United States v. Lin Lyn Trading, Ltd., and Raymond Lynn Thomas

Citations: 149 F.3d 1112; 1998 U.S. App. LEXIS 15016; 1998 WL 372353Docket: 96-4126

Court: Court of Appeals for the Tenth Circuit; July 6, 1998; Federal Appellate Court

SummaryOriginalCytator Case TreatmentBackward CitatorAnalysis

EnglishEspañolSimplified EnglishEspañol Fácil

Defendants Raymond Lynn Thomas and Lin Lyn Trading, Ltd. successfully moved to suppress evidence and dismiss an indictment due to the government's seizure of a notepad containing confidential attorney-client communications. The United States appealed this decision. The Court of Appeals for the Tenth Circuit affirmed the suppression of evidence but reversed the dismissal of the indictment, concluding that while the district court acted correctly in suppressing the evidence due to its privileged nature, it abused its discretion by dismissing the indictment.

The case originated from a confidential informant's tip in 1990, leading to a Customs investigation of Lin Lyn Trading, owned by Thomas, for allegedly importing goods without proper declaration and illegally importing trademarked toys. In January 1991, Customs agents discovered undeclared lace merchandise in a shipment to Lin Lyn, prompting a search warrant that resulted in the seizure of numerous documents on February 22, 1991. Thomas was informed of the investigation concerning violations of 18 U.S.C. §§ 542 and 545.

On March 29, 1991, upon his return from Asia, Customs inspectors detained Thomas at Portland International Airport. During the inspection, Customs Agent Keith Seagraves reviewed documents Thomas was carrying, including a notepad that Thomas indicated contained attorney-client communications. Despite recognizing the potential privilege, Seagraves seized the notepad because it suggested undervaluation of imported goods, copied its contents, and sent the notepad to the investigating agent.

Defendants' counsel requested the return of a notepad, leading Assistant U.S. Attorney Wayne Dance to order the sealing of materials received from Seagraves. However, the notepad had already become widely known within the Salt Lake City Customs office, and Seagraves had retained copies that were not sealed. These copies remained in an unmarked folder in the Portland office, under Agent Dennis Grossman's custody after Brua's retirement. On April 4, 1991, Customs declined to return previously seized documents, citing "new evidence," which the district court inferred referred to items seized from defendants on March 29, 1991. Following the investigation's conclusion in the summer of 1993, defendants were informed they needed to file a motion for the notepad's return under Federal Rule of Criminal Procedure 41(e). Their motion, filed on August 24, 1993, led to the sealed notepad being delivered to the district court. In February 1994, Magistrate Judge Samuel Alba recommended granting the motion due to the unlawful seizure of privileged communications, a recommendation accepted by District Judge Dee Benson on September 7, 1994. The government appealed but later dismissed the appeal after the Solicitor General's refusal to proceed.

On October 20, 1994, defendants Thomas and Lin Lyn were indicted for conspiracy and smuggling violations. Thomas received his documents back on October 25, 1994, as per the court order. On January 31, 1996, the defendants moved to suppress all evidence seized after March 29, 1991, arguing that the illegally seized notepad colored the case investigation. The government countered that it had independent sources for the evidence obtained thereafter. Subsequently, the defendants requested the indictment's dismissal, claiming violations of their attorney-client privilege impacted their Sixth Amendment rights. An evidentiary hearing was held in February and March 1996, with testimonies from Grossman, Thomas, and Brua. After Grossman's testimony, he found the unmarked folder containing the notepad copy, which he sent to AUSA Dance, who submitted it to the court on March 14, 1996. The district court ordered Grossman to clarify this discovery, and he explained that he had not reviewed the folder prior to his testimony but recognized its significance afterward.

The district court determined that Seagraves intentionally seized a notepad containing privileged information, with agents in the Salt Lake City Customs office aware that its contents included privileged communications relevant to the Lin Lyn investigation. The court found that Grossman and Seagraves likely discussed the notepad's contents and rejected Grossman's claim of unknowing possession of an unmarked folder. It concluded that Customs agents accessed and utilized the notepad in their investigation, rendering the entire investigation tainted by the illegal seizure. The government failed to demonstrate independent sources for the indictment's information, leading the court to rule that the defendants' Fifth and Sixth Amendment rights were violated, resulting in the dismissal of the indictment.

The government filed a motion to reconsider, arguing that the Sixth Amendment was not implicated at the time of the seizure and that the copy of the notepad in Portland was not kept in violation of the court's order. The defendants opposed this motion, asserting that the government improperly attempted to introduce new evidence. The district court denied the government's motion and granted the defendants' motion to strike. The government appealed.

On appeal, the government contended that the seizure was legal and that the sanctions imposed by the district court, including evidence suppression and indictment dismissal, were unwarranted. Judge Benson had previously ruled in 1994 that the seizure was illegal, a decision the government did not challenge. As a result, the legality of the seizure is considered waived by the government. The government argued that the investigation was based on independent sources, including a confidential informant and documents seized from Lin Lyn's office. The standard for reviewing the district court's ruling on suppression motions is that such rulings are upheld unless clearly erroneous or based on an incorrect legal standard, with legal questions reviewed de novo.

