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United States v. Hoang

United States District Court, D. Utah, Central Division

November 4, 2019

UNITED STATES OF AMERICA, Plaintiff,
v.
MINH HOANG, Defendant.

          ORDER AND MEMORANDUM OF DECISION RE: MOTION TO SUPPRESS (#104)

          TENA CAMPBELL U.S. DISTRICT COURT JUDGE

         The superseding indictment charges Defendant Minh Hoang with eleven counts of violating 18 U.S.C. § 1832, Theft of Trade Secrets. (ECF No. 70.) He is accused of illegally downloading trade secrets that belonged to his employer, Becton, Dickinson, and Company (BD). As part of its investigation, the United States executed four warrants. Mr. Hoang now moves to suppress evidence uncovered through these warrants. (ECF No. 104.)

         The first warrant was issued on September 14, 2015. It authorized agents to search Mr. Hoang's home and, among other things, seize any computer or computer storage devices discovered. (ECF No. 107-1.) The second warrant, issued on September 18, 2015, authorized agents to search these computer storage devices for evidence of stolen trade secrets. (ECF No. 107-2.) The third warrant was issued the same day. Part I of that warrant directed Comcast Corporation to give the United States all data it possessed from the email account “hoangmqh@comcast.net.” Part II of the warrant authorized the United States to search this data for evidence of stolen trade secrets. (ECF No. 107-3.) Finally, on March 16, 2016, a warrant was issued requiring that Google, Inc., turn over all email data for the email account “rchakroborty@gmail.com, ” and authorizing the United States to search this data for violations of trade secret laws. (ECF No. 107-4.)

         ANALYSIS

         I. First, Second, and Third Warrants

         A. Hearsay

         Mr. Hoang argues the evidence obtained from the first, second, and third warrants should be suppressed because the affidavits offered in support of the warrants improperly relied on double hearsay.

         The warrants were each supported by an affidavit signed by FBI Special Agent David Rawlings, who declared that “[t]he information contained in this affidavit is based primarily on information received from attorneys representing [BD] based on an internal investigation by BD, on my personal knowledge and limited investigation, and [on] information that I received from other law enforcement agents and officers assisting in this investigation.” (Affidavit in Support of Warrant Application (“Rawlings Affidavit”) ¶ 2, ECF No. 107-1.)[1]

         The information in the Rawlings Affidavit came from an investigation by BD's officers. They passed the information to BD's attorneys, and BD's attorneys provided it to Special Agent Rawlings.[2] Mr. Hoang claims that, because of these layers of hearsay, the warrant was not supported by probable cause.

         There is no rule against hearsay in warrant applications. “This court has long held hearsay, and even multiple layers thereof, ‘may support a finding of probable cause for a search warrant.'” United States v. Freerksen, 457 Fed.Appx. 765, 769 (10th Cir. 2012) (quoting United States v. Mathis, 357 F.3d 1200, 1204 (10th Cir. 2004)). Instead, the question is whether the hearsay is sufficiently reliable to allow a judge to conclude, in view of the totality of the circumstances, that there was probable cause to justify a search. See Cortez v. McCauley, 478 F.3d 1108, 1118 n.10 (10th Cir. 2017). In weighing whether information is reliable, courts consider, among other things, whether the information comes from known or anonymous sources, how the sources acquired their information, and how detailed the information is. See, e.g., United States v. Pulliam, 748 F.3d 967, 971 (10th Cir. 2014); United States v. Hendrix, 664 F.3d 1334, 1338-39 (10th Cir. 2011); United States v. Danhauer, 229 F.3d 1002, 1005-06 (10th Cir. 2000).

         Here, BD's attorneys identified themselves and identified by name the individuals involved in the internal investigation. (Rawlings Affidavit ¶¶ 42-44, 70-72, 77, 78, 81, 83, 85.) BD provided a detailed account of why Mr. Hoang's conduct made them suspicious and to what lengths they went to investigate him. (Id. ¶¶ 70-99.) And BD gave Special Agent Rawlings details about Mr. Hoang's alleged thefts. (Id. at ¶¶ 58-70, 93.) Cumulatively, this information was sufficiently reliable to provide probable cause for the warrant.

         None of the cases cited by Mr. Hoang are to the contrary. In Cortez, a two-year-old claimed a man had touched her sexually. The child's mother told a nurse what the child had said, and the nurse told the police. The police arrested the man before either the nurse or the police ever spoke to the child. The Tenth Circuit held that the officers did not have probable cause for the arrest. Cortez, 478 F.3d at 1118. These facts are far different than the facts here. The source of the information here-BD's officers and attorneys-is much more reliable.

