John K. Maciver Inst. for Pub. Policy, Inc. v. Schmitz
Docket: No. 17-1790
Court: Court of Appeals for the Seventh Circuit; March 21, 2018; Federal Appellate Court
The appeal centers on the Wisconsin "John Doe proceeding," a legal mechanism similar to a grand jury investigation, which has been in use since Wisconsin's territorial days and is codified under Wisconsin Statute 968.26. A putative class of plaintiffs, including the John K. MacIver Institute for Public Policy, alleges that their federal rights were violated during a John Doe investigation conducted between 2012 and 2014, which investigated illegal campaign coordination between advocacy groups and a political candidate. The plaintiffs sued members of the former Government Accountability Board and the Milwaukee County District Attorney's Office, claiming that the defendants improperly obtained search warrants for MacIver's electronic records and executed these warrants without notifying MacIver.
MacIver's lawsuit in the federal district court for the Western District of Wisconsin alleged violations of the Stored Communications Act (SCA). The district court dismissed the case, leading to MacIver's appeal. The court determined that only one issue needed to be addressed: the SCA's good-faith defense. Ultimately, the court affirmed the district court's judgment in favor of the defendants, concluding they were entitled to the good-faith defense.
John Doe proceedings serve two primary purposes: to investigate potential crimes and to protect citizens from baseless prosecutions. The presiding judge oversees the proceedings, ensuring due process for those involved and determining whether there is probable cause to issue a criminal complaint at the conclusion of the investigation. The judge acts as a judicial authority rather than merely a facilitator for the prosecution.
At the time relevant to this case, judges in John Doe proceedings had the authority to subpoena witnesses, take sworn testimony, and issue search warrants, as per Wis. Stat. 968.26(2)(c) (2009), later amended by 2015 Wis. Act 64. These proceedings could be conducted in secret, preventing subjects from being aware of the investigation (Wis. Stat. 968.26(3)). The case involves defendants linked to the disbanded Wisconsin Government Accountability Board and the Milwaukee County District Attorney's Office, including key individuals such as Francis Schmitz and John Chisholm.
On August 10, 2012, a petition was filed to initiate a John Doe investigation into alleged campaign-finance violations, requesting a secrecy order. The petition was assigned to Judge Barbara Kluka, who authorized the proceeding and issued the secrecy order. The investigation expanded in mid-2013, leading to Schmitz's appointment as special prosecutor. Judge Kluka authorized search warrants for the electronic records of the MacIver organization and others, resulting in the seizure of nearly five years of MacIver's electronic communications without their knowledge.
In late 2013, recipients of subpoenas moved to quash them, and due to an unspecified conflict, Judge Kluka recused herself, with the case reassigned to Judge Gregory Peterson. On January 10, 2014, Judge Peterson granted the motions, determining that Wisconsin law permitted coordination between campaign committees and outside groups for financing issue advocacy. The Wisconsin Supreme Court upheld this decision on July 16, 2015, closing the John Doe proceedings and mandating the return and destruction of the seized materials. A subsequent order on December 2, 2015, required Schmitz to file original documents with the court while allowing related copies to be destroyed, with a completion deadline set for November 2, 2016.
MacIver initiated a legal action on August 1, 2016, on behalf of a proposed class of plaintiffs whose information was seized during a John Doe proceeding. He claims that the defendants improperly obtained and executed search warrants for electronic communications without providing notice, constituting a violation of the Stored Communications Act (SCA). MacIver argues that the John Doe proceeding did not qualify as a "court of competent jurisdiction" under the SCA, thus invalidating the search warrants due to the lack of notice. He seeks both damages and declaratory relief, including an injunction to prevent the defendants from obtaining or disclosing additional records and to compel them to provide copies of all seized records. The defendants contended they do not possess the documents, which are under seal with the Wisconsin Supreme Court and the district court. The district court allowed the defendants to file copies under seal due to concerns over a file-and-destroy order affecting their defense. MacIver later requested a preliminary injunction for similar relief, but while this motion was pending, the defendants moved to dismiss the case. The district court granted the dismissal, ruling that MacIver did not adequately state a claim since the search warrants were compliant with the SCA and that the defendants were protected by the SCA's good faith defense and qualified immunity. Consequently, MacIver's motion for a preliminary injunction and return of the seized materials was denied, leading to this appeal. The case hinges on the interpretation of the SCA, part of the Electronic Communications Privacy Act (ECPA), which comprises three titles, two of which are pertinent here. Title I, the "Wiretap Act," addresses unauthorized interception of communications, while Title II, the SCA, regulates the privacy of stored electronic communications. The SCA restricts government access to electronic information and sets conditions under which search warrants are required, making the validity of the search warrants the central issue of the litigation.
