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Carpenter v. Commissioner, Internal Revenue Service

United States District Court, D. Connecticut

March 29, 2018

DANIEL CARPENTER, et al., Plaintiffs,
v.
COMMISSIONER, INTERNAL REVENUE SERVICE, et al., Defendants.

          RULING ON MOTIONS TO DISMISS AND FOR SUMMARY JUDGMENT

          STEFAN R. UNDERHILL UNITED STATES DISTRICT JUDGE.

         This case arises out of a search conducted at 100 Grist Mill Road, in Simsbury, Connecticut (the “Simsbury site”), on April 20, 2010, by the IRS's Criminal Investigation Division (the “IRS-CI”). On April 19, 2013, the plaintiffs, Daniel Carpenter and Grist Mill Capital, LLC, filed the present action pursuant to Bivens v. Six Unknown Fed. Narcotics Agents, 403 U.S. 388 (1971), against multiple named defendants, including Shaun Schrader, a Special Agent with IRS-CI (“Schrader”), and “Unknown Agents 1-72” of IRS-CI.[1] (Doc. # 1.) Carpenter has, in the various original and amended complaints in this action, alleged that seventy-three agents “descended” on the Simsbury site “brandishing automatic weapons” in a “‘shock and awe' blitz[]” designed to “terrorize” the people present at the site; that those agents engaged in “commando” and “SWAT-team tactics” and left Carpenter's office “ransacked”; and that Schrader was the officer responsible for organizing and executing the search and supervising the participating agents.

         On December 14, 2016, I denied Schrader's motion to dismiss the Fourth Amendment claims related to the unreasonableness of the search brought against him in Carpenter's penultimate complaint. (Doc. # 92.)[2] I noted that subsequent discovery might show that Carpenter's colorful allegations were not supported by actual evidence of Fourth Amendment violations or Schrader's personal involvement in such violations, but the issue could not be determined at the pleading stage. Discovery ensued. On June 2, 2017, Carpenter filed a Third Amended Complaint, which acknowledged that IRS-CI Supervisory Special Agent Kathy Enstrom (“Enstrom”) was at all relevant times Schrader's supervisor and the on-site “Team Leader” for the April 20, 2010 search. (Doc. # 114.) On September 1, 2017, Schrader simultaneously moved to dismiss the new complaint (doc. # 127), and sought summary judgment on the claims against him brought therein (doc. # 129).[3]

         The record now before me on summary judgment reveals a different account of the April 20, 2010 search, and a different role therein for Schrader, than I was obliged to accept in my last ruling: On the day of the search, the agents, who were encouraged to wear business casual attire, and who had not received any permission to bring automatic weapons, were led into the building by Enstrom. Employees the searchers encountered were gathered into a conference room, and soon after the employees identified themselves, they were permitted to leave. Carpenter's “ransacked” office was not damaged in any way, and was merely left messier than its usual already messy condition. Schrader was not the supervisor of the agents executing the search and was not even on site for much of the search.

         I need not address in this ruling the constitutionality of every single isolated use of force alleged by Carpenter. Although most are unsupported by significantly probative evidence, even if Carpenter has produced evidence of any actionable uses of force, no reasonable juror could conclude that Schrader was personally involved in such uses of force. Carpenter has failed to provide evidence capable of showing Schrader's personal involvement in any Fourth Amendment violations related to the execution of the April 20, 2010 search. Accordingly, for the reasons set forth more fully below, I GRANT Schrader's Motion for Summary Judgment and DENY as moot Schrader's Motion to Dismiss.

         I. Standard of Review

         Summary judgment is appropriate when the record demonstrates that “there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a); see also Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 256 (1986) (plaintiff must present affirmative evidence in order to defeat a properly supported motion for summary judgment).

         When ruling on a summary judgment motion, the court must construe the facts of record in the light most favorable to the nonmoving party and must resolve all ambiguities and draw all reasonable inferences against the moving party. Anderson, 477 U.S. at 255; Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986); Adickes v. S.H. Kress & Co., 398 U.S. 144, 158-59 (1970); see also Aldrich v. Randolph Cent. Sch. Dist., 963 F.2d 520, 523 (2d Cir. 1992) (court is required to “resolve all ambiguities and draw all inferences in favor of the nonmoving party”). When a motion for summary judgment is properly supported by documentary and testimonial evidence, however, the nonmoving party may not rest upon the mere allegations or denials of the pleadings, but must present sufficient probative evidence to establish a genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 327 (1986); Colon v. Coughlin, 58 F.3d 865, 872 (2d Cir. 1995).

