No privacy interest in bank records

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Suppression of evidence is not the remedy for a violation of sec. 968.135, which requires probable cause for issuance of a subpoena for a suspect’s bank records, the Wis-consin Court of Appeals held on Dec. 12.

Michelle R. Popenhagen worked for Save More Foods, when Save More’s owner contacted the Min-ocqua Police Department, and told police that Popenhagen was stealing money when she deposited funds into the ATM, and was cashing checks for herself and her mother that had been returned due to a closed account or insufficient funds.

Minocqua police officers then re-quested and obtained subpoenas for Popenhagen’s bank records through the Oneida County District Attorney’s office. However, no determination of probable cause was made, as required by the statute.

The subpoenas were served, and the banks provided the requested records. Confronted with the records, Popenhagen made incriminating statements, and was charged with theft.

Popenhagen moved to suppress the bank records, and her statements. Oneida County Circuit Court Judge Mark Mangerson granted the motion, holding that Popenhagen had a privacy interest in the records, and the searches violated her state and federal constitutional rights and sec. 968.135.

The State appealed, and a divided court of appeals reversed, in a decision written by Judge Gregory A. Peterson, and joined by Judge Michael W. Hoover. Judge Thomas Cane dissented.

Fourth Amendment

The court first held that the searches did not violate the Fourth Amendment.

In United States v. Miller, 425 U.S. 435 (1976), the U.S. Supreme Court held that there was no legitimate expectation of privacy in bank records.

The court acknowledged that, in response to Miller, Congress passed the 1978 Right to Financial Privacy Act (RFPA), which provides civil remedies against the government and banks for disclosures of a bank customer’s financial information without consent, or a valid warrant or subpoena.

However, because the RFPA provided exclusively civil remedies, the court concluded that the exclusionary rule is not an appropriate remedy for violation.

The court reasoned, “While the RFPA shows some congressional concern with bank customers’ privacy, Congress specifically did not recognize a privacy interest that rose to the level of the Fourth Amendment. If it had, it could easily have crafted a remedy on par with remedies available for Fourth Amendment violations. The fact that Congress chose not to shows it believed bank customers were deserving of some protection, but not the level of protection available under the Fourth Amendment. The RFPA therefore does not show that society is now prepared to recognize a Fourth Amendment privacy interest in bank records.”

Wisconsin Constitution

The court then held that the Wisconsin Constitution affords no greater protection than the Fourth Amendment.

The court acknowledged that the Wisconsin Supreme Court has, in recent years, shown more willingness to interpret the state constitution independently of its federal counterpart. Nevertheless, the court concluded it was bound by controlling precedent, which provides that Wisconsin’s Constitution provides no greater protection for bank records than the Fourth Amendment. State v. Swift, 173 Wis.2d 870, 496 N.W.2d 713 (Ct.App.1993).

Section 968.135

The court next held that the statutory violation does not require suppression as a remedy, either.

The statute provides, in relevant part, “Upon the request of
the attorney general or a district attorney and upon a showing of probable cause under s. 968.12, a court shall issue a subpoena requiring the production of documents. … This section does not limit or affect any other subpoena authority provided by law.”

Although it was undisputed that the subpoenas were issued in violation of the statute, the court found suppression was unavailable. In the absence of a violation of a constitutional rights, the court concluded, suppression is only required if a statute specifically provides for suppression as a remedy, which sec. 962.135 does not.

The court noted that, in State v. Raflik, 2001 WI 129, 248 Wis. 2d 593, 636 N.W.2d 690, a warrant was issued over the phone, in violation of the statutory requirement that the application be recorded. But, because the statutes did not require suppression, the Supreme Court held the evidence was admissible in a criminal trial.

As in Ratlik, sec. 968.135 provides a procedure for issuance of a subpoena for documents, but does not require suppression. Accordingly, the court held the circuit court erred in granting the motion to suppress.

Inherent Authority

Finally, the court rejected Popenhagen’s argument that suppression was proper pursuant to the circuit court’s inherent authority.

The court concluded that, even if such power exists, the circuit court never invoked that authority in granting the motion, but relied solely on the statute and the right to privacy.

Accordingly, the court found it could not affirm the order on that ground, and reversed the grant of the suppression motions.

The Dissent

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Judge Cane dissented, arguing that the Wisconsin Constitution protects against unlawful searches of bank records, and requires application of the exclusionary rule.

Judge Cane concluded that the enactment of sec. 968.135, in 1979, after Miller was decided, indicates that the Legislature does recognize a legitimate expectation of privacy in bank records.

Cane also noted that the statute is included in Chapter 968, which governs criminal procedure, rather than a chapter governing civil procedure or banking.

Finally, he noted that no Wisconsin statutes expressly provide for the exclusionary rule as a remedy for violation.

Cane concluded, “this case involves the flagrant violation of Wis. Stat. sec. 968.135. No attempt was made to comply with the statute, nor has any explanation been offered for the abuse of this process. Yet the State wants us to ignore the statute and allow evidence resulting from its unlawful seizure to be used in a criminal proceeding. I am not persuaded.”

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David Ziemer can be reached by email.