794 F. Supp. 2d 484
S.D.N.Y.2011Background
- Defendant Jiau moved to suppress recordings and contemporaneous messages of calls with Barai and Pflaum.
- The government relied on Barai’s purported consent and ordinary-course-of-business arguments.
- Pflaum testified Barai consented to Pflaum being on the line and taking notes.
- Haatch recorded two calls at Barai’s request to preserve details for Pflaum.
- Court conducted a May 12, 2011 evidentiary hearing and denied suppression based on consent and/or ordinary-course use.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Barai consented to the interceptions | Barai consented to Pflaum on the line and to recordings | Consent was not established for all interceptions | Consent established for Pflaum and for Haatch recordings |
| Whether interceptions were in the ordinary course of Barai Capital business | Recordings were made to document information Barai received | Ordinary-course defense applies to interceptions | Interceptions made in ordinary course; supports denial of suppression |
| Whether § 2511(2)(d) criminal/tortious act exception applies | Exception could apply if recordings aimed at insider trading | Exception broad; intended to protect non-consenting party | Exception not applicable to these facts |
| Whether the recordings were made to facilitate insider trading | Recordings served Barai’s trading scheme | Recordings were to capture information for Barai’s hearing impairment | Not made for the purpose of committing an illegal act |
| Whether Vest undermines the government’s position | Vest supports restricting consent defense | Vest not controlling; facts differ | Vest distinguished; not controlling here |
Key Cases Cited
- In re DoubleClick Inc. Privacy Litigation, 154 F. Supp. 2d 497 (S.D.N.Y.2001) (criminal/tortious exception narrow, mainly to prevent blackmail)
- United States v. Underhill, 813 F.2d 105 (6th Cir.1987) (defensive purpose of § 2511(2)(d) to protect non-consenting party)
- In re High Fructose Corn Syrup Litigation, 216 F.3d 621 (7th Cir.2000) (purpose of recording for evading detection not criminal/tortious)
- United States v. Vest, 639 F. Supp. 899 (D. Mass.1986) (primary motivation tortious/criminal; Vest distinguished here)
- Traficant v. Commission of IRS, 884 F.2d 258 (6th Cir.1989) (implication on § 2511(2)(d) privacy interests of conspirators)