failure to name essential parties and for lack of subject matter jurisdiction. The Court will address Defendant’s Motion to Transfer first before turning to Defendant’s Motion to Dismiss.

    A. Defendant’s Motion to Transfer

    *3 Defendant argues that the various factors considered in a Section 1404(a) motion weigh heavily in favor of transferring the case from the Eastern District of Virginia to the Central District of California. In deciding this question, the threshold issue the Court must consider is whether this action could have been brought in the proposed transferee forum. Subject matter jurisdiction over this action lies in diversity. See 28 U.S.C. § 1332. A diversity action may be brought “in a judicial district where any defendant resides, if all defendants reside in the same state.” 28 U.S.C. § 1391(a)(I). A defendant that is a corporation resides “in any judicial district in which it is subject to personal jurisdiction at the time an action is commenced.”1 Id. at § 1391(c). A diversity action may also be brought in “a judicial district in which a substantial part of the events or omissions giving rise to the claim occurred.” 28 U.S.C. § 1391(a)(ii).

    Given the location of Defendant’s California facility in the Central District of California, Defendant may very well have “substantial” or “continuous and systematic” contacts with California such that the U.S. District Court for the Central District of California possess general jurisdiction over Defendant. See Bancroft & Masters, Inc. v. Augusta National, Inc., 223 F.3d 1082, 1086 (9th Cir.2000). At the very least, because a substantial portion of the events giving rise to Plaintiffs’ claims-including Defendant’s wheel motor design project, which made use of the ARI motor technology-occurred at Defendant’s California facility, see Pls.’ Compl. at ¶¶ 16-18, the U.S. District Court for the Central District of California has specific jurisdiction over Defendant. See Ballard v. Savage, 65 F.3d 1495, 1498 (9th Cir.1995)(outlining three-part test to determine whether a court may exercise specific jurisdiction). As a result, Defendant “resides” in the Central District of California within the meaning of Section 1391(a)(I), and this action could have been brought in that District.2

    1) Plaintiffs’ Choice of Forum

    A plaintiff’s choice of forum is generally entitled to substantial weight. Lycos, Inc. v. TiVo, Inc., 499 F.Supp.2d 685, 692 (E.D.Va.2007). However, a plaintiff’s chosen venue will not be given substantial weight when the plaintiff brings suit in “a forum other than its home forum and the claims bear little or no relation to the chosen forum.” Koh v. Microtek Intern., Inc., 250 F.Supp.2d 627, 633 (E.D.Va.2003)(citing Intranexus, Inc. v. Siemens Med. Solutions Health Serv. Corp., 227 F.Supp.2d 581, 583 (E.D.Va.2002) and Acterna, L.L.C. v. Adtech, Inc., 129 F.Supp.2d 936, 939 (E.D.Va.2001)). If the plaintiff selects a forum “where neither the plaintiff nor the defendant resides and where few or none of the events giving rise to the cause of action accrued, ‘that plaintiff’s choice loses its place status in the court’s consideration.’ “ Original Creatine Patent Co., Ltd. v. Met-Rx USA, Inc., 387 F.Supp.2d 564, 568 (E.D.Va.2005)(quoting Ion Beam Applications S.A., v. Titan Corp., 156 F.Supp.2d 556, 563 (E.D.Va.2000)).

    *4 Plaintiffs contend that there is a “substantial connection” between Defendant’s affirmative acts in the Eastern District of Virginia and Plaintiffs’ claims that justify applying substantial weight to Plaintiffs’ choice of forum. Pls.’ Mem. in Opp’n at 7. Specifically, Plaintiffs argue that Defendant’s conduct in relation to the USPTO, which is located in this District, including filing patent applications, making knowingly false representations, and destroying trade secrets, are affirmative acts that occurred here and that are central to Plaintiffs’ allegations. Id. at 7-8. Defendant, however, filed its patent applications and related documents by placing them in the mail in Michigan, which, as Defendant argues, suggests that no affirmative act actually took place in this District. Def.’s Reply at 5 (citing Ex. A to Second Decl. of Lee Ann Stevenson).

    More importantly, if Plaintiffs’ theory is correct, the mere fact of filing a patent application with the USPTO would create a substantial connection and make venue proper in this District. Plaintiffs cite no cases that stand for the proposition that the location of the USPTO creates such a connection to this forum.3 As Defendants note, Courts in this District have had no qualms about transferring patent cases to other jurisdictions despite the location of the USPTO. See Def.’s Reply at 6 n. 2 (citing cases).

    Defendant argues that Courts in the Eastern District of Virginia have repeatedly found that the preferred forum in patent infringement cases is the “center of the accused activity.” See, e.g., Original Creatine Patent Co., 387 F.Supp.2d at 569; GTE Wireless, Inc. v. Qualcomm, Inc., 71 F.Supp.2d 517, 519 (E.D.Va.1999). Because the underlying case is not a patent infringement case, the Court cannot say with certainty that the “center of the accused activity” test applies here.4 However, for Plaintiffs’ chosen form to receive substantial weight there must still be a connection between the forum and the operative facts giving rise to the dispute, and Plaintiffs here have shown none. See Corry v. CFM Majestic Inc., 16 F.Supp.2d 660, 666 (E.D.Va .1998). “[I]f none of the operative events in the lawsuit took place in the district in which the action was originally filed, a motion to transfer to the district in which the events occurred is likely to succeed.” 17 James Wm. Moore, et al., Moore’s Federal Practice § 111.13(1)(d)(I) n. 23 (3d ed.2005).

    In contrast to the Eastern District of Virginia, the Central District of California has a substantial connection to this case. Defendants’ California facility, located in the Central District of California, is where Defendants developed and tested their wheel motor technology, where they met in person with the Professors and Lucchi regarding that technology and corresponded with them regarding their respective rights in that technology, and where Defendant maintains its engineering records for this technology. Def .’s Mot. to Transfer at 9 (citing J. Nagashima Aff. at ¶¶ 3-4, 8).

    *5 Additionally, Plaintiffs’ claim that the Eastern District of Virginia is their home forum is without merit. It is undisputed that Finmeccanica and ARI are alien corporations with their principal place of business in Italy. Complaint at ¶¶ 1-2. Plaintiffs, however, contend that while this District is not their domicile, because the Finmeccanica Group has two United States companies headquartered within this District-Selex Sensors, Inc. (“Selex Sensors”) and August Wetland, Inc. (“August Wetland”)-it is “nevertheless effectively their home forum.” Pls .’ Mem. in Opp’n at 8. In support of this contention, Plaintiffs cite General Creation LLC v. Leapfrog Enterprises, Inc., 192 F.Supp.2d 503, 505-06 (W.D.Va.2002). In that case, the Court found that the Western District of Virginia was the “equivalent of a home forum” for the plaintiff because the company’s founder, who also invented the patented item at issue in the litigation, worked in the District and was in possession of the documents relating to the invention. Id. at 505-06. The Court further based its finding on the fact that the plaintiff’s exclusive U.S. distributor-also a plaintiff in the case-was located in the Western District of Virginia. Id. at 506. By contrast, Plaintiffs here do not claim that Selex Sensors and August Wetland-both relatively minor operations, see Exs. B and C to Decl. of Lee Ann Stevenson-played any role in the events giving rise to this litigation.5 The Court thus concludes that, because Plaintiffs have chosen a foreign forum and because the cause of action bears little or no relation to the Eastern District of Virginia, Plaintiffs’ choice of forum is not entitled to substantial weight.

    2) Witness convenience and access

    Witness convenience and access is often the most important factor in determining whether transfer is appropriate. JTH Tax, Inc. v. Lee, 482 F.Supp.2d 731, 737 (E.D.Va.2007). However, its influence is dependent upon whether the movant meets its burden “to proffer, by affidavit or otherwise, sufficient details respecting the witnesses and their potential testimony to enable the court to assess the materiality of evidence and the degree of inconvenience.” Koh, 250 F.Supp.2d at 636. Moreover, in evaluating this factor courts must draw a distinction between party witnesses and non-party witnesses and “afford[ ] greater weight to the convenience of non-party witnesses.” Lycos, 499 F.Supp.2d at 693.

    Defendant cites six of its employees-including four of the five named inventors on the patents and applications in question and the business development personnel who planned and initiated the program with the Professors and Lucchi-“with potentially relevant knowledge of the allegations in the Complaint.” Def.’s Mot. to Transfer at 10-11 (citing J. Nagashima Aff. at ¶ 5). All of these employees are located in the Central District of California. Id. Though Defendant has not specifically set out any potential testimony of these witnesses, Defendant has identified six witnesses located in the Central District of California who appear to be closely intertwined with the events that form the basis of Plaintiffs’ claims. This showing is sufficient proof to demonstrate witness inconvenience. See Koh, 250 F.Supp.2d at 636-37 (“[I]t is permissible to infer, absent any contrary evidence from the nonmovant, that witnesses are located at or near the center of the alleged[ events] and that witnesses … are material.”). While Defendant does not offer evidence to suggest that these party witnesses would be unable to travel to Virginia, it is nevertheless clearly the case that the Eastern District of Virginia is more inconvenient for these witnesses than the Central District of California.

    *6 Both Defendants and Plaintiffs are unable to identify any witnesses, either party or non-party, who reside in Virginia. The absence of any witnesses in the chosen forum weighs in favor of transfer to a more convenient forum. See GTE Wireless, 71 F.Supp.2d at 519-20 (transferring case where, inter alia, the plaintiff failed to identify a single witness in the Eastern District of Virginia who had testimony relevant or unique enough to warrant venue). Instead, Plaintiffs base their argument for witness convenience in the chosen forum on the fact that, for Plaintiffs’ party and non-party witnesses alike, this District is less inconvenient than the Central District of California. See Pls.’ Mem. in Opp’n at 12. Plaintiffs first point to the Professors and Lucchi, all non-party witness who reside in Italy, and argue that it will be a greater inconvenience for them to fly across the United States than to Virginia. Id. (citing Mazzieri Decl. at ¶¶ 3-4). These witnesses, however, have already demonstrated by their prior actions their willingness to travel to California in matters relating to the substance of this case. J. Nagashima Aff. at ¶ 4. Given this behavior, Plaintiffs’ contention as to the relative convenience of Virginia for these non-party witnesses holds less weight.

    Plaintiffs make the same argument regarding their employee witnesses, all of whom also reside in Italy. See Pls.’ Mem. in Opp’n at 12 (citing Mazzieri Decl. at ¶ 6). In support of this argument, Plaintiffs provide evidence that a flight from Rome to Los Angeles is roughly six hours longer than a flight from Rome to Dulles International Airport, and contrast these lengthy flights with the five to six hour flights from Los Angeles to Dulles that Defendants’ witnesses face. See Pls.’ Mem. in Opp’n at 12 (citing Dubin Decl. at ¶¶ 19-22). Plaintiffs’ research also indicates that there are direct flights from Rome to Dulles but no direct flights from Rome to Los Angeles. Id. However, Plaintiffs’ analysis is flawed by the fact that all of the employee witnesses identified in paragraph six of the Mazzieri Declaration reside in Genoa, not Rome. Mazzieri Decl. at ¶ 6. According to Defendants’ calculations, flights from Genoa to Dulles are in some instances less than three hours shorter than flights from Genoa to Los Angeles, and none are non-stop. Def.’s Reply at 10 (citing Exs. E and F to Second Decl. of Lee Ann Stevenson).

    In situations where the original forum is convenient for the plaintiff’s witnesses, but inconvenient for the defendant’s witnesses, and where the reverse is true for the transferee forum, “transfer is inappropriate as it would ‘shift the balance of inconvenience’ “ to the other party. JTH Tax, Inc., 482 F.Supp.2d at 737 (quoting Bd. of Trustees, Sheet Metal Workers Nat. Fund v. Baylor Heating & Air Conditioning, Inc., 702 F.Supp. 1253, 1258 (E.D.Va.1988)). This case, however, does not involve a situation where the transferee forum is inconvenient to Plaintiffs’ witnesses or where transfer would mean shifting the “balance of inconvenience.” While transferring this case to the Central District of California would be more convenient for Defendants’ party witnesses, who would then not have to fly cross-country, transfer has a minimal impact on Plaintiffs’ party witnesses: it simply requires that they spend a few more hours on a plane than they would have to if the case remained in the Eastern District of Virginia. Because transfer is only marginally less convenient for Plaintiffs’ witnesses, it does not constitute a prohibited shifting of the “balance of inconvenience.” Thus, on balance, the Court finds that witness convenience weighs in favor of transfer.

    3) Convenience of the parties

    *7 The convenience of the parties factor includes an assessment of “the ease of access to sources of proof, the cost of obtaining the attendance of witnesses, and the availability of compulsory process.” Samsung Electronics Co., Ltd. v. Rambus, Inc., 386 F.Supp.2d 708, 717 n. 3 (E.D.Va.2005). This factor is chiefly operative in cases where the plaintiff chooses a forum away from home. Bd. of Trs., 702 F.Supp. at 1258. Where, as here, plaintiff chooses a forum that is not their home, “plaintiff’s venue choice is given less weight and if the venue substantially inconveniences defendants, transfer may be ordered.” Id.

    In arguing for the inconvenience of the Eastern District of Virginia, Defendant largely rehashes its arguments regarding witness convenience. Defendant expands upon those arguments, however, by noting that with the current forum Defendant’s party witnesses-all highly skilled and difficult to replace employees-would be away from work for extended periods of time to the detriment of Defendant. Def.’s Mot. to Transfer at 12. Defendant also asserts that virtually all of their discoverable documents “that may be relevant and necessary to this case” are maintained in California, including documents showing the development history of Defendant’s wheel motor technology, the design specifications and test reports for that technology, and correspondence by and between Defendant employees and the Professors and Lucchi. Id. at 12-13 (citing J. Nagashima Aff. at ¶ 8).

    Plaintiffs, in addition to rearguing their point regarding the additional time and distance required to fly from Italy to Los Angeles as compared to Dulles, note that in this District they would have access to Finmeccanica facilities like Selex Sensors and August Wetland, and would be subject to a less significant time difference from Italy. Pls.’ Mem. in Opp’n at 13. Plaintiffs also challenge Defendants’ claim regarding their documents, contending that “in the age of electronic discovery the physical location of documents is simply not an important consideration.” Id. (citing 15 Wright, Miller & Cooper, Federal Practice and Procedure: Juris.3d § 3853 (2007)).

    The Court finds that Defendant has not offered much in the way of specific evidence as to how the absence of its employee witnesses due to their involvement in this case would be significantly more disruptive if the case remains in this District than if it were transferred. The Court is also skeptical that, in the age of electronic discovery, the location of potentially relevant documents has much impact on the convenience to either party. Nevertheless, as the Court found in Part III.A.1 of this Opinion, Plaintiffs did not file in their home forum, and thus their chosen venue receives less weight. Moreover, Defendant’s arguments about party witness convenience, which weighed strongly in its argument for witness convenience, weigh strongly here as well. Consequently, the Court finds that this factor tips slightly, but not substantially, in favor of Defendant.

    4) The interests of justice

    *8 The interests of justice factor encompasses “those factors unrelated to witness and party convenience,” Acterna, L.L.C. v. Adtech, Inc., 129 F.Supp.2d 936, 939-40 (E.D.Va.2001), and includes such considerations as “a court’s familiarity with the applicable law, where the claim arose, and the relative congestion of the courts’ dockets.” Original Creatine Patent Co., 387 F.Supp.2d at 571-72. As the Court discussed in Part III.A.1 of this Opinion, a substantial portion of the events giving rise to Plaintiffs’ claims occurred at Defendant’s California facility in the Central District of California. Furthermore, there are no witnesses who reside in Virginia, and at least six potential witnesses who reside in the Central District of California. The interests of justice calculation includes the interest of having local controversies decided at home, see Intranexus, Inc. v. Siemens Medical Solutions Health Services Corp., 227 F.Supp.2d 581, 585 (E.D.Va.2002), and in this case the controversy is located squarely in California.

    As to the Court’s familiarity with applicable law, according to Plaintiffs’ Complaint two claims arise under California statutory law and one claim arises under Virginia statutory law. Compl. at ¶¶ 35-38, 72-84. The remaining claims are state common law tort claims. However, because the events giving rise to these claims largely occurred in California, it is most likely that California substantive law will apply. See Jones v. R.S. Jones & Assocs., Inc., 431 S.E.2d 33, 34 (Va.1993)(holding that in tort causes of action Virginia applies the law of the state where the “place of the wrong” occurred). Naturally, federal courts in California will be more familiar with California state law than federal courts in Virginia.

    Plaintiffs base their interests of justice argument primarily on docket considerations, contending that a speedy resolution of this case is essential to their interests, and that the Eastern District of Virginia will facilitate that speedy resolution. See Pls.’ Mem. in Opp’n at 16. While docket considerations are a relevant factor in the interests of justice analysis, they “cannot be the primary reason for retaining a case in this district…. The ‘rocket docket’ certainly attracts plaintiffs, but the Court must ensure that this attraction does not dull the ability of the Court to continue to act in an expeditious manner.” Cognitronics Imaging Systems, Inc. v. Recognition, 83 F.Supp.2d 689, 699 (E.D .Va.2000). When docket considerations are the primary reason a plaintiff has chosen the Eastern District of Virginia, “the interest of justice is not served.” Original Creatine Patent Co., 387 F.Supp.2d at 572.

    To the extent docket considerations are relevant, Plaintiffs’ own statistics show that there is only a 1.3 month difference in the median time from filing a civil case to disposition of that case between the two Districts. See Exs. M and N to Dubin Decl. Moreover, the Central District of California is the tenth most efficient District from filing to disposition in civil cases. Id. Perhaps the only significant difference between the two Districts that weighs in favor of Plaintiffs is the median time from filing to trial in civil cases: 21.3 months in the Central District of California versus 9.3 months in the Eastern District of Virginia. Id. Taking all of these things into consideration, however, the Court finds that the interests of justice weigh in favor of transferring this case to the Central District of California.

    *9 After weighing all of the factors pertaining to a transfer of venue under 28 U.S.C. § 1404(a), the Court finds that these factors weigh in favor of transferring this case from the Eastern District of Virginia to the Central District of California. Thus, the Court will grant Defendant’s Motion to Transfer.

    B. Defendant’s Motion to Dismiss

    In addition to its Motion to Transfer, Defendant moves in the Alternative to Dismiss for Lack of Subject Matter Jurisdiction and Failure to Name Essential Parties. Because the Court will grant Defendant’s Motion to Transfer, it need not consider Defendant’s Motion to Dismiss in the Alternative.

    IV. Conclusion

    For these reasons, the Court will grant Defendant’s Motion to Transfer and, as a result, will not reach Defendant’s Motion to Dismiss in the Alternative.

    An appropriate Order will issue.

    Continue reading →2007 WL 4143074 Only the Westlaw citation is currently available. United States District Court, E.D. Virginia, Alexandria Division. FINMECCANICA S.P.A., et al., Plaintiffs, v. GENERAL MOTORS CORPORATION, Defendant. Opinion MEMORANDUM OPINION JAMES C. CACHERIS, District Judge. *1 This matter is before the Court on Defendant General Motors Corporation’s (“Defendant”) Motion to Transfer Pursuant to 28 U.S.C. § 1404(a) or, in the Alternative, to Dismiss for ...
  • Cargill, Inc. v. C & P Towing Co., Inc.

    United States District Court, E.D. Virginia, Norfolk Division.

    CARGILL, INC., Plaintiff,

    v.

    C & P TOWING CO., INC., and Northeast Towing, Inc., in personam, and TUG RANDY D.,
    her engines, boilers, etc., in rem, Defendants.

    Civ. A. No. 89-378-N.

    Aug. 16, 1990.

    Guilford D. Ware/y/JamesL. Chapman, IV, Crenshaw, Ware & Martin, Norfolk, Va., for
    Cargill, Incorporated.

    John E. Holloway/y/PhilipN. Davey, Hunton & Williams, Norfolk, Va., for C & P
    Towing Co., Inc., Northeast Towing, Inc., & TUG RANDY D.

    OPINION AND ORDER

    TOMMY E. MILLER, United States Magistrate.

    I. Background

    *1 On May 10, 1989, plaintiff Cargill, Inc. launched this action in admiralty
    against defendants C & P Towing Co., Inc., Northeast Towing, Inc., in personam,
    and the tug RANDY D., in rem.   On November 24, 1989, plaintiff filed an  Amended
    Complaint, which defendants answered on November 30, 1989.   On January 12, 1990,
    in accordance with 28 U.S.C. s 636(c), all parties voluntarily waived their rights
    to proceed before a United States District Judge and consented to proceed to trial
    before a United States Magistrate.   The parties elected to proceed in the event
    of an appeal directly to the United States Court of Appeals for the Fourth
    Circuit.   See 28 U.S.C. s 636(c)(3).   The case was tried from January 16  to
    January 18, 1990; FN1  upon submission of post-trial memoranda, the Court heard
    argument on May 31, 1990.

    II. Findings of Fact and Conclusions of Law

    Cargill, Inc. entered into an agreement with C & P Towing Co., Inc. under which C
    & P Towing agreed to tow a laden barge-the NF-103-that was owned by Cargill from
    Cargill’s facility at Seaford, Delaware, to Cargill’s facility in Chesapeake,
    Virginia.   Stipulation 4-5; FN2  Pl.Exh. 1.FN3  Similarly, C & P Towing  had
    entered into an agreement with Northeast Towing, Inc. under which Northeast Towing
    engaged the tug RANDY D. to tow the NF-103.   Stipulation 5.   On February  25,
    1989, the RANDY D., with the NF-103 in tow, proceeded south on the Nanticoke River
    into the Chesapeake Bay by way of Tangier Sound.   Stipulation 6;  Pl.Exh.  6;
    Pl.Exh. 31.   During the voyage, the NF-103 listed severely to starboard,
    capsized, righted itself, and eventually sank.   Stipulation 6-7;  Pl.Exh. 31.
    At issue is the liability, if any, of the tug to the tow as the result of
    defendants’ negligence.   Plaintiff claims total damages of $485,447, including
    pre-judgment interest.   The Court has jurisdiction of this case under 28 U.S.C. s
    1333.

    A. Maritime Negligence Principles

    Cargill alleges that defendants were negligent in undertaking the voyage of the
    laden NF-103 from Seaford.   Cargill further alleges that defendants were
    negligent in proceeding into the open waters of the Chesapeake Bay in adverse
    weather with the laden NF-103 and that defendants were negligent in failing to use
    due care in handling the listing NF-103.   Finally, Cargill charges that
    defendants breached their warranty of workmanlike service.   In asserting its
    claims, Cargill argues that defendants failed to provide a seaworthy tug and that,
    as a result of such failure, Cargill suffered damages.

    In admiralty suits that allege maritime tort, the rules of common law negligence
    apply.   Leathers v. Blessing, 105 U.S. 626, 630 (1881);  see   Consolidated
    Aluminum Corp. v. C.F. Bean Corp., 833 F.2d 65, 67 (5th Cir.1987), cert. denied,
    486 U.S. 1055 (1988).   The mere occurrence of an accident or of casualty to  the
    tow does not give rise to a presumption that the tug was at fault.   Southgate  v.
    Eastern Transp. Co., 21 F.2d 47, 49 (4th Cir.1927);   Eastern Tar Prods. Corp. v.
    Chesapeake Oil Transport Co., 101 F.2d 30, 32, 1939 A.M.C. 58, 63 (4th Cir.1939).
    Thus, the owner of a tow bears the burden at trial of proving the tug’s duty to
    the tow, the tug’s breach of such duty, and the damages that the tug’s breach
    proximately caused.   The WHITE CITY, 285 U.S. at 202.

    *2 In The WHITE CITY, the United States Supreme Court held that suit by the owner
    of a tow was a cause of action ex delicto and not ex contractu against the tug and
    its owner.   The WHITE CITY, 285 U.S. at 201;  see  New Orleans Coal Co. v.  Texas
    Co., 122 F.2d 141, 143, 1941 A.M.C. 1463, 1467 (5th Cir.1941);   Simkins v. R.L.
    Morrison & Sons, 107 F.2d 121, 122, 1940 A.M.C. 24, 26 (5th Cir.1939);   Pool
    Shipping Co., Ltd. v. Moran Towing & Transp. Co., Inc., 65 F.2d 385, 386, 1933
    A.M.C. 836, 838 (2d Cir.1933).   In characterizing the suit as sounding in tort,
    the Court reasoned that a tug does not serve to insure the tow or to act as bailee
    of the tow.   The WHITE CITY, 285 U.S. at 202;   Eastern Tar Prods. Corp.,  101
    F.2d at 32, 1939 A.M.C. at 63.   The Court distinguished liability of a tug  from
    liability of “common carrier and other bailees.”   The WHITE CITY, 285 U.S. at
    200.   The Court reasoned that a tug did not exercise exclusive control over the
    tow;  rather, a tug was responsible “only so far as is necessary to enable the tug
    and those in charge of her to fulfill the engagement.”  Id.  Thus, the Court
    concluded that damage to a tow was similar to a collision case because a tug’s
    duties correspond to “those which one vessel owes to others which it may meet.”
    Id. at 201.

    1. Duties of the Tug

    In The WHITE CITY, the Court set forth the duties that a tug owes its tow.  Id. at
    202.   The Court ruled that a tug must “exercise such reasonable care and maritime
    skill as prudent navigators employ for the performance of similar services.”  Id.
    A commentator further defines the duty that a tug owes its tow, stating that a tug
    represents that

    it possesses sufficient knowledge and skill to perform the [towage] contract
    safely;  that it will use its best endeavors, skill and diligence for that
    purpose;  that it will provide a seaworthy vessel, properly equipped and manned,
    and of sufficient capacity and power to perform the service undertaken, under
    conditions which are to be reasonably anticipated.

    A. Parks, The Law of Tug, Tow, and Pilotage 135 (1982) [hereinafter A. Parks].

    The duty that a tug owes its tow envelops the duty of the tug to furnish a
    competent master;  a court analyzes the master’s competence by evaluating the
    master’s prudence and reasonableness.   See  Frank Jacobus Transp. Co. v. Steamtug
    ALICE MORAN, 67 F.2d 603, 605, 1933 A.M.C. 1626, 1630 (2d Cir.1933).   The master,
    however, need not exercise the highest degree of care;  rather, the master is
    merely obligated to use reasonable and ordinary care and skill, and a court must
    afford the master great discretion in judging the master’s decisions.  Id.  The
    master’s discretion extends not only to deciding whether to depart from port given
    certain weather conditions, but also to deciding, once underway, what action, if
    any, should be taken to protect the tow.  Id.;  see  International Salt Co.,  Inc.
    v. Diamond P. Transp. Co., 15 F.Supp. 727, 730, 1936 A.M.C. 1217, 1222
    (S.D.N.Y.1936), aff’d,  92 F.2d 65 (2d Cir.1937), cert. denied,  302 U.S. 764
    (1938);   S.C. Loveland Co., Inc. v. Pennsylvania Sugar Co., 100 F.2d 971, 974,
    1939 A.M.C. 20, 26 (4th Cir.1939).   A court reviewing the alleged breach of a
    tug’s duty must measure the allegations of negligence of the master in light of
    the circumstances at the time.   See Steamtug ALICE MORAN, 67 F.2d at 605, 1933
    A.M.C. at 1630;  Ocean Burning Inc. v. Moran Towing & Transp. Co., Inc., 1974
    A.M.C. 2307, 2311 (S.D.N.Y.1974).   After all, as Judge Learned Hand stated in
    Steamtug ALICE MORAN, a court “cannot charge a master because it seems to [a
    court], who [was] not there, that another choice would have been better.   Only in
    case his conduct is outside the range of possible discretion, may [a court] hold
    him for lack of seamanship;  error to become fault must be gross and flagrant.”
    Steamtug ALICE MORAN, 67 F.2d at 605, 1933 A.M.C. at 1630;  see Eastern Tar Prods.
    Corp., 101 F.2d at 33, 1939 A.M.C. at 63 (quoting Steamtug ALICE MORAN and
    adopting rule for United States Court of Appeals for the Fourth Circuit).

    *3 S.C. Loveland Co., Inc. provides an example of the discretion possessed by a
    tug master.   Owners of the barge FRED SMARTLEY, JR. hired the tug COLONNA to  tow
    the barge from Baltimore to Norfolk.    S.C. Loveland Co., Inc., 100 F.2d at  972,
    1939 A.M.C. at 22.   The barge was manned and laden with a cargo of sugar.   Id.,
    1939 A.M.C. at 22.   On November 23, 1935, the tug and tow, along with three  other
    barges, left North Point, Maryland.   At the time of departure, “there were no
    storm warnings displayed and there was only a strong breeze from north-northwest,
    blowing down the [Chesapeake Bay].”  Id., 1939 A.M.C. at 23.   When the  flotilla
    reached the mouth of the Potomac River, the hawser connecting the COLONNA and the
    FRED SMARTLEY, JR. parted, causing a collision between the FRED SMARTLEY, JR. and
    one of the other barges.  Id., 1939 A.M.C. at 22.   As a result of the impact,  the
    cargo of sugar was severely damaged.  Id., 1939 A.M.C. at 23.   The wind at  the
    time that the hawser parted was, at most, only 18 to 20 miles per hour, which is
    considered to be a “moderate breeze.”  Id., 1939 A.M.C. at 23.   The  court
    characterized the wind as “favorable for the voyage.”  Id., 1939 A.M.C. at 23.

    The court of appeals addressed the issue whether the tug was liable.  FN4  Id.,
    1939 A.M.C. at 25.   The trial court had found that the tug was liable because  the
    master of the tug was negligent in leaving North Point, Maryland in adverse
    weather.  Id. at 973, 1939 A.M.C. at 25.   The court of appeals reversed the  trial
    court on this issue, ruling that “[t]he advisability of leaving port under the
    conditions that existed was left to the judgment of the master of the tug alone
    and that the decision made by him was within the range of discretion properly
    allowed to him cannot be successfully disputed.”  Id. at 974, 1939 A.M.C. at 25.

    Ocean Burning, Inc. also demonstrates the broad scope of discretion that a master
    of a tug exercises.  Ocean Burning, Inc., 1974 A.M.C. at 2309-10.   On April  21,
    1969, the tug DIANA L. MORAN contracted to tow the barge OCEAN BURNING NO. 1 to an
    area 12 to 20 miles off the Shark River along the New Jersey coast.  Id. at 2308.
    The barge was designed to burn old waterfront timbers from dismantled piers and
    was engaged for this purpose on April 21-22, 1969.  Id.  The weather for the area
    was predicted to bring winds from the south at 10 to 15 miles per hour for the
    afternoon of April 21, 1969;  15 to 25 knots for that night, shifting to
    west-northwest by April 22, 1969.   An updated forecast called for winds from the
    southwest at 15 to 25 knots, with higher gusts;  a small craft warning was in
    effect.  Id. at 2309.   The court found that the actual weather was in accord  with
    the weather forecast.   Id.

    The master of the tug testified that the weather did not necessitate the return to
    port because, even though water broke across the bow of the barge, the weather did
    not present a hazard.  Id.  On April 22, 1969, however, the master noticed that
    the barge had assumed a slight list to port, which he reasonably assumed to have
    been the result of uneven burning.  Id.  The master could not inspect the barge
    because of the extreme heat of the fire.   Id.  When the fire had died down,  the
    tug was informed that it could return.   During the return voyage, the list
    increased;  the master shortened the hawser and continued to tow the listing
    barge.   The master put a man aboard the barge, who attempted to pump the  barge’s
    void tanks.   The master quickly removed the man for his own safety.  Id. at  2310.
    Thereafter, the master determined that, in his opinion, he could save the barge by
    beaching her.   The barge owner claimed damages sustained as the result of the
    beaching.  Id.

    *4 The court ruled that the decision to proceed under the weather forecasts given
    on April 21, 1969, was within the master’s discretion.  Id. at 2312.   The  court
    reasoned that the master properly relied on the tow’s warranty that the barge was
    seaworthy for the purpose of the voyage.  Id.  The court further ruled that the
    decision to proceed under the weather forecasts of small craft warnings was within
    the master’s discretion.  Id. at 2313 (citing S.C. Loveland Co., Inc., 100 F.2d at
    974, 1939 A.M.C. at 25).   Finally, the court ruled that the decision not to
    inspect the barge’s list when the list was first observed and the decision not to
    return immediately to port were within the master’s discretion.  Id. at 2315.
    The court concluded,

    Given the constantly increasing list to port, the DIANA L. MORAN was fully
    justified in concluding that the OCEAN BURNING NO. 1 was in imminent danger of
    capsizing or sinking and in taking appropriate measures to save her.   The
    measures which were taken, including the extinguishing of the remaining fire,
    placing Walla aboard the barge with pumps and, finally, beaching her as a last
    resort, constituted a reasonable exercise of judgment under the circumstances.
    Indeed, had the tugs attempted to beach the barge bow first [as the barge’s owners
    argued would have been the only reasonable manner in which to proceed], such an
    attempt might well have been far more disastrous than the sideways beaching which
    occurred.

    Id. (emphasis supplied).   The court’s findings are clearly based on the rule that
    a court cannot charge a master with negligence for decisions made under the
    circumstances as they were occurring merely because the court finds that “another
    choice would have been better.”   Steamtug ALICE MORAN, 67 F.2d at 605, 1933
    A.M.C. at 1630.

    These cases illustrate the substantial deference that a court must afford the
    master of a tug.   To be held liable, the decision of the master must  be
    unreasonable under the circumstances.   The rationale underlying the rule granting
    a master great discretion rests upon the basic principle that a court reviewing
    the master’s decisions must judge such decisions at the time they were made and
    with consideration for the circumstances that preceded the decisions, not by what
    later developed.   See Eastern Tar Prods. Corp., 101 F.2d at 33, 1939 A.M.C. at
    63;  S.C. Loveland Co., Inc., 100 F.2d at 974, 1939 A.M.C. at 26;    International
    Salt Co., Inc., 15 F.Supp. at 730, 1936 A.M.C. at 1222, aff’d,  92 F.2d 65 (2d
    Cir.1937), cert. denied,  302 U.S. 764 (1938).

    2. Duties of the Tow

    Because a tug does not serve to insure its tow or to act as bailee of its tow, it
    is entitled to rely on the presumption that the tow is seaworthy.   See   Kenny
    Marine Towing, Inc. v. M/V JOHN R. RICE, 583 F.Supp. 1196, 1198 (E.D.La.1984);
    Ocean Burning, Inc., 1974 A.M.C. at 2312.   The reliance arises from the firmly
    established rule that the owner of a tow owes an absolute duty to the tug that the
    tow is seaworthy.   Tebbs v. Baker-Whiteley Towing Co., 407 F.2d 1055, 1057 (4th
    Cir.1969);   Curtis Bay Towing Co. v. Southern Lighterage Corp., 200 F.2d 33, 34,
    1952 A.M.C. 2034, 2036 (4th Cir.1952);   Eastern Tar Prods. Corp., 101 F.2d at 32,
    1939 A.M.C. at 63;  see  Derby Co., Ltd. v. A.L. Mechling Barge Lines, Inc., 258
    F.Supp. 206, 211, 1968 A.M.C. 1436, 1443 (E.D.La.1966), aff’d,  399 F.2d 304 (5th
    Cir.1968);   McLain Line, Inc. v. Reading Co., 53 F.Supp. 736, 738, 1944 A.M.C.
    157, 159-60 (E.D.N.Y.1944).   A logical consequence of the reliance is that a
    court cannot hold liable a tug that does not have notice of the unseaworthiness of
    its tow, absent proof of the tug’s failure to use due care.   See  Otto  Candies,
    Inc. v. Great Am. Ins. Co., 221 F.Supp. 1014, 1018, 1965 A.M.C. 1028, 1034
    (E.D.La.1965) (finding tug not liable where tow’s unseaworthiness manifested
    itself too late for tug to prevent list and consequent loss of cargo), aff’d,  332
    F.2d 372 (5th Cir.1964);   Bouchard Transp. Co., Inc. v. The Tug GILLEN BROTHERS,
    389 F.Supp. 77, 82 (S.D.N.Y.1975).

    *5 Courts have defined seaworthiness of the tow to include the requirements that
    the tow must be structurally sound and that the tow must be in the proper state of
    repair.   Derby Co., Ltd., 258 F.Supp. at 211, 1968 A.M.C. at 1443, aff’d,   399
    F.2d 304 (5th Cir.1968);   S.C. Loveland Co., Inc., 100 F.2d at 973, 1939 A.M.C.
    at 25;  see  Miller v. Cornell Steamboat Co., 1934 A.M.C. 444, 446 (E.D.N.Y.1934).
    Seaworthiness of the tow further requires that the tow be able to endure the
    customary hazards of the intended voyage.   See  Gutierrez v. Waterman Steamship
    Corp., 373 U.S. 206, 213 (1963);   Consolidated Grain and Barge Co. v. Wisconsin
    Barge Line, Inc., 522 F.Supp. 842, 848 (E.D.Mo.1981);   Shebby Dredging Co., Inc.
    v. Smith Bros., Inc., 469 F.Supp. 1279, 1284 (D.Md.1979).   At least one court has
    defined the absolute duty of the tow to provide a seaworthy vessel in terms of a
    warranty that the tow is “sufficiently staunch and strong to withstand the
    ordinary perils to be encountered on the voyage.”   South, Inc. v. Moran Towing &
    Transp. Co., Inc., 360 F.2d 1002, 1005 (2d Cir.1966) (citing The  EDMUND L. LEVY,
    128 F. 683, 684 (2d Cir.1904);   Frederick Snare Corp. v. Moran Towing & Transp.
    Co., 195 F.Supp. 639, 644 (S.D.N.Y.1961));   Eastern Tar Prods. Corp., 101 F.2d at
    32, 1939 A.M.C. at 61;  see A. Parks at 213 (stating that tow owes tug “implied
    warranty of seaworthiness”);  id. at 54 (defining test of “seaworthiness” as
    “whether the vessel is reasonably fit to carry the goods which she has undertaken
    to transport”).

    Any inspection of a tow that a tug might undertake does not supersede the absolute
    duty of the tow to provide a seaworthy vessel.    Schuylkill Transp. Co. v.  Banks,
    1945 A.M.C. 1500, 1504 (3d Cir.1945);   Newtown Creek Coal & Coke Co. v. Barge
    MAURICE R., 1933 A.M.C. 273, 280 (E.D.N.Y.1932);  see A. Parks at 213.   Indeed,  a
    tug need not inspect the tow other than to give the tow a cursory investigation
    necessary to undertaking the voyage.   In re Steuart Transp. Co., 435 F.Supp. 798,
    804 (E.D.Va.1977), aff’d,  596 F.2d 609 (4th Cir.1979); FN5  see  Nat G. Harrison
    Overseas Corp. v. American Tug TITAN, 516 F.2d 89, 94 (5th Cir.1975) (ruling that,
    because tug is not insurer of tow, tug is under no duty to make detailed
    inspection of its tow);   Massman Constr. Co. v. Sioux City & New Orleans Barge
    Lines, Inc., 462 F.Supp. 1362, 1369 (W.D.Mo.1979) (holding that tug is “under no
    duty to make detailed inspection of the [tow] either prior to the voyage or during
    the voyage itself”);   McDonough Marine Serv., Inc. v. M/V ROYAL STREET, 465
    F.Supp. 928, 934 (E.D.La.) (holding that tug’s general inspection of tow, which
    failed to reveal that manhole covers were not watertight, was adequate and
    reasonable), aff’d,  608 F.2d 203 (5th Cir.1979);   Dow Chemical Co. v. M/V  GULF
    SEAS, 428 F.Supp. 667, 671-72 (W.D.La.1977) (holding that a “minute and detailed
    inspection” by the tug that would have revealed that ballast valve handles were
    not secured was not required).   Further, a “tugowner is entitled to rely upon a
    statement or representation by the owner or crew of a tow that the vessel is in
    proper condition to be towed.”   A. Parks at 213 (citing  A.S. Wikstrom, Inc.  v.
    The Tug JULIA C. MORAN, 190 F.Supp. 250, 1961 A.M.C. 536 (S.D.N.Y.1960);
    Schuylkill Transp. Co. v. Banks, 1945 A.M.C. 1500, 1504 (3d Cir.1945);   Newtown
    Creek Coal & Coke Co. v. Barge MAURICE R., 1933 A.M.C. 273, 280 (E.D.N.Y.1932)).

    *6 The absolute duty to provide a seaworthy tow is based upon the fact that the
    “tug does not have exclusive control over the tow but only so far as is necessary
    to enable the tug and those in charge of her to fulfill the engagement.”    The
    WHITE CITY, 285 U.S. at 200.   The owner of a tow has exclusive control over  the
    condition of its vessel;  additionally, the owner of a tow is in the best position
    to know of the tow’s defects and to inform the tug of those defects.   In  fact,
    the owner of a tow has “an affirmative duty to advise the tug of any conditions
    which might affect the safety of the towing movement.”   A. Parks at 214 (citing
    Triangle Cement Corp. v. The Towboats CINCINNATI AND TURECAMO BOYS, 1968 A.M.C.
    892 (2d Cir.1968);   Howard v. Scow GILDERSLEEVE NO. 325, 1934 A.M.C. 338
    (E.D.N.Y.1932);   Canada Steamship Lines, Ltd. v. Great Lakes Towing Co., 1932
    A.M.C. 563 (N.D.Ohio 1932));  Otto Candies, Inc., 1965 A.M.C. at 1034 (ruling that
    “[t]he towing vessel is not liable for the loss occasioned by the unseaworthiness
    of the tow unless its unseaworthiness is disclosed, or is so apparent that it
    would constitute negligence for the tug to attempt to proceed”).

    3. An Implied Warranty of Workmanlike Service

    Cargill claims that defendants breached their implied warranty of workmanlike
    service under the towage contract, causing Cargill to suffer damages.   Defendants
    counter that a court may hold a tug liable only if the tug is negligent and that
    an implied warranty that arises from towage contracts does not exist.   Although
    Cargill cites  Tebbs v. Baker-Whiteley Towing Co., 407 F.2d 1055 (4th Cir.1969),
    in support of its thesis that defendants owed Cargill an implied warranty of
    workmanlike service, the Court finds that Tebbs is distinguishable.   See
    Fairmont Shipping Corp. v. Chevron Int’l Oil Co., Inc., 511 F.2d 1252, 1258 (2d
    Cir.1975); FN6   id. at 1261 (Mansfield, J., dissenting) (stating that tug in the
    case did not contract to tow a “dead ship” and that towage contract at issue was
    one of “ordinary tug assistance”).

    In Tebbs, the ship SANDS POINT was in the custody of the United States Marshal
    Service because of a libel for oil pollution.   Tebbs, 407 F.2d at 1057.    The
    SANDS POINT was a “dead ship” that was docked at Broadway Pier in Baltimore,
    Maryland for one day before the Marshals were required to move it to an anchorage
    in the river.   Near the bow of the ship at the dock was a private yacht.    The
    Marshals entered into a towage contract to tow the ship to its new anchorage.
    During the undocking procedure, one of the tugs assigned to move the SANDS POINT
    rammed the ship forward, thus parting the only forward spring line, which had
    prevented the ship’s bow from coming into contact with the yacht.  Id.

    The trial court found that the Marshal’s failure to place more than one forward
    spring line was negligent and that the tug’s master was also negligent in failing
    to check the mooring lines of the SANDS POINT or to take other precautions against
    straining the line to the point of parting.  Id.  On appeal, the tug argued that
    the master was entitled to rely on the tow’s warranty that it was seaworthy.
    While the Fourth Circuit agreed that the owner of a tow “ordinarily” was
    responsible for its own seaworthiness, the court expressly found that the tug had
    knowledge of the fact that the SANDS POINT was a “dead ship” and that “the normal
    assumptions concerning a … seaworthy vessel were not justified.”  Id.  The court
    continued, “In a situation of this kind, the tug is responsible for both vessels.”
    Id.  Therefore, the court ruled that the tug had “a special duty in relation to
    the tow to take steps ‘necessary for its safety and the safety of other vessels.’
    ” FN7  Id.   The court in Tebbs further held that the tug’s liability rested  upon
    her exercise of control over a “dead tow,” which was necessary for the tug to
    “fulfill the engagement.”   The WHITE CITY, 285 U.S. at 200.

    *7 Under the Dead Ship Doctrine, a well established principle in admiralty, a
    “dead ship” is “incapable of navigation and unable to serve any of the purposes of
    a vessel in navigation.”   Johnson v. Oil Transport Co., Inc., 440 F.2d 109, 112
    (5th Cir.1971);   Goodman v. 1973 26 Foot Trojan Vessel, Arkansas Registration No.
    AR1439SN, 859 F.2d 71, 73 (8th Cir.1988) (defining “dead ship” as one that “loses
    its status as a vessel when its function is so changed that it has no further
    navigation function”);  see  Noel v. Isbrandtsen Co., Inc., 287 F.2d 783, 785 (4th
    Cir.1961).   In the case of a barge, a barge that is “actually used as a barge  and
    transporting a cargo” is not a “dead ship.”   Roper v. United States, 368 U.S.  20,
    24 (1961) (Douglas, J., dissenting).   Particular rules apply to “dead ships.”
    For example, a “dead ship” owes no warranty-express or implied-of seaworthiness to
    any person.   See, e.g.,  West v. United States, 361 U.S. 118, 122 (1959) ;
    Fairmont Shipping Corp. v. Chevron Int’l Oil Co., Inc., 511 F.2d 1252, 1258 (2d
    Cir.1975);   Davis v. Chas. Kurz & Co., Inc., 483 F.2d 184, 186 (9th Cir.1983);
    Dean v. United States, 418 F.2d 1236, 1238 (9th Cir.1969);   American Export Lines
    v. Norfolk Shipbuilding & Drydock Corp., 336 F.2d 525, 527 (4th Cir.1964);   Noel,
    287 F.2d at 785.   Another consequence of possessing “dead ship” status is that a
    “dead ship” is not liable in admiralty suits in rem.    Amoco Oil v.  M/V
    MONTCLAIR, 766 F.2d 473, 475 (11th Cir.1985).   The Court determines that the
    definition of a “dead ship” and the distinguishing characteristics of the law
    governing a “dead ship” amply demonstrate that this case does not involve a “dead
    ship.”   See infra s D (describing use of NF-103).

    The Court concludes that the Fourth Circuit’s use of language in Tebbs such as
    “ordinarily,” “normal assumptions concerning … a seaworthy vessel,” “[i]n a
    situation of this kind,” and “a special duty” demonstrate the intent of the court
    to limit the application of an implied warranty of workmanlike service to cases
    involving “dead tows.”   The Court concludes that the court’s placement of
    quotation marks around the term “dead tow” demonstrates the court’s intent to
    signify the distinct condition of a “dead tow.”   See WEBSTER’S THIRD NEW INT’L
    DICTIONARY OF THE ENGLISH LANGUAGE, UNABRIDGED 1868 (1986) (stating that authors
    use quotation marks “to enclose technical terms expected to be unfamiliar to the
    reader”).   Based upon the court’s rhetoric and grammar in Tebbs, therefore, this
    Court finds that Tebbs is limited to the specific situation where a tug tows a
    “dead vessel.”

    The Court has not found any opinions in the Fourth Circuit applying an implied
    warranty to an ordinary towage contract.   The Court will not extend an implied
    warranty of workmanlike service to towage contracts, except to the extent that any
    implied warranty of workmanlike service is subsumed by negligence principles.
    The definition of an implied warranty of workmanlike service employs the words
    “diligence” and “due care.”   These words denote and connote the concept of
    negligence.

    *8 The Court rules that a breach of any implied warranty of workmanlike service
    necessarily involves a finding of negligence.   See, e.g.,  Tebbs, 407 F.2d  at
    1059;   S.C. Loveland, Inc. v. East West Towing, Inc., 415 F.Supp. 596, 604-05
    (S.D.Fla.1976);   Bouchard Transp. Co. v. The Tug GILLEN BROTHERS, 389 F.Supp. 77,
    82 (S.D.N.Y.1975);  cf. The WHITE CITY, 285 U.S. at 202.   Therefore, the  Court
    rules that use of the term “warranty” in the context of towage contracts merely
    restates the law of maritime negligence as applied to towage contracts.   United
    States v. Tug MANZANILLO, 310 F.2d 220, 226 (5th Cir.1962) (holding that “a towing
    agreement gives rise to a ‘warranty of workmanlike service’ which is breached by
    negligence on the part of the operator of the tug”).

    A noted commentator has attacked the ruling of courts applying an implied warranty
    of workmanlike service to towage contracts:

    In a strange line of cases, seemingly without reference to the well-established
    rule in Stevens v. The White City, some courts have held a tug company to a
    warranty of workmanlike service …   It is submitted that a warranty of
    workmanlike service is not applicable to a towage situation and, if extended by an
    erroneous belief in its applicability would fly in the face of the rule in The
    White City;  would preclude limitation of liability under the ‘personal contract’
    doctrine;  and create confusion in the industry which has come to rely upon the
    principle that damage actions under towage contracts are ex delicto and not ex
    contractu.

    A. Parks at 29-30 (citations omitted).   The Court finds this reasoning
    persuasive.

    Generally, an implied warranty of workmanlike service provides that a person who
    contracts to perform a service impliedly agrees to perform the service in a
    diligent and workmanlike manner.   Cargill, however, asserts that the Court can
    find a breach of the warranty of workmanlike service without finding negligence on
    behalf of the tug.   In support of its proposition, Cargill cites Fairmont
    Shipping Corp., where the Second Circuit found that a “warranty of workmanlike
    performance may be breached by non-negligent conduct as well as by negligent
    conduct.”   Fairmont Shipping Corp., 511 F.2d at 1260.   Even if the Court  accepts
    Cargill’s argument that an implied warranty should be applied to towage contracts,
    the Court rejects Cargill’s expansive interpretation of such a warranty.

    In Fairmont Shipping Corp., the court relied solely upon the rule enunciated in
    Ryan Stevedoring Co. v. Pan-Atlantic S.S. Corp., 350 U.S. 124 (1956), in extending
    an implied warranty of workmanlike service from stevedoring contracts to towage
    contracts.FN8   Fairmont Shipping Corp., 511 F.2d at 1255-60.   Prior to  the
    decision in Ryan, a longshoreman who was injured as the result of an unseaworthy
    condition on a ship, which was caused solely by a stevedore’s negligence, could
    seek damages against the shipowner, who could be held liable despite lack of any
    fault.   See generally  Halcyon Lines v. Haenn Ship Ceiling & Refitting Corp.,  342
    U.S. 282 (1952);   Seas Shipping Co. v. Sieracki, 328 U.S. 85 (1946).   In  Ryan,
    the Supreme Court provided shipowners relief by allowing them to seek indemnity
    from the stevedore under the theory in contract law that the stevedore impliedly
    agreed to perform its services in a workmanlike manner.   The Court ruled,

    *9 The … agreement to perform all of the shipowner’s stevedoring operations at
    the time and place where the cargo in question was loaded … necessarily includes
    [the stevedore’s] obligation not only to stow the pulp rolls [that injured a
    seaman], but to stow them properly and safely.   Competency and safety of stowage
    are inescapable elements of the service undertaken.   This obligation is not a
    quasi-contractual obligation implied in law or arising out of a noncontractual
    relationship.   It is of the essence of [the] stevedoring contract.   It is  [the
    stevedore’s] warranty of workmanlike service that is comparable to a
    manufacturer’s warranty of the soundness of its manufactured product.

    Ryan, 350 U.S. at 133-34.

    In Ryan, the Supreme Court relied upon a limited number of bases to formulate its
    rule.   For example, progeny of Ryan acknowledge that the decision is based upon
    the “shipowner’s strict liability for unseaworthiness,”  Fairmont Shipping Corp.,
    511 F.2d at 1257 (citing  Schwartz v. Compagnie General Transatlantique, 405 F.2d
    270, 276 (2d Cir.1968), and that Ryan was designed to allow shipowners to seek
    indemnity against the stevedore, thus rectifying the inequitable rule that
    shipowners could be held liable without fault.   Bosnor, S.A. v. Tug L.A. BARRIOS,
    796 F.2d 776, 784 (5th Cir.1986).

    Courts find those in the business of selling manufactured goods strictly liable
    for selling defective or hazardous goods that reach a consumer without substantial
    change in the condition in which they are sold and that harm such a consumer.
    Restatement (Second) of Torts s 402A (1977).   The underlying policy of imposing
    strict liability rests upon the exclusive control that a manufacturer exercises
    over its product and that no intervening forces have interfered with the safety of
    the product.   See id.

    Cargill contends that the Court can find a tug strictly liable for the loss of its
    tow.   The Court rejects Cargill’s contention.   Many variables exist in  the
    towage situation that may exonerate the tug from responsibility for loss of its
    tow.   Foremost among these factors is the seaworthiness of the tow itself.
    Imposition of strict liability on a tug abrogates the absolute duty of a tow to
    provide a seaworthy vessel and unfairly foists upon the tug the burden of insuring
    the tow despite the fact that it does not exercise exclusive control over the
    tow’s condition of seaworthiness and only exercises as much control over the tow
    “as is necessary to enable the tug and those in charge of her to fulfill the
    engagement.”   The WHITE CITY, 285 U.S. at 200.   Furthermore, a rule of  strict
    liability provides no incentive for the owner of a tow to ensure that its vessel
    is seaworthy.   Cf.  Bosnor, 796 F.2d at 786 (citing  Smith & Kelly Co. v. The  S/S
    CONCORDIA TADJ, 718 F.2d 1022, 1029 (11th Cir.1983)).

    The primary issue that the Supreme Court in Ryan addressed was whether shipowners
    were entitled to indemnity from stevedoring companies because the stevedore had
    breached its warranty of workmanlike service through its negligence.   See  Ryan,
    350 U.S. at 133-34.   Indemnification is not at issue in this case,FN9 see   Todd
    Shipyards Corp. v. Moran Towing & Transp. Co., Inc., 247 F.2d 626, 628 (2d
    Cir.1957) (holding that tug-general contractor and tug-subcontractor would both be
    liable to tow for negligence), and the Court fails to find persuasive the
    conclusion in Fairmont Shipping Corp. that different factors are considered in
    “determining whether a contract includes a warranty of workmanlike performance
    [and in determining] whether that warranty encompasses an obligation to
    indemnify.”   Fairmont Shipping Corp., 511 F.2d at 1259.   The Court holds  that
    Fairmont Shipping Corp. is an anomaly because it does not recognize that an
    implied warranty of workmanlike service necessarily includes a finding of
    negligence on the part of the tug.   Absent negligence on the part of the tug,  the
    party best suited to prevent damage to the tow is the tow itself because the tow
    retains exclusive control over the seaworthiness of its vessel.  Ryan was designed
    to provide specific redress for a specific classification of persons and the rule
    has no logical correlation to the towage context.   Thus, the Court finds that the
    history and circumstances of the rule in Ryan are inherently and fundamentally
    different from the tug-tow context.   Even the nature of the services provided by
    a stevedore is inherently different from the nature of the services provided by a
    tug.

    *10 Finally, none of the reasoning that supports the application of an implied
    warranty of workmanlike service to a stevedore’s contract similarly supports the
    application of an implied warranty of workmanlike service to a towage contract.
    Courts have limited Ryan to its facts.   See  Bosnor, 796 F.2d at 785, 786.    The
    Court holds that the policy and rule in Ryan are inapplicable in a case such as
    this, where the owner of the tow is in the best position to care for, maintain,
    and warrant the seaworthiness of its own vessel and where indemnification is not
    an issue.   Because of the Court’s conclusions regarding Tebbs, Fairmont Shipping
    Corp., and Ryan, because of the inherent and fundamental differences between a
    towage contract and stevedoring services, and because of the Court’s conclusions
    of law regarding negligence in the maritime context, the Court rules that Tebbs is
    distinguishable and that a warranty of workmanlike service is not implied in the
    context of towage contracts, except insofar as such a warranty is already set
    forth in the allocation of the duties of a tug and a tow.   Compare The  WHITE
    CITY, 285 U.S. at 202 (ruling that a tug must “exercise such reasonable care and
    maritime skill as prudent navigators employ for the performance of similar
    services”) and A. Parks at 135 (stating that tug “will use its best endeavors,
    skill and diligence for … purpose [of performing towage contract safely]”) with
    Fairmont Shipping Corp., 511 F.2d at 1257 (stating that the owner of tow may
    properly rely upon the tug’s “expertise, control, supervision and ability to
    prevent accidents …”) and  Tebbs, 407 F.2d at 1059 (ruling that tow relies on
    tug’s “expertise in conducting safe towing operations”).

    B. Structural Design of the NF-103

    The NF-103, hull number 1267, was built in 1964 by Jefferson Boat Works in
    Jeffersonville, Indiana.   Stipulation 2.   The NF-103 was an unmanned,  all-welded
    steel constructed covered hopper barge that measured 195 feet in length, 35 feet
    in width, and 12 feet in depth;  empty, the NF-103 had approximately 10 feet
    freeboard or, conversely, a 2 foot draft.   Stipulation 2-3;  Pl.Exh. 28;   Pl.Exh.
    29.   The NF-103 was equipped with steel rolling hatch covers and was divided by
    five transverse bulkheads into a raked bow, a square stern, and four athwartships
    double bottom wing tanks that extended from port to starboard.   Stipulation 2-3;
    Pl.Exh. 28;  Pl.Exh. 29.   Collectively, the wing tanks are identified as  void
    tanks;  the four void tanks are referred to by number, beginning with number one
    forward port and number one forward starboard.   Stipulation 3.   From port  to
    starboard, the void tanks were not discrete and there was free communication of
    air and water;  from forward to aft, however, the void tanks were discrete,
    separated by watertight bulkheads.   Trial III 275; FN10  see Pl.Exh. 28.

    Access to the void tanks was gained through manhole covers, which were located at
    the forward end of each tank on the port side and at the stern end of each tank on
    the starboard side.   Stipulation 3;  Pl.Exh. 28.   These manhole covers sat  flush
    with the deck and were secured by twistlock mechanisms.   Stipulation 3.
    Entrance to the bow and stern tanks was gained through manhole covers, which were
    located approximately in the center of each tank.   Stipulation 3;  Pl.Exh.  28.
    These manhole covers were hinged on coamings and each was secured by four boltdown
    toggles, known as “dogs.”   Stipulation 3.  The manhole covers were designed to  be
    watertight.   Pl.Exh. 28.

    *11 The void tanks encased the hopper, an interior cargo compartment, whose floor
    was 15 inches above the hull.   Stipulation 3;  Pl.Exh. 28.   The hopper’s  sides
    were located 3 feet from the exterior walls of the barge and formed a coaming that
    rose 3 1/2  feet above the deck of the barge.   Stipulation 3;  Pl.Exh. 28.    The
    hopper had 8 hatch covers, numbered from the bow to the stern.   Stipulation 3.
    The hatch covers rolled on rails and were not watertight.   Pl.Exh. 28.    Rather,
    they were weathertight, allowing rainwater to drain off the top, but permitting
    entry of waves and sea spray through the sides.   Stipulation 3.

    C. Condition of the NF-103

    In August 1988, Continental Grain Co., Inc. sold the NF-103 to Cargill as part of
    a bulk sale of assets.   Trial II 139;  Stipulation 2.   Prior to  Cargill’s
    acquisition of the barge, Continental Grain employed the barge in the
    transportation of grain in the Chesapeake Bay and along the Atlantic Intracoastal
    Waterway in North Carolina.   Stipulation 2.   A short while after  Cargill
    purchased the NF-103, Ken Kiefer, logistics manager of Cargill’s Norfolk facility,
    contacted George C. Lyon Jr. of Lyon Shipyard in Norfolk to inspect the NF-103 and
    to arrange for any repairs of the NF-103.   Trial II 187;  Trial II  202-03.

    In October 1988, Lyon placed the barge in drydock to analyze the hull, making a
    visual inspection, testing the strength of the hull by tapping it with a hammer,
    and taking audiogauge readings of the barge.FN11  Trial II 203-04;  see Pl.Exh.
    51.   Audiogauge readings establish the thickness of a barge’s shell.    According
    to the design plans of the barge, the hull thickness of the bottom plate of the
    barge should be  3/8  inches, or .375 inches, thick.   Pl.Exh. 28.    The
    audiogauge readings of the bottom plates and side plates below the water line
    taken at Lyon Shipyard on October 12, 1988, depict the shoddy condition of the
    bottom of the NF-103.   For example, on the starboard side the readings indicate
    that the bottom plates ranged anywhere from .231 inches to .301 inches, with the
    average reading being .2709 inches.   See Pl.Exh. 60.   Thus the bottom  plates
    averaged .1041 inches less than the design specification of .375 inches.   See
    Pl.Exh. 60.   The side plates of the barge were also listed at .375 inches  thick.
    Pl.Exh. 28.   The audiogauge readings, however, showed that the side plates
    extended from .270 inches to .351 inches thick, averaging .3104 inches thick.
    See Pl.Exh. 60.   Notably, the readings indicate that the starboard bottom plates
    were thinner than the port bottom plates.   See Pl.Exh. 60.   Furthermore, the  aft
    half of the starboard bottom plates averaged .101 inches less than .375 inches.
    See Pl.Exh. 60.

    Additionally, Lyon found the entire barge to be in poor condition because of dents
    in the hull where the barge had probably run aground.   Trial II 204.   Lyon  found
    the hull to have heavy pitting, which was caused by rusting of the barge over a
    great length of time, without proper maintenance.   Trial II 204.   Lyon  related
    the poor condition of the barge to Kiefer and Howard J. Bohlander Jr., facility
    manager of Cargill’s operations in Tidewater, and discussed with Kiefer and
    Bohlander the amount of repair work needed by the NF-103 and two other barges.
    Trial II 205.   Kiefer and Bohlander allocated approximately $40,000 per barge for
    repairs.   Trial II 206.

    *12 In November and December 1988, the NF-103 was drydocked at Lyon Shipyard for
    repairs.   Trial II 207-11;  Pl.Exh. 52.   Of the $40,000 allocated to repair  the
    NF-103, Cargill wanted Lyon Shipyard to use $21,500 to sand-sweep and paint the
    barge.   Trial II 123.   The sand-sweep and painting were cosmetic in nature. FN12
    Trial II 220.   Lyon Shipyard was to use the remaining $18,500 to make substantive
    repairs.   Lyon Shipyard discovered that the NF-103 was in worse shape than
    anticipated and that the estimate of repair work would cost more than $40,000.
    After discussions with Charles W. Kight, job superintendent of Lyon Shipyard,
    Kiefer agreed to allot $3,000 more to repair the NF-103, but cautioned Kight, ”
    ‘Don’t let it go over $43,000.’ ”  FN13  Trial II 124.

    The Court finds that, given the poor condition of the NF-103, $40,000 was not a
    substantial amount of money to repair the barge and apportioning approximately 54%
    of that money for paint and other cosmetics is startling.   The supplemental
    $3,000 that Bohlander and Kiefer was inconsequential in light of the repairs Lyon
    Shipyard recommended.

    Lyon Shipyard detected holes in the hull of the NF-103 that required the placement
    of doublers.FN14  Trial II 207.   Lyon Shipyard placed approximately eight
    doublers on the hull of the NF-103 in November and December 1988.   Trial II  207;
    Trial II 125.   Lyon Shipyard also attempted to patch the cargo hold, which was  in
    the worst shape.   Trial II 207.   In fact, Lyon characterized the cargo hold  as
    being a cancer that “just kept growing and growing and growing.”   Trial II 220.
    The cargo hold housed eight holes and the chine, the joint between the floor of
    the cargo hold and the walls of the cargo hold, was thin and wasted.   Trial  II
    127.   The chine area was so wasted that Kight could fit his hand through one  of
    the holes.   Trial II 127.   Because Cargill needed the NF-103 to haul grain,  it
    required Lyon Shipyard to stop work on the barge and to return her to Cargill.
    Trial II 208;  Trial II 221.   Lyon Shipyard, therefore, did not have  an
    opportunity to test the repairs that it had made on the barge.FN15  Trial II 208;
    Trial II 220-21.

    Subsequent to the repairs completed in November and December 1988, Cargill used
    the NF-103 to transport soybeans from Bellhaven, North Carolina to Norfolk in
    January 1989.   Stipulation 4.   Upon completion of the voyage, Cargill  discovered
    that 20% of the grain was water-damaged because water in the void tanks had leaked
    into the cargo hold.   Trial II 50-51;  Trial II 125;  Trial II 187-88;  Trial  II
    210-11;  Pl.Exh. 55;  Pl.Exh. 61;  Pl.Exh. 63.FN16  Lyon, in conjunction  with
    Robert L. Bradford Jr., of Tidewater Marine Services, Inc.,FN17 examined the
    NF-103 and found 7 holes in the exterior plating of the barge.   Pl.Exh. 61.
    Bradford further concluded that water remained in the void tanks.   Pl.Exh. 61.
    The cargo hold itself revealed 8 holes in addition to leakage from places where
    Lyon Shipyard had previously placed doublers, but had not had the opportunity to
    test because of Cargill’s demand that Lyon Shipyard return the barge.   Pl.Exh.
    61.

    *13 Lyon Shipyard and Bradford discussed the necessary repairs that the NF-103
    should undergo.   Specifically, because the manhole covers were not watertight,
    Trial III 214-15;  Trial III 218;  Trial III 202-12;  Trial I 52, Lyon  and
    Bradford recommended that Cargill repair the manhole covers.   Both Lyon and
    Bradford further determined that the placement of sounding tubes was essential;
    Cargill, however, “didn’t have the time or the money to perform [the recommended]
    work.”   Trial II 224.   Lyon Shipyard repaired the NF-103 in accordance  with
    Bradford’s survey and to the extent that Cargill ordered.   Indeed, even after
    Lyon Shipyard completed repairs on the barge, water testing revealed even more
    holes that Lyon Shipyard had not found through visual inspection.   See Pl.Exh.
    61.   Lyon Shipyard water tested the NF-103 because the condition of the plating
    of the barge would not allow air testing.   Trial II 211;  see supra note  15
    (describing air testing).   After the repairs were made, Lyon again explicitly
    stated to Cargill through Kiefer that the NF-103 was in “very bad shape” and that
    the barge “should be checked daily for any signs of leakage or damage.”   Def.Exh.
    64.FN18  Lyon warned Kiefer that Cargill would continue to have problems with the
    barge unless the company was willing to spend more money for repair.   Trial II
    212.   Kiefer’s supervisor, Bohlander, and Ron Laumbach, with Cargill’s Law
    Department in Minneapolis, Minnesota, also had knowledge of the problems that the
    NF-103 was having.  FN19  Pl.Exh. 56;  Pl.Exh. 57.

    The Court expressly finds that the condition of the NF-103 was poor.   The barge
    was not seaworthy.   See S.C. Loveland, 1939 A.M.C. at 24.   Cargill was  negligent
    in failing to maintain a seaworthy NF-103.   See  In re Steuart Transp. Co.,  435
    F.Supp. at 803 (finding that barge owner had no established procedure for
    inspection of its own barges and stating that barge owners, “to operate
    responsibly, must implement systems which delegate necessary duties to specific
    individuals, so that one is able to ascertain that needed precautions have in fact
    been carried out”), aff’d,  596 F.2d 609 (4th Cir.1979).   The plating of  the
    sides and the hull was thin and wasted, often worn completely away.   Lyon
    Shipyard extensively repaired the barge;  nevertheless, each time the barge
    undertook a voyage, she acquired new leaks.   Cargill knew of the dilapidated
    state of the NF-103, yet persisted in using the barge without heeding the advice
    from Lyon Shipyard to check the barge daily for leakage.   The Court determines
    that such continued use was both perilous and precarious.  Id.

    D. Loading of the NF-103 in Seaford

    On February 19-20, 1989, in accordance with the terms of the agreement between C &
    P Towing and Cargill, the tug ANNE K., under the guidance of Jerald Tillett, towed
    the NF-103 light from Cargill’s Norfolk facility to Cargill’s Seaford facility.
    Stipulation 4;  Trial I 153;  Trial I 161;  Pl.Exh. 32.   The voyage  lasted
    approximately 17 1/4  hours, Pl.Exh. 32;  cf. Trial I 153, during which time
    Tillett did not notice any problems with the NF-103.   Trial I 153;  Trial I  161.
    When the ANNE K. arrived in Seaford on February 20, 1989, Cargill’s plant was not
    operating.FN20  Stipulation 5;  Pl.Exh. 32.   Therefore, loading of the  NF-103
    could not begin until the next day.   On February 21, 1989, the ANNE K.  departed
    Seaford.   Pl.Exh. 32.

    *14 Ann Gouverneur, plant supervisor of Cargill’s Seaford facility, testified that
    she was responsible for loading, shipping, and receiving grain on barges and that
    she was further responsible for employees who loaded barges.   Trial I 42-43.
    Gouverneur explained the procedure for loading a barge.   Trial I 43-45;  Trial  I
    49-51.   Cargill employees first ensure that the barge is secured and will move
    the barge into position using a cable winch.   Trial I 44.   Cargill  employees
    then open the hatch covers, moving them to the stern of the barge and securing
    them there with a chain.   Trial I 44.   Prior to loading, Cargill employees  weigh
    the grain on hopper scales.   Trial I 43.   Cargill employees then conduct  the
    grain via conveyer belt to a spout, which feeds the grain directly onto the barge.
    Trial I 43.   The spout telescopes, allowing the operator to let the spout out  and
    retract it, to raise and lower it, and to pull it fore and aft.   Trial I  44.
    The operator of the spout starts loading grain in the bow, trimming the grain port
    to starboard up to the edge of the coaming of the cargo hold.   Trial I  45.
    Because the spout does not reach the entire length of the barge, Cargill employees
    move the barge forward, using the cable winch.   Trial I 43;  Trial I 44.    After
    loading, Cargill employees secure the cargo hatch covers by placing pins that are
    attached to the covers themselves through brackets that are welded to the railing.
    Trial I 50.   During the loading process, Cargill has sole control of the barge,
    requiring tugboat crews and tugboats to “stay away, parked at another dock …”
    See Trial I 53.

    On February 21, 1989, Cargill commenced loading the NF-103 with winter wheat.
    Stipulation 5.   Because of rain, however, Cargill ceased loading the NF-103 after
    approximately 2 1/2  hours.   Stipulation 5;  see Trial I 47.   Cargill  employees
    then closed the rolling hatch covers to preserve the wheat from the rainwater.
    Stipulation 5;  Trial I 47.   Cargill could not resume loading the NF-103  until
    Thursday, February 23, 1989.   Stipulation 5;  Trial I 47.   When  Cargill
    completed loading the barge at approximately 4:00 p.m. on February 23, 1989,
    Stipulation 5;  Trial I 47-48;  Trial I 67, the NF-103 carried 52,796.25 bushels
    of wheat, Stipulation 5, which had a test weight of 61.8 pounds of wheat per
    bushel.   Pl.Exh. 73;  Trial I 68.FN21  Again, Cargill employees secured the  hatch
    covers.   Stipulation 5.   The laden NF-103 had a draft of approximately 10  feet
    forward and 10 feet 4 inches aft.FN22  Stipulation 5.   Hence, the NF-103 had  a
    freeboard of 2 feet forward, 1 foot 8 inches aft, and the distance from the water
    to the top edge of the coaming was 5 feet 6 inches forward, 5 feet 2 inches aft.
    Stipulation 5.   The laden NF-103 also listed approximately 2 inches to starboard,
    which the Court determines to be a de minimis list.FN23  Trial III 10;  Trial I
    109;  contra Trial I 53.

    When the NF-103 arrived at Cargill’s docks in Seaford and before she departed with
    the RANDY D., Gouverneur only made a cursory inspection of its condition and
    readiness for sea.   Trial I 51;  Trial III 182.   She did not inspect the  void
    tanks to make sure they were clear of water, nor did she physically inspect the
    manhole covers to make sure they were watertight.   See Trial I 51-52.   In  fact,
    Gouverneur would only check the manhole covers if she saw that they were loose.
    Trial I 52.   Gouverneur’s inspection, however perfunctory, had the effect of
    guaranteeing to the tug that the barge was seaworthy.  FN24  A. Parks at 213
    (citing  A.S. Wikstrom, Inc. v. The Tug JULIA C. MORAN, 190 F.Supp. 250, 1961
    A.M.C. 536 (S.D.N.Y.1960);   Schuylkill Transp. Co. v. Banks, 1945 A.M.C. 1500,
    1504 (3d Cir.1945);   Newtown Creek Coal & Coke Co. v. Barge MAURICE R., 1933
    A.M.C. 273, 280 (E.D.N.Y.1932)).

    E. The Voyage of the RANDY D. and the NF-103

    *15 The RANDY D. was built in 1942 in Port Arthur, Texas.   Pl.Exh. 40;   Pl.Exh.
    41;  Stipulation 4.   She is owned by Northeast Towing and was issued  a
    Certificate of Documentation on April 28, 1983, in Norfolk.   Pl.Exh. 41;
    Stipulation 4.   The tug is classified to trade the coast;  she is a single  screw
    tug, with plumb stem, has a rounded mid-body, with an elliptical stern and steel
    deckhouse.   Pl.Exh. 40;  Pl.Exh. 41;  Stipulation 4.   The RANDY D. is 87.8  feet
    in length, has a beam of 23.1 feet, and is 9.7 feet in depth.   Pl.Exh.  40;
    Stipulation 4.   The RANDY D. has a minimum operating freeboard of 1 1/2  feet  and
    is propelled by a diesel fueled GM/567 engine.   Stipulation 4.  Stored on  the
    tug’s stern deck is an 8 inch circumference nylon towing hawser, which the crew
    may manually retrieve by using a capstan on the deck.   Trial III 60;  Trial  III
    63;  Stipulation 4.   Positioned on the stern is a floodlight that illuminates  the
    stern of the tug, enabling the crew to place a hawser and to tie lines.   Trial  I
    96;  Trial III 20.   The illumination of the flood, however, could not reach  a
    barge that the tug was towing on a 250 feet hawser.   Trial III 20.

    On February 22, 1989, Thomas R. Douglas, captain of the RANDY D., arrived at
    Cargill’s Chesapeake facility to tow the light NF-102, a Cargill barge, to
    Seaford.   Pl.Exh. 6.   Accompanying Douglas as crewmembers of the RANDY D.  were
    Diane Bandelean, Timothy O. Smith, Steven Mitchell, and Cecil Nelson.   Pl.Exh. 6.
    Bandelean served as mate, Trial I 75;  Smith served as deckmate.   Trial III  82.
    Mitchell served as engineer;  Nelson, the cook.   Pl.Exh. 13.   Smith,  as
    deckmate, was responsible for handling lines on the barges that the RANDY D.
    towed, which required him to walk along the deck of the barges.   Trial III  85-86.
    As a general rule, Smith would visually inspect the barge before handling lines so
    that he did not trip over unsecured manhole covers or anything else.   Trial III
    89.   The purpose of Smith’s inspection did not involve examination of the barge
    for seaworthiness, although he would report peculiarities.   Trial III 89.    In
    any event, Smith’s inspection was not required to be detailed and extensive.   See
    Nat G. Harrison Overseas Corp., 516 F.2d at 94;   Massman Constr. Co., 462 F.Supp.
    at 1369;   McDonough Marine Serv., Inc., 465 F.Supp. at 934, aff’d,  608 F.2d  203
    (5th Cir.1979);  Dow Chemical Co., 428 F.Supp. at 971-72.

    The RANDY D. reached Seaford on February 23, 1989, at approximately 11:30 a.m.,
    while Cargill was still loading the NF-103.   Pl.Exh. 6;  Trial III 6;  Trial  III
    82.   Douglas placed the NF-102 alongside the NF-103 at Cargill’s pier and placed
    the RANDY D. next to the NF-102.   Pl.Exh. 31;  Trial III 6;  Trial III  82.
    After Cargill completed loading the NF-103, the RANDY D. moved the NF-103 upriver
    to another dock and shifted the NF-102 into the loading berth at Cargill.
    Pl.Exh. 31;  Trial III 6;  Trial III 8.   At 6:30 p.m. on February 23, 1989,  the
    RANDY D. finished shifting the barges and prepared to tow the NF-103 from Seaford
    to Norfolk.   Pl.Exh. 6;  Trial III 8.   At 6:40 p.m., however, Douglas  decided
    not to proceed because of inclement weather and stayed in Seaford overnight.
    Pl.Exh. 6;  Trial III 9.   On February 24, 1989, due to continuing snow and  high
    winds, the RANDY D. remained in Seaford for most of the day.   Pl.Exh. 6;   Pl.Exh.
    19;  Trial III 9;  see Trial I 55.   During this time, the deck of the  barge
    accumulated approximately 8 to 9 inches of snow.   Pl.Exh. 15.

    *16 The applicable weather forecast FN25 changed favorably on February 24, 1989,
    and the weather increasingly bettered.   From the Patuxent River south to Windmill
    Point, the National Weather Service posted a small craft advisory,FN26 with winds
    gusting from the north at 25 to 30 knots and occasionally heavy snow.   Pl.Exh.
    19.   Waves were forecast for this region at near 3 feet.   Pl.Exh. 19.    Winds
    for the night of February 24, 1989, were forecast to diminish to 15 to 25 knots
    from the northwest and the waves were expected to range from 2 to 3 feet.
    Pl.Exh. 19.   Saturday, the forecast was even more favorable.   Winds out of  the
    west were anticipated at near 15 knots;  waves were forecast at 1 to 2 feet.
    Pl.Exh. 19.

    In addition to the improving weather and weather forecast was the fact that the
    RANDY D. with the NF-103 in tow would need a substantial amount of time to travel
    south on the protected Nanticoke River to the Chesapeake Bay.   Pl.Exh. 6;   Trial
    III 14.   Even that portion of the Chesapeake Bay that the RANDY D. and the  NF-103
    were to travel was protected from north winds and northwest winds to some extent
    because it was in the lee of Bloodsworth Island, South Marsh Island, Smith Island,
    and Tangier Island.   Pl.Exh. 7.   Thus, at 5:20 p.m. on February 24,  1989,
    Douglas reasonably decided to quit Seaford during flood tide with the NF-103 in
    pushing gear.   Pl.Exh. 6;  Trial III 11;  see Trial I 172;  Stipulation 6.    The
    decision to proceed was within his discretion as master.   S.C. Loveland Co.,
    Inc., 100 F.2d at 974, 1939 A.M.C. at 26;  see Steamtug ALICE MORAN, 67 F.2d at
    605, 1933 A.M.C. at 1630 (requiring courts to test decisions of tug masters at
    time decisions were made).

    The tug and barge proceeded south on the Nanticoke River for approximately 5 hours
    without incident to either the tug or to the barge.   Douglas then ordered the
    crew of the RANDY D. to place the NF-103 on a 250 foot hawser.   Stipulation  6.
    Throughout the testimony, no evidence was presented that the crew released more of
    the hawser line or that the hawser strained to the point of parting.FN27  By this
    time, the RANDY D. and the NF-103 travelled only so far as the town of Nanticoke,
    somewhere in the vicinity of what was then buoy number 4.   Trial III 14.    While
    the RANDY D. was still in pushing gear, the wind was blowing approximately 25 or
    30 knots.FN28  Trial III 14.   By the time the crew of the RANDY D. placed  the
    barge on the hawser, the wind had subsided to 20 or 25 knots and the seas were
    approximately 1 1/2  feet.   Trial III 14.   Douglas maintained close watch  over
    the weather and the weather forecast.   Trial III 10.

    At 11:30 p.m. on February 24, 1989, the RANDY D. and the NF-103 passed the number
    1 buoy on the Nanticoke River.   Pl.Exh. 6;  Stipulation 6.   Bandelean took  over
    the watch from Douglas at 11:30 p.m. and stood watch from 11:30 p.m., February 24,
    1989, until 5:30 a.m., February 25, 1989.   Stipulation 6;  Trial I 86;  Trial  I
    89.   Douglas, however, remained in the wheelhouse until approximately 2:30 a.m.,
    February 25, 1989, at which time the tug and barge had reached a point between the
    number 10 buoy and the number 9 buoy in Tangier Sound, near Janes Island.    Trial
    III 17;  Pl.Exh. 38.

    *17 Although Douglas made the decision to proceed through Tangier Sound, Bandelean
    set the course for the tug and the barge for this portion of the journey by using
    charts.   Trial I 87-88;  Trial I 91;  see Pl.Exh. 8;  Pl.Exh. 38.    Bandelean
    noted that, when she assumed the watch, the waves were from 1 1/2  to 2 feet in
    height, Trial I 88, and the winds were 25 or 30 knots.   Trial I 106.   As the  tug
    and the barge moved southward, the seas increased somewhat to approximately 3 feet
    in height.   Trial I 88.

