United States v. 2012-08-07 | 11-35195 | USA V. GOLDEN VALLEY ELECTRIC ASSOCIATION | precedential |…

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
 UNITED STATES OF AMERICA,
Petitioner-Appellee, No. 11-35195
v. D.C. No.
 3:11-mc-00002-RRBGOLDEN VALLEY ELECTRIC
ASSOCIATION, OPINION
Respondent-Appellant. 
Appeal from the United States District Court
for the District of Alaska
Ralph R. Beistline, Chief District Judge, Presiding
Argued and Submitted
June 28, 2012—Fairbanks, Alaska
Filed August 7, 2012
Before: Alfred T. Goodwin, William A. Fletcher, and
Milan D. Smith, Jr., Circuit Judges.
Opinion by Judge William A. Fletcher
8909

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COUNSEL
Frank V. Russo, OFFICE OF THE UNITED STATES
ATTORNEY, Anchorage, Alaska, for the appellee.
Michael C. Kramer, Joseph W. Evans, BORGESON &
KRAMER, Fairbanks, Alaska, for the appellant.
OPINION
W. FLETCHER, Circuit Judge:
The United States petitioned the district court for an order
enforcing a Drug Enforcement Administration (“DEA”) sub-
poena served on Golden Valley Electric Association (“Golden
Valley”) for power consumption records concerning three
customer residences. The court granted the petition and
ordered compliance. Golden Valley complied with the sub-
poena but appealed the order. We hold that the appeal is not
moot and affirm on the merits.
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I. Background
Golden Valley is a member-owned cooperative providing
electricity to roughly 44,000 meters in Fairbanks and other
localities in the interior of Alaska. In late 2010, the DEA was
investigating suspected violations of the Controlled Sub-
stances Act, 21 U.S.C. § 801 et seq., by several of Golden
Valley’s customers. As part of its investigation, the DEA
served an administrative subpoena on Golden Valley pursuant
to 21 U.S.C. § 876(a). The subpoena ordered Golden Valley
to provide company records pertaining to electricity consump-
tion at three specified customer addresses. The records sub-
poenaed were:
customer information including full name, address,
telephone number, and any account information for
customer; method of payment (credit card, debit
card, cash, check) with card number and account
information; to include power consumption records
and date(s) service was initiated and terminated for
the period 10-01-2009 through 12-14-2010, if appli-
cable[.]
Golden Valley did not immediately comply with the sub-
poena.
The government petitioned the district court pursuant to
§ 876(c) for an order enforcing its subpoena. Golden Valley
opposed the petition, primarily relying on a company policy
of protecting the confidentiality of its members’ records. The
district court granted the petition to enforce the subpoena.
Golden Valley timely appealed the district court’s order. It
has now complied with the subpoena, but it has not dismissed
its appeal.
II. Standard of Review
We review de novo an appeal from an order enforcing an
administrative subpoena. EEOC v. Fed. Express Corp., 558
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F.3d 842, 846 (9th Cir. 2009). We review a question of moot-
ness de novo. Alvarez v. Hill, 667 F.3d 1061, 1063 (9th Cir.
2012).
III. Discussion
A. Mootness
[1] As a preliminary matter, we must decide whether Gol-
den Valley’s compliance with the district court’s order has
rendered its appeal moot. Neither party has raised the issue,
but we have an independent duty to decide whether an appeal
is moot within the meaning of the case or controversy require-
ment of Article III. See Renee v. Duncan, ___ F.3d ___, 2012
WL 1624772, at *13 (9th Cir. May 10, 2012).
An Article III federal court has “no authority to give opin-
ions upon moot questions or abstract propositions, or to
declare principles or rules of law which cannot affect the mat-
ter in issue in the case before it.” Church of Scientology of
Cal. v. United States, 506 U.S. 9, 12 (1992) (internal quota-
tion marks omitted). “A case becomes moot only when it is
impossible for a court to grant any effectual relief whatever
to the prevailing party.” Knox v. Serv. Employees Int’l Union,
132 S. Ct. 2277, 2287 (2012) (internal quotation marks omit-
ted). A case is not moot “as long as the parties have a concrete
interest, however small, in the outcome of the litigation[.]” Id.
