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UNITED STATES v. LA MONTE

August 3, 1978

UNITED STATES of America
v.
John Donald LA MONTE and House of Sounds, Inc.



The opinion of the court was delivered by: BRODERICK AS STATED BY JUDGE CAMPBELL IN HIS DISSENT IN KLEIN:

MEMORANDUM

Defendants, John La Monte and House of Sounds, Inc. ("HOS"), have been charged in an 149 count indictment with racketeering (18 U.S.C. §§ 1961 Et seq.), wire fraud (18 U.S.C. § 1343) and copyright infringement (17 U.S.C. §§ 101 Et seq.). Defendants have moved to suppress evidence seized as a result of four separate searches conducted by agents of the FBI.

 Factual Background

 The investigation which gave rise to these proceedings began in New York as the result of a complaint made to the FBI by the President of Bearsville Records, who reported that counterfeit recordings of the album "Runt" by Todd Rundgren had appeared on the market. The FBI traced the counterfeit recordings to Scorpio Music Distributors, Inc. ("Scorpio"), a record outlet in Croyden, Pennsylvania. A search of the business premises of Scorpio was conducted on February 8, 1977. *fn1" This search uncovered approximately 50 counterfeit "Runt" albums and business records which showed that during the period from January, 1976 through December, 1976, Scorpio had received over 41,000 "Runt" albums from HOS. These business records revealed that approximately 10,000 "Runt" albums had been shipped within the preceding two months.

 As a result of this information, an investigation of HOS was undertaken. During the course of this investigation, a surveillance led to the seizure, on February 10, 1977, of an Oneida tractor-trailer which contained suspect records. The trailer was taken by the FBI to the Philadelphia Naval Base where it was secured. A warrant to search the trailer was obtained on February 11, 1977 and the trailer was searched on February 21, 1977.

 The defendant, John La Monte, was arrested on the evening of February 10, 1977. A search warrant was then obtained for the HOS warehouse at Quarry and Hamilton Streets in Darby, Pennsylvania. The search of the warehouse in Darby was commenced on February 11, 1977 and during the search, approximately 160,000 records were seized. Further information revealed two other locations where it was believed the defendant had stored allegedly counterfeit records, labels and other related evidence. Based upon this information, a warrant was issued on February 11, 1977 to search James Enterprise, Ltd., Second and Main Streets ("James"), and on February 23, 1977, a warrant was issued to search "Rear # 10 North 9th Street "("9th Street"), both premises located in Darby, Pennsylvania. The James search commenced on February 11, 1978 and the search of 9th Street commenced on February 23, 1977.

 I. Seizure and Search of the Oneida Tractor-Trailer.

 On February 10, 1977, a confidential source who was an employee of HOS advised the FBI that the defendants were removing unusually large quantities of records from the HOS warehouse at Quarry and Hamilton Roads in Darby, Pennsylvania, and that these were not shipments in the ordinary course of business. Independent FBI surveillance revealed an Oneida Motor Freight truck leaving the HOS warehouse and arriving at the Oneida terminal in Pennsauken, New Jersey at approximately 2:45 p.m. on the afternoon of February 10, 1977. An Oneida employee stated to the FBI that the trailer was to remain at the terminal until February 28, 1977 and that it contained HOS recordings.

 At 3:15 p.m. on February 10, 1977, HOS telephoned Oneida and ordered the shipment be returned immediately to the HOS warehouse. On the return trip, on February 10, 1977, the trailer was seized by the FBI in Philadelphia just after it had crossed the Walt Whitman Bridge and was taken to the Philadelphia Naval Base. The next day, February 11, 1977, a warrant was obtained for the search of the trailer. The search was not made until February 21, 1977. In seeking the admission of evidence produced by this search, the government relies upon the doctrine of "exigent circumstances," Chambers v. Maroney, 399 U.S. 42, 90 S. Ct. 1975, 26 L. Ed. 2d 419 (1970), and does not rely upon the search warrant which was obtained the day after the seizure but before the search was conducted. We find that the facts in the instant case establish probable cause and presented the FBI with the "exigent circumstances" necessary to justify the warrantless seizure of the trailer. We reject, however, the contention of the government that the doctrine of exigent circumstances provides sufficient justification under the circumstances of this case for a warrantless search conducted on February 21, 1977, more than ten days after the seizure of the trailer. Under the facts of this case, to have seized the trailer and then to delay the warrantless search of the trailer more than ten days is clearly an unreasonable search pursuant to the doctrine of exigent circumstances.