    The RANDY D. and the NF-103 reached Tangier Light at 4:45 a.m., February 25, 1989.
    Pl.Exh. 6;  Trial I 90.   Toward the end of Bandelean’s watch, at  approximately
    5:30 a.m., Bandelean noticed that the barge had assumed a list of approximately 4
    inches to starboard.   Trial I 88-90.   Bandelean reported the list to  Douglas,
    who relieved her at 5:40 a.m.   Trial I 92-93.   With the exception of noting  the
    list, Bandelean did not report any other occurrences.

    During the course of the trial, the Court heard a substantial amount of testimony
    from tugboaters about listing of barges.   See, e.g., Trial I 98-100;  Trial  I
    157-159;  Trial I 162;  Trial III 94-97.   The testimony revealed that barges  that
    have slight lists are not uncommon and that a 2 to 4 inch list is not significant.
    Trial III 102;  Trial I 158.   In particular, Jerald Tillett and Bryan A.  McGowan
    provided the most credible testimony on the subject.   Tillett was licensed by the
    United States Coast Guard to operate 200 miles offshore and inland approximately
    15 years ago;  he has served as a tug captain for 6 years.   Tillett has  towed
    barges that started voyages with 6 to 8 inch lists from the southern end of
    Tangier Sound to the open Chesapeake Bay.   Trial I 157.   Such lists,  he
    testified, did not disturb him.   Trial I 157.   Tillett further testified  that,
    if a barge developed a list over 6 to 8 inches during a voyage, he would attempt
    to hold up to investigate the barge’s condition but only if he were in a position
    to do that.   Trial I 159.

    McGowan has held a license as master for freight and towing vessels up to 1,000
    gross tons since 1971.   He has 33 to 35 years experience as a tugboater and  is
    presently a tugboat captain.   McGowan testified that a 3 to 4 inch list would  not
    cause great concern, but that, if possible, he would turn back to investigate the
    problem.   Trial III 111.   Both witnesses conditioned their decisions to  turn
    back to investigate a listing barge on safety factors.   See Trial III 111-112;
    Trial III 114;  Trial I 158.

    Therefore, the Court finds that, at the time the NF-103 had a 4 inch list, Douglas
    properly did not perceive a problem severe enough to turn back to the barge to
    investigate.   See Steamtug ALICE MORAN, 67 F.2d at 605, 1933 A.M.C. at 1630
    (affording tug masters wide range of discretion).   The Court further finds that,
    at the time the NF-103 had a 4 inch list, Douglas would have endangered the tug,
    the barge, the crew, or all three by turning back to investigate the list.
    Specifically, Douglas risked losing the barge completely at that time for not
    maintaining tension on the hawser, puncturing the barge with the tug, or losing a
    crew member.FN29  Trial III 27.   Douglas’ actions in continuing the journey  were
    based on 42 years experience travelling the Chesapeake Bay as a tugboater and were
    based on safety concerns.   The Court concludes that these actions were prudent
    under the circumstances.   S.C. Loveland Co., Inc., 100 F.2d at 974, 1939 A.M.C.
    at 26;  see Steamtug ALICE MORAN, 67 F.2d at 605, 1933 A.M.C. at 1630;  cf. Ocean
    Burning, Inc., 1974 A.M.C. at 2315 (finding that tug master who did not turn tug
    back to investigate cause of barge’s list was “clearly not negligent”).

    *18 When Douglas assumed the watch from Bandelean the waves were 2 to 2 1/2  feet
    and the wind was, at most, 25 knots from the northwest.   Trial III 22.    Because
    of the season, day broke at approximately 6:45 a.m. on February 25, 1989.   Trial
    III 22.   Thus, Douglas determined to continue on course and await daylight to see
    what, if anything, he should or could do about the listing barge.   Trial III  22;
    see  International Salt Co., Inc., 15 F.Supp. at 730, 1936 A.M.C. at 1222, aff’d,
    92 F.2d 65 (2d Cir.1937), cert. denied,  302 U.S. 764 (1938).   The RANDY D.  was
    riding smoothly in the water, although water ran across her stern because she was
    low.   Trial III 23.   No water came across the tug’s bow, which sat 8 to 9  feet
    above the water.   Trial III 23.

    When dawn arrived at approximately 6:45 a.m., see Trial III 23, Douglas saw that
    the NF-103 was even lower in the starboard stern than she had been at 5:40 a.m.
    Trial III 23.   In fact, the list increased to approximately 10 to 12 inches,
    leaving as little as 8 inches of freeboard on her starboard side and permitting
    approximately 1 1/2  to 2 feet of sea to roll over her stern quarter.   Trial  III
    58.   To cushion the buffet of the waves, which were rising to 2 1/2  to 3  feet,
    Douglas changed course to due south, Trial III 24, and slowed the tug from
    approximately 5 to 6 knots to 3 to 3 1/2  knots.   Trial III 25;  Trial III  59.
    The effect of changing course placed the seas to the stern of the barge, which
    allowed the barge less movement port to starboard.

    The Court determines that, given a barge that has the potential of capsizing
    suddenly and without warning and given the celerity with which the barge assumed
    such a dramatic list, Douglas’ decision not to turn back to investigate the 10 to
    12 inch list of the NF-103 and to place a crew member aboard the barge was
    reasonable.   See Steamtug ALICE MORAN, 67 F.2d at 605, 1933 A.M.C. at 1630.    The
    Court further determines that Douglas’ decision not to return to Tangier Sound to
    beach the barge was sound.   Trial III 104.   The evidence established  that
    Douglas did not have time to beach the barge, see Otto Candies, Inc., 1965 A.M.C.
    at 1034 (finding tug not liable where tow’s unseaworthiness manifested itself too
    late for tug to prevent list and consequent loss of cargo).   Such a measure  would
    probably have endangered the barge more because Douglas would have had to maneuver
    the barge considerably, allowing it to roll port to starboard, and would have
    placed the bow of the barge directly into the seas, possibly allowing it to gather
    ice.   Trial III 101;  see supra note 28 (discussing Dail’s northward  journey).
    Douglas would have probably beached the tug as well.   Trial III 101.   The  Court,
    therefore, rejects counsel for plaintiff’s suggestion that the only reasonably
    prudent action for Douglas was to have beached the barge, but see Curtis Bay
    Towing Co. of Virginia, Inc., 200 F.2d at 35, 1952 A.M.C. at 2036 (holding that,
    where facts allowed, good seamanship required beaching of barge);  although not a
    common occurrence, the act of towing a barge that had capsized was well within
    Douglas’ discretion.   See Steamtug ALICE MORAN, 67 F.2d at 605, 1933 A.M.C. at
    1630 (requiring courts to test reasonableness of tug masters’ decisions at time
    they were made).

    *19 At 7:10 a.m. on February 25, 1989, the NF-103 rolled to starboard at 37’36’07”
    longitude, 76’06’07” latitude;  the position on charts of the area shows this to
    be due west of the Rappahanock River.   Pl.Exh. 6;  Pl.Exh. 8;  Stipulation  6-7;
    Trial III 25.   The barge turned completely over at this time, releasing its cargo
    into the Chesapeake Bay;  Douglas, worried that the bridles holding the hawser to
    the barge would fall off their bits, which would permit the barge to sink,
    increased power, straining the towing gear so the barge would not sink.   Trial
    III 25.   From 5:40 a.m. until 7:10 a.m., the RANDY D. travelled approximately 5.7
    nautical miles at approximately 3.4 knots.   Trial III 50;  Trial III 249.    At
    7:30 a.m., Douglas contacted the United States Coast Guard at Milford Haven,
    Virginia.   Pl.Exh. 6.   At 8:40 a.m., the NF-103 righted herself and her  stern
    immediately settled to the bottom of the Chesapeake Bay.   Pl.Exh. 6;  Trial  III
    61.   The coordinates where the NF-103 ran aground are 37’32’04” longitude,
    76’06’05” latitude, or due west of the northern point of the mouth of the
    Piankatank River.   Stipulation 7;  Pl.Exh. 8.

    At 12:30 p.m., February 25, 1989, Douglas requested that the Coast Guard give
    notice to mariners of the navigational hazard of the barge by placing a buoy.
    Pl.Exh. 6.   Douglas maintained a taut hawser until the Coast Guard arrived at
    2:00 p.m., at which time the bow of the barge remained out of the water.    Pl.Exh.
    6;  Pl.Exh. 12; FN30  Trial III 63;  Stipulation 7.   After questioning  Douglas
    and his crew, at 2:40 p.m., the Coast Guard carried Smith with them to retrieve
    the towing bridles and the hawser from the barge.   Pl.Exh. 13;  Pl.Exh. 14.    The
    Coast Guard also placed two lights on the barge and a lighted buoy in the water to
    warn mariners.   Pl.Exh. 13;  Pl.Exh. 14.   The Coast Guard released the RANDY  D.
    at 4:00 p.m., which then set course for Norfolk, arriving at 9:00 p.m.   Pl.Exh.
    13;  Pl.Exh. 14.

    F. Salvage of the NF-103

    On February 26, 1989, Cargill contacted Alyn Fife to superintend the salvage of
    the NF-103.   Trial III 254.   Fife approached Lane A. Briggs of Rebel  Marine
    Service, Inc. to survey the wreck of the NF-103.   Trial III 254;  Pl.Exh.  16.
    At 4:00 a.m., when Briggs passed the NF-103 to assemble the diving crew, he
    noticed the bow of the barge still protruding from the water.   Pl.Exh. 16.    At
    12:45 p.m., Briggs returned to the site of the sunken NF-103, which had completely
    submerged.   Pl.Exh. 16.   Because of poor visibility in the water, the  diving
    crew was unable to gather much information about the barge except that the cargo
    hold was completely empty of cargo and that all of the hatch covers were missing.
    Pl.Exh. 16.

    Fife then contacted Ellsworth Salvage, Inc. to raise the NF-103.   See Trial III
    255;  Walling Dep. 4; FN31  Def.Exh. 58.   Ritner E. Walling, president  of
    Ellsworth Salvage, Inc. testified that he had a diver inspect the barge prior to
    raising it.   Walling Dep. 8.   Walling holds an engineering degree from  the
    Massachusetts Institute of Technology and has been in the salvage business for
    over 30 years.   Walling Dep. 32.   The diver corroborated the account of  the
    condition of the barge that Rebel Marine Service, Inc. had given.   Compare
    Walling Dep. 8-9 with Pl.Exh. 16.   On May 12, 1989, Walling raised the barge,
    using the procedures that he normally would where a barge is generally
    structurally intact.   Walling Dep. 10.   Specifically, Walling raised the  bow
    with compressed air and raised the stern with a derrick.   Walling Dep. 10.
    Walling could not raise the stern with compressed air because of the amount of
    leaks in the area.   Def.Exh. 58.

    *20 After the NF-103 was raised, Walling inspected the barge’s condition while it
    was in drydock in Newport News, Virginia.   Def.Exh. 58;  see Pl.Exh. 49.   On  May
    30, 1989, Walling related to Cargill that the NF-103 was a total loss.   Walling
    found holes in the hull of the bow, near the curve of the rake, which he plugged
    with wooden plugs approximately  3/16  to  1/4  inch large.   Walling Dep.  11-12;
    see Trial III 256.   Walling further found severe rusting in the rake compartment,
    which existed prior to the sinking.   Walling Dep. 11-13;  Walling Dep.  26;
    Walling Dep. 28;  Def.Exh. 58.   Walling also determined that the barge  had
    numerous holes throughout the hull plating.   Walling Dep. 20-21;  Walling Dep.
    24;  Def.Exh. 58.   Some of these holes were as much as a couple of inches  wide,
    Walling Dep. 33, and some caused heavy damage in the form of rusting to the area
    of the two stern void tanks.   Def.Exh. 58.   The Court determines that  such
    rusting existed prior to the capsize and sinking of the NF-103.   See supra s  C
    (relating poor condition of NF-103).

    In addition to the general rusting of the barge and thinness of the plating,
    post-salvage inspection revealed that all of the manhole covers were missing,
    except for those on the bow rake, stern compartment, and on starboard void tanks 2
    and 3.   Def.Exh. 58;  see Pl.Exh. 49.   Photographs expose the deteriorated  and
    corroded nature of the manholes.   Pl.Exh. 48-A;  Pl.Exh. 48.   The  Court
    determines that the severity of rusting of the manholes indicates that the
    condition existed prior to the sinking.   See supra s C (describing condition of
    NF-103).   Many of the crossbars FN32 securing the manhole covers were also
    missing.   Trial III 200-01;  Trial III 204;  Trial III 209;  see Pl.Exh.  48-A;
    Pl.Exh. 48.   Those crossbars that were missing were either not present at the
    time of the capsize of the NF-103 or were not present at the time the NF-103 left
    Lyon Shipyard in January 1989.   Trial III 213.   Because of the missing  crossbars
    and because of the severely rusted condition of the manholes, the Court finds that
    the manhole covers were not watertight at the time of the voyage from Seaford in
    February 1989.   Trial III 215;  Trial III 229.

    G. Proximate Cause of the Capsize and Sinking of the NF-103

    The Court finds that the unseaworthiness of the NF-103, which was caused by
    Cargill’s negligence, was the sole proximate cause of the capsize and sinking of
    the barge.   See  In re Steuart Transp. Co., 435 F.Supp. at 805-06, aff’d,   596
    F.2d 609 (4th Cir.1979).   Specifically, the condition of the plating of the hull
    and of the manhole covers permitted the ingress of water into the void tanks.
    See supra s C (describing condition of NF-103);  Trial III 129.   Hendrik F.  van
    Hemmen provided the most credible testimony on the causation issue.FN33  See Trial
    III 128-70.   Van Hemmen is an engineering and marine consultant with Francis A.
    Martin and Ottaway, Inc., specializing in forensic engineering, surveying, and
    computer designing.   Resume of Hendrik F. van Hemmen.FN34  Van Hemmen is  a
    professional engineer in the state of New York, having earned a Bachelor of
    Science degree in Aerospace and Ocean Engineering from the Virginia Polytechnic
    Institute and State University in Blacksburg, Virginia.   He is a member of the
    Society of Naval Architects and Marine Engineers and of the American Institute of
    Aeronautics and Astronautics.   Resume of Hendrik F. van Hemmen.

    *21 The Court concludes that the void tanks filled with water as the result of any
    one of, or a combination of, three scenarios.   Trial III 129.   First, when  the
    NF-103 was delivered to Cargill in Seaford, she already had approximately 50 tons
    of water in the void tanks.   The NF-103 arrived in Seaford with a 2 feet of  draft
    in the stern, a little more in the bow.   After Cargill completed loading the
    NF-103 with grain, the barge’s draft was approximately 10 feet forward, 10 feet 4
    inches aft.   Stipulation 5.   Using a computer program, van Hemmen  determined
    that the fresh water displacement FN35 of the laden NF-103 was approximately 2000
    tons.   Trial III 132-33.   Thus, given the draft of the laden barge, the  barge
    had excess weight of approximately 100 tons.   Trial III 133-34.   This  excess
    weight was in the form of water, which was located primarily in void tank number 2
    starboard and which caused the barge to list approximately 2 inches to starboard.
    Trial III 147.

    Second, during the voyage of the NF-103 under tow from Seaford, wave water entered
    the void tanks through the rusty, non-watertight manhole covers.   Cf.  S.C.
    Loveland Co., Inc., 100 F.2d at 973, 1939 A.M.C. at 24 (holding that leak was
    result of “the extreme thinness of the [barge’s] plates resulting from corrosion,
    a condition that could have been discovered by proper inspection”).   Wave water
    would not have entered the cargo hold because the seas could not reach that high.
    Trial III 137.   The maximum height of the waves was four feet and the  maximum
    speed that the wind attained was 35 knots, which was mostly wind gusts.   See
    supra notes 26 and 27 and accompanying text (finding that wind speed did not
    exceed 35 knots).   The effect of the wind on the water was to create waves  that
    were regular in shape.   Trial III 138.   From the surface of the water to the  top
    edge of the coaming was 5 feet 6 inches forward, 5 feet 2 inches aft.
    Stipulation 5.   In calm seas, the NF-103 would have been supported evenly by
    water.   See Trial III 138.   In 4 foot seas, the NF-103 was supported by  waves,
    which lifted the barge, adding displacement.   Trial III 138.   The trough of  the
    wave dropped the barge, decreasing displacement.   Trial III 138.   The effect  of
    such a decrease in displacement allowed half of the height of the waves to rise
    above the freeboard, which still was below the top edge of the coaming.   Trial
    III 138-39.

    The waves, however, did wash along the deck of the barge where the manhole covers
    were located.   Because the manhole covers were not watertight or were not secured
    properly by Cargill, water entered the void tanks.   Trial III 143-44.    Because
    the barge already had a list to starboard, the water entering the void tanks
    flowed to starboard and caused the barge to settle in the stern.   Trial III  144;
    Trial III 164.   The water in the void tanks at the start of the voyage caused  the
    NF-103 to list to starboard;  the waves entering the void tanks during the voyage
    caused list of the NF-103 to increase;  the increased list of the NF-103 allowed
    more water into the void tanks;  more water in the void tanks caused the list of
    the NF-103 to increase.   Trial III 142-44;  Trial III 149-50.   The cycle  finally
    ended when enough water entered the void tanks to cause the waves to immerse the
    barge on the starboard side, capsizing her.   Trial III 144.

    *22 Third, water entered the void tanks through holes in the plating of the hull.
    The Court has already determined that the plating of the NF-103 was rusty and had
    numerous holes.   See supra s C (discussing condition of NF-103).   When the  barge
    arrived in Seaford, she had approximately 50 tons of water in the void tanks.
    Trial III 167.   After Cargill completed loading on February 23, 1989, and after
    the RANDY D. commenced travel on the voyage to Norfolk, an additional 50 tons of
    water entered the void tanks.   Trial III 168.   Van Hemmen reasoned that  that
    amount of water would enter the void tanks in 48 hours, which is approximately the
    amount of time from the loading of the barge to the capsize and sinking of the
    barge.   See Trial III 168.   The water would be able to flow through a hole  as
    small as a man’s thumb at the rate of approximately 33 pounds per minute.    Trial
    III 167-68.

    The Court accepts van Hemmen’s conclusions regarding the cause of the capsize and
    sinking of the NF-103 as its own conclusions.   Water existed in the void tanks  at
    the time the NF-103 arrived in Seaford, or entered through the void tanks through
    holes in the plating or through the manhole covers, or by any combination of these
    three conditions of unseaworthiness of the NF-103.

    III. Conclusion

    The Court finds that Douglas and the crew of the RANDY D. acted reasonably in
    departing Seaford.   S.C. Loveland Co., Inc., 100 F.2d at 974, 1939 A.M.C. at 26.
    They also acted prudently while on the voyage and when they noticed the list of
    the barge and when they noticed the list increase.  Id., 1939 A.M.C. at 26;  Ocean
    Burning, Inc., 1974 A.M.C. at 2311-15.   Consequently, the Court holds that
    Douglas and the crew were not responsible for the capsize and sinking of the
    NF-103.   Plaintiff’s theory of liability requires the Court to view defendants’
    actions with perfect hindsight.   The Court is not willing to do so;   defendants’
    actions were prudent under the circumstances.    Steamtug ALICE MORAN, 67 F.2d  at
    605, 1933 A.M.C. at 1630.

    The Court holds that the sole proximate cause of the capsize and sinking of the
    NF-103 was the unseaworthiness of the NF-103.   The barge was rusting and leaky.
    She took on water prior to loading in Seaford and accumulated more during the
    course of her journey south on the Nanticoke River and into the Chesapeake Bay.
    Cf. Otto Candies, Inc., 1965 A.M.C. at 1034 (finding no negligence on part of tug
    where unseaworthiness of tow manifested itself “much too late, even with the
    exercise of due diligence and reasonable care, to prevent the damage to the barge
    and the loss of a portion of its cargo”).   The great accumulation of water
    entered through the non-watertight manhole covers or through holes in the thin and
    wasted plating of the hull, either or both.   Defendants were not responsible for
    the capsize and sinking of the NF-103.

    The Court holds that towage contracts do not contain an implied warranty of
    workmanlike service.   Even if such a warranty existed, the Court rejects the
    notion that a tug may be held strictly liable for the loss of its tow.    The
    existence of an implied warranty is unnecessary because the language of the
    warranty is embodied in the concept of maritime negligence, which requires tugs to
    exercise due diligence and reasonable care.   The Court determines that broadening
    the scope of a tug’s liability ad infinitum is wholly unwarranted under the
    concept of an implied warranty of workmanlike service.   The concept of negligence
    enunciated in The WHITE CITY has served courts well and no logical reason exists
    to abandon the rule.

    *23 Therefore, the Court ORDERS the Clerk to enter judgment in this case in favor
    of defendants in accordance with this Opinion and Order.   The Clerk shall mail a
    copy of this Opinion and Order to all counsel of record.

    FN1. The Court has reviewed the entire record in this case, including
    testimony that occupies over 800 pages of transcript and over 70 exhibits
    introduced at trial.

    FN2. References in this form are to the Order on Final Pre-Trial Conference,
    filed December 20, 1989.

    FN3. References in this form are to evidence introduced at trial as
    Plaintiff’s Exhibits.

    FN4. The court of appeals also addressed the issue whether the tug was
    liable for the damage to the cargo of the FRED SMARTLEY, JR. as a result of
    the collision.    S.C. Loveland Co., Inc., 100 F.2d at 973, 1939 A.M.C.  at
    24.   The court found that the FRED SMARTLEY, JR. was unseaworthy prior to
    the fateful voyage.   Specifically, the barge had two leaks, of which one
    “could not have been caused by the rubbing of [the other barge] against the
    SMARTLEY but was the result of the extreme thinness of the SMARTLEY’S plates
    resulting from corrosion, a condition that could have been discovered by
    proper inspection.”  Id., 1939 A.M.C. at 24.   The court held that  the
    inspection rested with the owner of the FRED SMARTLEY, JR., who “was
    responsible for the seaworthiness of that barge.”  Id., 1939 A.M.C. at 24.
    For this Court’s discussion of the condition of the NF-103 and the proximate
    cause of the capsize and sinking of the NF-103, see infra ss C and G.

    FN5. In In re Steuart Transp. Co., the trial court stated:

    The tug captain should not be expected to follow the [person in charge of
    the barge] and check to see that each dog or fitting is secure.   Nor
    would it be reasonable for the captain to inspect the barge in every
    detail for seaworthiness.   He is entitled to rely on the expectation that
    he has been furnished a sound vessel …

    In re Steuart Transp. Co., 435 F.Supp. at 804, aff’d,  596 F.2d 609 (4th
    Cir.1979).

    FN6. In Fairmont Shipping Corp., the court cited Tebbs and, in so citing,
    used explicit language that an implied warranty of workmanlike service had
    been applied to “dead tows.”   Fairmont Shipping Corp., 511 F.2d at 1258.
    The Court finds that the use of such restrictive language demonstrates that
    the court in Fairmont Shipping Corp. recognized the limited application of
    the rule in Tebbs.

    FN7. In Tebbs, the trial court made its ruling based upon the specific
    findings of fact that the master of the tug had knowledge of or should have
    known of the placement of the lines running from the dock to the SANDS
    POINT, that the lines would not prevent forward movement of the ship until
    she after she had travelled a substantial distance, that the yacht was less
    than that distance, and that the ship was “dead.”   Tebbs, 407 F.2d at
    1057-58.   In this case, the Court makes no findings that the master had
    knowledge or should have known of the unseaworthy condition of the NF-103 or
    any other such fact.

    FN8. Interestingly, the court in Fairmont Shipping Corp. addressed a fact
    pattern similar to that in Tebbs in that the trial court had found that the
    tow was a “dead ship.”   Fairmont Shipping Corp., 511 F.2d at 1257.    The
    trial court’s finding in Fairmont Shipping Corp. was not appealed.  Id.  The
    Court finds that the rule enunciated in Fairmont Shipping Corp. is
    necessarily based upon the finding that the tow was a “dead ship.”   In
    accordance with its ruling regarding the limited scope of Tebbs, the Court
    rules that the scope of Fairmont Shipping Corp. is similarly limited.

    FN9. In Tebbs, indemnification was at issue.   Tebbs, 407 F.2d at 1057.
    Applying an implied warranty of workmanlike service to the towage contract
    in this case would unfairly shift liability from the tow, who is legally
    responsible for its vessel, to the tug, who is responsible only for breach
    of its duty to act prudently.   Such an application would hold the tug
    liable for a loss that it did not create and would impose too high a
    standard upon the tug.

    FN10. References in this form are to the transcript of the trial by volume
    number.

    FN11. In October 1988, Lyon Shipyard also repaired one hole in the bottom
    plates of the NF-103, which was the size of a pencil.   Trial II 115.

    FN12. The purpose of a sandblast is to determine the condition of the metal
    plate that the shipyard is to repair.   Trial II 219.   A sandblast is  a
    normal procedure, but the NF-103 could not withstand a sandblast because of
    the condition of the metal.   Trial II 230.   Thus, Lyon Shipyard was  forced
    to resort to the less damaging process of sweeping sand across the metal of
    the barge.   Trial II 219.

    A comparison of pictures of the NF-103 taken while Continental Grain still
    owned the barge with pictures of the NF-103 after the repairs at Lyon
    Shipyard illustrates the general rusted condition of the barge.   Compare
    Pl.Exh. 62 with Pl.Exh. 2.

    FN13. Kiefer testified that, until he was involved in the acquisition of the
    NF-103 and the other barges formerly owned by Continental Grain, he “had
    absolutely no experience in handling barges …” Trial II 187.   The NF-103
    underwent at least $65,000 worth of repairs at Lyon Shipyard and probably
    could have withstood substantially more.   Trial II 192.   Consequently,  the
    Court finds that Kiefer’s lack of experience with barges in late 1988 and
    early 1989 combined with the fiscal constraints that Cargill imposed,
    resulting in the miscalculation of the funds necessary to properly repair
    the barge.

    FN14. A doubler is a steel patch that is placed over the existing plate and
    welded to that plate.   Trial II 129.   The shipyard worker knows to place  a
    doubler over a hole by tapping a hammer around the hole and listening to the
    sound, which indicates the thickness of the plate.   Trial II 129.    A
    doubler covers not only the hole, but also the steel around the hole.
    Trial II 129.

    A doubler is contrasted with an insert, by which a shipyard worker removes
    the wasted metal, replacing it with a new plate.   Trial II 228.    An
    insert is recognized to be more effective than a doubler, but a shipyard
    must comply with the customer’s request, Trial II 228, although the Coast
    Guard does not prefer use of doublers.   Trial II 132.

    FN15. Such tests might have included an air test, which involves the
    application of 2 pounds per square inch of air pressure on the repaired
    area, which would be sealed airtight and watertight.   Subsequently, the
    tester soaks the area to inspect for leaks and takes a pressure gauge
    reading.   Trial II 208-09.   Even if Cargill had not hastily retrieved  the
    NF-103 from Lyon Shipyard, the shipyard could not have performed this
    particular test because of the wasted condition of the barge’s plating.
    Trial II 211;  see infra s C (describing condition of NF-103).

    FN16. The NF-103 also transported wheat from Seaford to Norfolk in early
    February 1989, which voyage was made without incident.   Stipulation 4.

    Although the parties stipulated that the NF-103 made both the voyage in
    January 1989 and the voyage in early February 1989 without misfortune, the
    Court recognizes its inherent power to conform the evidence presented at
    trial to stipulated facts.   Morrison v. Genuine Parts Co., 828 F.2d 708
    (11th Cir.1987), cert. denied,  484 U.S. 1065 (1988);   Coastal States
    Marketing, Inc. v. Hunt, 694 F.2d 1358, 1369 (5th Cir.1983);   Del Rio
    Distributing, Inc. v. Adolph Coors Co., 589 F.2d 176, 178 (5th Cir.1979).

    FN17. Cargill hired Bradford to determine the cause of the leakage into the
    cargo hold.   Pl.Exh. 61.

    FN18. References in this form are to evidence introduced at trial as
    Defendant’s Exhibits.

    FN19. Cargill knew of the pathetic condition of the NF-103.   In fact,
    Cargill thought that the NF-103 was not even worth insuring;  the deductible
    for the barge would have been $100,000.   Trial II 157.

    FN20. Cargill apparently honored Monday, February 20, 1989, as the
    observance of Washington’s Birthday.   See Pl.Exh. 6;  Pl.Exh. 32.

    FN21. The total weight of the wheat equals 3,262,808.2 pounds, or 1,631.4
    tons.   Trial I 68.

    In the transcript of the trial, counsel for defendants transposed the
    figures regarding the stipulated number of bushels, Trial I 68, line 9;
    the witness, however, used the correct figures in her calculations.
    Trial I 68.

    FN22. Tugboat captains find that barges laden with grain sail more smoothly
    when they have some drag in the stern.   Trial III 6-7;  Trial I  54.

    FN23. The Court rejects counsel for plaintiff’s suggestion that, because
    Douglas and Bandelean omitted mention of the 2 inch starboard list in their
    reports to the Coast Guard of the accident, their credibility is suspect.
    There was no evidence that the Coast Guard asked Douglas and Bandelean about
    the possibility of a 2 inch list and because tugboaters do not regard such
    lists to be significant, Trial III 102;  Trial I 158, the Court determines
    that the exclusion in the Coast Guard reports is inconsequential.

    FN24. As a matter of general practice, excluding visible signs indicating
    matters awry with a barge, Cargill employees do no more than to ensure that
    the manhole covers on the deck of the barge are not loose.   Trial I  51-52.
    If the manhole covers are loose, the employee would be expected to put them
    into place or to tighten them.   Trial I 52.   The employee would further  be
    expected to make a walk-around inspection of the laden barge to see “if
    there was anything out of place …”   Trial III 182.   If the  employee
    indeed found something amiss with the barge, the employee would be expected
    to report it to Cargill, which of course has the duty to repair problems
    with its own barges.   Trial III 184.   In  In re Steuart Transp. Co.,  435
    F.Supp. at 803, aff’d,  596 F.2d 609 (4th Cir.1979), the court ruled that
    the barge owner was negligent in failing to implement procedures by which it
    could ensure the seaworthiness of its vessels.

    Because Gouverneur only performed a cursory inspection and because Cargill
    failed to implement procedures for inspection of its own barges,
    Gouverneur failed to fulfill her obligation of providing the RANDY D. with
    notice that the NF-103 was unseaworthy.   Such failure to notify supports
    the Court’s conclusion that defendants are relieved of liability because
    of their reliance upon the apparent seaworthiness of the freshly painted
    NF-103.   See Otto Candies, Inc., 1965 A.M.C. at 1034.

    FN25. The National Weather Service maintains three antennae that broadcast
    weather conditions and forecasts for the Chesapeake Bay at approximately
    162.55 megahertz.   Trial II 205;  Trial I 173.   The information is  taped,
    with updates approximately every four hours.   Trial I 173;  Trial II  38.
    Douglas and the crew of the RANDY D. listened to these forecasts and weather
    reports.   Trial I 172-73.

    FN26. The Court takes judicial notice that the National Weather Service
    posts small craft advisories where winds approach sustained speeds of 15 to
    25 knots.   The Court further takes judicial notice that one knot equals
    1.15 miles per hour.   Finally, the Court takes judicial notice that wind
    speeds at sea create larger waves than wind speeds in the Chesapeake Bay.

    A “small craft” is a vessel whose maximum length ranges from 35 feet in
    length,  In re Hechinger, 890 F.2d 202, 205 (9th Cir.1989), to 50 feet in
    length,  Barbe v. Drummond, 507 F.2d 794, 796 (5th Cir.1974), to 65 feet
    in length,  Seaboard Properties, Inc. v. Bunchman, 278 F.2d 679, 680 (5th
    Cir.1960).   Even assuming the largest of these small crafts, both the tug
    and the barge in this case are substantially larger than small crafts.
    Therefore, the Court finds that Douglas’ decision to undertake and proceed
    on a voyage during a small craft advisory was not negligent.  Ocean
    Burning, Inc., 1974 A.M.C. at 2309-10 (holding that master’s decision to
    proceed where wind speeds at sea were 15 to 25 knots, with higher gusts,
    was not negligent);  see S.C. Loveland Co., Inc., 100 F.2d at 974, 1939
    A.M.C. at 26 (holding that proceeding on voyage with wind speeds of 18 to
    20 miles per hour was not negligent).

    FN27. The Court finds that at no time during the voyage of the NF-103 from
    Seaford to Norfolk were the seas above 4 feet in height and at no time were
    the winds above 35 knots.   Despite the volume of testimony by an expert
    from the NASA Goddard Space Flight Center in Maryland and by an expert who
    served as a captain with the United States Coast Guard and although the
    Court was impressed by the witnesses’ credentials, the overwhelming weight
    of evidence demonstrated that, in seas above 4 feet in height and winds
    above 35 knots, the hawser would certainly have parted.   See Trial III 27;
    Trial I 215-16.   It did not part.   Moreover, the Court finds that the  best
    evidence of the weather conditions was presented by those persons who were
    on the Chesapeake Bay from February 23, 1989 to February 25, 1989.

    Even if the waves were as much as 7 feet, the Court finds that a seaworthy
    NF-103 would not have capsized and sunk because the volume of the void
    tanks was greater than the weight of the steel of the barge.   Trial III
    145;  see infra s G (discussing cause of capsize and sinking of NF-103).

    FN28. On February 24, 1989, Lonnie Dail, captain of the tug HOLLY S., was
    travelling north on the Nanticoke River with a light fuel barge.   Trial III
    70-73.   Because he was headed northbound into the wind and waves, both the
    barge and the tug gathered ice.   Trial III 72-73;  Trial III 74.    Dail
    decided, therefore, to wait alongside the southern bank of Chapter Point.
    Trial III 73;  Pl.Exh. 38.   Although Dail saw Douglas pass with the  NF-103,
    he does not remember speaking with Douglas.   Trial III 73;  Trial III  79;
    cf.   Trial III 16.   Had Dail spoken with Douglas, however, he  testified
    that he would have advised Douglas that, at least for the type of tow that
    he had, the conditions on Tangier Sound were safe to proceed.   Trial III
    80.

    Dail reported that the winds at Chapter Point were 15 or 20 knots, that
    the weather conditions did not prevent them from continuing their journey,
    and that a reason that the HOLLY S. did not renew the journey was because
    of the accumulation of ice on the tug and barge.   Trial III 73.    There
    was no evidence presented at trial that the RANDY D. or the NF-103
    accumulated ice.

    FN29. Even if Douglas had turned back, discovered water in the void tanks,
    and attempted to pump the water, more water would enter the manhole than
    could ever be pumped out.   Trial III 65.   Even if Douglas  further
    discovered water in the cargo hold and attempted to pump the water, he would
    have risked worse exposure to water and would have destroyed the pump
    because he then would have been pumping grain as well as water.   Trial III
    65.

    FN30. Photographs taken at the scene of the Coast Guard crew and Smith
    releasing the bridles and hawser from the barge reveal that the hatch covers
    were either missing or had rolled open to the stern.   Pl.Exh. 12.   By  the
    time salvage divers inspected the wreck of the NF-103, all cargo hatch
    covers were missing.   Pl.Exh. 16;  Pl.Exh. 49.   Also at the time  the
    photographs were taken, Smith noticed that the bow rake tank manhole cover
    was open;  Smith closed the cover.   Stipulation 7.

    FN31. References in this form are to the deposition of Ritner E. Walling
    which was filed in open court on January 17, 1990.

    FN32. Since the design of the twistlock manhole covers that were on the
    NF-103, marine architects discovered that the design of the covers often
    allowed leakage because they become loosened over time.   Consequently,
    marine architects designed crossbars to provide security, thwarting leakage
    from this type of manhole cover.   Trial III 200.

    FN33. The Court rejects the hypothesis propounded by Szilard V. Pantyik and
    Alyn Fife that water entered the cargo hold.   Pantyik and Fife’s opinion is
    based upon the inaccuracy of the underlying assumptions about variables,
    such as the weather and the height of the waves.   Moreover, Pantyik’s
    testimony relied too heavily on speculation and was implausible.   For
    instance, Pantyik testified that 520 tons of water would have had to enter
    the cargo hold in order to sink the NF-103.   Trial III 308.   Assuming  a
    constant ingress of water into the cargo hold from 12:30 a.m. to 7:30 a.m.
    on February 25, 1989, approximately 1.24 tons of water per minute would have
    had to have entered the cargo hold through the weathertight hatch covers,
    which sat approximately 5 feet above the water line.   Trial III 308;   see
    infra (discussing displacement of laden barges in waves of certain heights).
    Because Pantyik and Fife’s underlying assumptions were not supported by the
    evidence and because the theory is factually implausible, the Court does not
    find their opinions on the issue of causation to be reliable.

    FN34. References in this form are to the resume of Hendrik F. van Hemmen,
    filed in open court on January 18, 1990.

    FN35. The difference between fresh water displacement, salt water
    displacement, and brackish water displacement is approximately one percent
    and, for the purposes of this opinion, nonexistent.

    E.D.Va.,1990.

    Cargill, Inc. v. C & P Towing Co., Inc.

    Not Reported in F.Supp., 1990 WL 270199 (E.D.Va.), 1991 A.M.C. 101

    Continue reading →United States District Court, E.D. Virginia, Norfolk Division. CARGILL, INC., Plaintiff, v. C & P TOWING CO., INC., and Northeast Towing, Inc., in personam, and TUG RANDY D., her engines, boilers, etc., in rem, Defendants. Civ. A. No. 89-378-N. Aug. 16, 1990. Guilford D. Ware/y/JamesL. Chapman, IV, Crenshaw, Ware & Martin, Norfolk, Va., for Cargill, Incorporated. John E. Holloway/y/PhilipN. Davey, Hunton & Williams, Norfolk, ...
  • Trigon Ins. v. U.S.

    United States District Court,

    E.D. Virginia,

    Richmond Division.

    TRIGON INSURANCE COMPANY (Formerly Blue Cross and Blue Shield of Virginia),
    Plaintiff,

    v.

    UNITED STATES of America, Defendant.

    Civ. No. 3:00CV365.

    Nov. 9, 2001.

    MEMORANDUM OPINION

    PAYNE, District Judge.

    Plaintiff, Trigon Insurance Company (“Trigon”), formerly known as Blue Cross and
    Blue Shield of Virginia, has moved FN1 the Court to impose sanctions on the
    Defendant, the United States of America (the “United States”) for inappropriately
    destroying, or “spoliating”, evidence and for allegedly “ghost writing” the
    reports of the testifying experts of the United States.

    FN1. Trigon’s Motion in Limine for Appropriate Relief Due to Spoliation of
    Evidence by Government’s Litigation Consultant and Government’s Use of
    Litigation Consultant to Ghost Write Testifying Experts’ Reports (“Trigon’s
    Motion” or “Motion for Appropriate Relief”).

    STATEMENT OF FACTS

    This is an action for the recovery of federal income taxes and interest assessed
    and collected from Trigon for the tax years 1989 through 1995.   The action
    presents issues of first impression under legislation that subjected Blue Cross
    and Blue Shield organizations, including Trigon, to federal income tax beginning
    with their first taxable years beginning after December 31, 1986.   See Tax Reform
    Act of 1986, Pub.L. No. 99-514, 100 Stat. 2085, 2390 (1986).   In subjecting Blue
    Cross and Blue Shield organizations to income tax, Congress enacted a number of
    transitional rules, including section 1012(c)(3)(A)(ii) of the 1986 Act (the
    “Fresh Start Basis Rule”).   Pursuant to the Fresh Start Basis Rule, Trigon’s
    basis in each asset owned on January 1, 1987, was equal to the asset’s fair market
    value on that date.   Deductions were allowed for any losses sustained during each
    taxable year and not compensated for by insurance or otherwise.   Trigon timely
    filed administrative claims for refund for the 1989 through 1995 tax years with
    respect to loss deductions arising from the cancellation, abandonment or
    termination of indemnity group health insurance subscription contracts, physician
    provider contracts and a hospital provider contract.   The administrative claims
    were denied by the Internal Revenue Service, and Trigon now seeks relief in the
    federal district court.

    To assist in this complex litigation, the United States employed Analysis
    Group/Economics (“AGE”) as a litigation consultant.   Trigon first learned of
    AGE’s involvement with the case on September 5, 2000, when R. Jeffery Malinak
    (“Malinak”), an employee of AGE and the principal manager of AGE’S work in this
    litigation, appeared with counsel *280 for the United States at the deposition of
    a Trigon employee.

    AGE’s role took on a new dimension when, on December 7, 2000, the United States
    filed a motion pursuant to  Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S.
    579, 113 S.Ct. 2786, 125 L.Ed.2d 469 (1993), seeking to strike the testimony of
    Trigon’s expert, Michael C. Wierwille, of PricewaterhouseCoopers (“PwC”).   On
    December 22, 2000, the United States submitted the sworn declaration of Bruce F.
    Deal (“Deal Declaration”)in support of its Daubert motion.   Deal is a principal,
    or owner, of AGE. In pleadings and telephone conferences respecting the Daubert
    motion filed by the United States, Trigon objected to AGE’s dual roles as both
    non-testifying expert litigation consultants and as testifying experts.   Trigon
    was allowed to take discovery respecting the Daubert challenge and, by letter
    dated December 26, 2000, requested the United States to produce Malinak and Deal
    for depositions.   At the same time, Trigon requested the United States to produce
    documents, including the following:

    3.  All correspondence between [AGE] and any third party relating to this case;

    4.  Any documents, including e-mails, that evidence any communications between
    or among Mr. Deal [who, at the time, was a testifying expert on the methods used
    by Wierwille], Mr. Malinak and others in [AGE] in connection with this case;

    5.  All memoranda, reports, studies or other documents prepared by [AGE], its
    principals or employees in connection with this case;

    6.  All notes taken by any principal or employee of [AGE] in connection with
    this case, …

    7.  All workpapers, ledgers, computations or other similar documents prepared by
    any principal or employee of [AGE] in connection with this case;  ….

    As discussions about discovery on the Daubert motion continued, Trigon became
    suspicious of the role AGE was playing in the litigation and, upon closer
    inspection, discovered that AGE was paying the fees of the testifying experts for
    the United States and was reimbursing their expenses.   On January 4, 2001, Trigon
    sent a letter to counsel for the United States seeking several additional
    categories of documents relating to the work being done by, and the role of, AGE
    in the litigation, in particular, Trigon sought correspondence, communications or
    documents between or among the United States, Deal, those working with or under
    the direction of Deal, other third parties relating to this case and other
    employees or academic affiliates of AGE relating to this case.   Memorializing the
    request for the documents requested in that letter, Trigon subpoenaed AGE and the
    requested documents.   In addition to information respecting information about the
    engagement of AGE by the United States, the same categories of documents described
    in the letter were sought in the subpoena.   The United States and AGE refused  to
    comply with the requests on the basis that AGE was acting as a non-testifying
    consultant and not as an expert.   The United States and AGE asserted also that
    Deal was separately retained as a testifying expert, notwithstanding that he is an
    owner of AGE.

    During a telephone hearing on January 15, 2001, Trigon sought to compel the
    depositions of Deal and Malinak, as well as production of the documents Trigon had
    requested earlier.   During that telephone hearing, the Court admonished counsel
    for the United States that he was “playing with fire” in using AGE in both
    capacities and also cautioned that “if an expert relies on something somebody else
    does, then [opposing counsel] is entitled in certain circumstances to depose that
    somebody and get what that somebody relied on.”   File Doc. 85, Telephone
    Conference of January 15, 2001, Tr. at 51-52.   The Court continued, stating that
    “the non-testifying expert generally is used to advise the lawyers, not to advise
    and prep the experts.”  Id.

    With respect to the documents that had been requested, the Court reminded counsel
    for the United States that “you run the risk … of having your experts precluded
    from testifying if you’ve not been forthcoming with all that is supposed to be
    produced.”  Id. at *281 54.   The Court also warned the United States that  ghost
    writing by AGE for the United States’ testifying experts would not be acceptable.

    Finally, during that hearing, Trigon’s motion to take the deposition of Deal was
    granted.   Then, after scheduling Deal’s deposition for January 18, 2001, the
    United States withdrew the Deal Declaration in support of the United States’
    Daubert motion and did not produce Deal or the requested documents on grounds of
    mootness.   During another telephone hearing on January 22, 2001, the United
    States withdrew its Daubert motion without prejudice to subsequently filing
    another motion on the topic of Wierwille’s methods.   On February 12, 2001, Trigon
    filed a Motion to Compel the production of documents related to work done by AGE
    and to compel Deal’s deposition.   During argument of the Motion to Compel on
    March 27, 2001, the United States withdrew its objections to the production of the
    requested documents and the taking of Deal’s deposition, thus making the Motion to
    Compel moot.

    The reports of the testifying experts of the United States were produced on March
    13, 2001.   Two of the testifying experts stated that they had reviewed and
    considered the Deal Declaration and several of the testifying experts disclosed
    that they had reviewed each other’s reports.

    On March 19, 2001, counsel for Trigon requested the drafts of the United States’
    testifying experts’ reports because they had not been produced with the reports,
    notwithstanding that:  (i) Trigon’s previous document requests clearly included
    draft reports within their reach;  (ii) Rule 26(a)(2) requires production of all
    documents reviewed by testifying experts;  and (iii) AGE’s business-litigation
    consultation-requires AGE to know the requirements of Rule 26.   See Letter from
    David Curtin, counsel for Plaintiff, to Charles Hurley and Angelo Frattarelli of
    the United States Department of Justice dated March 19, 2001, at P 7. At that
    time, counsel for the United States directed AGE and its testifying experts to
    preserve all draft reports and all communications between themselves.   However,
    by then, many of the communications and draft reports had been deleted as a result
    of AGE’s document retention policy and the individual practices of each of the
    testifying experts.   The depositions of the United States’ testifying experts
    established that AGE had participated extensively in the drafting (both
    preparation and editing) of the testifying experts’ reports.   And, it became
    apparent that some of the experts were publicly advertised as “affiliates” of AGE.

    On July 30, 2001, Trigon filed its Motion for Appropriate Relief.   On August 16
    and 21, 2001, argument was held on the parties’ motions in limine, including
    Trigon’s Motion for Appropriate Relief.   It being apparent that a substantial
    amount of potential evidence had been destroyed, the Court, in an Order dated
    August 21, 2001 (modified on August 27, 2001), directed:  (i) the United States to
    hire an independent computer  forensics expert to report on the retrievability of
    the documents allegedly deleted on the various computers of AGE and the testifying
    experts;  (ii) that the testifying experts of the United States and members of AGE
    be deposed regarding the destruction of documents;  and (iii) that both parties
    report to the Court regarding the results of the forensics expert’s work and the
    depositions.

    Hundreds of communications and many draft reports were recovered in the efforts of
    AGE FN2 and Deloitte & Touche, the chosen computer  forensics expert.   After  the
    reports of Deloitte & Touche and both parties’ papers were submitted, the Court
    directed further briefing on the spoliation issues, holding a final hearing on
    October 22, 2001.

    FN2. When requested by Trigon’s counsel to make a recovery effort, AGE had
    asserted that no recovery was possible.   AGE’s more successful effort after
    entry of the August 21, 2001, Order is in stark contrast to its earlier
    assertions of impossibility and the contrast serves to call into question
    the basis on which AGE asserted that recovery was not possible.

    DISCUSSION

    I. Discoverability Of Materials Reviewed By A Testifying Expert

    [1] Because the gravamen of Trigon’s complaint is that the United States did not
    *282 produce a substantial percentage of the communications between the testifying
    experts and AGE, including drafts of experts’ reports that were exchanged between
    the testifying experts and AGE, it is necessary first to ascertain what materials,
    if any, should have been produced by the United States.   That requires assessment
    of the substance of Trigon’s requests for production of documents as well as the
    effect of the disclosure provisions applicable to expert reports under
    Fed.R.Civ.P. 26(a)(2).

    The document requests made by Trigon on December 26, 2000,FN3 January 4, 2001,FN4
    January 5, 2001,FN5 January 10, 2001,FN6 and March 19, 2001,FN7 by their terms,
    encompass communications between the testifying experts as well as draft reports.
    The United States argues that, because Trigon’s document requests did not use the
    words “draft reports”, those requests did not require retention and production of
    draft reports.   That argument misses the mark because the language of Trigon’s
    request is broad enough to include draft reports.   The United States’ unilateral
    decision to narrow the plain meaning of the language used by Trigon was done at
    its risk.

    FN3. Letter from David Curtin, counsel for Plaintiff, to Charles Hurley of
    the United States Department of Justice dated December 26, 2000.

    FN4. Letter from David Curtin, counsel for Plaintiff, to Charles Hurley of
    the United States Department of Justice dated January 4, 2001.

    FN5. Subpoena in a Civil Case, dated January 5, 2001.

    FN6. Letter from David Curtin, counsel for Plaintiff, to Charles Hurley of
    the United States Department of Justice dated January 10, 2001.

    FN7. Letter from David Curtin, counsel for Plaintiff, to Charles Hurley and
    Angelo Frattarelli of the United States Department of Justice dated March
    19, 2001.

    Moreover, the basic precepts of the Federal Rules of Civil Procedure relating to
    the work of testifying experts requires, on this record, the retention and
    production of draft reports and the correspondence reviewed by the testifying
    expert.   That is obvious from the text of Fed. R. Civ. P. 26(a)(2), which  governs
    mandatory disclosure obligations respecting testifying experts, requires that the
    testifying expert must file a report which contains, inter alia, “a complete
    statement of all opinions to be expressed and the basis and reasons therefor;
    [and] the data or other information considered by the witness in forming the
    opinions….”  Fed.R.Civ.P. 26(a)(2) (emphasis supplied).

    The reach of that provision is illustrated by examining the 1993 Amendments to
    Rule 26 which broadened the scope of discoverable information from material “known
    by experts” to material “considered by” experts.   The drafters of the new Rule
    obviously contemplated that the term “considered” was something different than the
    term “relied”, given that the drafters rejected an earlier draft version of
    subdivision (a)(2) that required the disclosure of “the data or other information
    relied upon in forming such opinions.”  Preliminary Draft of Proposed Amendments
    to the Federal Rules of Civil Procedure and the Federal Rules of Evidence, 137
    F.R.D. 53, 89 (1991) (emphasis supplied);  see Michael E. Plunkett,
    Discoverability of Attorney Work Product Reviewed by Expert Witnesses:  Have the
    1993 Revisions to the Federal Rules of Civil Procedure Changed Anything?, 69
    Temple L.Rev. 451, 479 (1996).  “Considered”, which simply means “to reflect on”
    or “to think of:  come to view, judge or classify,” clearly invokes a broader
    spectrum of thought than the phrase “relied upon”, which requires dependence on
    the information.   See Webster’s Third New International Dictionary, at 483, 1919
    (1986).   Indeed, information considered, but not relied upon, can be of great
    importance in understanding and testing the validity of an expert’s opinion.

    [2] Caselaw also supports the view that documents reviewed (not just those upon
    which the expert relied) by an expert witness are to be disclosed.   In  Karn  v.
    Ingersoll-Rand, 168 F.R.D. 633 (N.D.Ind.1996), a federal district court held that
    the Advisory Committee clearly intended a broader scope of disclosure by rejecting
    the previous term “relied upon” and using, instead, the term “considered”.   Any
    information reviewed by an expert will be subject to disclosure including drafts
    of reports sent from and to the *283 testifying experts.   See, e.g.,  Georgou  v.
    Fritzshall, 1996 WL 73592, 1996 U.S. Dist. Lexis 1823 (N.D.Ill.1996) (Rule 26 and
    the Advisory Committee Notes mandate that materials furnished to experts used in
    forming an expert’s opinion, whether or not ultimately relied upon by expert, must
    be disclosed);   Haworth, Inc. v. Herman Miller, Inc., 162 F.R.D. 289, 293
    (W.D.Mich.1995) (reliance by an expert is unnecessary;  all documents considered
    by expert must be disclosed except portions containing counsel’s mental
    impressions);   United States v. City of Torrance, 163 F.R.D. 590, 593
    (C.D.Cal.1995) (disclosure of all documents considered by an expert is necessary
    to assure the independence of an expert’s opinion;  rejected documents could be
    more important to a cross-examination than the documents actually relied upon).

    [3] Thus, as a consequence of the 1993 amendments, disclosure simply includes all
    documents that were provided to and reviewed by the expert.   The party requesting
    discovery no longer bears the burden of demonstrating that the expert actually
    relied on the document.

    Our sister court, the Western District of Virginia, has determined that even
    materials otherwise protected by work-product privilege must be disclosed under
    Rule 26 if considered by an expert. “A number of courts and commentators who have
    considered the effect of the 1993 amendments and advisory note to Rule 26(a)(2)(B)
    have concluded that, where a lawyer gives work product to an expert who considers
    it in forming opinions which he or she will be testifying to at trial, this
    information is no longer privileged and must be disclosed.”   Lamonds v. General
    Motors Corporation, 180 F.R.D. 302, 305 (W.D.Va.1998) (citing 8 Charles A. Wright,
    Arthur R. Miller & Richard L. Marcus, Federal Practice and Procedure s 2016.2, at
    250 (1994) (“At least with respect to experts who testify at trial, the disclosure
    requirement of Rule 26(a)(2), adopted in 1993, was intended to pretermit further
    discussion and mandate disclosure despite [the work product] privilege.”)).   See
    also  B.C.F. Oil Ref., Inc. v. Consolidated Edison, 171 F.R.D. 57, 66
    (S.D.N.Y.1997);   Karn, 168 F.R.D. 633.   The court, in Lamonds, continued:   “[a]
    construction of Rule 26 establishing a bright line rule that permits an opposing
    party to discover work product materials where an attorney provides work product
    to a retained expert who will consider that information in the development of her
    opinions is not only consistent with the 1993 amendment and Advisory Note, but is
    also consistent with the important policies underlying the work product doctrine
    and the Federal Rules of Civil Procedure.”   Lamonds, 180 F.R.D. at 305.

    Some courts have directly discussed whether drafts of experts’ reports are
    discoverable.  “Courts have even extended the scope of the rule to allow
    disclosure of ‘drafts of reports or memoranda experts have generated as they
    develop the opinions they will present at trial.’ ”   B.C.F. Oil, 171 F.R.D. at  62
    (quoting  Hewlett-Packard Co. v. Bausch & Lomb, Inc., 116 F.R.D. 533, 536
    (N.D.Cal.1987));   W.R. Grace & Co. v. Zotos International, 2000 WL 1843258, *10
    (W.D.N.Y.2000) (“Courts have held that drafts of reports prepared by testifying
    experts are subject to disclosure pursuant to Fed.R.Civ.P. 26(a)(2)(B).”).   Draft
    documents are not considered work product.  “In addition to the Committee Notes,
    there are numerous cases both within the Second Circuit and outside of it which
    have held that documents generated by experts are not work product within the
    meaning of Rule 26(b)(3).”    B.C.F. Oil, 171 F.R.D. at 62 (citations  omitted).
    Given that drafts may be used for cross-examination and other purposes, and are
    not protected by another doctrine of privilege, drafts should be disclosed where,
    as here, they are not solely the product of the experts own thoughts and work.FN8

    FN8. There is no need to decide in this case whether a testifying expert is
    required to retain, and a party is required to disclose, the drafts prepared
    solely by that expert while formulating the proper language in which to
    articulate that experts’ own, ultimate opinion arrived at by the expert’s
    own work or those working at the expert’s personal direction.   There are
    cogent reasons which militate against such a requirement but the issue is
    not presented here because the testifying experts worked, not alone, but
    cooperatively with other experts and under the auspices of AGE.

    *284 In addition to the provisions of Fed.R.Civ.P. 26 that necessitate disclosure
    of materials considered by the testifying experts, as well as extensive decisional
    law that make that proposition very clear, the Court actually explained to counsel
    in January the need to disclose information considered by testifying experts.   In
    particular, the Court discussed the disclosure of communications between
    testifying experts and AGE.   See File Doc. 85, Telephone Conference of January
    15, 2001, Tr. at 42-46.   For example, during the phone conference on January 15,
    2001, the Court said:  “suppose the non-testifying expert read Book A, Book B,
    Book C, and Book D, formed an opinion, talked to the non-testifying
    [sic-“testifying”] expert, passed all that along to him and based the testimony on
    Book A, Book B, Book C, and Book D, [Trigon is] entitled to have Book A, B, C and
    D and to know what it is that the non-testifying expert passed along to the
    testifying expert, ….” File Doc. 85, Telephone Conference of January 15, 2001,
    Tr. at 44.

    In the face of the requests made by Trigon, the telephone hearings and the
    requirements of Fed.R.Civ.P. 26, the United States was on notice that it would
    have to produce communications between AGE and the testifying experts, as well as
    other materials provided to, or created by, the testifying experts, such as draft
    reports exchanged between experts and AGE. The requests made by Trigon appear
    largely to have been by letter and informal, but that does not relieve the United
    States from its responsibility to retain and produce such documents, especially in
    light of what the United States is automatically and mandatorily directed to
    disclose under Rule 26.   On the facts presented here, the United States should
    have produced the draft reports and communications with draft reports attached.
    Instead, it did not assure that these materials were retained so that they could
    be disclosed, and, as a result, its litigation consultant, AGE, and the testifying
    experts whose work AGE directed, destroyed many of the documents.

    II. Spoliation Of Evidence

    Trigon charges the United States with spoliation of evidence that could have been
    used by Trigon to cross-examine the United States’ testifying experts to test the
    substance of their opinions and to show a lack of independence.   The first step
    in resolving Trigon’s motion is to understand the concept of spoliation.

    [4] Spoliation is the willful destruction of evidence or the failure to preserve
    potential evidence for another’s use in pending or future litigation.   See   West
    v. Goodyear Tire & Rubber Co., 167 F.3d 776, 778 (2nd Cir.1999) ( “Spoilation is
    the destruction or significant alteration of evidence, or the failure to preserve
    property for another’s use as evidence in pending or reasonably foreseeable
    litigation.”);   Black’s Law Dictionary, 1401 (6th ed.1997) (defining spoliation
    as “[t]he intentional destruction of evidence….”).  See also  Vodusek v.
    Bayliner Marine Corp., 71 F.3d 148, 156 (4th Cir.1995);   Schmid v. Milwaukee
    Elec. Tool Corp., 13 F.3d 76, 78 (3rd Cir.1994).

    It has long been the rule that spoliators should not be able to benefit from their
    wrongdoing.   This policy is captured in the maxim omnia presumuntur contra
    spoliatorem, which means, “all things are presumed against a despoiler or
    wrongdoer.”   Black’s Law Dictionary, 1086 (6th ed.1997).

    Recognizing acts of spoliation and punishing the spoliators is the result of
    judicial recognition that the “spoliated physical evidence” is often the best
    evidence as to what has really occurred and that there is an inherent unfairness
    in allowing a party to destroy evidence and then to benefit from that conduct.
    See Bart S. Wilhoit, Spoliation of Evidence:  The Viability of Four Emerging
    Torts, 46 UCLA L. REV. 631 (1998).   As this Court pointed out only a short  time
    ago, “[t]he [spoliation] inference stems from the ‘common sense observation that a
    party who has notice that [evidence] is relevant to litigation and who proceeds to
    destroy [evidence] is more likely to have been threatened by [that evidence] than
    a party in the same position who does not destroy the [evidence].’ ”   Anderson  v.
    National Railroad Passenger Corporation, 866 F.Supp. 937, 945 (E.D.Va.1994)
    (quoting  *285Nation-Wide Check Corp. v. Forest Hills Distributors,  Inc., 692
    F.2d 214, 218 (1st Cir.1982)).   The destruction of evidence can lead to manifest
    unfairness and injustice, for it increases the risk of an erroneous decision on
    the merits of the underlying cause of action and can increase the costs of
    litigation as parties attempt to reconstruct the destroyed evidence or to develop
    other evidence that may be less persuasive, less accessible or both.

    A. The Authority Of The Court To Fashion A Remedy

    [5][6] Though the Court admonished counsel for the United States that it was
    “playing with fire” by resisting the production of documents to which Trigon may
    be entitled, the Court did not issue an order outlining specifically what the
    United States should turn over to Trigon.   Thus, the United States is not in
    violation of a court order and is not in contempt.   Nonetheless, the inherent
    authority to control litigation empowers a court to sanction the spoliation of
    evidence even absent an antecedent order.  “Certain implied powers must
    necessarily result to our Courts of justice from the nature of their institution,”
    powers “which cannot be dispensed with in a Court, because they are necessary to
    the exercise of all others.”   United States v. Hudson, 7 Cranch 32, 34, 3  L.Ed.
    259 (1812);  see also  Roadway Express, Inc. v. Piper, 447 U.S. 752, 764, 100
    S.Ct. 2455, 2463, 65 L.Ed.2d 488 (1980) (citing Hudson).  “Courts of justice are
    universally acknowledged to be vested, by their very creation, with power to
    impose silence, respect, and decorum, in their presence, and submission to their
    lawful mandates.”   Anderson v. Dunn, 6 Wheat. 204, 227, 5 L.Ed. 242 (1821);   see
    also Ex parte  Robinson, 86 U.S.  [19 Wall.] 505, 510, 22 L.Ed. 205 (1873).
    “These powers are ‘governed not by rule or statute but by the control necessarily
    vested in courts to manage their own affairs so as to achieve the orderly and
    expeditious disposition of cases.’ ”   Chambers v. NASCO, Inc., 501 U.S. 32, 43,
    111 S.Ct. 2123, 2132, 115 L.Ed.2d 27 (1991) (quoting  Link v. Wabash R. Co., 370
    U.S. 626, 630-631, 82 S.Ct. 1386, 1388-1389, 8 L.Ed.2d 734 (1962)).

    Decisional law recognizes that these inherent powers include the inherent
    authority to sanction spoliation of evidence.   For example, in  Dillon v.  Nissan
    Motor Co., 986 F.2d 263 (8th Cir.1993), the Eighth Circuit held that, to exclude
    testimony of an expert who has destroyed evidence, the moving party need not
    demonstrate violation of a court order.   The court upheld the district court’s
    exclusion of the expert’s testimony based on a finding that “both [the] expert and
    [the] attorney knew or should have known that the car was an important piece of
    evidence which should have been preserved in its entirety.”  Id. “Sanctions may be
    imposed against a litigant who is on notice that documents and information in its
    possession are relevant … or are reasonably calculated to lead to the discovery
    of admissible evidence, and destroys such documents.”  Id.

    In  W.R. Grace, 2000 WL 1843258 *10, the court stated that “[w]hile violation,
    through spoliation, of a court order directing production of discoverable evidence
    will support sanctions, the absence of such an order does not prevent sanctions
    based upon the court’s inherent authority to control the litigation.”   The Second
    Circuit also has held that “[e]ven without a discovery order, a district court may
    impose sanctions for spoliation, exercising its inherent power to control
    litigation.”   West, 167 F.3d at 779.   See also  Chambers v. NASCO, Inc.,  501
    U.S. 32, 43-45, 111 S.Ct. 2123, 115 L.Ed.2d 27 (1991);   Sassower v. Field, 973
    F.2d 75, 80-81 (2nd Cir.1992).

    The Fourth Circuit has considered spoliation where no court order had been issued
    and therein recognized that, in addressing spoliation, district courts have
    considerable discretion, including ordering dismissal, granting summary judgment,
    or permitting an adverse inference to be drawn against the party as a means of
    leveling the playing field and sanctioning the conduct of the party.   See
    Vodusek v. Bayliner Marine Corp., 71 F.3d 148, 156 (4th Cir.1995) (“when a
    proponent’s intentional conduct contributes to the loss or destruction of
    evidence, the trial court has discretion to pursue a wide range of responses both
    for the purpose of leveling the evidentiary playing field and for the purpose of
    sanctioning the improper conduct.”).   *286 See also  West, 167 F.3d at  779;
    Schmid, 13 F.3d at 78;   Welsh v. United States, 844 F.2d 1239, 1246 (6th
    Cir.1988);   Nation-Wide Check Corp., 692 F.2d at 218;   Hartford Ins. Co.  of
    Midwest v. American Automatic, 23 F.Supp.2d 623, 626 (D.Md.1998).

    B. Analysis Of Spoliation

    The leading authority in the Fourth Circuit respecting spoliation is Vodusek
    wherein the plaintiff’s husband died as a result of second and third degree burns
    following the explosion of her husband’s boat;  and in developing evidence to
    support allegations of product liability and negligence, agents of the plaintiff,
    namely her two children and an expert in marine vessel safety, employed
    destructive testing methods that rendered many portions of the boat useless for
    examination by the defendants and their experts.   In its analysis, the district
    court first concluded that the plaintiff had a duty not to take any action that
    would cause the destruction or loss of relevant evidence where to do so would
    hinder the opposing side from making its own examination and investigation of all
    potentially relevant evidence.   As a result of the substantial destruction of the
    boat by the plaintiff’s agents, the district court gave an adverse inference
    charge to the jury and the jury subsequently found for the defendant.

    On appeal, the Fourth Circuit upheld the adverse inference instruction.
    Plaintiff argued that the adverse inference was not warranted because the
    defendants could not show that she acted in bad faith.   The Court of Appeals
    rejected that argument, finding instead that “[w]hile a finding of bad faith
    suffices to permit such an inference, it is not always necessary.”  Vodusek, at
    156 (citing to  Glover v. B.I.C. Corp., 6 F.3d 1318, 1329 (9th Cir.1993)).    The
    court articulated the following reasoning:

    To draw an adverse inference from the absence, loss or destruction of evidence,
    it would have to appear that the evidence would have been relevant to an issue
    at trial and otherwise would naturally have been introduced into evidence.

    Even the mere failure, without more, to produce evidence that naturally would
    have elucidated a fact at issue permits an inference that “the party fears [to
    produce the evidence];  and this fear is some evidence that the circumstance or
    document or witness, if brought, would have exposed facts unfavorable to the
    party.”   2 Wigmore on Evidence, s 285 at 192 (Chadbourn rev.1979).

    Vodusek, 71 F.3d at 156.

    The Fourth Circuit then articulated the guiding precept that, when a “proponent’s
    intentional conduct contributes to the loss or destruction of evidence, the trial
    court has discretion to pursue a wide range of responses both for the purpose of
    leveling the evidentiary playing field and for the purpose of sanctioning the
    improper conduct.”   Vodusek, 71 F.3d at 156 (citing to  Welsh v. United  States,
    844 F.2d 1239, 1246 (6th Cir.1988);   Nation-Wide Check Corp., 692 F.2d at 218).

    [7] Of particular import to the facts of this case, the court, in Vodusek, stated
    that “[w]hile Vodusek may not have acted in bad faith in destroying portions of
    the boat, those portions were permanently destroyed as part of Halsey’s deliberate
    investigative efforts.”   Vodusek, 71 F.3d at 156.   Thus, proof of bad faith  is
    not necessary to obtain relief from spoliation.

    [8] To establish a claim of spoliation, a movant must show that the adverse party
    had a duty to preserve the allegedly spoiled documents and that the documents were
    intentionally destroyed.   The natural consequence of spoliation is that the
    moving party was prejudiced by the destruction.   The degree of culpability and
    the prejudice suffered by the moving party will guide a Court in its formulation
    of remedial and punitive action.   Each of the elements and considerations are
    analyzed below.

    1. Duty To Preserve Evidence

    [9] Though the Fourth Circuit has not specifically spoken to the duty to preserve
    evidence in this context, it is a necessary predicate of the controlling Fourth
    Circuit decisions that such a duty exists, because, without such an obligation,
    there would be no wrongdoing in destroying relevant documents.   In Vodusek, the
    Court of Appeals quoted with approval the district court’s finding*287  that there
    exists “the duty of a party, a party’s counsel and any expert witness, not to take
    action that will cause the destruction or loss of relevant evidence….”  Vodusek,
    71 F.3d at 155.   This Court, too, has noted that some degree of knowledge  that
    evidence should be preserved is a necessary predicate to a finding of spoliation:
    “the cases require at a minimum that the party must have tampered with the
    evidence in some way while on notice that the evidence ‘might be necessary’ to
    some party’s claim.”   Anderson v. National Railroad Passenger Corp., 866 F.Supp.
    937, 945-46 (E.D.Va.1994) (citing to  Nation-Wide Check Corp., 692 F.2d at 219).
    Thus, it is settled that, if a party has notice (by a discovery request, by the
    provisions of a rule requiring disclosure or otherwise), that evidence is
    necessary to the opposing party’s claim, that party is under a duty not to take
    actions that would result in the destruction of the evidence.

    [10] Other courts also have held that, in order for spoliation to have occurred,
    “the party having control over the evidence must have had an obligation to
    preserve it at the time it was destroyed.”   Kronisch v. United States, 150 F.3d
    112, 126 (2nd Cir.1998).   See  Skeete v. McKinsey & Company, Inc., 1993  WL
    256659, *3 (S.D.N.Y.1993);   Turner v. Hudson Transit Lines, Inc., 142 F.R.D. 68,
    72 (S.D.N.Y.1991).   Such a duty “arises when the party has notice that the
    evidence is relevant to litigation.”   Kronisch, 150 F.3d at 126.   See  Bowman  v.
    American Medical Systems, Inc., 1998 WL 721079, 1998 U.S. Dist. LEXIS 16082
    (E.D.Pa.1998) (stating that it is well established that a plaintiff who brings an
    action based on an allegedly defective product has a duty to preserve the product
    for the defense’s inspection).

    2. Intention To Destroy Evidence

    [11] Once a court concludes that a party was obliged to preserve the evidence, it
    must then consider whether the evidence was intentionally destroyed and the likely
    contents of that evidence.   Reference to the intentional destruction of documents
    does not imply that bad faith is necessary for the imposition of sanctions for
    spoliation.   In Vodusek, the Fourth Circuit upheld a spoliation inference on the
    basis that the agent of the plaintiff acted intentionally in his investigation,
    which resulted in the loss of the relevant evidence.   The court noted that “[a]n
    adverse inference about a party’s consciousness of the weakness of his case …
    cannot be drawn merely from his negligent loss or destruction of evidence;  the
    inference requires a showing that the party knew the evidence was relevant to some
    issue at trial and that his willful conduct resulted in its loss or destruction.”
    Vodusek, 71 F.3d at 156.   See  Kronisch, 150 F.3d at 127;   Caparotta v.  Entergy
    Corp., 168 F.3d 754, 756 (5th Cir.1999) (adverse inference “predicated on bad
    conduct”);   Anderson v. Production Management Corp., 2000 WL 492095, at *4
    (E.D.La.2000) (no adverse inference absent a showing of bad conduct);   In re
    Hopson Marine Transp., Inc., 168 F.R.D. 560, 567 (E.D.La.1996) (requiring wrongful
    denial).   As this Court has reasoned in the past, some quantum of blameworthiness
    is required before sanctions for spoliation may obtain.   See  Anderson v.
    National Railroad Passenger Corporation, 866 F.Supp. 937, 946 (E.D.Va.1994) (“Of
    course … some threshold level of blameworthiness is required before spoliation,
    if in fact shown to have occurred, becomes relevant.”).

    3. Arriving At The Appropriate Remedy

    [12][13] Once spoliation has been established, the sanction chosen must achieve
    deterrence, burden the guilty party with the risk of an incorrect determination
    and attempt to place the prejudiced party in the evidentiary position it would
    have been in but for the spoilation.   See  West, 167 F.3d at 779;   Kronisch,  150
    F.3d at 126;   W.R. Grace, 2000 WL 1843258, *10.   “Also, as the First  Circuit
    observed in Nation-Wide Check Corp., a ‘district court has some discretion in
    determining how much weight to give the [spoliation], and prophylactic and
    punitive considerations may appropriately be taken into account.’ ”   Anderson,
    866 F.Supp. at 945-946 (quoting  Nation-Wide Check Corp., 692 F.2d at 219).
    There is no single test or set of considerations that has been developed to apply
    to circumstances of spoliation.   As cogently explained in  *288Gates Rubber Co.
    v. Bando Chemical  Industries, Ltd., 167 F.R.D. 90, 102 (D.Colo.1996):

    There are obvious reasons which demonstrate why the criteria for sanctions
    cannot be reduced to a formula or standardized test.  ‘Determination of the
    correct sanction for a discovery violation is a fact-specific inquiry,’ [
    Ehrenhaus v. Reynolds, 965 F.2d 916, 919 (10th Cir.1992)], and in making such a
    determination trial courts are accorded broad discretion.   National Hockey
    League v. Metropolitan Hockey Club, 427 U.S. 639, 642, 96 S.Ct. 2778, 2780-81,
    49 L.Ed.2d 747 (1976)….. Thus, judicial decisions which are discretionary
    cannot be tied down to a fixed rule or formula.   If such were the case,  courts
    would lose their flexibility in the sanctions process, and discretion would lose
    its meaning.

    Id.

    Notwithstanding that each case must be decided on its own facts and that there is
    no definitive set of factors that must be considered in formulating an appropriate
    sanction for spoliation, on careful evaluation of the existing and applicable body
    of jurisprudence, the most important considerations for determining the
    seriousness of the sanctions were outlined by the United States Court of Appeals
    for the Third Circuit in  Schmid v. Milwaukee Elec. Tool Corp., 13 F.3d 76 (3rd
    Cir.1994):

    (1) the degree of fault of the party who altered or destroyed the evidence;

    (2) the degree of prejudice suffered by the opposing party;  and

    (3) whether there is a lesser sanction that will avoid substantial unfairness to
    the opposing party and, where the offending party is seriously at fault, will
    serve to deter such conduct by others in the future.

    Id. at 79 (citations omitted).   See also  Bowman, 1998 WL 721079, 1998 U.S.  Dist.
    LEXIS 16082.

    [14] Given the rationale for, and the policy behind, the rule against spoliation,
    assessment of sanctions depends most significantly on the blameworthiness of the
    offending party and the prejudice suffered by the opposing party.   See also
    Hartford, 23 F.Supp.2d at 626 (The rule takes into account the “blameworthiness of
    the offending party and the prejudice suffered by the opposing party.”);   Gates,
    167 F.R.D. at 104 (“to determine the appropriateness of certain sanctions, whether
    dispositive or otherwise, the Court must balance the degree of misconduct
    evidenced by a party’s mental state against the degree of harm which flows from
    the misconduct.”);   Anderson, 866 F.Supp. at 945-46 (“the cases require at a
    minimum that the party must have tampered with the evidence in some way while on
    notice that the evidence ‘might be necessary’ to some party’s claim.” (citation
    omitted)).

    Trigon’s spoliation claim and its request for the imposition of sanctions will be
    measured against these principles.

    C. Application Of Spoliation Analysis

    1. Was There A Duty To Preserve The Evidence At Issue?

    [15] The communications between AGE and the testifying experts, the communications
    between the testifying experts, and the draft reports of the experts are evidence.
    As noted in Section I, under the mandatory disclosure rules of Fed.R.Civ.P.
    26(a)(2) as applied to the facts of this case, the United States was obligated to
    produce the allegedly spoiled materials from the time of their genesis.   Thus,
    the United States and its agents, namely AGE and the testifying experts, were on
    notice that the materials were to be preserved so that they could be disclosed at
    the appropriate time.   The United States also was obliged to produce the
    materials pursuant to various document requests made by Trigon from December 2000
    through March 2001.   Though the majority of the requests were informal, they
    certainly gave the United States ample notice that the allegedly spoiled evidence
    was sought after.   Finally, the Court itself advised the United States that is
    was “playing with fire” in its hesitation to produce documents.   The ample
    advance notice given to the United States was sufficient to have prompted the
    United States affirmatively to assure the preservation of the allegedly spoiled
    documents by AGE and the testifying experts.   Therefore, *289 the United States
    was duty-bound not to destroy such documents.

    2. Was The Evidence Intentionally Destroyed?

    Clearly, the communications and drafts at issue were destroyed.   Some have been
    recovered from cyberspace by the efforts of AGE and Deloitte & Touche.   Others
    have not, and there is no way even to ascertain the nature or volume of the
    unrecovered evidence.

    [16] The United States seeks refuge from a finding of intentional destruction in
    its assertion that, until March 19, 2001, Trigon did not specifically ask for
    “draft reports”.   The United States also argues that AGE’s document retention
    policy precludes responsibility. Neither contention saves the United States from
    the conclusion that the evidence was destroyed intentionally.

    As explained above (Section I), Trigon’s document requests-fairly read and given
    their ordinary meaning-called for production of the evidence at issue as of
    December 26, 2000.   In January 2001, the Court made it clear that materials
    considered by experts was discoverable.   And, Rule 26, as well as the body of  law
    interpreting it, as applied to the facts here require disclosure of such evidence.
    Nonetheless, the United States took no steps to preserve evidence that it knew, or
    was charged with knowing, must be disclosed.   Its failure to discharge its known
    duty is sufficient to support a finding of intentional destruction under the
    circumstances.

    [17] Nor can the United States scapegoat AGE’s document retention policy.   AGE
    holds itself out to have expertise in litigation consulting.   AGE is the agent of
    the United States in arranging for the expert testimony to be given in this action
    on behalf of the United States.   As such, AGE is charged with knowing that
    materials reviewed by a testifying expert must be preserved and eventually
    produced to the opposing party.   The document retention policies of AGE do not
    trump the Federal Rules of Civil Procedure or requests by opposing counsel, even
    if the requests primarily are informal.   Moreover, AGE’s execution of a document
    retention policy that is at odds with the rules governing the conduct of
    litigation does not protect the United States from a finding of intentional
    destruction.

    In this case, documents and communications were willfully and intentionally
    destroyed by the United States’ non-testifying and testifying experts.   The
    documents destroyed should have been produced and would have been admissible at
    trial for cross-examination and Daubert purposes.

    3. Appropriate Remedy For The Spoliation

    Drafts of expert opinions and communications between experts and third parties
    assisting and preparing the experts would be highly useful to test both the
    substance of the testifying experts’ opinions and the independence of each
    testifying expert in arriving at his opinion.   That is especially true where the
    experts are in the retinue of a consultant who admittedly is involved in shaping
    the experts’ testimony and perhaps even their opinions, a thankfully unorthodox
    situation even in the world of today’s litigation.

    The ability meaningfully to cross-examine experts is important because their
    reliability is essential to the adversary system.   With the increasing demand for
    expert testimony by litigants, an astounding number of “expert consultants” has
    arrived on the scene. Some of these “experts” are of dubious assistance to the
    trier of fact, notwithstanding that they may qualify as experts under the standard
    established by the Supreme Court in  Daubert, 509 U.S. 579, 113 S.Ct. 2786, 125
    L.Ed.2d 469, and the Federal Rules of Evidence.   Because experts are often less
    then helpful and sometimes misleading, effective cross-examination by an opposing
    party is an essential tool for exposing any weaknesses in the expert’s opinions.
    One such potential weakness is the source of information the expert has considered
    (whether accepted or rejected) in forming his opinions.   It can be important for
    the trier of fact to know whether the expert’s opinion was arrived at after an
    independent review of all relevant facts or whether the opinion was formed in
    reliance on “facts” chosen and presented by an attorney*290  advocating a
    particular position or by a litigation consultant.   Of course, that information
    can surface on cross-examination only if an opposing party has been able to
    discover the material provided to the expert by the lawyer or consultant.

    The analysis of prejudice requires us to remember that the pertinent rules of
    evidence, the underlying philosophy behind allowing experts to testify, as well as
    the interests of justice, mandate that a testifying expert give his own opinion,
    arrived at by a reliable mode of analysis and that the opinion is not driven by a
    desire to reach a particular outcome, but by the principled application of
    “reliable principles and methods” to “sufficient facts or data”.  Fed.R.Evid. 702.
    Further, it is important to recall that, notwithstanding the contrary views of
    some litigation consultants and lawyers, it is specifically not an expert’s
    position to advocate for a party, lest the witness ceases to be an expert whose
    testimony is valuable because he or she is not an advocate and becomes, instead,
    just another legal practitioner for the client.

    Considered in perspective of these principles, it is obvious that the effect of
    the spoliation of the documents here is most serious indeed.   The documents
    destroyed by AGE and the testifying experts were important in testing the
    substantive validity of the experts’ opinions as well as the fundamental
    credibility of the witnesses’ claims of expertise and independence.   These
    documents, which show in a way no other evidence can, the evolution of the
    experts’ opinions and the influences upon them, are invaluable.