(internal quotation marks and alteration omitted).
[2] In Church of Scientology, the Supreme Court addressed
the very issue before us — whether compliance with a district
court’s order enforcing a subpoena moots an appeal from that
order. The Internal Revenue Service (“IRS”) had obtained an
order enforcing a subpoena requiring the production of state-
court records. 506 U.S. at 11. While the order was on appeal,
copies of the records were delivered to the IRS. Id. We dis-
missed the appeal as moot. Id. at 12. The Supreme Court
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reversed, concluding that the appeal was not moot. It
explained:
While a court may not be able to return the parties
to the status quo ante — there is nothing a court can
do to withdraw all knowledge or information that
IRS agents may have acquired by examination of the
tapes — a court can fashion some form of meaning-
ful relief in circumstances such as these. Taxpayers
have an obvious possessory interest in their records.
When the Government has obtained such materials
as a result of an unlawful [subpoena], that interest is
violated and a court can effectuate relief by ordering
the Government to return the records.
Id. at 12-13.
Prior to the Supreme Court’s decision in Church of Scien-
tology, we had held in several cases that an appeal was moot
if the subpoenaed party had complied with an enforcement
order. See, e.g., Remark v. United States, 979 F.2d 770, 771
n.1 (9th Cir. 1992); EEOC v. St. Regis Paper Co., 717 F.2d
1302, 1303 (9th Cir. 1983); United States v. Silva & Silva
Accountancy Corp., 641 F.2d 710, 711 (9th Cir. 1981); SEC
v. Laird, 598 F.2d 1162, 1163 (9th Cir. 1979). As a three-
judge panel, we must follow prior decisions of our court
unless “intervening Supreme Court authority is clearly irrec-
oncilable with our prior circuit authority.” Miller v. Gammie,
335 F.3d 889, 900 (9th Cir. 2003). “[T]he issues decided by
the higher court need not be identical in order to be control-
ling.” Id. But the intervening Supreme Court precedent must
“undercut the theory or reasoning underlying the prior circuit
precedent in such a way that the cases are clearly irreconcil-
able.” Id.
[3] We have previously recognized that Church of Scien-
tology is controlling on this issue. See United States v. Rubin,
2 F.3d 974, 976 (9th Cir. 1993). We take this opportunity to
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further clarify our case law. We conclude that the Supreme
Court’s decision in Church of Scientology is “clearly irrecon-
cilable” with our prior decisions listed above. See Remark,
979 F.2d at 771 n.1; St. Regis Paper Co., 717 F.2d at 1303;
Silva, 641 F.2d at 711; Laird, 598 F.2d at 1163. The fact that
these cases arose under different federal statutes does not dis-
tinguish them from Church of Scientology. Church of Scien-
tology, 506 U.S. at 17 (relying on “earlier cases involving
other statutes” to hold the appeal not moot).
[4] Accordingly, we hold that Golden Valley’s appeal is
not moot despite Golden Valley’s compliance with the district
court’s order.
B. Merits
[5] Congress enacted the Comprehensive Drug Abuse Pre-
vention and Control Act of 1970, inter alia, to “strengthen
law enforcement tools against the traffic of illicit drugs.”
Gonzales v. Raich, 545 U.S. 1, 10 (2005). The statute gives
the Attorney General the authority to issue administrative sub-
poenas to investigate drug crimes:
In any investigation relating to his functions under
this subchapter [Subchapter I — Control and
Enforcement] with respect to controlled substances
. . . the Attorney General may subp[o]ena witnesses,
compel the attendance and testimony of witnesses,
and require the production of any records (including
books, papers, documents, and other tangible things
which constitute or contain evidence) which the
Attorney General finds relevant or material to the
investigation.
