In the Matter of the Search of Content Stored at Premises Controlled by Google Inc. and as Further Described in Attachment A

Filing 96

ORDER HOLDING GOOGLE IN CIVIL CONTEMPT AND DENYING GOVERNMENT'S MOTION FOR EVIDENTIARY HEARING. Signed by Judge Richard Seeborg on 10/19/17. (cl, COURT STAFF) (Filed on 10/19/2017)

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Case 3:16-mc-80263-RS Document 96 Filed 10/19/17 Page 1 of 6 1 2 3 4 5 6 7 UNITED STATES DISTRICT COURT 8 NORTHERN DISTRICT OF CALIFORNIA 9 In the Matter of the Search of Content Stored at Premises Controlled by Google Inc. and as Further Described in Attachment A 10 United States District Court Northern District of California 11 Case No. 16-mc-80263-RS ORDER HOLDING GOOGLE IN CIVIL CONTEMPT AND DENYING GOVERNMENT'S MOTION FOR EVIDENTIARY HEARING 12 13 14 I. INTRODUCTION 15 On August 14, 2017, this Court ordered Google to fully comply with a government search 16 17 warrant seeking foreign-stored emails. Google has not complied and now moves to be held in civil 18 contempt so that it can seek appellate review. The government agrees that Google should be held 19 in contempt but also moves for an evidentiary hearing in order to determine an appropriate 20 sanction to be imposed if Google’s appeal fails. For the reasons that follow, Google is found in 21 civil contempt of the Court’s August 14 order and the government’s motion for an evidentiary 22 hearing is denied. 23 II. BACKGROUND1 24 On June 30, 2016, the magistrate judge authorized a search warrant, under the Stored 25 Communications Act (“SCA”), 18 U.S.C. § 2701 et seq., directing Google to produce stored 26 27 28 1 A more detailed explanation of the underlying facts in this case can be found in the August 14 order (Dkt. No. 84). Case 3:16-mc-80263-RS Document 96 Filed 10/19/17 Page 2 of 6 1 content related to certain email accounts. Google moved to quash with respect to content stored 2 outside the United States. The magistrate judge denied the motion and ordered Google to produce 3 all responsive content retrievable from the United States. See Dkt. No. 46. On August 14, 2017, 4 this Court affirmed the magistrate judge’s order and denied a concurrent request by the 5 government to hold Google in contempt. On September 13, 2017, Google filed the instant motion asking the Court to: a) hold 6 7 Google in civil contempt of the August 14 order; b) impose sanctions of $10,000 for every day 8 that Google fails to comply; c) stay those sanctions until seven business days after the Ninth 9 Circuit affirms the Court’s order; and d) require Google to preserve any information in its possession that is subject to the search warrant. The terms of the proposed sanctions are similar to 11 United States District Court Northern District of California 10 the terms of stipulations that Google and other companies have entered into with the government 12 in similar cases in other jurisdictions.2 III. LEGAL STANDARD 13 Courts have both inherent and statutory power to enforce compliance with their lawful 14 15 orders through civil contempt. California Dep't of Soc. Servs. v. Leavitt, 523 F.3d 1025, 1033 (9th 16 Cir. 2008) (citing Shillitani v. United States, 384 U.S. 364, 370 (1966); 18 U.S.C. § 401. This 17 power may be exercised over any person or party who “disobeys a specific and definite order of 18 the court.” Gifford v. Heckler, 741 F.2d 263, 265 (9th Cir. 1984). “Intent is not an issue in civil 19 contempt proceedings. The sole question is whether a party complied with the district court's 20 order.” Donovan v. Mazzola, 716 F.2d 1226, 1240 (9th Cir. 1983) (internal citations omitted). Unlike criminal contempt, which is designed to punish, civil contempt is a remedial device 21 22 that operates “in a prospective manner.” Shillitani, 384 U.S. 364 at 370. Civil contempt sanctions 23 are employed for two purposes: (1) to coerce compliance with a court’s order; and (2) to 24 25 26 27 28 2 See, e.g., In re Search of Information Associated with [redacted]@gmail.com that is Stored at Premises Controlled by Google Inc., Case No. 1:16-mj-00757 (BAH) (Sep. 5, 2017 (ECF No. 36). See also In re Warrant to Search a Certain E-Mail Account Controlled & Maintained by Microsoft Corp., Case Nos. 13-MAG-2184; M9-150 (S.D.N.Y. Sep. 4, 2014) (ECF No. 91). ORDER