explaining that if the corrected affidavit lacks probable cause, defendants are still entitled to immunity “if a similarly situated law enforcement official could have held an objectively reasonable—even if mistaken—belief that the corrected affidavit demonstrated the necessary probable cause”
How later courts described this case
- explaining that if the corrected affidavit lacks probable cause, defendants are still entitled to immunity “if a similarly situated law enforcement official could have held an objectively reasonable—even if mistaken—belief that the corrected affidavit demonstrated the necessary probable cause”
- explaining that “a warrant issuance question might arise where the credibility of certain evidence (e.g., from a source with a motive to lie), or the sufficiency of corroboration (e.g., for an anonymous tip) informs a probable cause determination”
- stating qualified immunity may still apply “if a similarly situated law enforcement official could have held an objectively reasonable–even if mistaken–belief that the corrected affidavit demonstrated the necessary probable cause”
- finding that plaintiff could not state a claim for a liberty deprivation attributable to an arrest supported by probable cause unless “the fabricated evidence causes some ‘further deprivation’” (quoting Garnett, 838 F.3d at 277 )
Written by the judges who cited it.
The opinion
16‐1463‐cv
Ganek v. Leibowitz
In the
United States Court of Appeals
for the Second Circuit
AUGUST TERM 2016
No. 16‐1463‐cv
DAVID GANEK,
Plaintiff‐Appellee,
v.
DAVID LEIBOWITZ, REED BRODSKY, DAVID MAKOL, MATT KOMAR,
JAMES HINKLE, HOLLY J. TRASK, DAVID CHAVES, PATRICK CARROLL,
RACHEL ROJAS, DIEGO RODRIGUEZ, MARC P. BERGER, CHRISTOPHER L.
GARCIA, RICHARD B. ZABEL, BOYD M. JOHNSON, III, PREETINDER S.
BHARARA,
Defendants‐Appellants.
On Appeal from the United States District Court
for the Southern District of New York
ARGUED: MARCH 24, 2017
DECIDED: OCTOBER 17, 2017
Before: RAGGI, CHIN, CARNEY, Circuit Judges.
________________
On appeal from an order entered in the United States District
Court for the Southern District of New York (Pauley, J.), the
defendants, all federal law enforcement authorities, argue that they
were wrongfully denied qualified immunity and, therefore,
dismissal of all plaintiffs’ claims for money damages pursuant to
Bivens v. Six Unknown Named Agents of Federal Bureau of Narcotics, 403
U.S. 388 (1971), based on alleged Fourth and Fifth Amendment
violations in procuring and executing a search warrant.
REVERSED AND REMANDED.
SARAH S. NORMAND, Assistant United
States Attorney (Andrew E. Krause, Jeffrey
S. Oestericher, Assistant United States
Attorneys, on the brief), for Joon H. Kim,
Acting United States Attorney for the
Southern District of New York, New York,
New York, for Defendants‐Appellants.
NANCY GERTNER (Anna Benvenutti
Hoffmann, Barry Scheck, Nick Brustin,
Farhang Heydari, Alexandra Lampert, Rick
Sawyer, on the brief), Neufeld Scheck &
2
Brustin, LLP, New York, New York, for
Plaintiff‐Appellee.
Joshua L. Dratel, Law Offices of Joshua L.
Dratel, P.C., New York, New York; John W.
Keker, Brook Dooley, Keker & Van Nest
LLP, San Francisco, California, for Amicus
Curiae National Association of Criminal
Defense Lawyers.
REENA RAGGI, Circuit Judge:
In this Bivens action, plaintiff David Ganek, a co‐founding
partner of investment fund Level Global Investors (“LG”), sues the
named agents of the Federal Bureau of Investigation (“FBI”) and
federal prosecutors in the United States Attorney’s Office for the
Southern District of New York (“SDNY”) for alleged violations of
his Fourth and Fifth Amendment rights in procuring and executing
a federal search warrant at LG’s Manhattan offices on November 22,
2010. See Bivens v. Six Unknown Named Agents of Fed. Bureau of
Narcotics, 403 U.S. 388 (1971). Defendants now appeal from an order
of the United States District Court for the Southern District of New
York (William H. Pauley III, Judge), denying their motion for
qualified immunity and, therefore, for dismissal of the entirety of
Ganek’s complaint. See Ganek v. Leibowitz, 167 F. Supp. 3d 623
(S.D.N.Y. 2016). Our jurisdiction to review this ruling under 28
U.S.C. § 1291 is undisputed. See Mitchell v. Forsyth, 472 U.S. 511, 530
(1985) (holding that denial of qualified immunity, “to the extent that
it turns on an issue of law, is an appealable ‘final decision’ within
the meaning of 28 U.S.C. § 1291”); accord Ashcroft v. Iqbal, 556 U.S.
3
662, 672 (2009). For the reasons stated in this opinion, we conclude
that defendants are entitled to qualified immunity and, accordingly,
we reverse the district court’s challenged order and direct the
dismissal of all Ganek’s outstanding claims.
BACKGROUND
I. The LG Search
The following facts are drawn from Ganek’s complaint and
must be credited on this appeal.
A. Sam Adondakis Admits Receiving and
Communicating Inside Information to Persons at LG
David Ganek and Anthony Chiasson co‐founded investment
fund LG, with Ganek serving as LG’s principal partner until the
fund’s closure in 2011. In 2010, LG’s offices were located on the 27th
floor of 888 Seventh Avenue in Manhattan, and the fund had
approximately $4 billion under management.
From 2006 until 2010, Spyridon “Sam” Adondakis was
employed by LG as a research analyst, with a particular focus on the
technology industry. Adondakis was asked to leave LG in May 2010
when it was determined that he had violated the fund’s internal
compliance protocols.
On October 14, 2010, FBI defendants Hinkle and Makol
confronted Adondakis with wiretap evidence collected from third
parties, which implicated Adondakis in insider trading while at LG.
Sometime thereafter, Adondakis agreed to cooperate with
government authorities and, on November 2, 2010, he met with
defendants Assistant United States Attorneys (“AUSAs”) Brodsky
4
and Leibowitz as well as FBI defendants Hinkle, Makol, and Komar.
At that meeting, Adondakis admitted to having knowingly received
sensitive, non‐public information from various insiders and to
having passed on that information to persons at LG, including
Ganek, Chiasson, and another LG employee, Greg Brenner. 1 All
three persons referenced by Adondakis in fact used the information
conveyed to them to make trading decisions. But whereas
Adondakis told defendants that he specifically advised Chiasson
and Brenner that the information conveyed came from an inside
source, Adondakis “never” said he so advised Ganek. J.A. 36, ¶ 86.
To the contrary, Adondakis told defendants that “he had never told
Mr. Ganek the source of the information he provided.” Id.
(emphasis in original).