         “Only when reasonable minds could not differ as to the import of the evidence is summary judgment proper.” Bryant v. Maffucci, 923 F.2d 979, 982 (2d Cir. 1991); see also Suburban Propane v. Proctor Gas, Inc., 953 F.2d 780, 788 (2d Cir. 1992). If the nonmoving party submits evidence that is “merely colorable”, or is not “significantly probative”, summary judgment may be granted. Anderson, 477 U.S. at 249-50.

The mere existence of some alleged factual dispute between the parties will not defeat an otherwise properly supported motion for summary judgment; the requirement is that there be no genuine issue of material fact. As to materiality, the substantive law will identify which facts are material. Only disputes over facts that might affect the outcome of the suit under the governing law will properly preclude the entry of summary judgment. Factual disputes that are irrelevant or unnecessary will not be counted.

Id. at 247-48. To present a “genuine” issue of material fact, there must be contradictory evidence “such that a reasonable jury could return a verdict for the non-moving party”. Id. at 248.

         If the nonmoving party has failed to make a sufficient showing on an essential element of his case with respect to which he has the burden of proof at trial, then summary judgment is appropriate. Celotex, 477 U.S. at 322. In such a situation, “there can be ‘no genuine issue as to any material fact, ' since a complete failure of proof concerning an essential element of the nonmoving party's case necessarily renders all other facts immaterial.” Id. at 322-23; accord Goenaga v. March of Dimes Birth Defects Found., 51 F.3d 14, 18 (2d Cir. 1995) (movant's burden satisfied if he can point to an absence of evidence to support an essential element of nonmoving party's claim). In short, if there is no genuine issue of material fact, summary judgment may enter. Celotex, 477 U.S. at 323.

         II. Background

         A. Factual Background

         1. Schrader's Role in the Investigation

         Schrader served as a Special Agent with the IRS-CI from April 2004 to August 2010 (Local Rule 56(a)(1) Statement of Undisputed Material Facts at ¶ 1, doc. # 129-2 [hereinafter “Facts at ¶ ”]), and was the Case Agent assigned to the investigation of NOVA, Benistar, and other related entities[4] (Facts at ¶ 2). Schrader's role in the NOVA/Benistar investigation included designing investigative strategy, serving subpoenas, considering individuals who may be interviewed, identifying suspects, proposing charges for indictments, drafting operations plans for search warrant execution, conducting pre-search warrant briefing for participating agents, and generally managing a criminal investigation from initial receipt through prosecution. (Facts at ¶ 3.) Schrader reported to Enstrom over the course of the NOVA/Benistar investigation. (Facts at ¶¶ 4-5.) Schrader did not himself supervise any other agents and had no authority to instruct agents regarding actions to take to further the investigation.[5] (Facts at ¶ 5.)

         Following a decision within the IRS-CI to seek to obtain evidence in the NOVA/Benistar investigation via search warrant, Schrader drafted an affidavit to support a search warrant for the Benistar office located at the Simsbury site. (Facts at ¶¶ 8-9.) Schrader's search warrant affidavit was submitted to U.S. Magistrate Judge Thomas P. Smith on April 16, 2010 and Judge Smith approved a search warrant for execution during the daytime, from 6:00 a.m. to 10 p.m., on or before April 25, 2010 (the “Search Warrant”). (Facts at ¶ 11.)

         2. Preparation for the Search of the Simsbury Site

         In preparation for the search of the Simsbury site, Schrader drafted a Search Warrant Checklist, an Enforcement Action Review Form, a Risk Assessment Form, and a Search Warrant Plan. (Facts at ¶ 17.) Those documents were approved by Enstrom, Assistant Special Agent in Charge Joan Totani, Special Agent in Charge Julio La Rosa, and IRS Criminal Tax Counsel. (Facts at ¶ 17.) Although Schrader shared responsibility for the selection of the number of agents participating in the search and the identity of such agents, he was not responsible for the supervision, instruction, or training of the officers who assisted with the execution of the search warrant.[6] (Facts at ¶¶ 20-22.) Schrader likewise had no authority to discipline any of the agents or to remedy complaints about any alleged wrongdoing by the agents, and did not set IRS policies regarding search warrant executions. (Facts at ¶ 21.)