 The Supreme Court in Chambers, 399 U.S. at 51, 90 S. Ct. 1975, relying on Carroll v. United States, 267 U.S. 132, 153, 45 S. Ct. 280, 69 L. Ed. 543 (1925), held that where probable cause exists to seize an automobile, a search may be made without a warrant where the car is movable and the evidence sought may be lost in the time it would take to secure a warrant. Chambers extended the exigent circumstances doctrine to include a later search at the police station. 399 U.S. at 52 and n. 10, 90 S. Ct. 1975. However, warrantless searches permissible under the doctrine of exigent circumstances are not without limits. As stated by the Third Circuit in United States v. Valen, 479 F.2d 467, 471 (3d Cir. 1973), Cert. denied, 419 U.S. 901, 95 S. Ct. 185, 42 L. Ed. 2d 147 (1974), "Chambers makes clear that the right to search which attaches at the time of seizure, continues to exist for a reasonable time after the seizure." See United States v. Vento, 533 F.2d 838, 866 (3d Cir. 1976); United States v. Dento, 382 F.2d 361, 366 (3d Cir.), Cert. denied, 389 U.S. 944, 88 S. Ct. 307, 19 L. Ed. 2d 299 (1967); Cf. Mincey v. Arizona, 437 U.S. 385, 98 S. Ct. 2408, 57 L. Ed. 2d 290 (1978). Thus, we are faced with two separate determinations, first whether exigent circumstances existed to permit the warrantless seizure, and second, whether pursuant to this doctrine the warrantless search was conducted within a reasonable time after the seizure. *fn2" See United States v. Chadwick, 433 U.S. 1, 97 S. Ct. 2476, 2486, 53 L. Ed. 2d 538 (1977).

 The Third Circuit in Valen established a two-prong test to determine the existence of exigent circumstances: (1) probable cause to make the search; and (2) reasonable possibility of the agent's loss of dominion and control over the object to be searched and the consequential loss of the contraband. 479 F.2d at 470.

 The second question in connection with the application of the doctrine of exigent circumstances is whether a warrantless search made more than ten days after the warrantless seizure is reasonable. *fn5" An examination of the rationale behind the allowance of a subsequent search based on Chambers compels us to conclude that a warrantless search conducted more than ten days after seizure, based on the mobility exception to the warrant requirement, absent compelling circumstances not present in this case, is not reasonable.

 In considering the reasonableness of the warrantless seizure and search in Chambers, the Supreme Court found:

 
It was not unreasonable in this case to take the car to the station house. All occupants in the car were arrested in a dark parking lot in the middle of the night. A careful search at that point was impractical and perhaps not safe for the officers, and it would serve the owner's convenience and the safety of his car to have the vehicle and the keys together at the station house.

 399 U.S. at 52 n. 10, 90 S. Ct. at 1981.

 The rationale justifying a warrantless search pursuant to the doctrine of exigent circumstances is certainly not present in this case where the FBI waited more than ten days before conducting the search after it had secured the vehicle. Presented with an unexplained delay of this magnitude, we find that the warrantless search was not reasonable.