B. The LG Search Warrant
On November 21, 2010, FBI defendant Trask applied to an
SDNY Magistrate Judge for a warrant to search certain areas within
LG, including Ganek’s, Chiasson’s, and Brenner’s offices; desktop
and laptop computers used by Adondakis while employed at LG;
and LG’s investors’ servers. In support, Trask submitted a signed
affidavit that contains the alleged misrepresentation at the heart of
this case, i.e., that “ADONDAKIS informed GANEK . . . of the
sources of the Inside Information” provided to him. J.A. 98, ¶ 13.c;
While defendants have redacted Brenner’s name from their filings in
1
this case, referring only to a “Third Person,” the complaint identifies that third
person as Brenner. See J.A. 48, ¶ 143.
5
see id. at 99, ¶ 13.e (same).2 Trask professed to have obtained this
information from FBI colleagues.
The magistrate judge authorized the requested search
warrant, which was executed at LG the following day, November
22, 2010. In the course of doing so, FBI agents and/or SDNY AUSAs
searched Ganek’s office, files, and electronic devices, and made an
electronic copy of the contents of his personal cellphone.
Defendants provided advance notice of the LG search to the Wall
Street Journal, which took and published photographs of FBI agents
carrying boxes out of LG.
C. Defendants’ Post‐Search Assurances
Ganek feared that media reports about the LG search and
attending federal investigation into insider trading would prompt
We here place the misstatement in the two contexts where it appears in
2
the Trask affidavit:
During his work as an analyst at [LG], ADONDAKIS obtained
Inside Information from insiders at public companies . . .[,]
provided this Inside Information to DAVID GANEK, ANTHONY
CHIASSON, and [Third Person], and GANEK, CHIASSON, and
[Third Person] executed and caused others to execute certain
securities transactions based, in part, on the Inside Information,
and . . . ADONDAKIS informed GANEK, CHIASSON, and [Third
Person] of the sources of the Inside Information.”
J.A. 98, ¶ 13.c (emphasis added).
During his work as an analyst at [LG], ADONDAKIS spoke with
and provided Inside Information to GANEK, CHIASSON, and
[Third Person], and informed GANEK, CHIASSON, and [Third
Person] regarding the sources of the Inside Information.
Id. at 99, ¶ 13.e (emphasis added).
6
LG investors to divest from the fund. Accordingly, on December 20,
2010, LG representatives met with AUSA defendants Zabel and
Leibowitz, in the course of which meeting defendants stated that the
LG search “had been carefully considered at the highest levels, with
full appreciation for the likely commercial consequences, and . . .
that all necessary precautions had been taken.” J.A. 41, ¶ 110. Some
months later, on February 4, 2011, an LG attorney contacted
defendant U.S. Attorney Bharara to ask that he publicly clarify that
“Mr. Ganek was not a target of the investigation or that the search
warrant did not allege probable cause that Mr. Ganek had engaged
in insider trading.” Id. at 43–44, ¶ 121. Bharara declined, asserting
that his office had not pursued the LG search “without thinking
through the consequences of doing so.” Id. at 44, ¶ 123.
D. Reiteration of the Misrepresentation and Further
Adondakis Interview
At and about this same time, on February 3, 2011, one of the
FBI defendants drafted a report of the November 2 meeting that
repeated the misstatement contained in the Trask affidavit, i.e., that
Adondakis had told defendants that he had advised Ganek of the
inside source of the information conveyed to him, specifically, that it
“came directly from contacts at Dell.” J.A. 42, ¶ 111.
Later that month, defendants again met with Adondakis, who
“reiterated that he had never told Mr. Ganek anything about the
source of his information.” Id. at 45, ¶ 130.
Meanwhile, on February 11, 2011, approximately three
months after the LG search, Ganek announced that, due to the flight
of investors from LG, he was forced to close the fund.
7
E. Indictments and Disclosure of the Trask Affidavit
Adondakis was indicted for insider trading on April 25, 2011,
but his indictment was not unsealed until January 18, 2012, the same
day on which Bharara announced the indictment of Chiasson,
among others, for insider trading. Ganek was never indicted.
On March 1, 2012, the district court issued a protective order
permitting certain documents, including those supporting the LG
search, to be disclosed to defendants and other specified categories
of persons, which ultimately included Ganek’s counsel.
Chiasson stood trial in the fall of 2012, and was found guilty
of conspiratorial and substantive securities fraud based on his
insider trading. 3 Testifying as a prosecution witness, Adondakis
acknowledged telling Chiasson and Brenner that the information he
passed on to them came from an inside source, but suggested that he
had not so told Ganek. In his trial testimony, FBI defendant Makol
also stated that Adondakis had not told defendants that he informed
Ganek of the inside source for information communicated to him.
Chiasson’s conviction was later vacated based on this court’s decision in
3
United States v. Newman, 773 F.3d 438 (2d Cir. 2014), which has since been
abrogated in part by Salman v. United States, 137 S. Ct. 420 (2016). Meanwhile,
Adondakis pleaded guilty to insider trading but, after Newman, the government
sought and obtained a nolle prosequi order. These legal developments, occurring
after the events here at issue, are irrelevant to resolution of this appeal because
qualified immunity must be assessed in light of the legal rules in place at the
time of the action in question. See Messerschmidt v. Millender, 565 U.S. 535, 546
(2012).
8
II. The Instant Action
Ganek filed this action on February 26, 2015, pleading Fourth
and Fifth Amendment claims against defendants Trask, Makol,
Hinkle, Komar, Brodsky, and Leibowitz; a failure‐to‐intercede claim
against all defendants; and a claim for supervisory liability against
defendants Bharara, Johnson, Zabel, Garcia, Berger, Rodriguez,
Rojas, Chaves, and Carroll. He seeks damages for the loss of his
business, which had been valued at $400 million, as well as for lost
income and lost business reputation.
Defendants moved for dismissal, arguing that they are
shielded from this suit by qualified immunity. The district court
granted dismissal of so much of Ganek’s Fourth Amendment claim
as challenged the manner in which the government seized property
from LG (i.e., via search warrant rather than subpoena and with
advance public notice). See Ganek v. Leibowitz, 167 F. Supp. 3d at
636–38. It also granted dismissal of so much of Ganek’s Fifth
Amendment claim as pleaded a “stigma plus” injury and a
substantive due process violation. See id. at 647.4
The district court declined, however, to dismiss the remaining
Fourth Amendment claim, concluding that Ganek had adequately
alleged a deliberate or reckless misstatement of material fact in the
warrant affidavit that could be deemed necessary to a finding of
probable cause. See id. at 634–36. As to the Fifth Amendment
procedural due process claim, the district court ruled that Ganek
had plausibly alleged defendants’ fabrication of evidence to secure a
Because Ganek does not here cross‐appeal the dismissal of these claims,
4
we do not now discuss them further.