21 U.S.C. § 876(a). Section 876(c) provides for judicial
enforcement of a subpoena issued under § 876(a): “In the case
of contumacy by or refusal to obey a subp[o]ena issued to any
person, the Attorney General may invoke the aid of any court
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of the United States within the jurisdiction of which the inves-
tigation is carried on . . . to compel compliance with the sub-
p[o]ena.”
[6] An administrative subpoena may not be “too indefinite
or broad.” Peters v. United States, 853 F.2d 692, 699 (9th Cir.
1988). “The critical questions are: (1) whether Congress has
granted the authority to investigate; (2) whether procedural
requirements have been followed; and (3) whether the evi-
dence is relevant and material to the investigation.” EEOC v.
Children’s Hosp. Med. Ctr. of N. Cal., 719 F.2d 1426, 1428
(9th Cir. 1983) (en banc), overruled on other grounds as rec-
ognized in Prudential Ins. Co. of Am. v. Lai, 42 F.3d 1299
(9th Cir. 1994). Even if other criteria are satisfied, “a Fourth
Amendment ‘reasonableness’ inquiry must also be satisfied.”
See Reich v. Mont. Sulphur & Chem. Co., 32 F.3d 440, 444
n.5 (9th Cir. 1994). The scope of judicial review in an admin-
istrative subpoena enforcement proceeding is “quite narrow.”
Children’s Hosp. Med. Ctr., 719 F.2d at 1428.
Golden Valley makes four principal arguments on appeal.
First, it argues that the subpoenaed records are irrelevant to
the DEA’s investigation. Second, it argues that the Attorney
General did not verify the existence of a pending drug investi-
gation involving the three residences prior to issuing the sub-
poena. Third, it argues that the subpoena was an overly broad
“John Doe” subpoena. Fourth, it argues that issuance of the
subpoena violated the Fourth Amendment because the gov-
ernment should have obtained a search warrant or a grand jury
subpoena. We take each argument in turn.
1. Relevance
“Relevancy is determined in terms of the investigation
rather than in terms of evidentiary relevance.” Fed. Express
Corp., 558 F.3d at 854. The relevance requirement is “not
especially constraining.” Id. (internal quotation marks omit-
ted). We “must enforce administrative subpoenas unless the
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evidence sought by the subpoena is plainly incompetent or
irrelevant to any lawful purpose of the agency.” EEOC v.
Karuk Tribe Hous. Auth., 260 F.3d 1071, 1076 (9th Cir. 2001)
(internal quotation marks and alteration omitted).
A DEA agent filed an affidavit in the district court stating
that the subpoenaed records were relevant to determine
whether individuals at three residences were involved in the
manufacture and distribution of controlled substances. Golden
Valley acknowledges that electricity consumption can indi-
cate whether a person is growing marijuana because “grow
lamps necessitat[e] a large amount of electricity.” However,
relying on Carter v. State, 910 P.2d 619, 625-26 (Alaska Ct.
App. 1996), Golden Valley argues that fluctuating energy
consumption is “not unusual” in Alaska and so “not obviously
relevant” to a drug crime.
[7] The information subpoenaed does not need to be rele-
vant to a crime; in fact, it may be used to dissipate any suspi-
cion of a crime. The information subpoenaed need only be
relevant to an agency investigation. Fed. Express Corp., 558
F.3d at 854. Energy consumption records can be relevant to
an investigation into a suspected drug crime. For example, in
United States v. Real Property in Santa Paula, Cal., 763 F.
Supp. 2d 1175 (C.D. Cal. 2011), a private residence suspected
of an indoor marijuana growing operation spent between $251
and $687 per month on electricity compared to a neighbor-
hood average of between $78 and $95 per month. Id. 1179-80
& n.39. The limited record before us nowhere indicates the
degree of fluctuation in electricity consumption that may be
common in Alaska. But seasonal or other fluctuations are not
the only thing that matters to a drug crime investigation. What
primarily matters is the amount of electricity usage relative to
that of other residences in the vicinity. We easily conclude
that power consumption records at the three customer resi-
dences satisfy the relevance standard for the issuance of an
administrative subpoena in a drug investigation.