    And, the United States and AGE certainly were aware of the value of the documents
    which were spoiled.   In fact, the rather obvious effect, and perhaps even the
    purpose, of AGE’s document retention policy was to eliminate this source of
    undeniably meaningful cross-examination resource about the substance of the expert
    opinions and about the ghost writing of the opinions.

    Through judicial intervention, the potentially irreparable prejudice to Trigon was
    ameliorated by requiring a computer  forensics expert to search the electronic
    ether for missing documents.   Deloitte & Touche found a significant quantity of
    the documents, the destruction of which was attempted.   Thus, Trigon will be able
    effectively to cross-examine most of the United States’ testifying experts.

    However, the efforts of Deloitte & Touche did not ameliorate Trigon’s prejudice
    respecting Dr. Feldstein.   Notwithstanding that AGE admitted to providing a
    “higher level of assistance” in drafting Dr. Feldstein’s report (see Memorandum in
    Opposition to Plaintiff’s Motion for Appropriate Relief, at 12), Deloitte & Touche
    was unable to recover any of the drafts of Dr. Feldstein’s report sent to AGE or
    to the other testifying experts, or returned from AGE or the other testifying
    experts, and only a very few e-mails between AGE and Dr. Feldstein relating to his
    report.   See Trigon’s Supplemental Brief on Motion for Appropriate Relief, at 14.
    Fragments of e-mails that were recovered by Deloitte & Touche evidence that Dr.
    Feldstein’s report was written in some part by AGE. Id. at 14-15.   For instance,
    one fragment of an e-mail from Dr. Feldstein to Malinik of AGE read:

    This is very rough.   Just to get started.   Feel free to totally change it  in
    any way you think best.   In a report these points might have to be  dropped,
    changed, expanded, the format changed, etc.   I have no concern with it being
    changed.

    Id. at 14, Exhibit 8. Deloitte & Touche also recovered a message from Malinik to
    Dr. Feldstein asking him to review an AGE draft of Dr. Feldstein’s report that
    contained the remarkable directive to the supposed author:  “PLEASE DO NOT WORK ON
    THE END OF YOUR REPORT YET BECAUSE WE ARE DOING SO.” Id. at 15, Exhibit 9.

    These communications raise serious doubts respecting whether the opinions to which
    Dr. Feldstein intends to testify are his own.   Without doubt, Trigon has been
    substantially prejudiced in its ability to cross-examine Dr. Feldstein as to both
    the substance of his report and as to potential issue of expert independence.FN9

    FN9. Furthermore, the communications between AGE and Dr. Felstein raise
    serious questions whether the same modus operandi has been pursued by AGE
    with the other experts, which cannot be shown now because Deloitte & Touche
    was unable to recover all of the spoliated evidence for each expert.   Thus,
    the evidence relating to Dr. Feldstein also is a harbinger of prejudice that
    could taint all of the expert evidence to be offered by the United States.

    *291 [18][19] In sum, Trigon has suffered prejudice in the form of a diminished
    ability to cross-examine the testifying experts of the United States about the
    substantive validity of their opinions, the way the opinions were arrived at, and
    the independence of the experts.   Trigon has shown that the prejudice is quite
    extensive as to Dr. Feldstein.   Fortunately, however, the efforts of Deloitte &
    Touche reduced the extent of that prejudice as to the other experts.   Trigon
    tacitly has conceded as much by expressly declining to have those experts
    precluded from testifying.   In fact, Trigon eschewed the opportunity even to have
    Dr. Feldstein’s testimony precluded.   Instead, Trigon asks that adverse
    inferences be drawn against the substance of the experts’ testimony and their
    credibility in general. Further, Trigon asks that AGE be foreclosed from further
    communicating with the experts or from participation in the trial.   Finally,
    Trigon asks that it be awarded attorneys fees and expenses incurred as the
    consequence of the spoliation.

    Although preclusion might well have been an appropriate sanction for the conduct
    described above, it is not appropriate in perspective of the remedial measures
    that recovered significant segments of the spoliated evidence.   Furthermore, this
    case is one of first impression under a new statute that ought to be resolved on
    its merits and that cannot be decided without expert evidence.   Hence, it would
    be necessary to allow the United States to retain new experts if its current
    experts were precluded from testifying.   Trigon asserts that the delay, expense
    and tactical disadvantages that would ensue if the United States were allowed to
    start over would constitute an even greater prejudice than currently exists.
    Therefore, on the facts of this case, preclusion of testimony is not an
    appropriate sanction.

    However, it is appropriate to draw adverse inferences respecting the substantive
    testimony and credibility of the experts.   That will be done based on the
    evidence presented at trial.

    Furthermore, it is necessary to assure that AGE does not further complicate the
    process of evaluating the expert evidence to be offered by the United States.
    Considering the actions taken by AGE that caused the present spoliation and its
    uncooperative attitude in attempting remediation when asked to do so by Trigon,
    that result can be accomplished only by foreclosing AGE’S further participation in
    any aspect of the development and presentation of the expert testimony to be
    offered by the United States.FN10

    FN10. AGE will be allowed to provide copies of existing documents requested
    by counsel for the United States’ use in presenting such testimony or in
    cross-examining the experts offered by Trigon.

    Finally, Trigon is entitled to recover attorneys fees and costs incurred as a
    consequence of the spoliation of evidence.   That, however, can await conclusion
    of the trial.FN11

    FN11. There has been significant expense in the briefing, deposing of
    experts, argument and hiring of computer  forensics experts to adjudicate
    the issues considered herein.   At the conclusion of the litigation of the
    merits of this action, Trigon may present an application for fees and costs
    associated with the United States’ spoliation of documents.

    Considering the degree of culpability, the quantum of prejudice and the least
    severe, but most effective, sanction leads to the conclusion that the foregoing
    sanctions are appropriate on the record here presented.

    III. Ghost Writing

    [20] Trigon also complains that the testifying experts’ reports have been ghost
    written by AGE and thus ought to be substantially discounted.   Ghost writing a
    testifying expert’s report is the preparation of the substance writing of the
    report by someone other than the expert purporting to have written it.

    Unquestionably, Rule 26 requires an expert witness to prepare his own Rule 26
    Report.   The Advisory Committee Notes accompanying this rule clarify the intended
    *292 meaning of the phrase “prepared and signed by the witness”, explaining that a
    report can be “prepared” by an expert witness even if counsel has aided the
    witness in preparing an expert’s report.   Specifically, the Advisory Committee
    Notes provide that:

    Rule 26(a)(2)(B) does not preclude counsel from providing assistance to experts
    in preparing the reports, and indeed, with experts such as automobile mechanics,
    this assistance may be needed.   Nevertheless, the report, which is intended to
    set forth the substance of the direct examination, should be written in a manner
    that reflects the testimony to be given by the witness and it must be signed by
    the witness.

    Rule 26, Advisory Committee Notes;  see also 8 Charles A. Wright, Arthur R. Miller
    & Richard L. Marcus, Federal Practice and Procedure:  Civ.2d s 2031.1 (2nd ed.1994
    & Supp.1999) (the Advisory Committee Notes to Rule 26 indicate that “it is
    expected that counsel may assist some witnesses” in preparing their reports).
    Though the Advisory Committee Notes offer some guidance, uncertainty remains as to
    acceptable level of involvement that counsel or others may have in the preparation
    of the expert report.

    Recent cases have helped to clarify this issue.   In  Marek v. Moore, 171  F.R.D.
    298 (D.Kan.1997), an expert had submitted a report to counsel who had engaged him.
    The lawyers made authorized revisions, fleshing out certain parts of the report,
    and then submitted the revised, unsigned version to opposing counsel as their
    expert’s rule 26(a)(2)(B) report.   Marek, 171 F.R.D. at 300.   The Marek  expert
    stated in his deposition that he had not prepared the final report, and opposing
    counsel moved to strike the expert report under Rule 37(c)(1).   The court
    declined to strike the report, stating that:

    [u]nlike the attorney, the expert witness more likely preoccupies himself with
    his profession or field of expertise.   He may have little appreciation or none
    whatsoever for Rule 26 and its exacting requirements for a legally ‘complete’
    report of the expert opinions, including all the ‘data or other information’;
    and designating all supporting exhibits.

    Marek, 171 F.R.D. at 301.   The court continued:

    To help ensure complete disclosure of the required information, counsel
    ordinarily should supervise preparation of the expert’s witness report.   Such
    assistance is permitted, though the report should be written in a manner that
    reflects the testimony to be given by the expert witness and must be signed by
    the expert.

    Marek, 171 F.R.D. at 301 (quoting William W. Schwarzer, et al., Civil Discovery
    and Mandatory Disclosure:  A Guide to Efficient Practice s 1[b][3] (2nd ed.1994)).

    The court found no evidence “to suggest some supervening domination over the
    witness by counsel or some improper conduct by either of them to support an
    argument that the report is not that of the witness,”  Marek, 171 F.R.D. at 302,
    and noted that it could find “no sufficient difference between the original and
    later versions of the report that should disqualify it as one prepared in
    substance by the witness.”  Id.FN12 But the court in Marek also emphasized that it
    was not suggesting “that attorneys have license to change the opinions and reports
    of expert witnesses.”  Id. at 302.   In arriving at its conclusion, the court  made
    the distinction between those opinions that an expert “freely authorized and
    adopted as his own” and those that are done “merely for appeasement or because of
    intimidation or some undue influence by the party or counsel who has retained
    him.”  Id. FN13

    FN12. The court also refused to disqualify a witness on the basis that he
    had changed his testimony after speaking with an attorney, but would instead
    give opposing counsel an opportunity to cross-examine the witness to “expose
    inconsistencies of importance.”

    FN13. No doubt inclusion of an opinion for purpose of appeasement or because
    of intimidation or undue influence would serve to disqualify the opinion
    thusly obtained.   However, ghost writing is not limited to such drastic
    modes of obtaining an expert’s signature to an opinion not truly his own.

    In  Indiana Ins. Co. v. Hussey Seating Co., 176 F.R.D. 291, 292 (S.D.Ind.1997),
    the expert testified at his deposition that the plaintiff’s*293  attorneys
    prepared his Rule 26 disclosure.   The court observed that, “[f]ortunately for
    Plaintiff, the [expert’s] deposition did not conclude on the spot,” as the expert
    went on to testify that, among other things, he had personally prepared the nine
    opinion reports and the work papers attached to the Rule 26 disclosure.  Id. The
    expert also testified that the opinions in the disclosure were his.  Id. The court
    found that, while “Rule 26 unquestionably requires an expert witness to prepare
    his own Rule 26 Report,” Rule 26(a)(2)(B) contemplated this type of assistance and
    that the expert had specifically embraced the entire disclosure, the court found
    that the expert’s involvement in the preparation of his report satisfied the
    rules.  Id. at 293.

    The Hussey court then found that the expert’s report satisfied Rule 26 because the
    expert personally had prepared the heart of the disclosure:  the attachments
    consisting of his opinions and work papers.  Id. In addition, the expert had
    drafted the portion of the report that included his opinions and bases for them.
    Id. It also noted that the materials prepared by counsel, such as the summary of
    the expert’s qualifications, did not directly relate to the expert’s opinion and
    were “paraphrased” by counsel from conversations with the expert.  Id.FN14

    FN14. Of course, under the circumstances presented in Hussey, the court
    credited the expert’s testimony that the opinions were his own considering
    the evidence of independent thought shown in the experts own work papers.
    That clearly shows the importance of preserving draft reports and it
    illustrates that, absent evidence to support the expert’s testimony that the
    report is his own, the court would be justified in refusing to credit the
    expert on that issue.

    Two years after Marek and Hussey, the court in  Manning v. Crockett, 1999 WL
    342715 (N.D.Ill.1999), faced a slightly different situation.   In Manning, the
    plaintiffs’ expert signed a report that was “remarkably similar” to the
    plaintiffs’ complaint, although written in narrative form.   Id. at *1. The
    plaintiffs’ counsel also signed the report.  Id.

    Marek and Hussey, as well as the advisory committee notes to Rule 26(a)(2),
    stand for the proposition that some attorney involvement in the preparation of
    an expert report is permissible, but that the expert must also substantially
    participate in the preparation of his report.   Thus, certain kinds of help are
    clearly in tune with the concept of assisting the expert discussed in Marek,
    Hussey, and the advisory committee notes.   Specifically, an attorney’s
    assistance with the preparation of documents required by Rule 26, such as a list
    of cases in which the expert has testified, or fine-tuning a disclosure with the
    expert’s input to ensure that it complies with the rules is permissible.

    Manning, 1999 WL 342715, *2-3.

    In again refusing to strike the report, the court contrasted the facts in Manning
    with the circumstances in which counsel had “ghost-written” a report “from whole
    cloth” and asked the expert to sign it as if it were his own.  Id.

    In contrast, preparing the expert’s opinion from whole cloth and then asking the
    expert to sign it if he or she wishes to adopt it conflicts with Rule
    26(a)(2)(B)’s requirement that the expert “prepare” the report.   Preparation
    implies involvement other than perusing a report drafted by someone else and
    signing one’s name at the bottom to signify agreement.

    In other words, the assistance of counsel contemplated by Rule 26(a)(2)(B) is
    not synonymous with ghost-writing.   The court thus disagrees with the Manning’s
    belief that “no rule … prohibits an expert from adopting the precise language
    alleged in a complaint” in his report.

    Manning, 1999 WL 342715, at *2-3.   The court further reasoned that, “[a]llowing
    an expert to sign a report drafted entirely by counsel without prior substantive
    input from an expert would read the word ‘prepared’ completely out of the rule.”
    Id.FN15

    FN15. Ultimately, the court refused to strike the expert report because the
    defense counsel had failed to demonstrate that the expert “lacked
    significant personal involvement in the preparation of his report.”  Id. at
    *4.

    In re Jackson Nat’l Life Ins. Co. Premium Litig., 1999 U.S. Dist. LEXIS 17153
    (W.D.Mich.1999), involved three expert reports in three different cases that were
    remarkably*294  similar in their language and conclusions.   The first report was
    signed by one of plaintiffs’ actuarial experts, but the other two reports were
    signed by another expert.   The Magistrate Judge concluded that “the substantial
    similarity among the three expert witness reports derived from the authorship of
    their common language by plaintiffs’ counsel.”  Id. at *3. Thus, the Magistrate
    Judge held that the report in the Jackson National case had not been “prepared by”
    the expert within the meaning of Rule 26(a)(2) and that, therefore, it should be
    stricken under Rule 37(c)(1).  Id. On review, the district court, citing the
    decisions in Marek and Hussey, affirmed the decision of the Magistrate Judge
    reasoning that:

    The record clearly supports the finding that the language of Mr. Bieluch’s
    report, including the formulation of his opinions, was not prepared by him, but
    was provided to him by plaintiffs’ counsel.   Granted, Rule 26(a)(2)
    contemplates some assistance of counsel in the preparation of an expert’s
    report.   See  Marek v. Moore, 171 F.R.D. 298 (D.Kan.1997).    However,
    undeniable substantial similarities between Mr. Bieluch’s report and the report
    of another expert prepared with assistance from the same counsel in an unrelated
    case, demonstrate that counsel’s participation so exceeded the bounds of
    legitimate “assistance” as to negate the possibility that Mr. Bieluch actually
    prepared his own report within the meaning of Rule 26(a)(2).   Plaintiffs’
    failure to furnish defendant with a report prepared by Mr. Bieluch constitutes a
    violation of Rule 26(a)(2).   See  Indiana Ins. Co. v. Hussey Seating Co.,  176
    F.R.D. 291, 293-94 (S.D.Ind.1997) (parenthetical omitted).

    In re Jackson Nat’l Life Ins. Co. Premium Litig., 46 Fed.R.Serv.3d 201, 5:96-
    MDL-1122, 2000 U.S. Dist. LEXIS 1318, at *2-3 (W.D.Mich. Feb. 8, 2000).   The
    district court further held that the sanction of exclusion under Rule 37(c)(1) was
    justified because the expert had given misleading and evasive answers when
    confronted at his deposition with questions about the authorship of his report.
    Id. at *5. Other courts have also discounted expert testimony when experts merely
    express the opinions of the lawyers who hired them.   See, e.g., C.  Baxter  Int’l.
    Inc. v. McGaw, Inc., No. 95 C 2723, 1996 WL 145778, at *4 (N.D.Ill.1996), aff’d in
    part and rev’d in part on other grounds,  149 F.3d 1321 (Fed.Cir.1998) (court
    disregarded an expert report because the expert did not independently prepare his
    report);   Marbled Murrelet v. Pacific Lumber Co., 880 F.Supp. 1343, 1365
    (N.D.Cal.1995), aff’d,  83 F.3d 1060 (9th Cir.1996) (finding that the expert’s
    testimony lacked objectivity and credibility where it appeared to have been
    crafted by attorneys);   Occulto v. Adamar of N.J., Inc., 125 F.R.D. 611, 616
    (D.N.J.1989) (noting that an expert cannot simply be an alter ego of the attorney
    who will be trying the case).

    Furthermore, if opinions expressed in an expert report are not the opinions of the
    expert, the expert will not be able to satisfy the requirements of Fed.R.Ev 702
    and Daubert that the report be based on the expert’s own valid reasoning and
    methodology.   See Fed.R.Evid. 702 (“a witness qualified as an expert by
    knowledge, skill, experience, training, or education, may testify thereto in the
    form of an opinion or otherwise, in (1) the testimony is based upon sufficient
    facts or data, (2) the testimony is the product of reliable principles and
    methods, and (3) the witness has applied the principles and methods reliably to
    the facts of the case.”);   Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S.
    579, 592-93, 113 S.Ct. 2786, 125 L.Ed.2d 469 (1993) (“Faced with a proffer of
    expert scientific testimony, then, the trial judge must determine at the outset,
    pursuant to Rule 104(a), whether the expert is proposing to testify to (1)
    scientific knowledge that (2) will assist the trier of fact to understand or
    determine a fact in issue.”).

    The court in  U.S. E.E.O.C. v. Rockwell Intern. Corp., 60 F.Supp.2d 791, 797
    (N.D.Ill.1999), stated that:

    It is obvious that Brethauer, who candidly admitted such at the Daubert hearing,
    was directed to employ principles that contradicted his normal methodology in
    various respects.   He performed analyses he would not normally perform.    He
    included analyses that he would not normally include.   He included calculations
    on upon which he did not rely and did not fully *295 believe should be followed.
    He relied on materials, reports and summaries given to him by counsel, and
    failed to verify the information from reliable, independent sources.   Finally,
    he incorporated language drafted by Waldron.   It is one thing for lawyers to
    make authorized revisions to an expert’s prepared report.   See  Marek v.  Moore,
    171 F.R.D. 298 (D.Kan.1997).   It is quite another for an expert to include
    calculations upon which he did not rely and he would not rely on simply to
    appease his client’s attorney.   A proffered expert must “bring to the jury more
    than the lawyers can offer in argument.”   Salas v. Carpenter, 980 F.2d 299, 305
    (5th Cir.1992).   In short, Brethauer’s own admissions demonstrate that he
    failed to employ the same level of intellectual rigor that characterizes the
    practice of experts in his field, or even his own normal practice.

    In the pre-Daubert, pre-1993 Amendment to Rule 26 case,  Occulto v. Adamar of New
    Jersey, Inc., 125 F.R.D. 611, 616 (D.N.J.1989), the district court held that an
    expert must report on the basis of his own knowledge and expertise.

    Experts participate in a case because, ultimately, the trier of fact will be
    assisted by their opinions, pursuant to Rule 702, Fed.R.Evid. They do not
    participate as the alter-ego of the attorney who will be trying the case.

    The weight accorded to an expert’s opinion must vary in accordance with the
    expert’s competence and knowledge;  an expert who can be shown to have adopted
    the attorney’s opinion as his own stands less tall before the jury than an
    expert who has engaged in painstaking inquiry and analysis before arriving at an
    opinion.

    Also, under the analysis required by Rule 702, absent independence from the party
    or its advocates, a testifying expert lacks the credibility necessary to be of
    assistance to the trier of fact.   See Fed.R.Evid. 702 (Expert testimony will be
    admissible first if “scientific, technical, or other specialized knowledge will
    assist the trier of fact to understand the evidence or determine a fact in issue,
    ….”).  See, also,  Mondry v. Speedway Superamerica LLC, 1999 WL 1072623, *7
    (N.D.Ill.1999) (“The court concludes that, while Dr. Abdul is qualified to render
    an expert opinion in this case, his credibility is suspect because, … he is not
    truly independent of [the defendant] ….”);   Clintec Nutrition Co. v. Baxa
    Corp., 1998 WL 560284, *6 (N.D.Ill.1998) (assertion that expert did not draft his
    report and incorporated verbatim language suggested by counsel could be brought
    out on cross-examination to attack expert’s independence and credibility);
    Polsby v. Shalala, 925 F.Supp. 379, 392 (D.Md.1996) (physician’s “lack of
    independence as an expert witness destroys his credibility”);   Folden v.
    Washington State Dept. of Social & Health Svs., 744 F.Supp. 1507, 1522
    (W.D.Wash.1990) (listing a number of points that undermined the expert’s
    credibility, including the fact that the expert held an interest in the outcome
    and was therefore not independent), aff’d,  981 F.2d 1054 (9th Cir.1992).    Under
    that circumstance, the testimony of experts simply cannot “assist the trier of the
    fact to understand the evidence or to determine a fact in issue.”   That, of
    course, is the sine qua non of admissibility of expert testimony.

    There is significant evidence of teamwork and collaboration among AGE and the
    United States’ testifying experts.   On the other hand, many of the experts
    testified in depositions that they acted independently and wrote their own reports
    with only editorial assistance from AGE. However, documents produced by the United
    States exhibit proof, particularly in the case of Dr. Feldstein, of extensive,
    substantive assistance in drafting the expert’s report.

    The burden of proving ghost writing rests with Trigon.   To prove ghost writing,
    Trigon must use the available documents to show that AGE provided the substance of
    the opinions of the testifying experts, not just editorial assistance.   In most
    cases, Trigon has been provided a goodly portion of the documents that existed,
    and they can be used to show the lack of independence.

    As the record currently exists, Trigon has not met its burden of proof.   However,
    as to Dr. Feldstein, there is not enough available evidence to enable Trigon to
    meet this burden, and the Court, making an adverse inference*296  as to the
    missing documents, will take this into consideration in its evaluation of Dr.
    Feldstein’s testimony at trial.   Furthermore, if Trigon satisfactorily develops
    its argument in the cross-examination of the other United States’ testifying
    experts, the Court will act appropriately at trial.

    CONCLUSION

    For the foregoing reasons, Trigon’s Motion in Limine for Appropriate Relief Due to
    Spoliation of Evidence by Government’s Litigation Consultant, and the Government’s
    Use of Litigation Consultant to Ghost Write Testifying Experts’ Reports is GRANTED
    in part, and DENIED in part with leave to adduce evidence of ghost writing at
    trial.

    The Clerk is directed to send a copy of this Memorandum Opinion to all counsel of
    record.

    It is so ORDERED.

    E.D.Va.,2001.

    Trigon Ins. Co. v. U.S.

    204 F.R.D. 277, 88 A.F.T.R.2d 2001-6883, 51 Fed.R.Serv.3d 378, 57 Fed. R. Evid.
    Serv. 664

    END OF DOCUMENT

    Not Reported in F.Supp., 1990 WL 270199 (E.D.Va.), 1991 A.M.C. 101

    (Cite as: 1990 WL 270199 (E.D.Va.))

    Continue reading →United States District Court, E.D. Virginia, Richmond Division. TRIGON INSURANCE COMPANY (Formerly Blue Cross and Blue Shield of Virginia), Plaintiff, v. UNITED STATES of America, Defendant. Civ. No. 3:00CV365. Nov. 9, 2001. MEMORANDUM OPINION PAYNE, District Judge. Plaintiff, Trigon Insurance Company (“Trigon”), formerly known as Blue Cross and Blue Shield of Virginia, has moved FN1 the Court to impose sanctions on the Defendant, the United States of America ...
  • Physicians Interactive v. Lathian Systems, Inc.

    United States District Court, E.D. Virginia.

    PHYSICIANS INTERACTIVE (a division of Allscripts, LLC) Plaintiff,

    v.

    LATHIAN SYSTEMS INC., Stephan Martinez and John Doe(s) 1-10, Defendants.

    No. CA 03-1193-A.

    Dec. 5, 2003.

    MEMORANDUM OPINION

    LEE, J.

    *1 THIS MATTER is before the Court on Plaintiff Physicians Interactive’s Motion for a Temporary Restraining Order and Preliminary Injunction, and Plaintiff’s Motion for Limited Expedited Discovery. This is a case where the host of an interactive website for medical professionals contends that Lathian Systems, Inc.’s (“Lathian”) information technology employee, Mr. Martinez, secretly hacked Physicians Interactive’s website and stole their confidential customer lists and computer software code.FN1 The question presented is whether an injunction should issue where Physicians Interactive has shown probable cause to believe that Lathian’s information technology employee used both a Lathian computer and his home computer to hack into Physicians Interactive’s web site using computer software to secretly collect Physicians Interactive’s customer lists and proprietary software. An injunction will be issued because Physicians Interactive has made a preliminary showing of an invasion of its computer system, unauthorized copying of its customer list, and theft of its trade secrets. Lathian may not use this confidential information to gain an unfair trade advantage; therefore, the Court will enjoin this activity. The Court will also enjoin Lathian, its employee Stephen Martinez, and any other agents of Lathian from any future attacks on the Physicians Interactive website. Finally, the Court will enjoin Lathian and its agents from using any of Physicians Interactive’s information previously obtained by Lathian or its employee(s).

    FN1. “Hack” is defined as, “to explore and manipulate the workings of a computer or other technological device or system, either for the purpose of understanding how it works or to gain unauthorized access.” See Microsoft Encarta College Dictionary 644 (1st ed.2001).

    FACTUAL BACKGROUND

    Physicians Interactive alleges that Defendants Lathian and Stephen Martinez hacked its website by sending “electronic robots” to steal its customer list, computer code, and confidential data. Physicians Interactive runs a website for physicians, www.physinteractive.com >, featuring medical product and pharmaceutical data. See Mem. of P. & A. in Supp. of Pl’s Mot. for a T.R.O. and Prelim. Inj. (“Pl.’s Prelim. Inj. Mem.”) at 1-5. Lathian runs a similar type of service, <www.mydrugrep.com>. Id. Physicians Interactive maintains its file servers in Sterling, Virginia, which is located in the Eastern District of Virginia.FN2 Id.

    On its file server, Physicians Interactive maintains an extensive confidential electronic database of the physicians and other medical professionals who use its service. Id . Specifically, Physicians Interactive’s database contains the names, street addresses, and e-mail addresses of all of its medical professional clients. Physicians Interactive’s file server is connected to the Internet, and is accessible by others via the Internet. Id. The public, however, does not have access to Physicians Interactive’s client lists. In order to make full use of the Physicians Interactive website, a medical professional must have a user password and personal identification number that has been issued by the Plaintiff. Id. The website’s most valuable asset is its data lists on medical professionals. These client lists consist of the medical professional’s name, title, occupation, speciality, mailing address, e-mail address, telephone number, and fax number. Id. at 5.

    FN2. “File server” is defined as, “a computer in a network that stores application programs and data files accessed by other computers.” See Microsoft Encarta College Dictionary 533 (1st ed.2001).

    *2 Physicians Interactive alleges that Defendants launched three “attacks” on its file servers to surreptitiously steal confidential data from its website. The attacks were carried out by Lathian’s technology employee, Stephan Martinez, to obtain the proprietary medical professional information stored on Physicians Interactive’s website. Id. at 7-11. The first alleged attack occurred on January 24, 2003. According to Plaintiff’s Preliminary Injunction Memorandum, the computer that accessed Physicians Interactive’s computer on that date “began to issue a series of commands to the Physicians Interactive Website Servers in which the URL and query string used by the Physicians Interactive Website Servers had been intentionally altered … These modifications appeared as part of a calculated effort to discover-through a process of experimentation-the elements of the query string that the Physicians Interactive Website Servers use to ensure that a user logged onto the site accesses only the information on the Website intended for that Medical Professional … Approximately 50 of these commands were issued.” Id. at 8. Physicians Interactive did an investigatory audit of this alleged attack, and concluded that the computer which initiated this action had an Internet Provider (“IP”) address of 4.18.53.195. Id. According to the registration records maintained by the American Registry for Internet Numbers (“ARIN”), this address is registered to <www.mydrugrep.com >, Lathian’s website. Id.

    The Defendants second alleged attack occurred on January 27, 2003. This attack, according to Physicians Interactive, lasted over 30 hours and “flooded [Physicians Interactive’s] servers with a constant stream of commands issued at a rate of approximately 2.4 commands per second. Id. at 9. This alleged attack, according to Physicians Interactive, succeeded in accessing a significant number of Plaintiff’s proprietary medical professional information. According to Physicians Interactive,because of the nature of the attack, the alleged hacker used a “software robot” or “extraction software” program. Id. The purpose of such a program, according to Plaintiff, is to “operat[e] across the Internet to perform searching, copying, and retrieving functions on the websites of others….” Id. The IP address involved in this alleged attack, 68.4.173.153, was registered to Cox Communications, Inc.

    (“Cox”), an Internet Service Provider (“ISP”). Physicians Interactive subpoenaed Cox to determine what person used this IP address at the time of the alleged attack. However, Cox no longer had the user information from this time period. Id.

    The Defendants third alleged attack took place on September 10, 2003. The third attack, according to Physicians Interactive, was similar to the second, and succeeded in accessing an even more greater number of Physicians Interactive’s proprietary medical professional information. Id. at 10. According to Physicians Interactive, the alleged attack originated from IP address 69.99.188 .51. This IP address was also registered to Cox. According to Cox, this IP address was assigned to Defendant Stephan Martinez of Lake Forest, California. Mr. Martinez is an information technology employee of Lathian Systems. Lake Forest, California, according to Physicians Interactive, is approximately 14 miles from Lathian’s Newport Beach offices. Id.

    *3 After Physicians Interactive determined the place and nature of these computer hacking attacks, its information technology professionals implemented a software patch to protect its website from unauthorized access. The purpose of this software patch is to “prevent such unauthorized access from recurring.” Id. at 12.

    Physicians Interactive is suing Lathian Systems, Stephan Martinez, and John Doe(s) 1-10 for a private right of action under the federal Computer Fraud and Abuse Act, 18 U.S.C. s 1030, the Virginia Computer Crimes Act, Va.Code Ann. ss 18.2-152.3 ,-153.4, the Virginia Uniform Trade Secret Act, Va.Code Ann. ss 59.1-336 et seq., and a common law trespass on chattels claim. In its Motion for Temporary Restraining Order and Preliminary Injunction, Physicians Interactive moves this Court to enjoin Defendants from (1) accessing Plaintiff’s website file servers; (2) obtaining confidential proprietary and trade secret information belonging to Plaintiff; (3) using or disclosing any information that Defendants acquired by their allegedly unauthorized and illegal intrusions into Plaintiff’s website file servers; and (4) destroying or altering any evidence of such acts. See Pl.’s Prelim. Inj. Mem. at 1. Physicians Interactive also seeks expedited discovery in connection with its Motion for Preliminary Injunction.

    STANDARD OF REVIEW

    In deciding whether to grant a motion for a preliminary injunction, this Court must apply the four part test set forth in Blackwelder Furniture Co. v. Seilig Mfg. Co., 550 F.2d 189 (4th Cir.1977); see also Manning v. Hunt, 119 F.3d 254, 263 (4th Cir.1997); Microstrategy Inc. v. Motorola, Inc., 245 F.3d 335 (4th Cir.2001). The four-part test involves a consideration of the following factors: (1) the likelihood of irreparable harm to the plaintiff if the preliminary injunction is denied; (2) the likelihood of harm to the defendant if the requested relief is granted; (3) the likelihood that the plaintiff will succeed on the merits; and (4) the public interest. Id. at 195-96. The Fourth Circuit has held that in a Blackwelder analysis, harm to both parties is the most important consideration. See Direx Israel, Ltd. v. Breakthrough Medical Corp., 952 F.2d 802, 812 (4th Cir.1992); see also Wilson v. Office of Civilian Health & Medical Program of the Uniformed Services (CHAMPUS), 866 F.Supp. 903, 905 (E.D.Va.1994).

    The plaintiff bears the burden of establishing that each of the Blackwelder factors support granting the injunction. See id. In addition, if the probable irreparable harm to the plaintiff in the absence of injunctive relief greatly outweighs the likely harm to the defendant if the Court should grant injunctive relief, then “it is not enough that grave or serious questions are presented; and plaintiff need not show a likelihood of success.” Blackwelder, 550 F.2d at 196.

    Conversely, “[t]he importance of probability of success increases as the probability of irreparable harm diminishes.” Blackwelder, 550 F.2d at 195.

    *4 Physicians Interactive also seeks limited expedited discovery directly related to the issues raised in its Motion for Temporary Restraining Order and Preliminary Injunction. According to Plaintiff’s Memorandum in Support of its Motion for Limited Expedited Discovery, Physicians Interactive seeks “a limited number of document requests from Lathian and Martinez that relate, in general, to the circumstances surrounding the illegal intrusion of the PI Website Servers, the persons involved, the scope of the disclosure or dissemination of the confidential and proprietary and trade secret information which was illegally obtained as a result of the intrusions, and the use to which such trade secrets were put.” See Pl.’s Mem. of P. & A. in Supp. of Pl’s Mot. for Limited Expedited Disc. at 3.

    Physicians Interactive also seeks “a limited number of interrogatories regarding the information downloaded from the PI Website Servers, the location of the computers used to access the PI Website Servers, the identity of persons involved in the underlying activities, the user of the illegally downloaded data, and the scope of the disclosure of such information.” Id. Physicians Interactive has attached to its pleadings proposed document requests and interrogatories.

    Physicians Interactive also seeks to enter the sites where the computers used in the alleged attacks are located in order to obtain a “mirror image” of the computer equipment containing electronic data relating to the Defendants’ alleged attacks on Plaintiff’s file server.

    This Court has “wide latitude in controlling discovery and … its rulings willnot be overturned absent a showing of clear abuse of discretion.” Rowland v. Am. Gen. Fin., Inc., 340 F.3d 187, 195 (4th Cir.2003) (quoting Ardrey v. United Parcel Service, 798 F.2d 679, 682 (4th Cir.1986)). Specifically, Federal Rules of Civil Procedure 26(d), 30(a), 33(b), 34(b) and 36 give this Court the power to adjust the timing requirements imposed under Rule 26(d) and if warranted, to expedite the time for responding to the discovery sought. Courts have held that expedited discovery is warranted “when some unusual circumstances or conditions exist that would likely prejudice the party if they were required to wait the normal time.” Fimab-Finanziaria Magklificio Beillese Fratelli Fila S.p.A. v. Helio Import/Export, Inc., 601 F.Supp. 1, 3 (S.D.Fla.1983); Semitool, Inc. v. Tokyo Electron America, Inc., 208 F.R.D. 273, 275 (N.D.Cal.2002). This Court, in granting motions for expedited discovery, has held that a plaintiff must sufficiently prove the first and second prongs of Blackwelder, the “balance of hardships” analysis. Religious Tech. Ctr. v. Lerma, 897 F.Supp. 260, 267 (E.D.Va.1995) (Brinkema, J.)

    ANALYSIS

    A) Irreparable Harm to Plaintiff

    The Fourth Circuit has held that a plaintiff must make a clear showing of the irreparable harm it will suffer from the denial of injunctive relief. Dan River, Inc. v. Icahn, 701 F.2d 278, 284 (4th Cir.1983). In accordance with Blackwelder, Physicians Interactive has demonstrated that there is a likelihood of irreparable harm to it if this Court denies the injunction. To date, Physicians Interactive has alleged three computer attacks against its file server. The origin of the second attack is unknown. However, Physicians Interactive has provided affidavits of its information technology staff, which trace the source of the first attack to <www.mydrugrep.com >, Lathian’s website. Further, Physicians Interactive has alleged that it has traced the third attack to an IP address registered to Mr. Martinez. Physicians Interactive has shown probable cause to establish that the three hacking attacks described above are directly linked to the Defendants. This preliminary showing demonstrates irreparable harm to Physicians Interactive. Defendants argue that Physicians Interactive fails to show irreparable harm regarding future attacks because Physicians Interactive has, by its own admission, installed a software patch to protect Physicians interactive’s computer file server. Defendants’ argument has little merit. Although Physicians Interactive has indeed stated that it has installed a software patch that corrects its file server’s current security vulnerabilities, such electronic security systems are not foolproof. The possibility still remains that Physicians Interactive’s system could continue to be the target of Lathian’s computer hackers. Such future Lathian attacks, if successful, would cost Physicians Interactive time and money through investigation and clean up.

    B) HARM TO DEFENDANTS

    *5 The Court holds that the likelihood of irreparable harm to defendant, if the Court grants injunctive relief, is non-existent compared to the likelihood of harm to the plaintiff if the Court does not grant injunctive relief. Under the second prong of Blackwelder, the Court must balance the likelihood of irreparable harm to the plaintiff against the likelihood of harm to the defendant. See Blackwelder, 550 F.2d at 195. Physicians Interactive argues that the likelihood of irreparable harm to the Defendants is slim, because “defendants Martinez and Lathian will suffer no legally cognizable harm if they are required to stop accessing the PI Website Servers and to stop using or disclosing Physicians Interactive trade secrets and other confidential and proprietary information they have illegally obtained.” See Pl.’s Prelim. Inj. Mem. at 28. The Court agrees with this argument. Injunctive relief is proper in this case for two reasons. First, injunctive relief is proper because any injunctive relief that this Court will grant will not prohibit the Defendants from using the authorized, public functions of Physicians Interactive’s website. Second, any injunctive relief that the Court will issue will not infringe upon Lathian’s right to legally compete within the marketplace for its services. Additionally, the Court recognizes some merit in Defendants’ assertion that Physicians Interactive’s proposed injunction request is vague. Indeed, the Court finds that Physicians Interactive’s proposed injunctive request is overbroad and accordingly will issue a more narrowly tailored form of injunctive relief in a separate order.

    C) LIKELIHOOD OF SUCCESS ON THE MERITS

    The Court holds that Physicians Interactive has sufficiently shown a likelihood of success on the merits at this stage of the pleadings on all of its Counts. The third prong of Blackwelder requires Physicians Interactive to demonstrate to the Court that it is likely to succeed on the merits of all claims. Counts One, Two, and Three of Plaintiff’s First Amended Complaint allege that Defendants violated subsections (a)(2)(C), (a)(4), and (a)(5) of the Computer Fraud and Abuse Act (“CFAA”), 18 U.S.C. s 1030. Counts Four and Five of Plaintiff’s First Amended Complaint allege that Defendants violated the Virginia Computer Crimes Act (“VCCA”), Va.Code Ann. ss 18.2-152.3, -153.4. Count Six of Plaintiff’s First Amended Complaint allege a violation of the Virginia Uniform Trade Secrets Act (the “VUTSA”), Va.Code Ann. ss 59.1-336 et seq. Finally, Count Seven of Plaintiff’s First Amended Complaint allege a trespass on chattels under Virginia common law.

    i) Counts One, Two, and Three (CFAA)

    This Court finds that at this stage of the pleadings, Physicians Interactive has proved a likelihood of success on the merits of its CFAA Counts against both Lathian and its agent, Mr. Martinez. The CFAA, although a criminal statute, provides for a private right of action. See 18 U.S.C. s 1030(g). A violation of Subsection (a)(2)(C) of the CFAA occurs whenever a person:

    *6 intentionally accesses a computer without authorization or exceeds authorized access, and thereby obtains-… (C) information from any protected computer if the conduct involved an interstate or foreign communication. 18 U.S.C. s 1030(a)(2)(C).

    A violation of 18 U.S.C. s 1030(a)(4) occurs whenever a person: knowingly and with intent to defraud, accesses a protected computer without authorization, or exceeds authorized access, and by means of such conduct furthers the intended fraud and obtains anything of value … 18 U.S.C. s 1030(a)(2)(C).

    In YourNetDating, Inc. v. Mitchell, 88 F.Supp.2d 870 (N.D.Ill.2000), the Northern District of Illinois held that the plaintiff had shown a likelihood of success on the merits of its CFAA claim when defendant was alleged to have hacked into its computer file server. In EF Cultural Travel BV v. Explorica, Inc ., 274 F.3d 577 (1st Cir.2001), the First Circuit held that the competitor’s use of a “scraper” computer software program to systematically and rapidly glean prices from a tour company’s website, in order to allow systematic undercutting of those prices, “exceeded authorized access” within the meaning of the CFAA.

    A violation of 18 U.S.C. s 1030(a)(5) occurs whenever a person “intentionally accesses a protected computer without authorization, and as a result of such conduct, causes damage.” 18 U.S.C. s 1030(a)(5)(A)(iii). The damage, or loss, must aggregate to at least $5,000 within a one-year period. 18 U.S.C. s 1030(a)(5)(B)(i).

    Physicians Interactive has shown probable cause to demonstrate that Lathian’s information technology employee, Mr. Martinez, directed two computer attacks against its website and computer file server. Physicians Interactive traced the first alleged attack, which occurred on January 24, 2003, to < www.mydrugrep.com>. This website belongs to Lathian. Physicians Interactive traced the third alleged attack, which occurred on September 10, 2003, to an IP address assigned to Mr. Martinez. The January 24, 2003 alleged attack, according to Physicians Interactive, was designed to obtain technical information about the workings and security vulnerabilities of its website. The September 10, 2003 attack used a “software robot” to obtain proprietary information from Plaintiff. Both alleged attacks, at this stage of the pleadings, appear more likely than not to fit within the definition of 18 U.S.C. s 1030(a)(4). These attacks were an unauthorized entry into Physicians Interactive’s website. The activity was geared towards copying confidential data. The end result was the loss to Physicians Interactive of something of value-a significant amount of its confidential customer list information.

    Courts have held that a loss under the CFAA includes remedial and investigative expenses incurred by the plaintiff. See, e.g., E.F. Cultural Travel BV v. Explorica, Inc., 274 F.3d 577, 584 (1st Cir.2001); Four Seasons Hotels and Resorts B.V. v. Consorcio Barr, S.A ., 267 F.Supp.2d 1268, 1321 (S.D.Fla.2003); Shurgard Storage Centers, Inc. v. Safeguard Self Storage, Inc., 119 F.Supp.2d 1121, 1126-27 (W.D.Wash.2000).

    Physicians Interactive has stated in its affidavit that it has spent in excess of approximately $18,750 to assess the extent of the alleged attacks. See Pl.’s Prelim. Inj. Mem. at 16.

    *7 Defendants contend that Physicians Interactive’s website authorized secret collections of customer lists and computer software code because the Physicians Interactive website does not have a sign posted on its opening page or elsewhere that sets limits on Internet users access to the site. While categorically denying involvement for the alleged attacks on Physicians Interactive’s website, Defendants argue that a website with no such posting is open to Internet users for any purpose, including the secret collection of data not generally available and computer code. This extravagant assertion warrants careful scrutiny, as this argument appears to circumvent the spirit of the CFAA, and any other type of statute designed to protect website owners against computer hackers. If Defendants’ argument has any merit, it is not for the Court to decide at this time. At this stage of the pleadings, based upon Physicians Interactive’s Complaint and allegations, Physicians Interactive is likely to succeed on the merits of a CFAA claim.

    ii) Counts Four and Five (VCCA)

    As with the CFAA claim, Physicians Interactive has shown a likelihood to succeed on the merits of its VCCA claim. Section 18.2-152.3 of the VCCA provides in pertinent part that this statute is violated when a person “uses a computer or computer network without authority and with the intent to: (1) Obtain property or services by false pretenses; … or, (3) Convert the property of another.” Section 18.2-152.4(A) makes it unlawful for a person “to use a computer or computer network without authority and with the intent to … (6) Make or cause to be made an unauthorized copy, in any form, … of computer data … residing in, communicated by, or produced by a computer or computer network.” Like the CFAA, the VCCA provides for a private right of action. See Va.Code Ann. s 18.2-152.12.

    Physicians Interactive has traced alleged hacking attacks to Defendants, in which the Defendants obtained property by false pretenses. In this case the alleged computer hacker used a software robot to obtain proprietary information. Based upon this fact, it is highly likely that the hacker, or hackers, converted Physicians Interactive’s proprietary information for their own use. It is undisputed that Physicians Interactive’s proprietary information was its own property. Likewise, in allegedly converting this property, it is highly likely that Defendants also made an unauthorized copy of computer data. Again, Defendants argue that if such an attack occurred, it was not unauthorized because of the Plaintiff’s failure to place a usage restriction on its website. At this stage of the pleadings, this argument suggests that any Internet user has an open invitation to enter any website and to access the host computer’s file server for any purpose including copying customer lists and computer code. Also, at this stage of the pleadings, Defendants argument offends the fundamental principles of ownership of private property. Suppose a private homeowner posted a sign welcoming all authorized visitors into her home. Certainly one would not consider the welcome sign as extending permission to visitors to not only enter, but to plunder through locked drawers in order to obtain confidential checking account and credit card statements. Applying the same analogy to a computer file server does not require much extrapolation. The website  invitation to Internet users to visit a website, gather information, and sign up for services is not an invitation for Internet users to hack the website’s host computer file server and copy company financial statements or personnel files. No sign need be posted on a website to protect the web host’s property rights. In sum, Physicians Interactive has shown a likelihood that it will succeed on the merits.

    iii) Count Six (VUTSA)

    *8 Physicians Interactive has demonstrated a likelihood of success on the merits of its VUTSA claim because Physicians Interactive has shown unauthorized copying of customer lists and proprietary software codes. Physicians Interactive has also shown that customer lists and proprietary software taken in the previously described computer attacks are trade secrets. Physicians Interactive has also shown a likelihood that these trade secrets were misappropriated by Lathian or its agent, Mr. Martinez.

    To succeed on a claim under the VUTSA, a plaintiff must demonstrate that (1) the defendant has acquired or disclosed a “trade secret” and (2) that the trade secret has been “misappropriated,” meaning that the person knows or has reason to know that the information was acquired by improper means. A trade secret is information that derives economic value from its secrecy and is subject to reasonable attempts to be maintained as secret. See Fordham v. Onesoft, Corp., No. 00 Civ. 1078-A, 2001 U.S. Dist. LEXIS 22918, *13 (E.D.Va.2001); Newport News Indus. v. Dynamic Test’g, Inc., 130 F.Supp.2d 745, 750-51 (E.D.Va.2001).

    In order to demonstrate the existence of a trade secret, a plaintiff must demonstrate that the information derives economic value from its secrecy and that it was subject to reasonable attempts to maintain it as a secret. Information that would economically benefit competitors, were it to become known to them, satisfies the standard if that information is safeguarded from disclosure in a manner that is reasonable under the circumstances. See Dionne v. Southeast Foam Conv’g & Pack’g, Inc., 240 Va. 297, 302-03, 397 S.E.2d 110, 113-14 (1990). Numerous courts have held that customer lists and customer information are classic examples of trade secrets. See, e.g., North Atl. Instr., Inc. v. Haber, 188 F.3d 38, 44 (2d Cir.1999); Four Seasons Hotels and Resorts B.V. v. Consorcio Barr, S.A, 267 F.Supp.2d 1268, 1325 (S.D.Fla.2003).

    Physicians Interactive’s information stored on its computer file server was not meant for the public domain and, therefore, was not stored in the public area of the website. Physicians Interactive created significant electronic safeguards to protect this information. Indeed, since the alleged attacks, Physicians Interactive has taken additional steps to safeguard this information through a software patch.

    Under the VUTSA, “misappropriation” is defined to include the use of “improper means” to acquire knowledge of the trade secret, and the “improper means” are defined to include “theft”, “misrepresentation” and “espionage through electronic or other means.” Va Code Ann. s 59.1-336; see Fordham, 2001 U.S. Dist. LEXIS 22918 at *13; Newport News, 130 F.Supp.2d at 751.

    There can be no doubt that the use of a computer software robot to hack into a computer system and to take or copy proprietary information is an improper means to  obtain a trade secret, and thus is misappropriation under the VUTSA. Defendants again argue that their access to Physicians Interactive’s website was authorized because of Physicians Interactive’s failure to place a usage restriction on its website. Again, for the reasons stated earlier, this argument fails to negate Plaintiff’s likelihood to succeed on the merits.

    iv. Count Seven (Trespass on Chattels)

    *9 Physicians Interactive has shown a likelihood of success on the merits of its trespass on chattels claim. A common law claim of trespass on chattels occurs “when one party intentionally uses or intermeddles with personal property in rightful possession of another without authorization.” America Online, Inc. v. LCGM, Inc ., 46 F.Supp.2d 451 (citing Restatement (Second) of Torts s 217(b)).

    Moreover, trespass occurs when the chattel “is impaired as to its ‘condition, quality, or value,” Id. (citing Restatement (Second) of Torts s 218(b)).

    This Court holds that there is a likelihood that the two alleged attacks that Physicians Interactive traced to Defendants were designed to intermeddle with personal property in the rightful possession of Plaintiff. The third alleged attack, which used a software robot to hack into Physicians Interactive’s computer system and obtain proprietary information serves as a prima facie basis for a claim for trespass on chattels.

    Defendants, as with all other of Plaintiff’s claims, argue that their access to Physicians Interactive’s website was authorized because of Plaintiff’s failure to place a usage restriction on its website. Again, for the reasons stated earlier, this argument does not negate Physicians Interactive’s likelihood to succeed on the merits.

    Even if Defendants arguments that its access was not unauthorized because of Physicians Interactive’s lack of notice on its website has merit, it is not for this Court to decide at this stage of the pleadings. As Blackwelder holds, if the probable irreparable harm to the plaintiff in the absence of injunctive relief greatly outweighs the likely harm to the defendant if injunctive relief should issue, then “it is enough that grave or serious questions are presented; and plaintiff need not show a likelihood of success.” Blackwelder, 550 F.2d at 196. Physicians Interactive has shown irreparable harm through the costs it must incur to guard against future attacks.

    v) Defendant Lathian Systems’ Respondeat Superior Argument

    Defendant Lathian Systems also argues that even if Defendant Martinez’s conduct was wrongful, it was outside the scope of his employment with Lathian Systems. Lathian Systems cites Newport News, which establishes a multi-part test for determining whether an employee’s conduct was within the scope of employment:

    Generally, an act is within the scope of the employment if (1) it was expressly or impliedly directed by the employer, or is naturally incident to the business, and (2) it was performed, although mistakenly or ill-advisedly, with the intent to further the employer’s interest, or from some impulse or emotion that was the natural consequence of an attempt to do the employer’s business, and did not arise wholly from some external, independent, and personal motive on the part of the employee to do the act upon his own account. Newport News, 130 F.Supp.2d at 750 (citing Kensington Associates v. West, 234 Va. 430, 432, 362 S.E.2d 900, 901 (1987).

    *10 At this stage of the pleading, it is unclear whether Physicians Interactive meets the test to establish respondeat superior as defined in Newport News. These facts will be elicited through discovery. However, based upon the given facts of the alleged attacks, this Court concludes that there is a substantial likelihood, at this stage of the pleadings, that the Plaintiff would succeed in proving that Mr. Martinez’s alleged actions were within the scope of his employment. Thus, Physicians Interactive succeeds in proving a likelihood of success on the merits on all of its claims.

    D) Public Interest

    This Court holds that there is a strong public interest in granting preliminary injunctive relief in this action. The facts alleged by Physicians Interactive, if true, violate several federal and state criminal and civil statutes. This Court has an obligation to enjoin any alleged computer hackers from continuing to attack and steal Physicians Interactive’s proprietary information.

    E) Expedited Discovery

    The Court will grant Physicians Interactive limited expedited discovery. Under a tailored form of injunctive relief issued in a separate order, Physicians Interactive satisfies the requirements for expedited discovery under the Fimab-Finanziaria, Semitool, and Religious Technology tests. In addition, Physicians Interactive meets the requirements for expedited discovery because it has successfully met the burden of all of the prongs of Blackwelder. Also, this case presents the Court with unusual circumstances or conditions that would likely prejudice the party if they were required to wait the normal time to initiate discovery. In this case, electronic evidence is at issue. Electronic evidence can easily be erased and manipulated. Physicians Interactive’s expedited discovery is limited, however, to the proposed set of document requests and interrogatories that it provided to the Court in its Motion for Limited Expedited Discovery.

    Physicians Interactive is also granted limited expedited discovery to enter the sites where the computers used in the alleged attacks are located and to obtain a “mirror image” of the computer equipment containing electronic data relating to Defendants’ alleged attacks on Physicians Interactive’s file server. This discovery is limited only to information on Defendants’ computers related to the alleged attacks, and must be done with the assistance of a computer forensic expert.

    As discussed above, Physicians Interactive meets its burden under Blackwelder and thus the Court will grant it preliminary injunctive relief. Physicians Interactive has shown irreparable harm. Defendants have failed to show they will suffer irreparable harm by the Court’s grant of injunctive relief. Physicians Interactive has overwhelmingly shown a likelihood of success on the merits. Finally, there is a strong public interest in granting this injunctive relief.

    For the foregoing reasons, Plaintiff’s Motion for a Temporary Restraining Order and Preliminary Injunction is GRANTED. Plaintiff’s Motion for Limited Expedited Discovery is also GRANTED. An appropriate order will issue. The Clerk is directed to forward a copy of this Memorandum Opinion to counsel.

    PRELIMINARY INJUNCTION

    *11 THIS MATTER is before the Court on Plaintiff Physicians Interactive’s Motion for a Temporary Restraining Order and Preliminary Injunction, and Plaintiff’s Motion for Limited Expedited Discovery. The Court previously issued a Memorandum Opinion stating its reasons for the following order.

    ORDERED that Plaintiff’s Motion for a Preliminary Injunction is GRANTED. It is further ORDERED that Plaintiff’s injunctive relief shall consist of the following: (1) to enjoin Defendants from engaging in any activity beyond the scope of a normal user or guest to Plaintiff’s website, < www.physinteractive.com>, including the use of any “software robots” to obtain data, to copy data or computer code, or any other type of behavior designed to compromise the data or security of Plaintiff’s website or file server; (2) using any information obtained in violation of (1); and (3) using or disclosing any information that Defendants may have obtained in connection to the computer attacks Plaintiff  alleges in its pleadings.

    It is also ORDERED that Plaintiff’s Motion for Limited Expedited Discovery is GRANTED. It is further ORDERED that Plaintiff’s expedited discovery be limited to the proposed set of document requests and interrogatories that it provided to the Court in its Motion for Limited Expedited Discovery. Plaintiff is also GRANTED limited expedited discovery to enter the Defendants computer server, Mr. Martinez’s work and home desktop and notebook computers, and any sites where the computers used in the alleged attacks are located, in order to obtain a “mirror image” of the computer equipment containing electronic data relating to Defendants’ alleged attacks on Plaintiff’s server. This discovery is limited only to information on Defendants’ computers related to the alleged attacks, and must be done with the assistance of a computer forensic expert. The Defendants have ten (10) days to respond and five (5) days to file objections from the date of service.

    The Court ORDERS Plaintiff to pay a bond in the amount of One Hundred Thousand ($100,000) Dollars, pursuant to Fed.R.Civ.P. 65(c). The Clerk is directed to forward a copy of this Order to counsel.

    Continue reading →United States District Court, E.D. Virginia. PHYSICIANS INTERACTIVE (a division of Allscripts, LLC) Plaintiff, v. LATHIAN SYSTEMS INC., Stephan Martinez and John Doe(s) 1-10, Defendants. No. CA 03-1193-A. Dec. 5, 2003. MEMORANDUM OPINION LEE, J. *1 THIS MATTER is before the Court on Plaintiff Physicians Interactive’s Motion for a Temporary Restraining Order and Preliminary Injunction, and Plaintiff’s Motion for Limited Expedited Discovery. This ...
  • Galaxy Computer Services, Inc. v. Baker

    United States District Court,

    E.D. Virginia,

    Alexandria Division.

    GALAXY COMPUTER SERVICES, INC., Plaintiff,

    v.

    Lara BAKER, et al., Defendants.

    No. 1:04CV1036 (JCC).

    May 27, 2005.

    MEMORANDUM OPINION

    CACHERIS, District Judge.

    This matter comes before the Court on: (1) Defendant Sullivan’s Motion In Limine Regarding Evidence of Indemnification; (2) Defendants’ Joint Motion for De Novo Review and Jury Trial on Portions of Bankruptcy Court Summary Judgment Order; (3) Plaintiff’s Motion In Limine Pursuant to Federal Rule of Civil Procedure 403 to Exclude Evidence of the Defendants’ Alleged “National Security Motive” in Breaching their Fiduciary Duties; (4) Defendants’ Motion In Limine to Exclude Evidence of the Deposition Testimony of Meredith Mouer of Andrews Kurth; (5) Defendants’ Motion In Limine to Exclude Testimony of Charles Lundelius; (6) Defendants’ Motion In Limine to Exclude Testimony of Charles Taylor; and (7) Plaintiff’s Motion In Limine Pursuant to Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579, 113 S.Ct. 2786, 125 L.Ed.2d 469 (1993) and Federal Rules of Evidence 702, 703 and 403, to Exclude the Testimony and Opinions of Alan S. Zipp.

    For the following reasons, the Court will deny Defendant Sullivan’s Motion In Limine Regarding Evidence of Indemnification, deny Defendants’ Joint Motion for De Novo Review and Jury Trial on Portions of Bankruptcy Court Summary Judgment Order, deny Plaintiff’s Motion In Limine *549 Pursuant to Federal Rule of Evidence 403 to Exclude Evidence of the Defendants’ Alleged “National Security Motive” in Breaching their Fiduciary Duties, partially grant and partially deny Defendants’ Motion In Limine to Exclude Evidence of the Deposition Testimony of Meredith Mouer of Andrews Kurth, deny Defendants’ Motion In Limine to Exclude Testimony of Charles Lundelius, deny Defendants’ Motion In Limine to Exclude Testimony of Charles Taylor, and partially grant and partially deny Plaintiff’s Motion In Limine Pursuant to Daubert and Federal Rules of Evidence 702, 703 and 403, to Exclude the Testimony and Opinions of Alan S. Zipp.

    I. Background

    This is an action by a Chapter 11 debtor in possession against two of its former officers, a company that purchased a portion of the debtor’s assets, and the parent of the company that purchased the assets.FN1 All the Defendants made a timely demand for a jury trial. Since no bankruptcy judge in the Eastern District of Virginia has been authorized to conduct a jury trial, the referral of this case to the bankruptcy court was withdrawn under 28 U.S.C. s 157(d).

    FN1. The bank that foreclosed on and sold the assets was also a Defendant but has settled with the debtor in possession and has been dismissed as a party to this action.

    The debtor in possession, Plaintiff Galaxy Computer Services, Inc. (“Galaxy,”) is in the business of providing computer security services to various government agencies and commercial customers. Defendants Gary Sullivan and Dr. Lara Baker founded Galaxy. They sold their ownership interest in Galaxy to a company named DOLFIN.COM (“Dolfin”) in June 2000 in exchange for Dolfin stock and a promissory note. Sullivan and Baker remained officers and directors of the company after the sale.

    Some of Galaxy’s government contracts were highly sensitive. The U.S. Government would not permit Galaxy to be merged into Dolfin, which is part-owned by non-U.S. citizens. The Government required that a barrier be established between Dolfin and Galaxy to prevent unauthorized access to classified information and influence over Galaxy’s business or management by Dolfin. This barrier took the form of two Proxy Holder Directors with high level security clearances who joined Galaxy’s Board.

    Sullivan and Baker entered into employment contracts with Dolfin. The agreements contained restrictions on:Sullivan and Baker’s post-termination employment with companies engaged in the provision of security services similar to those offered by Galaxy; their promotion to existing Galaxy customers of services similar to or competitive with Galaxy’s services; and their inducing customers or employees of Galaxy to alter or terminate their relationship with Galaxy. All three restrictions applied if the employee voluntarily resigned unless the employee had been constructively terminated, in which event only the last of the three restrictions applied. The restrictions were limited in time to twelve months following the termination of employment, but had no geographical limitation.

    After acquiring Galaxy, Dolfin sought out potential investors and merger partners. Defendant MCJM, LLC, d/b/a Pinnacle Financial Strategies (“Pinnacle”) expressed an interest and was permitted to review Galaxy’s financial records after signing a non-disclosure and non-solicitation agreement dated January 15, 2003. Dolfin ultimately rejected an offer by Pinnacle.

    *550 Galaxy had three loans with Los Alamos National Bank totaling approximately $668,000, the largest of which was due to mature on March 15, 2003. Baker and Sullivan were personally liable on the loans as guarantors. Galaxy had been experiencing severe cash-flow problems for some time, and often had difficulty meeting payroll.

    Baker and Sullivan were unhappy that Dolfin had repeatedly failed to deliver on its promised cash infusions to Galaxy or to pay the purchase-money notes for their stock. In early March 2003, they began discussing ways for Pinnacle to acquire Galaxy.

    Soon thereafter, without telling the Proxy Holder Directors or Dolfin, Baker and Sullivan advised the Bank that Galaxy would be unable to pay the largest of the three notes when it matured. Baker and Sullivan waived any cure periods and consented to the bank’s immediate foreclosure on Galaxy’s assets.

    Shortly before the foreclosure, Pinnacle caused a limited liability company known as Galaxy CSI, LLC (“CSI”) to be formed. CSI is a Defendant in this suit. On March 25, 2003, Sullivan told the Bank’s general counsel that Galaxy’s contract receivables were “very perishable” and that an expedited sale to Pinnacle would realize the Bank the greatest return on the collateral. On March 31, 2003, the Bank accepted Pinnacle’s bid of $430,000, executed a Bill of Sale to Pinnacle of Galaxy’s accounts receivable and contracts receivable. None of this was disclosed by Baker and Sullivan either to the Proxy Holder Directors or to Dolfin.

    On March 31, 2003, Sullivan called an “all hands” meeting of Galaxy’s employees. A representative of Pinnacle offered Galaxy’s employees new employment contracts with CSI. All of the employees resigned that day from Galaxy and accepted employment with CSI, which carried on Galaxy’s business at the same location and used Galaxy’s phone numbers and Internet web site.

    On April 3, 2003, Sullivan advised the Proxy Holders that he and Baker had resigned  two days earlier and that Galaxy’s assets had been purchased by CSI. A week later, Dr. John Fox, formerly the president of Dolfin, became Galaxy’s president. Galaxy filed a voluntary Chapter 11 petition on May 7, 2003.

    The present litigation was commenced by Galaxy on May 15, 2003. The First Amended Complaint is pleaded in 18 counts. Several of these counts are no longer at issue. The bankruptcy court granted partial summary judgment with respect to two counts as they pertain to the individual Defendants. The counts still at issue are as follows, annotated as to whether they remain pending against Defendants CSI (“C”), Pinnacle (“P”), Baker (“B”), and Sullivan (“S”).

    Count Description C P B S

    II Avoidance of Fraudulent Transfer (11 U.S.C. s X 548)

    III Accounting X X X X

    IV Injunctive Relief X X X X

    V Breach of Fiduciary Duty X X

    VI Aiding and Abetting Breach of Fiduciary Duty X X

    VII Fraudulent Conveyance (Va.Code s 55-80) X

    VIII Breach of Contract X X X X

    IX Civil Conspiracy X X X X

    XII Tortious Interference with Contractual Rights X X X X

    XIII Tortious Interference with at-will contracts X X X X

    XIV Business Conspiracy (Va.Code ss 18.2-499 &amp; 500) X X X X

    The parties’ motions in limine are now before the Court.

    II. Analysis

    A. Sullivan’s Motion to Exclude Evidence of Indemnification

    *551 [1] Pursuant to Rule 403 FN2 of the Federal Rules of Evidence, Defendant Sullivan seeks to exclude testimony and evidence relating to the indemnification section of his employment agreement with Defendant CSI. The employment agreement contains as a “Key Term and Condition,” a provision stating:

    FN2. Sullivan also references Fed.R.Evid. 411, but contends that a Rule 411 argument would be redundant because Rule 403 compels the same result. The Court does not consider the indemnification agreement to be liability insurance for purposes of Rule 411 and will analyze Defendant’s motion based on Rule 403.

    [CSI] agrees to indemnify, hold harmless, and defend [Sullivan] against any and all claims, suits, and demands of any kind (“Claims”) that may be brought against [CSI] and/or [Sullivan] for the actions or inactions arising both before and after this Agreement is executed, including but not limited to, any Claims, if any, brought by any entity or person as a result of the purchase of the assets of Galaxy Computer Services, Inc. by Galaxy CSI, LLC., and/or Galaxy Holdings, LLC, and/or the employment of [Sullivan] and any and all matters related thereto. As part of this indemnity agreement, the Company also agrees to pay in full any final judgments entered against [Sullivan] and/or any settlements agreed to by [Sullivan] that are the direct result of the sale/purchase transaction, along with all reasonable attorney’s fees incurred by [Sullivan’s] counsel of choice in the defense and/or resolution of said Claims. The parties agree that this indemnification agreement is a material incentive to [Sullivan] to enter into this Agreement, and is intended by the parties to be construed broadly so as to protect [Sullivan].

    (Sullivan Mot. Regarding Evid. of Identification, Ex. 1).

    [2] Sullivan argues that although the terms and conditions of his current employment are relevant to this dispute, the probative value of those terms does not outweigh FN3 the extremely prejudicial nature of the evidence. (Sullivan Mot. at 2). Federal Rule of Evidence 403 provides:

    FN3. In some portions of his brief Sullivan seems to flip Rule 403 on its head. The probative value of evidence need not outweigh the danger of unfair prejudice in order for the evidence to be presented to a jury. Rather, in order to be excluded under Rule 403, the probative value of evidence must be substantially outweighed by the danger of unfair prejudice.

    Although relevant, evidence may be excluded if its probative value is substantially outweighed by the danger of unfair prejudice, confusion of the issues, or misleading the jury, or by considerations of undue delay, waste of time, or needless presentation of cumulative evidence.

    Fed.R.Evid. 403.

    Sullivan argues that much like the exclusion of insurance arrangements under Fed.R.Evid. 411, evidence of this indemnification agreement could cause the jury to greatly increase the damages awarded against him because he is not really going to have to pay the damages, his employer will.

    The indemnification agreement is probative as evidence that Sullivan sought to shield himself from legal action taken against him by Galaxy. Thus, the indemnification agreement is probative evidence that Sullivan may have intended to engage in what he believed to be wrongful conduct or felt that he had already engaged in wrongful conduct with respect to Galaxy. See DSC Communications v. Next Level Communications, 929 F.Supp. 239, 244 (E.D.Tex.1996), aff’d in part and vacated *552 in part on other grounds, 107 F.3d 322 (5th Cir.1997) (“An individual’s subjective belief that an act already taken is wrongful is probative, but not dispositive, as to whether the individual’s conduct was wrongful.”)

    Plaintiff cites DSC Communications to support its argument that the probative value of indemnification agreement evidence is not substantially outweighed by the danger of unfair prejudice attached to such evidence. However, the Court does not consider DSC Communications to be instructive on this point. In that case, the evidence was admitted, in part, because the defendant “opened the door to admission of the agreement in voir dire, when counsel told the jurors that the case was ‘a question of life or death to [the defendants].’ ” 107 F.3d at 328 .

    Nevertheless, the Court finds that the probative value of this evidence is not substantially outweighed by the danger of unfair prejudice. Unlike a defendant in a  typical case involving a liability insurance policy, where the insurer is not a party to the lawsuit, the party indemnifying Sullivan, CSI, is itself a Defendant in this case. The relationship and understanding between the Defendants with regard to liability for the acts that comprise this lawsuit are especially probative. Baker and Sullivan are not alleged to be Defendants who happen to be insured against the acts at issue in the case. Rather, Baker and Sullivan are alleged to have conspired with the entity that has agreed to indemnify them. Given the probative value of the evidence of indemnification, a limiting instruction admonishing the jury that it should not consider the indemnification agreement when considering the issue of damages will sufficiently protect against unfair prejudice. Accordingly, Defendant Sullivan’s motion will be denied.

    B. Defendants’ Joint Motion for De Novo Review and Jury Trial on Portions of the Bankruptcy Court’s Summary Judgment Order

    [3] Defendants argue that pursuant to Bankruptcy Rule 9033 and 28 U.S.C. s 157(c)(1), this Court should exercise de novo review of the findings of the Bankruptcy court that  were non-core. Specifically, Defendants ask this Court to reverse two of the Bankruptcy court’s rulings: (1) the determination that Galaxy’s contracts were conveyed as part of the Bill of Sale between the Bank and CSI; and (2) the determination that Baker and Sullivan’s employment agreements are enforceable. Bankruptcy Rule 9033 provides, in pertinent part:

    In non-core proceedings heard pursuant to 28 U.S.C. s 157(c)(1), the bankruptcy judge shall file proposed findings of fact and conclusions of law.

    Within 10 days after being served with a copy of the proposed findings of fact and conclusions of law a party may serve and file with the clerk written objections which identify the specific proposed findings or conclusions objected to and state the grounds for such objection.

    The district judge shall make a de novo review upon the record or, after additional evidence, of any portion of the bankruptcy judge’s findings of fact or conclusions of law to which specific written objection has been made in accordance with this rule. The district judge may accept, reject, or modify the proposed findings of fact or conclusions of law, receive further evidence, or recommit the matter to the bankruptcy judge with instructions. Bankr.R. 9033(a), (b), (d).

    Plaintiff Galaxy argues that this was not heard pursuant to 28 U.S.C. s 157(c)(1), but pursuant to 28 U.S.C. s 157(c)(2). *553 Bankruptcy Rule 9033 does not apply to 28 U.S.C. s 157(c)(2). Accordingly, before the Court can consider any substantive issues regarding the Bill of Sale and Baker and Sullivans’ employment contracts, the Court must first satisfy itself that the Bankruptcy court operated pursuant to 28 U.S.C. s 157(c)(1).

    The relevant statutory provisions read:

    (1) A bankruptcy judge may hear a proceeding that is not a core proceeding but that is otherwise related to a case under title 11. In such proceeding, the bankruptcy judge shall submit proposed findings of fact and conclusions of law to the district court, and any final order or judgment shall be entered by the district judge after considering the bankruptcy judge’s proposed findings and conclusions and after reviewing de novo those matters to which any party has timely and specifically objected.  28 U.S.C. s 157(c)(1).

    (2) Notwithstanding the provisions of paragraph (1) of this subsection, the district court, with the consent of all the parties to the proceeding, may refer a proceeding related to a case under title 11 to a bankruptcy judge to hear and determine and to enter appropriate orders and judgments, subject to review under section 158 of this title. 28 U.S.C. s 157(c)(2).

    Federal bankruptcy courts possess jurisdiction to enter orders and judgments in core proceedings. 28 U.S.C. s 157(b)(1). They may not enter orders and judgments in non-core related proceedings unless they receive reference from the parent district court and the consent of each party. 28 U.S.C. s 157(c)(2). Without reference from the parent district court and the consent of the parties, a bankruptcy court may only issue proposed findings and recommendations to the district court. 28 U.S.C. s 157(c)(1).

    This case was transferred to the Bankruptcy court pursuant to a July 13, 1984 standing referral from this Court. Pursuant to 28 U.S.C. s 157, the Order refers to the Bankruptcy Judge, inter alia,

    [a]ll cases under Title 11 of the United States Code and any and all proceedings arising under Title 11 of the United States Code or arising in or related to a case under Title 11 of the United States Code filed in this Division on or after July 10, 1984 except  proceedings involving personal injury tort or wrongful death claims….

    (Order of Reference, No. 20 (E.D. Va. July 13, 1984 Order)).

    This standing Order permits the Bankruptcy court, with the consent of the parties, to hear and enter appropriate orders and judgments in cases arising in or related to a case under Title 11, pursuant to 28 U.S.C. s 157(c)(2). See In re McLean Square Assocs., G.P., v. J.W. Fortune, Inc., 200 B.R. 128, 133-34 (E.D.Va.1996).

    [4] In the Fourth Circuit, a party who fails to object to a bankruptcy court’s jurisdiction over a non-core related matter until after the entry of an unfavorable order has impliedly consented to the court’s power. See id. At no time before the Bankruptcy court entered its summary judgment order did the Defendants raise the core/non-core issue. Accordingly, the Court finds that the Defendants impliedly consented to the bankruptcy’s court’s power. See In re McLean Square Assocs., 200 B.R. at 134.

    Bankruptcy Judge Mitchell entered an order partially denying and partially granting summary judgment on July 30, 2004. Cases referred pursuant to s 157(c)(2) are subject to review under 28 U.S.C. s 158. The Defendants, however, did not timely seek leave have this non-*554 dispositive summary judgment order reviewed. Accordingly, Defendants’ motion will be denied.

    C. Plaintiff’s Motion in Limine Pursuant to Fed.R.Evid. 403 to Exclude Evidence of the Defendants’ alleged “National Security” Motive in Breaching their Fiduciary Duties

    [5][6] A critical issue in this action is whether Defendants Sullivan and Baker breached their fiduciary duties to Galaxy and its shareholder, Doflin, from mid-2002 to March 31, 2003. During this period, Galaxy provided hardware and software services to the U.S. military-intelligence community, which was preparing for the Iraq war. Defendants Sullivan and Baker will assert that their actions furthered U.S. national security interests because they sought to avoid any disruption in the work Galaxy performed for the U.S. military.

    Plaintiff requests that the Court prohibit the admission of any evidence or testimony related to this “national security” justification by Defendants Baker and Sullivan. Plaintiff argues that this evidence has little or no probative value, is unfairly prejudicial, will trigger a trial within a trial, and will confuse the issues.

    The issues presented are: (1) whether the motives of Baker and Sullivan are probative as to Plaintiff’s claims for the alleged intentional torts of common law conspiracy (Count IX), interference with contractual relations (Counts XII-XIII), and conspiracy to injure business (Count XIV); and (2) whether any probative value of the motives is  substantially outweighed by the danger of unfair prejudice.

    According to Plaintiff, the passions of the jurors would be unfairly inflamed such that they would not consider any instructions regarding breach of fiduciary duty, but instead, would react in accordance with their subjective beliefs on the Iraq war. Plaintiff further argues that permitting this defense would generate a “trial within a trial” because it would require a determination of whether the company’s existence was actually threatened, whether the U.S. government had “back-up” contractors, and ultimately, whether the U.S. national security interests would be impacted even if the company went out of business. Such a result, they say, would mislead the jury, cause undue delay, and waste the Court’s time.

    Defendant Sullivan argues that his belief that he was acting to protect the national security interests of the U.S. “goes to the facts and circumstances surrounding [his and Baker’s] actions as fiduciaries, an inquiry that is required to determine whether actions breached a fiduciary duty owed to the Plaintiff.” (Defs.’ Opp’n at 1-2). Defendants argue that this motive is probative as to their intent for the alleged intentional torts of common law conspiracy (Count IX), interference with contractual relations (Counts XII-XIII), and conspiracy to injure business (Count XIV).

    Plaintiff counters that the Defendants are confusing “motive” as the reason for the actions and “legal intent,” as an element in several of the claims. Essentially, Plaintiff argues that Defendants’ motivations for their actions are irrelevant to the various “intent” inquiries. Plaintiff is correct as to the tortious interference claims, but not as to the common law and statutory conspiracy claims.

    [7] While intent is an element of a tortious interference claim, all that is needed to prove intent is that a defendant “knows that the interference is certain or substantially certain to occur as a result of his [or her] actions.” Commerce Funding Corp. v. Worldwide Sec. Servs. Corp., 249 F.3d 204, 212-13 (4th Cir.2001). Thus, in establishing intent for purposes of the tortious*555 interference claim, the Defendants’ motive is irrelevant.

    [8] A common law civil conspiracy is a combination of two or more persons, by some concerted action, to accomplish some criminal or unlawful purpose, or to accomplish some purpose, not in itself criminal or unlawful, by criminal or unlawful means. Hechler Chevrolet, Inc. v. General Motors Corp., 230 Va. 396, 337 S.E.2d 744, 748 (1985)(citing Werth v. Fire Adjust. Bureau, 160 Va. 845, 171 S.E. 255, 259, cert. denied, 290 U.S. 659, 54 S.Ct. 74, 78 L.Ed. 570 (1933)). As set forth in American Jurisprudence:

    Since one cannot agree, expressly or tacitly, to commit a wrong about which he or she has no knowledge, in order for civil conspiracy to arise, the parties must be aware of harm or wrongful conduct at beginning of combination or agreement. Thus, civil conspiracy is an intentional tort requiring a specific intent to accomplish the contemplated wrong ….

    AMJUR CONSPIRACY s 51 (2d ed.2004).

    Since civil conspiracy requires a specific intent to accomplish the contemplated wrong, evidence of the Defendants’ motive is relevant.

    [9] The relevant section of the Virginia Code covering statutory conspiracy provides:

    A. Any two or more persons who combine, associate, agree, mutually undertake or concert together for the purpose of (i) willfully and maliciously injuring another in his reputation, trade, business or profession by any means whatever or (ii) willfully and maliciously compelling another to do or perform any act against his will, or preventing or hindering another from doing or performing any lawful act, shall be jointly and severally guilty of a Class 1 misdemeanor….

    Va.Code Ann. s 18.2-499.

    [10][11] With regard to statutory conspiracy, the plaintiff is not required to prove actual malice. Advanced Marine Enters., Inc. v. PRC Inc., 256 Va. 106, 501 S.E.2d 148, 154 (1998). Sections 18.2-499 and -500 do not require a plaintiff to prove that a conspirator’s primary and overriding purpose is to injure another in his trade or business. Id. (citing Commercial Bus. Sys., Inc. v. BellSouth Servs., Inc., 249 Va. 39, 453 S.E.2d 261, 267 (1995)); see also Va. Vermiculite, Ltd. v. W.R. Grace &amp; Co.-Conn., 144 F.Supp.2d 558, 601-02 (W.D.Va.2001) (defendants’ purpose of injuring plaintiff in its business is sufficient to establish the requisite intent under the Virginia Conspiracy Act which does “not require a plaintiff to prove that a conspirator’s primary and overriding purpose is to injure another in his trade or business”) (citations omitted). Rather, these statutes merely require proof of legal malice, that is, proof that the defendant acted intentionally, purposefully, and without lawful justification. Advanced Marine, 501 S.E.2d at 154-55.

    Since statutory conspiracy requires that the defendant acted with the purpose of injuring the plaintiff in its business, evidence of the Defendants’ motive is relevant. Although the plaintiff is not required to prove that a purpose of injuring the plaintiff in its business was a primary or overriding purpose, the plaintiff must prove that it was a purpose. Thus, Baker and Sullivan are entitled to admit evidence that this was not their purpose.

    [12] Since their motive is relevant and probative as to the civil and statutory conspiracy claims, the Court must determine whether the probative value of their alleged “national security motive” is substantially outweighed by the danger of unfair*556 prejudice, confusion of the issues, or misleading the jury under Rule 403.

    [13] Rule 403 authorizes the exclusion of evidence on the grounds of prejudice only when there is a genuine risk that the emotions of the jury will be excited to irrational behavior and only then when that risk is disproportionate to the probative value of the evidence. Westfield Ins. Co. v. Harris, 134 F.3d 608, 615 (4th Cir.1998) (internal citation and quotation marks omitted). Although national security has clearly been on the minds of the American public in recent times, the Court does not believe that there is a genuine risk that the jurors will be unable to fairly consider Baker and Sullivan’s proffered evidence that they acted out of concern for national security along with other evidence admitted at trial.

    Should Baker and Sullivan admit this evidence, the Plaintiff will have the opportunity to cross-examine them. Moreover, the Defendants have agreed that a jury instruction instructing the jury not to base its verdict on sympathy, bias, guesswork, or speculation, but only upon the evidence and instructions of the Court, should be given. With such an instruction and subjecting the evidence to cross-examination, any prejudicial effect will be minimized. See generally United States v. Masters, 622 F.2d 83, 87 (4th Cir.1980) (“Such prejudice, if any, can be generally obviated by a cautionary or limiting instruction, particularly if the danger of prejudice is slight in view of the overwhelming evidence of guilt.”); Coach, Inc. v. We Care Trading Co., Inc., 67 Fed.Appx. 626, *629-30, 2002 WL 32103175, at *3 (2d Cir. May 20, 2002) (potential prejudicial effect of certain evidence was obviated by cross-examination).