HOLDING GOOGLE IN CONTEMPT AND DENYING MOTION FOR HEARING CASE NO. 16-mc-80263-RS 2 Case 3:16-mc-80263-RS Document 96 Filed 10/19/17 Page 3 of 6 1 compensate the complainant for losses sustained. United States v. United Mine Workers of Am., 2 330 U.S. 258, 303-04 (1947); accord United States v. Bright, 596 F.3d 683, 695-96 (9th Cir. 3 2010). Given their remedial purpose, civil contempt sanctions must be conditional—i.e., they only 4 operate so long as the contemnor fails to comply with the court order—and generally must be no 5 more than the “minimum sanction necessary to secure compliance.” Id. at 696 (citing Whittaker 6 Corp. v. Execuair Corp., 953 F.2d 510, 517 (9th Cir. 1992)). IV. DISCUSSION 7 8 9 10 The parties agree that Google should be held in contempt of the August 14 order. They disagree, however, about the appropriate way to devise a sanction that will ensure Google’s compliance and about whether an evidentiary hearing is needed to conduct that inquiry effectively. United States District Court Northern District of California 11 A. Devising an Appropriate Sanction 12 When the purpose of a sanction is coercing compliance, the court must consider “the 13 character and magnitude of the harm threatened by continued contumacy, and the probable 14 effectiveness of any suggested sanction.” United Mine Workers, 330 U.S. at 304. See also 15 Whittaker, 953 F.2d at 516. In fixing the amount of a coercive fine, a court should consider the 16 contemnor’s “financial resources and the consequent seriousness of the burden” imposed by the 17 sanction. United Mine Workers, 330 U.S. at 304. 18 The government argues that an evidentiary hearing is needed to assess the equities at stake 19 in this case properly and to devise an appropriate sanction. Google, the government contends, has 20 resisted compliance with the search warrant at every turn. It has given little weight to the 21 government’s countervailing interest in stopping criminal activity. It also has offered inadequate 22 assurances that all of the data subject to the search warrant has been effectively preserved. It is 23 unclear, the government asserts, why Google has behaved as it has and thus it is difficult, without 24 a more substantial evidentiary record, to devise a sanction that the Court can be confident will 25 secure compliance. 26 27 28 Google, by contrast, argues that its motives are not nearly as opaque as the government suggests. It has not turned over the data subject to the search warrant because it believes, based on ORDER HOLDING GOOGLE IN CONTEMPT AND DENYING MOTION FOR HEARING CASE NO. 16-mc-80263-RS 3 Case 3:16-mc-80263-RS Document 96 Filed 10/19/17 Page 4 of 6 1 a Second Circuit decision, that it is not legally required to do so. The company is appealing the 2 Court’s August 14 order to get clarity on this issue in the Ninth Circuit. It has asked to be held in 3 contempt to ensure that it has standing to pursue its appeal. These actions, Google argues, are 4 taken in good faith and offer no indication that Google will continue to withhold the information 5 sought by the government if its appeal is unsuccessful. There is therefore no need to develop a 6 more substantial evidentiary record or to devise a more severe sanction than the $10,000 per day 7 fine that Google has proposed. Of the two sides, Google’s arguments are more persuasive. The government has an 8 9 undeniably significant interest in stopping criminal activity and in getting access to materials subject to a valid search warrant. Google has an important interest, on the other hand, in obtaining 11 United States District Court Northern District of California 10 clarity as to whether a search warrant issued under the SCA compels production of documents 12 stored outside the United States.3 The government acknowledges that Google has a right to press 13 its appeal; it is not arguing that Google must turn over the information now. Neither is it 14 arguing—at least at present—that Google should be held in criminal contempt for its past 15 behavior. Thus, the only question currently in need of answer is what sanction will secure 16 Google’s prompt compliance with the August 14 order should its appeal fail. As Google correctly notes, this Court already found in the August 14 order that, “[i]n light 17 18 