Paul L. Caron

Wednesday, January 9, 2008

Why Amazon Was Right to Raise a First Amendment Objection to a Subpoena for Its Customer Records in a Tax Fraud Case

Interesting op-ed on FindLaw:  Why Amazon Was Right to Raise a First Amendment Objection to a Subpoena for Its Customer Records in a Tax Fraud Case, by Anita Ramasastry (U. Washington):

Recently, Wisconsin-based U.S. Magistrate Judge Stephen Crocker made public his sealed decision concerning a federal government request to Amazon for customer book purchase records. Thus, the public learned that, in early August 2007, Magistrate Judge Crocker had denied a government subpoena request that would have forced to identify customers who had purchased books from a man charged with tax evasion.

As I will discuss below, the judge's ruling was straightforward and correct. Customers (or those parties who hold their customer records) should be able to invoke a First Amendment right when the government wants to seek access to their reading histories without their prior notice or consent. The government should have to justify the necessity of obtaining such records through subpoena, showing its heightened need for such sensitive, private information. ...

This past summer, the federal tax investigation at issue in the case targeted Robert D 'Angelo ... for possible charges of tax and mail fraud. D'Angelo had reportedly sold over 24,000 books through the Amazon website to third parties, operating from his office, without declaring his profits as income. ...  The feds ... noted that they needed to interview D'Angelo's customers in order to present evidence to the grand jury about D'Angelo's book sales. In other words, they could not prove he engaged in tax fraud without showing evidence of the sales that had transpired.

Magistrate Judge Crocker agreed with the point that the federal government had an important need to interview or contact D'Angelo's customers (who are also Amazon customers). Yet he pointed out that there was a less intrusive way to get the information: Amazon could create a process to randomly contact a subset of D'Angelo's customers to provide them with information about the investigation, and to ask them whether they voluntarily would contact and cooperate with federal prosecutors. A letter from the US Attorney would accompany the Amazon letter, but the identity of those customers who chose not to participate, would never be disclosed to the federal government.

This is a better solution. Granted, some critics may argue that no customers would step forward and agree to cooperate with the investigation. But until we set up such mechanisms, we will never know whether that is a correct assertion.

Ultimately, prosecutors withdrew the subpoena. They noted that they were able to get the needed customer information from computers they seized from D 'Angelo instead.

Thus, as Magistrate Judge Crocker noted, "If the government had been more diligent in looking for work-arounds instead of baring its teeth when Amazon balked, it 's probable that this entire First Amendment showdown could have been avoided."

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