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United States v. Detloff Marketing and Asset Management, Inc.

United States District Court, D. Minnesota

April 18, 2019

United States of America, Plaintiff,
Detloff Marketing and Asset Management, Inc. (1), Jeffery J. Detloff (2), and Lori K. Detloff (3), Defendants.

          Andrew K.M. Rosa, Jonathan Clow, Kevin C. Culum, Michael Neal Loterstein, Molly Kelly, United States Department of Justice for United States of America

          Ryan Patrick Garry, Ryan Garry, Attorney, LLC, for Detloff Marketing and Asset Management, Inc.

          Andrew S. Birrell and Ian S. Birrell, Gaskins, Bennett & Birrell, LLP, for Jeffrey K. Detloff.

          Joseph S. Friedberg, Joseph S. Friedberg, Chartered, for Lori K. Detloff.


          Hildy Bowbeer, United States Magistrate Judge.

         The above-captioned case comes before the undersigned on Defendant Jeffrey J. Detloff's Motion to Suppress Search and Seizure Evidence [Doc. No. 42], Motion to Suppress Statements [Doc. No. 43], and Defendant Detloff Marketing and Asset Management's (“DMAM”) Motion to Suppress Evidence Obtained as a Result of Search and Seizure [Doc. No. 54].[1] The case was referred for resolution of pretrial matters pursuant to 28 U.S.C. § 636 and District of Minnesota Local Rule 72.1. Special Agents Jonathan Holden and Matthew Vogel testified at the hearing before the undersigned and numerous exhibits were submitted for the Court's consideration. (Ex. & Witness List [Doc. No. 66].) Supplemental briefing was requested, and the Court took the matter under advisement on March 19, 2019. See (Feb. 12, 2019, Minute Entry [Doc. No. 65].) For the reasons stated below, the Court recommends that the motions be denied.

         I. BACKGROUND

         Starting in 2013, Jeffrey and Lori Detloff and DMAM were the subject of an investigation into whether they had conspired with others to rig bids “or otherwise subverted anti-fraud measures in order to win repair bids” on properties owned by various financial institutions. (Gov't Ex. 6 ¶ 13.) As the investigation ramped up, the Detloffs' residence was placed under surveillance. (Id. ¶ 4.) On May 18, 2015, as part of the investigation, Agent Holden conducted a “trash pull, ” i.e., he searched the Detloffs' trash. (Id. ¶ 25.) Agent Holden testified at the hearing that he has been trained about when property is considered abandoned, what is considered the “curtilage” of a property, and what is considered public property. (Tr. at 34-35.) Agent Holden testified that when he searched the trash, the container was at the curb in front of the residence, and appeared “consistent with the trash being left there for collection by a trash collection service.” (Id. at 35.) He believed there were other trash containers on the street in front of other residences on the same block that day. (Id. at 54.) Agent Holden could not recall precisely where the trash container he searched was located relative to the driveway of the Detloff residence, but stated it was at the curb and easily accessible. (Id. at 52-53, 56.). He stated that it is FBI policy to search only trash that has been placed at the curb. (Id. at 56.)

         Based in part on items discovered in the trash and information provided by at least one cooperating witness, Agent Holden concluded the Detloffs were conducting business related to the allegedly fraudulent scheme out of both their residence in Minnetonka, Minnesota, and DMAM's offices in Hopkins, Minnesota. (Gov't Ex. 6 ¶ 26; Gov't Ex. 7 ¶ 19.[2])

         Agent Holden prepared search warrant applications to search the Detloff residence and DMAM's offices. These applications were reviewed by the Honorable Tony N. Leung, United States Magistrate Judge, who issued the search warrants on June 4, 2015. (Gov't Exs. 6-7.)

         On June 10, 2015, Agent Holden, accompanied by Assistant United States Attorney Andrew Rosa, interviewed Jeffrey Detloff at DMAM's offices while other agents, including Agent Vogel, executed the search warrant for DMAM's offices. (Tr. at 19-34, 60-76.) On that morning, Agent Holden was in a car in DMAM's parking lot awaiting Detloff's arrival. (Tr. at 21.) Other agents were in cars off site at a staging area. See, e.g., (Tr. at 21-22, 61- 62.) Agent Holden was dressed in a suit and his sidearm was not visible when he approached Detloff. (Tr. at 22, 27.) Agent Holden identified himself as a Special Agent with the FBI, requested to speak with Detloff, and stated he wanted to ask questions regarding his involvement with a Mr. Monahan. (Tr. at 22.) Detloff and Agent Holden conversed for approximately five minutes in the parking lot. (Tr. at 23.)