    As to the civil and statutory conspiracy counts, the probative value of this evidence is not substantially outweighed by the danger of unfair prejudice, confusion of the issues, or misleading the jury. The Court will deny Plaintiff’s motion in limine to exclude evidence of the Defendants’ alleged national security motive.

    D. Defendants’ Motion in Limine to Exclude Evidence of the Deposition Testimony of Meredith Mouer of Andrews Kurth

    [14][15] Defendants seek to: (1) exclude two sets of handwritten notes of Meredith Mouer, an attorney with Andrews Kurth, (“the notes,”) arguing that they are prejudicial and protected by the attorney-client privilege; and (2) prohibit Plaintiff Galaxy from referring to the rulings of Bankruptcy Judge Mitchell and District Judge Brinkema concerning the crime-fraud exception to the attorney-client privilege, arguing that such reference would be prejudicial. Galaxy seeks to: (1) admit the notes in their entirety; and (2) confine the in-court testimony of Mouer to the scope of her deposition arguing that any testimony outside the scope would be prejudicial. Should the Court admit the notes, Defendants seek to have Mouer testify what two references in her notes to “tortious interference” mean. Should the Court permit Mouer to explain the references at trial, Galaxy seeks to refer to the rulings of Bankruptcy Judge Mitchell and District Judge Brinkema concerning the crime-fraud exception to the attorney-client privilege. The Defendants object to any such references.

    Mouer took the notes during two discussions with other Andrews Kurth counsel about a proposed structure involving Dolfin, Galaxy, and Pinnacle. (Def.’s Supp. Reply, Ex. 2 at 14-16). Bill Bracken of Pinnacle was involved in the discussion on March 4, 2003. (Id., Ex. 3 at 6). At oral argument, CSI explained that the proposed structure “did not come to fruition” and Galaxy did not contest this statement.

    *557 The notes contain two references to “tortious interference.” One reference is under the heading “Possible Claims,” as “1. Tortious Interference.” (Id., Ex. 1 at 2). The second reference is on the next page which shows a “Proposed Structure” at the top of the  page, a “Proposal” in the middle of the page, and at the bottom has a list that says: “1. How do this? What steps? 2. Concerns? Problems? Tortious Interference?” (Id. at 5).

    Mouer’s notes were produced pursuant to a production order by Judge Mitchell. In ruling on a motion to compel production of documents from Andrews Kurth filed by Galaxy, Judge Mitchell held that: (1) certain documents were not protected by the attorney-client privilege and had to be produced; (2) certain documents that might fall within the attorney-client privilege had to be produced under the crime-fraud exception to the privilege “because they are part and parcel of the on-going planning among defendants Pinnacle, Sullivan, and Baker to engineer a takeover of Galaxy;” and (3) depositions of Andrews Kurth attorneys were allowed for the limited purpose of establishing the authenticity of the documents he ordered produced and to establish dates and contents of any meetings with or communications by Baker and Sullivan prior to April 1, 2003. (See Def.’s Br. Regarding Andrews Kurth, Ex. 2). CSI stipulates that the notes are authentic.

    The Defendants appealed Judge Mitchell’s ruling and Judge Brinkema affirmed. Judge Brinkema ruled that the allegations in the Complaint of “an extensively planned course of dealing to collude with a competitor and clandestinely transfer assets from the parent company, through transactions structured with the advice of counsel” were sufficient allegations of fraud in a bankruptcy case to invoke the crime-fraud exception. Galaxy CSI, LLC v. Galaxy Computer Services, Inc., No. 04-07-A at *5 (E.D.Va. March 31, 2004) (Brinkema, J.). Judge Brinkema also ruled that Galaxy established a prima facie case of fraud as required for the exception to apply because:

    as the bankruptcy court found, Baker, Sullivan, and Pinnacle took steps to hide the foreclosure from the two independent proxy board members, depriving Dolfin of any opportunity to pay the notes and cure the default. Based on the evidence in this record of self-dealing and deliberate concealment of information, documents that show willful misrepresentation of the consent of the independent proxy board members are plainly relevant to the claim of fraudulent transfer of Galaxy’s assets. Therefore, the bankruptcy court’s finding that Baker and Sullivan were not acting in accordance with their fiduciary responsibilities as defined in [ Odyssey Partners, L.P. v. Fleming Cos., 735 A.2d 386, 417-21 (Del.Ch.1999)] is not error. Id. at *8.

    Judge Brinkema did not stay her order pending appeal. However, to give Defendants an opportunity to seek a stay from the United States Court of Appeals for the Fourth Circuit, Judge Brinkema did not require production of the documents until ten days after the issuance of her order. Id. The Defendants did not appeal Judge Brinkema’s ruling or seek a stay.

    Defendants argue that Mouer’s notes should be excluded because they are: (1) misleading and prejudicial; and (2) protected by the attorney-client privilege. However,  the Defendants’ argument that the notes are protected by privilege is foreclosed by the rulings of Judge Mitchell and Judge Brinkema. Judge Brinkema specifically gave the Defendants ten days from the date of her order to produce the documents to allow them to appeal. They did not do so. Defendants’ argument that *558 they were unable to appeal her ruling lacks merit. Thus, the Defendants are foreclosed from arguing that the notes be excluded based on the attorney-client privilege and the Court need only determine whether the notes are admissible under Federal Rule of Evidence 403.

    Defendants argue that the notes are misleading and irrelevant because they were created during a discussion about a proposed joint venture which never came to fruition. Defendants also argue that the notes, but specifically the references to “tortious interference,” will unduly prejudice and mislead the jury. Defendants claim that the notes are cryptic and cannot be put into context, so the jury cannot determine what Mouer meant by “tortious interference.” Galaxy argues that the “tortious interference” reference should go to the jury because it is probative evidence.

    The Court finds that the references to “tortious interference” have little or no probative value. It is difficult to determine what Mouer meant by the references, but it is unlikely that she meant that the Defendants were planning to tortiously interfere with Galaxy’s business. Even if an attorney thought the document was protected by privilege, he or she would not likely memorialize a client’s plan to break the law. As Defendants argue, Mouer more likely meant that tortious interference was a concern to keep in mind when deciding whether the Defendants should take certain actions. In fact, the first reference is under the heading “Possible Claims” and the second is after the words “Concerns? Problems?”

    Given that tortious interference is one of the claims alleged in this case, there is a genuine risk that the jury will be misled by the references in the notes. This risk does substantially outweigh any probative value of the references. The Court will exclude the references to “tortious interference” in the notes.

    [16] However, the Court will admit the remainder of the notes. They are probative because they show that the Defendants were considering a joint venture proposal involving Pinnacle, Galaxy, Baker, and Sullivan. The notes appear to indicate that the joint venture would have enabled Baker and Sullivan to foreclose Galaxy’s accounts receivable. (Def.’s Supp. Reply, Ex. 2 at 17-19). Even though the proposal was not implemented, it is probative because it was considered. It shows what the Defendants were thinking. The Defendants’ argument that the notes are not relevant because the proposal was not implemented lacks merit. The Defendants provide no other reason to exclude the remainder of the notes. Accordingly, the Court will admit the remainder of the notes.

    [17][18] Defendants seek to have Mouer testify at trial to explain her notes even though counsel for CSI instructed her not to answer most of the substantive questions she was asked about the notes during her depositions, invoking the attorney-client privilege. Galaxy argues that it would be prejudicial to allow her to testify at trial to topics which CSI shielded her from testifying to during the deposition.

    Mouer was questioned extensively about the notes during her depositions on April 27, 2004 and May 27, 2005. However, CSI’s counsel made sixty-three objections during this line of questioning, instructing her not to answer. CSI’s counsel limited her testimony to what is in the notes, and would not allow her testify as to her understanding of the notes. (See, e.g., Def.’s Supp. Reply, Ex. 2 at 18, Ex. 3 at 8). CSI so limited the depositions of other Andrews Kurth attorneys. (Pl.’s Mem. Supp. Obj. Mouer Test. at 4). During the deposition*559 of Matthew Hoeg, also with Andrews Kurth, Galaxy’s counsel adjourned for a telephone conference with Judge Mitchell to seek to expand discovery. (Id.) Judge Mitchell declined to allow full discovery on the documents. (Id.)

    In In re Edmond, 934 F.2d 1304, 1308 (4th Cir.1991), the Fourth Circuit held that the Fifth Amendment privilege could not be invoked as a shield to oppose depositions and then discarded for the limited purpose of making statements to support a summary judgment motion. In that case, the debtor had selectively asserted his Fifth Amendment privilege to submit an affidavit supporting his summary judgment motion, after having invoked it to oppose depositions. The court held it was proper for the trial court to refuse to consider the debtor’s affidavit when addressing the summary judgment motion.

    In United States v. Workman, 138 F.3d 1261, 1263-64 (8th Cir.1998), the Eighth Circuit explained that the defendant could not selectively assert the attorney-client privilege to block the introduction of information harmful to his case after introducing other aspects of his conversations with his attorney for his own benefit. The court stated: “[t]he attorney client privilege cannot be used as both a shield and a sword, and [the defendant] cannot claim in his defense that he relied on [his attorney’s] advice without permitting the prosecution to explore the substance of that advice.” Id. at 1264.

    In Gutierrez-Rodriguez v. Cartagena, 882 F.2d 553, 576-77 (1st Cir.1989), the First Circuit held that a defendant who had invoked the Fifth Amendment and refused to answer questions about a shooting during a deposition could not later testify at trial about the shooting. The court “would not tolerate nor indulge a practice whereby a defendant by asserting the privilege against self-incrimination during pre-trial examination and then voluntarily waiving the privilege at the main trial surprised or prejudiced the opposing party.” Id. at 576.

    Finally, in Engineered Prods. Co. v. Donaldson Co., Inc., 313 F.Supp.2d 951, 1022-23 (N.D.Iowa 2004), the court barred the plaintiff from introducing testimony at trial on issues that the plaintiff had prevented the defendant from exploring during a deposition by invoking the attorney-client privilege. Relying on Workman, the court explained that to allow the plaintiff to present the testimony at trial would be to allow the plaintiff to use the privilege “as both a shield and a sword.” Id. at 1022 (citing Workman, 138 F.3d at 1263). The court held that plaintiff’s objections during the deposition:

    likely precluded as full an exploration of documents and issues … as the defendant would have been entitled to make, had there been a contemporaneous judicial finding of waiver of attorney-client privilege. Therefore, the parties will be entitled to present documents and testimony formerly protected by attorney-client privilege only to the extent that those issues were explored in [the] deposition.  Id. at 1023.

    The weight of authority indicates that to permit Mouer to testify to issues which she refused to testify to during her deposition based on privilege would allow the Defendants to use the attorney-client privilege as both a shield and a sword. Thus, Mouer may only testify at trial within the scope of her deposition and Plaintiff may not refer to the rulings of Judge Mitchell and Judge Brinkema concerning the crime-fraud exception to the attorney-client privilege.

    Accordingly, the Defendants’ motion in limine with respect to the Andrews Kurth *560 lawyers is partially granted and partially denied.

    E. Defendants’ Motion In Limine to Exclude Testimony of Charles Lundelius

    [19] Galaxy seeks to introduce the expert opinion testimony of Charles Lundelius to establish the fair market value of Galaxy as of March 15, 2003 and the damages to Galaxy “due to the actions of Galaxy management and others.” In forming the bases for his opinions, Lundelius relies, in part, on two contested sources:

    1. Strawman Budget: prepared in early 2003 by Michael Dubrieul, Chief Executive Officer of Dolfin, the majority shareholder of Galaxy, to attract prospective buyers; and

    2. Due Diligence Report: prepared in January 2003 by two part-time consultants for Pinnacle or one of its wholly-owned subsidiaries, to determine Galaxy’s solvency. Defendants seek to have the Court exclude Lundelius’ testimony and report. They argue that Lundelius’ expert testimony is not reliable because the foundations for his opinion, the Strawman Budget and the Due Diligence Report, are unreliable.

    Defendants contend that the Strawman Budget is unreliable because Dubrieul grossly inflated Galaxy’s revenues and underestimated Galaxy’s costs to attract potential buyers. In particular, the Strawman Budget estimated that Galaxy’s revenues would nearly double in less than a one year period despite its historical averages. Defendants argue that Dubrieul fabricated the Strawman Budget.

    Defendants contend that the Due Diligence Report is unreliable because the consultants who prepared the report, Frank Tortorelli and Chris DeSouza, only had two and a half days to review Galaxy’s business documents. Additionally, there is scant evidence that these two consultants were qualified to produce such a report. Assuming their findings are legitimate, Lundelius also ignored findings in the Due Diligence Report that  significantly devalued Galaxy’s financial viability.

    Defendants argue that based on Federal Rule of Evidence 702 and Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579, 113 S.Ct. 2786, 125 L.Ed.2d 469 (1993) and its progeny, the expert testimony and report of Lundelius should be excluded.

    Rule 702 provides that expert testimony must be based on reliable principles:

    If scientific, technical, or other specialized knowledge will assist the trier of fact to understand the evidence or to determine a fact in issue, a witness qualified as an expert by knowledge, skill, experience, training, or education, may testify thereto in the form of an opinion or otherwise, if (1) the testimony is based upon sufficient facts or data, (2) the testimony is the product of reliable principles and methods, and (3) the witness has applied the principles and methods reliably to the facts of the case.

    Fed.R.Evid. 702.

    [20] If there is an objection to the testimony, the proponent of the testimony has the burden of establishing that the expert’s testimony is reliable by a preponderance of the evidence. Daubert, 509 U.S. at 592, 113 S.Ct. 2786.

    Galaxy contends that: (1) the Strawman Budget and Due Diligence Report accurately reflected the financial posture of Galaxy; (2) Lundelius reviewed and used other source documents (listed in his Report) to form the bases for his opinions; and (3) Lundelius made certain adjustments in his report “to allow for possible infirmities in the data he was using.” (Pl.’s Opp. Mem. at 5).

    Galaxy contends that Dolfin’s Strawman Budget was properly based on historical *561 data and that its projected increases in revenue and reduction in costs are reliable. In particular, Galaxy claims that prospectively reducing Galaxy’s Selling and Administrative costs by 21% in the Strawman Budget is not unreliable where Galaxy’s directors,  Defendants Sullivan and Baker, had just given themselves raises and employed some of their family members.

    The Court finds that Lundelius’ Report is sufficiently reliable. With respect to the Due Diligence Report, the two part-time consultants who prepared the Due Diligence Report analyzed Galaxy’s financial data for six months, irrespective of the fact that they were only present at Galaxy’s business location for two and a half days. The consultants, Tortorelli and DeSouza, were qualified to perform the analysis as evidenced by their subsequent positions in CSI: Tortorelli became Chief Executive Officer of Defendant CSI, and DeSouza became Chief Financial Officer of Defendant CSI. The Report is all the more reliable because it was based on a five-year analysis of Galaxy’s financial statements.

    Moreover, in addition to the contested Due Diligence Report and Strawman Budget, Lundelius relied on other data to form the bases of his opinions as outlined in his Report. These documents include profit and loss statements, balance sheets, audited and unaudited financial statements, pipeline reports, and tax returns.

    [21] At most, Defendants have raised factual disputes. “When, as here, the parties’ experts rely on conflicting sets of facts, it is not the role of the trial court to evaluate the correctness of facts underlying one expert’s testimony.” Micro Chem., Inc. v. Lextron, Inc., 317 F.3d 1387, 1392 (Fed.Cir.2003). The Advisory Committee note to Rule 702 instructs:

    When facts are in dispute, experts sometimes reach different conclusions based on competing versions of the facts. The emphasis in the amendment on “sufficient facts or data” is not intended to authorize a trial court to exclude an expert’s testimony on the ground that the court believes one version of the facts and not the other.

    [22] “Vigorous cross-examination, presentation of contrary evidence, and careful instruction on the burden of proof are the traditional and appropriate means of attacking shaky but admissible evidence.” Daubert, 509 U.S. at 595, 113 S.Ct. 2786. Accordingly, Defendants’ motion will be denied.

    F. Plaintiff’s Motion In Limine to Exclude Testimony of Alan S. Zipp

    [23] Defendants Pinnacle and CSI retained Alan S. Zipp to render an opinion and report on two issues: (1) at what point in time did Galaxy become insolvent; and (2) could Galaxy have survived with sufficient additional capital. Zipp prepared two reports. The first of these is dated October 31, 2003. The second is dated December 15, 2003. The second report was prepared to rebut the report prepared by Plaintiff’s expert, Lundelius.

    Plaintiffs argue that Zipp’s Reports, opinions, and related testimony should be excluded pursuant to Rule 702 and Daubert, because he: (1) did not apply any generally accepted or recognized methodology in reaching his conclusions; (2) relied on incomplete data; (3) failed to make adjustments and analyses which he admits should have been performed; and (4) was unaware of facts which would or could have affected his analyses and conclusions.

    The Court finds that Zipp’s October 31, 2003 Report does not meet Daubert’s reliability threshold. Zipp prepared his first report over an eight day period. He did not have  adequate time to analyze Galaxy’s voluminous financial documents. Indeed, *562 Zipp stated that he “only glanced through it. There was a lot of information, an awful lot of very valuable information that [he] just simply did not have time.” (Zipp Dep. November 18, 2003, at 32-33). Zipp’s notes of his initial conversation with counsel for Defendants CSI and Pinnacle reflect his understanding that he would be “[w]ell paid for a quick job.” (Id. at 65).

    In addition to the time constraints associated with Zipp’s preparation of the October 31, 2003 report, Zipp failed to incorporate significant assets in reaching a determination as to Galaxy’s value. He “did not analyze Galaxy as a going concern profit making business” and did not consider the value of Galaxy’s goodwill, including Galaxy’s “information diode operating system.” (Id. at 54, 104, 108). Zipp utilized unaudited financial statements in preparing the report and had no knowledge as to their reliability or correctness. (Id. at 107).

    Zipp’s own words best illustrate that his initial report is not sufficiently reliable.

    [T]here were many, many, many adjustments that I did not make because of the time in this case…. There were many adjustments that just didn’t get made that should have been made, or would have been made, and will be made in an analysis of profitability … [a]nd had I-if I have the opportunity to analyze the books more comprehensively, I will make the adjustments that are appropriate. (Id. at 110).

    For these reasons, Zipp’s October 31, 2003 report is not sufficiently reliable. The Court will exclude this report and Zipp’s related testimony. On the other hand, Zipp’s rebuttal report, dated December 15, 2003, is not burdened by these deficiencies. The Court will not exclude the December 15, 2003 report and will permit Zipp to testify as to his related findings in rebuttal to the Lundelius report.

    Accordingly, Plaintiff’s motion will be granted in part and denied in part.

    G. Defendants’ Motion In Limine to Exclude Testimony of Paul Taylor

    [24] Plaintiff Galaxy seeks to introduce the expert opinion testimony of Paul Taylor to establish that Defendants deleted certain Galaxy computer files. Taylor, who has worked in the field of computer forensics for five years, analyzed nine Galaxy hard drives and prepared an expert report that details, inter alia, deletion of the “Alamos” (the foreclosing bank) directory, deletion of all files with “Baker” in it from Plaintiff’s mail server, and several other deletions. Plaintiff offers Taylor’s testimony for the purpose of authenticating the recovered documents and to permit jury instructions on spoliation of evidence and consciousness of wrongdoing.

    Defendants seek to have the Court exclude Taylor’s testimony. They argue that: (1) Taylor’s expert opinion is irrelevant to the issues set for trial; (2) Taylor is not qualified to give expert testimony; (3) Taylor did not follow proper procedures; and (4) Taylor cannot opine about altered or deleted data.

    Defendants argue that Taylor will testify about matters beyond the scope of Plaintiff’s eighteen counts. Defendants note that the Complaint does not raise any allegations suggesting that Defendants altered or deleted data, documents, etc. Consequently, Defendants contend that Taylor’s proposed expert testimony is irrelevant and not helpful to the jury.

    The Court disagrees. The interactions between Galaxy’s officers and directors and Defendant Pinnacle and its agents, Frank Tortorelli and Chris DeSouza, are highly relevant to Galaxy’s claims in the Complaint. For instance, the alleged intentional*563 file deletions relate to the counts on conspiracy, breach of fiduciary duty, and aiding and abetting breach of fiduciary duty. Plaintiff seeks to use this testimony for jury instructions on consciousness of guilt and spoliation of evidence.

    [25] Defendants argue that Taylor is not qualified to testify as a computer expert because: (1) none of his degrees are in computer science; (2) he is not fluent in any computer language; (3) he is not a computer programmer; (4) he holds no certificates in computer science; and (5) he possesses no training or special education for Microsoft certification. Although Taylor did attend to computer studies at the Cranfield University in the United Kingdom, these courses were conducted as seminars in an off-campus hotel and lasted for no more than four weeks.

    The Court finds that Taylor qualifies as an expert based on his knowledge, skill, experience, training and education. The field of computer forensics does not require a background in computer programming or reading and writing code. Taylor has been working in the field of computer forensics for five years. During this period, he has completed between 1,600 and 1,700 forensic reports based on his findings, some of which have been accepted by various courts. Taylor is a member of the High Tech Crime Investigation Association and has completed three post-graduate intensive training courses in computer forensics at Cranfield University.

    Defendants also argue that Taylor and his employer, Data Recovery Services (“DRS,”) failed to follow their own internal chain of custody procedures when examining Galaxy’s hard drives and thus cannot ensure that their recovery and analysis of the data from the Galaxy computers was accurate and untainted. Some of the hard drives from the Galaxy computers were sent to Galaxy and/or Galaxy’s counsel and then to DRS approximately one week later. Defendants contend that this chain of custody problem creates a risk that some of the hard drives may have been tainted and are consequently unreliable.

    Plaintiffs concede that Taylor cannot specify who deleted the data from the hard drives or when the data was deleted. Taylor was only able to determine that the files at issue were deleted or altered some time after June 19, 2003.

    [26] The “chain of custody” rule is a variation of the requirement under Federal Rule of Evidence 901(a) that evidence must be properly authenticated or identified prior to being admitted. United States v. Turpin, 65 F.3d 1207, 1213 (4th Cir.1995) (citations omitted). The “chain of custody” rule requires that admitted exhibits “be preceded by ‘evidence sufficient to support a finding that the matter in question is what its proponent claims.’ ” United States v. Ricco, 52 F.3d 58, 61 (4th Cir.1995)(quoting Fed.R.Evid. 901), cert. denied, 516 U.S. 898, 116 S.Ct. 254, 133 L.Ed.2d 179 (1995).

    [27] However, the possibility of a break in the chain of custody goes only to the weight of the evidence. United States v. Harrington, 923 F.2d 1371, 1374 (9th Cir.1991) (citations omitted). The Court will allow Taylor to testify. Defendants may, of course, cross-examine Taylor regarding the chain of custody and Taylor’s inability to ascertain the exact dates of deletion and/or alteration of files or the identities of those responsible. Defendants’ motion will be denied.

    III. Conclusion

    For the foregoing reasons, the Court will deny Defendant Sullivan’s Motion In Limine Regarding Evidence of Indemnification, deny Defendants’ Joint Motion for De Novo Review and Jury Trial on Portions*564 of Bankruptcy Court Summary Judgment Order, deny Plaintiff’s Motion In Limine Pursuant to Federal Rule of Evidence 403 to Exclude Evidence of the Defendants’ Alleged “National Security Motive” in Breaching their Fiduciary Duties, partially grant and partially deny Defendants’ Motion In Limine to Exclude Evidence of the Deposition Testimony of Meredith Mouer of Andrews Kurth, deny Defendants’ Motion In Limine to Exclude Testimony of Charles Lundelius, deny Defendants’ Motion In Limine to Exclude Testimony of Charles Taylor, and partially grant and partially deny Plaintiff’s Motion In Limine Pursuant to Daubert and Federal Rules of Evidence 702, 703 and 403, to Exclude the Testimony and Opinions of Alan S. Zipp. An appropriate Order shall issue.

    Continue reading →United States District Court, E.D. Virginia, Alexandria Division. GALAXY COMPUTER SERVICES, INC., Plaintiff, v. Lara BAKER, et al., Defendants. No. 1:04CV1036 (JCC). May 27, 2005. MEMORANDUM OPINION CACHERIS, District Judge. This matter comes before the Court on: (1) Defendant Sullivan’s Motion In Limine Regarding Evidence of Indemnification; (2) Defendants’ Joint Motion for De Novo Review and Jury Trial on Portions of Bankruptcy Court Summary Judgment ...
  • U.S. ex rel. DRC, Inc. v. Custer Battles, LLC

    Example of a case where computer forensics played a part during a criminal case in Virginia: computer forensics expert Virginia criminal case.

    United States District Court,

    E.D. Virginia,

    Alexandria Division.

    UNITED STATES of America ex rel. DRC, Inc., et al., Plaintiffs,

    v.

    CUSTER BATTLES, LLC, et al., Defendants.

    No. 1:04CV199.

    Aug. 16, 2006.

    Eastern District of Virginia Computer Forensics Related Case

    MEMORANDUM OPINION

    ELLIS, District Judge.

    In this False Claims Act (FCA), 31 U.S.C. ss 3729 et seq., case, relators allege that defendants FN1 defrauded the United States by submitting false invoices and records to justify a $3 million advance payment that defendant, Custer Battles, received pursuant to a contract with the Coalition Provisional Authority (CPA) for work performed in Iraq in 2003 and 2004.FN2 Following a jury trial, the jury returned a verdict in favor of relators and defendants now seek judgment as a matter of law on various grounds, pursuant to Rule 50, Fed.R.Civ.P. Defendants’ Rule 50 motions have now been briefed and argued and are now ripe for disposition.

    For the reasons that follow, the motions must be granted on the ground that relators did not prove that the claims were presented to the United States.

    FN1. The defendants include: Custer Battles LLC’s principals, Scott Custer and Michael Battles; Custer Battles LLC (Custer Battles), a security and logistics support firm; Custer Battles’s related subsidiaries, Secure Global Distribution (SGD), Mideast Leasing, Inc.(MEL), and Custer Battles Levant (CBL); and Custer Battles’ former employee, Joseph Morris. Defendants Custer, Battles, Custer Battles, SGD, MEL, and CBL were represented jointly throughout this case and are referred to herein as the “Custer Battles defendants.” Defendant Morris retained independent counsel.

    FN2. Relators’ amended complaint also alleges that Custer Battles fraudulently solicited a contract to perform security services for Baghdad International Airport (BIAP). On January 30, 2006, these BIAP claims were severed from the ICE contract claims pursuant to the discretionary authority of Rule 42(b), Fed.R.Civ.P. DRC, Inc. v. Custer Battles LLC, Case No. 1:-4cv199 (Jan. 30, 2006) (Order severing ICE and BIAP trials). The BIAP trial has not yet been scheduled.

    I.

    The contract at issue between the CPA and Custer Battles required Custer Battles to provide support services to the CPA while the CPA launched the Iraqi Currency Exchange (ICE) project. The ICE project was the CPA’s effort to exchange new Iraqi dinars for the old Saddam Hussein-era dinars in circulation. Relators-a former Custer Battles subcontractor, DRC, Inc. (DRC); DRC’s principal, Robert Isakson; and Custer Battles’s former employee, William Baldwin-allege that Custer Battles and the other defendants used Custer Battles’s shell subsidiaries-SGD, MEL, and CBL-to submit fraudulent invoices to the CPA.

    At trial, three counts were presented. Count One alleged that the defendants had knowingly presented, or caused to be presented,*680 to an officer or employee of the United States Government or a member of the Armed Forces of the United States, a false or fraudulent claim to support the $3 million advance, in violation of 31 U.S.C. s 3729(a)(1). Count Two alleged that the defendants knowingly made, used, or caused to be made or used, false records or statements, and presented the false records or statements to the United States Government, in order to get paid or approved a false claim in support of the $3 million advance, in violation of 31 U.S.C. s 3729(a)(2). Count Three alleged that Custer Battles retaliated against relator Baldwin for blowing the whistle on Custer Battles’s fraudulent behavior, in violation of 31 U.S.C. s 3730(h).

    Over the course of a twelve day trial, the relators presented the testimony of twenty witnesses,FN3 and successfully moved for the admission of over 200 exhibits. Relators’ theory of the case was that, in the summer of 2003, defendants Custer, Battles, Morris, and others, conceived of a plan to defraud the CPA whereby defendants would submit to the CPA invoices that falsely inflated Custer Battles’s direct costs for work performed pursuant to a time and materials contract. In a time and materials contract the contractor, here Custer Battles, is (i) reimbursed for his direct costs, i.e., labor and materials, and (ii) paid a fixed percentage of those direct costs, which is meant to cover the contractor’s general and administrative expenses and provide a reasonable profit.

    FN3. The witnesses at trial included: (1) Darwin Kibby, the CPA’s contracting officer with responsibility for the ICE contract between August and mid-September 2003; (2) retired General Hugh Tant, the CPA official with primary authority over the ICE project; (3) Patricia Logsdon, the CPA’s contracting officer with responsibility for the ICE contract between mid-September 2003 and December 2003; (4) Gregory T. Pusch, an attorney for Custer Battles during the relevant time period; (5) Monty Jensen, an employee of Custer Battles in Iraq during the relevant time period; (6) Jeffrey Ottenbreit, an employee of BearingPoint, Inc., which was assisting the CPA in the ICE project during the relevant time period; (7) defendant Joseph Morris, Custer Battles’s Chief Operating Officer during the relevant time period; (8) relator William Baldwin; (9) Andrew Dunphy, a special agent with the Defense Criminal Investigative Service (DCIS); (10) Stevens R. Miller, an expert in computer forensics; (11) James Powell, Custer Battles’s Chief Financial Officer from September 2003 to June 2005; (12) Lori Pierce, the CPA’s contracting officer with responsibility for the ICE contract between December 2003 and the end of the contract’s performance; (13) Ngoctam Burch, an employee of Custer Battles from May 2002 to September 2003; (14) defendant Michael Battles; (15) defendant Scott Custer; (16) Jeffrey Thorpe, a special agent with the DCIS; (17) Marc Stanislawczyk, a government contracts lawyer who provided legal advice to Custer Battles in 2003; (18) relator Robert J. Isakson; (19) Daniel W. Ray, an expert in forensic accounting; and (20) Peter Miskovich, the Custer Battles employee responsible for closing out the ICE contract in February 2004.

    Although the parties disputed the nature of the ICE contract, the evidence tended to prove, and the jury ultimately found, that the ICE contract was a time and materials contract that was meant to reimburse Custer Battles for its direct costs and paid it an additional 25% of its direct costs; thus, in total Custer Battles was entitled to received 125% of its direct costs. Ex. 13. According to relators, defendants hatched a scheme to create the appearance of higher direct costs by presenting falsely inflated invoices to the CPA from fictional subcontractors-Custer Battles’s subsidiaries SGD, MEL, and CBL-purportedly providing services under the ICE contract. To prove this scheme, relators presented evidence that Custer Battles’s used these false invoices to (i) get reimbursed for costs it never actually incurred, and thereby (ii) increase the base from which Custer Battles’s 25% profit payment was calculated.

    *681 The centerpiece of the relators’ case in chief was the testimony of relator Baldwin, Custer Battles’s Iraq Country Manager throughout the relevant time period. Baldwin testified about his growing concerns over Custer Battles’s billing practices on the ICE project. Specifically, Baldwin was concerned that the invoices, which were chiefly handled by defendant Morris, and approved by defendant Custer, were grossly overstated. Additionally, relators presented damaging documentary evidence that tended to support their allegations of fraud by Custer Battles, including several invoices prepared by Custer Battles and presented to the CPA that contained suspiciously rounded figures. See, e.g., Ex. 76, 77, 102. Even more damaging to Custer Battles, was a spreadsheet, left behind, allegedly by defendant Battles, at a meeting with CPA officials, which detailed both the “actual costs” of work done by Custer Battles and the much greater “invoiced” costs Custer Battles presented to the CPA. The disparity between “actual costs” and “invoiced costs” represented a profit to Custer Battles far in excess of the 25% figure called for by the contract. Ex. 96A. In addition to the testimony and documentary evidence they adduced, relators also benefited from defendant Morris’s refusal to answer certain questions put to him by relators’ counsel. Specifically, the jury was instructed that it was permitted to draw an adverse inference from defendant Morris’s refusal to answer, namely the inference that had Morris answered the questions, the answers would have been favorable to defendants. DRC, Inc. v. Custer Battles, LLC, 415 F.Supp.2d 628, 636 (E.D.Va.2006) (permitting an adverse inference to be drawn from Morris’s refusal to answer a narrow set of questions). Thus, taken altogether, relators presented a significant amount of evidence tending to prove that Custer Battles did indeed submit false and fraudulently inflated invoices to the CPA for work performed under the ICE contract.

    At the conclusion of relators’ case in chief, both the Custer Battles defendants and defendant Morris moved for judgment as a matter of law, pursuant to Rule 50(a), Fed.R.Civ.P., arguing that relators had failed to present sufficient evidence to allow a jury to find liability under the statute. Following oral argument on the motions, the parties were directed to submit supplemental memoranda on the motions. A ruling on defendants’ Rule 50 motions was deferred, FN4 and the case was then submitted to the jury. After several days of deliberation, the jury returned a verdict in favor of relators on all three counts. Specifically, in response to special interrogatories, the jury stated that defendants had knowingly presented both false claims and false records to justify the $3 million advance Custer Battles received on the ICE contract. As a result, the jury found the defendants jointly and severally liable for $3 million in damages to the United States. FN5 Furthermore, the jury found that defendant Custer Battles had retaliated against relator Baldwin for his protected activity and awarded Baldwin $165,000 in *682 total damages. Judgment has not yet entered on this verdict.

    FN4. See March 2, 2006 Tr. at 144 (Docket # 411) (deeming the Rule 50 motions made and reserving argument); Rule 50(b), Fed.R.Civ.P. (“If, for any reason, the court does not grant a motion for judgment as a matter of law made at the close of all the evidence, the court is considered to have submitted the action to the jury subject to the court’s later deciding the legal questions raised by the motion.”).

    FN5. Based on a prior ruling, the jury was instructed that $3 million was the maximum amount of damages they could award. This award must be trebled by statute. 31 U.S.C. s 3729(a). Additionally, defendants are liable for a penalty of between $5,000 and $10,000 for each false claim and false record presented. Id. (authorizing “a civil penalty of not less than $5,000 and not more than $10,000”).

    Following the verdict, the parties were ordered to appear for a hearing to resolve the pending Rule 50, Fed.R.Civ.P. motions, and for entry of judgment on the verdict, if appropriate. DRC, Inc. v. Custer Battles LLC, Case No. 1:04cv199 (March 20, 2006). After this order, but before the hearing, the relators filed a motion seeking judgment on the jury’s verdict and entry of judgment as a matter of law, pursuant to Rule 50(b), Fed.R.Civ.P.FN6 Further oral argument on the parties’ Rule 50 motions was heard and the matter was taken under advisement. DRC, Inc. v. Custer Battles, Case No. 1:04cv199 (April 7, 2006).

    FN6. The defendants, correctly noted that Rule 50(b) motions are only proper after the entry of judgment and that relators’ motion was contrary to the Court’s explicit directions, promptly moved to strike the motion. See Rule 50(b), Fed.R.Civ.P. (“The movant may renew its request for judgment as a matter of law by filing a motion no later than 10 days after entry of judgment-and may alternatively request a new trial under Rule 59.”).

    Despite these flaws in the relators’ motion, the defendants’ motion to strike was denied, and the defendants were directed to submit a response to the relators’ Rule 50(b) motion for judgment as a matter of law.

    In their motion for judgment as a matter of law, defendants challenge whether relators adduced evidence (1) that any false claims (actionable pursuant to 31 U.S.C. s 3729(a)(1)) or false records (actionable pursuant to 31 U.S.C. s 3729(a)(2)) were knowingly presented, or caused to be presented, to employees or officers of the United States acting in their official capacity; (2) that the records submitted in support of the $3 million advance were materially false; (3) that the U.S. government or the CPA suffered any damage as a result of any false claim; (4) that any of the individual defendants-Scott Custer, Michael Battles or Joseph Morris-knew or should have known about any false document submitted in support of the $3 million advance; (5) that relator Baldwin was constructively discharged or demoted in retaliation for his protected activity; and (6) that the relators are “original sources” under 31 U.S.C. s 3730(e)(4). These issues are addressed in turn.

    II.

    The standard for granting a Rule 50, Fed.R.Civ.P. motion is well established. If the evidence, viewed in the light most favorable to the non-moving party, is of such “quality and weight that reasonable and fair minded” jurors could reasonably rely upon that evidence to return a verdict in favor of the non-movant, the motion must be denied. Martin v. Cavalier Hotel Corp., 48 F.3d 1343, 1350 (4th Cir.1995). In this respect, the Fourth Circuit has made clear that “[a] mere scintilla of evidence is insufficient to sustain the verdict, and the inferences a jury draws … must be reasonably probable.” Lust v. Clark Equip. Co., 792 F.2d 436, 437 (4th Cir.1986); see also Charleston Area Med. Ctr., Inc. v. Blue Cross & Blue Shield Mut. of Ohio, Inc., 6 F.3d 243, 248 (4th Cir.1993) (“We may not weigh the evidence, pass on the credibility of the witnesses, or substitute our judgment of the facts for that of the jury”). Thus, in addressing the defendants motions for judgment as a matter of law, “[t]he question to be resolved … is whether there is evidence on which a jury can properly base a verdict.” Lust, 792 F.2d at 437.

    A.

    As explained above, the trial proceeded on three counts. The first count alleged violations of 31 U.S.C. s 3729(a)(1), which provides, in pertinent part, that *683 any person who knowingly presents, or causes to be presented, to an officer or employee of the United States government … a false or fraudulent claim for payment of approval … is liable to the United States Government for a civil penalty ….

    Thus, to prevail under s 3729(a)(1), relators must prove by a preponderance of the evidence that: (1) there was a claim, (2) defendants knew the claim was false or fraudulent, (3) defendants presented, or caused to be presented, the false claim to an officer or employee of the United States for payment or approval, and (4) the false or fraudulent aspect of the claim or claims is material. United States ex rel DRC, Inc. v. Custer Battles LLC, 376 F.Supp.2d 617, 634 (E.D.Va.2005) [hereinafter DRC I ] (citing Harrison v. Westinghouse Savannah River Co., 176 F.3d 776, 785 (4th Cir.1999)).

    The first of these elements-whether there was a “claim”-was addressed at some length in DRC I, where the term was defined to include any request or demand that draws on the U.S. government fisc. DRC I, 376 F.Supp.2d at 641. In reaching its conclusion on the application of this definition to the facts of this case, DRC I began by identifying three types of funds from which Custer Battles received payment for its contracting work in Iraq. Specifically, payments were made from (1) Vested Funds, described as “Iraqi funds confiscated pursuant to Executive Order from United States bank accounts held in the name of the Government of Iraq,” id. at 624; (2) Seized Funds, described as “Iraqi state- or regime-owned cash, funds, or realizable securities that were found and seized by Coalition Forces in Iraq as an occupying force in accordance with the laws and usages of war,” id. at 626; and (3) DFI Funds, that is funds drawn from the Development Fund for Iraq (DFI), a fund established by the CPA and the United Nations to aid in the redevelopment of Iraq, id. at 626-27. Of these three types of funds, for the reasons set forth in DRC I, Seized Funds and Vested Funds belonged to the United States  government, while DFI Funds belonged to the people of Iraq and were merely  administered by the CPA. Id. at 645 (“[A]s the government conceded in its brief, the ‘funds in the DFI have always been Iraqi funds;’ they never became United States government property.”).

    [1] The difference between Seized and Vested Funds, on the one hand, and DFI Funds, on the other, is significant with respect to what constitutes a “claim” under the FCA. This is so because ownership of the funds will determine if there is a “claim” because a “claim” must be “a request or demand for payment that if paid would result in economic loss to the [U.S.] government fisc, i.e., a request for payment from [U.S.] government funds; it does not extend to cases where the government acts solely as a custodian, bailee, or administrator, merely holding or managing property for the benefit of a third party.” Id. at 641. The record establishes, without dispute, that only the $3 million advance, paid to Custer Battles by the CPA for work performed pursuant to the ICE contract, came from Seized Funds. The remaining funds for the ICE contract came from DFI Funds, which are Iraqui, not U.S. funds. Id. at 647. Thus, in terms of the ICE contract, only “claims” submitted to support the initial $3 million advance, that is claims requesting funds from the U.S. government fisc, were at issue during the trial.

    [2][3] Given that the invoices defendants presented to the CPA to justify the $3 million advance satisfy the “claims” requirement, it is necessary to address defendants’ challenge to relators’ evidence on the FCA’s third element, the “presentment”  requirement. 31 U.S.C. s 3729(a)(1). *684 This requirement was also at issue in the parties’ summary judgment dispute. There, defendants questioned whether the  then-voluminous record disclosed any evidence sufficient to satisfy relators’ burden of proving presentment. Specifically, defendants argued that there was no evidence of presentment to a U.S. government officer or employee because the CPA was an international entity, not an American entity, and because CPA personnel, even if U.S. officers or employees, were acting in their CPA capacities, not in their official U.S. capacities. In the end, summary judgment was denied without reaching the issue of whether the CPA was a U.S. entity. Because it is now necessary to address this question, it is appropriate to review DRC I’s ruling on presentment.FN7

    FN7. DRC I, as a prior ruling in this case, is binding under the “law of the case” doctrine, which provides that “when a court decides upon a rule of law, that decision should continue to govern the same issues in subsequent stages in the same case.” Christianson v. Colt Indus. Operating Corp., 486 U.S. 800, 815-16, 108 S.Ct. 2166, 100 L.Ed.2d 811 (1988) (quoting Arizona v. California, 460 U.S. 605, 618, 103 S.Ct. 1382, 75 L.Ed.2d 318 (1983)).

    As an initial matter, the parties do not dispute that “[b]efore FCA liability will attach to a ‘claim’ for payment under s 3729(a)(1), the false or fraudulent ‘claim’ must be ‘knowingly present[ed], or caus[ed] to be presented, to an officer or employee of the United States Government or a member of the Armed Services of the United States.’ ” DRC I, 376 F.Supp.2d at 647 (citing 31 U.S.C. s 3729(a)(1)).FN8 Furthermore, it is clear from DRC I that presentment remains as a requirement notwithstanding Congress’s amendment of  the term “claim” in 31 U.S.C. s 3729(c).FN9 In meeting this presentment requirement, DRC I explained, it is not enough simply to demonstrate that false claims were presented “to [ ] grantees of federal funds, without regard to whether claims presented to those grantees are in turn presented back to the United States for payment.” See DRC I, 376 F.Supp.2d at 647 n. 84 (citing Totten II, 380 F.3d at 496). Moreover, DRC I explained that the presentment requirement could not be satisfied by presentment to a United States government employee or officer where the employee or officer is not working in his or her official U.S. capacity:

    FN8. See also United States ex rel Totten v. Bombardier Corp., 380 F.3d 488, 493 (4th Cir.2004) (” Totten II “); Harrison v. Westinghouse Savannah River Co., 176 F.3d 776, 785 (4th Cir.1999); United States ex rel. Berge v. Bd. of Trustees of Univ. of Ala., 104 F.3d 1453, 1459 (4th Cir.1997).

    FN9. 31 U.S.C. s 3729(c) defines a “claim” as:

    any request or demand, whether under a contract or otherwise, for money or property which is made to a contractor, grantee, or other recipient if the United States Government provides any portion of the money or property which is requested or demanded, or if the Government will reimburse such contractor, grantee, or other recipient for any portion of the money or property which is requested or demanded.

    [I]t cannot be that the presentment requirement is satisfied as long as a false claim is presented to a person who happens to be an employee of the United States government, without respect to whether that person is acting in his or her capacity as a U.S. government employee. To be sure, if a contractor submitted a false claim to a U.S. government employee for remodeling her kitchen, the presentment requirement would not be satisfied. Thus, if the CPA was not a U.S. entity, then those U.S. employees detailed to the CPA were acting in their capacity as officers of the CPA, not as employees of the United States government.

    Id. at 648 n. 86. Thus, DRC I made clear that to satisfy the presentment requirement*685 of 31 U.S.C. s 3729(a)(1), relators must produce evidence that defendants presented, or caused to be presented, false claims to U.S. government employees or officers working in their official capacity. In other words, presentment to U.S. government employees or officers detailed to the CPA, but acting in their CPA capacities, fails to satisfy the FCA’s presentment requirement.

    This determination also affects the relator’s claim under 31 U.S.C. s 3729(a)(2) that defendants submitted false records or statements because this FCA subsection also embraces the presentment requirement. Specifically, s 3729(a)(2) provides for FCA liability when a person “knowingly makes, uses, or causes to be made or used, a false record or statement to get a false or fraudulent claim paid or approved by the Government.” 31 U.S.C. s 3729(a). Thus, an FCA claim under s 3729(a)(2) has three essential elements: (1) the defendant made a statement in order to receive money from the government, (2) the statement was false, and (3) the defendant knew it was false. 31 U.S.C. s 3729(a)(2). Although the parties dispute whether a presentment requirement is implicit in the first of these elements, DRC I reflects clear agreement with the opinion of then-Judge Roberts in Totten II that “by adding the phrase ‘by the Government’ to s 3729(a)(2), Congress intended to refer back to the presentment requirement in s 3729(a)(1).” DRC I, 376 F.Supp.2d at 650 & n. 88 (citing Totten II, 380 F.3d at 498). And, this view of now-Chief Justice Roberts was adhered to at the trial of this case, as the jury was instructed with respect to s 3729(a)(2) as follows:

    Finally, a defendant is only liable if the relators have proven, by a preponderance of the evidence, that any false record or statement was made or used in order to get paid or approved a false claim which called upon the $3 million advance payment, and was presented to the United States Government.

    See March 17, 2006 Jury Instructions (Docket # 426) at 246. See also id. at 254-55 (describing the verdict form). Thus, just as s 3729(a)(1) requires proof that false claims have been presented, or caused to be presented, to a United States government officer or employee working in his or her official capacity, s 3729(a)(2) also requires proof that any false records or statements were presented, or caused to be presented, to a United States government employee or officer working in their official capacity.

    It follows, then, that if the CPA was an international entity, rather than a U.S. entity, submission of claims to the CPA, without more, would not satisfy the presentment requirement. In this event, it would be necessary for relators to show that by submitting the claim to the CPA, defendants caused the claim ultimately to be presented to a U.S.  entity or to a U.S. officer or employee acting in her/his official capacity. Relators have failed in this respect. Relators have not pointed to any such evidence in the trial record, nor has an independent review of the record revealed that any such evidence was presented at trial. It is obvious, then, that unless the CPA is a U.S. entity, the defendants’ Rule 50 motions must be granted on the ground that the presentment requirement has not been proved.

    On the other hand, if the CPA was a U.S. government entity, the result differs dramatically-that is, the presentment requirement is easily met, for “[i]n that case, presentment occurred when Custer Battles submitted allegedly false or fraudulent contract bids or invoices to the CPA’s Contracting Officers who were also employees of the U.S. Armed Forces, and would have been acting in their capacity as representatives of a U.S. government entity.” *686 DRC I, 376 F.Supp.2d at 648. Indeed, the trial record is replete with evidence that invoices and records were presented to CPA employees, including members of the United States Armed Forces detailed to the CPA. For  example, Patricia Logsdon, the second contracting officer with responsibility for the ICE project, testified that she received copies of invoices members of Custer Battles’s ICE team also presented to the BearingPoint employees responsible for handling the CPA’s payment of subcontractors,FN10 and indeed, several invoices that the relators contend were fraudulent were addressed specifically to her.FN11 Similarly, Jeffrey Ottenbreit, an employee of BearingPoint, who worked on the ICE project at the direction of CPA officials, testified that he received the allegedly fraudulent invoices from Ms. Logsdon or directly from Custer Battles and that it was his common practice to submit invoices to the CPA’s Finance Office. Feb. 21, 2006 Tr. at 79-80, 123, 152-53. These examples illustrate that, if the CPA is considered a U.S. government entity, relators have presented sufficient evidence to allow a jury to find that the presentment requirements of both s 3729(a)(1) and s 3729(a)(2) have been met.

    FN10. Feb. 16, 2006 Tr. (Logsdon) at 145-46.

    FN11. Exhibit 102 (October 28, 2003 Custer Battles invoice), Exhibit 113 (November 6, 2003 Custer Battles invoice); and Exhibit 123 (November 12, 2003 Custer Battles invoice).

    Although the issue of the CPA’s status was fully briefed and argued on summary judgment, it was ultimately unnecessary to resolve it because, as DRC I reflects, even if the CPA were not a U.S. government entity defendants could be liable for ” ‘causing’ claims to be presented to a government official or employee.” DRC I, 376 F.Supp.2d at 648. As explained in DRC I:

    [T]he United States maintained dominion, control, and possession of Seized and Vested Funds until the Army was finally directed by CPA Contracting Officers to make payments directly to the contractors, whether in the form of cash, electronic funds transfer, or a check drawn on the U.S. Treasury. Thus, when a contractor submitted a false or fraudulent invoice for payment to a CPA Contracting Officer, like any subcontractor submitting a false invoice for payment to a contractor, those contractors “caused ” the CPA Contracting Officer to present a request for payment, inflated by the value of the false claim, to an officer of the United States Army.

    Id. DRC I based its characterization of the billing process on the general budgeting, allocation, and disbursement processes for Vested and Seized Funds used during the CPA’s tenure as the governing authority in Iraq. Id. at 627-29. According to the summary judgment record, this process proceeded, in general, as follows: First, the Vested and Seized Funds were allocated to a specific CPA ministry-in this case, the Ministry of Finance. Id. at 628. This allocation did not result in the actual transfer of any funds, but rather simply allowed the CPA to plan its budget. Id. at 628. Once the CPA allocated the Vested or Seized Funds, it solicited bids from contractors for the specific project and awarded the contracts based on a competitive bidding process. Id. Review of the trial record reflects that something similar to this process was used to plan and award the ICE contract, and neither party contends otherwise.

    Of course, for purposes of s 3729(a)’s presentment requirement, the critical step in the CPA’s budgeting and payment process is the submission of invoices by contractors seeking payment on the contract. *687 The summary judgment record lacked specific facts concerning the payment of claims after the award of the ICE contract, and DRC I accordingly based its ruling on the CPA’s typical practice for reimbursing contractors. DRC I describes this practice as follows:

    Thereafter, the contracts were performed and contractors submitted invoices to the CPA for payment. In reliance on these invoices, CPA Contracting Officers certified the disbursement of these funds to the United States Army. Importantly, the Army in turn made disbursements from Seized and Vested Funds in reliance on these CPA certifications. Payments were made by electronic fund transfer, check, or cash. CPA payments via check were made with U.S. Treasury checks. And cash payments in dollars were coordinated by the Army’s 336th Finance Command (FINCOM), which maintained physical control of the currency. Finally, the disbursement of the funds was recorded in the Army’s STANFINS system as well as on the CPA ledger.

    Id. at 629. This general practice evidence indicated that any false claim presented to the CPA would necessarily “cause” the Army to release funds to CPA contractors. Accordingly, summary judgment was denied on the ground that a triable factual issue existed as to whether this general practice occurred in the case of the ICE contract specifically. Importantly, were the trial evidence to show that the general practice occurred with respect to the ICE contract, the presentment requirement would necessarily be satisfied, whether or not the CPA was a U.S. entity. Accordingly, it was unnecessary at the summary judgment stage to decide the CPA’s status. But, DRC I explicitly noted the possibility that the trial record, if different, might require a determination of the CPA’s status. Id. at 649 (noting that the denial of summary judgment did “not foreclose the possibility that a different result might obtain as more facts are adduced at trial.”). Moreover, relators were given fair warning that the denial of defendants’ motion for summary judgment in DRC I did not relieve them of their burden of proving the element of presentment.FN12

    FN12. See Feb. 2, 2006 Tr. at 12 (“THE COURT: You do I think, understand, Mr. Grayson, that I did not make a finding under Rule 56 that [presentment of claims to government officials] occurred.”); id. at 31 (“THE COURT: I don’t think Mr. Grayson disputes that he has to show presentment. This is just a part of that. Is that right, Mr. Grasyon? ATTORNEY GRAYSON: Yes, your honor.”); id. at 45 (“THE COURT: [T]his does not absolve the relators from showing other aspects of presentment, who got the claim, where did it go, and so forth.”).

    In the end, relators failed to heed this advice. Relators did not adduce trial evidence establishing the CPA’s general procedure for the disbursement of funds to contractors as described by DRC I, or that any such procedure was followed in connection with the $3 million. Indeed, the $3 million payment to Custer Battles differed from the routine practice described in DRC I in a material respect-it was an advance. Because Custer Battles received an advance, it follows that the CPA never submitted to the U.S. Army any certifications based on Custer Battles’s invoices for the disbursement of money. The money had already been disbursed. While the ICE contract required Custer Battles to justify the advance by submitting invoices to the CPA, the CPA apparently was not required to present these invoices to the U.S. Army. As such, relators failed to adduce evidence that Custer Battles “caused to be presented” to the United States Army any invoices for work on the ICE project.

    *688 In short, evidence relied on in DRC I to avoid deciding whether the CPA is a U.S. government entity is not present in the trial record, and therefore the deferred question of the CPA’s status can no longer be avoided. FN13 Fortunately, the issue was fully briefed and argued on summary judgment and was extensively discussed and analyzed in DRC I, which analysis is instructive to quote here at length:

    FN13. The potentially dispositive nature of the legal determination of whether the CPA is or is not a U.S. entity was noted by the Court when it took the Rule 50 motions under advisement. See March 6, 2006 Tr. at 242 (“The parties originally argued strongly about the CPA and I side stepped that question suggesting that I didn’t need to reach it. I think ultimately, I must reach it.”).  Discerning the status of the CPA is not an easy task. Relators and the government argue that the CPA is not a U.S. agency or entity, but merely an “instrumentality of the United States.” FN14 In reaching this conclusion, the government observes that the CPA’s creation was first announced by the Commander of the U.S. Central Command, was staffed, in large part, by employees of the United States government, and was led by a CPA Administrator appointed by and subject to the President. Moreover, not only did the United States have substantial influence and control over the CPA, but the CPA received a substantial part of its operating budget (approximately $1 billion) from Congress. In fact, Congress even purported to  appropriate funds to the CPA “in its capacity as an entity of the United States.” 118 Stat. at 1225. Thus, it is tempting to conclude that the CPA was merely an alter-ego, a tool, or an instrumentality of the United States.

    FN14. The government was at great pains to emphasize that it takes this position for the purposes of the FCA only, and not for any other purpose.

    Yet, one should not too hastily conclude that because the United States was the CPA’s principal controller and contributor that it necessarily follows that the CPA is an instrumentality of the United States. For example, on this record, the CPA seems clearly different from the Commodity Credit Corporation (CCC), which was held to be an instrumentality of the United States in Rainwater v. United States, 356 U.S. 590, 592, 78 S.Ct. 946, 2 L.Ed.2d 996 (1958). As noted in that decision, the CCC was established “by Congress” as a “wholly owned government corporation” with all funds coming and returning to the United States Treasury, and every officer and employee coming from the Department of Agriculture. 356 U.S. at 591-92, 78 S.Ct. 946 (“[CCC] is simply an administrative device established by Congress for the purpose of carrying out federal farm programs with public funds.”). In sharp contrast, there is no dispute that the CPA was not established by Congress. Instead, as described in a letter to the United Nations, the CPA was an entity created by the United States, United Kingdom, and its Coalition partners “acting under existing command and control arrangements through the Commander of Coalition Forces.” Moreover, the United Nations recognized the CPA, not as an instrumentality of the United States, but as an entity through which the Coalition nations acted “as occupying powers under unified command.” UNSCR 1483. And while the substantial majority of the CPA staff was comprised of United States employees, a significant portion-13%-hailed from other Coalition partners. Thus, the CPA may also be described as an international body formed by the implicit, multilateral consent of its Coalition partners, which would not *689 be subject to the specific laws of its members states, including the FCA. Given the fluid nature of the conflict in Iraq and the challenges of establishing a new government in a war zone, it is not surprising that the organization of the CPA appears at times to have been ad hoc and to have relied heavily on the resources of its largest contributing member. Thus, it would seem that, like NATO or any other international organization created by the multilateral consent of multiple member nations, whether by treaty or otherwise, the CPA is not an instrumentality of each of its members states, distinctly subject to the laws of all of its members, but a wholly distinct entity that exercises power through a structure agreed to by its member states and that is subject to the laws of war and to its own laws and regulations. In any event, at this point, it is unnecessary to reach and decide this issue.

    See id. at 649-50. From this, it is clear that although the CPA’s status was not formally decided on summary judgment, the matter was thoroughly analyzed. And, indeed, the result of that analysis is clear-although the CPA was principally controlled and funded by the U.S., this degree of control did not rise to the level of exclusive control required to qualify as an instrumentality of the U.S. government. See Rainwater, 356 U.S. at 592-94, 78 S.Ct. 946. In fact, the evidence clearly establishes that it was created through and governed by multinational consent. This result is as compelling now as it was on summary judgment.FN15 Thus, it follows that because the CPA was not a U.S. government entity, and therefore U.S. employees of the CPA were not working in their official capacity as employees or officers of the United States government, relators have demonstrably failed to provide sufficient evidence to enable a jury to find presentment, as required by both s 3729(a)(1) and s 3729(a)(2).FN16 Accordingly, the defendants’ Rule 50(a) motions must be granted with respect to Counts I and II on the ground that  relators failed to produce sufficient evidence of presentment, and thus judgment as a matter of law must be entered for defendants on these counts. See Rule 50, Fed.R.Civ.P.

    FN15. See also March 6, 2006 Tr. at 242 (“THE COURT: It is my view that the CPA is not an American agency or entity.”).

    FN16. It is important to note that the jury was asked to return a verdict under alternative assumptions: first, that the CPA was a U.S. government agency and the CPA’s employees were U.S. government officials acting in their official capacity; and second, that the CPA was not a U.S. government agency and thus, the CPA’s employees were not U.S. government employees acting in their official capacity. See March 7, 2006 Jury Instructions (Docket # 426) at 243-44. Despite the demonstrated absence of any presentment to the U.S. Army or any other U.S. government entity, the jury returned a verdict for relators under both assumptions.

    Because the relators failed to adduce evidence of presentment, it is unnecessary to address the defendants’ other arguments that (i) there was insufficient evidence that claims calling on the $3 million were materially false, (ii) the United States suffered no damage stemming from the alleged false claims, and (iii) the individual defendants did not have knowledge or reason to know of the alleged fraudulent behavior.

    B.

    [4] Defendant Custer Battles next argues that relators failed to offer sufficient evidence that relator Baldwin was constructively discharged or demoted in violation of the FCA’s whistle-blower provision, *690 31 U.S.C. s 3730(h). This provision provides, in pertinent part:

    Any employee who is discharged, demoted, suspended, threatened, harassed, or in any other manner discriminated against, in the terms and conditions of employment by his or her employer, because of lawful acts done by the employee on behalf of the employee or others in furtherance of an action under this section, including investigation for, initiation of, testimony for, or assistance in an action filed or to be filed under this section, shall be entitled to all relief necessary to make the employee whole ….

    31 U.S.C. s 3730(h). Thus, an employee bringing a claim pursuant to the FCA’s whistle-blower provision must prove: “(1) that he took acts in furtherance of a qui tam suit [i.e., engaged in protected activity]; (2) that his employer knew of these acts; and (3) that his employer [demoted or] discharged him as a result of these acts.” Eberhardt v. Integrated Design & Construction, Inc., 167 F.3d 861, 866 (4th Cir.1999) (quoting Zahodnick v. IBM Corp., 135 F.3d 911, 914 (4th Cir.1997)). With respect to the first element, the Fourth Circuit has explained that “an employee need not have actually filed a qui tam suit or even known about the protections of section 3730(h) in order to engage in protected activity.” Eberhardt, 167 F.3d at 867. Indeed, protected activity includes “investigating matters which are calculated, or reasonably could lead, to a viable FCA action.” Id. (quoting United States ex rel. Hopper v. Anton, 91 F.3d 1261, 1269 (9th Cir.1996)).

    With respect to the first two elements, relators presented sufficient evidence to permit the jury to find that Baldwin engaged in protected activity and that Custer Battles knew of this. The evidence is easily summarized. First Baldwin testified that he became suspicious of Custer Battles’s billing practices under the ICE contract and advised the defendants that he thought their actions were illegal and should stop. February 21, 2006 Tr. at 303 (Baldwin); February 22, 2006 Tr. at 12-17 (Baldwin). Baldwin questioned Custer and Morris generally about Custer Battles’s inflated profits, id. at 16-17, and specifically about certain charges to the CPA for forklifts, id. at 88-89, 96, and leases. Id. at 182-86. Most importantly, Baldwin, dismayed by Custer Battles’s billing practices, resigned from the ICE contract board, and reported his suspicions to the Department of Defense’s Defense Criminal Investigative Service (DCIS). Id. at 151. Additionally, Baldwin raised his concerns regarding Custer Battles’s billing practices directly with defendant Custer. Id. at 83 (telling Custer that he viewed Custer Battles’s billing practices as fraudulent, and advising Custer to seek legal advice). In short, relators presented abundant evidence to permit the jury to find that Baldwin engaged in protected activity and that his superiors at Custer Battles knew about this protected activity.

    As to the third element, that the employer demoted or discharged the whistle-blower, relators presented ample evidence for the jury to conclude that Baldwin was demoted, and constructively discharged because he engaged in protected activity. Prior to Baldwin raising his concerns over Custer Battles’s billing practices, defendant Custer praised Baldwin’s work. See, e.g., Ex. 3 (July 20 email from Custer to Morris “I truly enjoyed working with Pete and think he is one of the most professional, hard working guys I’ve ever had the pleasure to work with.”); Ex. 19 (Sept. 10 email from Custer to Battles: “Pete is actually doing an outstanding job, although Joe has it in for him.”); Ex. 65 (Sept. 24, 2003 email from Custer to Morris: “Pete has been doing an outstanding job ….”). This praise turned to scorn when Baldwin began to object to Custer Battles’s billing *691 practices. Soon after, Baldwin was demoted from Country Manager to Facilities Manager. See February 22, 2006 Tr. at 156-59 (Baldwin) (“Q: Did you remain country manager at Custer Battles throughout your tenure at Custer Battles? A: No. I was demoted. Q: Why were you demoted? A: I was demoted because I resigned from the [ICE] board, and other issues. Q: How do you know you were demoted because you resigned from the board? A: Because Scott Custer had a private meeting with me in the Mansour house and told me.”). Based on this evidence, it was reasonable for the jury to conclude that Baldwin was demoted for engaging in protected activity.

    In addition, relators presented sufficient evidence that Custer Battles constructively discharged Baldwin. Baldwin submitted his notice of resignation in January 2004 because of Custer Battles’s persistent refusal to heed his warnings concerning the ICE billing practices. Specifically, senior management, including Custer, Battles and Morris, ignored Baldwin’s pleas to discontinue Custer Battles’s suspect billing practices. Indeed, the only reaction by Custer Battles to these pleas was to demote Baldwin. See, id.; Ex. 114, 125. Baldwin testified that he had asked defendants to allow him to do his job without implicating him in their fraud, but this request had been ignored. See February

    22, 2006 Tr. at 171-77; Ex. 125. Ultimately, faced with the specter of remaining at Custer Battles and entangling himself in his employer’s fraudulent practices, Baldwin chose to resign. February 22, 2006 Tr. at 179-89. These facts are sufficient to allow a jury to find that Baldwin was constructively discharged. See Batt v. City of Oakland, Case No. C 02-04975, 2006 WL 1980401, at *7 (N.D.Cal. July 13, 2006) (holding that a plaintiff’s knowledge of illegal acts coupled with threats to plaintiff rises “to the level of intolerable conditions required for a constructive discharge to occur.”). In sum, relators provided sufficient evidence that Baldwin was constructively discharged or demoted in violation of the FCA’s whistle-blowing provision and defendant’s motion for Judgment as a Matter of Law is denied. See Rule 50, Fed.R.Civ.P.

    C.

    Finally, defendant Morris argues that neither Isakson nor Baldwin have standing to bring the claims made pursuant to 31 U.S.C. s 3729(a) FN17 because they are not “original sources.” The FCA confers jurisdiction on district courts over a complaint by a private person, acting as a relator, provided the complaint is not based upon “the public disclosure of allegations or transactions in a criminal, civil, or administrative hearing, in a congressional, administrative, or Government Accounting Office report, hearing, audit, or investigation, or from the news media.” 31 U.S.C. s 3730(e)(4)(A). Even if a complaint is based, in part, on publicly disclosed information, a district court retains jurisdiction if “the person bringing the action is an original source of the information.” Id. The

    statute defines an “original source” as “an individual who has direct and independent knowledge of the information on which the allegations are based and has voluntarily provided the information to the Government before filing an action under this section which is based on the information.” 31 U.S.C. s 3730(e)(4)(B). So, although the fraud committed by Custer Battles allegedly damaged the United States and not relators, the FCA permits *692 relators to bring this suit in on behalf of the United States if the claims are not based upon a public disclosure, or if the relators are the “original source” of the claims.

    FN17. There is, of course, no doubt that Baldwin has standing to bring his whistle-blower claim.

    Although framed as a standing argument, defendant Morris’s argument simply revisits the ruling on subject matter jurisdiction made at the summary judgment stage of this litigation.FN18 Succinctly stated, this jurisdictional argument asks (1) whether there was a public disclosure of Custer Battles’s fraudulent behavior; FN19 (2) if so, were the allegations of the complaint “based upon” that public disclosure; FN20 and (3) if both of those prerequisites are met, then are the relators nonetheless “original sources” of the information contained in the complaint. See 18 U.S.C. s 3730(e)(4). Defendants unsuccessfully raised this issue at the summary judgment stage, and defendant Morris has presented no new evidence requiring reversal of that decision. See DRC, Inc. v. Custer Battles, LLC, Case No. 1:04cv199 (Jan. 23, 2006 Transcript on Summary Judgment Motions) (Docket # 417) at 79-81. The prior ruling determined that there was no public disclosure, FN21 and that, even assuming, arguendo, that there was a public disclosure, the complaint was not “based upon” that public disclosure. FN22 To date, defendant Morris has not presented any persuasive evidence that there was, in fact, a public disclosure, or that the complaint was “based upon” the public disclosure. Therefore, defendant Morris’s jurisdictional argument must fail, and his motion on this ground must be denied.

    FN18. It should be noted that defendant Morris’s motion is procedurally infirm. Although framed as a Rule 50(a), Fed.R.Civ.P., motion for judgment as a matter of law, jurisdictional issues are decided by the Court and not the jury, and therefore, the appropriate vehicle to raise this argument would have been a Rule 12(b)(1), Fed.R.Civ.P. motion.

    FN19. See Eberhardt ex rel United States v. Integrated Design and Constr. Inc., 167 F.3d 861, 870 (4th Cir.1999) (“[W]e find that the methods of public disclosure set forth in section 3730(e)(4) are exclusive of the types of public disclosure that would defeat jurisdiction under that section.”).

    FN20. See United States ex rel. Siller v. Becton Dickinson & Co., 21 F.3d 1339, 1347 (4th Cir.1994) (A relator’s action is “based upon” a public disclosure “only where the relator has actually derived from that disclosure the allegations upon which his qui tam action is based.”).

    FN21. Id. at 79 (“I think it’s clear that the set of facts from which someone might infer that there is an investigation into fraud is not a public disclosure as contemplated by the statute.”).

    FN22. Id. at 82 (“In any event, I don’t find that even assuming there was a public disclosure, that the allegations were based on the public disclosure.”).

    III.

    For the reasons stated above, defendants’ Rule 50, Fed.R.Civ.P., motion for judgment as a matter of law must be granted in part and denied in part. Because relators failed to present evidence that any of the defendants presented or caused to be presented any false claims or records, the motion must be granted with respect to relators’ claims in Counts One and Two made pursuant to 31 U.S.C. s 3729(a). Because relator Baldwin presented ample evidence to warrant submission of his whistle-blower claim to the jury, Custer Battles’s motion for judgment as a matter of law on that count must be denied. Accordingly, judgment will be entered on the jury’s verdict finding Custer Battles’s violation of 31 U.S.C. s 3130(h), and awarding damages of $165,000 to Baldwin. Finally, defendant Morris has not provided evidence that jurisdiction is lacking, and thus, his motion for judgment *693 as a matter of law related to relators’ standing is denied.

    Continue reading →Example of a case where computer forensics played a part during a criminal case in Virginia: computer forensics expert Virginia criminal case. United States District Court, E.D. Virginia, Alexandria Division. UNITED STATES of America ex rel. DRC, Inc., et al., Plaintiffs, v. CUSTER BATTLES, LLC, et al., Defendants. No. 1:04CV199. Aug. 16, 2006. Eastern District of Virginia Computer Forensics Related Case MEMORANDUM OPINION ELLIS, District Judge. In ...
  • U.S. v. Ward

    United States District Court, W.D. Virginia,

    Harrisonburg Division.

    UNITED STATES of America,

    v.

    Andrew Morgan WARD, Defendant.

    No. 5:06CR00019.

    Oct. 24, 2006.

    REPORT AND RECOMMENDATION

    WAUGH CRIGLER, Magistrate Judge.

    *1 In accordance with the provisions of Title 28 U.S.C. s 636(b)(3) and upon the defendant’s consent, this case was referred to the undersigned to conduct a plea hearing.

    DEFENDANT’S RESPONSES TO RULE 11 INQUIRY

    The Grand Jury has returned a multiple count Indictment charging defendant in Count One with knowingly transporting or shipping, or knowingly attempting to transport or ship, in interstate commerce by means of a computer, child pornography, as defined in Title 18, United States Code, Section 2256(8)(A), in violation of Title 18, United States Code, Section 2252A(a)(1) and 2252A(b)(1); in Count Two with knowingly attempting to receive child pornography or material that contained child pornography, as defined in Title 18, United States Code, Section 2256(8)(A), in violation of Title 18, United States Code, Sections 2252A(a)(2) and 2252A(b)(1); in Count Three with knowingly possessing or attempting to possess material containing images of child pornography as defined in Title 18, United States Code, Section 2256(8)(A) that had been mailed, or shipped or transported in interstate or foreign commerce by any means, including by computer, or that was produced using materials that had been mailed, or shipped or transported in interstate or foreign commerce by any means, including by computer, in violation of Title 18, United States Code, Sections 2252A(a)(5)(B) and 2252A(b)(2); and in Count Four a forfeiture count pursuant to Title 18, United States Code, Section 2253.

    On October 16, 2006, a plea hearing was conducted before the undersigned, and the  defendant entered a plea of guilty to Counts One, Three, and Four of the Indictment pursuant to a plea agreement between defendant and the government. The government has agreed to dismiss Count Two of the Indictment upon acceptance of plaintiff’s guilty plea.

    At this hearing the defendant was placed under oath and testified that his full legal name is Andrew Morgan Ward, that he was born on September 29, 1978, and that he attended high school up to the eleventh grade. The defendant stated that he can read, write, and understand the English language. The defendant stated that he was fully aware of the nature of the charges against him and the consequence of pleading guilty to those  charges. The defendant further testified that he was not under the influence of alcohol, medicine, or any drug. Defendant stated that he had no other physical or mental condition which impaired his ability to understand the nature of the proceedings being held. Defendant’s counsel stated that he had no reservations as to the defendant’s competency to enter a plea of guilty to the offenses. The defendant testified that he had received a copy of the Indictment pending against him and that he had fully discussed the charges therein, and his case in general, with his counsel. He also testified that he had read the plea agreement in its entirety and had discussed the plea agreement with his counsel before signing the agreement. He stated that he understood the terms of the agreement and that the document presented to the court set forth his agreement with the government in its entirety. The defendant specifically testified that he understood that under the terms of the agreement he was waiving any right to appeal or to  collaterally attack his conviction or sentence and that he was waiving his right to have a jury determine beyond a reasonable doubt any facts alleged in Counts One, Three, and Four. The defendant further testified that he knew that the government retained the right to appeal any sentence the court imposed that was below the applicable sentencing guideline range or below the government’s recommended sentence.

    *2 The defendant stated that he was pleading guilty of his own free will because he was, in fact, guilty of the offenses charged. The defendant also stated that no one had made any promises other than those contained in his agreement with the government, or made any assurances or threats to him in an effort to induce his plea. The defendant testified that he understood that the offenses with which he is charged in Counts One and Three are felonies and that if his plea is accepted, he will be adjudged guilty of those offenses. Moreover, the defendant testified that he understood that he will be required to pay a mandatory assessment of $200. The defendant acknowledged that he consented to the administrative forfeiture, official use and/or destruction of any illegal firearms or contraband seized by any law enforcement agency from his possession or from his direct or indirect control. The defendant further acknowledged that he was aware that the government had seized or restrained items of his personal property and that he had agreed to forfeit these items as set forth in the plea agreement. The defendant agreed that the forfeitures as set forth in the plea agreement are proportionate to the degree and nature of the offenses he committed and do not raise any of the concerns addressed in United States v. Austin, 509 U.S. 602, 113 S.Ct. 2801, 125 L.Ed.2d 488 (1993). The defendant stated that he understood that he must submit to the government a complete and truthful financial statement revealing all his assets and liabilities on a form provided by the government within 30 days of the date of the plea agreement. The defendant stated that he was waiving his right to raise the defense of the statute of limitations if for any reason the plea agreement is withdrawn or otherwise not consummated. The defendant also testified that he was waiving all rights under the Freedom of Information Act, 5 U.S.C. s 552, or the Privacy Act, 5 U.S.C. s 552a, to request or receive from any department or agency of the United States any records pertaining to the investigation or prosecution of his case.

    The defendant was informed that the maximum possible penalty provided by law for the offense with which he is charged, in the case of Count One, is twenty years imprisonment and a fine of $250,000, together with supervised release. The defendant was further informed that the minimum mandatory sentence for Count One is five years imprisonment. The defendant was informed that the maximum possible penalty provided by law for the offense with which he is charged, in the case of Count Two, is twenty years imprisonment and a fine of $250,000, together with supervised release. The defendant was further informed that the minimum mandatory sentence for Count Two is five years imprisonment. The defendant was informed that the maximum possible penalty provided by law for the offense with which he is charged, in the case of Count Three, is ten years imprisonment and a fine of $250,000, together with supervised release. Finally, the defendant was informed that Count Four is a forfeiture allegation.

    *3 The defendant was informed that under the Sentencing Reform Act of 1984, the United States Sentencing Commission has issued guidelines for judges to follow in determining the sentence in a criminal case. The defendant was then informed that, in light of the United States Supreme Court’s decision in United States v. Booker, 543 U.S. 220, 125 S.Ct. 738, 160 L.Ed.2d 621 (2005), the sentencing guidelines are no longer mandatory but that the sentencing judge may apply them in an advisory fashion in determining a reasonable sentence. The defendant testified that he and his counsel had discussed how the sentencing guidelines might apply in his case. The defendant also testified that he understood that the court would not be able to determine the applicable guideline range, for advisory purposes, until after a presentence report has been prepared and both parties have been given an opportunity to challenge the reported facts and application of the guidelines. He stated that he understood that the eventual sentence imposed may be different from any estimate his attorney had given him and that the court has the authority to impose a sentence that is either higher or lower than that called for by the guidelines, so long as the sentence is not greater than the statutory maximum for the offenses to which the defendant is pleading guilty.

    Defendant testified that he understood that the government will recommend that he be sentenced at the low end of the guideline range and that the government will object to any motion he makes for a downward departure. Also, defendant stated he understood that the government may request that he be sentenced to lifetime supervision or a lengthy period of supervised release. The defendant stated that he understood that his offense level would likely be calculated under USSG s 2G2.2. The defendant stated that he also understood that for purposes of the plea agreement only, the government would recommend that his offense level not be increased under USSG s 2G2.2(b)(4) and that his offense level be increased by two (2) points under USSG s 2G2.2(b)(3)(F). The defendant stated that he understood that, contingent upon his acceptance of  responsibility and continued cooperation in the sentencing process, and fulfillment of his duties under the plea agreement, the government will recommend a two-level (2) reduction under USSG s 3E1.1(a), and because he meets the listed criteria, he should be granted an additional one-level (1) reduction under USSG s 3E1.1(b). The defendant stated that he knew that parole had been abolished and that if he is sentenced to prison he will not be released on parole but on supervised release, a violation of which could result in additional incarceration.

    The defendant testified that he understood that he had the right to a trial by a jury, in addition to the following rights, which will be waived or given up if his guilty plea is accepted:

    1. The right to plead not guilty to any offense charged against him;

    2. The right at trial to be presumed innocent and to force the government to prove his guilt beyond a reasonable doubt;

    *4 3. The right of assistance of counsel at trial and in any subsequent appeal;

    4. The right to see, hear and cross-examine witnesses;

    5. The right to call witnesses to testify in his own behalf and to the issuance of subpoenas or compulsory process to compel the attendance of witnesses;

    6. The right to decline to testify unless he voluntarily elects to do so in his own defense;

    7. The right to a unanimous guilty verdict; and

    8. The right to appeal a guilty verdict.

    The defendant also testified that he understood that if he is adjudged guilty of these charges, he may be deprived of valuable civil rights, such as the right to vote, the right to hold public office, the right to serve on a jury, and the right to possess a firearm.

    The defendant stated that he was fully satisfied with the advice and representation given to him in this case by his counsel. The defendant also stated that he believed his counsel’s representation had been effective. The defendant testified that he understood the possible consequences of his plea and the consequences of breaching any term of the plea agreement. The defendant asked the court to accept his plea of guilty to Counts One, Three, and Four of the Indictment.

    THE GOVERNMENT’S EVIDENCE

    The defendant waived his right to have the government’s Factual Summary read in open court and had no objection to the fact that if the government had submitted evidence, the Factual Summary represented the evidence that would have been presented. The Factual Summary having been filed in open court, the evidence presented therein regarding the offenses charged is as follows:

    On or about April 17, 2004, the defendant, using a nickname of “speedy013” contacted an Internet Relay Chat (IRC) channel offering a file server (“f-serve”) that advertised child pornography. The channel, which was operated in Maryland, was identified as “# 100% preTeenGirlSexPics.” The f-server carried the following advertisement “banner:”

    “<ScubaStev> ScubaSteve Script! Fserve Trigger: !diverdown File Ratio: 1:3 MovieRatio: 1:2 Offering: Very, Very Categorized Quality Teen & Pre Pics with very rare movies. Will Trade Leech for series. Msg Me if interested. Only interested in action or masturbation! [0 of 3 people with a sense for quality currently online.] v2.1”

    The “rules” text for the IRC channel included the statement “No one over 17!” The defendant uploaded one child pornography video clip, entitled “14_ orgasm.mpg,” and seven digital image files (at least four of which depicted images of child pornography), entitled “11yr-lilhoe-1.jpg” through “11yr-lilhoe-7.jpg” to the IRC channel. He then attempted to monopolize on the “credit” that he believed he had earned by unsuccessfully attempting to download purported child pornography images and movie files.

    The IP address for speedy013 was determined to be assigned to the defendant who then lived in an apartment in Berryville, Virginia. Agents learned that the defendant had rented the apartment since some time in February 2004.

    *5 The defendant’s apartment was searched pursuant to a search warrant on February 24, 2005. Among other items seized were computer equipment and disks. Investigators also interviewed the defendant on February 24, 2005. The defendant stated, in part and in substance, that he knew he did wrong and wanted to cooperate; that he had been the only person with access to his computer and Internet service provider [during the relevant time period]; FN1 that he had conducted file trading/sharing on Yahoo, Kazaa, and IRC; that he used screen names “speedy013” and “award13;” that he searched various IRC directories for pornography, downloading and uploading adult and child pornography and other sexually explicit images; that he saved pornography to a default directory on his hard drive and then transferred it onto a CD; that he viewed, deleted, and saved child pornography; that he downloaded 700-900 pictures, at least half of which he estimated to be child pornography; and that the channel name “100% preTeenGirlSexPics” sounded familiar and he was sure that he uploaded pictures to this channel. He was shown pictures labeled “11yr-lilhoe-1” through “11yr-lilhoe-7” and was described the short video clip “14_ orgasm.” He recalled downloading these images and movie file but did not remember if he uploaded them. He stated that he was awestruck by the range of child pornography accessible on the Internet. He further stated that he was curious, knew it was wrong, and shouldn’t have viewed the child pornography, but felt that he was addicted to pornography. He claimed that he was not sexually attracted to children.

