On appeal from the Superior Court, Appellate Division.
For reversal and remandment -- Chief Justice Wilentz and Justices Clifford, Handler, Pollock, O'Hern, Garibaldi and Stein. For affirmance -- None. The opinion of the Court was delivered by O'Hern, J. Wilentz, C.J., and Handler, Pollock, Garibaldi and Stein, JJ., join in this opinion. Clifford, J., concurs in the result.
[109 NJ Page 4] This appeal primarily concerns the admissibility, as evidence in a criminal trial, of the business records of a pyramid swindle
scheme. Lois and Donald Sanders were the masterminds of the scheme. They have pled guilty to criminal fraud and other misconduct. In related proceedings, on the State's appeal, we remanded their cases for resentencing. State v. Sanders, 107 N.J. 609 (1987). In furtherance of their scheme, the Sanderses recruited or used a variety of confederates, including some New Jersey State Police officers who were said to have provided security for the operation. These and others are among the defendants before us. Evidence was seized from Lois and Donald Sanders and certain confederates in Illinois. We granted the State's motion for leave to appeal the Appellate Division judgment that affirmed a trial court order suppressing any use of the evidence in New Jersey criminal proceedings. 105 N.J. 532 (1986).
In 1981 the scheme was operated under the name of Co-Op Investments and relieved some 2,000 New Jersey investors of over $1,000,000. State v. Sanders, supra, 107 N.J. at 613-14. As the scheme unfolded, it came to the attention of the New Jersey Bureau of Securities in the Attorney General's office. In fact, the Sanderses themselves initiated litigation to qualify their plan for governmental approval. On March 17, 1981, in the course of that litigation, the State noticed for production of many of the business records that are the subject of this proceeding. While that civil litigation was pending, the Sanderses absconded to California, then to Illinois.
They soon commenced to market the scheme to the citizens of Illinois. New Jersey law enforcement authorities were not far behind them. Before New Jersey could obtain the records by an interstate subpoena or other means, the Illinois authorities arrested the Sanderses and took possession of their records. The Sanderses were arrested on April 29, 1981, at a hotel meeting room in Peoria, Illinois, as they were in the process of conducting a meeting for new investors in their pyramid scheme. One defendant, Hexter, had testified before the New Jersey Bureau of Securities on April 28, 1981, a day before the arrest in Peoria. On the same day, another defendant, Cray,
testified to the Bureau that the Sanderses had mentioned going to Chicago with the computer records. Incident to the arrest, the Illinois authorities seized membership charts, cards, forms, computer printouts, cash, and other evidence of the conspiracy.
The morning following the arrest Illinois police obtained consent from Lois Sanders to search her hotel room. There they seized other items and the contents of a confederate's purse. The confederate then gave consent to search her car.
Based on their investigation, the Illinois authorities obtained a warrant on or about May 1, 1981, to search rooms and a safe deposit box registered to the Sanderses at a Hilton hotel in Skokie, Illinois. There they seized a computer and more printouts, membership cards, cash receipts, notebooks and journals, as well as a gun and bullets.
For reasons not fully revealed because we do not have the official proceedings of the Illinois courts, the Illinois officers were found to have gained unlawful access to certain of the records in two respects: (1) the consent search was found not to have been voluntary, and (2) the search pursuant to the warrant was found to have been invalid because of insufficiency of the affidavits in support of the warrant.
The basic question that we now face is whether the actions of the Illinois authorities require that the evidence be quarantined to prevent further spread of any poisonous taint from their actions. We think not and reverse the judgments below that so held.
We must note at the outset that this is not a "silver platter" case. Cf. Elkins v. United States, 364 U.S. 206, 80 S. Ct. 1437, 4 L. Ed. 2d 1669 (1960) (rejecting the "silver platter" doctrine that allowed the prosecutors of one sovereign to use the fruits of an illegal search conducted by another sovereign). There is no evidence that the Illinois authorities conspired in any way with the New Jersey authorities or turned this information over to the New Jersey authorities as a way of circumventing the Illinois court order or the requirements of Illinois law. Nor is
there any evidence that New Jersey authorities used Illinois officials to do any dirty work for them.
The lower courts seemed to focus on the procedural aspects of the debate rather than the substantive admissibility issues. We address the procedural issues first. Foremost are the problems of standing and choice of law.
The factual context of this case first requires analysis of application of choice-of-law considerations to the standing issue. Ruling from the bench on the defendants' motion to suppress, the trial court did not specifically address the relationship between standing and choice-of-law issues. It merely held that "if you are going to have a conspiracy for theft by deception and conspiracy for promoting gambling, they are all in it. [Defendants] all have standing." The State emphasizes that standing is a substantive matter, not merely a question of procedure, and should therefore be governed by Illinois law. It points to the recognition in State v. Alston, 88 N.J. 211, 218 n. 2 (1981), that the question of who may challenge a search and seizure is "within the purview of substantive Fourth Amendment law * * *" (citation omitted). However, labels of substance and procedure do not always resolve the underlying issues of choice of law. In resolving choice-of-law issues, New Jersey generally does not apply mechanical rules. Rather we have, at least in the civil context, "adopted the more flexible governmental-interest analysis in choice-of-law decisions." Veazey v. Doremus, 103 N.J. 244, 247 (1986). Because of the governmental interests involved in protecting the privacy of our citizens and the integrity of our judicial process, there are sufficient grounds to employ New Jersey standing rules.
While we have not patterned our standing doctrine on the same concepts of fourth-amendment jurisprudence adopted by the Supreme Court in Rakas v. Illinois, 439 U.S. 128, 99 S. Ct. 421, 58 L. Ed. 2d 387 (1978), reh'g denied, 439 U.S. 1122, 99
S. Ct. 1035, 59 L. Ed. 2d 83 (1979), and its progeny, we also have not adopted a rule of automatic standing, except in the case of a defendant charged with possession of the very item seized. Rather, we have asked whether the defendant has "a proprietary, possessory or participatory interest in either the place searched or the property seized." State v. Alston, supra, 88 N.J. at 228. The Court reasoned that its standard would be clearer and would produce more predictable results than the more "amorphous" federal standard of whether the party had "legitimate expectations of privacy in the area searched." Ibid. The Court explained that certainly the occupant of a car, although not having a property interest in the vehicle, could be permitted to object to an illegal search of the vehicle, especially when charged with possession of the contents seized, there an illegal firearm.
Whether in a particular case a defendant should be permitted to object to the use of illegally obtained evidence in a criminal trial will depend, then, on the particular factual circumstances in which the issue arises. In reality, the federal concept of a legitimate expectation of privacy cannot be divorced from its "nexus with the property searched or seized." Id. at 227. Without attempting to delineate the contours of the interest in the evidence ...