         At that point, Detloff suggested that they go to his office and he escorted Agent Holden into his private office at DMAM. (Tr. at 24.) Soon thereafter, AUSA Rosa also arrived. (Id.) Agent Holden and AUSA Rosa were the only individuals involved in the interview with Detloff. (Id. at 24.) Agent Holden does not recall anyone else, whether from DMAM or from law enforcement, requesting to enter Detloff's office during that time. (Id. at 47.)

         The interview took approximately two hours. (Id. at 28.) It is undisputed that Detloff was not advised of his rights under Miranda v. Arizona, 384 U.S. 436 (1966). (Id.) Agent Holden testified that Detloff conducted himself in a “calm, businesslike” manner. (Id.) Agent Holden believed that Detloff appeared to understand the questions being asked of him and that his responses were clear and coherent. (Id.) Agent Holden stated that Detloff never asked to stop the interview, see (id.), although he could not recall whether Detloff asked to take a break to use the restroom or get a drink of water at any point. (Id. at 31.) At least twice during the interview, Agent Holden warned Detloff that lying was a federal crime. (Id. at 29-30.) Detloff was not arrested at the conclusion of the interview or the search of the DMAM offices. (Id. at 31.)

         At approximately 11:00 a.m., Agent Holden called Agent Vogel and instructed him to begin the search of the DMAM offices pursuant to the issued warrant. (Id. at 77-78.) Agent Vogel testified that his team entered DMAM's offices at approximately 11:15. (Id.) Agent Vogel noted that Detloff stayed mostly in his own office during the pendency of the search, which took approximately five hours. See, e.g., (id. at 49, 67-68.) Agent Vogel also testified that when Detloff was not in his office, he was escorted by an FBI agent. (Id. at 68, 85.) The purpose of the escort was “for agent safety and to see what he was doing to ensure that there was no evidence being potentially disturbed.” (Id. at 68.) Agent Vogel also stated that aside from the escort, Detloff was generally free to move about DMAM's offices. (Id. at 85.)

         After the interview was concluded but while the search of DMAM's offices was in progress, Agents Holden and Vogel approached Detloff and asked him if he would sign a form giving consent to search a storage area in the basement of DMAM's office building. (Id. at 32-33; Gov't Ex. 5.) Agents Holden and Vogel found out about the existence of the storage room because of answers Detloff had given during the interview. (Tr. at 32.) Detloff was provided instructions regarding the form before he signed it. (Id. at 71, 72.) The consent form identified the area to be searched as “[t]he storage room for suite 200 located in the basement” of DMAM's office building, and specifically states that “I have been advised of my right to refuse consent”; “I give this permission voluntarily”; and “I authorize these agents to take any items which they determine may be related to their investigation.” (Gov't Ex. 5.) On the basis of Detloff's consent, agents searched the storage room and seized additional evidence found there. (Tr. at 74.) Because the storage area was apparently a shared space, Detloff pointed out which property belonged to him and which property did not. (Id. at 75.)

         At no point, either during the interview or during the execution of the search warrant was Detloff handcuffed or physically restrained. See, e.g., (id. at 31, 68-69.) Both Agents Holden and Vogel testified that Detloff was always free to leave, but neither recalled ever specifically telling Detloff he was free to do so. See, e.g., (id. at 30-31, 64, 67-68, 72, 79.)

         Based in part on information obtained during Detloff's interview and information gathered as a result of the search of DMAM's offices, Agent Vogel prepared an application for a search warrant to obtain emails from Detloff's Google account. (Gov't Ex. 8.) The application was reviewed by the Honorable Jeffrey Keyes, United States Magistrate Judge, and a search warrant issued on January 26, 2016. (Id.); see also Order, United States v. Search Warrant, 16-mj-27 (JJK) [Doc. No. 2 at 2].

         Defendants Jeffrey Detloff and DMAM seek to suppress all statements made during the interview and all evidence obtained pursuant to the trash pull and the executed search warrants.