of the Second Circuit decision in Microsoft and the absence of relevant Ninth Circuit precedent, 19 Google’s diligent, good faith efforts to comply with current law do not warrant contempt at this 20 stage of the proceedings.” None of Google’s actions in the past month alters the assessment that 21 Google has acted and continues to act in good faith. Accordingly, there is no reason to believe that 22 the $10,000 per day sanction proposed by Google is insufficient to ensure compliance. It is true that at first blush $10,000 per day may seem like a small amount to a company of 23 24 25 26 27 28 3 The importance of this legal issue is evidenced by the Supreme Court’s recent grant of certiorari from the Second Circuit decision on which Google places principal reliance. See In re Warrant to Search a Certain E-Mail Account Controlled & Maintained by Microsoft Corp., 829 F.3d 197 (2d Cir. 2016), cert. granted sub nom. United States v. Microsoft Corp., No. 17-2, 2017 WL 2869958 (U.S. Oct. 16, 2017). ORDER HOLDING GOOGLE IN CONTEMPT AND DENYING MOTION FOR HEARING CASE NO. 16-mc-80263-RS 4 Case 3:16-mc-80263-RS Document 96 Filed 10/19/17 Page 5 of 6 1 Google’s resources. It is not, however, a meaningless amount. After ten days of noncompliance, 2 Google would owe $100,000. After a year of noncompliance, it would owe roughly $3.6 million. 3 Moreover, if Google’s appeal fails—especially if it does so because the Second Circuit’s decision 4 in Microsoft is overturned by the Supreme Court—Google will be subject to similar sanctions for 5 similar warrants in other districts and also inevitably will be served with additional warrants 6 pursuant to the SCA. The cost to Google of refusing to comply with these warrants will quickly 7 add up. Viewed in this broader context, the $10,000 per day sanction proposed by Google should 8 prove sufficiently coercive; imposing a more severe sanction runs the risk of being more than the 9 “minimum necessary to secure compliance.” B. Data Preservation 11 United States District Court Northern District of California 10 The government’s concerns regarding Google’s preservation of data subject to the search 12 warrant may or may not prove valid. It is premature, however, to address this issue. Should 13 Google prevail on appeal, the issue will be moot. If Google loses, it will be required to comply 14 with the August 14 order or be subject to the sanctions imposed by this order. If, at that time, 15 Google fails to turn over data the government believes Google previously possessed but did not 16 preserve, the government can raise the issue and seek an appropriate remedy. V. CONCLUSION 17 18 19 20 21 Google is held in contempt of this Court’s August 14, 2017 order under the following conditions: 1. Google is assessed sanctions of $10,000 per day, payable to the United States, until it complies with the Court’s order. 22 2. These civil contempt sanctions are stayed pending Google’s appeal of the Court’s August 23 14, 2017 order. The sanctions shall not accrue during the pendency of the appeal. The 24 sanctions shall only begin accruing seven business days after the filing of an opinion or 25 memorandum decision affirming this Court’s order, if Google has already exhausted its 26 appellate options and does not fully comply with this Court’s order. 27 28 ORDER HOLDING GOOGLE IN CONTEMPT AND DENYING MOTION FOR HEARING CASE NO. 16-mc-80263-RS 5 Case 3:16-mc-80263-RS Document 96 Filed 10/19/17 Page 6 of 6 3. During the pendency of the appeal and any related proceedings, Google shall preserve all 1 information called for by the search warrant in this matter. 2 3 The government’s motion for an evidentiary hearing is denied.4 4 5 IT IS SO ORDERED. 6 7 Dated: October 19, 2017 ______________________________________ RICHARD SEEBORG United States District Judge 8 9 10 United States District Court Northern District of California 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 4 Google’s argument that the government’s motion for an evidentiary hearing should be treated as a motion for reconsideration does not merit a detailed discussion. Google’s associated request for attorney fees is denied. ORDER HOLDING GOOGLE IN CONTEMPT AND DENYING MOTION FOR HEARING CASE NO. 16-mc-80263-RS 6

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