9
search warrant, as a result of which he was deprived of tangible
property seized during the LG search, and it rejected the idea that
Fed. R. Crim. P. 41 provided sufficient remedial process. See id. at
638, 640–41. As to the Fifth Amendment failure‐to‐intercede claim,
the district court concluded that the non‐supervisor defendants may
have had a duty to intervene before an affidavit containing a
material misstatement was submitted to the magistrate judge, while
the supervisor defendants may have been obligated to limit
collateral damage by correcting the misstatement prior to LG’s
closure. See id. at 642–44. Because Ganek had pleaded that the
supervisor defendants “were kept abreast of developments,
prioritized the prosecution of highlevel executives, and tipped the
Wall Street Journal,” the district court deemed it at least plausible that
they would have learned the truth about Adondakis’s November 2,
2010 statements either before or after the submission of the flawed
affidavit to the magistrate judge. Id. at 646.
Defendants timely filed this appeal.
DISCUSSION
I. Standard of Review
We review de novo the denial of a motion to dismiss a
complaint based on qualified immunity, accepting all plausible
allegations as true and drawing all reasonable inferences in
plaintiff’s favor. See Garcia v. Does, 779 F.3d 84, 91 (2d Cir. 2015).
Qualified immunity—a concept derived from common law—
affords law enforcement officers a broad shield from claims for
money damages arising from the performance of their duties. See
White v. Pauly, 137 S. Ct. 548, 551 (2017) (reiterating that qualified
immunity is “an immunity from suit,” not simply from liability
10
(internal quotation marks omitted)); Raspardo v. Carlone, 770 F.3d 97,
111 (2d Cir. 2014) (same). The shield applies “unless a plaintiff
pleads facts showing (1) that the official violated a statutory or
constitutional right, and (2) that the right was ‘clearly established’ at
the time of the challenged conduct.” Ashcroft v. al‐Kidd, 563 U.S. 731,
735 (2011) (quoting Harlow v. Fitzgerald, 457 U.S. 800, 818 (1982));
accord Carroll v. Carman, 135 S. Ct. 348, 350 (2014); Zalaski v. City of
Hartford, 723 F.3d 382, 388 (2d Cir. 2013).
If a plaintiff cannot make the first showing, i.e., a violation of
constitutional rights, no further inquiry is necessary “because where
there is no viable constitutional claim, defendants have no need of
an immunity shield.” Zalaski v. City of Hartford, 723 F.3d at 388. But
even where constitutional injury is shown, the shield applies unless
plaintiff can also show that the right violated was “clearly
established at the time of defendant’s actions.” Id.; see Ashcroft v.
al‐Kidd, 563 U.S. at 735.5 To make this “clearly established” showing,
a plaintiff need not identify a case directly on point, but precedent
must have spoken with sufficient clarity to have placed the
constitutional question “beyond debate.” Ashcroft v. al‐Kidd, 563 U.S.
at 741; accord White v. Pauly, 137 S. Ct. at 552 (stating that “clearly
established” showing requires “identif[ication of] a case where an
officer acting under similar circumstances . . . was held to have
violated the Fourth Amendment”). That determination is made not
from the perspective of courts or lawyers, but from that of a
5 The two‐step inquiry need not always be conducted sequentially; in
short, a court may assume, without deciding, that the facts state a constitutional
violation and, yet, grant qualified immunity on the ground that the right was not
then clearly established. See Pearson v. Callahan, 555 U.S. 223, 227 (2009); Zalaski v.
City of Hartford, 723 F.3d at 388–89.
11
reasonable officer in the defendant’s position. See Saucier v. Katz, 533
U.S. 194, 202 (2001) (“The relevant, dispositive inquiry in
determining whether a right is clearly established is whether it
would be clear to a reasonable officer that his conduct was unlawful in
the situation he confronted.” (emphasis added)), overruled in part on
other grounds by Pearson v. Callahan, 555 U.S. 223, 227 (2009); accord
Zalaski v. City of Hartford, 723 F.3d at 389. The standard is
deliberately “forgiving,” Amore v. Novarro, 624 F.3d 522, 530 (2d Cir.
2010) (internal quotation marks omitted), in order to give public
officials “breathing room to make reasonable but mistaken
judgments” without fear of disabling liability, Messerschmidt v.
Millender, 565 U.S. 535, 546 (2012) (internal quotation marks
omitted). Thus, as has often been observed, qualified immunity
protects “‘all but the plainly incompetent or those who knowingly
violate the law.’” Ashcroft v. al‐Kidd, 563 U.S. at 743 (quoting Malley
v. Briggs, 475 U.S. 335, 341 (1986)).
Applying these principles here, we conclude that defendants
are entitled to qualified immunity and, therefore, to dismissal of
plaintiffs’ claims.
II. Fourth Amendment Claim
A. Probable Cause
The Fourth Amendment prohibits “unreasonable searches and
seizures.” U.S. Const. amend. IV. While a search pursuant to a
warrant issued by a judicial officer upon a finding of probable cause
is presumptively reasonable, see Golino v. City of New Haven, 950 F.2d
864, 870 (2d Cir. 1991), that presumption can be defeated by showing
that a defendant (1) “knowingly and deliberately, or with a reckless
disregard of the truth,” procured the warrant, (2) based on “false
12
statements or material omissions,” that (3) “were necessary to the
finding of probable cause,” Velardi v. Walsh, 40 F.3d 569, 573 (2d Cir.
1994); accord McColley v. Cty. of Rensselaer, 740 F.3d 817, 823 (2d Cir.
2014). Ganek asserts that this is such a case. He claims that
defendants procured a warrant to search his LG office by falsely
representing that Adondakis had told law enforcement officials that
he advised Ganek of the inside source of the information being
conveyed to him when, in fact, Adondakis specifically denied telling
Ganek that the information came from an inside source.
Defendants challenge the district court’s determination that
Ganek’s pleadings satisfactorily allege a knowingly false statement
necessary to the warrant. We need not here decide whether the
affidavit’s misrepresentation of Adondakis’s statement was
knowingly false because, even if we assume it was, we conclude that
the statement was not necessary to probable cause.
To determine whether a false statement was necessary to a
finding of probable cause, we consider a hypothetical corrected
affidavit, produced by deleting any alleged misstatements from the
original warrant affidavit and adding to it any relevant omitted
information. See Soares v. Connecticut, 8 F.3d 917, 920 (2d Cir. 1993);
accord Escalera v. Lunn, 361 F.3d 737, 743–44 (2d Cir. 2004). If
probable cause is lacking after such correction, then the false
statement was “necessary” to secure issuance of the warrant. In that
case, defendants would be entitled to qualified immunity only at the
second step of analysis, i.e., if a similarly situated law enforcement
official could have held an objectively reasonable—even if
mistaken—belief that the corrected affidavit demonstrated the
necessary probable cause. See Escalera v. Lunn, 361 F.3d at 744
(holding that if corrected affidavit provides “objective basis to
13
support arguable probable cause, remaining factual disputes are not
material to the issue of qualified immunity and summary judgment
should be granted to the defendant on the basis of qualified
immunity”). On the other hand, “if probable cause remains” after
the warrant is corrected, plaintiff has suffered no violation of Fourth
Amendment rights, and defendants would be entitled to qualified
immunity and dismissal at the first step of analysis. Smith v.