         As an initial matter, the Court notes that both moving Defendants seek suppression of essentially the same things. Compare (Def. Jeffrey J. Detloff's Post-Hearing Mem. in Supp. of Mots. to Suppress Evidence Obtained by Search & Seizure & Statements, “Detloff's Suppl. Br.” [Doc. No. 73]), with (DMAM's Mem. of Law in Supp. of Mot. to Suppress Evidence Obtained as a Result of Search & Seizure, “DMAM's Suppl. Br.” [Doc. No. 74].) The primary difference is that Detloff seeks suppression of his statements during the interview conducted at DMAM's offices, while DMAM does not. Thus, any questions of standing are largely irrelevant, as the challenges to the lawfulness of the searches and seizures are largely coextensive. That is, the Court is satisfied that either Detloff, DMAM, or both have standing to challenge the constitutionality of the searches and seizures at issue. Therefore, instead of wading into the thorny question of standing on a per party and per issue basis, the Court will assume without deciding that standing is met and will address the merits of the various constitutional challenges.

         A. Trash Pull

         Defendants primarily argue that the trash pull at the Detloff residence was unconstitutional because the Government could not precisely establish the location of the trash container. See, e.g., (Detloff's Suppl. Br. at 12-13; DMAM's Mot. to Suppress at 4-8; DMAM's Suppl. Br. at 5-8.) In addition, because search warrants were obtained for the residence and the business office based in part on information obtained from the trash pull, Defendants argue that any evidence seized pursuant to those warrants “should be suppressed as derivative of the unconstitutional trash search.” (DMAM's Mot. to Suppress at 8; see also Detloff Suppl. Br. at 13.)

         1. Legal Standard

         In the leading case involving the Fourth Amendment and trash pulls, the Supreme Court established that when a person “exposes [his or her] garbage to the public” it deprives that person of Fourth Amendment protections. California v. Greenwood, 486 U.S. 35, 40 (1988). Specifically, the Court in Greenwood found that the respondents, “having deposited their garbage in an area particularly suited for public inspection and, in a manner of speaking, public consumption, for the express purpose of having strangers take it, respondents could have had no reasonable expectation of privacy in the inculpatory items that they discarded.” Id. at 40-41.

         2. Analysis

         Defendants argue that because Agent Holder could not testify to the specific location of the trash container when he pulled the trash, it is unclear whether the trash was within the curtilage of the Detloff residence or without. (DMAM's Suppl. Br. at 8-9.) DMAM also argues that under an emerging line of cases in Florida v. Jardines, 569 U.S. 1 (2013), and United States v. Jones, 565 U.S. 400 (2012), suppression is warranted because the government's actions constituted a trespass on Detloff's property interest. See (id. at 6-8.) But the argument that Jones and Jardines have in any way changed the analysis set forth in Greenwood is misplaced. In 2018, the Eighth Circuit reaffirmed its holding in United States v. Comeaux, 955 F.2d 586 (8th Cir. 1992), that “‘the proper focus under Greenwood [remains] whether the garbage was readily accessible to the public so as to render any expectation of privacy objectively unreasonable.'” United States v. Thompson, 881 F.3d 629, 632 (8th Cir. 2018) (quoting Comeaux, 955 F.2d at 589) (alteration in original). Consequently, the parties' arguments premised on the location of the trash with respect to the curtilage are largely unavailing. What is critical here is whether the trash was “readily accessible to the public” and not whether the trash was left within or outside of the curtilage. Thompson, 881 F.3d at 632.

         In Thompson, the Eighth Circuit found the following facts to be indicative that the trash was “readily accessible”: “[t]he trash was placed in a location from which the garbage collectors regularly collected it at the regularly-scheduled time of collection”; “[t]he garbage container was easily visible from the street”; “and there were no barriers preventing access to the container or its contents.” 881 F.3d at 632. Here, the unrefuted evidence shows that Detloff had no reasonable expectation of privacy in his trash. First, Agent Holden affirmed that it is “FBI policy to only conduct a trash pull when the trash is at the curb, ” that “Detloff's trash was at the curb, ” and that the trash was “easily accessible.” (Tr. at 55-56.) This testimony is also consistent with Agent Holden's affidavit in the search warrant application for the Detloff residence, in which he stated that “[o]n 18 May 2015, law enforcement officers conducted a search of the trash abandoned in front of [Detloff's] residence.” (Gov't Ex. 6 ¶ 25.)