 This situation is not unlike that presented to the Supreme Court in United States v. Chadwick, 433 U.S. 1, 97 S. Ct. 2476, 53 L. Ed. 2d 538 (1977), in which the Court was confronted with the question of whether the Fourth Amendment precluded the warrantless search of a footlocker which had been permissibly seized without a warrant from the defendant's car. The Court stated:

 
Nor does the footlocker's mobility justify dispensing with the added protections of the Warrant Clause. Once the federal agents had seized (the footlocker) at the railroad station and had safely transferred it to the Boston federal building under their exclusive control, there was not the slightest danger that the footlocker or its contents could have been removed before a valid search warrant could be obtained. The initial seizure and detention of the footlocker, the validity of which respondents do not contest, were sufficient to guard against any risk that evidence might be lost. With the footlocker safely immobilized, it was unreasonable to undertake the additional and greater intrusion of a search without a warrant.

 Id. at 13, 97 S. Ct. at 2484-85 (footnotes omitted). Here, as Agent McKeen's testimony demonstrates, the trailer was taken to the Philadelphia Naval Base after its seizure, where it was secured. As Chief Justice Burger concluded in Chadwick :

 
Here the search was conducted more than an hour after federal agents had gained exclusive control of the footlocker and long after respondents were securely in custody; the search therefore cannot be viewed as incidental to the arrest or as justified by any other exigency. Even though on this record the issuance of a warrant by a judicial officer was reasonably predictable, a line must be drawn. In our view, when no exigency is shown to support the need for an immediate search, the Warrant Clause places the line at the point where the property to be searched comes under the exclusive dominion of police authority.

 Id. at 15, 97 S. Ct. at 2485-86. The government produced no justification whatsoever for delaying the search eleven days after seizure. Under the doctrine of exigent circumstances, upon which the government relies, we find that the warrantless search was unreasonable. However, our conclusion that the warrantless search was unreasonable does not conclude the matter since a warrant was obtained after the seizure, but before the search. The fact that the government relied on the doctrine of exigent circumstances for the seizure clearly would not preclude it from obtaining a warrant for the search. This is precisely the procedure endorsed by the Supreme Court in Chadwick, 97 S. Ct. at 2485; Cf. United States v. Allen, 566 F.2d 1193, 1194 (3d Cir. 1977); United States v. Simmons, 444 F. Supp. 500, 506 (E.D.Pa.1978). Inasmuch as we have heretofore found that the warrantless seizure of the trailer was justified under the doctrine of exigent circumstances, but that a warrantless search conducted more than ten days after the seizure was unreasonable under the circumstances, we must now determine whether the search was nevertheless valid in that a warrant was obtained. *fn6"

 Defendants contend that the information set forth in the affidavit that the defendants were engaged in a massive record counterfeiting operation is insufficient to meet the two-pronged test of credibility and reliability set forth in Aguilar v. Texas, 378 U.S. 108, 84 S. Ct. 1509, 12 L. Ed. 2d 723 (1964) and Spinelli v. United States, 393 U.S. 410, 89 S. Ct. 584, 21 L. Ed. 2d 637 (1969). *fn7" The FBI had information from Paul Fishkin, President of Bearsville Records Company *fn8" and Jack Francis, Chief Investigator, Anti-Piracy Division of the Recording Industry Association of America, Inc., to the effect that the defendant did not have the authority to produce or distribute the five named albums. The defendants, relying on Aguilar and Spinelli, contend that the affidavit is inadequate in that it does not contain specific allegations of reliability concerning these individuals. We reject this reasoning under the circumstances of this case. Where there exists a substantial basis on the face of the affidavit to credit the hearsay, the reliability requirement is satisfied. See United States v. Harris, 403 U.S. 573, 581, 91 S. Ct. 2075, 29 L. Ed. 2d 723 (1971). Here the statements were made by persons whom the affidavit identifies as being persons whose positions of employment would have given them the opportunity to personally observe the allegations contained in the affidavit. An employee's personal observations have "built-in" indicia of reliability. United States v. Hunley, 567 F.2d 822, 825 (8th Cir. 1977); United States v. Swihart, 554 F.2d 264, 268-69 (6th Cir. 1977); United States v. Simmons, 444 F. Supp. 500, 505 (E.D.Pa.1978); See United States v. Darensbourg, 520 F.2d 985, 988-89, Modified, 524 F.2d 233 (5th Cir. 1975); United States v. Burke, 517 F.2d 377, 380-81 (2d Cir. 1975). In addition, the statements in the affidavit tend to corroborate each other; thus, a substantial basis exists to credit the testimony that the defendants had no authorization to produce the albums listed. While this would be sufficient to satisfy the Aguilar-Spinelli test, in this case there is the additional safeguard of the personal observation of the agents conducting surveillance of the truck and their questioning of the Oneida employee. The FBI surveillance and questioning reasonably alerted the agents to the fact that the defendants might attempt to dispose of evidence. See Draper v. United States, 358 U.S. 307, 313, 79 S. Ct. 329, 3 L. Ed. 2d 327 (1959); United States v. Swihart, 554 F.2d at 269-70. The statements of the named informants and the unnamed employee of HOS, each of whom was in a position which afforded reliability to his information, coupled with the independent corroboration of the FBI agents, presented the magistrate with sufficient evidence to reasonably find probable cause. *fn9"