    FN1. At the beginning of the search, the defendant was contacted by telephone and at that time (i.e., prior to the interview referenced above), he stated that he was not the only person who had used his computer.

    The defendant’s computer and disks were analyzed by a forensic examiner. Numerous movie files and digital images depicting minors engaged in sexually explicit conduct were found on his computer (and child pornography images were also found on one of the disks that had been recovered). Some of the images were determined to portray identified minors from different states and countries.

    FINDINGS OF FACT

    Based on the evidence presented at the plea hearing, the undersigned now submits the following formal findings of fact, conclusions and recommendations:

    1. The defendant is fully competent and capable of entering an informed plea;

    2. The defendant is aware of the nature of the charges and the consequences of his plea;

    3. The defendant knowingly and voluntarily entered a plea of guilty to Counts One, Three, and Four of the Indictment; and

    4. The evidence presents an independent basis in fact containing each of the essential elements of the offenses to which the defendant is pleading guilty.

    RECOMMENDED DISPOSITION

    Based upon the above findings of fact, the undersigned RECOMMENDS that the court accept the defendant’s plea of guilty to Counts One, Three, and Four and adjudge him guilty of those offenses. The undersigned further DIRECTS that a presentence report be prepared. A sentencing hearing hereby is scheduled for January 16, 2007 at 10:00 a.m. before the presiding District Judge in Harrisonburg.

    NOTICE TO PARTIES

    *6 Notice is hereby given to the parties of the provisions of 28 U.S.C. s 636(b)(1)(C): Within ten days after being served with a copy of this Report and Recommendation, any party may serve and file written objections to such proposed findings and  recommendations as provided by rules of court. The presiding District Judge shall make a de novo determination of those portions of the report or specified proposed findings or recommendations to which objection is made. The presiding District Judge may accept, reject, or modify, in whole or in part, the findings or recommendations made by the undersigned. The judge may also receive further evidence or recommit the matter to the undersigned with instructions.

    Failure to file timely written objections to these proposed findings and recommendations within 10 days could waive appellate review. At the conclusion of the 10-day period, the Clerk is directed to transmit the record in this matter to the presiding United States District Judge.

    The Clerk is hereby directed to send certified copies of this Report and Recommendation to all counsel of record.

    Continue reading →United States District Court, W.D. Virginia, Harrisonburg Division. UNITED STATES of America, v. Andrew Morgan WARD, Defendant. No. 5:06CR00019. Oct. 24, 2006. REPORT AND RECOMMENDATION WAUGH CRIGLER, Magistrate Judge. *1 In accordance with the provisions of Title 28 U.S.C. s 636(b)(3) and upon the defendant’s consent, this case was referred to the undersigned to conduct a plea hearing. DEFENDANT’S RESPONSES TO RULE 11 INQUIRY The Grand ...
  • U.S. v. Knellinger

    United States District Court,

    E.D. Virginia,

    Richmond Division.

    UNITED STATES of America

    v.

    David Leroy KNELLINGER.

    Criminal No. 3:06cr126.

    Jan. 25, 2007.

    MEMORANDUM OPINION

    PAYNE, District Judge.

    This matter is before the Court on the Supplemental Brief in Support of Motion to Dismiss (Docket No. 46) filed by the defendant, David Leroy Knellinger, in which Knellinger asserts that 18 U.S.C. s 3509(m) is both invalid and unconstitutional. For the following reasons, Knellinger’s motion is denied. However, Knellinger’s request for a mirror image copy of his computer hard drive, which contains the child pornography images listed in the Superseding Indictment (Docket No. 14), is granted subject to the entry of an appropriate protective order and a certification by counsel for Knellinger that he will use that copy for assessment and preparation of a defense.

    *642 BACKGROUND

    Knellinger stands charged with seven counts of transporting, attempting to transport, receiving, and possessing child pornography (Docket No. 14). The statutory maximum sentence faced by Knellinger is twenty years imprisonment on each count. On July 17, 2006, Knellinger filed a Motion for Independent Analysis of Physical Evidence and Protection Order (Docket No. 21), in which he requested a copy of the computer hard drive that was seized during a search of his residence and that now is in the possession of law enforcement authorities. That hard drive contains the images of child pornography at issue in this case, and Knellinger’s counsel sought a copy of the hard drive so that computer experts could examine it, and the images contained therein, to help counsel ascertain therefrom the basis for a defense to the pending charges. During a telephone conference on July 26, 2006, the United States agreed to provide Knellinger with a mirror image copy of his computer hard drive and, accordingly, the Court denied as moot Knellinger’s Motion for Independent Analysis (Docket No. 31).

    However, the very next day, on July 27, 2006, the Adam Walsh Child Protection and Safety Act, Pub.L. No. 109-248, 120 Stat. 587 (2006), was signed into law. A provision of that statute, codified at 18 U.S.C. s 3509(m), requires that child pornography remain in the custody of the United States or the Court, and prohibits a defendant from obtaining copies thereof so long as the United States provides the defendant “ample opportunity for inspection, viewing, and examination” of the child pornography “at a Government facility.” Because of this new law, the United States told Knellinger that it could not honor its agreement to turn over a mirror image copy of his computer hard drive, and the United States has been in sole possession of the child pornography images ever since.

    At a hearing on August 28, 2006, Knellinger raised a challenge to the constitutionality of 18 U.S.C. s 3509(m). Knellinger claimed that he is constitutionally entitled to copies of the child pornography that will be presented as evidence against him and that 18 U.S.C. s 3509(m) violates the Constitution by preventing him from having those copies. The Court asked the parties to brief the issue, invited amicus briefs from the National Association of Criminal Defense Lawyers, the Federal Public Defender, and the University of Richmond Law School, and held an evidentiary hearing on November 6, 2006 to determine whether 18 U.S.C. s 3509(m) violates Knellinger’s rights under the United States Constitution.

    DISCUSSION

    As described above, Knellinger’s primary objection to 18 U.S.C. s 3509(m) is that it prevents him from obtaining a copy of the child pornography in this case for independent examination. Section 3509(m) reads as follows:

    (M) Prohibition on reproduction of child pornography.-

    (1) In any criminal proceeding, any property or material that constitutes child pornography (as defined by section 2256 of this title) shall remain in the care, custody, and control of either the Government or the court.

    (2)(A) Notwithstanding Rule 16 of the Federal Rules of Civil Procedure, a court shall deny, in any criminal proceeding, any request by the defendant to copy, photograph, duplicate, or otherwise reproduce any property or material that constitutes child pornography (as defined by section 2256 of this title), so long as the Government makes the *643 property or material reasonably available to the defendant.

    (B) For the purposes of subparagraph (A), property or material shall be deemed to be reasonably available to the defendant if the Government provides ample opportunity for inspection, viewing, and examination at a Government facility of the property or material by the defendant, his or her attorney, and any individual the defendant may seek to qualify to furnish expert testimony at trial.

    18 U.S.C. s 3509(m) (emphasis added). As Knellinger correctly points out, the effect of the statute is to prevent the Court from ordering the United States to provide Knellinger with a copy of the child pornography in this case so long as the United States makes that material “reasonably available” to Knellinger in a Government facility. The upshot is that Knellinger’s counsel has not been able to conduct the type of examination that he feels is necessary to assess effective defenses to the very serious charges that Knellinger now faces. For that reason, Knellinger challenges the validity of s 3509(m). He first argues that s 3509(m) is an invalid amendment to the Federal Rules of Criminal Procedure. He also asserts that s 3509(m) is unconstitutional, both facially and as applied in this case. Knellinger seeks either dismissal of the indictment or a copy of the child pornography that will be presented as evidence against him.

    A. Knellinger’s Assertion That s 3509(m) Offends The Rules Enabling Act

    [1] Knellinger contends that s 3509(m) is invalid because it promulgates a rule of criminal procedure, thereby amending a current rule, without following the requirements of the Rules Enabling Act, 28 U.S.C. s 2071 et seq. This challenge to the power of Congress lacks merit. Congress at all times retains the authority to enact statutes affecting federal rules of procedure. As the Fifth Circuit summarized in Jackson v. Stinnett:

    It has long been settled that Congress has the authority to regulate matters of practice and procedure in the federal courts…. Congress delegated some of this power in 1934 by passing the Rules Enabling Act, which gave the Supreme Court the power to promulgate rules of practice and procedure for United States courts…. Although  Congress has authorized the Court to exercise some legislative authority to regulate the courts, Congress at all times maintains the power to repeal, amend, or supersede its delegation of authority or the rules of procedure themselves.

    102 F.3d 132, 134-35 (5th Cir.1996) (citations omitted). Indeed, Congress often has enacted statutes that repeal, amend, or supercede existing rules of federal procedure, and courts consistently upheld the power of Congress to do so. See, e.g., Floyd v. United States Postal Service, 105 F.3d 274, 277-78 (6th Cir.1997) (upholding provisions of the Prison Litigation Reform Act which conflicted with the Federal Rules of Appellate Procedure); United States v. Mitchell, 397 F.Supp. 166, 170 (D.D.C.1974), aff’d sub nom, United States v. Haldeman, 559 F.2d 31 (D.C.Cir.1976) (upholding authority of Congress to extend the life of a federal grand jury beyond the expiration date prescribed by Rule 6 of the Federal Rules of Criminal Procedure). Given the ultimate Congressional authority over the federal rules of procedure, there is no merit to Knellinger’s argument that Congress ran afoul of the Rules Enabling Act by passing a subsequent statute that also affects the rules of federal criminal procedure.

    *644 B. Knellinger’s Constitutional Challenges To § 3509(m)

    1. Separation of Powers

    In ways that are neither adequately explained nor readily apparent, Knellinger asserts that s 3509(m) offends the constitutionally-imposed separation of powers between the legislative and the judicial branches of government. The argument amounts to an assertion that Congress cannot tell “an Article III court how to rule on a motion before it.” (Def’s Reply to United States’ Resp. in Opp. to Def.’s Supp. Br. in Supp. of Mot. to Dismiss “Def.’s Reply” at 15.) This contention appears to be predicated on the arguments respecting the Rules Enabling Act, and, to that extent, is meritless for the reasons explained above.

    [2] In any event, this argument, which was unaccompanied by citation in Knellinger’s Supplemental Brief in Support of Motion to Dismiss (Docket No. 46), and was accompanied only by indiscriminate inapposite citation in his Reply (Docket No. 50), was not raised during or after the evidentiary hearing on November 6, 2006, and, quite frankly, appears to have been abandoned. Hence, it will not be further considered.

    2. Knellinger’s Constitutional Arguments Respecting The Rights Of Criminal Defendants

    Knellinger also argues that s 3509(m) deprives criminal defendants of their right to a fair trial under the United States Constitution.FN1 (See Def.’s Supp. Br. in Supp. Of Mot. to Dismiss at 16-17; Def.’s Reply at 6-11.) The constitutional rights which produce a “fair trial” are implicated by the restrictions imposed by s 3509(m) on the custody and reproduction of child pornography that is the subject of a criminal proceeding. However, while those restrictions are serious and significant, they have limited reach. Defendants, including Knellinger, may obtain, by court order, copies of child pornography when the United States cannot provide an “ample opportunity for inspection, viewing, and examination at a Government facility.” Consequently, s 3509(m) is not an absolute prohibition on copying child pornography for inspection outside a Government facility. That being the case, Knellinger’s facial challenge to the statute can succeed only if he can demonstrate that no application of the statute’s safety valve provision (“ample opportunity for inspection, viewing, and examination at a Government facility”) would be sufficient to protect the constitutional rights of any criminal defendant. See United States v. Salerno, 481 U.S. 739, 745, 107 S.Ct. 2095, 95 L.Ed.2d 697 (1987). Knellinger’s argument therefore turns on the definition of “ample opportunity.”

    FN1. Knellinger’s “fair trial” argument seems to encompass many of the various rights afforded by the Fifth and Sixth Amendments. See Strickland v. Washington, 466 U.S. 668, 684-85, 104 S.Ct. 2052, 80 L.Ed.2d 674 (1984) (“The Constitution guarantees a fair trial through the Due Process Clauses, but it defines the basic elements of a fair trial largely through the several provisions of the Sixth Amendment”).

    [3] While the statute does not define “ample opportunity,” that term must be read to include at least every opportunity for inspection, viewing, and examination required by the Constitution. If read in that way, any opportunity for inspection that falls short of that mark would enable a court to order a copy given to the defendant for inspection outside a “Government facility.” Long-established canons of statutory construction require the Court to read “ample opportunity” in just this way. As the Supreme Court reiterated in Edward*645 J. DeBartolo Corp. v. Florida Gulf Coast Building & Constr. Trades Council:

    ‘[t]he elementary rule is that every reasonable construction must be resorted to, in order to save a statute from unconstitutionality.’ This approach … also recognizes that Congress, like this Court, is bound by and swears an oath to uphold the Constitution. The courts will therefore not lightly assume that Congress intended to infringe constitutionally protected liberties or usurp power constitutionally forbidden it.

    485 U.S. 568, 575, 108 S.Ct. 1392, 99 L.Ed.2d 645 (1988) (citing Grenada County Supervisors v. Brown, 112 U.S. 261, 269, 5 S.Ct. 125, 28 L.Ed. 704 (1884)). Because Knellinger does not explain why “ample opportunity” cannot reasonably be read to, at a minimum, protect the constitutional rights of defendants, the Court need not further address Knellinger’s facial constitutional challenge.FN2

    FN2. To the extent that Knellinger contests this reading of the statute, he does not explain why this reading is unreasonable, nor does he offer an alternative definition for “ample opportunity.” (See Def.’s Reply at 6.) Indeed, even after the evidentiary hearing in this matter, which focused largely on the meaning of “ample opportunity,” Knellinger has never adequately explained why the Court cannot order production of the child pornography if the Government has failed to provide an ample opportunity for inspection, viewing, and examination at a Government facility. (See Def.’s Post-Hearing Br.; Def’s Post-Hearing Reply Br.)

    Moreover, “ample opportunity” may, in some circumstances, include greater access than what the Constitution alone would require. In interpreting this same statutory provision, another district court noted that “[t]he word ‘ample’ means ‘generous or more than adequate in size, scope, or capacity.’ ” United States v. O’Rourke, 470 F.Supp.2d 1049, 1055-56, No. CR 05-1126-PHX-DGC, 2007 WL 104901, *4 (D.Ariz. Jan.17, 2007) (citing Webster’s New Collegiate Dictionary 39 (1981)). As discussed above, the opportunity to inspect, view, and examine contemplated by s 3509(m)(2)(B) requires, at a minimum, whatever opportunity is mandated by the Constitution; therefore, an opportunity that is “generous” or “more than adequate” may, in some circumstances, require more access than what would be mandated by the Constitution alone.FN3 Under that interpretation of “ample opportunity,” the Court need not necessarily resolve Knellinger’s as applied constitutional challenge in order to determine whether Knellinger has been afforded an “ample opportunity” to access his hard drive. If the statutorily required ample opportunity to access his hard drive has not been provided, the Court may order production of the hard drive without deciding whether the Constitution would also compel its production.

    FN3. The O’Rourke court similarly construes “ample opportunity.” While, in rejecting the defendant’s constitutional challenges to s 3509(m), the court noted that “ample opportunity” might be “coterminous with the requirements of due process,” and that “ample opportunity” requires “due-process-level access” to evidence, the court ultimately held that the defendant was not entitled to a copy of his computer hard drive because his particular concerns did not “amount to a denial of due process or of an ample opportunity to inspect the hard drive.” 470 F.Supp.2d at 1049, 1057-58, 2007 WL 104901, *6 (emphasis added). If “ample opportunity” were necessarily “coterminous” with the requirements of due process, there would have been no need for the court to have considered the defendant’s alleged difficulties with s 3509(m) under the requirements of both due process and “ample opportunity.” Thus, the O’Rourke court, like this Court, concluded that “ample opportunity” means, only at a minimum, the opportunity for inspection, viewing, and examination required by the Constitution.

    As the United States correctly argues, whether there is ample opportunity for *646 inspection, viewing, and examination is a factual issue that must be resolved on the record in each case. Thus, the threshold task here is to assess, on the record made in this case, whether Knellinger has been afforded an ample opportunity to inspect, view, and examine the hard drive at a Government facility. If the Court finds that the statutorily required ample opportunity has been provided, Knellinger’s constitutional rights will, by definition, have been protected.FN4 If ample opportunity has not been provided, the statute itself renders Knellinger’s as applied constitutional challenge moot because the statute permits the Court to provide a copy of the materials to the defense. Here, as discussed below, the Court finds that ample opportunity has not been provided on the facts of this case, so there is no need further to consider Knellinger’s as applied challenge to the statute.

    FN4. This conclusion accords with those reached by the only courts to have previously considered the constitutionality of s 3509(m). See United States v. Johnson, 456 F.Supp.2d 1016 (N.D.Iowa 2006); O’Rourke, 470 F.Supp.2d 1049, No. CR 05-1126-PHX-DGC, 2007 WL 104901; United States v. Butts, No. CR 05-1127-PHX-MHM, 2006 WL 3613364 (D.Ariz. Dec.6, 2006).

    C. Knellinger’s Opportunity To Inspect, View, And Examine The Child Pornography In This Case

    The United States contends that it has afforded an adequate opportunity for inspection, viewing, and examination by offering to provide a private room in the Richmond, Virginia offices of the Federal Bureau of Investigation where counsel and his experts can access the hard drive. Knellinger disputes that contention.

    An evidentiary hearing was held on November 6, 2006 to resolve this factual dispute. In support of his position, Knellinger presented expert testimony from one computer forensic expert, two digital video experts, and a trial attorney with extensive experience handling child pornography cases.FN5 The United States presented no evidence.

    FN5. The United States challenges the relevance of the testimony provided by Knellinger’s digital video experts because they do not have extensive experience in child pornography cases. (See United States Resp. in Opp. to Def.’s Post-Hearing Br. Concerning the Constitutionality of 18 U.S.C. s 3509(m) at 20-22.) However, while the experts have minimal experience in child pornography cases, they have extensive experience in the sort of analysis that would be conducted in a child pornography case. The experts are therefore qualified to assist the Court in understanding the type of analysis that Knellinger seeks to undertake. If the United States had wanted to challenge the substantive testimony of these two experts, it could have put on testimony from its own experts. The United States chose not to do so.

    Knellinger’s first witness, Mark Vassel, is a computer forensic expert who already has conducted an analysis of Knellinger’s hard drive in this case. Vassel, however, does not need to view images of child pornography to conduct the sort of analysis in which he specializes, so, while he expressed some frustration with the strictures of s 3509(m), the statute apparently did not prevent him from doing his job. (See Evidentiary Hr’g Tr. (“Hr’g Tr.”) 9, 33, Nov. 6, 2006.)

    Knellinger’s second witness, Louis Sirkin, is a trial lawyer based in Cincinnati, Ohio. Sirkin has extensive experience as a defense attorney in child pornography cases, and was primary counsel in Ashcroft v. Free Speech Coalition, 535 U.S. 234, 122 S.Ct. 1389, 152 L.Ed.2d 403 (2002). (Hr’g Tr. 75.) In Ashcroft, the Supreme Court of the United States struck down certain provisions of the Child Pornography Prevention Act of 1996 as overbroad. *647535 U.S. at 258, 122 S.Ct. 1389. The provisions were overbroad because they proscribed images that were neither obscene nor produced with real children. See id. at 250, 122 S.Ct. 1389. Therefore, Sirkin noted, a defendant like Knellinger, who is not charged with violating obscenity laws, may argue that the child pornography he possessed was not produced using real minors.FN6 (Hr’g Tr. 83.) Sirkin himself has pursued that “viable defense” and has had child pornography analyzed by experts in order to determine whether or not the children depicted were real. (Id. at 120.)

    According to Sirkin, such an analysis is “absolutely essential” where a defendant intends to pursue that line of defense.FN7 (Id. at 87.)

    FN6. Knellinger is charged in this case with transporting, attempting to transport, receiving, and possessing child pornography made only with real minors. See 18 U.S.C. s 2256(8)(A). That, of course, does not foreclose the defense that the images are not real minors but, instead, are computer-generated images.

    FN7. Sirkin also testified at length about many practical problems that s 3509(m) will create for defense attorneys. While helpful to the Court, a recitation of his testimony is not necessary here.

    Knellinger’s final two witnesses were the types of digital video experts who could conduct the analysis described by Sirkin as “absolutely essential” in a case like Knellinger’s. Both described the great cost and effort that would be required to conduct their analyses in a Government facility. Tom Owen, the third witness, testified that he would normally charge approximately $135,000 to analyze the child pornography in this case, but that he would charge approximately $540,000 if he had to analyze those materials away from his offices in a Government facility. (Id. at 163-64.) That figure does not include the cost of transporting the quite extensive collection of equipment that is necessary to his analysis, which would take approximately one week and three men to move, and which would require “a box truck … 20 feet long and 10 feet wide.” FN8 (Id. at 152-53.)

    FN8. It would be necessary for Owen or any other expert to bring his own equipment because the United States has not offered to provide the requisite equipment in a Government facility for the expert’s use. (See Hr’g Tr. 268-69; United States’ Resp. in Opp. to Def.’s Post-Hearing Br. Concerning the Constitutionality of 18 U.S.C. s 3509(m) at 22-23.) This is not surprising, because Owen’s equipment costs approximately $350,000. (Hr’g Tr. 167.)

    Moreover, even if Owen were able to move his equipment to a Government facility, he would have concerns about its reliability after the move. (Id. at 165.) And, even if he thought his equipment was functioning properly, his personal ability to analyze the evidence thoroughly and carefully would be compromised to such a degree that he “wouldn’t be able to service the client or the attorney” effectively. (Id. at 165-66.) The practical consequence of all these difficulties is that, while Owen’s testimony indicates that it would be conceptually possible for Owen to conduct his time-consuming analysis in a Government facility, Owen would not agree to work on a case like Knellinger’s because he could not feasibly move his equipment to, or properly do his work in, a Government facility. (Id. at 165.)

    Knellinger’s final witness, James Griffin, testified similarly. Griffin has never moved all of his digital video analysis equipment from his offices to another location, but he calculated that such an effort would take more than “several days” each time he was required to disassemble and transport his equipment. (Id. at 232.) *648 Like Owen, Griffin testified that he would also have to charge significantly more for his services if he conducted an analysis of child pornography outside his offices in a Government facility, even if transportation of his equipment were possible. (Id. at 235.) Finally, Griffin also testified that, although it might theoretically be possible to bring his own equipment to a Government facility and analyze the child pornography images outside his offices, he would not agree to work on a case like Knellinger’s because of the difficulty associated with moving equipment to, and adequately performing his analytical work in, a  Government facility. (Id. 242.)

    In sum, Knellinger’s witnesses established that assessment and presentation of a viable legal defense in Knellinger’s case requires expert analysis and testimony, and that qualified experts could not reasonably be expected to agree to conduct the required analysis given the extremely burdensome practical effects of s 3509(m) on the reliable discharge of their obligations. The United States presented no witnesses or other evidence to controvert that offered by Knellinger.

    Although the United States put on no evidence of its own, it was able, on cross-examination, to make two salient, but ultimately non-dispositive points: (1) that none of Knellinger’s technical witnesses were aware personally of a case in which child pornography had been produced using entirely virtual children; and (2) that the analysis sought by Knellinger could, in abstract theory, be conducted in a Government facility. The United States therefore argues that Knellinger is pursing a “fairy tale” defense and that he has not made sufficient efforts to comply with s 3509(m). (United States’ Resp. in Opp. to Def’s Post-Hearing Br. Concerning the Constitutionality of 18 U.S.C. s 3509(m) (“United States’ Resp.”) at 5.)

    The first point asks the Court to foreclose to Knellinger the opportunity to explore a potentially viable legal defense simply because it is novel. The United States has cited no authority to support the principle that a district court is empowered to intrude into the investigation and preparation of potential defenses in a criminal case at such a  preliminary stage and, in so doing, to peremptorily preclude the development of a potential defense. FN9

    FN9. Of course, it always is appropriate for a district court to assess whether requested evidence may be relevant to the case and to the defense thereof when deciding whether the evidence must be made available to the defense. The United States has conceded that point by agreeing to make the hard drive available to Knellinger’s counsel before s 3509(m) was enacted. Moreover, the record developed since then shows that the hard drive could form the basis for a viable defense. Neither s 3509(m) nor any other principle of law cited by the United States or known to the Court requires more.

    Moreover, in Ashcroft, the United States argued that “the possibility of producing [child pornography] images by using computer imaging makes it very difficult for it to prosecute those who produce pornography by using real children,” and that experts “may have difficulty in saying whether the pictures were made by using real children or by using computer imaging.” 535 U.S. at 254, 122 S.Ct. 1389. The rather obvious implication of that argument, of course, is that improvements in technology may make it increasingly difficult for laymen to distinguish pornography produced with real children from pornography produced with virtual children. Furthermore, the Supreme Court has recognized the potential availability of the defense that Knellinger wishes to develop. Id. at 254-55, 122 S.Ct. 1389. And, this record establishes that a respected and competent lawyer has pursued this defense and has had *649 child pornography analyzed by experts in assessing the availability of that defense. For the foregoing reasons and on this record, the Court is loath to foreclose to Knellinger the opportunity to explore the possibility that the child pornography at issue here was produced without the use of real children. FN10

    FN10. After Ashcroft, Congress amended its child pornography statutes in a manner that still proscribes certain computer-generated images of child pornography. See 18 U.S.C. 2256(8)(b). As noted above, however, Knellinger is not charged under that definition of child pornography, so Knellinger’s proposed “virtual child” defense is viable in this case.

    [4] As to the second point, the record here establishes that the defense theory being pursued by Knellinger requires a kind of analysis that cannot be conducted feasibly by outside experts in the facility as offered by the United States. Even though, as the United States pointed out, it is theoretically possible for outside experts to transport their equipment to a Government facility and conduct their analyses on-site, the practical reality is that experts would not agree to such terms and that Knellinger ultimately would be prevented from conducting his analysis at all. Considering the testimony from the legal and technical experts in this case and the absence of any opposing evidence, the Court concludes that, at least in this case, the record permits no other factual conclusion.

    The United States also argues that Knellinger’s request to analyze the child pornography in this case is “disingenuous.” (Id. at 3.) The United States argues that Knellinger has not yet hired an expert like Owen or Griffin to conduct the analysis, and that Knellinger has not contacted the United States about conducting such an analysis in a Government facility were an expert like Owen or Griffin hired. (Id. at 3-5.) A simple explanation for this, however, is that, as far as the Court can tell from the record, a reasonable expert would not agree to conduct the analysis required in this case because of the cost and difficulty of moving the necessary equipment to, and adequately providing the appropriate services in, a Government facility. Therefore, it would make  sense that Knellinger has not yet hired an expert because Knellinger has not known whether or not he will be given a copy of the child pornography in this case. Moreover, the record provides good reason to conclude that Knellinger is not, as the United States puts it, simply engaging in “litigation for litigation’s sake” because of the great cost associated with conducting the analysis that the evidence shows to be appropriate here. (United States’ Resp. at 5.)

    Because the United States did not present evidence that contradicts the evidence put forth by Knellinger, and because Knellinger’s witnesses were both credible and relevant, the Court accepts the showing made by Knellinger’s experts as true. On this record, which includes the evidence from Knellinger’s legal and technical expert witnesses, the Court finds that technical expert witnesses are a necessary component of the  assessment and presentation of a viable legal defense that is available to Knellinger, and that the United States has not provided Knellinger an ample opportunity for those experts, or counsel in conjunction with the experts, to conduct the required analysis of the child pornography in this case at a Government facility. The Court further concludes that the analysis described by Owen and Griffin at the evidentiary hearing constitutes an “examination” within the plain meaning of 18 U.S.C. s 3509(m)(2).FN11

    FN11. To “examine” means “to test by an appropriate method,” and an “examination” is “the act or process of examining.” Webster’s Third New International Dictionary 790 (1961).

    *650 Thus, under the terms of s 3509(m), it is necessary to order production of a copy of the hard drive to the defense. Production is necessary to ensure Knellinger an ample opportunity to conduct the examination described by Owen and Griffin at the evidentiary hearing, and to give his counsel an opportunity to participate in that examination in order to evaluate its ramifications for the legal defenses Knellinger might raise.FN12

    FN12. The United States has conceded that “[a]mple opportunity also requires that the defense is able to prepare any exhibits it deems necessary to be used in support of their case.” (See United States’ Resp. at 17.) That issue is not presently before the Court, so a mirror image copy of Knellinger’s hard drive will not be allowed, at this point, to be used by Knellinger’s experts or counsel to produce exhibits. That issue will be taken up, as necessary, at a later time.

    However, the Court also is mindful that Knellinger has not yet advised that he has retained expert witnesses to examine the copy of the hard drive here at issue. And, the record establishes that a copy of the hard drive is of no use to the defense unless there is a defense expert to examine the copy. Therefore, it would be contrary to the  provisions of s 3509(m) to require delivery of a copy of the hard drive unless the defendant promptly advises the Court that it has retained an expert witness for that purpose.

    In sum, the statute, s 3509(m), can be given a reasonable construction which avoids the need for a constitutional decision in this case. That construction simply requires the Court to ascertain on the basis of a record whether the statutorily required ample opportunity to examine, view, and inspect the hard drive has been given. If not, the statute permits a copy to be supplied. On this record, the ample opportunity has not been provided, and production of a copy, on certain terms, will be required.

    CONCLUSION

    For the foregoing reasons, Knellinger’s motion to dismiss the indictment based on the unconstitutionality of s 18 U.S.C. s 3509(m) (Docket No. 46) is denied. However, because the Court also concludes that the United States cannot provide Knellinger an ample opportunity to inspect, view, and examine the child pornography listed in the Superseding Indictment, the Court, pursuant to 18 U.S.C. s 3509(m)(2), will order a mirror image copy of Knellinger’ s hard drive provided to Knellinger’s counsel and made available to either Tom Owen or James Griffin if counsel for Knellinger certifies to the Court that the copy will be used for the assessment or presentation of a defense as discussed by Owen, Griffin and Sirkin during the evidentiary hearing held on November 6, 2006. Custody and use of that copy will be subject to an appropriate protective order that, inter alia, will punish any distribution or publication not authorized.

    The Clerk of the Court is directed to send a copy of this Memorandum Opinion to all counsel of record.

    It is so ORDERED.

    Continue reading →United States District Court, E.D. Virginia, Richmond Division. UNITED STATES of America v. David Leroy KNELLINGER. Criminal No. 3:06cr126. Jan. 25, 2007. MEMORANDUM OPINION PAYNE, District Judge. This matter is before the Court on the Supplemental Brief in Support of Motion to Dismiss (Docket No. 46) filed by the defendant, David Leroy Knellinger, in which Knellinger asserts that 18 U.S.C. s 3509(m) is both invalid ...
  • U.S. v. McVey

    United States District Court,

    E.D. Virginia,

    Newport News Division.

    UNITED STATES of America,

    v.

    Clint Manuel McVEY, Defendant.

    Criminal No. 4:06cr97.

    Feb. 27, 2007.

    OPINION

    REBECCA BEACH SMITH, District Judge.

    On October 24, 2006, Defendant Clint Manuel McVey pled guilty to receipt of child pornography, in violation of 18 U.S.C. s 2252A(a)(2). The court sentenced Defendant on February 7, 2007. At the sentencing hearing, the court denied Defendant’s objection to receiving an enhancement pursuant to section 2G2.2(b)(3)(B) of the U.S. Sentencing Guidelines Manual (2006). This Opinion memorializes this ruling from the bench.

    I. Facts and Procedural History

    On October 27, 2005, an investigator with the Bedford County Sheriff’s Office initiated an online Internet session and utilized a computer program to search for any computers in the Virginia area that were distributing child pornography. The investigator found a computer attempting to share a file that contained images of child pornography, and eventually determined that the computer in question belonged to Defendant. At that time, Defendant was enlisted in the United States Army and worked as a watercraft operator at Fort Eustis, Virginia.

    On December 16, 2005, Defendant’s computer was recovered during a search of his barracks. That same day, Defendant made a sworn statement to investigators. Defendant explained that in June or July of 2005, he began using file-sharing software to download music, pornography, and child pornography.FN1 He installed and used a computer program called “LimeWire” as his primary file-sharing software.FN2 Defendant noted that he never sent child pornography to anyone over the Internet, but that he knew his file-sharing software allowed other people to upload child pornography from his computer. Defendant claimed that he did not know how to shut off this feature of the software. On February 21, 2006, a forensic analysis of Defendant’s computer revealed the presence of various files containing child pornography.

    FN1. The parties described the software used by Defendant as “share ware software.” However, the term “file-sharing software” is more commonly used to describe the software in question.

    FN2. The LimeWire user manual, which was introduced into evidence at sentencing, sets forth nine separate steps the user must take to install the LimeWire software. See Gov. Ex. 3 at 5-6; infra at 3.

    On October 24, 2006, Defendant pled guilty, pursuant to a written plea agreement, to receipt of child pornography in violation of 18 U.S.C. s 2252A(a)(2). The probation officer prepared a presentence report on December 14, 2006. The probation officer recommended, inter alia, a five-level enhancement pursuant to section 2G2.2 (b)(3)(B) of the U.S. Sentencing Guidelines Manual, reasoning that Defendant’s offense involved “[d]istribution for the receipt, or expectation of receipt, of a thing of value, but not for pecuniary gain.” Defendant objected to this enhancement.

    At the sentencing hearing on February 7, 2007, the government introduced a LimeWire user manual into evidence. In *562 addition, the government called an agent of the Federal Bureau of Investigation as a witness, and the agent testified regarding the user manual and other matters. The user manual explains how to install the software and how to obtain files from others. See Gov. Ex. 3. It also explains how files are shared and how to disable the file-sharing feature. Id. at 5, 14. It describes LimeWire as “the most robust application available for file-sharing.” Id. at 2.

    II. Issue

    The issue before the court is whether the section 2G2.2 (b)(3)(B) enhancement applies when a defendant, as a member of a file-sharing group of computer users, receives child pornography over the Internet and knows that his computer shares it with other members of the file-sharing group.

    III. Analysis

    Section 2G2.2(b)(3)(B) provides for a five-level enhancement where an offense of receipt of child pornography involves “[d]istribution for the receipt, or expectation of receipt, of a thing of value, but not for pecuniary gain.” The term “distribution” means “any act, including possession with intent to distribute, production, advertisement, and transportation, related to the transfer of material involving the sexual exploitation of a minor.” U.S. SENTENCING GUIDELINES MANUAL s 2G2. 2 cmt. n. 1. Distribution,  therefore, includes acts such as “posting material involving the sexual exploitation of a minor on a website for public viewing.” Id. The phrase “distribution for the receipt, or expectation of receipt, of a thing of value, but not for pecuniary gain” means “any transaction, including bartering or other in-kind transaction, that is conducted for a thing of value, but not for profit.” Id. “Thing of value” means “anything of valuable consideration.” Id.

    [1] It is well-settled that the enhancement applies when a defendant exchanges child pornography with another person pursuant to a specific agreement or understanding. See, e.g., United States v. Bender, 290 F.3d 1279, 1286-87 (11th Cir.2002) (holding that “when a defendant trades child pornography in exchange for other child pornography, the defendant has engaged in ‘distribution for the receipt, or expectation of receipt, of a thing of value’ “). In addition, courts of appeals have held that the enhancement applies even in the absence of a specific agreement or understanding, as long as “a defendant distributes child pornography in anticipation of, or while reasonably believing in the possibility of, the receipt of a thing of value.” United States v. Maneri, 353 F.3d 165, 169 (2d Cir.2003); see United States v. Oldham, 177 Fed.Appx. 842, 846-47 (10th Cir.2006) (quoting and applying Maneri ).FN3

    FN3. The enhancement at issue here has been in effect since November 1, 2000. See U.S. SENTENCING GUIDELINES MANUAL s 2.2G(b)(2)(B) (2000). It was set forth in section 2.2G(b)(2)(B) of the U.S. Sentencing Guidelines Manual until November 1, 2004, when it was recodified as section 2.2G (b)(3)(B). See U.S. SENTENCING GUIDELINES MANUAL, supp. to app. C at 42-43, 45-46 (2004). Although the Fourth Circuit has decided several cases involving the enhancement, it has not yet had occasion to discuss the proper interpretation or application of it. See, e.g., United States v. Guffey, 185 Fed.Appx. 295, 296 (4th Cir.2006) (mentioning the enhancement, without interpreting or applying it, in a case arising under the 2003 edition of the U.S. Sentencing Guidelines Manual); United States v. Stevens, 167 Fed.Appx. 949, 950 (4th Cir.2006) (finding a Sixth Amendment violation where the district court applied the section 2.2G(b)(2)(B) enhancement based on facts found by the court).

    [2] In determining whether the enhancement applies in this case, this court must first assess whether Defendant’s offense involved “distribution.” See *563U.S. SENTENCING GUIDELINES MANUAL s 2G2.2 (b)(3)(B) (listing “distribution” as an element of the enhancement). It is uncontested that Defendant knew that his file-sharing software allowed others to obtain child pornography from his computer. Thus, by installing and using the file-sharing software, Defendant committed acts “related to the transfer of material involving the sexual exploitation of a minor.” Id. s 2G2.2 cmt. n. 1 (defining “distribution”). Accordingly, Defendant’s offense involved distribution. See id.; United States v. Shaffer, 472 F.3d 1219, 1223-24 (10th Cir.2007) (holding that a defendant “distributed” child pornography within the meaning of 18 U.S.C. s 2252A(a)(2) when he used file sharing software and knew that the software allowed other persons to access the child pornography on his computer).FN4

    FN4. At the sentencing hearing, the government argued that if Defendant had wanted to avoid distributing files to others, he could have simply disabled the sharing feature of his software. Defendant countered that he did not know how to disable the sharing feature. The court notes that it is clear from the LimeWire user manual that a user of the software can disable the sharing feature with a few “clicks of the mouse.” See Gov. Ex. 3 at 14. However, even assuming for the sake of argument that Defendant did not know how to disable the sharing feature, it is still clear that Defendant distributed child  pornography. As noted above, “distribution” is defined broadly to include “any act … related to the transfer of material involving the sexual exploitation of a minor.” U.S. SENTENCING GUIDELINES MANUAL s 2G2.2 cmt. n. 1. Defendant committed acts falling within this definition when he installed and used the file-sharing software with the knowledge that it allowed others to obtain child pornography from his computer. See supra note 2 and accompanying text.

    [3] Having determined that Defendant’s offense involved distribution, the court must next address whether the distribution was “for the receipt, or expectation of receipt, of a thing of value, but not for pecuniary gain.” U.S. SENTENCING GUIDELINES MANUAL s 2G2.2(b)(3)(B). Defendant’s distribution was not related to any specific agreement or understanding between Defendant and another person. However, the enhancement may nevertheless apply, as long as Defendant distributed child pornography “in anticipation of, or while reasonably believing in the possibility of, the receipt of a thing of value.” Maneri, 353 F.3d at 169.

    [4] In the instant case, Defendant installed and used file-sharing software to receive child pornography from others, while knowing that the software allowed other persons to obtain child pornography from his computer. In other words, Defendant knowingly became a member of a file-sharing group of computer users that shared child pornography. It is undisputed that the very purpose of belonging to any file-sharing group is to facilitate the receipt of files from others by agreeing to allow other persons access to the files on one’s own computer. Thus, when Defendant distributed child pornography by installing and using the file-sharing software, he did so in anticipation of, or with a reasonable belief in the possibility of, the receipt of a thing of value, namely, other child pornography. Accordingly, the court FINDS by a preponderance of the evidence that the five-level enhancement pursuant to section 2G2.2(b)(3)(B) applies in this case.

    IV. Conclusion

    For the reasons set forth above, this court HOLDS that the five-level enhancement under section 2G2. 2(b)(3)(B) of the U.S. Sentencing Guidelines Manual applies when a defendant, as a member of a file-sharing group of computer users, receives child pornography over the Internet while also knowing that his computer shares it *564 with other members of the group. Therefore, the court DENIES Defendant’s objection to receiving the section 2G2.2(b)(3)(B) enhancement. The Clerk is DIRECTED to forward a copy of this Opinion to counsel for both parties.

    IT IS SO ORDERED.

    Continue reading →United States District Court, E.D. Virginia, Newport News Division. UNITED STATES of America, v. Clint Manuel McVEY, Defendant. Criminal No. 4:06cr97. Feb. 27, 2007. OPINION REBECCA BEACH SMITH, District Judge. On October 24, 2006, Defendant Clint Manuel McVey pled guilty to receipt of child pornography, in violation of 18 U.S.C. s 2252A(a)(2). The court sentenced Defendant on February 7, 2007. At the sentencing hearing, the ...
  • U.S. v. Brown

    United States District Court, W.D. Virginia,

    Roanoke Division.

    UNITED STATES of America

    v.

    Aaron Campbell BROWN.

    Criminal No. 7:06cr00044.

    April 26, 2007.

    MEMORANDUM OPINION AND ORDER

    SAMUEL G. WILSON, United States District Judge.

    *1 This is a criminal prosecution against defendant, Aaron Campbell Brown, who allegedly owned and operated a website hosting and payment processing company that facilitated child pornography trafficking. The indictment charges Brown with various offenses relating to the production, sale, transportation, receipt, and importation of child pornography in violation of 18 U.S.C. ss 2251, 2252A, 2260, and with money-laundering arising out of those offenses in violation of 18 U.S.C. s 1956. The matter is before the Court on Brown’s second motion to exclude the testimony of three expert witnesses, two forensic experts “in the field of computer examination,” James Fottrel and Kristi  Witsman, and a Special Agent with the Federal Bureau of Investigation, Brook Donahue, who will testify from his training and experience in law enforcement about the operation of commercial child pornography websites. Brown contends that the government has failed to comply with the expert disclosure requirements of Rule 16(a)(1)(G) of the Federal Rules of Criminal Procedure. The Court finds that the Special Agent’s disclosure complies sufficiently with Rule 16 but that some supplementation to the disclosure is necessary for the two computer forensic experts. However, the court denies Brown’s motion to exclude the forensic experts’ testimony and, instead, directs the government to make them available for examination via videoconference or in person under the supervision of the United States Magistrate Judge.

    I.

    In December 2006 Brown filed his first motion to exclude the expert testimony of the three witnesses, and the Magistrate Judge directed the government to “give to the defendant a written summary of any testimony that the government intends to use under Rules 702, 703, or 705 … during its case-in-chief at trial.” The government responded by forwarding a 10 page report which contained a listing of the items examined by Fottrell and Witsman and a summary of their findings. The government also provided a  two-page summary of Donahue’s expected testimony. The Court finds that these supplementations were a good-faith effort to comply. Brown has filed a second motion to exclude.FN1

    FN1. The court mistakenly believed that the parties had resolved the issue following the court’s last continuance to allow Brown additional time to prepare. Counsel renewed the motion, however, during a pre-trial conference last week.

    II.

    Rule 16(a)(1)(G) requires the government to provide a summary of the testimony to be given by any expert witness who will testify pursuant to Fed.R.Evid. 701, 703 or 705. The summary must describe the witnesses’ opinions, their qualifications and the bases and reasons for those opinions. Fed.R.Crim.P. 16(a)(1)(G). The advisory committee notes further explain that the rule “is intended to minimize surprise that often results from unexpected expert testimony, reduce the need for continuances, and to provide the opponent with a fair opportunity to test the merit of the expert’s testimony through focused cross-examination.” Therefore, the purpose of the rule is to provide fair notice of the content of the expert’s opinion and fair notice as to how those conclusions have been reached. United States v. Yoon, 128 F.3d 515, 526-27 (7th Cir.1997).

    *2 With these precepts in mind, given the relatively simple nature of the subject matter, the Court readily concludes that the government’s disclosures concerning Donahue’s expert opinions provide fair notice of his opinions and how he reached them. The court can confidently conclude that the disclosures provide Brown with “a fair opportunity to test the merit of the expert’s testimony through focused cross-examination.”

    The disclosures concerning Fottrell’s and Witsman’s opinions stand on a different footing. Their testimony intertwines the highly technical field of computer forensics, and the government’s summary does not in each instance describe the witness’s opinions, and his or her bases and reasons for those opinions. Under the circumstances, the court cannot predict with confidence that the disclosures are sufficient to avoid surprise and properly focus cross-examination in all important respects.

    Rule 16 provides the court with a broad range of remedies other than exclusion, including entry of any “order that is just under the circumstances.” Rule 16(d)(2)(D). Accordingly, the court finds it appropriate under the circumstances to permit a limited, on the record, examination of Fottrell and Witsman via videoconference or in person at the government’s option under the Magistrate Judge’s supervision. The single purpose of that examination, as far as practicable, is to avoid surprise at trial concerning their opinions and the bases and reasons for their opinions. The purpose is not to subject the experts to cross-examination, to test their credibility, or to explore incidental facts. To that end the Magistrate Judge is requested to permit government’s counsel to question first and to permit Brown’s counsel to question only if the Magistrate Judge determines that it is necessary for the disclosures to comply with Rule 16.

    III.

    In accordance with the court’s memorandum opinion, it is ORDERED and ADJUDGED  that this matter is referred to the United States Magistrate Judge for this division of court to carry out the court’s directives.

    Continue reading →United States District Court, W.D. Virginia, Roanoke Division. UNITED STATES of America v. Aaron Campbell BROWN. Criminal No. 7:06cr00044. April 26, 2007. MEMORANDUM OPINION AND ORDER SAMUEL G. WILSON, United States District Judge. *1 This is a criminal prosecution against defendant, Aaron Campbell Brown, who allegedly owned and operated a website hosting and payment processing company that facilitated child pornography trafficking. The indictment charges ...
  • U.S. v. Henry

    United States District Court, W.D. Virginia,

    Roanoke Division.

    UNITED STATES of America et al., Plaintiffs,

    v.

    John Crockett HENRY et al., Defendants.

    Civil Action No. 7:08mc003.

    June 30, 2008.

    MEMORANDUM OPINION

    MICHAEL F. URBANSKI, United States Magistrate Judge.

    *1 This matter stems from intervening plaintiffs’ motion, filed on June 10, 2008, for sanctions and petition for issuance of a rule to show cause why William A. White (“White”) should not be held in contempt of court. This motion concerns subpoenas served on or about January 30, 2008 to White and four of his corporations: White Homes & Land, LLC; White Politics, LLC; American National Socialist Workers’ Party, LLC; and National Socialist Movement of Roanoke, LLC. The subpoenas sought production of electronic information and computers used by White in conjunction with White’s alleged interference with a fair housing lawsuit pending in the Eastern District of Virginia.FN1 On February 11, 2008, White filed two motions to quash these subpoenas in the Eastern District of Virginia. These motions were withdrawn, as the subpoenas were issued out of the Western District of Virginia, making this district the appropriate venue to entertain the motions to quash. White subsequently refiled these motions in this district on March 3, 2008. By order entered March 6, 2008, the court denied White’s motions to quash and ordered that the subpoenaed computers be produced to a court appointed computer forensic expert, Dr. Glenn Dardick (“Dardick”) of Longwood University, for imaging and analysis. Order Denying Motion to Quash, Dkt. # 7. By agreed order dated March 12, 2008, Dr. Dardick was asked to perform various computer searches for relevant data and to “examine and search the electronically-stored information produced to him for evidence of any destruction, deletion, erasing,  overwriting or other compromising of data.” Agreed Protective Order of March 12, 2008, Dkt. # 9. After investigation, Dr. Dardick, by email dated April 11, 2008, reported an “unusual number of files deleted.” FN2 Email from Dr. Dardick to all counsel of record dated April 11, 2008. Specifically, Dr. Dardick reported that his analysis of White’s computers revealed that 53,199 files located in White’s Recycler folder were emptied on February 24, 2008. Id. This emptying of 59% of the Recycler folder was done three weeks after the subpoenas were served and eight days before the March 3, 2008  hearing. Id. In an email dated April 18, 2008, Dr. Dardick was posed the following question by counsel for the United States Department of Justice (“DOJ”) and made the following response:

    FN1. The parties have informed the court that the underlying litigation in the Eastern District of Virginia has been settled. According to the parties, however, the settlement contained a carve out provision for any link established between the defendant in that case and White and for matters relating to these subpoenas and any contempt or sanctions motions pertaining to White.

    FN2. The string of email communications between Dr. Dardick and all counsel of record regarding the issue of deletion of data from White’s computers is attached as Exhibit A. Pursuant to Standing Order No. 04-1 of the court, regarding redaction of personal data identifiers from all pleadings, the user names or local part of all email addresses, phone numbers, and fax numbers have all been redacted for public viewing. The domain name for the email addresses, however, have not been redacted. Unredacted copies of these materials shall be filed under seal in accordance with Standing Order No. 04-1.

    [Question:]

    Is your finding that 53,199 files were “emptied” on 2/24/2008 consistent with an effort by the user of the computer to intentionally delete or destroy certain data files on that date?

    [Answer:]

    Although, I cannot give an opinion on why the files were emptied, I can say that the deletion of the files, given the quantity and content would be consistent with an effort by the user of the computer to intentionally delete or destroy certain data files on that date.

    Email from Dr. Dardick to all counsel of record dated April 18, 2008. Dr. Dardick performed additional analysis and investigation concerning the deleted data pursuant to an order dated April 22, 2008. After further inquiry and email communication with counsel for the parties, Dr. Dardick was asked by counsel for the United States on May 1, 2008 whether his further investigation provided him “any reason as yet to change your earlier conclusion that the condition of the PC drive is consistent with an intentional effort by the user to destroy files? Could you explain?” Email from Daniel Yi of DOJ to Dr. Dardick and all counsel of record dated May 1, 2008. Dr. Dardick responded a little over two hours later as follows:

    *2 I have no reason to change my earlier conclusion that the deletion of the files was consistent with an intentional effort by the user to destroy files. However, the additional information that is now available, such as the file listings could assist the parties in supporting their arguments whether the evidence is not just “consistent,” but whether or not the evidence supports or does not support the hypothesis that the deletion of the files were in fact an intentional effort by the user to destroy specific files.

    Email from Dr. Dardick to all counsel of record dated May 1, 2008. In communications with Dr. Dardick, White’s counsel questioned whether the large number of deleted files could be due to file compression or to free up disk space. By emails dated April 11 and April 18, 2008, Dr. Dardick rejected the suggestion that the large number of deleted files were due to file compression. On May 2, 2008, Dr. Dardick provided a lengthy explanation to Harry Brown, counsel for White, that it “seems unlikely” that the deletions were done to free up disk space as White’s computer already had free disk space of “more than a third of the drive’s capacity.” Email from Dr. Dardick to all counsel of record dated May 2, 2008.

    In their motion for sanctions and contempt filed on June 10, 2008, intervening plaintiffs allege that White intentionally deleted these files “at a time when he had actual knowledge that the information was being sought in discovery and that it might contain relevant information.” Show Cause Motion at P 7, Dkt. # 26. Intervening plaintiffs assert further that “Dardick reported on May 22, 2008 that approximately 4,581 possibly relevant files containing user-created text (emails, Microsoft Word documents, Microsoft Excel files, etc) were irretrievable because of the large number of electronic files White had deleted at one time.” Show Cause Motion at P 8. Because of White’s alleged mass file deletion in the face of the subpoenas for his computers, intervening plaintiffs move for sanctions and for White to show cause why he should not be held in contempt of court. Intervening plaintiffs also allege they are entitled to attorney’s fees incurred as a result of the alleged destruction of documents in violation of the subpoenas and that Dr. Dardick be compensated for the time incurred by him in researching and analyzing the information destroyed by White. Show Cause Motion at P 16.

    Shortly after the Show Cause Motion was filed with the court, White filed for Chapter 11 bankruptcy in the United States Bankruptcy Court for the Western District of Virginia. The court received notice of White’s personal bankruptcy filing on June 16, 2008. The issue presently before the court is whether the automatic stay issued upon White’s filing for bankruptcy, as required by 11 U.S.C. s 362(a), stays the intervening plaintiffs’ motion for sanctions and petition to show cause.FN3

    FN3. Although the subpoenas were issued to White and his four corporations, intervening plaintiffs’ motion seeks sanctions and a motion to show cause only against White. The court notes that the four subpoenaed corporations would not be affected by an automatic stay resulting from White’s personal bankruptcy filing. See A.H. Robins Co. v. Piccinin, 788 F.2d 994, 999 (4th Cir.1986) (holding that, absent “unusual circumstances,” an automatic stay is generally not applicable to third party defendants or co-defendants); see also Kreisler v. Goldberg, 478 F.3d 209, 213 (4th Cir.2007). However, as intervening plaintiffs do not appear to seek sanctions or contempt against the subpoenaed corporate entities but rather seek to proceed only against White, the court will not address the issue of any sanctions or contempt concerning the four corporations.

    Under 11 U.S.C s 362(a), a bankruptcy filing operates as a stay of “the commencement  or continuation … of a judicial, administrative, or other action… against the debtor….” 11 U.S.C. s 362(a)(1). The exemptions to the stay are listed in 11 U .S.C. s 362(b),  including an exemption of the “commencement or continuation of a criminal action or proceeding against the debtor.” 11 U.S.C. s 362(b)(1). A district court has concurrent jurisdiction with the bankruptcy court to determine the effect of White’s bankruptcy proceeding on intervening plaintiffs’ motion. See United States Dep’t of Hous. & Urban Dev. v. Cost Control Mktg. & Sales Mgmt. of Va., Inc., 64 F.3d 920, 927 n. 11 (4th Cir.1995) (citing Brock v. Morysville Body Works, Inc., 829 F.2d 383 (3d Cir.1987)). Because the district court’s jurisdiction “attached first in time,” it is proper for the district court to determine the issue. Id. (citing Kline v. Burke Constr. Co., 260 U.S. 226 (1922)).

    *3 A threshold issue is whether the contempt proceeding is civil or criminal, as the automatic stay does not apply to criminal contempt proceedings. Whether a contempt proceeding is civil or criminal is determined by examining the “character and purpose of the sanction involved,” not by the manner in which the contempt proceeding is labeled. Int’l Union, United Mine Workers of Am. v. Bagwell, 512 U.S. 821, 827 (1994) (citing Gompers v. Bucks Stove & Range Co ., 221 U.S. 418, 441 (1911)) (internal quotations omitted); see also In re Dill, 300 B.R. 658, 667 (Bankr.E.D.Va.2003) (quoting In re Maloney, 250 B.R. 671, 674 (Bankr.E.D.N.Y.1996)). A civil contempt proceeding is remedial and either “coerces the defendant into compliance with the court’s order” or “compensates the complainant for losses sustained.” Bagwell, 512 U.S. at 827 (internal quotations omitted); see also Dill, 300 B.R. at 667. A criminal contempt proceeding is punitive and seeks to “vindicate the authority of the court.” Bagwell, 512 U.S. at 828 (internal quotations omitted); see also Dill, 300 B.R. at 667. As such, penalties associated with criminal contempt are imposed “retrospectively for a completed act of disobedience” and without any provision for purge of the contempt. Bagwell, 512 U.S. at 828 (internal quotations omitted); see also Dill, 300 B.R. at 667.

    To determine whether the stay applies to a contempt proceeding, the United States Bankruptcy Court for the Eastern District of Virginia has adopted an analysis which “examine[s] all aspects surrounding” the contempt proceeding. In re Rook, 102 B.R. 490, 494 (Bankr.E.D.Va.1989), aff’d 929 F.2d 694 (4th Cir.1991); see also In re Dunham, 175 B.R. 615 (Bankr.E.D.Va.1994). In Rook, the debtor, Rook, was held in contempt in 1983 (“1983 contempt order”) for disobeying a previous state court decree concerning a divorce settlement. Rook, 102 B.R. at 491. After many appeals, the state court  reaffirmed the 1983 contempt order in 1989 (“1989 contempt order”). Id. Sometime before the 1989 contempt order, Rook filed for bankruptcy and moved for the application of the automatic stay to the civil contempt proceedings. Id. The state court did not apply the stay to the contempt proceedings, finding that Rook was in contempt of court prior to his bankruptcy filing. Id. The Bankruptcy Court upheld the decision of the state court because the 1989 contempt order “was issued solely to uphold the dignity of the prior circuit court orders.” Id. at 495. Rook was no longer able to bring himself into compliance with the 1983 contempt order, thus “converting a contempt citation, civil and remedial in nature, into a citation criminal and punitive in nature.” Id.

    Allowing those allegedly in contempt of court to avoid possible penalties by filing for bankruptcy would enable parties to “blatantly violate direct orders of [a] court and then seek shelter from a bankruptcy judge.” Am. Online, Inc. v. CN Prods., Inc., 272 B.R. 879, 881 (Bankr.E.D.Va.2002) (holding that plaintiff’s discovery requests served for the purpose of determining if defendant was in contempt were not stayed by a bankruptcy filing) (quoting U.S. Spring Comm’s Co. v. Buscher, 89 B.R. 154, 156 (Bankr.D.Kan.1988)) (internal quotations omitted). “The bankruptcy process cannot be invoked to immunize contumacious behavior.” Id.

    *4 The motion before the court does not specifically delineate whether it seeks criminal or civil contempt. There is nothing about the show cause motion which seeks to coerce White to do anything or to provide him an opportunity to mitigate or avoid punishment for the already completed file deletion. Like Rook, White is no longer able to bring himself into compliance with the subpoena which the contempt proceedings concern. The files were deleted, some of which cannot be recovered. The thrust of the motion is to punish the underlying alleged deletion of computer files in the face of federal court subpoenas for production of those files. As such, the relief sought in the contempt proceeding is not remedial, but punitive in nature, and would be issued to uphold the dignity of the subpoenas issued under the authority of the court under the Federal Rules of Civil Procedure. Fed.R.Civ.P. 45(e) (“The issuing court may hold in contempt a person who, having been served, fails without adequate excuse to obey the subpoena.”); see also Nilva v. United States, 352 U.S. 385 (1957) (affirming conviction of criminal contempt for disobeying a subpoena duces tecum ). In Nilva, the Supreme Court noted that “it is settled that a criminal contempt is committed by one who, in response to a subpoena calling for corporation or association records, refuses to surrender them when they are in existence and within his control.” 352 U.S. at 392. Destruction of documents called for by subpoena is likewise punishable as criminal contempt. Any sanctions issued for the deletion of the files subject to the subpoenas are not remedial, but rather would issue to vindicate the authority of the court. “[T]he automatic stay was not intended by Congress to be used as a sword,” and White cannot be allowed to use his bankruptcy filing as such. In re Clowser, 39 B.R. 883, 886 (Bankr.E.D.Va.1984). Accordingly, intervening plaintiffs’ petition for a motion to show cause is properly considered to be a criminal contempt proceeding and exempt from the automatic stay under 11 U.S.C. s 362(b)(1).

    The fact that intervening plaintiffs’ motion seeks recovery of attorneys’ fees and expert costs does not render the contempt civil and subject to the automatic stay. The expense, time, and effort expended by intervening plaintiffs’ counsel and the court appointed expert as a result of the alleged contempt can be considered by the court as a factor in fashioning a criminal contempt penalty. Long ago, the Supreme Court upheld a criminal contempt sanction paid to a district court, half of which was to be paid to the party moving for criminal contempt for that party’s reasonable expenses incurred as a result of the criminal contempt proceeding. Union Tool Co. v. Wilson, 259 U.S. 107, 109 (1922). More recently, the Fourth Circuit characterized an award of attorneys’ fees which were “proximately caused by defiance” of court orders as a criminal contempt penalty. Cromer v. Kraft Foods N. Am., Inc., 390 F.3d 812, 822 (4th Cir.2004). The Fourth Circuit explained that “putatively civil contempt sanctions will be held to be criminal sanctions in cases when the fines were ‘not conditioned on compliance with a court order,’ ‘not tailored to compensate the complaining party,’ but instead ‘initiated to vindicate the authority of the court and to punish the actions of the alleged contemnor.’ ” 390 F.3d at 822 (quoting Buffington v. Baltimore County, 913 F.2d 113, 133-35 (4th Cir.1990), and Bradley v. Am. Household, Inc., 378 F.3d 373, 377-79 (4th Cir.2004). Because the petition seeks to punish White for deletion of documents subject to a subpoena, actions which cannot now be remedied, it is essentially criminal in nature and not subject to the automatic stay. In connection with this criminal contempt proceeding, the amount of fees incurred by the parties may be considered by the court in fashioning an appropriate criminal contempt sanction.

    *5 Because the motion to show cause is a criminal contempt proceeding, the court must, under Rule 42 of the Federal Rules of Criminal Procedure, appoint a prosecutor to pursue this matter.FN4 Accordingly, Julia C. Dudley, Acting United States Attorney for the Western District of Virginia, is appointed to prosecute this contempt allegation. Such prosecution is to include two aspects of criminal contempt: (1) the alleged destruction of computer files subject to subpoena as detailed herein and in Exhibit A; and (2) White’s emailing of a derogatory and inflammatory email to the court’s law clerk on June 18, 2008. The email, attached as Exhibit B, is vile, contumacious and laced with expletives. While the invective in the email is not directed at the court, it was communicated directly to the court’s law clerk. Plainly, such statements would be contemptuous if uttered in open court. The court sees no difference in making such statements in an email sent to the court’s law clerk as they are plainly disrespectful and constitute an insult to the dignity of the court and an affront to our system of justice.

    FN4. By order entered June 13, 2008, intervening plaintiffs’ motion was referred to the undersigned magistrate judge for report and recommendation. However, as this matter concerns criminal contempt, the undersigned magistrate judge, under 28 U.S.C. s 636(e)(6), must certify the facts to a district judge who shall hear the evidence and decide the issue.

    Pursuant to 28 U.S.C. s 636(e)(6), the undersigned certifies to the district court the following facts which occurred outside the presence of the undersigned magistrate judge: (1) Intervening plaintiffs have filed a motion for sanctions and contempt, which the court construes as criminal in nature, based on Dr. Dardick’s forensic computer analysis, asserting that White deleted thousands of files from his computers at a time when said computers were subject to a subpoena issued by counsel for the intervening plaintiffs under the authority of the Federal Rules of Civil Procedure and the United States District Court for the Western District of Virginia; and (2) White sent the profane email attached as Exhibit B to the undersigned’s law clerk, the court-appointed expert and counsel of record in this proceeding on June 18, 2008.

    White is ORDERED to appear before The Honorable James C. Turk, Senior United States District Judge, on Friday, July 18, 2008 at 10:00 a.m. to show cause why he should not be held in contempt by reason of the facts so certified.

    The Clerk of the Court hereby is directed to send a copy of this Memorandum Opinion to all counsel of record and to Julia C. Dudley, Acting United States Attorney for the Western District of Virginia.

    ORDER

    In accordance with the memorandum opinion entered this day, it is hereby

    ORDERED:

    1. That Julia C. Dudley, Acting United States Attorney for the Western District of Virginia, is APPOINTED to prosecute the allegations of criminal contempt set forth in the memorandum opinion. Such prosecution is to include two aspects of criminal contempt which occurred outside the presence of the undersigned magistrate judge:

    (a) the alleged deletion of a large number of computer files subject to subpoena; and

    (b) White’s emailing of a profane email to the court’s law clerk on June 18, 2008.

    *6 2. White is ORDERED to appear before The Honorable James C. Turk, Senior United States District Judge, on Friday, July 18, 2008 at 10:00 a.m. to show cause why he should not be held in criminal contempt.

    3. The unredacted versions of Exhibits A and B attached to the memorandum opinion entered this day SHALL be filed under seal.

    The Clerk of the Court hereby is directed to send a copy of this Order to all counsel of record and to Julia C. Dudley, Acting United States Attorney for the Western District of Virginia.

    Continue reading →United States District Court, W.D. Virginia, Roanoke Division. UNITED STATES of America et al., Plaintiffs, v. John Crockett HENRY et al., Defendants. Civil Action No. 7:08mc003. June 30, 2008. MEMORANDUM OPINION MICHAEL F. URBANSKI, United States Magistrate Judge. *1 This matter stems from intervening plaintiffs’ motion, filed on June 10, 2008, for sanctions and petition for issuance of a rule to show cause why ...
  • Gibson v. U.S.

    United States District Court, E.D. Virginia,

    Alexandria Division.

    Colleen GIBSON, Petitioner,

    v.

    UNITED STATES of America, Respondent.

    Criminal No. 1:07CR395.

    Civil Action No. 1:08cv639.

    July 24, 2008.

    MEMORANDUM OPINION

    CLAUDE M. HILTON, District Judge.

    On September 24, 2007, a Criminal Complaint charged the petitioner with Aggravated Identity Theft under 18 U.S.C. 1028(A). The petitioner entered into a plea agreement with the government, under which she pled guilty to Aggravated Identity Theft in violation of 18 U.S.C. s 1028(A). On October 17, 2007, the court accepted the petitioner’s guilty plea and found the petitioner guilty after conducting a plea colloquy pursuant to Rule 11 of the Federal Rules of Procedure. On the petitioner’s motion, with which the government agreed, the court proceeded to sentencing immediately following its acceptance of the petitioner’s guilty plea. As the statute mandates a two-year  sentence for the crime of aggravated identity theft, the court sentenced the petitioner to a two-year term of imprisonment and permitted the petitioner to self-surrender to the custody of the Bureau of Prisons. On June 18, 2008, the petitioner filed this Motion to Vacate Pursuant to 28 U.S.C. s 2255.

    On March 5, 2007, Detective Albert Leightly of the United States Secret Service Electronic Crimes Task Force (“Task Force”) obtained a Search Warrant for the petitioner’s home in Washington, D .C. from the Superior Court of the District of Columbia based on a sworn affidavit that set forth the following facts: On December 20, 2006, a victim reported to police the unauthorized use of his credit card to make purchases on the internet. The email address connected to those unauthorized  purchases was being accessed from two separate Internet Provider (“IP”) addresses, one of which was located at the petitioner’s place of employment, a doctor’s office in Fairfax, VA. Following this report, Task Force officers obtained the petitioner’s employer’s permission to perform a forensics analysis of the petitioner’s work computer, which revealed 31 different credit card numbers and 13 different email accounts. Detective Leightly’s affidavit also set forth that when Ms. Gibson was arrested on Virginia identity theft charges on February 26, 2007, she admitted taking patients’ credit card information to purchase items online.

    On September 24, 2007, a Criminal Complaint in the Eastern District of Virginia charged the petitioner with Aggravated Identity Theft in violation of 18 U.S.C. s 1028(A). United States Secret Service Special Agent Kimberly McGill’s sworn affidavit in support of the Criminal Complaint established the following: During a February 27, 2007 interview with Task Force officers following a waiver of her Miranda rights, the petitioner admitted using various stolen credit card numbers to make online purchases and have them delivered to her home. On March 8, 2007, Task Force officers executed a search warrant on the petitioner’s residence and discovered fraudulently obtained items including apparel and electronic equipment as well as medical records for patients of the petitioner’s employer.

    *2 On September 27, 2008, the government extended a draft pre-indictment plea agreement to the petitioner through her counsel. The plea agreement offered by the government gave the petitioner the opportunity to plead guilty to a single count of aggravated identity theft. Although the Statement of Facts that the petitioner later signed established the elements that the government would have to prove for the underlying  crime of credit card fraud, part of the government’s plea offer was an agreement not to charge the defendant with the underlying fraud offense.

    Counsel for the petitioner, Geremy C. Kamens, met with the petitioner at the Office of the Federal Public Defender on October 3, 2007 to discuss this plea offer. During the meeting, petitioner and her counsel discussed her case and the possible penalties. Specifically, defense counsel informed the petitioner that accepting the plea would require a mandatory sentence of 24 months of incarceration. At the meeting, the petitioner decided to accept the government’s plea offer and expressed a desire to resolve the matter as quickly as possible.

    On October 17, 2007, the court held a plea hearing. During its Rule 11 colloquy with the petitioner, the court found that the petitioner’s plea was voluntary and intelligent and that there was a factual basis to support it. The court then found the petitioner guilty of aggravated identity theft in violation of 18 U.S.C. s 1028(A). After the guilty plea was accepted by the court, petitioner’s counsel explained to the petitioner that although the Court generally continues sentencing for approximately three months in most felony cases, in her case the sentence would be 24 months whether the Court continued the sentencing or not because of the mandatory two-year sentence under 18 U.S.C. s 1028(A). On that basis, petitioner agreed to immediate sentencing if the court would permit it.

    At that point, petitioner’s counsel moved to proceed to sentencing, gave a brief background of the petitioner, and informed the court that the petitioner was in Criminal History Category I. Petitioner’s counsel argued for a 24 month sentence, one year of supervised release, no fine, and the required special assessment. Although moving immediately to sentencing would prevent the government from seeking restitution in this case, the government did not object to petitioner’s motion. The court then asked the petitioner if there was anything further that she wished to say, and the petitioner responded that there was not. The court imposed a sentence of two years imprisonment with one year of supervised release, no fine and a special assessment of $100. The court also granted defense counsel’s motion that the petitioner be permitted to voluntarily surrender to Bureau of Prisons custody.

    On June 18, 2008, Petitioner filed her pro se Motion under 28 U.S.C. s 2255 to Vacate, Set Aside, or Correct Sentence. In her motion, the petitioner alleges the following grounds for her motion: (1) she received ineffective assistance of counsel and (2) her sentencing was flawed because no Pre-Sentence Investigation Report (“PSI”) was prepared.

    *3 None of the petitioner’s arguments in support of her claim of ineffective assistance of counsel establish that her attorney’s representation was in any way objectively unreasonable and that but for such representation, the outcome of her case would have been different, as is required to establish a claim of ineffective assistance of counsel. In her motion to vacate her sentence under 28 U.S.C. s 2255, the petitioner asserts ineffective assistance of counsel as her primary ground for relief. In support of her ineffective assistance of counsel claim, the petitioner asserts the following: (1) there was a lack of communication between client and attorney … petitioner wanted to make a recommendation to the government and the court if she could get split sentencing as part of the condition of the plea agreement and (2) that defense counsel failed to prepare adequately for her plea bargaining, colloquy and sentencing hearings, and that she was lied to, taken advantage of and was rushed through the system without being truthfully told and/or informed as tot he ramification of signing and agreeing to the plea agreement. Petitioner also states that she was coerced by defense counsel to take the plea because defense counsel stated to her that she was guilty of the crime and this statement showed that defense counsel was not going to defend her rights.

    In Strickland v. Washington, 466 U.S. 668, 687, 104 S.Ct. 2052, 80 L.Ed.2d 674 (1984), the Supreme Court established a two-prong standard that the defendant must satisfy to demonstrate a denial of the Sixth Amendment right to effective assistance of counsel. The first prong requires the defendant to prove that counsel’s representation fell below an objective standard of reasonableness. However, there is a strong presumption that an attorney is acting reasonably.

    Strickland, 446 U.S. at 689. The second prong requires the defendant to prove that but for his attorney’s errors, there is a reasonable probability that the outcome of the trial would have been different. See Strickland, 466 U.S. at 694. If a defendant claims that she was denied effective assistance of counsel when entering a guilty plea, courts likewise apply the Strickland test, requiring the defendant to “show that there is a reasonable probability that, but for counsel’s errors, he would have not pleaded guilty and would have insisted on going to trial.” Hill v. Lockhart, 474 U.S. 527 (1985). Each of the petitioner’s arguments in support of her claim of ineffective assistance of counsel fails to meet this standard, as discussed below.

    The petitioner claims that there was a lack of communication between client and attorney … petitioner wanted to make a recommendation to the government and the court if she could get split sentencing as part of the condition of the plea agreement. As stated in defense counsel Geremy Kamens’ affidavit, defense counsel met with the petitioner in person six days after the government extended its plea agreement. During that meeting, the petitioner and her counsel discussed the plea agreement, the facts of the petitioner’s case, and the possible penalties. Based on that conversation, the defendant decided to accept the plea agreement. Defense counsel conferred with his client again following the court’s acceptance of the petitioner’s plea and her sentencing. In fact, defense counsel had discussed the petitioner’s case in sufficient depth to enable him to represent to the court that the petitioner was extraordinarily ashamed about this and wants to get it over with as quickly as possible. The communication between the petitioner and her counsel demonstrates diligence and thought fulness on the part of her counsel. The petitioner fails to meet the first prong of the Strickland test because she has alleged no facts that would demonstrate that the level of communication between the her and her counsel was objectively unreasonably.

    *4 The petitioner also seems to argue that if it were not for this lack of communication, the petitioner might have received a split sentence. The Aggravated Identity Theft offense to which the petitioner plead guilty requires a term of imprisonment of two years and does not authorize that term to be divided between the Bureau of Prisons and another method of confinement. 18 U.S.C. 1028(A). Therefore, the petitioner also fails to meet the second prong of the Strickland standard by failing to show that but for counsel’s actions, the outcome of the petitioner’s case would have been different. The petitioner’s claim that there was a lack of communication between her and her counsel fails to demonstrate that she received ineffective assistance of counsel.

    The petitioner also claims that her counsel did not adequately prepare for her for her plea and that she feels lied to and taken advantage of with regard to her plea. With respect to this argument, the petitioner has not alleged sufficient facts to support this assertion. The petitioner must present more than naked allegations in support of her grounds for relief under 28 U.S.C. s 2255. Adams v. Rice, 40 F.3d 72, 74 (4th Cir.1992); see also Rasberry v. United States, No. 2:00cr76, 2001 WL 34808293, (E.D.Va. July 31, 2001) (noting that “naked allegations do not sustain [petitioner’s] burden of proving by a preponderance of the evidence that he is entitled to relief under s 2255.”) Here, the petitioner does not present the court with any particulars concerning her attorney’s failure to prepare for the plea agreement, nor concerning any way in which her counsel may have taken advantage of her or lied to her. Accordingly, the petitioner fails, as required, to present more than naked allegations to support her claim that her Fifth Amendment rights were violated. Therefore, her assertion that she received ineffective assistance of counsel because she was “coerced” to plead guilty cannot be used to support her motion under 28 U.S.C. s 2255.

    Furthermore, there is no indication in the record that the petitioner’s guilty plea was in any way flawed. In determining whether a plea of guilty was properly entered, the Fourth Circuit consider the following factors: “(1) whether the defendant has offered credible evidence that his plea was not knowing or not voluntary, (2) whether the defendant has credibly asserted his legal innocence, (3) whether there has been a delay between the entering of the plea and the filing of the motion, (4) whether defendant has had close assistance of competent counsel, (5) whether withdrawal will cause prejudice to the government, and (6) whether it will inconvenience the court and waste judicial resources.” United States v. Moore, 931 F.2d 245 (4th Cir.1991). The most important consideration is whether the Rule 11 colloquy was properly conducted and the plea was both counseled and voluntary.” United States v. Bowman, 348 F.3d 408 (4th Cir.2003).

    During the petitioner’s Rule 11 colloquy, she stated that she understood the nature of the charges against her, the penalties that she faced if she pled guilty, and the rights that she was waiving by entering into a guilty plea. She also stated that she was satisfied with the assistance of her attorney. Neither does the petitioner assert any facts that would support a finding that she was coerced into her plea agreement nor does the record support such a conclusion. Therefore, even if read as a claim separate from the claim of ineffective assistance of counsel, the petitioner’s assertions concerning her guilty plea do not establish a valid ground her motion under 28 U.S.C. s 2255.

    *5 Petitioner’s Motion to Vacate Pursuant to 28 U.S.C. s 2255 seems to argue that the sentence she received was flawed because a Presentence Investigation Report (“PSI”) was not considered by the judge prior to the imposition of her sentence. Rule 32(c)(1)(A)(ii) allows the court to sentence without a PSI if “the court finds that the information in the record enables it to meaningfully exercise its sentencing authority under 18 U.S.C. s 3553, and the court explains its finding on the record.” 18 U.S.C. s 3553 sets forth the factors the court must consider when determining the particular sentence to be imposed. Although Section 3553 requires the court to examine such factors as the nature and circumstances of the offense and the history and characteristics of the defendant when imposing its sentence, it does not authorize the court to depart from any statutorily mandated minimum or maximum penalties. The statue for the Aggravated Identity Theft offense to which the petitioner plead guilty authorizes an mandatory sentence of two years.

    For these reasons, the Petitioner’s s 2255 motion should be denied.

    Continue reading →United States District Court, E.D. Virginia, Alexandria Division. Colleen GIBSON, Petitioner, v. UNITED STATES of America, Respondent. Criminal No. 1:07CR395. Civil Action No. 1:08cv639. July 24, 2008. MEMORANDUM OPINION CLAUDE M. HILTON, District Judge. On September 24, 2007, a Criminal Complaint charged the petitioner with Aggravated Identity Theft under 18 U.S.C. 1028(A). The petitioner entered into a plea agreement with the government, under which she ...
  • U.S. v. Doyle

    United States District Court,

    W.D. Virginia,

    Big Stone Gap Division.

    UNITED STATES of America

    v.

    Robert Franklin DOYLE, Jr., Defendant.

    No. 2:07CR00004.

    June 2, 2009.

    OPINION AND ORDER

    JAMES P. JONES, Chief Judge.

    In this criminal case, the defendant, convicted by a jury of possessing child pornography, has filed post-trial motions seeking acquittal and a new trial. For the reasons that follow, I will deny the motions.

    I

    The defendant Robert Doyle was convicted by a jury of knowingly receiving and knowingly possessing child pornography in violation of 18 U.S.C.A. ss 2252A(a)(2)(A), (a)(5)(B), and (b)(2) (West Supp.2008) (Counts One and Two), and knowingly transporting child pornography in violation of 18 U.S.C.A. ss 2252A(a)(1) and (b)(1) (West Supp.2008) (Counts Three, Four, and Five). At trial, the government contended that the defendant had used a desktop computer located in his bedroom to download images of child pornography from the internet. The defendant argued that since other people had had access to the computer, the government did not prove beyond a reasonable doubt that the defendant was the person who had downloaded the images. The defendant also asserted that the government did not meet its burden of proving that the images depicted real children under the age of eighteen.

    In his post-trial Motion for a Judgment of Acquittal, the defendant raises these arguments once more, contending that the government presented insufficient evidence for the jury to find beyond a reasonable doubt that the defendant was the person who downloaded the images and that the images depicted real children under the age of eighteen. The defendant also argues that the government did not establish that the Western District of Virginia was the proper venue for the three counts of transporting child pornography.

    In his Motion for New Trial, the defendant argues that the testimony of a deceased witness given previously at a bond hearing should not have been admitted at trial under Federal Rule of Evidence 804(b)(1) and the Sixth Amendment’s Confrontation Clause because the defendant did not have a similar motive to cross-examine the witness  during the bond hearing. The defendant’s motions have been briefed and argued and are ripe for decision.

    II

    The evidence adduced at trial was sufficient for a reasonable jury to convict the defendant beyond a reasonable doubt, and the government presented sufficient evidence that the Western District of Virginia was the proper venue for all counts. Therefore, I will deny the defendant’s Motion for a Judgment of Acquittal.

    [1][2] The defendant argues that the government submitted insufficient evidence for a jury to convict him of the crimes charged. Specifically, the defendant claims that there was insufficient evidence that the defendant was the person who downloaded the images of child pornography and that the images depicted real children under the age of eighteen. A conviction must be sustained if, viewed in the light most favorable to the government, there is substantial evidence to support it. *340Glasser v. United States, 315 U.S. 60, 80, 62 S.Ct. 457, 86 L.Ed. 680 (1942), superseded by statute on other grounds as recognized in Bourjaily v. United States, 483 U.S. 171, 177-78, 107 S.Ct. 2775, 97 L.Ed.2d 144 (1987). I must determine “whether any rational trier of fact could have found the essential elements of the crime charged beyond a reasonable doubt.” United States v. Capers, 61 F.3d 1100, 1107 (4th Cir.1995) (internal quotation marks and alternations omitted).

    The government presented sufficient evidence that the defendant was the person who downloaded the images of child pornography. Other individuals did testify to having used the computer on which the images were found. However, the twenty-six offensive images admitted into evidence were all created and accessed exclusively between 6:21 p.m. and 1:53 a.m., and twenty-four of those images were only accessed after 9:18 p.m.FN1 The three emails sent from “bobby” <rfdj [email protected]> to <[email protected] yahoo. com> FN2 or <rfdj 1 @hotmail. com> with images of child pornography attached were time marked 9:02 p.m., 9:40 p.m., and 9:41 p.m.FN3 The computer was located in the defendant’s bedroom, evidence that he was the most likely person to have had access to the computer late at night. A jury verdict may be based in whole or in part on circumstantial evidence, Holland v. United States, 348 U.S. 121, 140, 75 S.Ct. 127, 99 L.Ed. 150 (1954), and this evidence was sufficient for the jury to conclude the defendant was the person accessing and transporting the images.

