The opinion of the court was delivered by: SAROKIN
This action is before the court on the return date of an order to show cause why a preliminary injunction should not issue, which order, including temporary restraints, was issued by the court on June 5, 1984. At issue is the propriety of the government's search of plaintiff's law offices and the seizure of 2000 client files and numerous financial documents, all pursuant to three separate search warrants. Plaintiff seeks the return of the documents seized, as well as damages for violations of its constitutional rights.
As part of a pending grand jury investigation into allegations of a conspiracy to defraud insurance companies by submitting false medical reports and fraudulently inflated medical bills, on May 16, 1984, United States Postal Inspectors searched the law offices of Klitzman, Klitzman & Gallagher in Asbury Park, New Jersey. Initially, such search was accomplished pursuant to a warrant issued on May 14, 1984 by Honorable Robert E. Cowen, United States Magistrate. The warrant authorized the seizure of
certain business records, books and other documents which are case registers, legal diaries, telephone message books and pads, visitor's logs, telephone toll records, business bank accounts, any and all records of all deposits in and withdrawals from all bank accounts pertaining to the practice of law by Charles B. Klitzman, any and all ledger books or other records concerning trust clients and trustee accounts, all retainer and compensation agreements with personal injury clients, all records pertaining to the disbursement of funds on behalf of personal injury clients, all records reflecting payments to attorneys, investigators and others, all closed or nonactive files for personal injury claimants containing reports and bills for professional services allegedly performed by physicians and other medical practitioners and any correspondence and other records and documents associated with the preparation and presentation of these claims, and any other evidence, instrumentalities and fruits of the crimes of conspiracy to devise and execute a scheme to defraud insurance companies through the submission of fraudulent medical claims and the use of the mails in executing said scheme in violation of Title 18, United States Code, Sections 371 and 1341.
Aff. of Robert J. Krut, Exh. A. Such warrant was based upon an affidavit of defendant Krut detailing particular examples of false or inflated medical bills submitted on behalf of plaintiff's clients. For example, the supporting affidavit reads:
. . . a former client represented by Charles B. Klitzman stated that he was never treated by Alan Lederman. A review of the insurance company file reveals that on December 8, 1980, a bill for medical services prepared on the stationery of Alan Lederman, D.C. d/b/a Matawan Chiropractic Center reporting that his client/patient had been treated forty-six times, was mailed from the Klitzman law firm to the Royal Globe Insurance Company, Shrewsbury, New Jersey.
Krut Aff., Exh. A (Rider para. 9).
During the course of the search, it became necessary to obtain two additional warrants. See Aff. of Michael Milner, paras. 8-10. Both were based on the affidavits of Postal Inspector Vernon Holmes, a defendant herein, who was in telephonic contact with defendant Krut, himself a participant in the search. The first of these warrants extended the scope of the search to
personal injury files of the Klitzman law firm presently pending payment from insurance companies in which releases have been executed and submitted to the insurance company for which payment has not yet been disbursed to the client . . .
Krut. Aff., Exh. B. Hence, open files could now be searched. Krut, however, seems to state that such files were only cursorily examined. Krut Aff. para. 15. The second additional warrant further extended the scope of the search to include plaintiff's storage room, "located in an alley" behind the premises already searched. This search became necessary when, based upon information provided by one of plaintiff's employees, investigators realized that certain of the closed files in which they were interested were contained in such storage room. Krut Aff., Exhibit C.
As a result of this search, a full-day occupation of plaintiff's offices occurred on May 16, 1984. Aff. of Abraham R. Klitzman (6/5/84) paras. 2-4. The office was closed, and over 2000 files seized. Plaintiff alleges that the search and seizure exceeded the scope of the warrant and paints a picture of "a wholesale rummaging of all the files and other documents in the office," Klitzman Aff. para. 2, see also Klitzman Aff. (6/14/84) para. 11, including personal records. Klitzman Aff. (6/5/84) para. 7. The government, however, contends that plaintiffs agreed to cooperate in the search, Krut Aff. para. 9, and that, in fact, the government relied upon the representations of plaintiff's bookkeeper in deciding which documents were covered by the first search warrant. Id. P 14. It states that plaintiff made the decision to close its own offices, id. P 13, and portrays the actions of government agents as reasonable throughout. Id. PP 14, 19, 21, 23.
Plaintiff now moves for a preliminary injunction, arguing that the search here at issue was unreasonable under the circumstances, as well as per se unreasonable as a result of its violation of the attorney-client relationship. It also argues that the scope of the search was unconstitutionally broad and that, in undertaking it, the government violated certain of its own regulations. The government both disputes these claims and moves to dismiss for failure to state a claim upon which relief can be granted. Fed. R. Civ. P.12(b)(6).
The prospect of a law office search is a matter of serious concern because of the threat it poses to the nature of the attorney-client relationship, the legal devices that have evolved to promote and foster it, and ...