         At the motion hearing, Mr. Hoang contended that Cortez, at a minimum, required some level of corroboration of the facts by the police. But the Cortez court explicitly stated that, depending on the context, corroboration may not be necessary. Id. at 1118 n.11. (“[W]e do not suggest a per se rule that unsubstantiated double-hearsay testimony can never give rise to probable cause. There, in fact, may be situations in which a double-hearsay statement involves individuals or circumstances of sufficient trustworthiness to give rise to probable cause.”).

         Mr. Hoang also cites to Ruttkamp v. De Los Reyes, No. 3:10-cv-392 (SRU), 2012 WL 3596064 (D. Conn. Aug. 20, 2012) and Nieves v. New York City Police Department, No. 07 Civ. 5751 (SAS), 2010 WL 330305 (S.D.N.Y. May 18, 2010). But in both of those cases, the police informants had no personal connection to the alleged crimes and were several steps removed from those with actual knowledge of what had occurred. Here, BD's officers and attorneys were much more reliable.

         Mr. Hoang argues Special Agent Rawlings should not have relied on the BD attorneys' hearsay because the events they recounted were not recent enough: BD was aware Mr. Hoang was downloading confidential material in June and July but did not report it to the FBI until September. (Rawlings Affidavit ¶¶ 58-59.) While the court agrees that a delay in reporting crimes may make the information less reliable (see, e.g., United States v. Snow, 919 F.2d 1458, 1459-60 (10th Cir. 1990)), any delay here was understandable given that BD decided to investigate Mr. Hoang's conduct internally before informing the FBI. Especially because Mr. Hoang's alleged misconduct was ongoing-BD also accused him of downloading material in August and September (Rawlings Affidavit ¶ 60(h))-the information BD supplied to the FBI was not stale.

         In sum, the court concludes Special Agent Rawlings's reliance on hearsay did not affect the validity of the warrants.

         B. Probable Cause

         Mr. Hoang is accused of violating 18 U.S.C. § 1832, which states:

Whoever, with intent to convert a trade secret, that is related to a product or service used in or intended for use in interstate or foreign commerce, to the economic benefit of anyone other than the owner thereof, and intending or knowing that the offense will, injure any owner of that trade secret, knowingly-
(1) steals, or without authorization appropriates, takes, carries away, or conceals, or by fraud, artifice, or deception obtains such information;
(2) without authorization copies, duplicates, sketches, draws, photographs, downloads, uploads, alters, destroys, photocopies, replicates, transmits, delivers, sends, mails, communicates, or conveys such information;
(3) receives, buys, or possesses such information, knowing the same to have been stolen or appropriated, obtained, or converted without authorization;
(4) attempts to commit any offense described in paragraphs (1) through (3); or
(5) conspires with one or more other persons to commit any offense described in paragraphs (1) through (3), and one or more of such persons do any act to effect the object of the conspiracy, shall, except as provided in subsection (b), be fined under this title or imprisoned not more than 10 years, or both.

         Mr. Hoang argues that to secure a warrant, the United States was required to show that it had probable cause for each element of the crime. The United States responds that it need only show that there was probable cause that the crime as a whole was committed and states that the court need not undertake an element-by-element analysis of the Rawlings Affidavit.

         The Tenth Circuit has recognized a split of authority on this issue, but it has not resolved the question:

[W]e lack precedential decisions on the necessity of probable cause for each element of a suspected crime. On that issue, the circuits are divided. Compare Spiegel v. Cortese, 196 F.3d 717, 724 n.1 (7th Cir. 2000) (stating that probable cause is unnecessary on each element of a crime), and Gasho v. United States, 39 F.3d 1420, 1428 (9th Cir. 1994) (“[A]n officer need not have probable cause for every element of the offense.”), with Williams v. Alexander, Ark., 772 F.3d 1307, 1312 (8th Cir. 2014) (“For probable cause to exist, there must be probable cause for all elements of the crime.”), and United States v. Joseph, 730 F.3d 336, 342 (3d Cir. 2013) (“To make an arrest based on probable cause, the arresting officer must have probable cause for each element of the offense.”). Neither our court nor the Supreme Court has weighed in on this circuit split.

United States v. Argueta-Mejia, 615 Fed.Appx. 485, 489-90 (10th Cir. 2015).

         In Argueta-Mejia, the Tenth Circuit held only that it was permissible-without deciding whether it was required-for the district court to review each element in evaluating probable cause. Id. The United States cites no case law suggesting the Tenth Circuit or the Supreme Court has resolved this issue in the four years since Argueta-Mejia was decided.

         This court need not decide this issue because the United States has demonstrated probable cause for each element.

         Mr. Hoang asserts that the United States did not have probable cause for four of the elements necessary to prove a violation of the trade secrets law. When a warrant is challenged on its face, the court looks within the four corners of the affidavit to determine whether the warrant is supported by probable cause. Whiteley v. Warden, Wyo. State Penitentiary, 401 ...


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