Edwards, 175 F.3d 99, 105 (2d Cir. 1999) (Sotomayor, J.) (internal
quotation marks omitted). That is this case.
To explain, we start by stating what is well established at law:
that probable cause to search exists where circumstances indicate a
“fair probability that contraband or evidence of a crime will be
found in a particular place.” Illinois v. Gates, 462 U.S. 213, 238 (1983);
accord Walczyk v. Rio, 496 F.3d 139, 157 (2d Cir. 2007). This is not to
be confused with probable cause to think that the person whose
premises are to be searched is implicated in the crime. The Supreme
Court has expressly stated that where authorities do
not seek to seize ‘persons’ but only those ‘things’ which
there is probable cause to believe are located on the
place to be searched, there is no apparent basis in the
language of the [Fourth] Amendment for also imposing
the requirements for a valid arrest—probable cause to
believe that the third party is implicated in the crime.
Zurcher v. Stanford Daily, 436 U.S. 547, 554 (1978); accord United States
v. Martin, 426 F.3d 83, 86 (2d Cir. 2005) (holding it “untenable to
conclude that property may not be searched unless its occupant is
reasonably suspected of a crime and is subject to arrest” (internal
quotation marks omitted)).
14
We note this distinction at the outset because much has been
made by Ganek and, to a degree, the district court about whether or
not Ganek knowingly traded on inside information. See Ganek v.
Leibowitz, 167 F. Supp. 3d at 635 (faulting warrant for “treating
[Ganek] as if he were directly implicated in an insider trading
scandal”). While evidence that Ganek knowingly traded on inside
information would enhance probable cause to search his office, the
absence of such mens rea evidence would not preclude probable
cause for such a search. One has only to imagine a scenario where
the government seeks to search the residence of a person who left a
box on a subway car that exploded and killed numerous persons.
The person may have known the contents of the box when he acted,
or he may have been an unwitting dupe. No matter. Whatever his
mens rea, his involvement in the actus reus of a crime would
sufficiently establish probable cause to search his residence for
criminal evidence pertaining to the bombing. So here, where the
warrant affidavit clearly alleges knowing insider trading by various
LG employees, as well as Ganek’s trading on some of the same
inside information, and where correction of the affidavit leaves only
his mens rea at issue, there was at least a fair probability to think that
his office was among the LG premises where evidence of an insider
trading scheme would be found.
Before explaining this conclusion more fully, we make a
further general observation about probable cause. As the Supreme
Court has explained, this is a “fluid” standard, which is not usefully
analogized to a prima facie case, or even to a preponderance (i.e.,
more likely than not) showing of criminal activity. Illinois v. Gates,
462 U.S. at 232, 235; see Walczyk v. Rio, 496 F.3d at 156–57. To be
sure, probable cause demands more than a “mere suspicion” of
wrongdoing, Mallory v. United States, 354 U.S. 449, 454 (1957), but
15
when, as here, a person’s conduct satisfies the actus reus of a crime,
we have moved well beyond mere suspicion. See Illinois v. Gates, 462
U.S. at 231 (observing that probable cause does not demand “hard
certainties,” but only “probabilities,” determined by looking to “the
factual and practical considerations of everyday life on which
reasonable and prudent men, not legal technicians, act” (internal
quotation marks omitted)); Florida v. Harris, 568 U.S. 237, 244 (2013)
(observing that probable cause is “practical,” “common‐sensical,”
“all‐things‐considered” standard).
With these principles in mind, we consider what a corrected
version of the 37‐page affidavit would look like after (a) deleting the
allegedly false assertions that Adondakis informed Ganek as to the
inside sources of the information conveyed to him, and (b) adding
(in italics) the undisclosed fact that Adondakis actually said he did
not inform Ganek that communicated information came from inside
sources. Such a warrant can be summarized as follows:
1. Ganek and Chiasson were co‐founding partners of LG,
which was located at 888 Seventh Avenue in Manhattan.
Chiasson was the fund’s director of research. See J.A. 94,
¶ 10; 97, ¶ 11; 100, ¶ 13.f.
2. At the relevant times (2009–2010), Adondakis was an
employee of LG who researched and analyzed public
technology companies. See id. at 98, ¶ 13.a.–b.
3. In the course of investigating insider trading schemes
during that time period, the FBI intercepted telephone
conversations of Adondakis knowingly and repeatedly
receiving inside information from third‐party consultants.
See id. at 80–93, ¶ 8.a.–d.
4. In October 2010, FBI agents approached Adondakis
(among others) about the possibility of his cooperating in a
16
broad investigation of insider trading. In early November,
Adondakis agreed to cooperate and admitted his
participation in obtaining inside information on multiple
occasions. See id. at 96–97, ¶ 11; 102, ¶ 14.a.
5. Adondakis further revealed to law enforcement authorities
that,
a. he had both “provid[ed] the Inside Information to
DAVID GANEK, ANTHONY CHIASSON, [Third
Person,] among others, at Level Global Investors who
then executed and caused others to execute securities
transactions based in part on the Inside Information,”
and “exchang[ed] that Inside Information with other
individuals,” id. at 97, ¶ 11;
b. his conversations communicating inside information
would “take place in, among other locations, the offices
of GANEK, CHIASSON, and [Third Person],” id. at 100,
¶ 13.e.;
c. he had informed Chiasson and [Third Person,] but not
Ganek, of the inside sources of the information conveyed
to them, see id. at 98–99, ¶ 13.c. & e.;
d. he had saved notes of conversations with insiders
regarding information received from them to the shared
network drive at LG, which, in turn, was maintained
and kept on LG’s servers, see id. at 98, ¶ 13.c.;
e. up until about October 16, 2009, he had used his LG
email address to exchange inside information with
several colleagues at other money managers, sometimes
forwarding emails received from such colleagues and
containing inside information to, among other people,
Chiasson, see id. at 99, ¶ 13.d.;
f. his LG emails were maintained on LG’s servers, see id.;
17
g. after the October 16, 2009 arrest of Raj Rajaratnam, a
separate hedge fund’s founder, and others for insider
trading, Adondakis and colleagues with whom he
exchanged inside information at other money managers
stopped using their work email addresses and started to
use personal email addresses to communicate with each
other, see id.
