A panel of judges on the U.S. Court of Appeals for the Second Circuit has finally issued its long-awaited opinion in the case of Ganek v. Leibowitz, in which David Ganek sued federal prosecutors and FBI agents for violating his Fourth and Fifth Amendment rights by raiding the office of his hedge fund on the basis of a false affidavit.
Judge Reena Raggi wrote the opinion for the panel that included Judge Denny Chin and Judge Susan Carney. It's hard to see it as anything other than a victory for the prosecutors and FBI agents and a defeat for Mr. Ganek, who shut down his hedge fund after the raid attracted negative press attention. A district court judge, William Pauley III, had given Mr. Ganek's suit an initial partial go-ahead, but the appellate panel reversed his decision. The appeals court judges found that the federal officials had "qualified immunity" that protected them from being sued even though they searched Mr. Ganek's office and destroyed his business on the basis of a false affidavit. The court reasoned that if the falsehood hadn't been included in the affidavit, there would still have been probable cause to conduct the search.
In a statement, Mr. Ganek said, "This is a dangerous day for private citizens and a great day for ambitious, attention-seeking prosecutors who are now being rewarded with total immunity even when they lie and leak. The good news is this ruling does not preclude the Department of Justice from bringing disciplinary charges."
The decision is a rare appellate vindication for Preet Bharara, the former U.S. attorney for the Southern District of New York who has had a string of high-profile convictions overturned on appeal.
Judge Raggi's opinion does report that the prosecutors and FBI agents "provided advance notice of the...search to the Wall Street Journal, which took and published photographs of FBI agents carrying boxes out of" the offices of Level Global Investors, a hedge fund that had about $4 billion under management. The opinion further explains that probable cause for a search: "is a 'fluid' standard, which is not usefully analogized to to a prima facie case, or even to a preponderance (i.e., more likely than not) showing of criminal activity."
Maybe I am missing something, but I've got to say I find the whole thing chilling: the government can file a false document in court and then publicize a raid of a business that has the effect of destroying it, and when the business owner seeks a remedy in court the Second Circuit basically tells him to forget it.
Meanwhile, for a flavor of just how atrociously bad the mainstream press reporting has been on this issue, check out a widely picked up Reuters dispatch (here it is on the New York Times website) that claims, inaccurately, that Judge Raggi "wrote Tuesday's opinion on behalf of an anonymous three-judge panel." The names of the other judges are right there in the opinion, and, generally speaking, anonymous judges aren't a frequent feature of the American judicial system.