FBI breached search, privacy rights during safe deposit box seizure at self-storage facility

LOS ANGELES (CN) — A Ninth Circuit appeals panel found Tuesday that a group of safe deposit box owners' Fourth Amendment rights against unreasonable search and seizure were violated when the FBI seized 700 safe deposit boxes at a self-storage facility in Beverly Hills during a raid in 2021.

The FBI sought the safe deposit boxes as part of its investigation into US Private Vaults, which it suspected of money laundering. 

While the FBI did find evidence of criminal activity in some boxes, it also seized boxes belonging to non-criminal safe deposit box owners — who filed a class action against the agency in June 2021 — that contained money, legal documents, jewelry, family trusts and other personal property.

The government told the class members it intended to keep the property at first, but eventually returned it. The plaintiffs still seek equitable relief requiring the government to destroy or return records related to the search.

The decision published Tuesday reverses a lower court ruling from U.S. District Judge R. Gary Klausner, who said that the FBI acted within the scope of its warrant when it seized the safe deposit boxes from US Private Vaults. Klausner rejected the plaintiffs' claims that the FBI had misled a magistrate judge by not specifying it would forfeit the contents of the safety deposit boxes when it requested a search warrant and that the agency had exceeded the scope of the search warrant by searching and seizing the contents of individual safe deposit boxes. 

To determine whether the FBI overstepped its warrant, the appeals panel held the government’s actions against the scope of the warrant.

The three-judge appeals panel found that the FBI exceeded the scope of its warrant when it seized the boxes, because the warrant did not authorize the agency for a criminal search or seizure of box contents, and the FBI did not follow its own written policies to inventory items and contact box owners to claim their property after the seizure. 

“The district court abused its discretion in holding that the government did not exceed the bounds of the warrant in this case because it clearly erred in finding that the government was incapable of following its own standardized instructions. Recall that the warrant in this case required agents to follow their ‘written policies,’” U.S. Circuit Judge Milan D. Smith Jr., a George W. Bush appointee, wrote in the opinion.

The appeals panel — also consisting of U.S. Circuit Judges Carlos T. Bea, also a Bush appointee, and Lawrence VanDyke, a Donald Trump appointee — found that the FBI did find contraband during its seizure of the boxes, which the FBI tagged, inspected and secured without obtaining a warrant. The magistrate judge that wrote the warrant “explicitly did not authorize a criminal search or seizure of box contents,” Smith Jr. wrote.

Instead, that warrant limited the FBI to opening up individual security deposit boxes only for the purpose of identifying owners and safely returning property.

“That shows that the FBI exceeded the scope of the warrant — by failing to follow their written policies,” Smith Jr. wrote.

The FBI had argued that the anonymous nature of the boxes at US Private Vaults made it impossible to identify who the owners were. The panel found that argument lacking, however.

“Because the district court’s conclusion that the government was excused from following its standardized policy rested on its clearly erroneous finding that the government simply could not apply for warrants as to individual box holders, it abused its discretion in concluding that the government did not exceed the scope of the warrant for this reason as well,” Smith Jr. wrote.

The panel remanded the case to back to federal court to order the FBI to dispose of any records of the plaintiffs’ property, including any information kept on its Sentinel database.

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