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[8] Golden Valley argues further that the information relat-
ing to individual customers at the three residences — such as
names, addresses, telephone numbers, account information, as
well as credit or debit card and checking information — is not
relevant to the DEA’s investigation. We do not agree. This
information may or may not turn out to be incriminating, but
it is clearly relevant to an investigation of a possible violation
of the drug laws. It may, among other things, identify possible
suspects with control over the premises. See, e.g., United
States v. Crozier, 777 F.2d 1376, 1380 (9th Cir. 1985) (noting
that we have upheld search warrants “authorizing the seizure
of items which indicate ownership or control of the premises,”
including utility bills).
2. Procedural Requirements
[9] Section 876(a) requires that “the Attorney General
find[ ] [the records] relevant or material to the investigation”
prior to issuing a subpoena. 21 U.S.C. § 876(a). Golden Val-
ley contends that the “Attorney General has not even verified
that there is a current drug investigation involving these resi-
dences.” The record belies Golden Valley’s contention. A
DEA supervisor signed and issued the administrative sub-
poena directed to Golden Valley, and a DEA agent served the
subpoena. The Attorney General has delegated his authority
under § 876 to DEA agents. See 21 U.S.C. § 871(a) (“The
Attorney General may delegate any of his functions under this
subchapter to any officer or employee of the Department of
Justice.”); 28 C.F.R. § 0.104 app.
3. Overly Broad Subpoena
We have quashed a “John Doe” administrative subpoena as
overly broad where the governing statute did not authorize the
agency’s use of group subpoenas. See Peters, 853 F.2d at 700.
A “John Doe” subpoena is one “where the [agency’s] investi-
gation and request for information concerns individuals
whose identity is currently unknown to the [agency].” Id. at
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695 n.3. In Peters, the Immigration and Naturalization Ser-
vice had served a “John Doe” subpoena on the manager of a
labor camp with 150 resident families, seeking records related
to any unnamed “undocumented aliens” living there. Id. at
694. We quashed the subpoena, holding that the Immigration
and Naturalization Act does not authorize the agency to serve
“John Doe” subpoenas. Id. at 699-700.
[10] Golden Valley argues under Peters that the subpoena
in this case seeking records for the residences of three cus-
tomers is an impermissible “group subpoena.” We disagree.
Unlike the broad and indefinite subpoena in Peters, the sub-
poena in this case is narrow and specific. A DEA agent stated
in a declaration in the district court, “I suspect that individuals
at these residences may be involved in the manufacture and
distribution of controlled substances.” The subpoena requests
information related to customer information at only these
specified residences.
4. Fourth Amendment
[11] “[I]n the context of an administrative [subpoena], the
Fourth Amendment’s restrictions are limited.” Mont. Sulphur,
32 F.3d at 448. We have described the scope of protection:
[I]t is sufficient [for Fourth Amendment purposes] if
the inquiry is within the authority of the agency, the
demand is not too indefinite and the information
sought is reasonably relevant. The gist of the protec-
tion is in the requirement, expressed in terms, that
the disclosure sought shall not be unreasonable.
Id. (quoting United States v. Morton Salt Co., 338 U.S. 632,
652-53 (1950)) (internal quotation marks omitted; alterations
in original). An administrative subpoena is consistent with the
Fourth Amendment if “the investigation is authorized by Con-
gress, is for a purpose Congress can order, and the documents
sought are relevant to the inquiry.” Okla. Press Publ’g Co. v.
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Walling, 327 U.S. 186, 209 (1946). “Beyond this[,] the
requirement of reasonableness . . . comes down to [whether]
specification of the documents to be produced [is] adequate,
but not excessive, for the purposes of the relevant inquiry.”
Id. A “subpoena should be enforced unless the party being
investigated proves the inquiry is unreasonable because it is
overbroad or unduly burdensome.” Children’s Hosp., 719
F.2d at 1428 (citing Okla. Press, 327 U.S. at 217; Morton Salt
Co., 338 U.S. at 653).