         In addition, although there is no evidence regarding “the regularly scheduled time of collection, ” Agent Holden testified that he recalled seeing other trash containers at the curb in front of other residences on the same block, see (Tr. at 54), which is at least circumstantial evidence that the Detloff trash container had been placed at the curb in anticipation of the “regularly scheduled time of collection, ” and that it was placed “in a location from which the garbage collectors regularly collected it.” Cf. Thompson, 881 F.3d at 632. Furthermore, there was unrefuted testimony that the trash container was easily visible from the street and that there were no barriers to the container or its contents. (Tr. at 55-56; Gov't Ex. 6 ¶ 25.) As a result, like in Thompson, the Court concludes that the facts demonstrate that Detloff had no reasonable expectation of privacy in his trash, and the trash pull did not violate his Fourth Amendment rights. Cf. Thompson, 881 F.3d at 632.

         Because the Court concludes the trash pull did not violate Detloff's constitutional rights, Defendants' challenges to the search warrants obtained in reliance on that information (and the evidence seized pursuant to those warrants) necessarily fail. See Oregon v. Elstad, 470 U.S. 298, 305 (1985) (stating that suppressing evidence as “fruit of the poisonous tree assumes the existence of a constitutional violation”).

         B. Suppression of Statements

         1. Legal Standard

         The Fifth Amendment provides that “[n]o person . . . shall be compelled in any criminal case to be a witness against himself.” U.S. Const. amend. V. Prior to initiating a custodial interrogation, law enforcement officials must inform the person being questioned of his rights under the Fifth Amendment as a “procedural safeguard” in order to “secure the privilege against self-incrimination.” Miranda, 384 U.S. at 444. That procedural safeguard is met when “[p]rior to any questioning, the person [is] warned that he has a right to remain silent, that any statement he does make may be used as evidence against him, and that he has a right to the presence of an attorney.” Id. A Miranda warning is only required for official interrogations where a person has been “taken into custody or otherwise deprived of his freedom of action in any significant way.” Id.; see also Stansbury v. California, 511 U.S. 318, 322 (1994). Failing to inform the interrogee of his Fifth Amendment rights may result in exclusion whereby the “prosecution may not use statements, whether exculpatory or inculpatory, stemming from custodial interrogation of the defendant.” Miranda, 384 U.S. at 444.

         An interrogation occurs where an officer engages in “either express questioning or its functional equivalent, ” which includes “any words or actions on the part of the police . . . that the police should know are reasonably likely to elicit an incriminating response from the suspect.” Rhode Island v. Innis, 446 U.S. 291, 300-01 (1980). “The latter portion of this definition focuses primarily upon the perceptions of the suspect, rather than the intent of the police.” Id. at 301. Information voluntarily provided by a suspect is not considered to be in response to an interrogation, and is admissible with or without Miranda warnings. United States v. McGlothen, 556 F.3d 698, 701 (8th Cir. 2009).

         “Custody” is the deprivation of “freedom of action in any significant way.” Yarborough v. Alvarado, 541 U.S. 652, 663-65 (2004). In deciding whether a person was “in custody, ” courts examine “the presence and extent of physical and psychological restraints placed on the person's liberty during the interrogation ‘in light of whether a reasonable person in the suspect's position would have understood his situation to be one of custody.United States v. Axsom, 289 F.3d 496, 500 (8th Cir. 2002) (quoting United States v. Griffin, 922 F.2d 1343, 1347 (8th Cir. 1990)); see also United States v. Czichray, 378 F.3d 822, 828 (8th Cir. 2004).

         The Eighth Circuit Court of Appeals has identified six common indicia of custody:

(1) whether the suspect was informed at the time of questioning that the questioning was voluntary, that the suspect was free to leave or request the officers to do so, or that the suspect was not considered under arrest; (2) whether the suspect possessed unrestrained freedom of movement during questioning; (3) whether the suspect initiated contact with authorities or voluntarily acquiesced to official requests to respond to questions; (4) whether strong arm tactics or deceptive stratagems were employed during questioning; (5) whether the atmosphere of the questioning was police dominated; or, (6) whether the suspect was placed under arrest at the termination of the questioning.

Griffin, 922 F.2d at 1349. The first three indicia are mitigating factors that weigh against finding that custody existed. Axsom, 289 F.3d at 500-01. Conversely, the last three indicia are aggravating factors that weigh in favor of custody. Id. at 501. These six indicia are not exclusive, and “a particularly strong showing of one factor may compensate for a lesser or non-existent showing of another factor.” Id.

         2. ...

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