Personal Privacy in an Information Society. Regulating the Compelled Production of Records

07/12/1997

We thus conclude that under the statutes here applicable . . . that today that which we have previously considered to be administrative fishing expeditions are often permitted; and that administrative subpoenas may be enforced for investigative purposes unless they are plainly incompetent or irrelevant to any lawful purpose.43

The quotation above from a recent opinion of the United States Court of Appeals for the Tenth Circuit symbolizes the relative ease with which the Federal government today may compel the production of records about individuals. Whatever the scope or purpose of a subpoena, be it an administrative or judicial summons, compulsory process to obtain documentary information about an individual from a third party who maintains a record about, or on behalf of, that individual is virtually unchallengeable. Equally important from the perspective of safeguarding individual rights, certain portions of the process by which some judicial or administrative summons may be issued need reconsideration.

Though the Commission is most directly concerned with problems engendered by government access to records about individuals held by third parties, this examination of summons and subpoena power pays more than passing attention to the procedure by which any compulsory process is issued, whether to the individual or to an independent record holder. In large part, this scope of inquiry is appropriate because distinguishing between types of legal process on the basis of who receives the process would be spurious in procedural terms.

The processes of compulsion at the Federal level which the Commission scrutinized fall into three broad categories: (1) administrative summons, (2) judicial subpoenas in the course of litigation, and (3) Grand Jury subpoenas. These and the search warrant are the forms of legal process the Federal government uses to compel the production of records or testimony. The Commission is well aware of the bewildering variety of administrative tools, from "inspection warrants" to "subpoenas," which fall under the umbrella term, "summons." But as the discussion below explains, the Commission found good reason to treat all such processes similarly.

Before examining the forms of administrative summons and judicial subpoena, however, two questions must be disposed of: the definition of an individual's legal interest in records which he has a right to consider confidential; and, the rationale of the Commission in not including the use of the search warrant in its considerations.

DEFINITION OF AN INDIVIDUAL'S LEGAL INTEREST

As the earlier portions of this chapter illustrate, an individual currently has no legally recognized interest in certain records about him, though these records may be ones in which the Commission has found that he ought to have an expectation of confidentiality.44 Without that legal interest, or "legitimate expectation of privacy" as the courts have termed it, the individual has no basis to challenge access to those records by government; that is, no ability to protect his expectation of confidentiality. Whether access to information about an individual is demanded by Grand Jury subpoena to a bank,45 by administrative summons to an accountant or employer,46 or by a subpoena during litigation directed to third parties, the individual is without standing to contest and, even if he were given standing, without substantive protections, constitutional or statutory, which he might assert.

Attempts to provide the individual with protection through mere procedural reform are, unfortunately, ineffective. The Tax Reform Act of 1976,47 for example, provides a mechanism that was meant to help individuals protect records in third-party hands from the administrative summons of the IRS. The mechanism, however, does not accomplish that purpose (though it does provide means for oversight of agency activity by other institutions). The Tax Reform Act requires the IRS to give an individual notice that a summons has been served on a third-party record keeper and allows the individual both to stop the record keeper from complying until a hearing is held and to intervene in any hearing or enforcement proceeding. Such a notice, with standing and nothing more, while it may deter baseless investigative activity, gives the individual little with which to impede IRS access. In short, the recent amendments to the tax code do not alter the inability of an individual to protect records about him held by third parties, even in the limited context of IRS summonses. To be sure, the individual may go into court, but when he gets there he has nothing to say, because he has no legal interest to defend or to balance against the government's desire for the record.

The rationale for leaving the individual helpless in this situation was best articulated in the Miller decision; because he does not possess and control the records, the individual has no "proprietary" interest in them and, thus, no protectible legal interest of any sort, at least against the government.48

The emphasis the Supreme Court laid on the possessory relationship of the individual to the record in Miller, however, need not frustrate efforts to fashion a legally protectible interest for the individual. Previous Supreme Court decisions, in fact, had suggested that such an interest might be found. In Donaldson v. United States,49 he Court rejected an employee's attempt to challenge an IRS summons for certain employment records because the summons was not directed to records "in the hands of anyone with whom the taxpayer had a confidential relationship of any kind"; the records sought were ones "in which the taxpayer has no proprietary interest of any kind, which are owned by the third person, which are in his [the third person's] hands, and which relate to the third person's business transactions with the taxpayer."50 In short, the records sought were not held by someone from whom the individual might claim any duty to hold the record in confidence.51 The Court did not, in Donaldson, restrict the possible reach of the individual's interest to possession alone. In a line of cases which the Court distinguishes from those involving records,52 it recognized an interest in information not possessed or controlled by the individual.

Rejecting the notion that geographic suzerainty or a "proprietary" interest is necessary to protect communications from interception without a search warrant, the Supreme Court indicated in Katz v. United States that even without such traditional interests an individual had a legitimate expectation of privacy.53 The Court noted that "the premise that property interests control the right of the government to . earch and seize has been discredited."54 Thus, a legal and logical basis exists for recognizing an individual interest in records about him held by third parties, but the parameters of that interest have yet to be defined.

In the definition emerging as the California courts apply that State's constitutional protection for a "legitimate expectation of privacy" in bank records, the Commission sees the outline of the protectible legal interest that will safeguard the individual while permitting the effective enforcement of law necessary for an ordered society. While the legal expectation enjoyed by an individual in California was first recognized in 1974 in Burrows v. Superior Court,55 the substance of that expectation did not begin to emerge clearly until a year later in Carlson v. Superior Court.56 Giving content to the expectation recognized by the California Supreme Court in Burrows, the California Court of Appeals (4th District) ruled that, "law enforcement officials may not gain access to an accused's private papers [in this case, bank records] by subpoena until there has been a judicial determination that there is probable cause to believe he has committed a criminal offense and that the papers and documents described in the subpoena would be material evidence in the case."57 In other words, the Court of Appeals suggested that the State must establish both probable cause to believe a crime has been committed and the relevance of the records sought to that crime before the privacy interest of the individual in the records can be overborne.

The Commission endorses this approach, believing that records in which an individual has an expectation of confidentiality should not be accessible to government unless a compelling governmental interest, outweighing the individual's interest to be free from government intrusion, can be shown.