Golden Valley contends that the Government should have
to meet a higher standard than that just described. Golden
Valley notes that the government normally obtains evidence
in a criminal investigation through a search warrant, which
requires probable cause and prior judicial review, or a grand
jury subpoena, which requires the presentation of evidence
and grand jury approval.
[12] The Supreme Court has refused to require that an
agency have probable cause to justify issuance of a subpoena.
See United States v. Powell, 379 U.S. 48, 57 (1964) (citing the
“general rejection of probable cause requirements in [admin-
istrative subpoenas] involving other agencies”); Okla. Press,
327 U.S. at 215-16 (rejecting probable cause requirement in
agency subpoena context). Further, nothing in existing case
law requires the Attorney General to use a grand jury sub-
poena rather than an administrative subpoena. Grand jury and
administrative subpoenas function in similar ways. The Court
wrote in Oklahoma Press that an administrator’s “investiga-
tive function, in searching out violations with a view to secur-
ing enforcement of the Act, is essentially the same as the
grand jury’s . . . and is governed by the same limitations.” 327
U.S. at 216; see also Morton Salt, 338 U.S. at 642 (an admin-
istrator’s “power of inquisition” “is more analogous to the
Grand Jury, which . . . can investigate merely on suspicion
that the law is being violated, or even just because it wants
assurance that it is not.”). Neither type of subpoena is self-
enforcing. See United States v. Williams, 504 U.S. 36, 48
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(1992) (grand jury subpoena); Mont. Sulphur, 32 F.3d at 444
(administrative subpoena). If the subpoenaed party fails to
comply, the government must seek a court order compelling
compliance. See 21 U.S.C. § 876(c); Williams, 504 U.S. at 48.
The court will review both grand jury and administrative sub-
poenas for compliance with the appropriate standard before
issuing an enforcement order. Williams, 504 U.S. at 48; Mont.
Sulphur, 32 F.3d at 444.
[13] Golden Valley contends that it may assert its custom-
ers’ Fourth Amendment privacy rights. Even assuming that it
can do so, this would not change the analysis here. A cus-
tomer ordinarily lacks “a reasonable expectation of privacy in
an item,” like a business record, “in which he has no posses-
sory or ownership interest.” United States v. Cormier, 220
F.3d 1103, 1108 (9th Cir. 2000) (motel registration records);
see also United States v. Miller, 425 U.S. 435, 440 (1976)
(bank records); United States v. Hamilton, 434 F. Supp. 2d
974, 979-80 (D. Or. 2006) (electricity consumption records).
The records sought here are business records owned and pos-
sessed by Golden Valley.
[14] Golden Valley also relies on a company policy of pro-
tecting the privacy of its members. Depending on the circum-
stances or the type of information, a company’s guarantee to
its customers that it will safeguard the privacy of their records
might suffice to justify resisting an administrative subpoena.
However, Golden Valley has not shown the existence of any
agreement with its customers to keep their usage and payment
records confidential. Further, the Court in Miller carefully
explained that the nature of the subpoenaed bank records gave
the bank’s customers little reason to expect that they would be
kept confidential from the government. The Court wrote:
Even if we direct our attention to the original
checks and deposit slips, rather than to the microfilm
copies actually received and obtained by means of
the subpoena, we perceive no legitimate “expecta-
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tion of privacy” in their contents. The checks are not
confidential communications but negotiable instru-
ments to be used in commercial transactions. All of
the documents obtained, including financial state-
ments and deposit slips, contain only information
voluntarily conveyed to the banks and exposed to
their employees in the ordinary course of business.
425 U.S. at 442. Golden Valley’s business records are no
more inherently personal or private than the bank records in
Miller. But see Gonzales v. Google, Inc., 234 F.R.D. 674,
683-84 (N.D. Cal. 2006) (noting the personal nature of
Google search queries).
Conclusion
[15] We hold that Golden Valley’s compliance with the
district court’s enforcement order does not moot the appeal.
On the merits, we hold that the DEA’s subpoena sought infor-
mation relevant to a drug investigation, was procedurally
proper, and was not overly broad. Finally, we hold that the
subpoena complies with the Fourth Amendment.
AFFIRMED.
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