A warrant must be issued by a "court of competent jurisdiction" according to the statute, specifically following the Federal Rules of Criminal Procedure or state procedures, as outlined in 18 U.S.C. 2703(a) and (b)(1)(A). The term "court of competent jurisdiction" includes U.S. district courts, magistrate judges, U.S. courts of appeals, and state courts authorized to issue search warrants. MacIver contends that the warrants in this case were not issued by a competent court, thus making the searches unlawful under the Stored Communications Act (SCA). The SCA allows for a "good faith reliance" defense if officials act based on a court warrant or order, as established in 18 U.S.C. 2707(e)(1) and previously interpreted in McCready v. eBay, Inc.
To evaluate the good faith defense, both MacIver's position and the defendants' arguments must be examined. MacIver concedes that the warrants issued by Judge Kluka were valid under Wisconsin law, referencing a state case that supported judicial authority. Consequently, MacIver must argue why compliance with state law is insufficient under the SCA. They argue that the Electronic Communications Privacy Act (ECPA) distinguishes between "court" and "judge," noting that the Wiretap Act refers to a "State court judge of competent jurisdiction," while the SCA refers to a "court of competent jurisdiction." MacIver posits that this terminological distinction implies Congressional intent to differentiate between these entities, forming a reasonable basis for their argument.
A principle of statutory construction holds that if Congress includes specific language in one section of a statute but omits it in another, it is presumed that such inclusion or exclusion was intentional. In this case, MacIver argues that Congress has purposefully excluded certain warrants from the Stored Communications Act (SCA) that are lawful under state law. The Wisconsin John Doe statute distinguishes between a "judge" and a "court," where a judge can conduct investigations and examine witnesses, but only a court can compel testimony or evidence. This distinction has been affirmed by Wisconsin courts, noting that a John Doe judge does not possess the powers of a court, and proceedings under this statute are not considered court proceedings. MacIver contends that a John Doe proceeding must qualify as a "court of general criminal jurisdiction" to comply with the SCA. However, the jurisdiction of a John Doe proceeding is limited to the specific subject matter of the complaint, preventing the judge from investigating beyond that scope. This limitation is deemed essential to prevent the proceedings from resembling general warrants. While the definition of "court of competent jurisdiction" under the SCA is somewhat open-ended, it suggests that a warrant must be issued by a court of general criminal jurisdiction, rather than by a judge in an ancillary capacity such as a John Doe investigation.
MacIver's arguments are acknowledged, but the defendants present a valid counterargument regarding the Stored Communications Act (SCA). They assert that the SCA does not distinctly separate "judge" from "court," requiring only a search warrant valid under state law. The defendants argue that references to the Wiretap Act are irrelevant, as it necessitates a "super" search warrant and a "judge of competent jurisdiction" with specific additional findings for wiretap warrants. In contrast, the SCA's terminology, "court of competent jurisdiction," simply ensures warrants are issued through valid judicial proceedings under state law, rather than informal processes.
The defendants clarify that judges wield the power of the court, particularly at the trial level, and that it is misleading to claim a John Doe judge does not constitute a court. They reference Federal Rule of Criminal Procedure 41(b), which allows magistrate judges or judges from state courts to issue search warrants, highlighting that Wisconsin law permits Judge Kluka to issue the warrants in question.