Under the "fruit of the poisonous tree" doctrine, the exclusionary rule prohibits the admission of evidence obtained through police illegality. However, evidence may be admitted if the government demonstrates: (1) it was obtained from an independent source, (2) it would have been discovered inevitably, or (3) the connection between the illegality and the evidence is sufficiently attenuated. The government must prove these points by a preponderance of the evidence. In the case of Thomas and Lin Lyn, the government asserted an independent source for the evidence but failed to provide adequate proof during the evidentiary hearing. The district court chose not to believe the government’s witnesses and noted the absence of documents from Lin Lyn that could have substantiated the government's claims. Consequently, the court suppressed all evidence obtained after March 29, 1991, due to the government's inability to establish independent sources.

Regarding the dismissal of the indictment, the government contended this sanction was excessive. The review of such a dismissal is based on whether the district court abused its discretion, which occurs if there is a legal error or a clearly erroneous fact finding. The appellate court identified three abuses of discretion by the district court: reliance on the Sixth Amendment right to counsel despite the illegal conduct occurring before indictment, failure to require a showing of prejudice from the defendants, and neglecting to consider less severe remedies. The court clarified that the right to counsel does not attach until adversarial proceedings begin, which in this case occurred after the notepad was seized, thus negating the claim of a Sixth Amendment violation.

The district court ruled that the government's seizure of evidence violated the Fourth Amendment and that, due to the use of this tainted evidence, the Sixth Amendment right to counsel was violated upon the return of the indictment. However, referencing Maine v. Moulton, the court clarified that evidence obtained in violation of the Sixth Amendment is inadmissible only if an indictment has already been filed; therefore, the district court erred in its conclusion that the Sixth Amendment was violated immediately after the indictment. 

Additionally, the district court incorrectly determined that defendants Thomas and Lin Lyn were prejudiced by the government's conduct. The record lacks sufficient evidence to support a finding of prejudice, as the court did not consider documents and affidavits presented by the government that could have clarified the situation. According to the precedent set in Kingston, the burden of proving prejudice lies with the defendants, not the government, regardless of whether the violation was intentional. 

Moreover, the district court's determination that the government's actions violated the Fifth Amendment right to due process and warranted dismissal of the indictment was deemed an abuse of discretion, as the court failed to explore less severe remedies. Dismissal of an indictment is a significant and disfavored action, and the court must justify its decision in the record to allow for proper review.

The Supreme Court emphasizes the importance of neutralizing the impact of illegal evidence acquisition to ensure defendants receive effective counsel and a fair trial. The appropriate remedy for violations, such as the alleged infringement of the Fifth Amendment, is typically the suppression of the illegally obtained evidence and its derivatives. In this case, the district court failed to justify why less severe sanctions would not suffice to protect the defendants' rights, indicating that suppressing all evidence obtained after March 29, 1991, could be a suitable remedy. However, the independence of the grand jury was not fundamentally compromised, and an indictment cannot be dismissed unless prosecutorial misconduct significantly undermines the grand jury's judgment. Though the evidence in question was seized illegally, the Supreme Court permits grand juries to consider such evidence unless they also violate constitutional protections. The prosecution may utilize untainted evidence acquired before the illegal seizure to pursue its case, reinforcing that defendants are not entitled to immunity from lawful government actions. The district court's decision to suppress evidence obtained post-March 29, 1991, is affirmed, while its dismissal of the indictment is reversed, and the case is remanded for further proceedings.

Thomas and Lin Lyn have filed a motion to strike parts of the government's appellate brief, arguing that the government's reliance on materials that were stricken by the district court is improper since those materials are not part of the appellate record. The motion to strike is denied, with the court noting that it would have been preferable for the district court to deny the government's motion rather than striking it. Nevertheless, any error resulting from this action is deemed harmless, as the district court evidently considered the motion before its denial, and the appellate court has reviewed the government's arguments as discussed in Section III. 

Additionally, the court clarifies that Thomas and Lin Lyn, though treated as one entity in the litigation, are distinct legal entities. It is assumed that Thomas attended the attorney-client conference in both his individual capacity and as an officer of Lin Lyn, thus allowing Lin Lyn to assert standing for attorney-client privilege regarding the seizure of materials from Thomas. 

The government claims that Agent Seagraves was unavailable to testify due to recovering from a serious auto accident, but there is no record of the government informing the district court of Seagraves's unavailability during the hearing. The information about Seagraves's condition was only provided later in response to the defendants' motion to strike. Hence, the district court was not required to consider Seagraves's affidavit, which was submitted too late.

Lastly, while the district court may have believed that the defendants' Sixth Amendment rights were violated, the court asserts that the Sixth Amendment does not apply in this case.