6. In or about October or November 2010, a Dell employee
admitted to FBI agents that he had provided inside
information to various clients, “including Level Global
Investors, in exchange for money.” Id. at 102–03, ¶ 14.b.
7. From May to August 2010, FBI agents monitoring the
cellphone conversations of third‐party consultant John
Kinnucan intercepted his communications with, inter alia,
Chiasson and [Third Person] of LG, which revealed these
two men’s knowing receipt of inside information from
Kinnucan distinct from that provided by Adondakis. See
id. at 93–96, ¶¶ 9–10.
8. In October 2010, when FBI agents solicited Kinnucan’s
cooperation, he not only refused, but also, on October 26,
2010, sent an email to some 20 clients disclosing both the
federal contact and his refusal. See id. at 104, ¶ 16.
9. On November 19 and 20, 2010, the Wall Street Journal
reported these Kinnucan developments and further stated
that federal authorities had pursued a “Vast Insider
Trading Probe” over three years and were preparing
insider trading charges against consultants, investment
bankers, hedge‐fund and mutual‐fund traders, and
analysts across the country. See id. at 103–04, ¶¶ 15–16.
10. Following publication of the first Wall Street Journal report,
a confidential source working at an unidentified hedge
fund informed FBI agents that his supervisor had directed
him “to delete and discard evidence of their participation
18
in illegal insider trading and wire fraud schemes.” Id. at
105, ¶ 17.
11. Based on experience and training, the affiant reported
knowledge that,
a. participants in insider trading and fraud schemes
frequently maintain paper and electronic records of
i. communications relating to the inside
information,
ii. communications relating to trades executed in
reliance on such information,
iii. the transfers of money and proceeds related to
such schemes, and
iv. names, addresses, and contact numbers for
associates in the schemes, see id. at 107–08, ¶ 19.a.
& b.;
b. participants in insider trading and fraud schemes often
use computers, cellphones, and other electronic devices
to store documents and to send and/or receive email
communications and text messages, see id. at 108, ¶ 19.c.
& d.;
c. emails deleted from individual computers will often
remain stored on the related server, see id. at 109, ¶ 19.e.
As thus corrected, the affidavit demonstrates probable cause to
search Ganek’s office as well as the rest of the LG premises
identified in the warrant.6
Precedent instructs that, in applying the corrected affidavit doctrine, a
6
court properly examines “all of the information the officers possessed when they
applied for the [search] warrant.” Escalera v. Lunn, 361 F.3d at 744. Adondakis’s
testimony in the Chiasson trial suggests that, at the time defendants sought the
LG warrant, they may have possessed additional information as to the manner in
19
First, and at a minimum, the facts detailed give rise to a “fair
probability” that evidence of insider trading and related crimes as
committed by the cooperator Adondakis would be found in the LG
premises, including Ganek’s office. Adondakis, a former LG
employee, admitted knowingly procuring inside information that he
conveyed to various persons within LG—Ganek, Chiasson, Brenner,
and others—with the expectation that it be traded on. Ganek’s office
was one of the LG locations where Adondakis conveyed such
information. Ganek, Chiasson, Brenner, and others in fact traded
and caused others to trade on the information provided by
Adondakis. Thus, whether or not each recipient—and Ganek,
specifically—knew that he was trading on inside information, there
was probable cause to search each recipient’s office, including
computers and electronic devices, for records of communications
with Adondakis and of the ensuing trades, simply as evidence of
Adondakis’s criminal conduct. Ganek can point to no law
supporting his assertion, repeated at oral argument, that the
possibility of recovering some of these records from LG equipment
used by Adondakis or from LG servers defeats probable cause to
search the offices of recipients of Adondakis’s inside information for
evidence of transmittal and receipt.
Second, the facts detailed in the corrected affidavit further
demonstrate a “fair probability” that evidence of criminal conduct
which inside information was conveyed to Ganek. See, e.g., United States v.
Newman, No. 12‐cr‐121 (RJS), Trial Tr. 1779, 1801–03, ECF No. 199 (Dec. 21, 2012).
Because these facts are not part of the record on appeal, however, we do not
consider them part of the corrected affidavit.
20
by persons other than Adondakis would be found in the LG premises,
including Ganek’s office. The affidavit reveals that numerous
persons within LG in addition to Adondakis—Ganek, Chiasson,
Brenner, and others—received and then traded on inside
information, using still other employees to effect such trades. Such
evidence of receipt and trading is enough by itself to supply
probable cause to search each recipient’s office for evidence of the
overall insider trading scheme.
Nor is a different conclusion warranted because a corrected
affidavit shows that, at the time a search warrant was sought for
LG’s offices, the government had developed direct evidence of
knowing insider trading only as against Adondakis, Chiasson, and
Brenner, and not as against Ganek. As earlier observed, probable
cause to search a location, such as Ganek’s office, for evidence of a
crime does not require probable cause to think that the person
whose premises is to be searched is himself a knowing participant in
the criminal activity under investigation. It requires only probable
cause to think that evidence of a crime—by whomever committed—
will be found in the place to be searched. See Zurcher v. Stanford
Daily, 436 U.S. at 554; accord United States v. Martin, 426 F.3d at 86.
That probable cause was established by the fact that Ganek’s office
was one of the LG locations where Adondakis admitted conveying
inside information.
In any event, this is not a case in which there was no evidence
of Ganek’s involvement in insider trading. To the contrary, the actus
reus elements of the crime are plainly asserted in the corrected
affidavit: (1) Ganek had received inside information from
Adondakis, and (2) he had traded on it. Only his mens rea was
questionable. The law has long recognized that probable cause does
21
not demand evidence of every element of a crime—not even to
support a person’s arrest. See Gonzalez v. City of Schenectady, 728 F.3d
149, 155 (2d Cir. 2013). Indeed, the law is particularly tolerant with
respect to the mens rea element of a crime on a probable cause
showing. See, e.g., Zalaski v. City of Hartford, 723 F.3d at 393
(observing that because of practical restraints in ascertaining
knowledge and intent, “the latitude accorded to officers considering
the probable cause issue in the context of mens rea crimes must be
correspondingly great” (internal quotation marks omitted)). Such
tolerance is especially warranted here, where the corrected affidavit
shows that various persons closely associated with Ganek at LG
were knowingly trading on the very same information that Ganek
was receiving and using in making his own trades. In such
circumstances, Ganek’s actus reus conduct is sufficient to establish
probable cause to think that further evidence of the insider trading
scheme would be discovered in a search of his office.
No different conclusion is warranted by adding to the
corrected warrant affidavit Adondakis’s statement that he did not
tell Ganek the inside source of the information conveyed to him.
The totality of the circumstances, viewed in a common sense
manner, establish at least a “fair probability” that Ganek recognized
the inside source of the information in any event. He was a
sophisticated trader, who would likely know without needing to be
told that the sort of information being conveyed—e.g., future
projections provided in advance of earnings announcements—was
not yet public and could not be obtained without the aid of an
insider. Moreover, Ganek could have learned the inside source of
the information from persons other than Adondakis, notably,
Chiasson and Brenner, who were trading on the same information.