         a. Planning related to the number of agents executing the search

         The Search Warrant Plan included a list of 57 IRS-CI agents who would be involved with the execution of the Search Warrant. (Facts at ¶ 19.) The agents involved were assigned responsibilities including (i) interviewing employees, (ii) identifying Benistar employees, (iii) “provid[ing] outside cover”, (iv) conducting the search, (v) logging evidence, and (vi) attending to attorney-client privilege issues related to the seized items.[7] (Facts at ¶ 19; Search Warrant Plan, at IRS00021-22.) Additional factors considered in determining the number of agents necessary for the search included the need to ensure the safety of the officers and other individuals present during the entry and search, the size of the building to be searched, the number of potential occupants present, the document-intensive nature of the case, and the need to maintain control of the scene.[8] (Facts at ¶ 23.) The Simsbury site consisted of a 42, 000 square- foot building on 11.2 acres of land. (Facts at ¶ 38.) The building had space for over 50 offices, and included at least 6 conference rooms, separate filing rooms, a large record center, a secure storage facility, and approximately 30-40 cubicles, of which 80% to 90% were occupied.[9] (Facts at ¶ 38.) Carpenter estimated that a videographer might take an hour and a half to get to Carpenter's personal office (Facts at ¶ 38), which he estimated was 150 to 200 feet from the front entrance (Fact Response at ¶ 38). There were at least 30 to 40 employees who might be at the Simsbury site on a typical day.[10] (Carpenter Dep. at 14:9-15:24; M. Carpenter Dep. at 25:17-23; Schrader Dep. at 42:21-24.) There is no dispute that this was a document-intensive case, with a “sheer volume” of documents. (Fact Response at ¶ 23 (quoting Schrader Dep. at 10:2).)

         b. Planning related to agents' attire

         The Search Warrant Plan called for the entry team members to wear ballistic vests, pursuant to IRS-CI policies. (Facts at ¶ 25 (citing IRM § 9.4.9.3.5 (“All GS-1811 employees and their managers taking an active, participating role should wear a ballistic vest. The final judgment on whether a ballistic vest must be worn or whether an exception will be granted, rests with the SSA.”)).) Schrader was not the SSA, and was not responsible for deciding whether vests would be worn by the agents.[11]

         Schrader had no independent role in determining the clothing that would be worn by the agents. (Facts at ¶ 26; Schrader Decl. at ¶ 11.) According to IRS procedures, the agents were required to wear clothing that identified them as IRS-CI or police officers. (Facts at ¶ 26; Schrader Decl. at ¶ 12.)

         c. Planning related to firearms carried by agents

         Schrader had no role in creating the IRS policies relating to firearms. (Facts at ¶ 27.) IRS-CI agents are permitted by IRS policy to carry firearms. (Facts at ¶ 27 (citing IRM § 9.1.2.4.1).) All agents are assigned a semiautomatic handgun as their service weapon (Facts at ¶ 27), and at the time of the search it was IRS-CI policy that agents involved in search warrant execution must carry a holstered semiautomatic firearm and handcuffs (Facts at ¶ 27 (citing Schrader Decl. at ¶ 12)). Before “long guns” (e.g., rifles and shotguns) may be brought along in search warrant executions, a specific written request must be submitted and approved, also in writing. (Schrader Dep. at 39:25-40:13.) If long guns were to be used, that fact would be noted in the Search Warrant Plan. (Enstrom Dep. at 73:2-25.) Schrader did not request authority for long guns to be used in the search of the Simsbury site, no approvals for long guns were given in this case, and the Search Warrant Plan does not indicate that long guns would be used. (Schrader Dep. at 39:25-40:13, 41:7-8; Enstrom Dep. at 66:2-13, 73:2-25.)

         d. Planning related to entry and execution of the search

         The Search Warrant Plan called for the agents to enter the Simsbury site through the unlocked main entrance at approximately 9:00 a.m. on April 20, 2010. (Facts at ¶ 29.) The Search Warrant Plan did not include the use of a SWAT team, but did note that the “Hartford POD [would] bring entry/extraction tools” to the site.” (Facts at ¶ 29; Fact Response at ¶ 29.) The Search Warrant Plan called for the agents to “make a general announcement to the building while walking through regarding the warrant”. (Search Warrant Plan, at IRS00014.) Each officer who encountered an employee would then identify themselves, tell the employee that they were executing a search warrant, and ask the employee if they had any keys to unlock “their area or file cabinets and to leave the keys at their desk”. (Search Warrant Plan, at IRS00014.) The employee would then be instructed to “gather their purse/wallet and personal keys and proceed to a general area in the front for identification”. (Search Warrant Plan, at IRS00014.) The Search Warrant Plan did not contemplate lengthy questioning or detention of most employees during the search, simply stating that “[p]reviously assigned agents will identify each employee prior to allowing them to leave the building.” (Search Warrant Plan, at IRS00014.) By contrast, the plan sought interviews with three specific employees: The plan stated that “Stefan Cherneski, Kevin Slattery and Richard Belding will be interviewed, please ensure the assigned agents are in contact with them as soon as possible.”[12] (Search Warrant Plan, at IRS00014.) Carpenter did appear on a list tiled “Background on Subjects/Interview Targets”, which was included in the Search Warrant Plan (Search Warrant Plan, at IRS00015-17), but at the pre-operational meeting and in discussions between IRS-CI and Criminal Tax Counsel, it was determined that Carpenter would not be interviewed (Facts at ¶ 32 (citing Schrader Dep. at 75:9-76:2)).[13]