    FN1. The images admitted into evidence included time stamps for when they were created, modified, last written, and last accessed. Testimony at trial showed that the computer on which the images were found was set to Central Standard Time, which was reflected in the time stamps. The times listed here have been converted into Eastern Standard Time.

    FN2. Evidence at trial showed that the email address [email protected] was registered to Mr. Bobby Doyle. (Gov’t Ex. 15.) The Yahoo! account for [email protected] listed [email protected] as an alternate email address. (Id.) The government argued that the defendant emailed the images to himself for safekeeping.

    FN3. The time stamps on the email messages reflected the correct hour in Eastern Standard Time.

    [3] The government introduced the pornographic images as the only evidence that those images depicted real children under the age of eighteen, but such evidence was sufficient. Under Ashcroft v. Free Speech Coalition, 535 U.S. 234, 251-56, 122 S.Ct. 1389, 152 L.Ed.2d 403 (2002), pornographic images of “virtual” children are protected free speech. The government therefore had the burden to prove beyond a reasonable doubt that the images in this case depicted real children. Although the Fourth Circuit has yet to rule upon the issue, other circuits have concluded that images themselves may be sufficient evidence for a jury to conclude that real children are depicted. United States v. Salcido, 506 F.3d 729, 733-34 (9th Cir.2007); United States v. Rodriguez-Pacheco, 475 F.3d 434, 437 (1st Cir.2007); United States v. Irving, 452 F.3d 110, 121-22 (2d Cir.2006); United States v. Farrelly, 389 F.3d 649, 654 & n. 4 (6th Cir.2004), abrogated on other grounds by United States v. Williams, 411 F.3d 675, 678 n. 1 (6th Cir.2005); United States v. Slanina, 359 F.3d 356, 357 (5th Cir.2004); United States v. Kimler, 335 F.3d 1132, 1142 (10th Cir.2003); United States v. Deaton, 328 F.3d 454, 455 (8th Cir.2003). The jury is capable of distinguishing for itself whether a child depicted in an image is real or virtual. Salcido, 506 F.3d at 733-34. Based on my review of the images in this case, I find that these images alone were *341 sufficient evidence for the jury to conclude that the images depicted real children under the age of eighteen.FN4

    FN4. The jury in this case was instructed, “It is not necessary that the Government introduce direct evidence of the age of the persons depicted and the jury may consider all of the evidence in the case, including the visual depictions themselves, in determining whether the persons depicted were minors.” (Jury Instruction No. 11.)

    [4] The government also presented sufficient evidence that all of the offenses, including the three counts of transporting child pornography, occurred in the Western District of Virginia. Evidence at trial showed that the defendant resided in a house in Rose Hill, Virginia, which is in this district, from August 2003 to January 2004. The defendant’s niece testified that she had visited the defendant’s residence at least twice per week from August to December 2003, and that there had been a black Dell computer located in the defendant’s bedroom during that time period. This testimony was corroborated by Fred Rouse, an investigator for the Lee County Sheriff’s Department. He testified that officers had seized a black Dell computer from the defendant’s bedroom on January 9, 2004, during the execution of a search warrant at the defendant’s residence. It was on this computer, identified by Investigator Rouse during his testimony at trial, that the offending images were found. Special Agent Chris Hoy, who forensically examined the black Dell computer, testified that the operating system had been registered to “Bobby Doyle” in May 2003.

    I find that when viewed in the light most favorable to the government, there was sufficient evidence from which the jury could conclude that images of child pornography were transported, received, and possessed by the defendant on the black Dell computer in his residence in this judicial district during the time period in question. Thus, the defendant’s Motion for a Judgment of Acquittal will be denied.

    III

    [5] I will also deny the defendant’s Motion for New Trial because the testimony of the unavailable witness was properly admitted at trial. The defendant argues that a new trial should be granted because the admission of prior testimony of a deceased witness violated Federal Rule of Evidence 804(b)(1) and the defendant’s Sixth Amendment right to confront witnesses against him. This court has the discretion to grant a new trial where the interests of justice so require. Fed.R.Crim.P. 33(a); United States v. Mitchell, 602 F.2d 636, 639 (4th Cir.1979).

    [6][7][8] The Sixth Amendment’s Confrontation Clause provides that, “[i]n all criminal prosecutions, the accused shall enjoy the right … to be confronted with the witnesses against him.” U.S. Const. amend. VI. Prior testimony may therefore only be admitted if the declarant is unavailable and the defendant had a prior opportunity for cross-examination. Crawford v. Washington, 541 U.S. 36, 68, 124 S.Ct. 1354, 158 L.Ed.2d 177 (2004). Federal Rule of Evidence 804(b)(1) permits the admission of prior testimony of an unavailable witness only where the “party against whom the testimony is now offered … had an opportunity and similar motive to develop the testimony by direct, cross, or redirect examination.” ” ‘[S]imilar motive’ does not mean ‘identical motive.’ ” United States v. Salerno, 505 U.S. 317, 326, 112 S.Ct. 2503, 120 L.Ed.2d 255 (1992) (Blackmun, J., concurring). “[T]he similar-motive inquiry … is inherently a factual inquiry, depending in part on the similarity of the underlying issues and on the context of the … questioning.” Id.

    *342 Silas Glass testified at the defendant’s bond hearing before a magistrate judge of this court on March 9, 2007. The issues at the hearing included whether the defendant posed a danger to the community and whether conditions of release might reasonably assure his appearance at trial. One factor the court was required to consider was the weight of the evidence against the defendant. 18 U.S.C.A. s 3142(g)(2) (West 2000 & Supp.2005). Doyle’s attorney called Glass to discuss the defendant’s work history with a road construction and highway maintenance company, Glass Machinery Excavation. Glass testified that the defendant had been hired initially in 1991 as a truck driver and a part-time mechanic. Over the previous three or five years, however, the defendant had been employed primarily to look after Glass and his wife, who both had physical ailments. The defendant drove Glass to pick up parts for the business. He took Glass or his wife grocery shopping every Friday, and occasionally drove Glass to doctors’ appointments. He sometimes came by Glass’s home in the evening to see if Glass needed anything. The defendant also assisted with whatever needed to be done at the company, such as driving trucks, performing mechanical work, and running errands.

    During cross-examination by the government, Glass revealed that although the defendant had generally worked at the store from 8:00 a.m. to 5:00 p.m. five days per week, he would leave during the day to run errands as needed. Glass estimated that the defendant had spent ten to fifteen hours per week running personal errands for Glass and his wife.

    Unfortunately, Glass passed away prior to the commencement of the defendant’s trial and was therefore unavailable to testify. During the trial, the defendant called Glass’s son and daughter-in-law to testify in support of his alibi defense. Responding to some discrepancies between their testimony and Glass’s prior testimony, the government cross-examined both witnesses with portions of Glass’s testimony regarding the defendant’s work history and duties. During its rebuttal case, I also permitted the government to read portions of Glass’s testimony to the jury over the defendant’s objection.

    The defendant argues that the testimony of Glass was inadmissible because the defendant did not have a similar motive to examine Glass on direct and redirect during the bond hearing as he would have had during cross-examination at trial. I find that the defendant’s motive for direct examination and redirect examination at the bond hearing, although not identical, was substantially similar to what his motivation would have been during cross-examination at trial. Thus, the testimony of Glass was properly admitted.

    The main issue at the bond hearing was the safety of the community if the defendant were released pending trial. See United States v. Doyle, No. 2:07CR00004, 2007 WL 1097844, at *1 (W.D.Va. Apr. 11, 2007) (upholding the magistrate judge’s detention order because no condition of release would ensure the safety of the community). On direct examination, Glass’s testimony showed that the defendant was working and was accounted for during most weekdays. The government’s cross-examination of Glass revealed that the defendant was, in fact, not accounted for during large portions of the day. The clear implication was that during those hours, the defendant could engage in criminal behavior, such as receiving and transporting child pornography. The defendant had a fair opportunity to examine Glass on direct and redirect, if desired. If the defendant could have been accounted for during all hours of the day and night while *343 employed by Glass Machinery, it would have been to the defendant’s advantage to bring forth that testimony from Glass during the bond hearing. If Glass’s testimony about the defendant’s general working hours and duties was false or the result of misrecollection or confusion, the defendant had a full and fair opportunity to examine Glass to bring the matter to the court’s attention.

    If Glass had been available to testify at trial, the defendant presumably would have liked to cross-examine him regarding the number of hours the defendant worked each day in Glass’s presence, the amount of time the defendant spent running errands each week, and to what extent the defendant worked in the evenings. However, the defendant had a motive and opportunity to question Glass on these issues during direct and redirect examination at the bond hearing. At the bond hearing, the defendant’s daily whereabouts made it more or less probable that he would be a danger to the community during pre-trial release and was probative as to whether he was able to commit the crimes charged and whether he would have the opportunity to commit additional crimes upon release. At trial, the defendant’s daily whereabouts made it more or less probable that he had a consistent alibi. Although the underlying issues at the bond hearing and at trial were not identical, they were sufficiently similar so that the defendant had an adequate opportunity to confront and examine the witness.

    Federal courts have admitted prior testimony from preliminary hearings, even though such hearings are intended merely to show probable cause, not proof of guilt beyond a reasonable doubt. Glenn v. Dallman, 635 F.2d 1183, 1187 (6th Cir.1980) (“The fact remains that while petitioner’s counsel did not exercise her opportunity to fully cross examine the witness, she still had that opportunity.”); United States ex rel. Haywood v. Wolff, 658 F.2d 455, 461 (7th Cir.1981) (noting that the opportunity for cross-examination afforded at the preliminary hearing need not be identical to that required at trial) contra People v. Fry, 92 P.3d 970, 980 (Colo.2004) (concluding that admission of prior testimony elicited during a state court preliminary hearing violated the defendant’s Sixth Amendment right to confront witnesses against him).

    Courts have also admitted prior testimony elicited during other types of hearings, such as a bond hearing, State v. Douglas, 310 Or. 438, 800 P.2d 288, 293 (1990) (finding that the defendant had a similar motive to cross-examine the unavailable witnesses during a prior security release hearing), a sanity hearing, McMurrey v. State, 145 Tex.Crim. 439, 168 S.W.2d 858, 861 (1943), a committal hearing, Barnes v. State, 256 Ga. 370, 349 S.E.2d 387, 388 (1986), a suppression hearing, United States v. Poland, 659 F.2d 884, 896 (9th Cir.1981); Williams v. State, 214 Ga.App. 280, 447 S.E.2d 676, 678 (1994), an adult certification hearing, Coffin v. State, 850 S.W.2d 608, 610-11 (Tex.App.1993), an extradition hearing, Prater v. State, 148 Ga.App. 831, 253 S.E.2d 223, 229 (1979), and a grand jury proceeding where the testimony was later sought to be admitted by the defendant, United States v. McFall, 558 F.3d 951, 963 (9th Cir.2009) (noting that Rule 804(b)(1) “does not require an identical quantum of motivation”).

    The defendant cites People v. Brown, 374 Ill.App.3d 726, 312 Ill.Dec. 589, 870 N.E.2d 1033 (2007), in support of his contention that a defendant’s motive to cross-examine a witness at a bond hearing is not sufficiently similar to the motive during trial. But Brown is clearly distinguishable. In that case, the sole issue before the court during the prior hearing was *344 whether the defendant had violated a condition of release. The court inappropriately expanded the scope of the bond violation hearing by permitting the government to question the witness about the underlying offense, and the defendant had no motive to cross-examine the witness regarding those facts since they were not at all relevant to the issue at hand. The Illinois court therefore held that the testimony of the witness from the bond violation hearing was impermissibly admitted at the defendant’s subsequent trial. Id. at 1039.

    Other cases cited in Brown are also distinguishable on the facts. See People v. Vera, 153 Mich.App. 411, 395 N.W.2d 339, 341 (1986) (affirming trial court’s exclusion of testimony from a preliminary hearing where the government did not have a motive to cross-examine the witness regarding a statement she made while answering questions relevant only to the proper amount of bond); Dickson v. State, 281 Ga.App. 539, 636 S.E.2d 721, 724 (2006) (concluding that the trial court erred in admitting an audiotape of the deceased witness’s interview with an investigator, finding that it was not adequate that the defendant had an opportunity to cross-examine that witness during a bond hearing).

    “[T]he similar-motive inquiry … is inherently a factual inquiry, depending in part on the similarity of the underlying issues and on the context of the … questioning.” Salerno, 505 U.S. at 326, 112 S.Ct. 2503. The facts in this case show that the defendant had a similar motive to question Glass about the defendant’s working hours at both the bond hearing and the subsequent trial. Therefore, Glass’s prior testimony was properly admitted under Federal Rule of Evidence 804(b)(1), and its admission did not violate the Sixth Amendment’s Confrontation Clause.

    [9][10] Even if the testimony had been admitted in error, it would not be in the interests of justice to grant the motion for a new trial.FN5 First, the jury had already heard about the discrepancies between Glass’s prior testimony and the testimony of his son and daughter-in-law at trial through the government’s proper cross-examination of those witnesses. The admission of Glass’s testimony from the bond hearing was therefore cumulative of other admissible evidence on that issue.

    FN5. “Any error … that does not affect substantial rights must be disregarded.” Fed.R.Crim.P. 52(a). A Confrontation Clause violation may be found harmless. United States v. Banks, 482 F.3d 733, 741 (4th Cir.2007) (citing United States v. Khan, 461 F.3d 477, 496 (4th Cir.2006)). The Fourth Circuit will find an error harmless if it is “able to say with fair assurance, after pondering all that has happened without stripping the erroneous action from the whole, that the judgment was not substantially swayed by the error.” Id. at 741-42 (quoting United States v. Brooks, 111 F.3d 365, 371 (4th Cir.1997)). See id. at 742 (finding Crawford error harmless after considering importance of erroneously admitted testimonial evidence and strength of government’s case); Khan, 461 F.3d at 496 (same); United States v. Bryant, No. 06-4977, 2008 WL 5070972, at *5 (4th Cir. Nov. 25, 2008) (unpublished) (same).

    Second, any dispute about the defendant’s duties at Glass Machinery was minor and could not have substantially swayed the jury’s verdict. Glass’s son testified that Glass Machinery performed snow removal for the Virginia Department of Transportation, and that the defendant had assisted with snow removal at night. The defendant’s work records, which were admitted into evidence, specified the dates on which he performed snow removal and the total number of hours he worked on each date, but did not specify the time of day work was completed. Glass’s son indicated that he could have determined the *345 time of day the work was completed by consulting “[t]he daily field sheet,” but that he did not bring that information to court and could not say what time the defendant’s work was conducted. (Trial Tr. vol. 3, 6, Dec. 10, 2008.) Glass’s son also testified that the defendant had occasionally assisted Glass with personal errands during evening hours, and that Glass and the defendant had taken several overnight fishing trips together on weekends, but he did not specify which weekends.FN6

    FN6. Glass’s daughter-in-law also testified that Glass and the defendant had taken weekend fishing trips, but she could not point to which weekends.

    Although there were some differences between Glass’s testimony at the bond hearing and his son’s testimony at trial, the most important fact relevant to the defendant’s alibi defense was not in dispute: the defendant occasionally worked during evening hours. FN7 The jury heard a portion of Glass’s testimony where he affirmatively stated that this was so. (Trial Tr. vol. 1, 9, Dec. 10, 2008) (“A lot of times he sees I get home all right, he comes home in the evening after I get home to see if I need anything.”).

    FN7. This was relevant because, as described above, all of the twenty-six offending images were accessed between 6:21 p.m. and 1:53 a.m., and all but two were emailed or accessed after 9:02 p.m.

    On the other hand, there was no direct evidence that the defendant was working in the evening or was out of town on a fishing trip on the specific dates that the offending images were accessed. Considered in its totality, along with all of the other evidence in the case, Glass’s testimony could not have substantially swayed the jury’s conclusion that the defendant was available to access and email the images of child pornography during evening and late-night hours on the relevant dates.

    Third, as described above, the government presented substantial evidence that the defendant was the person who emailed, downloaded, and accessed the images of child pornography.

    IV

    For the foregoing reasons, it is hereby ORDERED that the defendant’s Motion for a Judgment of Acquittal and Motion for New Trial are DENIED.

    Continue reading →United States District Court, W.D. Virginia, Big Stone Gap Division. UNITED STATES of America v. Robert Franklin DOYLE, Jr., Defendant. No. 2:07CR00004. June 2, 2009. OPINION AND ORDER JAMES P. JONES, Chief Judge. In this criminal case, the defendant, convicted by a jury of possessing child pornography, has filed post-trial motions seeking acquittal and a new trial. For the reasons that follow, I will deny ...
  • U.S. v. Russo

    United States District Court, E.D. Virginia,

    Richmond Division.

    UNITED STATES of America

    v.

    Matthew James RUSSO.

    Criminal No. 3:09cr191.

    Nov. 16, 2009.

    MEMORANDUM OPINION

    ROBERT E. PAYNE, Senior District Judge.

    *1 This matter is before the Court on the Defendant Matthew James Russo’s Motion for Judgment of Acquittal, or, in the Alternative, Motion for New Trial (Docket No. 22). For the reasons set forth below, the motion will be denied.

    STATEMENT OF FACTS

    As established at trial, the facts are as follows. An Agent for Immigration and Customs Enforcement (“ICE”) conducted an investigation into a foreign child pornography website, “Illegal.cp,” which, for $79.99, offered 21 days of access to material containing child pornography. When a user purchased such a 21-day membership, the charge to his credit card was discretely labeled “AdSoft.” FN1

    FN1. Nominally, AdSoft is/was a company that sold software products. An ICE agent involved in the Illegal.cp investigation confirmed, however, that she was unable to purchase any legitimate software products from AdSoft.

    Matthew Russo came to ICE’s attention during an investigation of the Illegal.cp website. Based on ICE’s investigative findings, two ICE agents conducted a “knock and talk” with Mr. Russo at his residence. Although the conversation was at first light and civil, the atmosphere intensified when the agents asked Mr. Russo about charges to his debit card. At that point, Mr. Russo said something to the effect of, “what are you here for-Guns? Child Porn? Money?,” without the agents having first mentioned the subject of child pornography. The agents then examined Russo’s debit card and seized two computers from the household.

    An ICE Forensic Expert examined the two computers, one of which was found to contain several items of evidence. First, hundreds of child pornographic images were found in the AOL cache folder, having been downloaded to that folder between February and September 2007, based on the internet browsing of an AOL user with the username “rdendron.” FN2 Second, hundreds more images were found in the unallocated space of the computer’s hard drive. The ICE Forensic Expert testified that the computer’s operating system automatically transferred these images from folders such as the cache folder. Third, dozens of sites, with names advertising child pornographic content, were bookmarked as “favorites” on the rdendron profile. Fourth, the Internet Explorer web browser’s history revealed that several such child-pornographically named sites had been visited by a user on that computer.

    FN2. A second username for this computer had no pornographic images associated with it. The ICE Forensic Expert, who was well qualified in his field, came to the conclusion that Russo had made significant efforts to access websites containing child pornography. The Forensic Expert, along with another ICE Agent, then interviewed Russo, and, during the interview, Russo stated that the rdendron profile was his, and he admitted to viewing child pornography, among other types of pornography.

    Russo called no witnesses; however, he vigorously questioned the sufficiency of the Government’s evidence at trial. He successfully argued for excluding some significant items of the Government’s evidence. He also presented alternative theories of how the hundreds of images and dozens of websites appeared on his computer.

    At trial, when the Government had concluded its case, Russo moved for a Judgment of Acquittal pursuant to Fed.R.Crim.P. 29, contending that the evidence presented was insufficient to sustain a guilty verdict. The Court denied the motion. After closing arguments, the Court found the Defendant guilty as charged. This motion followed.

    DISCUSSION

    *2 When considering whether the Government’s evidence is sufficient to support a conviction, “[t]he relevant question is … whether, viewing the evidence in the light most favorable to the government, any rational trier of facts could have found the defendant guilty beyond a reasonable doubt.” United States v. Tresvant, 677 F.2d 1018, 1021 (4th Cir.Va.1982). “To that end, this Court ‘must consider circumstantial as well as direct evidence, and allow the government the benefit of all reasonable inferences from the facts proven to those sought to be established.’ ” United States v. Cameron, 573 F.3d 179, 183 (4th Cir.2009) (quoting Tresvant, 677 F.2d at 1021).

    1. The Evidence that the Defendant Attempted to Access the Illegal.cp Site is Sufficient to Sustain the Verdict

    Russo now contends that the evidence fails to show that he attempted to access the Illegal.cp site. Specifically, he asserts that the Government never showed that the Defendant: (1) received a confirmation email allowing him to access the full Illegal.cp site; (2) visited the Illegal.cp site; or (3) had any specific images from Illegal.cp on his computer. To the contrary, the totality of the Government’s evidence is sufficient to support a finding, beyond a reasonable doubt, that Russo attempted to receive material containing child pornography by way of the Illegal.cp website.

    In addition to proving the basic statutory elements of knowingly receiving child pornography in interstate commerce, the Government’s burden in this case also included proving “attempt” (though charging “attempt” relieved the Government of its burden to prove the completed crime). At common law, attempt has two elements: (1) specific intent to commit the completed offense; and (2) a substantial step toward completing it. See United States v. Resendiz-Ponce, 549 U.S. 102, 106, 127 S.Ct. 782, 166 L.Ed.2d 591 (U.S.2007) (“At common law, the attempt to commit a crime was itself a crime if the perpetrator not only intended to commit the completed offense, but also performed ‘some open deed tending to the execution of his intent.’ “) (citations omitted).

    In this case, Russo’s specific intent to receive child pornography is clear, from his own words and the images on his computer. That Russo took a substantial step toward that end, even when the question is artificially narrowed to the totality of the evidence that is related only to the Illegal.cp site, is thoroughly established. Russo viewed the  introductory page of the Illegal.cp site, which, the parties stipulated, contained child pornography. FN3 His debit card was charged $79.99 by AdSoft, a company that, from the only account of a person with any firsthand knowledge, did not in fact conduct any legitimate business, but was instead used exclusively for processing payments to child pornography websites. This payment was a substantial step toward receiving child pornography from the Illegal.cp site, regardless of whether Russo ever received a confirmation email or accessed the site later.

    FN3. It is true that the Government presented no direct evidence that Russo actually viewed the introductory page of the Illegal.cp site. However, the Court must consider the circumstantial evidence of the $79.99 AdSoft charge to Russo’s debit card, combined with the evidence that Russo had viewed child pornography in other contexts, and the absence of anything other than speculation by the Defendant to rebut this circumstantial evidence. As a whole, the evidence shows, beyond a reasonable doubt, that Russo viewed this introductory page of the website.

    *3 The Government’s inability to connect images from the Illegal.cp site to images found on the Defendant’s computer is of no moment. Based on the Forensic Expert’s testimony of how files are saved in the AOL cache folder, subsequently moved by the operating system into the computer’s unallocated space, and then deleted permanently, one would not expect to find files accessed in March 2006 (when Russo registered for Illegal.cp site access) during a forensic examination conducted over a year and a half later in November 2007.

    Furthermore, Russo is mistaken in one of his fundamental assumptions. Specifically, Russo argues that “the Court indicated at various points that the evidence was insufficient as to the attempted receipt of material containing child pornography from the Illegal.cp website.” Def. Mot. at 3-4. The Court did not so indicate. The Court posed pointed questions to counsel for both Russo and the Government to ensure presentation of a comprehensive picture of events. The Government, in response to the Court’s questions, stated that Russo was charged with attempt, rather than the completed crime, due to difficulties in establishing the actual, active receipt of specific images by Russo. Ultimately, although the Court may have harbored doubts about the wisdom of charging Russo with attempt rather than the completed crime, the Court concluded that the Government had met its burden to prove attempted receipt of child pornography by way of the Illegal.cp site. Moreover, the evidence also showed that Russo attempted to possess other child pornography.

    2. Additional Evidence Presented to and Considered by the Grand Jury was also Sufficient to Sustain the Verdict Russo’s second contention is that the evidence presented to the Court differed so much from the evidence upon which Russo was indicted that the trial evidence “constructively amended” the indictment. Because the evidence presented to the Grand Jury centered on the Illegal.cp site, Russo argues, while the evidence presented at trial focused more on the images and websites found on his computer, Russo asserts that he was convicted on a basis not charged in the Indictment.

    “When the government, through its presentation of evidence and/or its argument … broadens the bases for conviction beyond those charged in the indictment, a constructive amendment-sometimes referred to as a fatal variance-occurs.” See United States v. Randall, 171 F.3d 195, 203 (4th Cir.1999). Such basis-broadening results in the defendant being convicted of an offense that was not charged in the indictment, violating the Due Process protections of the Fifth Amendment. Id.

    However, not all differences between an indictment and the proof offered at trial, rise to the “fatal” level of a constructive amendment. When different evidence is presented at trial but the evidence does not alter the crime charged in the indictment, a mere variance occurs. A mere variance does not violate a defendant’s constitutional rights unless it prejudices the defendant either by surprising him at trial and hindering the preparation of his defense, or by exposing him to the danger of a second prosecution for the same offense.

    *4 Id. (citations omitted).

    In this case, there was no amendment of the indictment. Russo was not charged with an offense substantively different from that of which he was convicted. Nor could Russo claim surprise; the Government submitted a Notice of Intent to Use Expert Testimony (Docket No. 14) a week before trial. This notice explicitly revealed the Government’s approach, and, because its expert witness also served as a fact witness, revealed that the Government’s findings would include “hundreds of sexually explicit images” discovered on Russo’s computer “[u]nder the AOL profile ‘rdendron.’ ” Government’s 16(a)(1)(G) Notice, at 4.

    Moreover, there was not even a “mere variance” here. As the Government recites in its Response to the Defendant’s Motion, the Grand Jury heard evidence of Russo’s attempts to access child pornography that had nothing to do with the Illegal.cp site. Gov. Response at 2-3. The transcript of Grand Jury proceedings that Russo attaches to his motion further demonstrates that his efforts to view child pornography extended far beyond that associated directly with the Illegal.cp site. See generally Transcript at 12:9-10 (noting the Forensic Expert’s discovery of “[o]ver 500 images of suspected child pornography”); id. at 14:3-20 (discussing the bookmarks and internet history found on Russo’s computer); id. at 15:20-22 (identifying Russo’s admission that “he has viewed child pornography on his computer in the past”); id. at 18:9-14 (noting that the Illegal.cp site investigation “led us to [Russo],” after which the Government “found, through a forensic exam, the … additional child pornography images on his computer.”).

    In sum, although the Grand Jury evidence shows that Russo’s access of the Illegal.cp site provided the Government a lead that it investigated, the Grand Jury could not have reasonably believed that Russo’s conduct was limited in scope to that associated with the Illegal.cp site.

    3. The Government Proved the Completed Crime/ Thereby Proving Attempt

    As the Court noted above, Russo was wrong in his impression that the Court found the Government’s evidence relating to the Illegal.cp site insufficient to support a guilty verdict. Russo did astutely observe, however, the Court’s consternation that the Government charged Russo with attempt, rather than the completed crime. The Government’s evidence proved commission of the completed crime beyond a reasonable doubt. It is not evident, therefore, why the Government saddled itself with the additional burden of proving “attempt.”

    Thus, an alternative basis for sustaining the conviction emerges: the Government proved the completed crime (actual receipt of child pornography) beyond a reasonable doubt, and in proving the completed crime, the Government also proved attempt. When Russo knowingly received child pornography, he did not take one substantial step towards completion of the underlying crime-he took all substantial steps.FN4

    FN4. Although the Fourth Circuit has, in one instance, indicated that an attempt charge requires that the substantial step “fell short of the commission of the intended crime due to intervening circumstances,” United States v. Pratt, 351 F.3d 131, 135 (4th Cir.2003), this appears to be mere dicta. Research has turned up no reported cases finding a defendant not guilty of an attempt charge because he was successful in completing the crime.

    *5 The Court notes that conceptually, it is possible to knowingly receive child pornography without attempting to have done so, because an attempt crime requires “specific intent” to commit the underlying crime, as opposed to the lesser mens rea, “knowingly,” that 18 U.S.C. 2252A requires. Cf. Braxton v. United States, 500 U.S. 344, 351, 111 S.Ct. 1854, 114 L.Ed.2d 385 fn* (1991) (noting analogously that, for common law murder, “attempt” denotes “a specific intent to commit the unlawful act. Although a murder may be committed without an intent to kill, an attempt to commit murder requires a specific intent to kill.”). But, in this case, the evidence proved Russo’s specific intent to receive child pornography beyond a reasonable doubt. Thus, both elements of attempt are proven: specific intent and substantial steps.

    CONCLUSION

    Taken as a whole, the Government presented sufficient evidence to sustain Russo’s conviction for attempted receipt of material containing child pornography. The Government did not constructively amend the proceedings, as Russo asserts, Def. Mot. at 4 (citing United States v. Randall, 171 F.3d 195, 203 (4th Cir.1999)). Furthermore,  although the Government presented evidence sufficient to support a finding of actual receipt of material containing child pornography, the Government also proved attempted receipt thereof. The Government proved this to the Grand Jury’s satisfaction, resulting in a true bill. The Government then proved the crime beyond a reasonable doubt to the Court, resulting in the Defendant’s conviction.

    Based on the foregoing, the Defendant’s Motion for Acquittal or, in the Alternative, Motion for a New Trial, will be denied.

    It is SO ORDERED.

    Continue reading →United States District Court, E.D. Virginia, Richmond Division. UNITED STATES of America v. Matthew James RUSSO. Criminal No. 3:09cr191. Nov. 16, 2009. MEMORANDUM OPINION ROBERT E. PAYNE, Senior District Judge. *1 This matter is before the Court on the Defendant Matthew James Russo’s Motion for Judgment of Acquittal, or, in the Alternative, Motion for New Trial (Docket No. 22). For the reasons set forth ...
  • U.S. v. Ellyson

    United States Court of Appeals,

    Fourth Circuit.

    UNITED STATES of America, Plaintiff-Appellee,

    v.

    Ronald David ELLYSON, Defendant-Appellant.

    No. 00-4600.

    Argued: Oct. 30, 2002.

    Decided: March 17, 2003.

    Defendant was convicted by jury in the United States District Court for the Eastern District of North Carolina, James C. Fox, Senior Judge, of possessing child pornography. Defendant appealed. The Court of Appeals, Traxler, Circuit Judge, held that: (1) defendant preserved objection to erroneous instruction that defendant could be convicted if jury concluded that he had possessed material containing visual depiction that appeared to be of a minor; (2) defendant’s conviction could not stand, since it could not be determined if conviction rested on constitutional basis that defendant possessed images of actual child or on unconstitutional basis that he possessed images that appeared to be of a minor; and (3) double jeopardy clause did not preclude retrial.

    Vacated and remanded.

    OPINION

    TRAXLER, Circuit Judge:

    Ronald Ellyson was convicted of possessing child pornography in violation of 18 U.S.C.A. s 2252A(a)(5)(B), (b)(2) (West 2000). Ellyson argues that law enforcement officers obtained the illicit pornographic material at issue through a constitutionally defective search of his residence. Ellyson also contends that the district court’s jury instructions failed to comply with Ashcroft v. Free Speech Coalition, 535 U.S. 234, 122 S.Ct. 1389, 152 L.Ed.2d 403 (2002), thereby permitting the jury to convict him on unconstitutional grounds. Because the court’s instructions were erroneous under Free Speech Coalition, we must set aside the verdict and remand the matter for further proceedings.

    I.

    On September 11, 1998, officers from the Boiling Springs Lake Police Department in North Carolina received information that two larceny suspects were guests at a trailer owned by Ellyson. Officers knocked and then entered the trailer in hopes of arresting Nathan Rudolphsky, one of the suspects. According to Chief White, he asked Ellyson if the police could search the trailer for Rudolphsky and Ellyson agreed. Police found Rudolphsky asleep in a back bedroom with Angela Burr, a woman who was living in Ellyson’s trailer at the time.

    During the time that officers were in the trailer, they observed a marijuana bong in plain view in the living room. When asked if the trailer contained any drugs or more drug  paraphernalia, Ellyson responded that it did not. According to the officers, Ellyson did not object to a search of the trailer for additional illegal drugs or items associated with such drugs. During a search of Ellyson’s bedroom, officers located a binder notebook containing images of children engaged in sexual activity. Ellyson was arrested for possessing child pornography. At the request of police, Ellyson then directed officers to a closet where he kept a second notebook containing similar images. Officers also seized Ellyson’s computer, as well as various videotapes, magazines, photographs, letters, and newspaper clippings belonging to Ellyson.

    After Ellyson’s arrest, Angela Burr continued to live in the trailer. For nearly two weeks after the September 11 search, Burr remained in contact with officers from the Boiling Springs Lake Police Department. Burr testified that various officers told her that if law enforcement officers searched the trailer again and “there was anything [illegal] found in the house … [she] would possibly [be charged with] aiding and ab[etting],” J.A. 116, and if she “came across [anything illegal] that it would be” in her best “interest to turn it in or else [she] could be liable for it.” J.A. 176.

    On September 18, 1998, Burr visited Ellyson in jail. According to Burr, the purpose for her visit was to ask permission to continue living in the trailer while Ellyson was incarcerated. During their conversation, Ellyson inquired whether police officers had returned to conduct another search. When Burr responded that they had not done so, Ellyson told her that he had some computer diskettes that he wanted Burr to dispose of as soon as she returned to the trailer. Burr testified that she visited Ellyson of her own accord and that she was never asked to meet Ellyson or elicit any information from him on behalf of the police. The following day, Burr *526 located a box containing several diskettes, letters, and more photographs; she also found a few computer diskettes in a night stand. On September 20, 1998, in light of what she had been told about any such material remaining in the trailer, Burr contacted police and turned over the materials.

    Ellyson successfully moved to suppress the items obtained by police in their initial search on September 11. After an extensive evidentiary hearing, the district court granted Ellyson’s motion as to the evidence obtained during the initial search. The court concluded that the officers’ “opening of the door of Ellyson’s trailer constituted a warrantless, nonconsensual entry into the residence” in violation of Ellyson’s Fourth Amendment rights; that “[e]xigent circumstances did not justify the illegal entry into the home”; and “that Ellyson’s consent to search subsequent to the illegal entry” did not purge “the taint of the original illegality.” J.A. 614.

    Ellyson also moved to suppress the evidence that Burr subsequently located and then turned over to authorities on September 20. There was evidence in the record before the district court that cast doubt on whether Burr was acting independently when she learned of and recovered the evidence that she eventually gave to police officers and that ultimately led to Ellyson’s conviction. The district court, however, rejected Ellyson’s argument that Burr was acting as an agent of the government and thus conducted an impermissible search when she located the computer disks and other items that she relinquished to the police. The court made a factual finding “that the police did not participate directly in obtaining the September 20 evidence,” J.A. 626, and that “Burr’s decision to turn over the items she found was motivated primarily by her desire to protect herself,” J.A. 624. Thus, the court concluded that Ellyson failed to carry his burden of showing that Burr was acting as an agent of the government.

    The case went to trial based on the evidence Burr gave police on September 20, 1998. This evidence included multiple images of an actual, identifiable minor engaged in explicit sexual conduct; however, there were many other images introduced for which there was no testimony that the minors depicted were actual children. The district court instructed the jury that the government was required to prove that Ellyson “knowingly possessed at least one visual depiction of an image … he knew to be child pornography.” J.A. 1568. In accordance with the Child Pornography Prevention Act of 1996 (“CPPA”), see 18 U.S.C.A. s 2256(8) (West 2000), the district court instructed the jury that “child pornography” was defined as “any visual depiction, including any photograph, film, video, picture, or … computer-generated image … of sexually explicit conduct, where the production of such visual depiction involves the use of a minor … engaging in sexually explicit conduct; or such visual depiction is, or appears to be, of a minor engaging in sexually explicit conduct.” J.A. 1570 (emphasis added). The court further instructed the jury that the government was required to prove that the images possessed by Ellyson “either had been mailed or shipped or transported in interstate or foreign commerce by any means, including computer.” J.A. 1572. The jury returned a guilty verdict. At sentencing, the district court imposed a 78-month term of imprisonment, departing upward on the basis that Ellyson’s criminal history category did not adequately reflect the likelihood that Ellyson would continue to commit crimes involving sexually deviant conduct with minors.

    Ellyson filed this appeal, arguing that the district court erroneously concluded *527 that law enforcement agents were not acting through Burr to conduct a search for additional evidence of child pornography and that the items turned over to police on September 20 should have been suppressed. Initially, Ellyson contended that the government failed to establish an interstate commerce nexus to his possession of the images involving actual minors. Ellyson claimed that his possession of the remaining images, which did not definitively involve the use of actual children, could not be constitutionally prohibited. Although Ellyson acknowledged that his argument was contrary to circuit precedent at the time he filed his appeal, see United States v. Mento, 231 F.3d 912 (4th Cir.2000), vacated, 535 U.S. 1014, 122 S.Ct. 1602, 152 L.Ed.2d 617 (2002), he urged us to follow the view of the Ninth Circuit in Free Speech Coalition v. Reno, 198 F.3d 1083, 1097 (9th Cir.1999), which the Supreme Court affirmed, that the definition of “child pornography” under s 2256(8)(B) was unconstitutional to the extent that it proscribed possession of an image that “appears to be[ ] of a minor engaging in sexually explicit conduct.” 18 U.S.C.A. s 2256(8)(B). Because the Supreme Court had already granted certiorari to address this issue, we held this appeal in abeyance pending the Court’s decision in Ashcroft v. Free Speech Coalition, 535 U.S. 234, 122 S.Ct. 1389, 152 L.Ed.2d 403 (2002).

    II.

    [1][2] First, we consider Ellyson’s argument that the district court was in error when it concluded that no agency relationship existed between Burr and the government for Fourth Amendment purposes and denied his motion to suppress the evidence given to police by Burr. We review the factual findings underlying the district court’s denial of a pretrial motion to suppress for clear error, and the court’s legal determinations de novo. See Ornelas v. United States, 517 U.S. 690, 699, 116 S.Ct. 1657, 134 L.Ed.2d 911 (1996); United States v. Seidman, 156 F.3d 542, 547 (4th Cir.1998). We review the evidence in the light most favorable to the government. See Seidman, 156 F.3d at 547.

    [3][4][5][6][7] Because the protection afforded by the Fourth Amendment is aimed “exclusively at state action … evidence secured by private searches, even if illegal, need not be excluded from a criminal trial.” United States v. Kinney, 953 F.2d 863, 865 (4th Cir.1992). The Fourth Amendment applies to a search conducted by a private citizen only if that individual is “acting as an agent of the Government or with the participation or knowledge of any governmental official.” United States v. Jacobsen, 466 U.S. 109, 113, 104 S.Ct. 1652, 80 L.Ed.2d 85 (1984) (internal quotation marks omitted); see Coolidge v. New Hampshire, 403 U.S. 443, 487, 91 S.Ct. 2022, 29 L.Ed.2d 564 (1971) (explaining that a private search may be converted into state action only if the private actor is “regarded as having acted as an ‘instrument’ or agent of the state”). The burden of proving that a private party acted as an agent or instrument of the government is on the defendant. See United States v. Shahid, 117 F.3d 322, 325 (7th Cir.1997). Whether an agency relationship exists is a fact-intensive inquiry that is guided by common law agency principles. See United States v. Koenig, 856 F.2d 843, 847 n. 1 (7th Cir.1988). One highly pertinent consideration is “whether the government knew of and acquiesced in the intrusive conduct and whether the private party’s purpose for conducting the  search was to assist law enforcement efforts or to further her own ends.” United States v. Feffer, 831 F.2d 734, 739 (7th Cir.1987); see Kinney, 953 F.2d at 865 (affirming the district court’s conclusion that no agency relationship existed where the private individual *528 “acted on her own initiative, without suggestion from the police officers”).

    [8] The district court made several critical factual findings on this issue. The court found that Burr visited Ellyson in jail on September 18 “because she wanted to discuss with Ellyson whether she could continue to reside in his trailer,” that Ellyson “requested Burr to locate and dispose of some computer disks that remained in the trailer,” and that “Burr made no effort to look for evidence in the trailer until after her meeting with Ellyson.” J.A. 616. The district court further found that “Burr’s actions were not motivated by a desire to aid the police in building their case” but by a desire to preclude “law enforcement from holding her responsible for any items subsequently discovered in the trailer.” J.A. 617. Thus, the district court found that Burr had a “legitimate independent motivation” for performing the search. J.A. 624. The court also found, based on the testimony of Burr and various officers, that the police never asked Burr to visit Ellyson in jail, that they were not “aware that Ellyson had requested Burr to dispose of the disks,”  and that they did not prompt Burr to search further after she had turned over the evidence on September 20. J.A. 623. Based on these findings of fact-that Burr had a  “legitimate independent motivation” for performing the search and the police had not  participated or acquiesced in the search-the district court concluded that Burr had not  been acting as an agent or instrument of the state.

    Ellyson concedes that the district court’s findings of fact are not clearly erroneous, and, having reviewed the record, we perceive no clear error in any event. Ellyson argues simply that the district court drew the wrong legal conclusion from its findings. Ellyson suggests that the evidence in the record compels the conclusion that Burr was an instrument of the police, and he points out that the district court even acknowledged that the record contained “several pieces of evidence” supporting his agency theory. J.A. 620.FN1 However, once it has been established that the court did not clearly err in its findings that the police neither directed nor acquiesced in Burr’s independently-motivated activities, our inquiry is at an end even though the evidence might have allowed a different conclusion. See Feffer, 831 F.2d at 739 (agency relationship turns on the government’s knowledge and the private actor’s motivation). For Ellyson to argue that the record contains substantial conflicting evidence that would have supported the finding that Burr was not acting independently is simply another way of suggesting the district court reached the wrong factual conclusion. As Ellyson himself observed, the  district court acknowledged that there was conflicting evidence but simply decided to credit the testimony of Burr and the police officers on this issue. Accordingly, we reject this argument and affirm the *529 denial of Ellyson’s motion to suppress this evidence.

    FN1. For example, there was evidence that, at or near the time that Burr turned over the evidence, Police Chief White met with Burr and drafted (or assisted the drafting of) a purported lease agreement governing Burr’s rights with respect to the trailer. There was evidence that, following Ellyson’s arrest, Burr was issued a “citation” for felonious harboring of a fugitive and then was told, at or around the time that she turned over the evidence, that the charges were dismissed because they had been irregularly issued. And, there was evidence that Burr filed a complaint with the North Carolina State Bureau of Investigation alleging that the Chief White during this time induced Burr to exchange sexual favors for money with a friend of Chief White. Burr acknowledged these allegations at the suppression hearing, but denied the alleged conduct had any bearing on her decision to gather and turn over the disks.

    III.

    A.

    Next, Ellyson contends that, in light of Free Speech Coalition, the district court’s jury instructions permitted the jury to convict him on constitutionally infirm grounds, requiring the verdict to be set aside. Ellyson was convicted of knowingly possessing computer disks that contained “image[s] of child pornography.” 18 U.S.C.A. s 2252A(a)(5)(B). Before Congress passed the CPPA, the definition of “child pornography” applied to visual depictions of actual minors “engaging in sexually explicit conduct.” 18 U.S.C.A. s 2256(8)(A); see Free Speech Coalition, 122 S.Ct. at 1397. The CPPA expanded the definition of “child pornography” to include a “visual depiction [that] is, or appears to be, of a minor engaging in sexually explicit conduct,” 18 U.S.C.A. s 2256(8)(B), or a “visual depiction [that] is advertised, promoted, presented, described, or distributed in such a manner that conveys the impression that the material is or contains a visual depiction of a minor engaging in sexually explicit conduct,” 18 U.S.C.A. s 2256(8)(D). Accordingly, the expanded definition of child pornography encompassed images that did not involve actual minors in the production, including ” ‘virtual child pornography’ “-images that were completely computer-generated. Free Speech Coalition, 122 S.Ct. at 1397.FN2

    FN2. Under s 2256(8)(C), the definition of child pornography also includes images produced by “morphing,” a “lower tech means of creating virtual images” whereby a “pornographer can alter innocent pictures of real children so that the children appear to be engaged in sexual activity.” Free Speech Coalition, 122 S.Ct. at 1397. Although not presented with the question of whether such morphed images can be constitutionally banned, the Court noted that, unlike virtual images, morphed images “implicate the interests of real children.” Id.

    In concluding that the CPPA’s prohibition against the possession of virtual child pornography was overly broad under the First Amendment, the Court focused on two obscenity/pornography decisions. In Miller v. California, 413 U.S. 15, 24, 93 S.Ct. 2607, 37 L.Ed.2d 419 (1973), the Court instructed that the First Amendment prohibits government regulation of sexually oriented material unless it is obscene, which the Court defined as material that, “taken as a whole, appeal[s] to the prurient interest in sex, … portray[s] sexual conduct in a patently offensive way, and … do[es] not have serious literary, artistic, political, or scientific value.” The CPPA’s ban on virtual child pornography, however, “extends to images that appear to depict a minor engaging in sexually explicit activity without regard to the Miller requirements.” Free Speech Coalition, 122 S.Ct. at 1399. Although New York v. Ferber, 458 U.S. 747, 102 S.Ct. 3348, 73 L.Ed.2d 1113 (1982), allows the prohibition of child pornography that is not necessarily obscene under Miller, the Court explained that Ferber ‘s holding was based “on the production of the work, not its content.” Free Speech Coalition, 122 S.Ct. at 1401. Ferber permits a state to ban the sale or distribution of child pornography that is ” ‘intrinsically related’ to the sexual abuse of children” in that such material is “a permanent record of a child’s abuse, [and] the continued circulation itself would harm the child.” Id. The Court in Free Speech Coalition concluded that “[i]n contrast to the speech in Ferber, speech that itself is the record of sexual abuse,” the CPPA’s ban of material that “appears to *530 be” child pornography “prohibits speech that records no crime and creates no victims by its production.” Id. at 1402. Because s 2256(8)(B) “covers materials beyond the categories recognized in Ferber and Miller,” the Court held that the provision is overbroad under the First Amendment. Id. at 1405.FN3

    FN3. For the same reasons, Free Speech Coalition also struck down s 2256(8)(D), which prohibits the possession of images that are “advertised, promoted, presented, described, or distributed in such a manner that conveys the impression that the material is or contains a visual depiction of a minor engaging in sexually explicit conduct.” See 122 S.Ct. at 1405-06. Although the district court included this language in his jury charge, the government has never contended that s 2256(8)(D) applied to Ellyson, and it is not an issue on appeal.

    The district court in this case instructed the jury that it could find Ellyson guilty of violating s 2252A if it concluded that he had possessed material containing a visual depiction that “appears to be[ ] of a minor engaging in sexually explicit conduct.” J.A. 1570. The instruction simply tracked the language of s 2256(8)(B) and therefore amounted to an erroneous instruction to the extent that it permitted the guilty verdict to rest on the unconstitutional “appears to be” language in the statute. See United States v. Richardson, 304 F.3d 1061, 1063 (11th Cir.2002) (finding jury instructions plainly erroneous because the district court included “appears to be” language in the definition of child pornography so that the government did not have to prove that the images were of “actual children, as opposed to ‘virtual’ children”), cert. denied, 537 U.S. 1138, 123 S.Ct. 930, 154 L.Ed.2d 832 (2003). Of course, the district court did not have the benefit of Free Speech Coalition at the time it issued its instructions to the jury. Indeed, at the time of trial, the court’s instructions were consistent with circuit precedent rejecting a constitutional challenge to the “appears to be” language of the CPPA. See Mento, 231 F.3d at 921.

    B.

    [9] We next consider the appropriate standard of review. We conclude our review is for harmless error. Despite Mento, it appears that defense counsel had the prescience to preserve an objection to a guilty verdict based on a visual depiction that did not make use of an actual child. During the charge conference, defense counsel asked the court to remove language that included the phrase “appeared to be” because the government was required to prove that Ellyson was “required to know that they are minors.” J.A. 1516. Although this particular objection may have been inexact, we think it sufficiently reflects the legal theory underlying Ellyson’s earlier Rule 29 motion for acquittal. In arguing for a judgment of acquittal, Ellyson contended that the “prosecution did not prove by any credible evidence … that there were victims under the age of 18.” J.A. 1332. When the government responded that it was only required to prove the images involved “someone who looks like a minor,” J.A. 1335, Ellyson clarified that he was “not talking about age … [but] actual people.” J.A. 1336. Ellyson contended that, according to the government’s own witnesses, “images can be entirely generated without the use of individuals in any way, shape or form,” and that “there is no evidence … that [a large number of] the images are not entirely made up and do not fall within the statute,” J.A. 1332, because “it has to be an actual [minor].” J.A. 1336. In view of the record as a whole, we conclude that Ellyson’s attorney preserved the record on this issue. Accordingly, our review is for *531 harmless error rather than plain error. See Fed.R.Crim.P. 52(a).

    C.

    [10][11][12] Under Yates v. United States, 354 U.S. 298, 312, 77 S.Ct. 1064, 1 L.Ed.2d 1356 (1957), “a verdict [must] be set aside in cases where [it] is [legally] supportable on one ground, but not on another, and it is impossible to tell which ground the jury selected.” See Griffin v. United States, 502 U.S. 46, 52, 112 S.Ct. 466, 116 L.Ed.2d 371 (1991). “[R]eversal is required when a case is submitted to a jury on two or more alternate theories, one of which is legally (as opposed to factually) inadequate, the jury returns a general verdict, and it is impossible to discern the basis on which the jury actually rested its verdict.” United States v. Hastings, 134 F.3d 235, 242 (4th Cir.1998). The district court’s instructions permitted the jury to convict Ellyson on essentially alternate grounds-that Ellyson possessed images involving the use of an actual minor engaged in explicit sexual conduct or that Ellyson possessed images involving what “appears to be … a minor engaging in sexually explicit conduct.” J.A. 1570. Therefore, the jury was presented with one alternative that was constitutionally viable and one that was not. Because the jury rendered a general guilty verdict that did not specify the basis for the conviction, the question becomes whether it is possible for us to determine such basis.

    It is undisputed that several of the images involved the use of an actual, identifiable minor named “Mike” from the Raleigh, North Carolina area. The jury’s conviction of Ellyson for his possession of these particular images would not offend the First Amendment under Free Speech Coalition. There are other images contained on Ellyson’s diskettes, however, with respect to which the government failed, at least on the record before us, to establish the use of an actual child victim. Agent Michael Darnell, who had experience in the investigation of cases involving internet child pornography and was specially trained to extract such images from a defendant’s computer, testified that it is “possible to completely construct an image of a young boy … not having utilized a young boy in the construction of that image.” J.A. 1321.FN4 Agent Darnell indicated that diskette number 20, for example, contained 57 images of child pornography, but that he did not know whether these particular images involved the use of actual children or whether the images were virtual creations. Had the jury found Ellyson guilty based on these images because they “appeared to be” a depiction of child pornography, the verdict could not stand under Free Speech Coalition. In sum, the evidence in the record, coupled with the court’s instructions, permitted the jury to convict Ellyson on both a constitutional and unconstitutional basis. Because there is no way for us to determine the jury’s basis for its verdict, we must set the verdict aside. Cf. Richardson, 304 F.3d at 1064 (finding jury instructions plainly erroneous but concluding that the error did not affect the “fairness, integrity of public reputation” of the judicial process where “the evidence clearly established that the children depicted in the images or pictures were actual children”).

    FN4. Although Agent Darnell used the term “morphing” to describe this process, it is clear from his comments as a whole that he was describing what the Supreme Court called “virtual” pornography. See Free Speech Coalition, 122 S.Ct. at 1397.

    D.

    [13] This conclusion does not end the matter because we must determine whether the government may retry Ellison or *532 whether he is entitled to an outright reversal and judgment of acquittal. Ellyson contends that he is entitled to a judgment of acquittal because only images involving the use of an actual child are sufficient to support a conviction, and that the government failed to introduce evidence establishing an interstate nexus with those relatively few images introduced that depicted an actual child. Ellyson concedes that the images of “Mike”-approximately 12 of them-were images of an actual child; however, he contends that the government failed to meet its burden of establishing that the images of Mike were “mailed, or shipped or transported in interstate or foreign commerce by any means, including by computer, or that was produced using materials that have been mailed, or shipped or transported in interstate or foreign commerce by any means, including by computer.” 18 U.S.C.A. s 2252A(a)(5)(B).

    [14][15] When an appellate court vacates a conviction based on an error in the trial proceedings, the government is generally free to retry the defendant. See Lockhart v. Nelson, 488 U.S. 33, 38-39, 109 S.Ct. 285, 102 L.Ed.2d 265 (1988). Well-established Supreme Court jurisprudence on this subject teaches that “the Double Jeopardy Clause’s general prohibition against successive prosecutions does not prevent the government from retrying a defendant who succeeds in getting his first conviction set aside … because of some error in the proceedings leading to conviction.” Id. at 38, 109 S.Ct. 285. However, there is an exception to this rule “when a defendant’s conviction is reversed by an appellate court on the sole ground that the evidence was insufficient to sustain the jury’s verdict.” Id. at 39, 109 S.Ct. 285; see Burks v. United States, 437 U.S. 1, 18, 98 S.Ct. 2141, 57 L.Ed.2d 1 (1978). “A reversal based on the legal insufficiency of evidence is, in effect, a determination that the government’s case was so lacking that the trial court should have entered a judgment of acquittal rather than submitting the case to the jury.” United States v. Akpi, 26 F.3d 24, 25 (4th Cir.1994). The Double Jeopardy Clause does not permit “the prosecution another opportunity to supply evidence which it failed to muster in the first proceeding.” Burks, 437 U.S. at 11, 98 S.Ct. 2141; see Gilliam v. Foster, 61 F.3d 1070, 1085 (4th Cir.1995) (en banc) (Niemeyer, J., dissenting) (“The Court has stated that the protection against affording the prosecution a second opportunity to supply evidence which it failed to present initially” falls within the heart of double jeopardy protection). By contrast, a conviction set aside based on trial error “does not constitute a decision to the effect that the government has failed to prove its case … [and] it implies nothing with respect to the guilt or innocence of the defendant.” Burks, 437 U.S. at 15, 98 S.Ct. 2141.

    Although Ellyson’s claim focuses on what he believes is insufficient evidence of an interstate nexus to the images of “Mike,” the basis for setting aside Ellyson’s conviction is not an insufficiency of evidence; rather, we must set aside the verdict because of the erroneous jury instruction. Under circuit law at the time of trial, the government presented more than sufficient evidence to support a guilty verdict against Ellyson. Prior to Free Speech Coalition, the government could satisfy its burden by showing that Ellyson’s child pornography “appear[ed] to be of a minor” under s 2256(8)(B), and it was unnecessary for the government to offer evidence that a minor depicted in a given image was an actual child and not a computer-generated image. See Mento, 231 F.3d at 921-22.

    The record contains substantial evidence that the images possessed by Ellyson (apart from the ones involving “Mike”), at *533 the very least, “appeared to be of … minors” involved in sexually explicit conduct, see 18 U.S.C.A. s 2256(8)(B), and that such  images had moved in interstate commerce, see 18 U.S.C.A. s 2252A(a)(5)(B). As established through the testimony of several witnesses, Ellyson’s diskettes contained numerous images depicting minor boys, teenage and younger, engaged in sexual activity. These images were originally stored on the diskettes by James Manchester, an inmate Ellyson befriended while Ellyson was serving time for violating the terms of his supervised release imposed in connection with an unrelated child pornography offense. Manchester testified that he downloaded images of child pornography from various internet websites onto the diskettes and ultimately gave the diskettes to Ellyson because of Ellyson’s shared interest in child pornography. Agent Darnell, who examined each image contained on the diskettes, testified that the images depicted “young boys engaged in different sexual acts.” J.A. 1311. Because the actual images have not been included in the joint appendix, we have not reviewed them. However, Ellyson does not dispute that a substantial number of these images appear to depict minors engaged in sexually explicit conduct and, therefore, at the very least, fell within the definition of child pornography under s 2256(8)(B) prior to Free Speech Coalition.

    There was also substantial evidence to satisfy the interstate commerce component of s 2252A(a)(5)(B) with respect to a number of the images Manchester downloaded from  the Internet and stored on the diskettes discovered in Ellyson’s possession. Superimposed over some of these images were internet addresses for European child pornography websites or other indications that the image originated from a particular website, such as a logo. For example, exhibit 204, which Agent Darnell described as “pictures of young males engaged in various sexual activit[ies],” bore a “Pink Panther” logo that Agent Darnell identified as an European internet website “visited by people looking for child pornography.” J.A. 1324-25. A graphic reference to a European child pornography website, where it is superimposed over the visual depiction itself and the nature of the website is verified through the testimony of an agent with relevant experience, is sufficient evidence, albeit circumstantial, to establish an interstate nexus under s 2252A(a)(5)(B). See United States v. Runyan, 290 F.3d 223, 242 (5th Cir.) (acknowledging that “the presence of a website address embedded on the image” may constitute “sufficient evidence of interstate transportation to support a conviction under s 2252A”), cert. denied, 537 U.S. 888, 123 S.Ct. 137, 154 L.Ed.2d 149 (2002); United States v. Hilton, 257 F.3d 50, 54-55 (1st Cir.2001) (“[P]roof of transmission of pornography over the Internet … satisfies the interstate commerce element of the offense,” which the government supplied through testimony from a computer forensics agent that images had “likely” been downloaded from the Internet because the storage disk “contained software used in conjunction with Internet chat rooms.”).

    Thus, the double jeopardy concerns that preclude the government from having a second opportunity to build a case against a defendant when it failed to do so the first time are not present here. Any insufficiency in proof was caused by the subsequent change in the law under Free Speech Coalition, not the government’s failure to muster evidence. In Lockhart, the Court addressed a somewhat analogous situation in which the defendant argued that retrial was impermissible because once his conviction had been set aside on appeal based on erroneously admitted evidence, the remaining (properly admitted) evidence was insufficient to sustain a conviction. See *534 488 U.S. at 34, 109 S.Ct. 285. The Court concluded that retrial was permitted “where the evidence offered by the State and admitted by the trial court … would have been sufficient to sustain a guilty verdict.” Id. The Court explained that, had the evidence been properly excluded at trial, the government would have had an opportunity to offer other evidence to satisfy its burden. See id. at 42, 109 S.Ct. 285. Similar reasoning applies here. The government presented its evidence under the wrong standard, i.e., it presented evidence correctly believing, based on the law at the time, that it was enough to prove the images “appeared” to depict minors. If the evidence in the record is insufficient to support a verdict under Free Speech Coalition, it is not because of the government’s failure of proof but because of the changes brought by Free Speech Coalition.

    Moreover, there is, even after Free Speech Coalition, sufficient evidence in the record to support a guilty verdict on the basis that Ellyson possessed images involving the use of actual minors. At a minimum, sufficient evidence was introduced through testimony surrounding the creation, storage and movement of the images of “Mike,” an actual, identifiable child. The images of Mike were created originally by Manchester, who later gave them to Ellyson. Manchester testified that he had created the images of Mike, a 12-year-old boy from Manchester’s neighborhood, and eventually that he had been convicted of producing and distributing child pornography as a result of his illicit activities with Mike. Manchester videotaped Mike engaged in graphic sexual activity in the living room of Manchester’s home. Manchester, who apparently had been a computer instructor, then “digitized” various still images from the videotape of Mike and put these pictures on a computer file. Manchester made these still pictures from the videotape available for others to view or access on the Internet. Manchester indicated that the images of Mike were then downloaded onto the diskettes from the Internet. After Manchester stated unequivocally that the images contained on the diskettes had come from the Internet, the prosecutor asked Manchester to explain his answer further and Manchester then expressed some uncertainty as to the sequence of events.

    In mounting a challenge to the sufficiency of the evidence, a defendant must overcome a heavy burden in that we view the evidence in the light most favorable to the government, “making all inferences and credibility determinations in its favor.” United States v. Hoyte, 51 F.3d 1239, 1245 (4th Cir.1995); see United States v. Romer, 148 F.3d 359, 364 (4th Cir.1998). The evidence connecting the images of Mike to interstate commerce is thin, and Manchester’s equivocation clouded the record somewhat. Nevertheless, read in the light most favorable to the government, Manchester’s testimony was sufficient to establish the interstate connection. See Runyan, 290 F.3d at 242; Hilton, 257 F.3d at 54-55. Manchester testified that, after creating the videotape, he first stored the still images of Mike on his computer and then put them on the Internet. Manchester never disclaimed his initial response that he subsequently pulled the pictures from the Internet onto the diskettes that he gave Ellyson; he just expressed uncertainty.FN5

    FN5. Ellyson also contends that we should not consider the images of Mike because they were not introduced as substantive evidence but only to show intent, motive, or lack of mistake. A review of the record, however, reveals that at least two of the three diskettes containing the images of Mike were introduced by the government without objection from Ellyson.

    Finally, retrial is appropriate because not only do the Mike images involve a real child victim, but the other images depicting minors engaged in explicit sexual activity*535 also may well involve actual children. The government represents that it is clear simply from looking at many of the images on their face that actual children were involved. As we have indicated, this is not apparent from the materials before us, which do not include the images. See Richardson, 304 F.3d at 1064 (concluding that disputed images depicted actual children based in part on appellate panel’s review of images). But neither is it apparent that the images are computer-generated virtual pornography. In fact, there has been no suggestion whatsoever that such is the case. Accordingly, we are satisfied that retrial is appropriate.

    IV.

    We vacate Ellyson’s conviction and remand for further proceedings consistent with this opinion.

    VACATED AND REMANDED

    Continue reading →United States Court of Appeals, Fourth Circuit. UNITED STATES of America, Plaintiff-Appellee, v. Ronald David ELLYSON, Defendant-Appellant. No. 00-4600. Argued: Oct. 30, 2002. Decided: March 17, 2003. Defendant was convicted by jury in the United States District Court for the Eastern District of North Carolina, James C. Fox, Senior Judge, of possessing child pornography. Defendant appealed. The Court of Appeals, Traxler, Circuit Judge, ...
  • U.S. v. Buckner

    United States Court of Appeals,

    Fourth Circuit.

    UNITED STATES of America, Plaintiff-Appellee,

    v.

    Frank Gary BUCKNER, Defendant-Appellant.

    No. 06-4399.

    Argued Nov. 29, 2006.

    Decided Jan. 11, 2007.

    Background: Defendant charged with wire and mail fraud moved to suppress evidence from the search of a computer’s hard drive seized during a search of his residence. The United States District Court for the Western District of Virginia, Samuel G. Wilson, J., 407 F.Supp.2d 777, denied motion. Following conviction, upon conditional guilty plea, defendant appealed.

    Holdings: The Court of Appeals, Diana Gribbon Motz, Circuit Judge, held that:

    (1) wife did not have actual authority to consent to a search of her husband’s password-protected files in their home computer, but

    (2) defendant’s wife had apparent authority to consent to search.

    Affirmed.

    OPINION

    DIANA GRIBBON MOTZ, Circuit Judge.

    Frank Gary Buckner appeals from an order denying his motion to suppress evidence gathered from password-protected files on the hard drive of a computer police seized from his home. The officers seized and searched the computer, without a warrant, on the basis of oral consent granted by Buckner’s wife, Michelle. On appeal, Buckner contends that although Michelle’s consent sufficed to give the officers permission to search the computer itself, her consent could not extend to his password-protected files. Because Michelle Buckner did have apparent authority to consent to the search of these files, we affirm.

    I.

    This criminal investigation began when the Grottoes, Virginia police department received a series of complaints regarding online fraud committed by someone using AOL and eBay accounts opened in the name Michelle Buckner. On July 28, 2003, police officers went to the Buckner residence to speak with Michelle, but only Frank Buckner was at home. The officers *553 then left, asking Frank to have Michelle contact them. A short while later, Frank Buckner himself called the police, seeking more information about why they wanted to speak with Michelle. The police responded that they wanted to talk with her about some computer transactions. That evening, Michelle Buckner went to the police station and told officers that she knew nothing about any illegal eBay transactions, but that she did have a home computer leased in her name. She further stated that she only used the home computer occasionally to play solitaire.

    The next day, July 29, police returned to the Buckner residence to speak further with Michelle about the online fraud. Frank Buckner was not present. Michelle again cooperated fully, telling the officers “to take whatever [they] needed” and that she “want[ed] to be as cooperative as she could be.” The computer Michelle had indicated was leased in her name was located on a table in the living room, just inside the front door of the residence. Pursuant to Michelle’s oral consent, the officers seized the leased home computer.

    At the time the officers seized the computer, it was turned on and running, with the screen visibly lit. The officers did not, at this time, open any files or look at any information on the computer. Instead, with Michelle’s blessing, they shut down the computer and took its data-storage components for later forensic analysis. This analysis consisted of “mirroring”-that is, creating a copy of-the hard drive and looking at the computer’s files on the mirrored copy.

    Ultimately, a grand jury indicted Frank Buckner on twenty counts of wire fraud, see 18 U.S.C. s 1343 (2000), and twelve counts of mail fraud, see 18 U.S.C. s 1341 (2000). At a suppression hearing, Frank Buckner offered the only affirmative evidence on the password issue, testifying that a password was required to use the computer. Buckner stated that he was the only person who could sign on to the computer and the only person who knew the password necessary to view files that he had created. Nothing in the record contradicts this testimony. Nor, however, is there any record evidence that the officers knew this information at the time they seized or searched the computer. Indeed, the evidence indicates that no officer, including the officer who conducted the search of the mirrored hard drive, ever found any indication of password protection. The Government’s evidence was that its forensic analysis software would not necessarily detect user passwords.FN1

    FN1. The parties agree that none of Frank Buckner’s files were encrypted. Nor is there any contention that the police officers deliberately used software that would avoid discovery of any existing passwords. The district court denied Buckner’s motion to suppress and Buckner entered a conditional plea of guilty under Federal Rule of Criminal Procedure 11(a)(2) (2003), reserving the right to appeal the denial of the suppression motion. In the district court, Buckner challenged both the officers’ seizure of the computer and the subsequent search of password-protected files located on the computer’s hard drive. On appeal, he challenges only the search.

    II.

    [1] In considering a ruling on a motion to suppress, we review conclusions of law de novo and underlying factual findings for clear error. United States v. Jarrett, 338 F.3d 339, 343-44 (4th Cir.2003).

    [2][3] Although the Fourth Amendment generally prohibits warrantless searches, see *554Maryland v. Dyson, 527 U.S. 465, 466, 119 S.Ct. 2013, 144 L.Ed.2d 442 (1999), valid consent to seize and search items provides an exception to the usual warrant requirement, see Schneckloth v. Bustamonte, 412 U.S. 218, 93 S.Ct. 2041, 36 L.Ed.2d 854 (1973). In responding to a defendant’s motion to suppress, the Government bears the burden of establishing, by a preponderance of the evidence, that it obtained valid consent to search. See United States v. Block, 590 F.2d 535, 539 (4th Cir.1978).

    [4] Consent to search is valid if it is (1) “knowing and voluntary,” Trulock v. Freeh, 275 F.3d 391, 401 (4th Cir.2001) (citing United States v. Mendenhall, 446 U.S. 544, 557, 100 S.Ct. 1870, 64 L.Ed.2d 497 (1980)), and (2) given by one with authority to consent, Trulock, 275 F.3d at 402-03 (citing Stoner v. California, 376 U.S. 483, 84 S.Ct. 889, 11 L.Ed.2d 856 (1964)). There is no question in this case that Michelle Buckner’s consent was knowing and voluntary; Frank Buckner challenges only her authority to consent. Because the Government has never contended that Michelle had primary ownership of, or sole access to, these files, this case presents an issue of third-party consent.

    [5][6] A third-party has authority to consent to a search of property when she possesses “common authority over or other sufficient relationship to the … effects sought to be inspected.” United States v. Matlock, 415 U.S. 164, 171, 94 S.Ct. 988, 39 L.Ed.2d 242 (1974). “Common authority” in this context is not merely a question of property interest. Rather, it requires evidence of “mutual use” by one generally having “joint access or control for most purposes.” Id. at 171, n. 7, 94 S.Ct. 988. Such use makes it “reasonable to recognize that any of the co-[users] has the right to permit the inspection in h[er] own right and that the others have assumed the risk that one of their number might permit the common [effects] to be searched.” Id.

    [7] We have previously considered whether a computer user has actual authority to consent to a warrantless search of the password-protected files of a co-user. In Trulock, when considering whether FBI agents were entitled to qualified immunity in a suit alleging a Fourth Amendment violation, we held that a co-resident of a home and co-user of a computer, who did not know the necessary password for her co-user’s password-protected files, lacked the authority to consent to a warrantless search of those files. 275 F.3d at 403. Borrowing an analogy from United States v. Block, 590 F.2d 535, 539 (4th Cir.1978), we likened these private files to a “locked box” within an area of common authority. Trulock, 275 F.3d at 403-04. Although common authority over a general area confers actual authority to consent to a search of that general area, it does not “automatically … extend to the interiors of every discrete enclosed space capable of search within the area.” Block, 590 F.2d at 541.

    [8] The logic of Trulock applies equally here. “By using a password,” Frank Buckner, like Trulock, “affirmatively intended to exclude … others from his personal files.” Trulock, 275 F.3d at 403. For this reason, “it cannot be said that” Buckner, any more than Trulock, “assumed the risk” that a joint user of the computer, not privy to password-protected files, “would permit others to search his files.” See id. Thus, under the Trulock rationale, Michelle Buckner did not have actual authority to consent to a search of her husband’s password-protected files because she did not share “mutual use, general access or common authority” over those files, FN2 United States v. Kinney, 953 F.2d 863, 866 (4th Cir.1992).

    FN2. The Government argues that because the computer was leased only in Michelle’s name, Buckner had no reasonable expectation of privacy in his password-protected files. To be sure, this fact does bear on the reasonableness of an expectation of privacy; but in this case, the district court expressly found that Buckner did have a reasonable expectation of privacy in his password-protected files, see United States v. Buckner, 407 F.Supp.2d 777, 779 (W.D.Va.2006), a finding that we cannot hold clearly erroneous.

    *555 [9] Michelle’s lack of actual authority, however, does not end our inquiry. The Government need not establish that Michelle Buckner had actual authority to consent to a search of Buckner’s password-protected files in order to succeed on appeal. Rather, it would be sufficient that Michelle had apparent authority to consent to the search at issue. See Illinois v. Rodriguez, 497 U.S. 177, 188, 110 S.Ct. 2793, 111 L.Ed.2d 148 (1990). As long as “the facts available to the officer at the moment … ‘warrant a [person] of reasonable caution in the belief’ that the consenting party had authority,” apparent authority to consent exists, and evidence seized or searched pursuant to that consent need not be suppressed. Id. (quoting Terry v. Ohio, 392 U.S. 1, 21-22, 88 S.Ct. 1868, 20 L.Ed.2d 889 (1968)); see also Kinney, 953 F.2d at 866.

    [10] Michelle gave the officers consent to “take whatever [they] needed [and] whatever [they] found that [they] thought was important to the investigation.” This unquestionably provided the officers with valid consent to seize and search any items in the home over which Michelle had common authority. Nevertheless, Frank Buckner contends that Michelle did not have common authority over his computer files-a fact that the officers must have known, according to Buckner, because Michelle had told them that she was not computer-savvy and that she only used the computer to play games.

    Whether the officers reasonably believed that Michelle had authority to consent to a search of all the contents of the computer’s hard drive, however, depends on viewing these facts in light of the totality of the circumstances known to the officers at the time of the search. At that time, the officers knew that the computer was located in a common living area of the Buckners’ marital home, they observed that the computer was on and the screen lit despite the fact that Frank Buckner was not present, and they had been told that fraudulent activity had been conducted from that computer using accounts opened in Michelle’s name. The officers also knew that the machine was leased solely in Michelle’s name and that she had the ability to return the computer to the rental agency at any time, without Frank Buckner’s knowledge or consent.

    Furthermore, the officers did not have any indication from Michelle, or any of the attendant circumstances, that any files were password-protected. Cf. Trulock, 275 F.3d at 398 (noting that the searching officers were explicitly told that the computer contained password-protected files to which the consenting party did not have access). Even during the mirroring and forensic analysis processes, nothing the officers saw indicated that any computer files were encrypted or password-protected.FN3 Despite Michelle’s suggestion that she lacked deep familiarity with the computer, the totality of the circumstances provided the officers with the basis for an objectively reasonable belief that Michelle had authority to consent to a search of the computer’s hard drive. Therefore, the police*556 were justified in relying on Michelle’s consent to search the computer and all of its files, such that no search warrant was required.

    FN3. We do not hold that the officers could rely upon apparent authority to search while simultaneously using mirroring or other technology to intentionally avoid discovery of password or encryption protection put in place by the user. See supra note 1.

    III.

    For the foregoing reasons, we hold that the officers acted pursuant to a reasonable belief that Michelle Buckner had authority to consent to the contested search. Therefore, the district court’s judgment denying Frank Buckner’s motion to suppress is

    AFFIRMED.

    Continue reading →United States Court of Appeals, Fourth Circuit. UNITED STATES of America, Plaintiff-Appellee, v. Frank Gary BUCKNER, Defendant-Appellant. No. 06-4399. Argued Nov. 29, 2006. Decided Jan. 11, 2007. Background: Defendant charged with wire and mail fraud moved to suppress evidence from the search of a computer’s hard drive seized during a search of his residence. The United States District Court for the Western District ...
  • Expert Business Systems, LLC v. BI4CE, Inc.

    United States Court of Appeals,

    Fourth Circuit.

    EXPERT BUSINESS SYSTEMS, LLC; David Esaw, Plaintiffs-Appellants,

    v.

    BI4CE, INCORPORATED, d/b/a Business Intelligence Force; Christopher S. Chodnicki, Defendants-Appellees.

    No. 06-1265.

    Argued: Jan. 31, 2007.

    Decided: May 9, 2007.

    Background: Software manufacturer brought action against website developer, alleging violations of Electronic Communications Privacy Act (ECPA), and Computer Fraud and Abuse Act (CFAA). The United States District Court for the District of Maryland, Andre M. Davis, J., 411 F.Supp.2d 601, granted defendant summary judgment. Plaintiff appealed.

    Holdings: The Court of Appeals held that:

    (1) defendant did not remotely access plaintiff’s computers, in violation of CFAA, and

    (2) defendant did not intercept plaintiff’s e-mails, in violation of ECPA.

    Affirmed.

    Before MICHAEL, MOTZ, and KING, Circuit Judges.

    Affirmed by unpublished PER CURIAM opinion.

    PER CURIAM:

    **1 Plaintiffs Expert Business Systems, LLC, and David Esaw (collectively, “EBS”) appeal from the district court’s award of summary judgment to defendants BI4CE, Incorporated, d/b/a Business Intelligence Force, and Christopher Chodnicki (collectively, “BI4CE”), pursuant to the court’s January 2006 Memorandum Opinion. See Expert Business Systems, LLC v. BI4CE, Inc., 411 F.Supp.2d 601 (D.Md.2006) (the ” Opinion”). As explained below, we are satisfied with the district court’s analysis of the issues in its Opinion, and we are content to affirm its judgment in favor of BI4CE.

    I.

    A.

    On February 27, 2004, EBS filed a seven-count complaint against BI4CE in the District of Maryland, alleging that BI4CE had violated the Electronic Communications Privacy Act (the “ECPA”), 18 U.S.C. ss 2510-2521, and the Computer Fraud and Abuse Act (the “CFAA”), 18 U.S.C. s 1030, and also alleging various state law claims. On December 16, 2005, the parties filed cross-motions for summary judgment. Concluding that there were no issues of material fact in dispute, and that EBS had failed to forecast sufficient evidence to establish either of its two federal causes of action, the district court awarded summary judgment to BI4CE on the ECPA and CFAA claims. By its Opinion, the court declined to exercise supplemental jurisdiction over EBS’s five state law causes of action and dismissed them without prejudice. EBS contends on appeal that the court erred in its Opinion in four specific respects: (1) concluding that there was insufficient evidence to support the ECPA and CFAA claims; (2) failing to view the evidence in the light most favorable to EBS; (3) applying an incorrect evidentiary standard for claims arising under the ECPA and CFAA; and (4) making impermissible credibility determinations.

    B.

    EBS and BI4CE, which are information technology businesses, entered into an agreement to develop a computer software program after David Esaw, the president of EBS, and Christopher Chodnicki, the president of BI4CE, met in early 2002 at a technology seminar. Pursuant to a Teaming Agreement executed in January 2003, EBS and BI4CE were to work together closely in a joint effort to develop a web-enabled version of EBS’s proprietary software. After several months, however, the business relationship between the parties began to deteriorate and EBS terminated the Teaming Agreement in July 2003. At that time, EBS informed BI4CE that it had breached the Teaming Agreement by, inter alia, remotely accessing an EBS desktop and laptop on several occasions without authorization. EBS asserts that shortly after it notified BI4CE of its alleged breach of the Teaming Agreement, BI4CE transmitted a program, code or command to an EBS desktop computer which rendered it useless. As specific evidence of interception, EBS contends that BI4CE intercepted two emails addressed to fictional employees created by EBS for marketing purposes.

    EBS’s contentions on its ECPA and CFAA claims are spelled out in its Complaint and these contentions and the related evidence were carefully reviewed by the district court in the Opinion. These contentions include, inter alia, the assertion *253 that during their business relationship, BI4CE gained access to two of EBS’s computers and, through the unauthorized installation of a remote access program, improperly gained access to the records and data contained therein. Specifically, Count I of the Complaint alleges that BI4CE violated the ECPA by intercepting, disclosing, endeavoring to disclose, and using EBS’s wire, oral or electronic communications.FN1 EBS then alleges, in its Count II, that BI4CE violated the CFAA by remotely accessing EBS’s computers without authorization and transmitting a computer program that destroyed one of EBS’s computers.FN2

    FN1. The ECPA creates a cause of action for a violation thereof and provides, in relevant part:

    [A]ny person who … intentionally intercepts, endeavors to intercept, or procures any other person to intercept or endeavor to intercept, any wire, oral, or electronic communication; … shall be subject to suit.

    18 U.S.C. s 2511(1)(a).

    FN2. The CFAA creates a cause of action for a violation thereof, and provides, in relevant part, that whoever causes a $5,000 loss during a one-year period by “knowingly caus[ing] the transmission of a program, information, code, or command, and as a result of such conduct, intentionally caus[ing] damage without authorization, to a protected computer” shall be subject to suit. 18 U.S.C. s 1030(a), (g).

    **2 In contrast, BI4CE explains that it installed the remote access program at EBS’s request to allow EBS to remotely access BI4CE’s server. According to BI4CE, this arrangement allowed EBS to make changes to its product website, which BI4CE was developing pursuant to the Teaming Agreement. BI4CE further contends that it received the two emails at issue in the ordinary course of its business arrangement with EBS and immediately forwarded them to EBS. Finally BI4CE asserts that the damage to the computer was caused by EBS’s own system upgrades and file downloads and not by any harmful program or code sent by BI4CE.

    [1][2] Although it is undisputed that BI4CE had physical access to the computers in question on at least one occasion, the evidence fails to demonstrate that BI4CE installed any software that allowed it remote access to EBS’s computers. Instead, the evidence indicates that the software on these computers allowed EBS to initiate remote access to BI4CE’s server, not vice versa.FN3 This evidence supports BI4CE’s contention that EBS requested the remote access arrangement so that it could make alterations to its product website, which BI4CE was developing and hosting. EBS also failed to forecast any evidence to demonstrate that BI4CE had “intercepted” the emails at issue or any other wire, oral or electronic communication. Instead, the evidence is that BI4CE received and promptly forwarded to EBS the two contested emails pursuant to the Teaming Agreement and its obligations to host and maintain the EBS product website on its server. Finally, EBS failed to rebut BI4CE’s evidence that the complained of damage to the EBS computer was caused by the activities of an EBS employee, rather than being caused by a *254 harmful program or code sent by BI4CE.FN4

    FN3. EBS and BI4CE each submitted expert reports of forensic computer examinations to the district court in support of their respective motions for summary judgment. Lawrence Larsen, retained by EBS to examine the hard drives of its two computers, drew no conclusions regarding the cause of EBS’s computer problems. Instead, Larsen reported that he had not detected any suspicious internet activity or spyware during his forensic review, and indicated that it was the EBS computer that was initiating contact with the BI4CE server, in a manner consistent with BI4CE’s explanation of events.