Chiasson, after all, was Ganek’s partner and LG’s research director.
22
Thus, it was fairly probable that Ganek would have discussed with
Chiasson information coming from an analyst such as Adondakis
before trading on it. In any event, with so many persons within
LG—Adondakis, Chiasson, Brenner—all knowingly trading on the
same inside information, it was unlikely that Ganek would have
been the sole recipient and trader ignorant of the inside source. See
Zalaski v. City of Hartford, 723 F.3d at 393 (stating that mens rea
assessment frequently depends on circumstantial evidence and, on
probable cause inquiry, “can be made on substantially less
evidence” than required for a beyond‐a‐reasonable‐doubt finding at
trial (internal quotation marks omitted)); United States v. Newman,
773 F.3d 438, 451 (2d Cir. 2014) (stating that fraudulent intent
element of insider trading can be established “solely through
circumstantial evidence”), abrogated on other grounds by Salman v.
United States, 137 S. Ct. 420 (2016).
In short, the mere possibility that Ganek unwittingly traded
on inside information cannot defeat the probable cause to search
Ganek’s office that is evident from the totality of the corrected
affidavit. See, e.g., Fabrikant v. French, 691 F.3d 193, 216 (2d Cir. 2012)
(observing that innocent explanation consistent with facts alleged
does not negate probable cause). Nor can Ganek persuasively argue
that “the suspected criminal activity of a few [other] employees”
was all that “justified an absolute and complete rummaging search
of anyone who interacted with them.” Appellee’s Br. 34. As noted,
Ganek himself committed the actus reus element of insider trading.
When one considers that fact, particularly in light of circumstantial
evidence making Ganek’s culpable mens rea fairly probable, the
corrected affidavit establishes probable cause to search Ganek’s
office for evidence of his own criminal conduct as well as for that of
Adondakis and others at LG involved in insider trading.
23
We reach this conclusion, moreover, as a matter of law
because there can be no genuine dispute as to a reasonable judicial
officer issuing the challenged search warrant upon review of the
corrected affidavit. See Smith v. Edwards, 175 F.3d at 106; Velardi v.
Walsh, 40 F.3d at 574; Soares v. Connecticut, 8 F.3d at 920–21.
Assuming that such a warrant issuance question might arise where
the credibility of certain evidence (e.g., from a source with a motive
to lie), or the sufficiency of corroboration (e.g., for an anonymous tip)
informs a probable cause determination, see McColley v. Cty. of
Rensselaer, 740 F.3d at 824–26, that is not this case. The corrected
affidavit cleanly deletes the alleged misrepresentation (that
Adondakis disclosed the inside source of information to Ganek) and
adds a correction (that Adondakis made no such disclosure).
Presented with that corrected affidavit, a reasonable judicial officer
who weighed the totality of facts in the corrected affidavit could
only find probable cause established. The district court erred in
concluding otherwise. See Walczyk v. Rio, 496 F.3d at 158.
Accordingly, we conclude that Ganek cannot show that his
Fourth Amendment rights were violated by the alleged
misstatement in the Trask warrant affidavit because a corrected
affidavit still establishes probable cause to search the LG premises,
including Ganek’s office. Thus, defendants are entitled to qualified
immunity and dismissal on this part of Ganek’s Fourth Amendment
claim.
B. Scope of Warrant
Although Ganek criticizes the “wide‐ranging” and
“expansive” scope of the warrant, Appellee’s Br. 32, 35, the basis for
that criticism appears to be his professed non‐involvement in the
insider trading under investigation, see id. at 32 (emphasizing that
24
warrant is “expansive” because it permits search of office used by
person (i.e., Ganek) “not implicated in the wrongdoing under
investigation”); id. at 35 (“There is no basis given for why this
exhaustive search, foraging through all of [Ganek’s] files . . . would
have been necessary or justified assuming Ganek was believed only
to be an unwitting participant in others’ alleged crimes.”). In short,
in Ganek’s view, his office and effects should not have been
searched at all in the absence of evidence that he knowingly
participated in insider trading. We have already rejected this
argument in our immediately preceding discussion of probable
cause.7
Even if we construe Ganek’s pleadings to raise a distinct
challenge to the scope of the LG search warrant, however, he states
no Fourth Amendment violation because the authorized search did
not “outrun[] the probable cause supporting the warrant.” United
States v. Clark, 638 F.3d 89, 94 (2d Cir. 2011).
The warrant authorized a search of “the premises,” which was
defined to include, inter alia, Ganek’s office and any computers or
Given our conclusion that probable cause existed to search Ganek’s
7
office, any damages awarded based on overbreadth could only be nominal in
any event because Ganek effectively concedes that the loss of his business is
attributable to his having been the subject of a search at all. Insofar as he argues
on appeal that LG’s “sophisticated investors could distinguish between a search
of the principal for evidence implicating other employees and one indicating
Ganek himself was a target of the [investigation],” Appellee’s Br. 35 n.7, there is
no basis to conclude that a corrected affidavit would have to state that
prosecutors did not consider Ganek a target. It had only to recount accurately
what Adondakis had stated about what he did and did not tell Ganek in
conveying inside information.
25
cellphones located therein. J.A. 68, 70 (Attachment A). Within the
LG premises, agents were authorized to search for the following:
[a]ll financial records, handwritten documents and/or
notebooks, letters and correspondence, photographs,
telephone and address books, identification documents,
travel documents, telephone records, computers and
other electronic devices, cellular telephones, and other
records and documents that constitute evidence of the
[crimes under investigation, specifically] securities
fraud, wire fraud, money laundering, [and] commercial
bribery . . . .
Id. at 70.
To be sure, this language sweeps broadly, but the corrected
affidavit showed that inside Ganek’s office, Adondakis had
conversations in which he communicated inside information on
which Ganek then traded. Further, Agent Trask states in the
corrected affidavit that the items identified in Attachment A are of
the sort where evidence of insider trading is likely to be found.
Adondakis confirmed as much when he reported using LG
computers and servers, as well as cellphones and personal email
accounts, to carry out insider trading. Moreover, conversations
intercepted over the Kinnucan wiretap, including some with LG
employees, further confirmed Agent Trask’s statements. Thus, the
authorized search was not overbroad.
The search procedures outlined in Attachment B to the
warrant reinforce this conclusion. Attachment B authorized the FBI
to search the content of items identified in Attachment A for the
following information:
26
(1) Any and all communications between and among
David Ganek, Anthony Chiasson, [Third Person],
Sam Adondakis, [redacted] consultants, . . . John
Kinnucan, Broadband Research, and any third‐party
consultant.