         e. Pre-search briefing of the agents assisting with the search

         The day before the execution of the Search Warrant, Schrader and Enstrom conducted a briefing for the agents who were assigned to assist with the search.[14] (Facts at ¶ 35.) Schrader provided an overview of the investigation, including the 419 plans at issue, and discussed the “whole op plan”. (Schrader Dep. at 131:18-21; Enstrom Dep. at 56:16-19, 207:17-24.) Schrader did not give instructions concerning how the agents “were to effect their jobs”. (Enstrom Dep. at 206:20-207:1.) Enstrom “provided guidance as to the operational plan and what [they] were going to do the following day” and “how [they] were going to act the next day” (Enstrom Dep. at 56:16-19, 206:24-207:1.) Enstrom provided the agents with a copy of the Items to Be Seized list, and both Schrader and Enstrom discussed the list. (Enstrom Dep. at 56:22-24.)

         3. Execution of the Search of the Simsbury Site

         On the day of the search, April 20, 2010, at approximately 9:05 a.m., Enstrom, acting as the team leader of the Search Warrant execution, led the agents into the Simsbury site through the unlocked front door. (Facts at ¶¶ 46-47.) Schrader was not on site for the commencement of the search. (Facts at ¶ 48.) Upon entry, Enstrom first encountered an employee she believes was a receptionist. (Facts at ¶ 47.) Enstrom identified herself to the employee, explained what the agents were doing there, and asked to see the individual in charge of the premises. (Facts at ¶ 47.) Agents then gathered the employees into a large conference room. (Facts at ¶ 81.)

         Carpenter first encountered the search team when two male agents entered his suite of offices at the rear of the building around 9:00 a.m., through an unlocked door.[15] (Facts at ¶ 56; Fact Response at ¶ 56.) Carpenter observed that the agents appeared surprised to see him, and that although one of the agents entering his office had a rifle that was pointed at him when the agents entered, the rifle was not purposely pointed at him.[16] (Carpenter Dep. at 108:8-109:18.) Carpenter was escorted by the two agents to the large conference room where other employees had been gathered. (Carpenter Dep. at 84:24-85:5.) Carpenter does not know who the two agents were. (Carpenter Dep. at 85:9-11, 87:9-12.)

         After gathering the employees into a large conference room, agents asked the employees their names, and whether they had identification on them. (Facts at ¶¶ 81-82.) Employees who did not have identification on them were escorted back to their offices to obtain their identification. (Facts at ¶ 82; Meckel Dep. at 36:10-15.) Employees were allowed to take any personal effects, but were told not to take any files or other work records. (Facts at ¶ 82; Meckel Dep. at 36:15-19.) After identifying themselves, the employees were allowed to leave and most did leave.[17] Molly Carpenter recalls that everyone was told they were free to go, including “maybe even Dan and [herself]”, but she did not feel free to leave the building, because if she left she would not be let back in, and she was “not going to leave [her] building with a bunch of strangers”-she wanted to wait for their lawyers to arrive.[18] (M. Carpenter Dep. at 37:14-38:15.)

         Enstrom provided the Search Warrant to Carpenter, but did not provide the Search Warrant affidavit, which was under seal at the time.[19] (Facts at ¶ 80.)

         Daniel and Molly Carpenter left the building between approximately 11:10 a.m. and noon (Facts at ¶ 87), before Schrader had arrived at the site (Facts at ¶ 50). Carpenter did not re-enter the building on the day of the search. (Carpenter Dep. at 118:5-11.)

         Enstrom, acting as the Team Leader of the Search Warrant execution, was “in charge on scene”. (Facts at ¶ 46.) Carpenter recognized that Enstrom “was the ‘authority figure' who was in control of the site during the search” and has stated that she “definitely appeared to be the boss”. (Facts at ¶ 46; Carpenter Dep. at 127:21-22.) On the other hand, at the time of the initial entry at the Simsbury site, Schrader was off-site at the M&M Coffee Shop in Hartford, meeting with another target of the NOVA/Benistar investigation. (Facts at ¶ 48.) Schrader arrived at the Simsbury site a few hours after initial entry, and therefore did not witness the agents entering the site, and only arrived after Carpenter had left the building. (Facts at ¶¶ 49-50.) Schrader did not interact with Carpenter at all, and Carpenter “still to this day couldn't pick Shaun Schrader out of a ...


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