The distinction between investigatory and adjudicative phases in both federal and state systems is noted, with examples such as federal grand juries operating under district court supervision. The SCA, distinct from the Wiretap Act, was intended to acknowledge that judges authorized by state law can exercise their powers. The use of the term "court of competent jurisdiction" serves as shorthand, and Wisconsin's legal framework affirms the authority of John Doe judges to issue warrants. Despite limitations on the powers of a John Doe judge, the SCA does not require the judge to possess all court powers, and state law affirms their authority to issue search warrants, a point conceded by MacIver.
Defendants contest MacIver's claim that the John Doe judge operates without external authority, clarifying that the judge was appointed by the chief judge of the Milwaukee County Circuit Court with the state's chief justice's agreement. The Wisconsin Supreme Court has established that a John Doe judge's decisions can be reviewed through a supervisory writ, similar to grand jury proceedings, even though direct appeals are not permitted. The appointment of judges Kluka and Peterson as John Doe judges did not violate any statutes regarding "reserve" judges, as they possess similar powers to active judges, including the authority to issue warrants.
The John Doe statute allowed the Chief Justice of Wisconsin to delegate oversight of the investigation to any authorized circuit court judge, which was done in this case. Although the judges themselves were not "courts of general criminal jurisdiction," they acted within their judicial capacity.
MacIver challenges the defendants' good-faith defense at the pleading stage, arguing that it is inappropriate to consider affirmative defenses under Rule 12(b)(6). However, defendants assert that MacIver's Amended Complaint does not dispute the legitimacy of the John Doe proceeding or the search warrants issued, only claiming they were executed improperly without notice. Since MacIver's argument is based solely on legal interpretation, the court can address the good-faith defense at this stage as previously established in case law.
The good-faith defense is not limited to defendants who can demonstrate entitlement to judgment on the merits, as it is based on the premise that investigating agents should not be liable for mistakes made in good faith. This aligns with the Supreme Court's ruling in United States v. Leon, which established that the Fourth Amendment's exclusionary rule does not apply to evidence obtained in good faith reliance on a warrant. The defendants acted objectively reasonably by following the correct procedures in the John Doe proceeding, obtaining warrants from properly appointed judges, and investigating potential violations of election laws, despite subsequent changes in the legal landscape that they could not have predicted. The legal system ultimately supported their actions, as evidenced by Judge Peterson quashing subpoenas and the Wisconsin Supreme Court affirming this decision. Prosecutors should not face lawsuits for losing cases in court.
Additionally, the defendants assert entitlement to qualified immunity, which protects officials from damages unless it can be shown they violated a clearly established statutory or constitutional right. The district court recognized that the legal interpretation of the SCA was not clearly established at the time the warrants were issued, supporting the defendants' claim to qualified immunity. Although MacIver contends that qualified immunity does not apply to statutory claims under the SCA, existing circuit precedents have affirmed its applicability in related contexts, such as the Wiretap Act. Despite MacIver’s reliance on a contrary D.C. Circuit ruling, the court finds no compelling reason to differentiate between the SCA and the Wiretap Act, confirming that qualified immunity is available to SCA defendants, including those in this case.
MacIver requests two forms of injunctive relief: (1) an injunction to prevent defendants from future seizures or public disclosures of records, and (2) an order for confidential provision of seized materials to MacIver and potential class members. Both requests are deemed meritless. The claim for prospective relief cannot be evaluated due to the lack of a "real and immediate threat" of future injuries, as established in relevant case law. The Amended Complaint acknowledges that the Board has been dissolved, the relevant John Doe proceedings are closed, the underlying legal theory has been repudiated, and the statute has been amended, indicating no imminent threat of future prosecution or seizures.
Regarding the second request for the return of previously seized materials, a prior ruling dictates that the state court has established regulations on document disclosure from the John Doe proceedings. The Wisconsin Supreme Court's ruling on document disclosure negates the need for further injunctions from the defendants. Additionally, the district court denied MacIver's motion under Federal Rule of Criminal Procedure 41(g) for the return of property, as the materials are under the jurisdiction of the Wisconsin Supreme Court, which must handle requests for document copies. Since all defendants are protected by the good-faith defense and qualified immunity, the district court's judgment is affirmed.