(2) Any and all documents relating to, reflecting, and/or
concerning information about public companies.
(3) Any and all evidence reflecting communications
about trading based on information about public
companies.
(4) Any and all other evidence that will assist the FBI in
identifying and/or determining whether other
individuals were involved in providing material,
nonpublic information in violation of fiduciary and
other duties of confidentiality and/or involved in
trading based on material, nonpublic information.
(5) Any and all other information reflecting and/or
showing and/or leading to evidence [of the crimes
under investigation].
Id. at 73. While this attachment is also broad, the corrected affidavit
supports its scope.
The corrected affidavit provides evidence that, within LG’s
premises, Adondakis, Ganek, Chiasson, and Brenner received and
traded on inside information about multiple public companies,
including Dell, Texas Instruments, Western Digital, and Seagate.
Moreover, because the persons communicating that information
included some who were then cooperating with the government,
such as Adondakis, and some who were not, such as Kinnucan, the
affidavit admitted a fair probability that the extent of insider trading
27
within LG reached beyond the public companies thus far identified
by the government. Accordingly, it was appropriate to afford law
enforcement authorities some latitude in searching physical and
electronic record depositories for evidence of insider trading. As
this court stated more than twenty‐five years ago,
[A] warrant authorizing seizure of records of criminal
activity permits officers to examine many papers in a
suspect’s possession to determine if they are within the
described category. . . . [A]llowing some latitude in this
regard simply recognizes the reality that few people
keep documents of their criminal transactions in a
folder marked ‘drug records.’
United States v. Riley, 906 F.2d 841, 845 (2d Cir. 1990). This reasoning
applies with equal force to searches of electronic records for
evidence of insider trading.
This is not to ignore the particular challenges posed by
electronic searches. See generally United States v. Ganias, 824 F.3d 199,
215 (2d Cir. 2016) (en banc). But Attachments A and B effectively
placed an important limit on defendants’ search authority. They
could search business records and communications for evidence of
insider trading. No authority was given to search such personal
effects and communications as Ganek might have had in his LG
office (even on his computer and cellphone). This distinguishes the
LG search from those limitless searches at issue in the district court
cases cited by Ganek.8
8 See United States v. Zemlyansky, 945 F. Supp. 2d 438, 459 (S.D.N.Y. 2013)
(holding warrant overbroad because it failed to provide “any instructions”
respecting seizure of clinic records by reference to “particular suspects in the case
. . . the time period of the suspected conspiracy . . . the crimes alleged, or any
28
Thus, because Ganek cannot show that the breadth of the
warrant violated the Fourth Amendment, defendants are entitled to
qualified immunity and dismissal on this part of his Fourth
Amendment claim.
C. Fifth Amendment Due Process Claim
The district court concluded that Ganek’s allegation of a
knowingly false statement in the LG warrant affidavit supported not
only a Fourth Amendment claim for unreasonable search and
seizure but also a Fifth Amendment claim for the deprivation of
property without due process. See Ganek v. Leibowitz, 167 F. Supp. 3d
at 638, 640–41.9 In reaching this conclusion, the district court relied
on precedent recognizing a procedural due process cause of action
for damages where “an (1) investigating official (2) fabricates
information (3) that is likely to influence a jury’s verdict,
other limits”); United States v. Vilar, No. 05‐CR‐621, 2007 WL 1075041, at *20
(S.D.N.Y. Apr. 4, 2007) (holding warrant overbroad because it permitted search
of, e.g., “all client files [and] all investment advisory agreements . . . regardless of
whether those documents had any relation to the funds, accounts, and
individuals addressed by the Warrant application” and about which there was
probable cause to search (emphasis in original)); cf. United States v. Levin, No. 15‐
CR‐101, 2015 WL 5602876, at *8 (S.D.N.Y. Sept. 23, 2015) (finding probable cause
supported search of premises, including private office, for evidence of mail and
wire fraud, because corrected affidavit indicated that employees working there
may have engaged in fraudulent practices).
The district court acknowledged that “some courts have held that
9
procedural due process claims cannot be predicated upon the same factual basis
as Fourth Amendment claims,” but concluded that “the issue of whether Ganek’s
due process fabrication claim will be absorbed by the Fourth Amendment
probable cause claim” was not an issue that had to be resolved on the motion
then before it. Ganek v. Leibowitz, 167 F. Supp. 3d at 641 n.14 (alterations and
internal quotation marks omitted). We also need not resolve the question
because Ganek’s due process claim fails on the merits.
29
(4) forwards that information to prosecutors, and (5) the plaintiff
suffers a deprivation of life, liberty, or property as a result.” Garnett
v. Undercover Officer C0039, 838 F.3d 265, 279 (2d Cir. 2016).10
We assume, without deciding, that Ganek could successfully
clear possible threshold obstacles to his pursuit of such a due
process claim.11 We nevertheless conclude that he cannot plausibly
state such a claim because, even viewing the facts in a light most
favorable to him, the alleged deprivation of property resulting from
the search of his office cannot be said to be the result of the
fabrication of evidence in view of our corrected affidavit analysis.
See Zahrey v. Coffey, 221 F.3d 342, 349 (2d Cir. 2000) (observing that
“right at issue is a constitutional right, provided that the deprivation
of liberty of which Zahrey complains can be shown to be the result
of Coffey’s fabrication of evidence”).12
Ganek frames this as a Fifth Amendment claim and so we refer to it as
10
such herein without deciding whether such a claim does indeed find its basis in
that amendment. See Garnett v. Undercover Officer C0039, 838 F.3d at 276 n.6
(“Whether this right is rooted in the Sixth Amendment or Fifth and Fourteenth
Amendments, or both, is an issue we need not decide . . . .”).
Among these are (1) the availability of a Bivens remedy for such a due
11
process claim, see Ziglar v. Abbasi, 137 S. Ct. 1843, 1857 (2017) (“[E]xpanding the
Bivens remedy is now a ‘disfavored’ judicial activity.” (internal quotation marks
omitted)); but see Zahrey v. Coffey, 221 F.3d 342, 357 (2d Cir. 2000) (recognizing,
without discussion, Bivens claim for fabrication of evidence); and (2) whether
(a) the deprivation of property was “random and unauthorized” and (b) Fed. R.
Crim. P. 41(g) provides a “meaningful postdeprivation remedy” for that loss,
Hudson v. Palmer, 468 U.S. 517, 533 (1984).
Zahrey observed that “[c]ourts considering whether the deprivation of a
12
plaintiff’s liberty is the legally cognizable result of a government officer’s
misconduct have approached the issue in either of two ways: (1) as a separate
issue of causation, or (2) as part of the right allegedly violated.” Zahrey v. Coffey,
221 F.3d at 349. Ganek’s claim fails under either approach.
30
That analysis shows that probable cause existed to search
Ganek’s office even when the alleged fabricated statement is deleted.
