Harbor Healthcare System v. United States, 19-20624

Background

Harbor Healthcare was the subject of qui tam suits; DOJ issued a Civil Investigative Demand and later obtained warrants to search Harbor locations in May 2017.
The searches seized ~3.59 terabytes of data, dozens of devices, and hundreds of boxes of paper, including thousands of attorney–client privileged documents and communications involving Harbor’s in-house and outside counsel.
The government used a filter/taint team to review seized material but stipulated it did not seek express prior authorization from the issuing magistrates to seize privileged materials and retained copies of materials it agreed were privileged.
Harbor filed a pre‑indictment Rule 41(g) motion seeking return/destruction of privileged materials; the district court initially supervised a limited screening plan but later dismissed Harbor’s action, finding protective processes in place and suggesting suppression in any later criminal case.
The Fifth Circuit reversed, holding the district court abused its discretion by misunderstanding the harms asserted (privacy and loss of privilege), misapplying Richey factors, and wrongly treating Rule 41(g) relief as equivalent to a suppression remedy.

Issues

Issue	Harbor's Argument	United States' Argument	Held
Appellate jurisdiction over dismissal of pre‑indictment Rule 41(g) action	The dismissal is a final appealable decision and reviewable under 28 U.S.C. § 1291	The order was not immediately appealable (district court lacked finality)	Court had jurisdiction; dismissal was appealable under DiBella framework
Whether the district court should continue exercising equitable jurisdiction over Harbor's Rule 41(g) claim	Court should exercise jurisdiction to protect Harbor’s privilege and privacy given alleged wrongful seizure and retention	District court may decline because a privilege‑screening plan was in place and suppression would be available post‑indictment	District court abused its discretion by declining jurisdiction; remanded for further proceedings
Whether the government showed "callous disregard" in seizing/retaining privileged material	Government knowingly seized privileged materials without magistrate authorization and kept copies—showing callous disregard	Government relied on warrants and post‑seizure screening; no callousness	Court found stipulated facts and retention of copies supported a finding of callous disregard
Whether suppression in a future criminal case is an adequate remedy versus Rule 41(g) return/destruction relief	Suppression is inadequate because there may be no indictment and suppression does not require return/destruction of property; Rule 41(g) protects the privacy/property interest	Rule 41(g) claim is effectively an improper suppression claim; suppression protects Fourth Amendment rights	Suppression is not an adequate remedy for Harbor’s asserted privacy/property injury; Rule 41(g) relief is appropriate

Key Cases Cited

DiBella v. United States, 369 U.S. 121 (1962) (pre‑indictment return‑of‑property claims can be appealed where order is final)
Richey v. Smith, 515 F.2d 1239 (5th Cir. 1975) (four‑factor test for pre‑indictment Rule 41(g) equitable jurisdiction)
United States v. Zolin, 491 U.S. 554 (1989) (limits on in‑camera review to prevent fishing expeditions while protecting privilege)
Fisher v. United States, 425 U.S. 391 (1976) (privilege protects privacy and confidential communications)
Nixon v. Administrator of General Services, 433 U.S. 425 (1977) (privileges serve to protect confidential communications)
United States v. Search of Law Office, Residence, & Storage Unit Alan Brown, 341 F.3d 404 (5th Cir. 2003) (distinguishable—movant there failed to identify specific privileged documents)
In re Terra Int’l, Inc., 134 F.3d 302 (5th Cir. 1998) (use of logs and categorical review to limit document review burden)
In re Sealed Case, 716 F.3d 603 (D.C. Cir. 2013) (addresses mootness where property already returned; distinguished here because government retained materials)