    FN4. EBS’s expert, Larsen, did not identify any evidence of a program or code sent by BI4CE to cause damage to EBS’s desktop computer in violation of the CFAA. In contrast, Michael Wertheimer, retained by BI4CE, found forensic evidence indicating that EBS’s difficulties with its desktop computer were ongoing, rather than sudden, and that they may have been caused by a system update, hardware installation or file download that all coincided with EBS’s computer problems. Wertheimer did not find any evidence of a harmful code or program sent by BI4CE and, accordingly, concluded that there is no basis to identify any suspicious activity on the part of BI4CE. EBS accordingly failed to forecast any evidence that BI4CE had transmitted such a code or program beyond its undisputed computer problems.

    II.

    We review de novo a district court’s award of summary judgment, viewing the facts and the reasonable inferences drawn therefrom in the light most favorable to the nonmoving party. See EEOC v. Navy Fed. Credit Union, 424 F.3d 397, 405 (4th Cir.2005). Summary judgment is permissible when “there is no genuine issue as to any material fact.” Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). When a party has submitted sufficient evidence to support its request for summary judgment, the burden shifts to the nonmoving party to show that there are genuine issues of material fact justifying a trial. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586-88, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986). And, of course, unsupported speculation is not sufficient to defeat a properly supported summary judgment motion. Ash v. UPS, 800 F.2d 409, 411-12 (4th Cir.1986). An award of summary judgment is also appropriate when a party “fails to make a showing sufficient to establish the existence of an element essential to that party’s case, and on which that party will bear the burden of proof at trial.” Celotex, 477 U.S. at 322, 106 S.Ct. 2548. With these principles in mind, we turn to EBS’s appellate contentions.

    III.

    A.

    **3 EBS first contends on appeal that the district court erred in concluding that EBS had forecast insufficient evidence to support its federal claims under the ECPA and the CFAA. Having thoroughly reviewed the Opinion and the parties’ appellate briefs, and having heard and considered the oral argument, we are satisfied that the court did not err in ruling that there is insufficient evidence to support the ECPA and CFAA claims. We are therefore content to reject this contention on the reasoning of the district court. See Opinion at 605-06

    (concluding that there is an “utter lack of any substantial probative evidence” to support the ECPA cause of action, and an “utter lack of expert opinion evidence” to support EBS’s “speculative assertions” of a CFAA cause of action).FN5

    FN5. The Opinion can be found at J.A. 1238-47. (Citations to “J.A. —-” refer to the Joint Appendix filed by the parties in this appeal.)

    B.

    EBS next contends that the district court applied an incorrect evidentiary standard for its claims under the ECPA and CFAA, by ruling that direct evidence is essential in order to establish such claims. To the contrary, however, the Opinion does not so rule, and it does not mandate that direct evidence is essential to maintaining the two federal claims. Instead, the court concludes that there is an “utter lack of any substantial probative evidence that defendants wrongfully ‘intercepted’*255 the disputed e-mails” and notes the “utter lack of any expert opinion evidence supporting the speculative assertions by plaintiffs that defendants … damaged the computers through the delivery of a [code or program].” Opinion at 605-06. The only discussion by the court of either direct or circumstantial evidence is its characterization of the evidence offered by EBS as “an increasingly attenuated series of inferences-on-inferences based on circumstantial evidence arising from defendants’ undisputed physical access to the plaintiffs’ computers.” Opinion at 604-05. Accordingly, the Opinion does not premise the court’s award of summary judgment to BI4CE on the fact that EBS presented circumstantial evidence only. The award is, to the contrary, simply based on the court’s conclusion that EBS’s evidence was insufficient to present a genuine issue of material fact.

    C.

    EBS next asserts that the district court, in its Opinion, failed to view the evidence in the light most favorable to EBS, and contends that the court erred when it failed to give proper weight to the evidence presented. This contention is again contradicted by the Opinion, where the court observes that, “[e]ven viewing the record in favor of plaintiffs as the non-movants, no reasonable juror could reasonably conclude by a preponderance of the evidence that defendants violated s 2511.” Opinion at 605-06. The Opinion points out, as to EBS’s CFAA claim, that “plaintiffs have not even attempted to respond to the unobjected-to and unrebutted opinion stated by defendants’ forensic computer experts.” Id. After our independent consideration of the record and the Opinion, we are satisfied that the court viewed the evidence in the light most favorable to EBS and correctly concluded that no reasonable juror could find in EBS’s favor on the basis thereof. Although reasonable inferences must be drawn in favor of EBS as the nonmoving party, such inferences are required by law to “fall within the range of reasonable probability and not be so tenuous as to amount to speculation or conjecture.” Thompson Everett, Inc. v. Nat’l Cable Adver., L.P., 57 F.3d 1317, 1323 (4th Cir.1995). The district court correctly applied the controlling legal principles in this regard, and this contention of EBS is thus also without merit.

    D.

    **4 Finally, EBS contends that the district court made credibility determinations in its Opinion that are inappropriate for a summary judgment proceeding. Specifically, EBS asserts that the court erred when it observed, by footnote, that emails sent by EBS contained “harsh language” and “sarcasm,” when it stated that EBS did not “accurately set forth the date on which plaintiffs’ interns first exercised dominion and control over plaintiffs’ computers,” and when it observed that an intern resisted BI4CE’s attempts to depose him “apparently with plaintiffs’ acquiescence.” Opinion at 603-04 n. 6, 604-05 n. 9. EBS is correct, of course, that credibility determinations by a trial court are not permissible in a summary judgment proceeding. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986) (noting that “[c]redibility determinations, the weighing of evidence, and the drawing of legitimate inferences from the facts are jury functions, not those of a judge, whether he is ruling on a motion for summary judgment or for a directed verdict”). Contrary to this contention, however, the Opinion does not reflect that the district court made any such credibility determinations. Moreover, the court did not rest its award of summary judgment to BI4CE on the specified footnotes, but instead*256 on the failure of EBS to demonstrate a dispute of material fact on the ECPA and CFAA claims. As a result, this final contention is also rejected.

    IV.

    Pursuant to the foregoing, we are unable to identify any reversible error made by the district court in its disposition of this case, and we thus affirm its award of summary judgment to BI4CE.

    AFFIRMED.

    Continue reading →United States Court of Appeals, Fourth Circuit. EXPERT BUSINESS SYSTEMS, LLC; David Esaw, Plaintiffs-Appellants, v. BI4CE, INCORPORATED, d/b/a Business Intelligence Force; Christopher S. Chodnicki, Defendants-Appellees. No. 06-1265. Argued: Jan. 31, 2007. Decided: May 9, 2007. Background: Software manufacturer brought action against website developer, alleging violations of Electronic Communications Privacy Act (ECPA), and Computer Fraud and Abuse Act (CFAA). The United States District Court ...
  • U.S. v. Kaye

    United States Court of Appeals,

    Fourth Circuit.

    UNITED STATES of America, Plaintiff-Appellee,

    v.

    David A. KAYE, Defendant-Appellant.

    No. 06-5277.

    Submitted: May 30, 2007.

    Decided: July 6, 2007.

    Background: Defendant was convicted following a bench trial in the United States District Court for the Eastern District of Virginia, James C. Cacheris, Senior District Judge, 451 F.Supp.2d 775, of coercion and enticement of a minor, and travel with intent to engage in illicit sexual contact with a minor. He appealed conviction 78-month sentence.

    Holdings: The Court of Appeals held that:

    (1) that defendant was communicating with adult posing as a 13-year-old boy had no bearing on Virginia crime of attempted indecent liberties with a minor, for purposes of federal prosecution for coercion and enticement of a minor;

    (2) online organization’s failure to record defendant’s conversation with adult posing as 13-year-old boy did not warrant dismissal of indictment due to spoliation of evidence;

    (3) evidence of defendant’s post-sting chat with operative of online organization was inadmissible; and

    (4) evidence was sufficient to sustain convictions.

    Affirmed.

    Before NIEMEYER, KING, and SHEDD, Circuit Judges.

    Affirmed by unpublished PER CURIAM opinion.

    PER CURIAM:

    **1 David A. Kaye appeals his convictions after a bench trial of coercion and enticement of a minor in violation of 18 U.S.C. s 2422(b) (2000), and travel with intent to engage in illicit sexual contact with a minor in violation of 18 U.S.C. s 2423(b) (2000), and his resulting seventy-eight month sentence. Kaye claims the district court erroneously: (i) denied his pre-trial motion to dismiss the indictment; (ii) excluded evidence at trial he claims was exculpatory; and (iii) denied his Fed.R.Civ.P. 29 motion for judgment of acquittal based on the sufficiency of the evidence. We affirm.

    At 3:50 a.m. on August 7, 2005, Kaye, a fifty-four year old resident of Maryland, initiated Internet contact under the screen name “REDBD” with an individual with the screen  name “MadC Rad1992.” Upon contact, Kaye immediately inquired whether “MadC Rad1992” was thirteen years old, to which “MadC Rad1992” responded in the affirmative and informed Kaye he lived in Herndon, Virginia. When “MadC Rad 1992” inquired whether Kaye could not sleep, Kaye responded he was “prowling for young men.” During this communication, Kaye and “MadC Rad1992” electronically exchanged photographs. “MadC Rad1992” emailed Kaye a photograph of a young male and Kaye emailed sexually explicit photographs of himself posing nude and engaging in fellatio with another male.

    Unbeknownst to Kaye, “MadC Rad1992” was really an adult, Sean O’Connor. O’Connor was an undercover operative with Perverted Justice, an online organization dedicated to exposing adults who use the Internet to seek sexual activity with children. During his online chat with “MadC Rad1992,” Kaye also communicated by telephone with a person he believed to be “MadC Rad1992,” but who was really a twenty-four-year-old woman named Alison Shea, another undercover operative with Perverted Justice.

    Between August 7, 2005 and August 17, 2005, Kaye communicated via instant messaging with “MadC Rad1992” several times, each time discussing sexually explicit topics and sexual acts Kaye and “MadC Rad1992” could perform on one another. The two also planned to meet when “MadC Rad1992’s” father would not be home, and on August 17, 2005, Kaye traveled from Maryland to Herndon, Virginia to meet “MadC Rad1992.”

    *766 Upon entering the Herndon, Virginia home, Kaye was met by NBC Dateline correspondent, Chris Hansen, who immediately conducted an interview of Kaye. When asked by Hansen what he was doing there, Kaye responded “[n]ot somethin’ good.” Upon questioning why he came to the home, Kaye responded “[u]m, that I don’t wanna be … look this isn’t good.” Shortly thereafter, Kaye stopped the interview and left the home.

    Kaye subsequently contacted America Online to inquire how he could remove “all aspects of the screen name REDBD from his computer.” Kaye also inquired of his employer’s computer network manager how he could remove personal items from his computer. After receiving the information from the manager, Kaye asked if “there was any way that [she] could guarantee nobody would find” the information. Kaye’s employer later gave Kaye’s computer to law enforcement and forensic analysis revealed a portion of the chat with “MadC Rad1992,” the pictures Kaye sent to him, and driving directions to the Herndon, Virginia home.

    **2 Kaye claims the district court erred in denying his motion to dismiss the indictment because: (i) Kaye could not be convicted of a violation of s 2422(b) since he interacted at all times with an adult and not a thirteen year old boy; (ii) s 2422(b) unconstitutionally criminalized Kaye’s protected speech; (iii) s 2423 unconstitutionally criminalized Kaye’s right to travel; and (iv) Perverted Justice’s failure to record Shea’s telephone conversation with Kaye required the indictment be dismissed. We review a district court’s denial of a motion to dismiss the indictment made before trial de novo. See United States v. Loayza, 107 F.3d 257, 260 (4th Cir.1997).

    Kaye argues he could not be convicted of a violation of s 2422(b) because the Government did not prove he was guilty of s 18.2-370 since his victim was not a child under fourteen years of age. Kaye’s argument is meritless. Under s 2422(b), it is unlawful for a person, “using … any facility or means of interstate … commerce … [to] knowingly persuade[ ], induce [ ], entice[ ] or coerce[ ] any individual who has not attained the age of 18 years, to engage in … any sexual activity for which any person can be charged with a criminal offense, or attempt[ ] to do so …” See 18 U.S.C. s 2422(b) (2000). To obtain a conviction under s 2422(b), the Government must also prove that the additional elements of Va.Code Ann. s 18.2-370, which makes it unlawful for an individual to take indecent liberties with a child, FN1 were satisfied.

    FN1. A violation of s 18.2-370 occurs when “any person eighteen years of age or over, who, with lascivious intent, knowingly and intentionally” takes indecent liberties with “any child under the age of fifteen years.” Va.Code Ann. s 18.2-370. Taking indecent liberties with a child includes proposing “that any such child expose his or her sexual or genital parts to such person”, “feel or fondle the sexual or genital parts of any such child”, perform “an act of sexual intercourse” or “entice[s], allure[s], persuade[s], or invite[s] any such child to enter … [a] place, for any of the[se] purposes.” Va.Code Ann. s 18.2-370.

    [1] Kaye argues that because it is undisputed he interacted with adults rather than a child, his behavior did not violate s 18.2-370, and therefore could not violate 18 U.S.C. s 2422. Because the Virginia Supreme Court explicitly ruled in Hix v. Commonwealth, 270 Va. 335, 619 S.E.2d 80, 83-87 (2005), that the absence of an actual child has no bearing on the crime of attempt under s 18.2-370, we conclude the district court correctly rejected Kaye’s argument.

    *767 [2] We also reject Kaye’s arguments that ss 2422 and 2423 are unconstitutional as applied to him. Because these arguments were made in a supplemental memorandum filed long after the motions deadline set by the district court pursuant to Fed.R.Crim.P. 12(c), and after oral argument on Kaye’s motion to dismiss the indictment took place, the district court dismissed them as untimely. In rejecting Kaye’s supplemental arguments, the district court also noted it nonetheless found Kaye’s arguments meritless. On appeal, Kaye argues only that the district court erred in its ruling on the substance of his arguments, but does not challenge the district court’s finding the supplemental arguments were untimely. Accordingly, we conclude Kaye has abandoned any challenge to the dismissal of his arguments by the district court. See United States v. Al-Hamdi, 356 F.3d 564, 571 n. 8 (4th Cir.2004) (“It is a well settled rule that contentions not raised in the argument section of the opening brief are abandoned.”). In any event, we have carefully reviewed the district court’s alternative reasoning that ss 2422 and 2423 are constitutional as applied to Kaye, and would reach the same conclusion.

    **3 [3] Kaye also argues the district court erred in denying his motion to dismiss the indictment for spoliation of evidence because Perverted Justice’s failure to record a telephone conversation between Shea and Kaye prevented Kaye “from playing the true, complete and accurate telephone conversation and proving that he was lead to believe, by the speaker’s voice, that he was speaking with an adult.” Kaye’s argument is meritless.

    In his motion to dismiss the indictment for spoliation of evidence, Kaye conceded, as he does on appeal, that dismissing an indictment for “spoliation of evidence is a drastic remedy that typically requires that bad faith be proven.” Cole v. Keller Indus., Inc., 132 F.3d 1044, 1047 (4th Cir.1998). Kaye, however, neglects to identify any bad faith on the part of Perverted Justice.

    [4] Moreover, to the extent Kaye argues he was denied due process by Perverted Justice’s failure to record the conversation, this argument similarly fails because law enforcement, not a private actor, must have acted in bad faith before the destruction of evidence will constitute a due process violation. See Arizona v. Youngblood, 488 U.S. 51, 57-58, 109 S.Ct. 333, 102 L.Ed.2d 281 (1988). Because there was no showing that Perverted Justice acted at the direction or under the control of law enforcement, the district court correctly found that “[a]ny deficiency in the evidence can be remedied during cross-examination at trial and considered by the fact-finder.”

    [5] Kaye next claims the district court erred in excluding evidence of an instant message chat he had with Gregory Brainer, another Perverted Justice operative, after the Perverted Justice sting operation. Kaye claims the chat was a prior consistent statement that should have been allowed after Kaye was cross-examined by the Government and his intention regarding the solicitation questioned, or in the alternative, that the chat log should have been excepted from hearsay under the residual exception because it was inherently trustworthy. Because the conversation post-dated the sting operation, lacked indicia of reliability, and since its admission would have far-reaching ramifications, the district court found the evidence to be inadmissible hearsay. The decision of a district court to admit or exclude evidence is reviewed for abuse of discretion. See United States v. Young, 248 F.3d 260, 266 (4th Cir.2001). This court will find such abuse of discretion only if the district court’s evidentiary ruling was arbitrary or *768 irrational. See United States v. Achiekwelu, 112 F.3d 747, 753 (4th Cir.1997). Because Kaye’s chat with Brainer took place in January or February 2006, five or six months after the Perverted Justice sting operation, Kaye’s motive to fabricate an exculpatory explanation for his conduct arose before Kaye’s chat with Brainer. Accordingly, we conclude the district court did not err in excluding evidence of the chat between Kaye and Brainer.

    [6] Kaye’s final contention is that the district court erred in denying his motion for judgment of acquittal because the Government produced insufficient evidence regarding Kaye’s intent to engage in unlawful sexual acts with a minor and to travel in interstate commerce for that purpose. We review the denial of a Rule 29 motion de novo. See United States v. Alerre, 430 F.3d 681, 693 (4th Cir.2005), cert. denied, 547 U.S. 1113, 126 S.Ct. 1925, 164 L.Ed.2d 667 (2006). We conclude there was sufficient evidence to establish Kaye intended to engage in unlawful sexual acts with a minor and to travel in interstate commerce for that purpose.

    **4 A review of the trial transcript leaves little room to doubt that Kaye communicated  with “MadC Rad1992” believing he was a minor, that his communications were an attempt to lure “MadC Rad1992” into engaging in unlawful sexual acts with him, and that Kaye traveled from Maryland to Herndon, Virginia intending to lure “MadC Rad1992” into engaging in sexual acts with him. As the district court found, the chat logs of Kaye’s conversations with “MadC Rad1992” established Kaye first complimented “MadC Rad1992” on being “cute” and “sweet,” then made “blatant, aggressive sexual advances” toward him by suggesting various forms of oral and manual sexual stimulation.

    We conclude the evidence also established Kaye believed he was communicating with a thirteen-year-old boy. During Kaye’s first chat with “MadC Rad1992,” Kaye immediately inquired whether “MadC Rad1992” was only thirteen, likely inferring his age from the inclusion of “1992” in his screen name. In addition, Kaye repeatedly referred to “MadC Rad1992” as “young” and being only thirteen years of age during their chats, and the chats often centered around whether and when “MadC Rad1992’s” father was home. This conclusion is bolstered by the manner in which Kaye reacted upon entering the Herndon, Virginia home.

    Although Kaye claims the evidence was insufficient to support a conviction because he thought “MadC Rad1992” was an adult and did not travel to Herndon to engage in sexual acts with him, we conclude the district court’s disregard of this testimony was a credibility determination that should not be disturbed on appeal. See United States v. Lomax, 293 F.3d 701, 706 (4th Cir.2002). As the district court explicitly stated, it “did not find Defendant’s testimony to be credible in its assessment of his veracity, demeanor, cadence, tenor, and inflection of his voice as well as the consistency of his answers on cross examination.” Accordingly, we conclude the district court correctly denied Kaye’s Rule 29 motion.

    Based on the foregoing, we affirm Kaye’s convictions and sentence. We dispense with oral argument because the facts and legal contentions are adequately presented in the materials before the court and argument would not aid the decisional process.

    AFFIRMED.

    Continue reading →United States Court of Appeals, Fourth Circuit. UNITED STATES of America, Plaintiff-Appellee, v. David A. KAYE, Defendant-Appellant. No. 06-5277. Submitted: May 30, 2007. Decided: July 6, 2007. Background: Defendant was convicted following a bench trial in the United States District Court for the Eastern District of Virginia, James C. Cacheris, Senior District Judge, 451 F.Supp.2d 775, of coercion and enticement of a minor, ...
  • U.S. v. Colonna

    United States Court of Appeals,

    Fourth Circuit.

    UNITED STATES of America, Plaintiff-Appellee,

    v.

    Willoughby Warren COLONNA, IV, a/k/a maryanna, Defendant-Appellant.

    No. 06-5237.

    Argued: Sept. 28, 2007.

    Decided: Dec. 20, 2007.

    Background: Defendant was convicted for transporting child pornography, advertising exchange of child pornography, and possession of material containing child pornography by the United States District Court for the Eastern District of Virginia, at Norfolk, Robert G. Doumar, Senior District Judge. Defendant appealed.

    Holding: The Court of Appeals, Gregory, Circuit Judge, held that defendant’s statements should have been suppressed as he was in custody and required Miranda warnings.

    Reversed and remanded.

    OPINION

    GREGORY, Circuit Judge:

    Willoughby Warren Colonna, IV appeals his conviction for Transporting Child Pornography in violation of 18 U.S.C. s 2252A(a)(1), Advertising the Exchange of Child Pornography in violation of 18 U.S.C. s 2251(d)(1)(A), and Possession of Material Containing Child Pornography in violation of 18 U.S.C. s 2252A(a)(5)(B). Colonna raises several errors on appeal, *433 asserting that the district court improperly: (1) denied his motion to suppress; (2) abused its discretion in excluding relevant testimony; and (3) improperly questioned him. Having considered Colonna’s claims, we conclude that the district court’s denial of his motion to suppress was erroneous. For the reasons stated below, we reverse and remand the case for trial.

    I.

    In March 2004, while conducting an online undercover investigation, a Federal Bureau of Investigation (“FBI”) agent, Kenneth Jensen (“Agent Jensen”) accessed a chat group called “100% PreTeenGirl-SexPics.” After gaining access to an f-server,FN1 Agent Jensen observed child pornography files.FN2 Within a few minutes, he uploaded four child pornography videos. FBI software allowed the agent to capture the IP address of the f-server, which was assigned to Colonna’s home in Chesapeake, Virginia.

    FN1. An “f-server” is a file-sharing system on a computer that allows others to access the computer via the internet and trade files. (J.A. 312-16.)

    FN2. The agent accessed the files by typing “!maryanna”; a trigger term referenced in the f-serve advertisement.

    On June 24, 2004, at 6:29 a.m., Special Agent Christopher A. Kahn (“Agent Kahn”) along with twenty-three FBI Task Force Officers and a computer forensic technician executed a search warrant for child pornography at Colonna’s home. FN3

    FN3. Agent Kahn testified that he took twenty-three agents because the house was of considerable size; three stories high, four bedrooms, and a large detached garage. Colonna, his parents, and his younger sister were all present in the house. The agents awoke Colonna’s parents and sister and allowed them to dress before bringing them to the living room for questioning. The parents informed the agents that Colonna was asleep in the third floor attic. The agents then went upstairs and kicked open Colonna’s bedroom door. At gun point, the agents ordered Colonna to dress and come downstairs. Colonna contends as he attempted to put on his pants, an agent slammed him into a door jam causing injuries to his spine.

    The agents escorted Colonna to the living area with his other family members. When Colonna’s mother attempted to smoke a cigarette, an agent told her that she could not smoke in the house and would not be allowed to return if she went outside. Colonna, his mother, and his sister went outside, and agents followed them.

    Agent Kahn asked to speak with Colonna in a FBI vehicle. He advised Colonna that he was not under arrest. Parked behind the house, Agent Kahn along with another agent, Beverly Borgia (“Agent Borgia”), interviewed Colonna. During the conversation, Colonna informed the officers that there were four computer towers and one laptop, all connected to the internet through a wireless router, in the home. One computer was located in his bedroom.

    Initially, Colonna denied having any knowledge of child pornography on the computers but admitted to viewing and trading adult pornography over the internet. After Agent Kahn twice advised Colonna that lying to a federal agent was a felony, he admitted sharing child pornography through the f-server. Colonna informed Agent Kahn that about a year prior to the search, he created the f-server to send, receive, and store child pornography videos of underage girls.

    *434 Agent Kahn then suggested Colonna write a statement for the Assistant United States Attorney investigating the crime. Colonna agreed. According to his written statement, Colonna “was under the impression that viewing other people’s illegal acts would be less illegal/wrong, than trying to live out those fantasies.” (J.A. 53). He also stated that no one else had access to his computer and that he took total responsibility for any material found on the computer.

    Both Agents Kahn and Borgia witnessed and signed the statement. The interview lasted approximately three hours, during which Agent Kahn spoke to other agents and Colonna took several cigarette breaks. However, the agents never left Colonna unattended. Colonna never asked to leave and did not receive Miranda warnings.

    During the search, the agents seized, among other things, the computer located in Colonna’s bedroom. FBI computer forensic analysis confirmed that the file sharing software and videos were consistent with files uploaded and logged by Agent Jensen in March, 2004. One year and ten months after the search, the FBI arrested Colonna for transporting, advertising, and possessing child pornography.

    Colonna filed a motion to suppress his oral and written statements. The district court denied the motion, ruling that Miranda warnings were not required because Colonna was not in custody. Thus, the statement along with testimony from the agents, Colonna, and his family and friends were introduced at trial.

    In his defense, Colonna sought to introduce impeaching testimony from his brother, Charles Colonna (“Charles”), that a mutual friend and defense witness, switched the f-server’s channels to capture videos about teens as “a joke” and that, in 2006, the same witness downloaded child pornography to a computer that he and Charles shared. The district court, however, restricted Charles’s testimony on these points.

    Finally, throughout the trial, the district court questioned Colonna on various issues, which Colonna now contends prejudiced him before the jury.

    II.

    Colonna challenges the district court’s denial of his motion to suppress. He argues that he was in custody for Miranda purposes during his interview with FBI agents, and because Miranda warnings were not given, his statements should have been suppressed.

    A.

    [1][2] In considering a district court’s denial of a suppression motion, we review a district court’s findings of fact for clear error and its legal conclusions de novo. United States v. Uzenski, 434 F.3d 690, 704 (4th Cir.2006) (citing United States v. Parker, 262 F.3d 415, 419 (4th Cir.2001)); see also United States v. Rusher, 966 F.2d 868, 873 (4th Cir.1992) (citing United States v. Ramapuram, 632 F.2d 1149, 1155 (4th Cir.1980)). We construe the evidence in the light most favorable to the Government, the prevailing party below. Parker, 262 F.3d at 419 (citing United States v. Seidman, 156 F.3d 542, 547 (4th Cir.1998)).

    B.

    [3][4][5] The Fifth Amendment requires that “[n]o person … shall be compelled in any criminal case to be a witness against himself.” U.S. Const. amend. V. In Miranda v. Arizona, 384 U.S. 436, 444, 86 S.Ct. 1602, 16 L.Ed.2d 694 (1966), the Supreme Court adopted prophylactic procedural measures to ensure that a defendant is advised of his Fifth Amendment rights *435 during custodial interrogations. “Absent formal arrest, Miranda warnings only apply ‘where there has been such a restriction on a person’s freedom as to render him ‘in custody.’ ‘ ” Parker, 262 F.3d at 419 (4th Cir.2001) (quoting Oregon v. Mathiason, 429 U.S. 492, 495, 97 S.Ct. 711, 50 L.Ed.2d 714 (1977) (per curiam)). An individual is in custody “when, under the totality of the circumstances, ‘a suspect’s freedom from action is curtailed to a ‘degree associated with formal arrest.’ ‘ ” Id. (quoting Berkemer v. McCarty, 468 U.S. 420, 440, 104 S.Ct. 3138, 82 L.Ed.2d 317 (1984)). The operative question is whether, viewed objectively, “a reasonable man in the suspect’s position would have understood his situation” to be one of custody. Berkemer, 468 U.S. at 422, 104 S.Ct. 3138.

    The Government argues that Colonna was not in custody because: (1) the interrogation occurred outside of his home; (2) Colonna was told that he was not under arrest; and (3) Colonna was not arrested until almost two years later. Colonna counters that the totality of the circumstances indicate he was “in custody” for Miranda purposes.

    The district court found that Colonna was awakened by armed agents and guarded by agents until the search and interview concluded. The home was inundated with approximately 24 officers who gave Colonna and his family members instructions; that is, they told them where to sit and restricted their access to the home. Colonna did not voluntarily request to speak with Agent Kahn. Instead, Agent Kahn requested that Colonna accompany him to a FBI vehicle to answer questions, wherein a full-fledged interrogation took place. Agent Kahn questioned Colonna for almost three hours, albeit with breaks. But, even during these breaks, Colonna was constantly guarded. Although Colonna was not placed under formal arrest, he was told twice that lying to a federal agent was a federal offense. And, at no time was he given Miranda warnings or informed that he was free to leave.

    [6] The district court found that “given the totality of the circumstances, a reasonable person would have believed that his freedom was curtailed.” (J.A. 297.) But, according to the district court, because Agent Kahn specifically told Colonna he was not under arrest and did not, in the end, arrest him for two years, a custodial interrogation did not take place. While we find no error in the district court’s findings of fact, we do take issue with the district court treating Agent Kahn’s statement to Colonna that he was not under arrest as the dispositive fact in its determination of custody.

    Indeed, there is no precedent for the contention that a law enforcement officer simply stating to a suspect that he is “not under arrest” is sufficient to end the inquiry into whether the suspect was “in custody” during an interrogation. See Davis v. Allsbrooks, 778 F.2d 168, 171-72 (4th Cir.1985) (“Though informing a suspect that he is not under arrest is one factor frequently considered to show lack of custody, it is not a talismanic factor”). Rather, we have held that the “ultimate inquiry” looks to the totality of the circumstances to determine whether they indicate an individual’s freedom of action is curtailed to a degree associated with formal arrest. Parker, 262 F.3d at 419; see also California v. Beheler, 463 U.S. 1121, 1125, 103 S.Ct. 3517, 77 L.Ed.2d 1275 (1983). Here, the district court made two factual findings that support a custody determination: First, “even if the agents truly requested [Colonna’s] voluntary participation in an interview, it is highly doubtful that a reasonable person would have felt entitled to decline their request [to talk]”; and, second, “the agents did everything short of actually, physically restraining [Colonna] *436 to make him, or any reasonable man, believe that he was not free to leave.” (J.A. 294, 297.) Given that the district court made both of these findings, it is difficult to see how it could then say that Colonna was not in custody.

    Moreover, despite acknowledging clear indicia of custody, the district court allowed a single factor to “sway the analysis.” (J.A. 297.) While one factor “may sway” the analysis under the totality of the circumstances test, it is clear that the circumstances of Colonna’s interrogation-telling Colonna that he was not under arrest-is insufficient to preclude a finding of a custodial interrogation.

    In United States v. Uzenski, we examined the totality of the circumstances and held that the defendant, a police officer, was not in custody for purposes of Miranda. 434 F.3d 690, 704 (4th Cir.2006). Although Uzenski was explicitly told he was not under arrest, the officer’s statement was only one of several factors in our calculus of determining custody-not a dispositive factor, as the Government suggests. In fact, Uzenski was also informed that he was free to leave at any time. We concluded, therefore, that Uzenski was not in custody because the totality of the circumstances demonstrated that the “coercive pressures that can be brought to bear upon a suspect in the context of custodial interrogation” were not present. Id. at 705 (quoting Pasdon v. City of Peabody, 417 F.3d 225, 228 (1st Cir.2005)). Unlike Uzenski, here coercive pressures existed because Colonna’s interrogation occurred in a police dominated environment where the agents did everything to make Colonna, or any reasonable man believe that he was not free to leave.

    For example, the house was inundated with over twenty-three FBI agents. Colonna was awakened at gun point and guarded at all times. In Colonna’s presence, an agent instructed his mother that she could not smoke in her own house and that she could not reenter the house if she chose to go outside. Agents accompanied Colonna, his mother, and his sister outside. While questioned in the FBI vehicle, Colonna was bracketed by Agent Borgia in the backseat and Agent Kahn in the front seat, both of whom were armed. During the three hour interview, Colonna was guarded by Agent Borgia when he smoked cigarettes. See United States v. Griffin, 922 F.2d 1343, 1350-51 (8th Cir.1990) (“We realize that the likely effect on a suspect of being placed under guard during questioning, or told to remain in the sight of interrogating officials, is to associate these restraints with a formal arrest.”). Colonna did not initiate police questioning and was never told that he was free to leave or that he did not have to respond to questions. See United States v. Ollie, 442 F.3d 1135, 1138 (8th Cir.2006) (noting that although advising someone that he or she is not under arrest mitigates an interview’s custodial nature, “an explicit assertion that the person may end the encounter is stronger medicine.”).

    As Uzenski makes clear we have never abandoned the totality of the circumstances test or short stopped our analysis at the mere utterance of the phrase-“you are not under arrest.” Uzenski, 434 F.3d at 705. To do so, would provide law enforcement officers with a complete “end run” around Miranda.FN4 At bottom, considering the totality of the circumstances, a reasonable man in Colonna’s position would have felt that his freedom was curtailed to a degree associated with formal arrest. Thus, his statements should have been suppressed.

    FN4. To be sure, we do not mean to suggest that advising a suspect that he is not under arrest is irrelevant to an “in custody” determination. Rather, we merely point out that it is not dispositive.

    *437 [7] Further, we cannot conclude that the district court’s error is harmless. See Correll v. Thompson, 63 F.3d 1279, 1291 (4th Cir.1995) (noting that even if admission of a confession was error, a defendant is not entitled to relief if the error was harmless). In our view, the strength of the Government’s case against Colonna, absent his oral and written inculpatory statements, is questionable. In fact, the Government conceded at oral argument that admission of Colonna’s oral statements would not be harmless error.FN5

    FN5. Neither party briefed or addressed the issue of harmless error.

    Accordingly, the judgment of the district court is reversed, Colonna’s sentence is vacated, and the case is remanded for trial on the merits.FN6

    FN6. Colonna also asserts that his conviction should be reversed because the district court: (1) did not allow him to introduce impeaching testimony from his brother concerning a defense witness; and (2) improperly questioned him throughout the trial, which prejudiced him before the jury. Because we vacate Colonna’s conviction on other grounds, we need not reach these issues.

    REVERSED AND REMANDED

    Continue reading →United States Court of Appeals, Fourth Circuit. UNITED STATES of America, Plaintiff-Appellee, v. Willoughby Warren COLONNA, IV, a/k/a maryanna, Defendant-Appellant. No. 06-5237. Argued: Sept. 28, 2007. Decided: Dec. 20, 2007. Background: Defendant was convicted for transporting child pornography, advertising exchange of child pornography, and possession of material containing child pornography by the United States District Court for the Eastern District of Virginia, at ...
  • U.S. v. Gavegnano

    United States Court of Appeals,

    Fourth Circuit.

    UNITED STATES of America, Plaintiff-Appellee,

    v.

    Derek F. GAVEGNANO, Defendant-Appellant.

    No. 07-4579.

    Submitted: Oct. 28, 2008.

    Decided: Jan. 16, 2009.

    Background: Defendant was convicted in the United States District Court for the Western District of Virginia, Norman K. Moon, J., of receipt of child pornography, possession of child pornography, and importation or transportation of obscene matters, and he appealed.

    Holdings: The Court of Appeals held that:

    (1) district court did not clearly err in its determination that defendant had no reasonable expectation of privacy in the unauthorized use of his government-issued computer;

    (2) district court was not required to instruct jury that it was not required to accept judicially noticed facts as conclusive; and

    (3) Government satisfied its burden to authenticate forensic report that detailed contents of computer.

    Affirmed.

    Before MOTZ, TRAXLER, and SHEDD, Circuit Judges.

    Affirmed by unpublished PER CURIAM opinion.

    PER CURIAM:

    **1 Derek F. Gavegnano appeals his conviction on two counts of receipt of child pornography, in violation of 18 U.S.C. ss 2252(a)(2), 3261(a) (2006); one count of possession of child pornography, in violation of 18 U.S.C. ss 2252(a)(4), 3261(a) (2006); and one count of importation or transportation of obscene matters, in violation of 18 U.S.C. ss 1462, 3261(a) (2006). We have reviewed the record and find no reversible error.

    Gavegnano first claims the district court erred in denying his motion to suppress based on violation of his Fourth and Fifth Amendment rights when evidence against him was obtained from a government-issued laptop. We review legal conclusions underlying the denial of a motion to suppress de novo, and review factual findings for clear error. United States v. Moreland, 437 F.3d 424, 433 (4th Cir.2006). The evidence is construed in the light most favorable to the Government. United States v. Seidman, 156 F.3d 542, 547 (4th Cir.1998).

    To establish a violation of his Fourth Amendment rights, Gavegnano must establish that he had a “legitimate expectation of privacy” in the computer searched. United States v. Simons, 206 F.3d 392, 398 (4th Cir.2000) (citing Rakas v. Illinois, 439 U.S. 128, 143, 99 S.Ct. 421, 58 L.Ed.2d 387 (1978)). To prove a legitimate expectation of privacy, Gavegnano must show that his subjective expectation of privacy is one that society is prepared to accept as objectively reasonable. Simons, 206 F.3d at 398. As the district court properly held, this he did not do.

    [1] It is uncontroverted that when Gavegnano was issued a government computer, the user agreement he signed stated that he was aware of the acceptable use of all government-issued information systems,*956 that he consented to the monitoring of the information systems, and included the statement that he understood that monitoring was not selective and would include all activities on the information system. Moreover, the user agreement form Gavegnano signed applied to his use of all computer systems owned by the governmental agency for which he worked, which included the laptop he used in Qatar, on which the pornographic images were found. On these facts, and construing the evidence in favor of the Government, see Seidman, 156 F.3d at 547, we find no clear error by the district court in its determination that Gavegnano had no reasonable expectation of privacy in the unauthorized use of his government-issued laptop computer such that his Fourth Amendment rights were violated.

    Gavegnano’s Fifth Amendment claim, based on the fact that, after invoking his right to consult with an attorney, he was asked for, and revealed, the password to the computer, also fails. Any self-incriminating testimony that he may have provided by revealing the password was already a “foregone conclusion” because the Government independently proved that Gavegnano was the sole user and possessor of the computer. See United States v. Stone, 976 F.2d 909, 911 (4th Cir.1992) (quoting Fisher v. United States, 425 U.S. 391, 411, 96 S.Ct. 1569, 48 L.Ed.2d 39 (1976)).

    **2 [2] Next, Gavegnano challenges the district court’s taking of judicial notice of the court’s jurisdiction insofar as its failure to instruct the jury that it was not required to accept as conclusive any fact judicially noticed, as required by Fed.R.Evid. 201(g). Specifically, he takes issue with the district court’s judicial notice that Gavegnano was charged with crimes punishable by over a year in prison.

    Rule 201(a) limits the scope of Rule 201 to judicial notice of adjudicative, not legislative, facts. See Fed.R.Evid. 201(a) advisory committee notes. Here, the fact of which the district court took judicial notice, i.e., the penalty for the crimes with which Gavegnano was charged, is fixed, does not change from case to case, and applies to all cases in which those crimes were charged. Hence, it is a legislative, not an adjudicative fact. See, e.g., United States v. Williams, 442 F.3d 1259, 1261 (10th Cir.2006) (citations omitted) (“statutes are considered legislative facts” of which the authority of courts to take judicial notice is “unquestionable.”). Accordingly, the district court was under no obligation to follow the jury instruction requirement set out in Rule 201(g), and it  committed no reversible error in its failure to instruct the jury pursuant to Rule 201(g).

    In a related claim, Gavegnano also challenges the district court’s taking of judicial notice of the element that the crimes with which he was charged were punishable by more than one year in prison if committed in the United States, an element required under 18 U.S.C. s 3261, claiming that the court’s action precluded him from requiring that the Government prove each element of the charges against him beyond a reasonable doubt. He supports his argument by reference to Virginia state law statutes regarding obscene material that carry sentences of less than a year. He also asserts that one of the charges carried a penalty of “zero to five” years. His argument is without merit.

    First, as discussed above, the district court properly may take judicial notice of legislative facts, and such legislative facts include the interpretation of statutes. Fed.R.Evid. 201(a) advisory comm. notes. Moreover, the requirements of Rule 201(b) state that a “judicially noticed fact must be one that is either (1) generally known within the territorial jurisdiction of the trial court, or (2) capable of accurate and *957 ready determination by resort to sources whose accuracy cannot reasonably be questioned.” Here, the length of punishment is determined simply by reading the text of the statutes violated, each of which provide that violation of the statute is punishable by more than one year in prison.FN*

    FN* Counts One through Six of which Gavegnano was charged alleged a violation of 18 U.S.C. s 2252(a)(2), requiring a punishment of five to twenty years in prison. See 18 U.S.C. s 2252(b)(1) (2006). Count Seven, alleging a violation of 18 U.S.C. s 2252(a)(4), is punishable by up to ten years in prison. See s 2252(b)(2) (2006). Count Eight, alleging a violation of 18 U.S.C. s 1462 (2006), is punishable by up to five years in prison.

    Second, Gavegnano’s reliance on the fact that certain Virginia state statutes provide for punishment of less than a year for the receipt and possession of obscene material is misplaced, as Gavegnano was not charged under Virginia law, but rather under federal statutes for offenses that took place in Qatar. As it is undisputed that, on their face, the federal statutes under which Gavegnano was charged carried sentences of more than one year, the length of the relevant penalties cannot reasonably be questioned. Hence, the fact of that penalty properly was found by judicial notice.

    **3 Likewise without merit is Gavegnano’s contention that judicial notice was not proper  because one of the charges carried a penalty of “zero to five” years. As the crimes all were punishable by imprisonment for a term exceeding one year, the actual prison sentence imposed is not relevant to the determination of whether judicial notice in this case was proper. See e.g., United States v. Jones, 195 F.3d 205, 207 (4th Cir.1999).

    Gavegnano’s additional assertion, that by taking judicial notice the district court erroneously precluded him from requiring the Government to meet its burden of proof for the element of s 3251 requiring the alleged crimes to carry a prison sentence of over a year, is without merit. As the length of the penalty properly was a judicially noticed fact, the Government was without obligation to prove that element, and we find no error.

    [3] Gavegnano’s final claim on appeal is that the district court erred in admitting the forensic report which detailed the contents of the computer containing child pornography. His objection is based on his contention that the chain of custody for the computer had not been adequately established because other individuals handled the computer after it was taken away from him, such that tampering could have occurred.

    Pursuant to Fed.R.Evid. 901(a), a party introducing evidence is required to authenticate it with “evidence sufficient to support a finding that the matter in question is what its proponent claims.” The proper inquiry relating to chain of custody is whether the authentication testimony was sufficient to “convince the court that it is improbable that the original item had been exchanged with another or otherwise tampered with.” United States v. Howard-Arias, 679 F.2d 363, 366 (4th Cir.1982) (citation omitted). Chain of custody precision is not an “iron-clad requirement” and a “missing link does not prevent the admission of real evidence, so long as there is sufficient proof that the evidence is what it purports to be and has not been altered in any material aspect.” Id. (internal quotation marks and citation omitted). Once evidence is established that the item is what it is purported to be any “[r]esolution of whether evidence is authentic calls for a factual determination by the jury….” United States v. Branch, 970 F.2d 1368, 1370 (4th Cir.1992). It is the jury’s job to evaluate any defects in the chain of custody and accept or disregard evidence. *958United States v. Clonts, 966 F.2d 1366, 1368 (10th Cir.1992). The decision to admit evidence at trial is within the sound discretion of the  district court and we review for abuse of discretion. United States v. Jones, 356 F.3d 529, 535 (4th Cir.2004).

    Here, the Government satisfied its Rule 901(a) burden. Evidence was introduced that the forensic report contained information found on Gavegnano’s computer. Evidence was presented that matched the serial number for the computer subject to the forensic report with the computer and hard drive issued to Gavegnano. Gavegnano admitted that the computer placed into evidence, which was the same computer from which the files listed in the forensic report were taken, was the same one taken from him in Qatar. The Government introduced testimony by the man who saw pornography on Gavegnano’s computer before it was taken by the Government. There was no evidence or indication of any tampering with the computer between the time it was taken from Gavegnano and the time the forensic report was compiled. That others looked at or used Gavegnano’s computer during the time it was in custody, and the possibility that they may have tampered with the computer, was an issue for the jury to consider. See Branch, 970 F.2d at 1370. We find no abuse of the district court’s discretion when it found the Government had established a sufficient chain of custody and admitted the forensic report.

    **4 Accordingly, we affirm Gavegnano’s conviction and sentence. We dispense with oral argument because the facts and legal contentions are adequately presented in the materials before the court and argument would not aid the decisional process.

    AFFIRMED

    Continue reading →United States Court of Appeals, Fourth Circuit. UNITED STATES of America, Plaintiff-Appellee, v. Derek F. GAVEGNANO, Defendant-Appellant. No. 07-4579. Submitted: Oct. 28, 2008. Decided: Jan. 16, 2009. Background: Defendant was convicted in the United States District Court for the Western District of Virginia, Norman K. Moon, J., of receipt of child pornography, possession of child pornography, and importation or transportation of obscene matters, ...
  • U.S. v. Layton

    United States Court of Appeals,

    Fourth Circuit.

    UNITED STATES of America, Plaintiff-Appellee,

    v.

    Terry LAYTON, Defendant-Appellant.

    No. 07-4763.

    Argued: Dec. 5, 2008.

    Decided: April 27, 2009.

    Background: Defendant was convicted in the United States District Court for the Middle District of North Carolina, William L. Osteen, Senior District Judge, of possession of child pornography, and was sentenced to 97 months in prison.

    Holdings: The Court of Appeals, Smith, District Judge for the Eastern District of Virginia, sitting by designation, held that:

    (1) sentencing increases for child pornography depicting prepubescent minor, child pornography portraying sadistic or masochistic conduct, and possession of over six hundred images of child pornography were warranted;

    (2) use of peer-to-peer file-sharing program was”distribution,” within meaning of sentencing guideline providing for sentencing increase for distribution of child pornography;

    (3) sentencing increase for distribution of child pornography was warranted;

    (4) sentence was procedurally reasonable; and

    (5) sentence was substantively reasonable.

    Affirmed.

    OPINION

    SMITH, District Judge:

    For possession of child pornography, defendant Terry Layton (“Layton”) received a sentence of ninety-seven months, the lowest term of imprisonment recommended by the United States Sentencing Guidelines (“U.S.S.G.” or “Guidelines”). Layton argues that the district court improperly applied various sentencing enhancements, including an enhancement for distribution of child pornography, and imposed an unreasonable sentence. For the following reasons, we affirm the district court.

    I.

    On February 17, 2006, agents from the Federal Bureau of Investigation (“FBI”) searched Layton’s home computer, after an informant claimed to have seen Layton viewing child pornography on the computer. Layton voluntarily gave an interview to the FBI agents, which was later documented in an official report. During the interview, Layton admitted that he had downloaded about ten to fifteen images of *333 child pornography from the peer-to-peer file-sharing program WinMX. Using the same program, Layton also had created a shared folder called “My Music” that allowed others to download his files. The FBI agents reported that Layton admitted burning images of child pornography onto about a dozen compact discs and acknowledged there could be a few thousand images of child pornography on his computer. Layton also wrote a statement, witnessed by the FBI agents, in which he apologized for downloading and viewing child pornography.

    A forensic examination of Layton’s computer revealed over one thousand images of child pornography, many depicting prepubescent children and some containing sadomasochistic encounters. On October 31, 2006, Layton was indicted for possession of child pornography, in violation of 18 U.S.C. s 2252A(a)(5)(B) and (b)(2). Layton’s presentence report (“PSR”) calculated a criminal history category of I and a total offense level of thirty, resulting in an advisory Guidelines range of ninety-seven to one hundred twenty months imprisonment, the latter figure being capped at the statutory maximum. Before the sentencing hearing, Layton objected to various sentencing enhancements in the PSR. Layton conceded that all of the child pornography images were found on his computer, but asserted that he was not responsible for all of them being there.

    On July 18, 2007, the district court held a sentencing hearing. The district judge received two psychological evaluations of Layton, the PSR, and the report of Layton’s interview with the FBI agents. Moreover, the district judge heard testimony from Layton; his brother, Wayne Layton; and his friend, Jamie Griffin. All three claimed to have witnessed Jamie Cook, the FBI’s informant, looking at child pornography on Layton’s computer. Wayne Layton and Jamie Griffin also testified that they personally saw Layton viewing child pornography on Layton’s computer. Indeed, Layton testified-just as he had told the FBI agents-that he downloaded about ten to fifteen images of child pornography, but he claimed to have accidentally downloaded these images. Although testifying that he knew how to download and upload files from the internet, Layton denied knowing how to download from file-sharing programs. Layton claimed he never told the FBI agents that he burned child pornography onto compact discs, and he denied admitting that there could be a few thousand images of child pornography on his computer. According to Layton, Jamie Cook was responsible for all the child pornography downloads and compact discs-a fact that Layton claims to have told the FBI agents, although it was not included in their report of the interview.

    After hearing all testimony and receiving all exhibits, the district judge accepted his “obligation of determining what to do about the credibility in this case.” (J.A. 186.) FN1 The district judge found that Layton did tell the FBI agents that he burned child pornography onto compact discs and that there could be a few thousand images of child pornography on his computer. After considering all the evidence and making factual findings, the district court overruled Layton’s objections to the sentencing enhancements.

    FN1. Citations herein to “(J.A. —-.)” refer to the contents of the Joint Appendix filed by the parties in this appeal.

    Next, the district judge stated that he was “not bound to follow the recommendation of the Sentencing Guidelines,” recognizing*334 that the district court was “unfettered, so long as it finds reasonable and appropriate factors to remove someone from Guidelines, if that should become appropriate under the circumstances.” (J.A. 203-04.) The district judge specifically discussed the factors under 18 U.S.C. s 3553(a), as they applied to Layton. Finally, the district judge recognized his duty to impose a sentence “which is necessary, but not more than that which the Court finds is necessary[.]” (J.A. 206.) After weighing these considerations, the court sentenced Layton to ninety-seven months imprisonment. Judgment was entered on July 30, 2007, and Layton timely appealed.

    II.

    The Guidelines provide for enhancing a defendant’s base offense level in certain circumstances, thus increasing the corresponding advisory sentencing range. For instance, when a defendant possesses child pornography depicting a prepubescent minor or a minor under twelve years old, U.S.S.G. s 2G2.2(b)(2) applies, resulting in a two-level increase. When a defendant possesses child pornography portraying “sadistic or masochistic conduct or other depictions of violence,” U.S.S.G. s 2G2.2(b)(4) provides for a four-level increase. When the offense involves six hundred or more images of child pornography, U.S.S.G. s 2G2.2(b)(7)(D) applies, resulting in a five-level increase. Finally, when an offense involves certain distribution of child pornography, U.S.S.G. s 2G2.2(b)(3)(F) provides for a two-level increase.

    [1][2] In determining whether a district court properly applied the advisory Guidelines, including application of any sentencing enhancements, we review the district court’s legal conclusions de novo and its factual findings for clear error. E.g., United States v. Osborne, 514 F.3d 377, 387 (4th Cir.2008). The district court’s credibility determinations receive “great deference.” United States v. Feurtado, 191 F.3d 420, 424 n. 2 (4th Cir.1999).

    A.

    [3] The record shows that the district court properly applied the sentencing enhancements under U.S.S.G. s 2G2.2(b)(2), (4), and (7)(D) for the type and amount of child pornography that Layton possessed. Contrary to Layton’s argument that the district judge relied only on specious statements from an informant, the record shows that the court actually relied on Layton’s own incriminating statements to the FBI agents. Noting his “main concern is the statements [Layton] gave to the FBI,” the district judge found that Layton told the FBI agents that there could be a few thousand images of child pornography on his computer. (J.A. 179.)

    We give the district court’s credibility determinations “great deference,” Feurtado, 191 F.3d at 424 n. 2, and find no clear error in its factual finding, based on Layton’s interview with, and the resulting report of, the FBI agents, that Layton admitted he had a few thousand images of child pornography on his computer. No party contests that some of these images depicted prepubescent children; children under twelve years old; and sadistic, masochistic, or violent behavior. Thus, we find that the sentencing enhancements for the type and amount of child pornography were properly applied.

    B.

    Because of the file-sharing program installed on Layton’s computer, the district court applied a sentencing enhancement for distribution of child pornography. Under U.S.S.G. s 2G2.2(b)(3)(F), a defendant’s*335 offense level is increased by two levels for distribution of child pornography that is not to minors and is not for money or other things of value. The term “distribution” is broadly defined as “any act, including possession with intent to distribute, production, advertisement, and transportation, related to the transfer of material involving the sexual exploitation of a minor.” U.S.S.G. s 2G2.2 cmt. n.1.

    While this circuit has not addressed whether use of a peer-to-peer file-sharing program qualifies as distribution, other circuits have found that it does. The Seventh Circuit upheld a distribution enhancement where a defendant downloaded child pornography through a file-sharing program, since defendant’s choice to “knowingly [make] his child pornography available for others to access and download” fell within the plain meaning of “distribution.” United States v. Carani, 492 F.3d 867, 875-76 (7th Cir.2007). The Seventh Circuit found the passive nature of a file-sharing program “irrelevant.” Id. at 876.

    Similarly, the Eighth Circuit upheld a distribution enhancement for a defendant who  downloaded child pornography from a file-sharing program and knew that others could download these files from his computer. See United States v. Griffin, 482 F.3d 1008, 1010-12 (8th Cir.2007). Likewise, the Eleventh Circuit affirmed an enhancement for distributing child pornography through a file-sharing program. See United States v. Mathenia, 409 F.3d 1289, 1290 (11th Cir.2005).

    [4] We concur with the Seventh, Eighth, and Eleventh Circuits and hold that use of a peer-to-peer file-sharing program constitutes “distribution” for the purposes of U.S.S.G. s 2G2.2(b)(3)(F). When knowingly using a file-sharing program that allows others to access child pornography files, a defendant commits an act “related to the transfer of material involving the sexual exploitation of a minor.” U.S.S.G. s 2G2.2 cmt. n.1.

    [5] Based on its factual findings, with which we find no clear error, the district court properly applied the enhancement for distribution of child pornography. Layton told the FBI agents that as a member of WinMX, a file-sharing program, “he created a shared folder called ‘My Music’ with privileges that allowed other people to download files that he put into the folder.” (J.A. 270.) He also wrote a statement, witnessed by the FBI agents, that he downloaded child pornography from WinMX. Giving the district judge’s credibility determinations great deference, we find no clear error in the facts found from the record to support a distribution enhancement. Because Layton created and used a shared folder that he knew others could access to download his child pornography files, FN2 the district court properly applied a two-level sentencing enhancement for distribution under U.S.S.G. s 2G2.2(b)(3)(F).

    FN2. Even if Layton did not know how to disable the sharing feature of WinMX, his deliberate creation of a shared folder that he knew others could access falls within the broad definition of “distribution.” See U.S.S.G. s 2G2.2 cmt. n.1 (” ‘Distribution’ means any act … related to the transfer of material involving the sexual exploitation of a minor.”).

    III.

    [6][7][8][9] We review the district court’s sentence under an abuse of discretion standard. United States v. Curry, 523 F.3d 436, 439 (4th Cir.2008). Our review involves a two-part inquiry, which first examines any significant procedural error committed by the district court and then considers the substantive reasonableness of the sentence imposed. Id. A district court commits a procedural error if it fails *336 to properly calculate the Guidelines, treats the Guidelines as mandatory, fails to consider the statutory factors under 18 U.S.C. s 3553(a), bases a sentence on facts that are clearly erroneous, or fails to adequately explain the sentence imposed. Gall v. United States, 552 U.S. 38, 128 S.Ct. 586, 597, 169 L.Ed.2d 445 (2007). If no significant procedural error is committed, we then examine the sentence for substantive reasonableness “in light of all relevant facts.” Curry, 523 F.3d at 439.

    A.

    [10] Layton challenges the sentencing procedures employed by the district court in imposing his sentence, but the record shows that the district court adhered to the necessary procedural requirements. After hearing all evidence and argument, the district judge properly calculated Layton’s advisory Guidelines range to be ninety-seven to one hundred twenty months imprisonment. Next, the district judge gave Layton an opportunity to present further evidence or argument on the “appropriate disposition.” (J.A. 193.) Layton declined, resting on the evidence already presented. After the district judge asked whether “you wish to make any further comment on the fact that the Sentencing Guidelines is a recommendation to the Court and it is not bound by that, but certainly must consider it, and must also consider 3553,” defense counsel offered further argument. (J.A. 194.) The district court also heard from the government and listened to Layton’s allocution before imposing sentence.

    The district judge stated that, after considering the s 3553(a) factors and the advisory Guidelines range, he would “enter what is called a reasonable sentence.” (J.A. 34-35.) Based on this single remark, Layton contends on appeal that the district court improperly sought to fashion a “reasonable sentence,” rather than a sentence “sufficient, but not greater than necessary,” to achieve the goals of 18 U.S.C. s 3553(a). The record shows otherwise: the district judge expressly stated that “a sentence should be that which is necessary, but no more than that which the Court finds is necessary, and the Court is well aware of that.” (J.A. 206.) To fashion a sentence sufficient, but not greater than necessary, the district court considered the evidence presented, the advisory Guidelines range, and the s 3553(a) factors. Specifically, the district judge addressed the nature and circumstances of the offense, Layton’s history and characteristics, the need to protect the public from his further crimes, the seriousness of the offense, promoting respect for the law, and providing just punishment. Thus, the district court selected a sentence that served the s 3553(a) factors and provided a detailed explanation of the appropriate sentence before imposing it. Layton’s attempt to characterize the district judge’s use of the phrase “reasonable sentence” as a procedural error is misleading, as it isolates the statement and takes it out of context. As such, Layton’s contention is without merit.

    Nor does any evidence in the record suggest that the district judge presumed an advisory Guidelines sentence to be reasonable. See Nelson v. United States, — U.S. —-, 129 S.Ct. 890, 892, 172 L.Ed.2d 719 (2009) (“The Guidelines are not only not mandatory on sentencing courts; they are also not to be presumed reasonable.”) (emphasis in original); see also Spears v. United States, — U.S. —-, 129 S.Ct. 840, 172 L.Ed.2d 596 (2009) (explaining that the Sentencing Guidelines cannot be used as a substitute for a court’s independent determination of a just sentence based upon consideration of the statutory sentencing factors). Indeed, after noting *337 “the Court is not bound to follow the recommendation of the Sentencing Guidelines,” the district judge asserted that the court was “unfettered, so long as it finds reasonable and appropriate factors to remove someone from Guidelines, if that should become appropriate under the circumstances.” (J.A. 203-04.) The district judge explained that while he “does not always agree with the Guidelines … in this case, I find no particularly persuasive treatises or argument or comment that would indicate that the ninety-seven or one hundred twenty months range is inappropriate.” (J.A. 204.) To the extent that the district judge found the Guidelines range to be appropriate, he arrived at that conclusion independently, rather than by relying on a presumption.

    Layton has not shown any procedural error in his sentencing. The district judge properly determined the advisory Guidelines range, considered and discussed the s 3553(a) factors, and then fashioned an appropriate sentence, based on his independent judgment, imposing a sentence at the bottom of the Guidelines range. As the record illustrates, the district court understood and complied with proper sentencing procedures.

    B.

    [11] Finally, the sentence imposed by the district court was not substantively unreasonable “in light of all the relevant facts.” Curry, 523 F.3d at 439. After calculating Layton’s advisory Guidelines range, the district court carefully considered the s 3553(a) factors before fashioning a sentence that would be sufficient, but not greater than necessary, to meet the sentencing factors. See supra Part III.A. While Layton argues that his history and characteristics could support a lower sentence, the district court fully considered this factor and other s 3553(a) factors, in conjunction with the PSR, Layton’s psychological evaluations, arguments from both sides, and Layton’s statement, before deciding that the lowest sentence recommended by the Guidelines was appropriate in this case. In light of the court’s factual findings, in which we find no clear error, we hold that the court imposed a reasonable sentence of ninety-seven months imprisonment.

    IV.

    For the above reasons, the judgment of the district court is

    AFFIRMED.

    Continue reading →United States Court of Appeals, Fourth Circuit. UNITED STATES of America, Plaintiff-Appellee, v. Terry LAYTON, Defendant-Appellant. No. 07-4763. Argued: Dec. 5, 2008. Decided: April 27, 2009. Background: Defendant was convicted in the United States District Court for the Middle District of North Carolina, William L. Osteen, Senior District Judge, of possession of child pornography, and was sentenced to 97 months in prison. Holdings: The ...
  • U.S. v. Wadford

    United States Court of Appeals,

    Fourth Circuit.

    UNITED STATES of America, Plaintiff-Appellee,

    v.

    Kelly Edward WADFORD, Jr., Defendant-Appellant.

    No. 08-4423.

    Argued: March 26, 2009.

    Decided: June 10, 2009.

    Background: In prosecution for a number of federal offenses, defendant pleaded guilty to two firearms counts, and a jury in the United States District Court for the District of South Carolina, Patrick Michael Duffy, J., found him guilty of the remaining nine counts. Defendant appealed.

    Holdings: The Court of Appeals, Shedd, Circuit Judge, held that:

    (1) evidence that the computers defendant accessed were “protected computers” was sufficient to support conviction for attempted computer fraud;

    (2) evidence was sufficient to support conviction for attempted possession of flunitrazepam, a “date rape” drug, with intent to distribute;

    (3) substantial evidence supported finding that an unlawful purpose was a dominant purpose of the trip on which defendant brought his co-worker, as required in prosecution for a Mann Act violation;

    (4) evidence that two e-mails were transmitted in either interstate or foreign commerce was sufficient to support conviction on two counts of sending threatening e-mails; but

    (5) evidence was not sufficient to show that third e-mail was transmitted in either interstate or foreign commerce.

    Affirmed in part, vacated in part, and remanded.

    SHEDD, Circuit Judge:

    **1 The United States filed an eleven-count superseding indictment against Kelly Wadford Jr., charging him with a number of federal offenses. The indictment included charges that Wadford slipped a date rape drug into a co-worker’s drink while they were on an interstate business trip and then took photographs of her partially naked. The indictment further alleged that Wadford unlawfully accessed protected computers and sent false, fraudulent, and threatening e-mails in interstate or foreign commerce to co-workers and attached copies of the photographs. Wadford pled guilty to two of the counts, and a federal jury found him guilty of the remaining nine counts. Wadford now appeals, challenging the sufficiency of the evidence with respect to Counts One *200 through Seven of the indictment. For the following reasons, we affirm in part, vacate in part, and remand for further proceedings.

    I

    Viewing the evidence in the light most favorable to the government, see Glasser v. United States, 315 U.S. 60, 80, 62 S.Ct. 457, 86 L.Ed. 680 (1942), the evidence at trial establishes the following. Wadford worked in South Carolina as a manager of Pumps America, a company which distributed electric water pumps throughout the United States. Pumps America is a subsidiary of Leader Pumps, an Italian manufacturer of electric water pumps. Pumps America employees used the company’s computers in South Carolina to communicate with employees located in Italy, and employees in Italy used the company’s computers to access electronic information stored in South Carolina.

    In January 2005, Wadford hired a woman (hereinafter, the “co-worker”) as a sales representative for Pumps America. In March 2005, Wadford purchased approximately 250 tablets of Rohypnol from a pharmacy in Brazil. Rohypnol, which is illegal in the United States, is a brand name for the drug flunitrazepam. It is known as a “date rape drug” because it has been secretly given to individuals to facilitate sexual assaults.FN1

    FN1. Flunitrazepam is a strong central nervous system depressant which causes extreme sleepiness and amnesia. It is water-soluble, tasteless, and odorless.

    On April 11, 2005, Wadford and the co-worker left South Carolina by car on a multi-day interstate sales trip. Wadford selected the customers they would visit ahead of time, and he brought one or more Rohypnol tablets with him. The next day, after meeting with a customer in Ohio, Wadford and the co-worker stopped for gas, and he offered to get her a drink. Wadford went into a store and returned with a fountain soda for her. Wadford put flunitrazepam in her drink without her knowledge. She consumed the drink and shortly thereafter became nauseated.

    When they arrived at a hotel later that day, Wadford checked them into separate rooms and then helped the co-worker into her room. The next thing she remembered is waking up the next morning. Unbeknownst to her, Wadford had entered her hotel room during the night and had taken photographs of her naked from the waist down.

    Over a year later, in May 2006, someone sent an anonymous e-mail to Pumps America’s parent company in Italy, complaining that Wadford was sexually harassing employees. The company initiated an internal investigation and began interviewing employees about the allegations. The co-worker and her fellow employees, Mary Brown and Vicki Hilderbrand, were among those interviewed. Wadford was fired sometime in June 2006.

    **2 During May and June 2006, Wadford accessed the work e-mail accounts of Hilderbrand and Brown and sent a series of unauthorized e-mails under their names in an effort to disguise his identity. In the e-mails, Wadford sent copies of the photographs and threatened Pumps America employees in an effort to get them to retract allegations about him so he could retain or get his job back. Three of the e-mails are particularly relevant to this appeal.

    On May 20, Wadford sent an e-mail from Hilderbrand’s work e-mail account to Brown’s work e-mail account, and it contained the following text: “Mary, If you care about the long term future of your grandkids you should tell the truth and *201 resign from the company.” J.A. 661-62. It was signed “Vicki.” Id. The government introduced the expanded header information for this e-mail into evidence.FN2 The expanded header included data about the route the e-mail took from sender to recipient. When coupled with other evidence presented at trial, including the expert testimony of an FBI computer forensic examiner, the header information shows that the e-mail was sent from Wadford’s home in South Carolina and travelled through a Leader Pumps server located in Italy before it was received by Brown back in South Carolina. This e-mail serves as the basis for Count Five of the indictment.

    FN2. E-mails usually display partial header information which reveals the basic to/from information, the date, and the subject line of the e-mail. However, users can access an e-mail’s extended header information which contains additional information, such as the Internet Protocol addresses associated with the sender and recipient and information about the servers that processed the e-mail.

    On June 20, Wadford sent an e-mail from Hilderbrand’s work e-mail account to her personal e-mail account, which ended in “@aol.com.” This e-mail contained the following text: “If you wish to ensure the long term welfare of evryone [sic] close to you, you should consider telling the truth and resign from your position,” J.A. 664, and it serves as the basis for Count Six. Like the e-mail underlying Count Five, the government introduced the expanded header information for this e-mail. The evidence indicates that Wadford sent this e-mail from his home in South Carolina and that Hilderbrand received it in South Carolina. Unlike the Count Five e-mail, however, this one did not pass through the company’s server in Italy because Wadford sent it to Hilderbrand’s personal e-mail account. Instead, the e-mail passed through servers owned or operated by various companies, including America Online (“AOL”).FN3 While the expanded header information appears to contain data about the AOL servers through which the e-mail passed, the government did not introduce any evidence regarding the location of those servers or the specific route this e-mail travelled. The government’s computer forensic examiner testified that the Internet is basically a group of computers and servers acting together, but the government did not ask, and the expert did not offer, any opinion on whether an e-mail sent from South Carolina to an “@aol. com” address which was received in South Carolina could or would travel outside the state.

    FN3. AOL provides a number of online communications tools, such as e-mail, news groups, and chat rooms, that allow its subscribers to communicate with one another and with other users over the Internet.

    Also on June 20, Wadford sent an e-mail from Brown’s work e-mail account to Hilderbrand’s work e-mail account and from there forwarded the e-mail to the co-worker’s work e-mail account. Wadford attached three photographs he took of the co-worker during their April 2005 sales trip showing her naked from the waist down. The e-mail contained the following text: “there are 137 more like these but better. To prevent widespread distribution, you need to contact the one you have wronged.” J.A. 659-60. It was signed “Vicki.” Id. The expanded header information and other evidence in the record establishes that Wadford sent this e-mail from his home in South Carolina and it travelled through a company server in Italy before being received by the co-worker back in South Carolina. This e-mail serves as the basis for Count Seven.

    *202 **3 As noted, the government filed an eleven-count superseding indictment against Wadford.FN4 After he pled guilty to two firearm possession counts, a federal jury found him guilty of the remaining nine counts. At the close of the government’s case, Wadford moved for a judgment of acquittal under Fed.R.Crim.P. 29 based on insufficiency of the evidence, and he renewed the motion at the close of all evidence and after the jury returned its verdict. The district court denied Wadford’s motions and sentenced him to a total term of 180 months imprisonment. This appeal followed.

    FN4. After the grand jury returned an eight-count indictment against Wadford, he was released on bond pending trial. Approximately two weeks later, a police officer on patrol spotted Wadford on the same street where the co-worker lived. Wadford was wearing a black mask, a hooded sweatshirt, and gloves. He was also carrying a backpack. When the officer stopped Wadford and examined the contents of his backpack, the officer found a handgun with the safety off and a bullet in the chamber. The officer also found Rohypnol tablets in Wadford’s car, which was parked nearby. The government then filed the superseding indictment, which included three additional charges based on Wadford’s post-indictment conduct: possession of a firearm by a felon in violation of 18 U.S.C. ss 922(g)(1), 924(a)(2), 924(e), and 3147(1); attempted witness tampering in violation of 18 U.S.C. ss 1512(a)(2)(A) and 3147(1); and carrying a firearm during and in relation to his attempt to tamper with a witness in violation of 18 U.S.C. s 924(c)(1).

    II

    Wadford argues that the district court erred by denying his Rule 29 motion. In particular, he argues that we should vacate his convictions on Counts One through Seven because certain elements of the offenses charged in those counts are not supported by substantial evidence.

    We review the district court’s decision to deny a Rule 29 motion for judgment of acquittal de novo. United States v. Gallimore, 247 F.3d 134, 136 (4th Cir.2001). Where, as here, the motion was based on a claim of insufficient evidence, “[t]he verdict of a jury must be sustained if there is substantial evidence, taking the view most favorable to the Government, to support it.” Glasser, 315 U.S. at 80, 62 S.Ct. 457. Substantial evidence is evidence which “a reasonable finder of fact could accept as adequate and sufficient to support a conclusion of a defendant’s guilt beyond a reasonable doubt.” United States v. Burgos, 94 F.3d 849, 862 (4th Cir.1996) (en banc). In evaluating the sufficiency of the evidence, we do not review the credibility of the witnesses, and we assume that the jury resolved all contradictions in the testimony in favor of the government. United States v. Sun, 278 F.3d 302, 313 (4th Cir.2002). In addition, we consider circumstantial and direct evidence, and allow the government the benefit of all reasonable inferences. United States v. Tresvant, 677 F.2d 1018, 1021 (4th Cir.1982).

    A.

    In Count One, the government charged Wadford with attempted computer fraud in violation of 18 U.S.C. ss 1030(a)(4) and 1030(b). As an element of the offense, the government must show that Wadford accessed or attempted to access a “protected computer,” 18 U.S.C. s 1030(a)(4), which includes a computer “used in or affecting interstate or foreign commerce or communication,” id. s 1030(e)(2)(B).

    [1][2] Wadford argues that his conviction on Count One should be vacated because there is no evidence that the computers in question were “protected computers.” We disagree. The evidence adduced at trial indicates that the company’s computers were used by employees in South Carolina to communicate*203 with employees in Italy and that employees in Italy used the computers to access electronic data stored in South Carolina. Viewing this evidence in the light most favorable to the government, we conclude that substantial evidence supports the jury’s verdict because the computers were used in foreign communication. See, e.g., Cable & Wireless P.L.C. v. FCC, 166 F.3d 1224, 1231 (D.C.Cir.1999) (recognizing that Congress has defined the phrase “foreign communication” as a ” ‘communication or transmission from or to any place in the United States to or from a foreign country’ “).FN5

    FN5. Wadford also argues that the jury’s verdict on Count Two, which alleged aggravated identity theft in violation of 18 U.S.C. s 1028A(a)(1) could not be sustained because it was dependent upon a valid finding of guilt on Count One. Because we reject Wadford’s argument regarding Count One, we find that his argument regarding Count Two is also without merit.

    B.

    **4 [3] In Count Three, the government charged Wadford with attempted possession of flunitrazepam with intent to distribute it in violation of 21 U.S.C ss 841(a)(1), 841(b)(1)(D), and 846. Wadford argues that his conviction under Count Three should be vacated because there is no evidence that he intended to distribute the flunitrazepam. However, viewing the evidence in the light most favorable to the government, including the evidence that Wadford purchased approximately 250 tablets containing flunitrazepam before his April 2005 trip with the co-worker, brought one or more of the tablets with him on the trip, and then placed the drug in her drink, we conclude that substantial evidence supports this element of the charged offense.

    C.

    In Count Four, the government charged Wadford with violating the Mann Act, 18 U.S.C. s 2422(a), which generally prohibits a person from coercing or inducing another to travel in interstate commerce to engage in unlawful sexual activity. Wadford argues that the evidence is insufficient to support a finding that he induced the co-worker to travel in interstate commerce to engage in unlawful sexual activity. Specifically, he argues that the evidence shows that they left South Carolina on a legitimate business trip and, at most, he drugged and photographed the co-worker entirely within Ohio. We disagree.

    [4] To establish a violation of the Mann Act, the government does not need to establish that an unlawful purpose was the sole factor motivating Wadford’s interstate travel. Some courts have sustained Mann Act convictions where the unlawful purpose was simply one of the purposes motivating the interstate travel while other courts have required the unlawful purpose to be the dominant purpose. See, e.g., United States v. Vang, 128 F.3d 1065, 1071 (7th Cir.1997). The evidence in this case tends to prove that Wadford purchased the flunitrazepam approximately two months after he hired the co-worker and one month before he went on the April 2005 interstate trip with her. The evidence also indicates that Wadford decided where they would travel on their trip, took one or more tablets containing flunitrazepam with him on the trip, slipped the drug into her drink, and then took photographs of her naked while she was under the influence of the drug. Viewed in the light most favorable to the government, we conclude that substantial evidence supports a finding that an unlawful purpose was not only one *204 of the purposes motivating Wadford’s interstate travel but a dominant purpose.

    D.

    In Counts Five, Six, and Seven, the government charged Wadford with sending three threatening e-mails in violation of 18 U.S.C. ss 875(b) and (d). Wadford argues that substantial evidence does not support a finding that the e-mails underlying these counts were transmitted in either interstate or foreign commerce as required by ss 875(b) and (d). As set forth below, we find that substantial evidence supports the jury’s verdict with respect to Counts Five and Seven, but not Count Six.

    **5 A conviction under either ss 875(b) or (d) requires the government to prove that the threatening communication was transmitted “in interstate or foreign commerce.” 18 U.S.C. s 875(b) (emphasis added); id. s 875(d). The emphasized language is important because “Congress uses different modifiers to the word ‘commerce’ in the design and enactment of its statutes.” Circuit City Stores, Inc. v. Adams, 532 U.S. 105, 115, 121 S.Ct. 1302, 149 L.Ed.2d 234 (2001). For example, “[t]he phrase ‘affecting commerce’ indicates Congress’ intent to regulate to the outer limits of its authority under the Commerce Clause.” Id. In contrast, the words in commerce are “understood to have a more limited reach.” Id. Courts have repeatedly held that the in commerce formulation requires that the communication actually cross a state or national border. See, e.g., United States v. Lewis, 554 F.3d 208, 212-14 (1st Cir.2009); United States v. Schaefer, 501 F.3d 1197, 1200-02 (10th Cir.2007); Smith v. Ayres, 845 F.2d 1360, 1366 (5th Cir.1988). Consistent with these cases, we find that ss 875(b) and (d) require as an element of the offenses that the communication cross a state or national border. This element can be established by either direct or circumstantial evidence.

    [5] With respect to the e-mail Wadford sent to Brown’s work e-mail address and the e-mail he sent to Hilderbrand’s and the co-worker’s work e-mail addresses-i.e., those underlying Counts Five and Seven-we find that substantial evidence supports a finding that they were transmitted in interstate or foreign commerce. As noted above, the evidence indicates that these e-mails were sent from South Carolina and travelled through servers located in Italy before they were received by these employees back in South Carolina.

    [6] We reach a different conclusion with respect to the e-mail underlying Count Six-the e-mail Wadford sent to Hilderbrand’s personal “@aol. com” e-mail address-because substantial evidence does not support a finding that this e-mail was transmitted in interstate or foreign commerce. The government concedes that there is no direct evidence on this point, and we discern no circumstantial evidence in this record which would allow a reasonable juror to infer that the e-mail crossed a state or national border.FN6 Therefore, we agree with Wadford that his conviction on Count Six must be vacated. FN7

    FN6. We recognize that other courts have found that e-mails sent to an “@aol. com” address always pass through AOL servers located in Virginia before arriving at their final destination. See, e.g., Jaynes v. Commonwealth, 276 Va. 443, 666 S.E.2d 303, 307 (2008). However, the government acknowledges that the record in this case is silent on the location of AOL’s servers. Moreover, the government asserted at oral argument that it would not be appropriate to take judicial notice that AOL’s servers are located in Virginia.

    FN7. It appears that vacating Wadford’s conviction on Count Six will not alter his length of imprisonment. The district court sentenced Wadford to a 70-month prison term on Count Six, but this term was to run concurrently with at least one other 70-month prison term.

    *205 III

    For the foregoing reasons, we affirm the district court in part, vacate in part, and remand for further proceedings consistent with this opinion.

    AFFIRMED IN PART, VACATED IN PART, AND REMANDED.

    Continue reading →United States Court of Appeals, Fourth Circuit. UNITED STATES of America, Plaintiff-Appellee, v. Kelly Edward WADFORD, Jr., Defendant-Appellant. No. 08-4423. Argued: March 26, 2009. Decided: June 10, 2009. Background: In prosecution for a number of federal offenses, defendant pleaded guilty to two firearms counts, and a jury in the United States District Court for the District of South Carolina, Patrick Michael Duffy, J., ...
  • U.S. v. Gatherum

    United States Court of Appeals,

    Fourth Circuit.

    UNITED STATES of America, Plaintiff-Appellee,

    v.

    Dean R. GATHERUM, Defendant-Appellant.

    No. 08-4683.

    Argued: March 27, 2009.

    Decided: July 7, 2009.

    Background: Defendant pleaded guilty, in the United States District Court for the Southern District of West Virginia, Thomas E. Johnston, J., to possession of child pornography. He appealed.

    Holdings: The Court of Appeals, Traxler, Circuit Judge, held that:

    (1) officers reasonably relied on search warrant despite absence from the affidavit of a detailed description of the conduct pictured in the images observed on defendant’s computer;

    (2) omission from affidavit, of information that the website from which images were downloaded carried a disclaimer asserting that all of its models were at least 18 years old, did not require voiding of the warrant; and

    (3) failure to inform defendant of outstanding arrest warrants before interviewing him did not render his statements involuntary.

    Affirmed.

    TRAXLER, Circuit Judge:

    **1 Dean Gatherum pleaded guilty to possession of child pornography, preserving his right to appeal the district court’s denial of his motions to suppress. Because we find no error in the district court’s rulings, we affirm Gatherum’s conviction.

    I.

    Gatherum registered as a sex offender in accordance with West Virginia law, and two state troopers went to his house to confirm information he provided when registering. Gatherum indicated when he registered that he had a personal computer with internet access. While the officers were at Gatherum’s home, they asked Gatherum for consent to search his computer. Gatherum agreed and signed a consent form provided to him by Trooper Eldridge.

    Eldridge used a program that permitted him to browse the computer files and view video and images stored on Gatherum’s computer. Eldridge viewed a series of “thumbnail” previews of images that featured three males standing in a wooded area. The progressing images showed the men removing their clothes and engaging in sexual activity. While two of the men appeared to be more than 18 years old, the third appeared to Eldridge to be between 12 and 14 years old. Eldridge sought Trooper Summers’s opinion, and he, too, believed that the third male was between 12 and 14 years old.

    Eldridge told Gatherum that he believed the images were child pornography and that he was going to use the images as the *273 basis for seeking a search warrant. When Eldridge described the pictures at issue to Gatherum, Gatherum explained that he had gotten the pictures from a website called “Mike18.com” and that the website had a disclaimer stating that all of the models were at least 18 years old. (Each of the images had a Mike18.com logo in the corner, although Eldridge was not aware of that fact at the time). Eldridge refused Gatherum’s offer to log-on to Mike18.com to show the troopers the age certification for the model the troopers believed to be underage.

    At the troopers’ request, Gatherum accompanied them to the state police barracks for further questioning. Gatherum continued to maintain that the images all came from the Mike18.com website, and Gatherum told the troopers that the website included a picture of the apparently underage model holding a passport that showed his birth date.