 
Unauthorized and infringing copies of copyrighted sound recordings, unauthorized and infringing sound recordings of copyrighted musical compositions, any phonograph record, disk, wire, tape or other article on which sounds are recorded, to which or upon which is stamped, posted or affixed any forged or counterfeit label, any master stampings, master tapes, or other devices and equipment used to reproduce unauthorized and infringing copies of copyrighted sound recordings or copyrighted musical compositions, business records relating to the manufacture, distribution and sale of aforesaid recordings, and other evidence of a crime, fruits of a crime, and items designed, used or intended to be used to commit a crime, to wit: The sale for profit of unauthorized and infringing copies of copyrighted sound recordings and copyrighted musical compositions, and the interstate transportation, sale or receipt of phonograph recordings bearing forged or counterfeit labels, in violation of Title 17, United States Code, Section 1(a), 1(e), 1(f), 101(e), 104 and Title 18, United States Code, Section 2318. The aforesaid recordings include, but are not limited to: "Runt" by TODD RUNDGREN, manufactured by Bearsville Record Company, 75 East 55th Street, New York, N.Y., "Golden Oldies for WCAU," "Deep Purple," "Shades of Deep Purple," and "Book of Talisin."

 The Fourth Amendment provides that no warrant shall issue except upon probable cause and "particularly describing the place to be searched, and the persons or things to be seized." In determining whether the description of the items to be seized is sufficient to comport with the Fourth Amendment, the Supreme Court has stated:

 Marron v. United States, 275 U.S. 192, 196, 48 S. Ct. 74, 76, 72 L. Ed. 231 (1927); See also Andresen v. Maryland, 427 U.S. 463, 480, 96 S. Ct. 2737, 49 L. Ed. 2d 627 (1976); United States v. Johnson, 541 F.2d 1311, 1314 (8th Cir. 1976). Specificity is required in the warrant to limit the discretion of the executing officers and to give notice to the party being searched. United States v. Johnson, 541 F.2d at 1315; United States v. Marti, 421 F.2d 1263, 1268 (2d Cir. 1970). The underlying measure of the adequacy of the description is whether, given the specificity in the warrant, a violation of personal rights is likely. United States v. Bynum, 386 F. Supp. 449, 461 (S.D.N.Y.1974).

 Defendants rely on a recent First Circuit decision, United States v. Klein, 565 F.2d 183 (1st Cir. 1977), in which the Court suppressed the fruits of a search conducted pursuant to a warrant, holding that the warrant contained an insufficient description of items to be seized. The Klein warrant authorized the seizure of

 
certain 8-track electronic tapes and tape cartridges which are unauthorized "pirate" reproductions and also any commercial documentation and advertising materials relating thereto which are evidence of the commission of a criminal offense, to wit, the knowing and wilful infringement of copyrights secured by Title 17, United States Code, in violation of 17 U.S.C. § 104.

 Id. at 184-85. Judge Coffin, who participated in the Klein decision, in In the Matter of the Application of Montilla Records of Puerto Rico, Inc. v. Morales, 575 F.2d 324, 326 (1st Cir. ...


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