    After interviewing Gatherum, Eldridge prepared an application for a warrant to search for child pornography. In the affidavit supporting the application, Eldridge set forth in a fair amount of detail the specialized training he had received in “computer forensics, criminal use of computers and the Internet and the investigation of matters concerning child sexual exploitation,” J.A. 573, and the affidavit noted that Gatherum was a registered sex offender. With regard to the facts gathered during Eldridge’s search of the computer, the affidavit stated:

    [T]he affiant conducted a secure preview of Dean Gatherum’s home computer. During this preview, the affiant observed that Dean Gatherum’s computer had numerous graphic picture files of three male[s] engaged in sexually explicit conduct. The affiant further observed that one of the males depicted in these pictures appeared to be approximately 12 to 14 years of age. The affiant further observed that Corporal Summers examine[d] these picture files, in which he too agreed that the one of the male subjects participating in the pictures appeared to be 12 to 14 years old.

    **2 The affiant brought these pictures to Dean Gatherum’s attention, in which he advised that he had obtained them from a web site on the Internet.

    J.A. 581-82. The affidavit did not include copies of the images themselves or otherwise describe the nature of the sexually explicit conduct pictured, nor did the affidavit recount Gatherum’s claim about the age-disclaimer on Mike18.com.

    A state-court judge concluded that the affidavit established probable cause, and the search warrant was issued and executed that day. Gatherum’s computer was seized, as were a number of CD-ROMs that were found under Gatherum’s bed. Images on those CD-ROMs led to the child pornography charge to which Gatherum pleaded guilty.

    The day after the search warrant was executed, Gatherum was admitted to a hospital for an in-patient psychiatric evaluation. Four days later, Trooper Eldridge learned that Gatherum was to be discharged. Eldridge went to the hospital and asked if Gatherum would return to the police barracks for another interview. Gatherum agreed. Eldridge did not tell Gatherum that he had already obtained warrants for Gatherum’s arrest (based on the images found on the CD-ROMs).

    At the police barracks, Trooper Smith advised Gatherum of his Miranda rights before the interview began. Smith told Gatherum that he was not under arrest and was free to leave at any time, without mentioning the arrest warrants. Gatherum signed a form waiving his rights, and Smith began the interview. When Gatherum started making incriminating statements,*274 Smith brought Eldridge into the room. Eldridge reviewed  the Miranda form with Gatherum and reaffirmed that Gatherum was not under arrest, again without mentioning the outstanding arrest warrants. During the interview, Gatherum admitted that the CD-ROMs contained images of child pornography. As soon as the interview was over, Eldridge arrested Gatherum on the outstanding warrants.

    Gatherum moved to suppress the evidence seized pursuant to the search warrant and the statements he gave upon his release from the hospital. The district court denied the motions, concluding that Eldridge’s affidavit supporting the search warrant application was sufficient to establish probable cause, that there were no material omissions in the affidavit that would invalidate the warrant, and that Gatherum was not coerced into giving the post-hospitalization statements. This appeal followed.

    II.

    We first consider Gatherum’s challenges to the search warrant.

    A.

    West Virginia law prohibits the possession of “material visually portraying a minor engaged in sexually explicit conduct.” W. Va.Code Ann. s 61-8C-3. FN1 Gatherum contends that because Eldridge’s affidavit did not include copies of the thumbnail images at issue or describe the nature of the images in any detail, there was no basis for the issuing judge to find probable cause that a minor was involved or that the minor was engaging in sexually explicit conduct.

    FN1. Although Gatherum pleaded guilty to federal charges, he was initially arrested on state charges. The federal statute is similar to the state statute. See 18 U.S.C.A. s 2252A(a)(5)(B).

    **3 Preliminarily, we reject any suggestion that a search-warrant affidavit must include copies of images giving rise to the request for a warrant. See United States v. Lowe, 516 F.3d 580, 586 (7th Cir.2008) (“As a general matter, an issuing court does not need to look at the images described in an affidavit in order to determine whether there is probable cause to believe that they constitute child pornography.”). Including copies of the images believed to be child pornography would certainly aid in a probable-cause determination, but the relevant question is whether “the known facts and circumstances are sufficient to warrant a man of reasonable prudence in the belief that contraband or evidence of a crime will be found in a particular place.” United States v. Perez, 393 F.3d 457, 461 (4th Cir.2004) (internal quotation marks omitted). The probable-cause standard “is not defined by bright lines and rigid boundaries. Instead, the standard allows a magistrate judge to review the facts and circumstances as a whole and make a common sense determination of whether there is a fair probability that contraband or evidence of a crime will be found in a particular place.” United States v. Grossman, 400 F.3d 212, 217 (4th Cir.2005) (internal quotation marks omitted). Given the fluid nature of the probable-cause standard and the deference to which the magistrate’s determination is entitled, see id., we see no reason to establish a bright-line rule requiring investigating officers to provide magistrates with copies of the images they believe to be unlawful. Cf. New York v. P.J. Video, 475 U.S. 868, 874 n. 5, 106 S.Ct. 1610, 89 L.Ed.2d 871 (1986)

    (“[W]e have never held that a magistrate must personally view *275 allegedly obscene films prior to issuing a warrant authorizing their seizure.”).

    [1] We turn now to the ultimate question of whether the affidavit in this case was sufficient to support the issuance of the search warrant. As previously noted, the affidavit stated that Trooper Eldridge and Trooper Summers viewed the images at issue and that both believed one of the males pictured was between 12 and 14 years old. In our view, it was entirely reasonable for the magistrate to accept the officers’ estimation of the child’s age when determining whether probable cause existed. While some 16- or 17-year-old models might be difficult to distinguish from 18-year-olds, the physical differences between a 12-year-old model and an 18-year-old model generally would be significant and readily apparent. That both troopers believed the model at issue might be so young provided the magistrate with a reasonable basis for concluding that the images at issue involved a minor. See United States v. Battershell, 457 F.3d 1048, 1053-54 (9th Cir.2006) (finding affidavit sufficient in child pornography case where officer described images as depicting “young female[s] (8-10 YOA)” and noting that “we have accepted, for purposes of an affidavit in support of a search warrant, the conclusory age estimates made by civilians and other untrained lay witnesses without demanding a detailed explanation of how the witnesses reached that conclusion”). We therefore conclude that the information in the affidavit was sufficient to establish a fair probability that the images at issue depicted a minor.

    **4 The more difficult question, however, is whether the affidavit was likewise sufficient to establish that the minor was engaged in sexually explicit conduct. Trooper Eldridge stated in his affidavit that he had viewed “graphic picture files” showing three males, including one he believed to be a minor, engaging in “sexually explicit conduct.” J.A. 581. Although the statute prohibits the possession of material depicting minors engaged in sexually explicit conduct, the statute specifically defines the acts that constitutes sexually explicit conduct, such as sexual intercourse or the exhibition of genitals in a sexual context. See W. Va.Code s 61-8C-1(c); see also 18 U.S.C.A. ss 2256(2)(A)(i), 2256(2)(A)(v) (West Supp.2009). Because the affidavit did not include any description of the actual behavior depicted in the images at issue, it may be that the affidavit failed to provide sufficient information to permit the magistrate to make an independent determination of whether probable cause existed. See Illinois v. Gates, 462 U.S. 213, 239, 103 S.Ct. 2317, 76 L.Ed.2d 527 (1983) (“Sufficient information must be presented to the magistrate to allow that official to determine probable cause; his action cannot be a mere ratification of the bare conclusions of others.” (emphasis added)).

    [2] We need not definitively determine whether the affidavit was sufficient in that regard, however. Even if the affidavit was deficient, suppression of the evidence is not required, because the officers acted in good faith and were entitled to rely on the warrant. See United States v. Leon, 468 U.S. 897, 926, 104 S.Ct. 3405, 82 L.Ed.2d 677 (1984).

    “[U]nder Leon’s good faith exception, evidence obtained pursuant to a search warrant issued by a neutral magistrate does not need to be excluded if the officer’s reliance on the warrant was objectively reasonable.” Perez, 393 F.3d at 461 (internal quotation marks omitted). “[S]earches conducted pursuant to a warrant will rarely require any deep inquiry into reasonableness, for a warrant issued by a magistrate normally suffices to establish that a law enforcement officer has acted in good faith in conducting the *276 search.” Id. (internal quotation marks omitted). Under Leon, however, reliance on a warrant is not objectively reasonable if: (1) the magistrate was misled by false information knowingly or recklessly included in the underlying affidavit, id.; (2) “the magistrate acted as a rubber stamp for the officers and so wholly abandoned his detached and neutral judicial role,” United States v. Bynum, 293 F.3d 192, 195 (4th Cir.2002) (internal quotation marks omitted); (3) the supporting affidavit is “so lacking in indicia of probable cause as to render official belief in its existence entirely unreasonable,” Leon, 468 U.S. at 923, 104 S.Ct. 3405 (internal quotation marks omitted); or (4) the warrant itself is so facially deficient in particularizing the place to be searched or the evidence to be seized that “the executing officers cannot reasonably presume it to be valid,” id.

    **5 The only exceptions arguably relevant here are the second and third, FN2 but we do not believe that either precludes reliance on the warrant issued in this case. The affidavit cannot be described as so bare-boned that the magistrate’s issuance of the warrant could be viewed as a mere rubber-stamping of the warrant application, nor is the affidavit so lacking in indicia of probable cause that it was unreasonable for the officers or the magistrate to conclude that probable cause existed.

    FN2. With regard to the first Leon exception, there was no false information included in the affidavit, and, as we will discuss in more detail below, there is no evidence that Eldridge intentionally or recklessly omitted any material information from his affidavit. As to the fourth exception, we do not believe that the warrant itself was facially deficient.

    The affidavit explained that Gatherum was a registered sex offender who had “numerous graphic picture files” on his home computer, J.A. 581, and the affidavit outlined Trooper Eldridge’s extensive training in the investigation of similar crimes. The affidavit stated that Eldridge and Trooper Summers had viewed the images themselves and had both determined that the images depicted a minor engaged in sexually explicit behavior. Because the affidavit specifically referred to the relevant West Virginia statute, which sets out a list of actions that constitute “sexually explicit conduct,” FN3 the kind of conduct that could have been depicted in the images was necessarily limited. While a more detailed description of the conduct pictured would have been helpful, courts have found similar language used under similar factual situations to be sufficient to support a finding of probable cause. See United States v. Smith, 795 F.2d 841, 848 (9th Cir.1986) (“As to the affidavit’s ‘conclusory’ statement that the photographs depicted ‘sexually explicit conduct,’ we do not find the character of the allegation fatal to the warrant. Although more specific descriptions of the photographs would have been desirable, we note that the affidavit specifically refers to violation of section 2251, directing the magistrate to the child pornography statute and its definitions. These definitions are quite specific, and the magistrate reasonably considered the statement of an experienced postal inspector that the photos depicted ‘sexually explicit conduct’ within the statute.” (citation and footnote omitted)); see also Battershell, 457 F.3d at 1052 (“The statement that the photographs depict sexually explicit conduct is similar to many other *277 factual conclusions routinely accepted by courts in applications for warrants. Factual conclusions are a normal, necessary, and perfectly acceptable part of an affidavit.” (internal quotation marks and alterations omitted)). While there also is case law to the contrary, see United States v. Brunette, 256 F.3d 14, 17 (1st Cir.2001) (concluding that affidavit parroting the statutory definition of child pornography but not otherwise describing the nature of the images was not sufficient to support the magistrate’s probable-cause finding), this court has yet to address the question directly. Under these circumstances, we cannot say that an objectively reasonable officer should have known that the affidavit was insufficient. See United States v. Bynum, 293 F.3d at 195 (” Leon teaches that a court should not suppress the fruits of a search conducted under the authority of a warrant, even a subsequently invalidated warrant, unless a reasonably well trained officer would have known that the search was illegal despite the magistrate’s authorization.” (internal quotation marks omitted)).

    FN3. See W. Va.Code s 61-8C-1(c) (defining “sexually explicit conduct” as “(1) Genital to genital intercourse; (2) Fellatio; (3) Cunnilingus; (4) Anal intercourse; (5) Oral to anal intercourse; (6) Bestiality; (7) Masturbation; (8) Sadomasochistic abuse, including, but not limited to, flagellation, torture or bondage; (9) Excretory functions in a sexual context; or (10) Exhibition of the genitals, pubic or rectal areas of any person in a sexual context.”).

    **6 Accordingly, even if the absence of a detailed description of the conduct pictured in the relevant images rendered the affidavit deficient, the officers relied in good faith on the warrant issued by the magistrate, and the district court therefore properly denied Gatherum’s suppression motion.

    B.

    Gatherum also argues that the warrant must be voided under Franks v. Delaware, 438 U.S. 154, 98 S.Ct. 2674, 57 L.Ed.2d 667 (1978), because Trooper Eldridge intentionally omitted from his affidavit any mention of the Mike18.com website or the website’s disclaimer asserting that all of its models, including the one Eldridge believed to be a minor, were at least 18 years old. We disagree.

    Under Franks, a search warrant may be voided and the fruits of the search suppressed if the defendant establishes that the underlying affidavit contained material falsehoods that were knowingly or recklessly made. Where, as here, the claim involves omissions from the affidavit, the standard for establishing materiality is fairly high:

    [T]o be material under Franks, an omission must do more than potentially affect the probable cause determination: it must be necessary to the finding of probable cause. For an omission to serve as the basis for a hearing under Franks, it must be such that its inclusion in the affidavit would defeat probable cause for arrest. Omitted information that is potentially relevant but not dispositive is not enough to warrant a Franks hearing.

    United States v. Colkley, 899 F.2d 297, 301 (4th Cir.1990) (citations and internal quotation marks omitted).

    [3] Beyond the mere fact of omission, the record is devoid of evidence suggesting that Eldridge intentionally or recklessly failed to disclose to the issuing magistrate the Mike18.com information. Moreover, even if information about the disclaimers on the website and Gatherum’s belief about the age of the models had been included in the affidavit, their presence would not have defeated probable cause. As discussed above, Trooper Eldridge and Summers both looked at the images and concluded that one of the models was between 12 and 14 years old. That was enough to establish probable cause that the model was underage, even in the face of Gatherum’s (and Mike18.com’s) insistence to the contrary. The district court therefore properly denied Gatherum relief on his Franks v. Delaware claim. See *278 United States v. Shorter, 328 F.3d 167, 171, n. 2 (4th Cir.2003) (explaining that “the fact of an omission, standing alone, is not sufficient to demonstrate intent or reckless disregard” in cases where the omitted material is not “clearly critical” to the probable-cause determination (internal quotation marks omitted)).

    III.

    Finally, we consider Gatherum’s claim that the district court should have suppressed the statements Gatherum made when he was interviewed after his release from the hospital. Although Gatherum was informed of and waived his Miranda rights before making the statements, he claims that the troopers’ failure to inform him of the outstanding arrest warrants invalidated the Miranda waiver and rendered his statements inadmissible.

    **7 A waiver of Miranda rights is valid as long as “the waiver is made voluntarily, knowingly and intelligently.” Moran v. Burbine, 475 U.S. 412, 421, 106 S.Ct. 1135, 89 L.Ed.2d 410 (1986) (internal quotation marks omitted). A waiver is voluntarily, knowingly, and intelligently made if it was “voluntary in the sense that it was the product of a free and deliberate choice rather than intimidation, coercion, or deception,” and if it was “made with a full awareness of both the nature of the right being abandoned and the consequences of the decision to abandon it.” Id.; see also United States v. Cristobal, 293 F.3d 134, 139-40 (4th Cir.2002).

    [4] “We engage in the same inquiry when analyzing the voluntariness of a Miranda waiver as when analyzing the voluntariness of statements under the Due Process Clause,” Cristobal, 293 F.3d at 140, and thus ask whether “the defendant’s will has been overborne or his capacity for self-determination critically impaired because of coercive police conduct,” id. (citations and internal quotation marks omitted). Because the failure to inform Gatherum of the warrants does not even approach the level of coercive, overreaching conduct that could render the Miranda waiver involuntary, see Colorado v. Connelly, 479 U.S. 157, 163 n. 1, 107 S.Ct. 515, 93 L.Ed.2d 473 (1986) (collecting cases), we reject Gatherum’s claim that his Miranda waiver was involuntary.

    [5] We likewise reject Gatherum’s contention that the failure to inform him about the warrants “made it impossible for him to understand the nature of the rights he could invoke and the consequences of abandoning them.” Brief of Appellant at 36. Preliminarily, we note that the waiver form Gatherum executed before the interview stated that Gatherum was being investigated for possession of child pornography, information that should have signaled to Gatherum the significance of the interview, just as a statement about the outstanding warrants might have. In any event, the troopers informed Gatherum about the nature of his Miranda rights and the consequences of a decision to waive those rights, which is all that is required under Moran. While knowledge of the outstanding warrants might have been useful to Gatherum when deciding whether to provide a statement, the troopers’ failure to provide him with that information simply does not render the waiver invalid:

    We have held that a valid waiver does not require that an individual be informed of all information useful in making his decision or all information that might affect his decision to confess. We have never read the Constitution to require that the police supply a suspect with a flow of information to help him calibrate his self-interest in deciding whether to speak or stand by his rights. *279 Here, the additional information could affect only the wisdom of a Miranda waiver, not its essentially voluntary and knowing nature.

    Colorado v. Spring, 479 U.S. 564, 576-77, 107 S.Ct. 851, 93 L.Ed.2d 954 (1987) (citations, internal quotation marks and alterations omitted). Because the Miranda waiver was valid, the district court properly denied Gatherum’s motion to suppress the statements made after his release from the hospital.

    IV.

    **8 For the reasons discussed above, we conclude that the district court properly denied Gatherum’s motion to suppress the evidence seized pursuant to the search warrant and his motion to suppress the statements he gave after waiving his Miranda rights. Accordingly, we hereby affirm Gatherum’s conviction.

    AFFIRMED.

    MICHAEL, Circuit Judge, dissenting:

    Because the officer’s affidavit presented to the state judge failed to provide a factual basis on which the judge could independently determine that there was probable cause to issue the warrant for the search of Dean Gatherum’s home, and because the judge acted as a rubber stamp for the officer’s legal conclusions, see United States v. Leon, 468 U.S. 897, 914, 104 S.Ct. 3405, 82 L.Ed.2d 677 (1984), I respectfully dissent.

    I.

    The search warrant in this case was issued under a West Virginia statute that prohibits the possession, “with knowledge,” of “any material visually portraying a minor engaged in sexually explicit conduct.” W. Va.Code Ann. s 61-8C-3. See also 18 U.S.C. 2252A(5)(B). “Sexually explicit conduct” is defined to include several specific sexual acts. W. Va.Code Ann. s 61-8C-1(c). As the majority notes, in order for a search warrant to be properly issued under Illinois v. Gates, “[s]ufficient information must be presented to the magistrate to allow that official to determine probable cause; his action cannot be a mere ratification of the bare conclusions of others.” 462 U.S. 213, 239, 103 S.Ct. 2317, 76 L.Ed.2d 527 (1983) (emphasis added). See ante at 275. The affidavit in this case merely parrots the relevant statute, W. Va.Code Ann. s 61-8C-3, and provides no facts upon which the state judge could have conducted an independent probable cause analysis. Rather than describing, even superficially, what the photographs found on Gatherum’s computer depicted, Corporal Eldridge’s affidavit simply states that the photographs showed three males (one of whom the officer believed to be 12 to 14 years old FN1) “engaged in sexually explicit conduct.” J.A. at 581-82.

    FN1. I agree with the majority’s conclusion that it was reasonable for the judge to accept the officer’s estimate of the younger male’s age. See ante at 275.

    Whether or not the activities in the photographs constituted “sexually explicit conduct” was a matter for the state judge to decide without deferring to the officer’s “bare conclusion.” See Gates, 462 U.S. at 239, 103 S.Ct. 2317. “The point of the Fourth Amendment, which often is not grasped by zealous officers … [is that] [i]ts protection consists in requiring that … inferences be drawn by a neutral and detached magistrate instead of being judged by the officer engaged in the often competitive enterprise of ferreting out crime.” United States v. Ventresca, 380 U.S. 102, 106, 85 S.Ct. 741, 13 L.Ed.2d 684 (1965) (quoting Johnson v. United States, 333 U.S. 10, 13-14, 68 S.Ct. 367, 92 L.Ed. 436 (1948)). See also *280South Dakota v. Opperman, 428 U.S. 364, 370 n. 5, 96 S.Ct. 3092, 49 L.Ed.2d 1000 (1976) (“[The Supreme Court has] frequently observed that the warrant requirement assures that legal inferences and conclusions as to probable cause will be drawn by a neutral magistrate unrelated to the criminal investigative-enforcement process”). Thus, the benefit of having a neutral magistrate make the probable cause determination is forfeited if the magistrate defers to an officer’s legal conclusions in an affidavit that merely recites general statutory language. A detached and independent review is especially important in the context of determining whether images involve child pornography, a determination that by its very nature will often involve a high degree of subjectivity.

    **9 In United States v. Brunette, 256 F.3d 14 (1st Cir.2001), the First Circuit applied these principles in almost identical circumstances to those presented here. In that case a search warrant was issued based on a single affidavit, written by a law enforcement agent, which asserted that he had viewed thirty-three images traced to the defendant and that they met the statutory definition of child pornography. Id. at 16. The agent neither appended copies of these images to his affidavit nor included a description of the images’ contents. Id. The First Circuit held that the government had failed to make a showing of probable cause because “[t]he evidence on the nature of the images consisted solely of [the agent’s] legal conclusion parroting the statutory definition.” Id. at 17. This conclusion was based on that court’s recognition that the “inherent subjectivity [of identifying images that are ‘lascivious’] is precisely why the determination should be made by a judge, not an agent.” Id. at 18.

    The majority cites two Ninth Circuit cases reaching the opposite conclusion on similar facts, but I believe the reasoning in Brunette is more persuasive. First, the majority points to United States v. Smith, 795 F.2d 841 (9th Cir.1986), which is distinguishable because the affidavit “[did] not stand on the evaluation of the photographs alone,” but also included statements by a pediatrician, the defendant, and the two alleged victims. Id. at 849. Furthermore, Smith reaches the unwarranted conclusion that “[t]he statement that the photographs depict sexually explicit conduct is similar to many other factual conclusions routinely accepted by courts.” Id. at 848 n. 7. This reasoning, adopted by the second case cited by the majority, United States v. Battershell, 457 F.3d 1048 (9th Cir.2006), mistakes a legal conclusion-whether the contents of a photograph amount to “sexually explicit conduct”-with the conclusion’s factual underpinnings (the contents of the photograph itself).

    An officer can readily provide the factual description required to allow an independent determination by the magistrate. In most instances it would be enough for the officer to describe the “focal point and setting of the image, and [the] pose [or activity] and attire of the subject.” FN2 Brunette, 256 F.3d at 20. But in this case the judge was presented with an affidavit that provides no factual details whatsoever regarding the substance of the photographs in question. The affidavit is simply insufficient to support a finding of probable cause.

    FN2. The best course of action, and the one most certain to ensure a valid probable cause finding, would be to include copies of the photographs themselves with the affidavit. I agree with the majority, however, that this is not a requirement. See ante at 274-75.

    II.

    For similar reasons, the Leon good faith exception does not apply in this case. As *281 a general matter, evidence need not be excluded when police officers act in objectively reasonable reliance on a search warrant issued by a neutral magistrate. United States v. Leon, 468 U.S. at 926, 104 S.Ct. 3405. Reliance is not warranted in certain circumstances, however, such as when “the magistrate acted as a rubber stamp for the officers and so ‘wholly abandoned’ his detached and neutral ‘judicial role’.” United States v. Bynum, 293 F.3d 192, 195 (4th Cir.2002) (citing Leon, 468 U.S. at 923, 104 S.Ct. 3405). Because the state judge in this case acted as a rubber stamp by failing to conduct an independent probable cause inquiry and instead simply adopted the one officer’s legal conclusion that the pictures he found portrayed “sexually explicit conduct,” the officers were not objectively justified in relying on the warrant.

    **10 The majority offers four basic reasons to support its conclusion that the state judge did not act as a rubber stamp (and that the affidavit was not “so lacking in indicia of probable cause”, ante at 276, that it could not be reasonably relied on). First, the majority points out that the affidavit “explained that Gatherum was a registered sex offender who had ‘numerous graphic picture files’ on his home computer.” Ante at 276. But this merely resurrects the basic questions before us: What specific activities did the pictures portray, and did those activities constitute “sexually explicit conduct”?

    Second, the majority notes that the “affidavit outlined [Corporal] Eldridge’s extensive training in the investigation of similar crimes.” Id. This statement refers to ten pages of “Facts for Belief” that the officer included in his affidavit. J.A. 573-582. The facts showing the officer’s training do not remove the state judge’s decision from the “rubber stamp” category. These “facts” are boilerplate, listing, for example, many “characteristics [of] people who sexually exploit children” that have no specific bearing on this case. It is telling that amidst the ten pages of “facts,” the officer included only three sentences pertaining to, with one only vaguely describing, the photographs at issue. Furthermore, regardless of the officer’s training, the state judge himself had to ultimately determine the factual content of the photographs. There was insufficient information for the judge to perform that function.

    Third, the majority reasons that “[b]ecause the affidavit specifically referred to the relevant West Virginia statute, which sets out a list of actions that constitute ‘sexually explicit conduct,’ the kind of conduct that could have been depicted in the images was necessarily limited.” Ante at 276. However, this assumes that the officer would refer to the statute only if one of the listed “sexually explicit” activities was implicated. Thus, the officer’s cryptic reference to the statute only reinforces the conclusion that the judge functioned solely as a rubber stamp in making the probable cause determination. Again, the affidavit gave no factual information about the contents of the photographs, instead merely parroting the conclusory language of the statute. This rendered the judge unable to make an independent determination as to whether there was probable cause to believe the photographs violated the statute.

    Fourth, the majority states that Corporal “Eldridge and Trooper Summers had viewed the images themselves and had both determined that the images [contained] sexually explicit behavior.” Ante at 276. But it was for the judge, not the officers, to make this determination. The problem is that the judge in this case could only substitute the officers’ conclusions for his own. As a result, the judge committed precisely the error warned of in *282Gates, 462 U.S. at 239, 103 S.Ct. 2317, and became merely a rubber stamp for the officers’ determination.

    III.

    **11 Today’s decision allows law enforcement officers to submit legal conclusions, rather than factual observations, to a magistrate and allows the magistrate to issue a warrant without conducting an independent probable cause determination. We should make clear that the affidavit in this case was insufficient to support probable cause and thereby put law enforcement officers and magistrates on notice for the future. In all events, because the affidavit was inadequate, and because the state judge served as a rubber stamp for the officer’s conclusions, evidence seized pursuant to the invalid search warrant should have been suppressed. I would therefore vacate Gatherum’s conviction.

    Continue reading →United States Court of Appeals, Fourth Circuit. UNITED STATES of America, Plaintiff-Appellee, v. Dean R. GATHERUM, Defendant-Appellant. No. 08-4683. Argued: March 27, 2009. Decided: July 7, 2009. Background: Defendant pleaded guilty, in the United States District Court for the Southern District of West Virginia, Thomas E. Johnston, J., to possession of child pornography. He appealed. Holdings: The Court of Appeals, Traxler, Circuit Judge, held ...
  • U.S. v. Cameron

    United States Court of Appeals,

    Fourth Circuit.

    UNITED STATES of America, Plaintiff-Appellee,

    v.

    Kenny CAMERON, Defendant-Appellant.

    No. 08-4277.

    Argued: May 15, 2009.

    Decided: July 21, 2009.

    Background: Defendant was convicted in the United States District Court for the Southern District of West Virginia, Joseph R. Goodwin, Chief District Judge, of uttering counterfeited obligations of the United States and falsely making and counterfeiting obligations of the United States, and he appealed.

    Holdings: The Court of Appeals, Gregory, Circuit Judge, held that:

    (1) evidence was sufficient to support the defendant’s conviction for falsely making and counterfeiting obligations of the United States, and

    (2) district court clearly err in applying a sentencing guidelines offense level enhancement for being an organizer or leader.

    Affirmed in part, vacated in part, and remanded.

    OPINION

    GREGORY, Circuit Judge:

    The Appellant, Kenny Cameron, was convicted of three counts of uttering counterfeited obligations of the United States, in violation of 18 U.S.C. s 472 (2006); and *181 one count of falsely making and counterfeiting obligations of the United States, in violation of 18 U.S.C. s 471 (2006). At sentencing, the district court applied a four-level enhancement because it found that Cameron was a leader or organizer of a counterfeiting operation that involved five or more participants. Cameron challenges both his conviction under 18 U.S.C. s 471 as well as the district court’s application of the enhancement. For the reasons set forth below, we affirm Cameron’s conviction but vacate his sentence and remand for resentencing.

    I.

    On October 3, 2003, Cameron made a purchase from the Tobacco Plus store in Dunbar, West Virginia, using a counterfeit twenty-dollar bill. The store owner suspected that the bill was counterfeit and called the police. Two Dunbar police officers, Scott Dempsey and Charles Young, responded to the call. When the officers arrived on the scene, Officer Young asked Cameron to give him the change from the transaction. Although Cameron complied with the request, the officers noticed that Cameron kept his left hand clenched. From this, the officers surmised that Cameron was attempting to conceal an object in his hand. Officer Dempsey grabbed Cameron’s left wrist, causing him to unclench his hand and reveal a second counterfeit twenty-dollar bill. Cameron was then arrested and taken to the police station, where he admitted that he passed a counterfeit bill at the Tobacco Plus store and that he planned to pass the second counterfeit bill.

    After Cameron’s arrest, police officers and United States Secret Service personnel executed a search warrant on the home of Cameron’s grandmother, where Cameron was residing at the time of his arrest. In an upstairs bedroom, officers found cut and uncut counterfeit bills, an X-Acto cutting board, FN1 currency envelopes, and a counterfeit detection pen. While officers were searching the home, Cameron arrived in a vehicle being driven by Brett Reynolds. Reynolds consented to a search of the vehicle, and officers found sixteen counterfeit $100 bills in a paper box located in the passenger-side floorboard.

    FN1. Special Agent Thomas Sheppard of the United States Secret Service testified that X-Acto cutting boards can be used to cut bills so that the bills have straight edges. (J.A. 100.)

    The following day, police officers and Secret Service personnel executed a search warrant on the home of Cameron’s sister. During this search, officers recovered a computer, paper cuttings, printer ink cartridges, ink refills, and a printer manual.

    At trial, the Government presented testimony from Secret Service agents who analyzed several of the items recovered from the homes. Vici Inlow, a fingerprint expert with the Secret Service, testified that Cameron’s fingerprints were discovered on eight of the sixty-one counterfeit bills found in his grandmother’s home. Special Agent Mark Grantz, a computer forensic examiner, testified that a deleted file was recovered from the computer found in the home of Cameron’s sister. According to Special Agent Grantz, the file contained an image of a twenty-dollar bill that matched the serial number of one of the bills that was seized from the home of Cameron’s grandmother.

    At the close of the Government’s case, Cameron moved for a judgment of acquittal on the count of falsely making and counterfeiting obligations of the United States, claiming that the Government had not produced sufficient evidence that he actually manufactured the counterfeit *182 bills.FN2 The district court denied Cameron’s motion, and the jury returned guilty verdicts on all counts.

    FN2. Cameron also objected to the district court’s failure to provide his proposed “reasonable doubt” instruction to the jury. While Cameron presents this issue on appeal, he acknowledges that this argument is contrary to our established precedent. See, e.g., United States v. Najjar, 300 F.3d 466, 486 (4th Cir.2002); United States v. Williams, 152 F.3d 294, 298 (4th Cir.1998).

    At sentencing, Cameron objected to a recommended four-level enhancement for being the leader or organizer of the counterfeiting operation. In support of the enhancement, the Government presented the testimony of Ashley Campbell, a participant in the counterfeiting operation. Campbell testified that her role in the operation was to make small purchases with the counterfeit bills and return the change to Jessie Smith, another participant in the operation. Reynolds recruited people into the operation and supervised the participants, and the earnings from the scheme were ultimately split between three participants-Reynolds, Smith, and Jason D’Arco.

    By contrast, Campbell’s testimony provided little insight into the nature of Cameron’s involvement in the operation beyond his manufacturing of counterfeit bills. According to Campbell, she first met Cameron when she, D’Arco, Smith, and Reynolds picked him up from his place of work and drove him home. At that time, Smith and Reynolds gave Cameron cocaine and a genuine $100 bill. Reynolds then entered Cameron’s home and returned a few minutes later with the same bill.

    Two days later, Campbell, D’Arco, Smith, and Reynolds again drove to Cameron’s home. This time, Reynolds went into the home and returned ten minutes later with counterfeit bills. Although Campbell could not say how many bills Reynolds received from Cameron, she testified that Reynolds gave her eight counterfeit $100 bills and that Reynolds used the rest of the bills to purchase approximately $2000 worth of marijuana. Campbell had no knowledge of the nature of the relationship between Reynolds and Cameron, but she knew that Cameron supplied the counterfeit bills for the operation.

    In addition to the testimony of Campbell, the district court had before it the presentence investigative report (“PSR”) and the representations made by the Government during sentencing. According to the PSR, Secret Service agents had traced counterfeit bills manufactured by Cameron to at least twelve states, and the loss attributed to the operation was determined to be $10,520. The Government further proffered that the counterfeit bills had been passed in over 250 businesses.

    Based on this evidence, the district court overruled Cameron’s objection to the enhancement, stating that it was “very comfortable that this manufacturing operation was extensive and that the person who did the manufacturing of the bills and the distribution of them, or a leader of that enterprise[,] was this defendant.” (J.A. 304.) The court continued: “This was a rather major counterfeit operation and this-you know, it’s like saying Henry Ford wasn’t a leader of Ford, he just made the cars. This defendant made money. He decided who to turn it over to. He passed it himself. He received drugs.” (J.A. 304-05.) After applying the recommended enhancements, including a two-level enhancement for manufacturing the counterfeit bills, Cameron’s total offense level was nineteen and his criminal history category was III, which yielded a Guidelines range of thirty-seven to forty-six months’ imprisonment. The district court *183 ultimately sentenced Cameron to a term of forty-six months’ imprisonment, followed by a three-year term of supervised release.

    II.

    A.

    [1][2] Cameron first challenges his conviction on the count of falsely making and counterfeiting obligations of the United States, 18 U.S.C. s 471. In a criminal case tried by a jury, we must sustain a guilty verdict ” ‘if there is substantial evidence, taking the  view most favorable to the Government, to support it.’ ” United States v. Burgos, 94 F.3d 849, 862 (4th Cir.1996) (en banc) (quoting Glasser v. United States, 315 U.S. 60, 80, 62 S.Ct. 457, 86 L.Ed. 680 (1942)). In this context, “substantial evidence is evidence that a reasonable finder of fact could accept as adequate and sufficient to support a conclusion of a defendant’s guilt beyond a reasonable doubt.” Id. To that end, this Court “must consider circumstantial as well as direct evidence, and allow the government the benefit of all reasonable inferences from the facts proven to those sought to be established.” United States v. Tresvant, 677 F.2d 1018, 1021 (4th Cir.1982); accord United States v. Harvey, 532 F.3d 326, 333 (4th Cir.2008).

    B.

    [3] Cameron advances several arguments in support of his contention that the Government did not present substantial evidence to support his conviction for manufacturing counterfeit bills: (1) there was no evidence during trial regarding the inside details of the counterfeiting operation; (2) the link between the computer seized from his sister’s home and the counterfeiting operation was weak, since the computer contained only one image of a counterfeit bill; (3) there was no evidence that Cameron himself used the computer to create counterfeit bills; (4) officers did not recover a printer when they searched his sister’s home; and (5) Cameron’s fingerprints were identified on only eight of the sixty-one documents recovered from his residence.

    Cameron’s arguments, however, discount the significance of the circumstantial evidence introduced by the Government at trial and the reasonable inferences that may be drawn therefrom. In Cameron’s room at his grandmother’s home, officers found the trappings of a counterfeiting operation-cut and uncut counterfeit bills, cutting equipment, a counterfeit detection pen, and currency bills. The fact that Cameron’s fingerprints were identified on several of the counterfeit bills further connects him to the operation.

    Even if the evidence recovered from Cameron’s residence would not have been sufficient on its own to sustain his conviction, that was not the only evidence presented at trial. The computer and evidence of printing found in his sister’s home, in combination with the evidence recovered from Cameron’s residence, was more than sufficient to sustain his conviction. Using file recovery software, Special Agent Grantz discovered a deleted computer file that contained an image of a twenty-dollar bill. He testified that the serial number from that bill matched one of the counterfeit bills found in Cameron’s residence. Taken together, the evidence from Cameron’s residence and his sister’s home creates a more than reasonable inference that Cameron manufactured the counterfeit bills found in his place of residence.

    While Cameron points out that Special Agent Grantz discovered only one image on the computer and the officers did not actually find a printer in his sister’s home, these facts must be weighed against the *184 considerable evidence of manufacturing recovered from both homes. Given the “circumscribed scope of our review,” Burgos, 94 F.3d at 862, the evidence connecting Cameron to the manufacturing of counterfeit bills was sufficient to sustain his conviction for that offense.

    III.

    A.

    [4][5] Cameron next challenges the district court’s application of the four-level enhancement at sentencing for being a leader or organizer of the counterfeiting operation. We review all sentences for reasonableness under an abuse-of-discretion standard. United States v. Osborne, 514 F.3d 377, 387 (4th Cir.2008) (citing Gall v. United States, 552 U.S. 38, 128 S.Ct. 586, 590, 169 L.Ed.2d 445 (2007)). “In assessing whether a sentencing court properly applied the Guidelines, ‘we review the court’s factual findings for clear error and its legal conclusions de novo.’ ” Id. (quoting United States v. Allen, 446 F.3d 522, 527 (4th Cir.2006)).

    B.

    Section 3B1.1(a) of the United States Sentencing Guidelines (2007) provides for a four-level increase (the so-called “leadership enhancement”) in a defendant’s offense level “[i]f the defendant was an organizer or leader of a criminal activity that involved five or more participants or was otherwise extensive.” The Sentencing Commission has clarified in an Application Note to s 3B1.1 that in order to qualify for an enhancement, the defendant must have been the organizer or leader “of one or more other participants” as opposed to merely “exercis[ing] management responsibility over the property, assets, or activities of a criminal organization.” See U.S.S.G. s 3B1.1 cmt. n. 2. In determining a defendant’s “leadership and organizational role,” courts must consider seven factors

    [1] the exercise of decision making authority, [2] the nature of participation in the commission of the offense, [3] the recruitment of accomplices, [4] the claimed right to a larger share of the fruits of the crime, [5] the degree of participation in planning or organizing the offense, [6] the nature and scope of the illegal activity, and [7] the degree of control and authority exercised over others.

    U.S.S.G. s B1.1, cmt. n. 4; see also United States v. Sayles, 296 F.3d 219, 224 (4th Cir.2002) (discussing the seven-factor test).

    In Sayles, this Court provided insight regarding the type of evidence needed for a district court to assess a s 3B1.1 enhancement. The defendants in that case, Robert Jared Smith and Leonard Sayles, were participants in a drug distribution conspiracy. The Government presented evidence from coconspirators that both defendants purchased and sold crack to other participants in the conspiracy. Furthermore, one of the co-conspirators testified that Sayles was involved in the conversion of cocaine powder to crack. Based on this evidence, the district court assessed the leadership enhancement to Smith and a lesser two-level enhancement to Sayles.FN3 Id. at 220-22.

    FN3. Sayles received a two-level enhancement under U.S.S.G. s 3B1.1(c) for being an “organizer, leader, manager, or supervisor in any criminal activity other than that discussed in [s 3B1.1] (a) or (b).” 296 F.3d at 224. While the leadership enhancement at issue in this case is different from the two-level enhancement in some respects, the application of both enhancements depends on the same seven-factor test. See U.S.S.G. s 3B1.1 cmt. n. 4.

    *185 In reversing the district court’s application of the s 3B1.1 enhancements, this Court held that “being a buyer and seller of illegal drugs, even in league with more than five or more other persons, does not establish that a defendant has functioned as an ‘organizer, leader, manager, or supervisor’ of criminal activity.” Id. at 225. That is because an adjustment under s 3B1.1 is proper “only … if it [was] demonstrated that [the defendant] was an organizer, leader, manager or supervisor of people.” Id. at 226. Although the Government contended that it had presented evidence that both defendants had recruited other participants and that Smith had retained a larger share of the proceeds from the conspiracy, no such evidence was found in the record. Without evidence of the defendants’ aggravating role in the conspiracy beyond the buying and selling of “significant” quantities of drugs, this Court found that the district court clearly erred in applying the enhancement to the defendants. Id. at 226-27.

    [6] As in Sayles, the Government failed to present evidence at Cameron’s trial or during his sentencing demonstrating that his role in the conspiracy was that of an organizer or leader of people, as opposed to that of a manager over the literal and figurative “currency” of the counterfeiting operation. There was no evidence that Cameron planned or organized the operation, exercised any control or authority over other participants, recruited accomplices into the operation, or claimed any share-much less a larger share-of the fruits of the criminal activity. If anything, the testimony elicited from Campbell suggested that the other participants, and Reynolds in particular, organized and led the counterfeiting operation. Although it is true that more than one person may qualify as an organizer or leader of a criminal operation, U.S.S.G. s 3B1.1, cmt. n. 4, Campbell’s testimony highlights the paucity of evidence supporting the application of the leadership enhancement in this case.

    The Government nevertheless contends that this Court should defer to the district court’s judgment because Cameron manufactured bills for the counterfeiting operation. According to the Government, Cameron’s integral role as the manufacturer of the bills effectively gave him the authority to control the flow of the bills to the other participants. However, this argument misses the mark because it conflates the potential to exercise control over an operation with the actual exercise of control. In the cases in which this Court has affirmed the application of the leadership enhancement, there was evidence that the defendants actually exercised authority over the other participants in the operation or actively directed its activities. See, e.g., United States v. Jones, 356 F.3d 529, 538 (4th Cir.2004), cert. denied, 541 U.S. 952, 124 S.Ct. 1694, 158 L.Ed.2d 384 (2004) (defendant recruited dealers, controlled the allocation of drugs to dealers, determined how the profits were divided, and handled the logistics and arrangements for the transactions); United States v. Perkins, 108 F.3d 512, 518 (4th Cir.1997) (defendant “directed the activities of other members of the drug ring and facilitated the criminal enterprise by renting apartments, acquiring pagers, hiring a lawyer for a codefendant, and paying for the bond of another codefendant”).

    If we were to adopt the position urged by the Government, any defendant who supplies a good or service to a criminal operation would automatically qualify for the leadership enhancement because he or she could potentially leverage that role to control the other participants in the operation. Such an outcome is contrary to the letter and spirit of the Sentencing Guidelines.*186 The Sentencing Commission amended its Application Notes to clarify that the enhancement applies only to defendants who organize or lead “one or more other participants” and not to those who just “exercise [ ] management responsibility over the property, assets, or activities of a criminal organization.” U.S.S.G. s 3B1.1, cmt. n. 2. The Government’s position ignores this distinction.

    Furthermore, Cameron’s sentence already reflects his role in the counterfeiting operation through application of s 2B5.1(b)(2)(A) of the Sentencing Guidelines, which provides a two-level increase where a defendant manufactured or produce counterfeit obligations of the United States. The existence of this separate enhancement suggests that, at least in the context of counterfeiting operations, a defendant must exercise a leadership role beyond the manufacturing of counterfeit bills in order to be subject to the leadership enhancement.

    [7] The Government is thus left with evidence that Cameron supplied counterfeit bills to one other participant in an extensive counterfeiting operation and that Cameron himself passed bills on one occasion. As this Court already decided in Sayles, the supplying of contraband to other participants in a conspiracy and involvement in illegal transactions, without more, cannot sustain the application of the leadership enhancement. See 296 F.3d at 227. And although the extensiveness of a criminal activity is a relevant consideration in determining whether the leadership enhancement should apply, U.S.S.G. s 3B1.1 cmt. n. 4, the Government urges this Court to give this factor more weight than it deserves. If the extensiveness of a criminal activity were enough to justify the assessment of the leadership enhancement, then all participants in an extensive operation would be subject to the leadership enhancement regardless of whether there was any evidence that the particular participants were leaders or organizers of the operation. Such an interpretation is clearly contrary to s 3B1.1, which provides enhancements “[b]ased on the defendant’s role in the offense.”

    IV.

    We affirm Cameron’s conviction for falsely making and counterfeiting obligations of the United States. However, because the district court clearly erred in applying the leadership enhancement in calculating Cameron’s offense level, we vacate his sentence and remand the case to the district court for resentencing.

    AFFIRMED IN PART, VACATED IN PART, AND REMANDED

    Continue reading →United States Court of Appeals, Fourth Circuit. UNITED STATES of America, Plaintiff-Appellee, v. Kenny CAMERON, Defendant-Appellant. No. 08-4277. Argued: May 15, 2009. Decided: July 21, 2009. Background: Defendant was convicted in the United States District Court for the Southern District of West Virginia, Joseph R. Goodwin, Chief District Judge, of uttering counterfeited obligations of the United States and falsely making and counterfeiting obligations ...
  • U.S. v. Richardson

    United States Court of Appeals,

    Fourth Circuit.

    UNITED STATES of America, Plaintiff-Appellee,

    v.

    Thomas McCoy RICHARDSON, Jr., Defendant-Appellant.

    AOL LLC, Amicus Supporting Appellee.

    No. 09-4072.

    Argued March 24, 2010.

    Decided June 11, 2010.

    Background: Following denial of defendant’s motion to suppress and grant of internet service provider’s motion to quash his subpoena duces tecum, 2008 WL 818863, he was convicted, upon a conditional guilty plea, in the United States District Court for the Western District of North Carolina, Martin K. Reidinger, J., of knowingly transporting child pornography in interstate commerce, and possession of child pornography. Defendant appealed.

    Holdings: The Court of Appeals, Traxler, Chief Judge, held that:

    (1) internet service provider’s conduct in scanning e-mails did not equate to governmental conduct, as would trigger Fourth Amendment protections;

    (2) mandatory reporting requirements in statute did not trigger application of Fourth Amendment protections for internet service provider’s conduct;

    (3) subpoena duces tecum was unreasonable and overly broad; and

    (4) search warrant for defendant’s residence was supported by probable cause.

    Affirmed.

    OPINION

    TRAXLER, Chief Judge:

    Thomas McCoy Richardson, Jr., pled guilty to violating 18 U.S.C. s 2252A(a)(1) & (b)(1) by “knowingly transport[ing] and ship[ping] in interstate and foreign commerce, by means of a computer, child pornography,” J.A. 16, and to violating 18 U.S.C. s 2252A(a)(5) by “knowingly possess[ing] material that contained images of child pornography,” J.A. 16. In doing so, Richardson preserved the right to appeal the district court’s order denying his motion to suppress and quashing his subpoena duces tecum under Rule 17(c)(2) of the Federal Rules of Criminal Procedure.

    On appeal, Richardson contends that AOL LLC (“AOL”), an internet service provider (“ISP”) with whom he had an email account, discovered the illegal images on which Richardson’s child pornography charges were based by conducting an unconstitutional search on behalf of the Government. Richardson also contends that the search warrant subsequently executed at his Charlotte-area apartment was not supported by probable cause, rendering the evidence culled from his computer inadmissible. Finally, Richardson claims that the district court committed reversible error in granting AOL’s motion to quash his subpoena seeking the production of documents that would establish an agency relationship between AOL and the Government with respect to the detection of AOL subscribers involved in child pornography. We conclude that the district court correctly rejected these arguments and affirm the district court.

    I.

    On June 10, 2004, AOL, pursuant to a mandatory reporting requirement set forth in 42 U.S.C. s 13032(b)(1),FN1 reported to the Cyber Tip Line at the National Center for Missing and Exploited Children (“NCMEC”) that AOL had detected the transmission of child pornography images by a subscriber using an e-mail address called [email protected] aol. com. NCMEC, also as mandated by the same federal law, passed along this information to the North Carolina State Bureau of Investigation (“SBI”), which, in turn, served AOL with an administrative subpoena for subscriber information related to the “[email protected] aol. com” address. AOL determined that the “[email protected] aol. com” account was registered to Richardson at 2541 Pine View Lane, Apartment H, Gastonia, North Carolina. The screen name “tr2066” was also linked to this account. By August 2004, however, when SBI agents received and followed up on this information, Richardson*361 no longer resided at the 2541 Pine View Lane address and no forwarding address was available.

    FN1. This particular provision is no longer in effect. The reporting requirements were amended and are now codified in 18 U.S.C. s 2258A.

    The investigation of Richardson apparently stalled for about one year. Then, on September 2, 2005, AOL reported to NCMEC that it had detected the transmission of two e-mail messages containing images depicting child pornography from an account named “tr [email protected] aol. com” by a person using the screen name “tr1029.” NCSBI Agent J.D. White initiated an investigation following this second report. Pursuant to another administrative subpoena, AOL indicated that the “[email protected] aol.com” account was registered to Richardson at 8508 Park Road, Charlotte, North Carolina. The Park Road address, as it turned out, was the location of a UPS store. Further investigation by the NCSBI, however, revealed that Richardson was residing in Charlotte at 7805 Andover Woods Drive, Apartment 604, and linked Richardson through his driver’s license to both the Park Road address of the UPS store (where Richardson had apparently received mail for a period of time) and the Pine View Lane address in Gastonia (where Richardson had established the [email protected] aol. com account).

    NCSBI agents researched Richardson’s criminal history and discovered that Richardson was a registered sex offender in South Carolina as a result of two 1996 convictions. In the first instance, Richardson was arrested and charged with performing a lewd act upon a child under 14 years of age after he entered a Wal-Mart store in Florence, South Carolina, grabbed the buttocks of a minor girl, and uttered an obscene remark to her. He was ultimately convicted of assault and battery of a high and aggravated nature. In the second instance, Richardson was convicted for exposing himself as he walked through the same Wal-Mart.

    On November 17, 2005, Agent White applied for a search warrant to search Richardson’s Andover Woods Drive apartment in Charlotte primarily for evidence of Richardson’s use of a computer to view, store, and transmit images of child pornography. In support of his probable cause showing, Agent White included the information disclosed by AOL pursuant to the administrative subpoenas and the details of the subsequent investigation conducted by NCSBI. Additionally, Agent White provided a summary of his background in criminal and computer investigation as well as his special training in the “investigation[ ] of child sexual exploitation and child pornography.” J.A. 41. Based on his experience, Agent White indicated “[t]he use of computers to traffic in, trade, or collect child pornography has become one of the preferred methods of obtaining such materials … [because computers] provide[ ] a high degree of anonymity in obtaining child pornography … [and] a sense of privacy and secrecy not attainable by other media.” J.A. 50. White further explained in his affidavit that “[i]ndividuals involved in the possession and transportation of child pornography rarely, if ever, dispose of their sexually explicit materials,” which “are extremely valuable to these individuals because of the difficulty, scarcity, expense, and danger involved in their collection.” J.A. 50. Noting that even computer files that are deleted from the hard drive can be retrieved through a forensic examination of the computer, White asked the issuing judge to find “probable cause to believe that Thomas Richardson’s residence, 7805 Andover Woods Drive, Apartment 604, Charlotte, North Carolina, contains a computer or computers that have been used to communicate with individuals to acquire child pornography; store images of child pornography, and distribute images of child pornography.” J.A. 51.

    *362 On November 17, 2005, law enforcement officers executed the search warrant for Richardson’s Andover Woods apartment. The primary evidence recovered in the search was a computer. Richardson indicated that he was the sole user of the computer and admitted that he had sent and received child pornography by email. Richardson also told officers that he was “addicted to viewing [child pornography] over the Internet, but denied ever meeting or speaking by phone with anyone he met on the Internet under the age of 18.” J.A. 211. A forensic examination of Richardson’s computer revealed 28 images and 21 video files containing child pornography. Some of these images included depictions of adults engaged in illegal, obscene sexual acts with children between four and nine years of age.

    Richardson moved to suppress both the evidence seized in the search of his home and his statements to law enforcement officers during the search. First, Richardson argued that in reporting the contents of his email, AOL was acting as an agent of the Government and had therefore conducted an unconstitutional warrantless search of his private email communications. Second, Richardson argued that even if AOL had not acted as a law enforcement agent in reporting the emails, the issuing judge lacked probable cause to believe that evidence of a child pornography offense would be located at his apartment at the time of the search.

    Subsequently, in hopes of obtaining documentary support for his argument that AOL was acting as an agent for the Government, Richardson served AOL with a subpoena duces tecum pursuant to Rule 17(c)(1) of the Federal Rules of Criminal Procedure requesting that AOL produce all records (including but not limited to emails, postal correspondence, minutes/notes of meetings, memoranda, and public relations material, and Congressional testimony) relating to AOL’s coordination of efforts, training and/or strategic partnerships with all agencies of the United States Department of Justice, the United States Postal Service, the Secret Service, the Internet Crimes Against Children Task Force with the Department of Justice, and the [NCMEC], regarding the detection and reporting of child pornography content in emails and/or web browsing activities by AOL subscribers or on its network. J.A. 64.

    In response to the subpoena, AOL filed a motion to quash on the grounds that the subpoena was grossly overbroad in scope and that “compliance would be unreasonable or oppressive.” Fed.R.Crim.P. 17(c)(2). AOL argued that Richardson’s subpoena was essentially a fishing expedition “based on the unsupported legal theory that AOL is an agent of the United States,” J.A. 58, and that compliance with the subpoena would require AOL “to carry out a search of its immense paper files and data bases seeking that which does not exist.” J.A. 60.

    In support of its motion to quash, AOL submitted a declaration from AOL Assistant General Counsel John R. LoGalbo primarily to show that there was no agency relationship between AOL and the Government. LoGalbo denied that law enforcement asked AOL to search Richardson’s email or otherwise participate in the investigation of Richardson “except through the ordinary forms of compulsory legal process.” J.A. 66. Instead, LoGalbo stated, AOL detected the illegal images attached to Richardson’s email transmissions through AOL’s Image Detection and Filtering Program (“IDFP”), one of several internally-developed scanning programs designed to keep AOL’s systems secure. The IDFP, as summarized by the LoGalbo *363 Declaration, recognizes and compares the digital “fingerprint” (known as a “hash value”) of a given file attached to a subscriber’s email with the digital “fingerprint” of a file that AOL previously identified as containing an image depicting child pornography. LoGalbo indicated that if the IDFP detected a match suggesting that an email transmission contained child pornography images, then AOL notified the NCMEC as required by 42 U.S.C. s 13032. According to LoGalbo, “AOL developed and began using the IDFP in 2002 in order to protect its rights and property against lawbreakers, prevent the network from being used to carry or store contraband (i.e., illegal child pornography), and fulfill its legal obligation to report the transmission … of child pornography on its systems.” J.A. 65.

    The magistrate judge concluded that the subpoena was unreasonably broad and, therefore, that Richardson failed to show that all of the information sought by the subpoena was relevant, admissible, and specific. See United States v. Nixon, 418 U.S. 683, 698-700, 94 S.Ct. 3090, 41 L.Ed.2d 1039 (1974). The district court adopted the ruling of the magistrate judge.

    The magistrate judge then recommended that Richardson’s motion to suppress be denied. First, the magistrate judge concluded that the search warrant was supported by probable cause and rejected Richardson’s argument that Agent White’s affidavit failed to establish a sufficient nexus between evidence of the child pornography offense and the Andover Woods apartment where the warrant was executed. The magistrate judge found that, based both on the allegations specifically related to Richardson and the “general ‘profile’ ” of child pornographers, J.A. 214, “there was a fair probability that the computer used by defendant for transmission of and storage of [child pornography] would be found in his residence.” J.A. 213. The district court adopted the recommendation of the magistrate judge.FN2

    FN2. The magistrate judge also concluded that even if the warrant lacked probable cause, the good faith exception under United States v. Leon, 468 U.S. 897, 913, 104 S.Ct. 3405, 82 L.Ed.2d 677 (1984), would apply. The district court, however, declined to reach the issue of whether the law enforcement officers acted in good faith.

    Second, the magistrate judge rejected Richardson’s argument that AOL was acting as an agent for law enforcement and therefore conducted a warrantless search. In concluding that Richardson failed to carry his burden of establishing that AOL served as an agent or instrument of the government, the magistrate judge noted that AOL’s “discovery of [child pornography] associated with [Richardson’s] email account was the result of routine scanning the company conducts to recognize files that may be detrimental to AOL.” J.A. 216. The district court adopted this recommendation as well.

    Following the denial of his motion to suppress, Richardson pled guilty to transporting and shipping child pornography in violation of 18 U.S.C. ss 2252A(a)(1) & (b)(1), and to possessing child pornography in violation of 18 U.S.C. s 2252A(a)(5). Under the terms of his plea agreement, Richardson preserved his right to appeal both the denial of his motion to suppress and the granting of AOL’s motion to quash.

    II.

    [1] Richardson believes that AOL, functioning as a government agent, conducted a constitutionally impermissible search when it scanned his email communications for illicit images of child pornography without a search warrant. If AOL *364 was a government agent, then probable cause and a warrant were required before any search was undertaken. If, however, AOL acted in a private capacity, then government activity is not implicated and the Fourth Amendment does not apply.

    [2][3][4] Assuming that AOL conducted a search within the meaning of the Fourth Amendment, we conclude that AOL’s actions did not equate to governmental conduct triggering constitutional protection. The Fourth Amendment guarantees citizens the right to be free from “unreasonable searches and seizures.” U.S. Const. amend. IV. But for a few exceptions, warrantless searches and seizures are “per se unreasonable.”  Schneckloth v. Bustamonte, 412 U.S. 218, 219, 93 S.Ct. 2041, 36 L.Ed.2d 854 (1973) (internal quotation marks omitted). The Fourth Amendment, however, does not protect against searches, no matter how unreasonable, conducted “by private individuals acting in a private capacity.” United States v. Jarrett, 338 F.3d 339, 344 (4th Cir.2003); see United States v. Jacobsen, 466 U.S. 109, 113, 104 S.Ct. 1652, 80 L.Ed.2d 85 (1984). Rather, the Fourth Amendment “proscrib[es] only governmental action,” Jacobsen, 466 U.S. at 113, 104 S.Ct. 1652, and thus “evidence secured by private searches, even if illegal, need not be excluded from a criminal trial,” United States v. Ellyson, 326 F.3d 522, 527 (4th Cir.2003) (internal quotation marks omitted).

    [5][6] However, when a private individual conducts a search “as an instrument or agent of the Government,” Skinner v. Railway Labor Executives’ Ass’n, 489 U.S. 602, 614, 109 S.Ct. 1402, 103 L.Ed.2d 639 (1989), the limits imposed by the Fourth Amendment apply, see Jarrett, 338 F.3d at 344 (“The Fourth Amendment protects against unreasonable searches and seizures by Government officials and those private individuals acting as instruments or agents of the Government.” (alterations and internal quotation marks omitted)). The defendant shoulders the burden of establishing the existence of an agency relationship-“a fact-intensive inquiry that is guided by common law agency principles.” Ellyson, 326 F.3d at 527; see Jarrett, 338 F.3d at 344.

    [7][8][9] The question of whether a private entity such as AOL serves as a mere conduit for the Government in performing a search “necessarily turns on the degree of the Government’s participation in the private party’s activities.” Skinner, 489 U.S. at 614, 109 S.Ct. 1402. “[T]here must be some evidence of Government participation in or affirmative encouragement of the private search before a court will hold it unconstitutional. Passive acceptance by the Government is not enough.” Jarrett, 338 F.3d at 346. Additionally, we generally look for evidence bearing upon the question of “whether the private party’s purpose for conducting the search was to assist law enforcement efforts or to further h[is] own ends.” Ellyson, 326 F.3d at 527 (internal quotation marks omitted).

    Thus, the key factors bearing upon the question of whether a search by a private person constitutes a Government search are: “(1) whether the Government knew of and acquiesced in the private search; and (2) whether the private individual intended to assist law enforcement or had some other independent motivation.” Jarrett, 338 F.3d at 344.

    There is no question that law enforcement agents did not actually participate in the search at issue here. Richardson does not dispute LoGalbo’s assertion that no law enforcement agency specifically asked AOL to search Richardson’s email or provided information about Richardson to cause AOL to scan his emails. Neither *365 did law enforcement officials request that AOL aid in the investigation of Richardson “except through the ordinary forms of compulsory legal process,” i.e., “two administrative subpoenas and a preservation request” served pursuant to the Stored Communications Act “for the purpose of identifying the name, address, and other subscriber identifying information for an AOL client.” J.A. 66; see 18 U.S.C. s 2703. There is nothing in the record to suggest that, in fact, law enforcement agents were involved in the search or investigation of Richardson’s email transmissions until after AOL reported its discoveries to NCMEC. Likewise, there is little evidence in this record to suggest that AOL intended to assist the Government in its case against Richardson. Without the unspecified discovery materials to which he believes he is entitled pursuant to the subpoena duces tecum quashed by the district court, Richardson is essentially forced to concede that there is little evidence in this record upon which to demonstrate the existence of a de facto agency relationship between AOL and the Government.

    [10] Instead, Richardson contends that by mandating AOL’s compliance with the reporting scheme set forth in 42 U.S.C. s 13032, the Government actively encouraged the search of his email and transformed AOL into its agent. According to Richardson, the Government, by regulating ISP conduct, did not simply acquiesce to AOL’s actions, but instead was actively involved in the search so as to “trigger[ ] Fourth Amendment protections, regardless of the private party’s intentions.” Presley v. City of Charlottesville, 464 F.3d 480, 488 n. 7 (4th Cir.2006).

    Richardson draws an analogy to the Supreme Court’s decision in Skinner v. Railway Labor Executives’ Association for the basis of his argument. In Skinner, the Court considered whether the regulatory scheme imposed by the Federal Railroad Administration (“FRA”) for mandatory and permissive drug testing by private railroads implicated the Fourth Amendment. Subpart C of the regulations, entitled “Post-Accident Toxicological Testing,” required railroads to gather blood and urine samples from employees involved in serious accidents resulting in fatalities, injuries or significant property damage. See Skinner, 489 U.S. at 609, 109 S.Ct. 1402. Because the regulations in subpart C mandated the means, methods and procedures for testing, the Court concluded that “[a] railroad that complies with the provisions of Subpart C of the regulations does so by compulsion of sovereign authority, and the lawfulness of its acts is controlled by the Fourth Amendment.” Id. at 614, 109 S.Ct. 1402.

    A more difficult question for the Skinner Court, however, was whether the Fourth Amendment was implicated when a private railroad tested its employees under certain non-mandatory regulations. Subpart D of the FRA’s regulatory scheme, entitled “Authorization to Test for Cause,” was permissive, authorizing breath or urine tests when a supervisor had a ” ‘reasonable suspicion’ ” that a worker’s actions “contributed to the occurrence or severity of [an] accident” or that an employee was “under the influence of alcohol.” Id. at 611, 109 S.Ct. 1402. Although permissive, Subpart D nevertheless dictated how the blood and urine tests were to be conducted: “As in the case of samples procured under Subpart C, the regulations set forth procedures for the collection of samples, and require[d] that samples be analyzed by a method that is reliable within known tolerances.” Id. at 611-12, 109 S.Ct. 1402 (internal quotation marks omitted). Moreover, the regulations “confer[red] upon the FRA the right to receive certain biological samples and test results procured by railroads*366 pursuant to Subpart D.” Id. at 615, 109 S.Ct. 1402.FN3

    FN3. Subpart D also prescribed formal procedures in the event samples procured under Subpart D were used for disciplinary purposes:

    Subpart D further provides that whenever the results of either breath or urine tests are intended for use in a disciplinary proceeding, the employee must be given the opportunity to provide a blood sample for analysis at an independent medical facility. s 219.303(c). If an employee declines to give a blood sample, the railroad may presume impairment, absent persuasive evidence to the contrary, from a positive showing of controlled substance residues in the urine. The railroad must, however, provide detailed notice of this presumption to its employees, and advise them of their right to provide a contemporaneous blood sample.

    Skinner v. Railway Labor Executives’ Ass’n, 489 U.S. 602, 611, 109 S.Ct. 1402, 103 L.Ed.2d 639 (1989).

    The Court concluded that, despite the non-mandatory nature of Subpart D, a private railroad acts as a government agent when conducting breath or urine tests under that section:

    The fact that the Government has not compelled a private party to perform a search does not, by itself, establish that the search is a private one. Here, specific features of the regulations combine to convince us that the Government did more than adopt a passive position toward the underlying private conduct.

    Id. at 615, 109 S.Ct. 1402. The Court explained that the Government’s intent to actively participate and exert a measure of control over any search under Subpart D was apparent from the fact that the regulations preempted state law and “supersede[d] any provision of a collective bargaining agreement, or arbitration award construing such an agreement.” Id. (internal quotation marks omitted). Additionally, the Court noted a private railroad was not permitted to “divest itself of, or otherwise compromise by contract, the authority conferred by Subpart D,” and its employees were not “free to decline … to submit to breath or urine tests under the conditions set forth in Subpart D.” Id.

    Based on those provisions, the Court in Skinner concluded that any testing under Subpart D was not “primarily the result of private initiative” and thus triggered application of the Fourth Amendment. Id. The regulations in Skinner clearly demonstrated “the Government’s encouragement, endorsement, and participation,” id. at 615-16, 109 S.Ct. 1402, by “remov[ing] all legal barriers” to such testing, by making clear the Government’s “strong preference for testing” and “its desire to share the fruits of such intrusions,” and by “mandat[ing] that the railroads not bargain away the authority to perform tests granted by Subpart D.” Id. at 615, 109 S.Ct. 1402.

    We reject Richardson’s attempt to draw an analogy between the simple reporting requirement of s 13032 and the regulatory scheme at issue in Skinner authorizing a search. The version of s 13032 in effect when AOL reported Richardson required only that an ISP such as AOL report to the Cyber Tip Line at NCMEC in the event it “obtain[ed] knowledge of facts or circumstances from which a violation of section … 2252A … involving child pornography … [wa]s apparent.” 42 U.S.C. s 13032 (b)(1). Unlike the regulatory scheme at issue in Skinner, s 13032(b)(1) neither directed AOL to actively seek evidence of child pornography in certain circumstances nor prescribed the procedures for doing so in the event that AOL decided to ferret out subscribers using its system to transmit illegal digital images. In fact, Congress made abundantly clear that s 13032(b)(1) was not to be interpreted as requiring an ISP to monitor a subscriber’s internet activity, explicitly stating that *367 “[n]othing in this section may be construed to require a provider of electronic communication services or remote computing services to engage in the monitoring of any user, subscriber, or customer of that provider, or the content of any communication of any such person.” 42 U.S.C. s 13032(e).

    The extensive regulatory scheme at issue in Skinner suggested a “strong preference for testing,” having eliminated “all legal barriers to the testing.” Skinner, 489 U.S. at 615, 109 S.Ct. 1402. Indeed, the FRA’s regulatory scheme forbade railroads from contracting away the authority to perform such tests via the collective bargaining process. By contrast, nothing in s 13032 precludes AOL or any other ISP from entering into subscriber agreements that actually preclude monitoring or the use of a scanning tool, nor does any portion of s 13032 remotely suggest a congressional preference for monitoring.

    Moreover, the penalty provision for failure to report contained in s 13032 does not persuade us to the contrary. Richardson suggests that ISPs such as AOL would be compelled as a practical matter to monitor their subscribers in the face of substantial monetary fines imposed against “[a] provider … who knowingly and willfully fails to make a report” under s 13032(b)(1). 42 U.S.C. s 13032(b)(4). FN4 As AOL points out, however, the converse is just as likely to be true, if not more so-if substantial fines are imposed for the failure to report known facts suggesting a violation of federal child pornography laws, ISPs and others subject to such penalties might just as well take steps to avoid discovering reportable information.

    FN4. An initial failure to report carried a fine of up to $50,000, while a subsequent failure carried a possible fine of $100,000. See 42 U.S.C. s 13032(b)(4).

    Finally, we reject Richardson’s argument that Congress’ intent to deputize ISPs in the Government’s effort to fight child pornography on the Internet is reflected by the immunity from civil liability afforded by s 13032(c). See 42 U.S.C. s 13032 (c) (“No provider or user of an electronic communication service or a remote computing service to the public shall be held liable on account of any action taken in good faith to comply with or pursuant to this section.”). Richardson believes this is especially true given the policy statements contained in the Communications Decency Act of a national policy “to remove disincentives for the development and utilization of blocking and filtering technologies that empower parents to restrict their children’s access to objectionable or inappropriate online material” and “to ensure vigorous enforcement of Federal criminal laws to deter and punish trafficking in obscenity … by means of computer.” 47 U.S.C. ss 230(b)(4) & (5).

    The plain language of s 13032(c) clears the way for ISPs to report violations of the child pornography laws, not investigate them. The provision was clearly aimed at immunizing civil claims for mistaken and incorrect reports issued to the NCMEC and in no way encourages surreptitious searches. The Communications Decency Act is likewise of no assistance to Richardson, as it aims “to encourage service providers to self-regulate the dissemination of offensive material over their services” by protecting service providers from law-suits casting them “in the role of a publisher.” Zeran v. America Online, Inc., 129 F.3d 327, 331 (4th Cir.1997).

    We conclude that the statutory provision pursuant to which AOL reported Richardson’s activities did not effectively convert AOL into an agent of the Government for Fourth Amendment purposes. *368 III.

    [11] We review the district court’s order granting AOL’s motion to quash under Rule 17(c) of the Federal Rules of Criminal Procedure for an abuse of discretion. See United States v. Fowler, 932 F.2d 306, 311 (4th Cir.1991). In this context, an abuse of discretion occurs when the court uses an erroneous legal standard or bases its decision on clearly erroneous facts. See United States v. Under Seal (In re Grand Jury), 478 F.3d 581, 584 (4th Cir.2007).

    [12] The subpoena duces tecum issued by Richardson to AOL sought the production of essentially any document that would support his theory that AOL was in an agency relationship with the Government:

    YOU ARE … COMMANDED to bring with you the following document(s) or object(s): … [A]ll records (including but not limited to emails, postal correspondence, minutes/notes of meetings, memoranda, and public relations material, and Congressional testimony) relating to AOL’s coordination of efforts, training and/or strategic partnerships with all agencies of the [U.S.] Department of Justice, … Postal Service, the Secret Service, the Internet Crimes Against Children Task Force … and the [NCMEC], regarding the detection and reporting of child pornography content in emails and/or web browsing activity by AOL subscribers or on its network.

    J.A. 64.

    [13][14] Under Rule 17(c)(2), the court “may quash or modify” a subpoena duces tecum “if compliance would be unreasonable or oppressive.” Fed.R.Cr.P. 17(c)(2). A subpoena is unreasonable or oppressive if it is “excessively broad” or “overly vague.” In re Grand Jury, 478 F.3d at 584. In that vein, a fundamental concern is that the subpoena duces tecum is not intended to provide a means of pretrial discovery; rather, its primary purpose is simply “to expedite the trial by providing a time and place before trial for the inspection of subpoenaed materials.” Nixon, 418 U.S. at 689-99, 94 S.Ct. 3090; see Fowler, 932 F.2d at 311 (rejecting criminal defendant’s application for a subpoena duces tecum in that it “was little more than a duplication of [his] discovery motion”).

    [15][16] Richardson bears the burden under Nixon of showing that the material he has subpoenaed meets the requirements of “(1) relevancy; (2) admissibility; [and] (3) specificity.” Nixon, 418 U.S. at 700, 94 S.Ct. 3090. The subpoena duces tecum must be “made in good faith and [must] not [be] intended as a general ‘fishing expedition.’ ” Id.

    Richardson contends that any information tending to show a partnership or agency relationship between AOL and the Government was highly relevant to his Fourth Amendment claim and that the district court’s refusal to require compliance precluded him from developing this claim. While such information might indeed be relevant, Richardson fails to address the principal deficiency in his subpoena-the lack of specificity. Without it, Richardson is merely fishing for evidence that might support his theory, as if he were in the discovery phase of a civil action. Even on appeal, the phrasing of Richardson’s argument-that “he should be allowed to discover the facts” supporting his theory that AOL and the Government were in a partnership-betrays his intention to misuse the subpoena duces tecum as a discovery mechanism to develop his agency claim. As we have explained consistently, “a Rule 17 subpoena duces tecum cannot substitute for the limited discovery otherwise permitted in criminal*369 cases and the hope of obtaining favorable evidence does not justify the issuance of such a subpoena.” United States v. Caro, 597 F.3d 608, 620 (4th Cir.2010) (internal quotation marks omitted).

    We conclude, therefore, that the district court did not abuse its discretion in granting AOL’s motion to quash.

    IV.

    [17][18][19] Finally, Richardson challenges the district court’s conclusion that the search warrant was supported by probable cause. When considering a district court’s denial of a suppression motion, we review factual findings for clear error and legal conclusions de novo. See United States v. Blake, 571 F.3d 331, 338 (4th Cir.2009), cert. denied, — U.S. —-, 130 S.Ct. 1104, — L.Ed.2d —- (2010). And, “[a]lthough we review de novo the denial of the motion to suppress by the district court, the determination of probable cause by the issuing magistrate is entitled to great deference from this court.” United States v. Hodge, 354 F.3d 305, 309 (4th Cir.2004). Our duty ” ‘is simply to ensure that the magistrate had a substantial basis for concluding that probable cause existed.’ ” Id. (quoting Illinois v. Gates, 462 U.S. 213, 238-39, 103 S.Ct. 2317, 76 L.Ed.2d 527 (1983)).

    [20][21] Although the concept of probable cause defies a precise definition, it “exist[s] where the known facts and circumstances are sufficient to warrant a man of reasonable prudence in the belief that contraband or evidence of a crime will be found” in the place to be searched. Ornelas v. United States, 517 U.S. 690, 696, 116 S.Ct. 1657, 134 L.Ed.2d 911 (1996). A probable cause assessment requires the issuing judge to decide whether, given the totality of the circumstances, there is a “fair probability that contraband or evidence of a crime will be found in a particular place.” Gates, 462 U.S. at 238, 103 S.Ct. 2317.

    [22] Richardson contends that there was no probable cause because the information supporting the issuance of the search warrant was stale. See United States v. McCall, 740 F.2d 1331, 1335-36 (4th Cir.1984) (“A valid search warrant may issue only upon allegations of facts so closely related to the time of the issue of the warrant as to justify a finding of probable cause at that time.” (internal quotation marks omitted)); id. at 1336 (“[E]vidence seized pursuant to a warrant supported by ‘stale’ probable cause is not admissible in a criminal trial to establish the defendant’s guilt.”). In this regard, Richardson claims that the fatal flaw in Agent White’s affidavit is that it failed to specify the date on which he possessed or emailed the illegal images; at most, Richardson contends, the supporting affidavit established probable cause that he possessed and distributed child pornography at some unspecified time in the past. Furthermore, Richardson suggests that the only information offered to the issuing judge to “freshen” the probable cause was boilerplate “profile” information about the general tendencies of child pornography collectors, e.g., that “[i]ndividuals involved in the possession and transportation of child pornography rarely, if ever, dispose of their sexually explicit materials” and tend to store their collected materials in their “residence or other secure location to ensure convenient and ready access.” J.A. 50. If Agent White’s affidavit establishes probable cause, Richardson concludes, then the residence of anyone who has ever possessed or distributed any such materials at some point in the past will be subject to a search so long as the supporting affidavit includes similar boilerplate language. See *370United States v. Prideaux-Wentz, 543 F.3d 954, 957, 958- 59 (7th Cir.2008) (concluding affidavit contained stale information despite description of ” ‘child pornography collector characteristics’ ” where the government did not identify dates on which illegal images were uploaded and record indicated that images could have been obtained as much as four years prior to the warrant). We cannot agree.

    [23] Although “there is no question that time is a crucial element of probable cause,” McCall, 740 F.2d at 1335, the existence of probable cause cannot be determined “by simply counting the number of days between the occurrence of the facts supplied and the issuance of the affidavit,” id. at 1336 (internal quotation marks omitted). Instead, we “look to all the facts and circumstances of the case, including the nature of the unlawful activity alleged, the length of the activity, and the nature of the property to be seized.” Id. In the context of child pornography cases, courts have largely concluded that a delay-even a substantial delay-between distribution and the issuance of a search warrant does not render the underlying information stale. This consensus rests on the widespread view among the courts-in accord with Agent White’s affidavit-that “collectors and distributors of child pornography value their sexually explicit materials highly, ‘rarely if ever’ dispose of such material, and store it ‘for long periods’ in a secure place, typically in their homes.” United States v. Lacy, 119 F.3d 742, 746 (9th Cir.1997); see United States v. Watzman, 486 F.3d 1004, 1008 (7th Cir.2007) (rejecting challenge to probable cause where three months elapsed between the crime and issuance of the warrant where agent testified child pornographers retain their collected materials for long periods of time); United States v. Gourde, 440 F.3d 1065, 1072 (9th Cir.2006) (en banc) (concluding that “[t]he details provided on the use of computers by child pornographers and the collector profile” provided support for a finding of probable cause); United States v. Riccardi, 405 F.3d 852, 861 (10th Cir.2005) (finding probable cause based, in part, on “the observation that possessors often keep electronic copies of child pornography”); United States v. Lemon, 590 F.3d 612, 615 (8th Cir.2010) (“Many courts, including our own, have given substantial weight to testimony from qualified law enforcement agents about the extent to which pedophiles retain child pornography.”), cert. denied, No. 90-10170, —U.S. —-, 130 S.Ct. 3305, — L.Ed.2d —-, 2010 WL 1531424 (2010); United States v. Morales-Aldahondo, 524 F.3d 115, 119 (1st Cir.2008) (holding that three-year delay between acquisition of child pornography and application for warrant did not render supporting information stale since “customers of child pornography sites do not quickly dispose of their cache”), cert. denied, — U.S. —-, 129 S.Ct. 512, 172 L.Ed.2d 376 (2008).

    Here, the information provided by Agent White established that no more than four months had passed from the time that Richardson emailed an image depicting child pornography using his “tr [email protected] aol. com” account until the warrant was issued on November 17, 2005. Although Agent White did not supply the precise date of the email transmission, he indicated that the “tr [email protected] aol. com” account was established by Richardson on July 22, 2005, and the offending email could thus not have been sent before that time. We conclude that a delay of four months does not preclude a finding of probable cause based on staleness in light of the other information supplied by Agent White, including the previous instance in which Richardson used an AOL account to send such images and Agent White’s sworn statement that child pornographers “rarely, if ever, dispose of their sexually explicit materials,” *371 and that “even if a computer file is deleted from a hard drive or other computer media, a computer expert is still likely to retrieve … such files through scientific examination of the computer.” J.A. 50.

    Richardson raises one other challenge to the search warrant that is closely related to the idea of staleness. He contends that the affidavit failed to include any specific facts suggesting that evidence of these offenses would be found in the Andover Woods apartment. That is, Richardson argues the affidavit failed to establish a nexus with the place to be searched. According to Richardson, the only basis in the supporting affidavit for finding the required nexus to Richardson’s Andover Woods apartment was the generic, boilerplate “child pornographer profile.” Richardson believes that there must be some “specific” allegation that he was keeping evidence of these crimes at the Andover Woods apartment-for example, that he was using the same computer at the new residence. We disagree.

    [24] Richardson’s argument ignores the reasonable, commonsense inferences that an issuing magistrate is permitted to draw from the totality of the circumstances in assessing probable cause. As we have observed before, “the nexus between the place to be searched and the items to be seized may be established by the nature of the item and the normal inferences of where one would likely keep such evidence.” United States v. Anderson, 851 F.2d 727, 729 (4th Cir.1988). Agent White’s affidavit linked Richardson’s email accounts, which he used to distribute child pornography, to his previous and current (at the time of the warrant) addresses. The totality of the evidence, including this information, provided the issuing magistrate with a substantial basis for concluding that there was a fair probability that the computer Richardson used to engage in these unlawful activities was kept in his current residence.

    V.

    For the foregoing reasons, we affirm the order of the district court denying Richardson’s motion to suppress and granting AOL’s motion to quash the subpoena duces tecum.

    AFFIRMED

    Continue reading →United States Court of Appeals, Fourth Circuit. UNITED STATES of America, Plaintiff-Appellee, v. Thomas McCoy RICHARDSON, Jr., Defendant-Appellant. AOL LLC, Amicus Supporting Appellee. No. 09-4072. Argued March 24, 2010. Decided June 11, 2010. Background: Following denial of defendant’s motion to suppress and grant of internet service provider’s motion to quash his subpoena duces tecum, 2008 WL 818863, he was convicted, upon a conditional guilty ...

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