While Garnett v. Undercover Officer C0039, 838 F.3d at 277, and its
predecessor case, Ricciuti v. New York City Transit Authority, 124 F.3d
123, 130 (2d Cir. 1997), state that probable cause for arrest is not a
defense to a fabrication‐of‐evidence due process claim, the alleged
deprivations in those cases involved separate harms beyond the
deprivation—arrest—supported by probable cause. For example, in
Garnett, the fabrication allegedly informed post‐arrest charging and
bail determinations. See 838 F.3d at 277 (“The setting of bail, which
may make the difference between freedom and confinement
pending trial, and the prosecutor’s decision to pursue charges rather
than to dismiss the complaint without further action, may depend
on the prosecutor’s and magistrate’s assessments of the strength of
the case, which in turn may be critically influenced by fabricated
evidence.”). Thus, where a corrected affidavit establishes probable
cause to arrest or to search, a plaintiff cannot state a procedural due
process claim for lost liberty or property attributable only to that
arrest or search. Such a claim can be pursued, however, if the
fabricated evidence causes some “further deprivation.” Id.
Here, the only property loss alleged to have occurred without
due process resulted from seizures made during the challenged
search. But as we have concluded, even on a corrected affidavit, that
search is supported by probable cause, the only process due.13 Thus,
Ganek cannot claim that the affidavit misstatement caused a further
13
loss of property—specifically, his business—without due process. The Trask
affidavit was not unsealed until March 1, 2010, some weeks after Ganek closed
LG on February 11, 2010. Thus, it is apparent that the due process injuries of
which he complains are all attributable to the challenged search of his office,
31
because Ganek cannot show a procedural due process violation,
defendants are entitled to qualified immunity and to the dismissal of
this part of his Fifth Amendment claim.
D. Failure‐To‐Intercede Claim
The district court denied defendants’ motion to dismiss
Ganek’s failure‐to‐intercede claim, which it construed to apply both
to (1) non‐supervisor defendants, for their failure to correct the
affidavit misstatement prior to issuance of the warrant; and
(2) supervisor defendants, for their failure to clarify publicly that
Ganek was not a target of the insider trading probe. See Ganek v.
Leibowitz, 167 F. Supp. 3d at 642 (“It is widely recognized that all law
enforcement officials have an affirmative duty to intervene to
protect the constitutional rights of citizens from infringement by
other law enforcement officers in their presence.” (internal quotation
marks omitted)).
Ganek cannot plausibly claim that he suffered constitutional
harm from defendants’ failure to correct a misstatement in a warrant
affidavit that would have stated probable cause to search Ganek’s
office even on correction. Cf. Anderson v. Branen, 17 F.3d 552, 557 (2d
Cir. 1994) (“An officer who fails to intercede is liable for the
preventable harm caused by the actions of the other officers . . . .”)
(emphasis added)); O’Neill v. Krzeminski, 839 F.2d 9, 11–12 (2d Cir.
1988).
As for Ganek’s failure‐to‐clarify claim, there is no
constitutional right—and certainly none that is clearly established by
which we have concluded was not unlawful, and not to the public dissemination
of Adondakis’s false statement.
32
law—to have law enforcement officials issue public statements
clarifying a person’s investigative status. Indeed, in the context of
ongoing investigations, it is generally thought better for law
enforcement officials to make no comments about such matters
unless and until they are prepared to file public charges. See U.S.
Dep’t of Justice, U.S. Attorneys’ Manual § 1‐7.530 (stating, subject to
certain exceptions, that “components and personnel of the
Department of Justice shall not respond to questions about the
existence of an ongoing investigation or comment on its nature or
progress”).
Nor is such a right‐to‐clarify status established in the context
of this case by precedent recognizing a constitutional obligation to
protect an individual when the government itself “has created or
increased the danger to the individual.” Ying Jing Gan v. City of New
York, 996 F.2d 522, 533 (2d Cir. 1993). That right has been recognized
in circumstances of increased physical, often life‐threatening, danger
to individuals, particularly those in state custody. See id. (collecting
cases). That is not this case. Ganek cites no precedent that
constitutionally obligates government authorities to mitigate the risk
of injury to reputation resulting from public knowledge of an
ongoing investigation.
In sum, because Ganek fails to state cognizable claims for
failure to intervene and failure to clarify, defendants are entitled to
qualified immunity and to dismissal of these Fifth Amendment
claims.
E. Claims Against Supervisor Defendants
Ganek also asserts his Fourth Amendment, procedural due
process, and failure‐to‐intercede claims against the supervisor
33
defendants. Because we conclude that each of those claims fails on
the merits, the supervisor defendants are entitled to dismissal.
Even if Ganek had stated plausible Fourth and Fifth
Amendment claims against the non‐supervisor defendants,
however, he fails to plead sufficient facts to attribute liability to the
supervisor defendants. As the Supreme Court has instructed,
“[b]ecause vicarious liability is inapplicable to Bivens and § 1983
suits,” a plaintiff bringing a Bivens claim “must plead that each
Government‐official defendant, through the official’s own
individual actions, has violated the Constitution.” Ashcroft v. Iqbal,
556 U.S. at 676. To satisfy this standard, Ganek had to plead facts
showing each supervisor defendant’s personal involvement in the
submission of an intentionally or recklessly false statement to the
magistrate judge. He does not do so here.
Specifically, Ganek does not allege that any of the supervisor
defendants attended the November 2, 2010 meeting at which
Adondakis purportedly told defendants that he had not informed
Ganek of the inside source of the information he was sharing. Nor
does Ganek allege that any supervisor defendant actually knew that
any statement attributed to Adondakis in the search warrant
affidavit was not true. He alleges only that Zabel and Leibowitz
informed LG representatives that the search “had been carefully
considered at the highest levels,” J.A. 18, ¶ 6; and that defendant
Bharara told LG’s attorney that the LG search had not been
authorized “without considering the consequences,” id. at 19, ¶ 8.
From this, he argues that supervisor responsibility for the
Adondakis misstatement can be inferred from
the high‐profile nature of this raid and investigation,
the anomalous use of such a raid in an investigation of
34
financial crimes, the customs and practices of the FBI
and U.S. Attorney’s Office, and the subsequent
statements about this investigation by supervisors up to
and including United States Attorney Preet Bharara
himself.
Id. at ¶ 10.
The argument does not persuade because the fact that the
decision to search LG’s offices was “carefully considered at the
highest levels” of the U.S. Attorney’s office is not enough to admit
an inference that supervisors knew or should have known that a
statement in the warrant affidavit, attributed to Adondakis, was
false. See Ashcroft v. Iqbal, 556 U.S. at 680–81 (concluding that
allegation that department head was “principal architect” of
challenged policy was too conclusory to support claim against him
for how subordinates effected policy). Certainly Ganek does not
plead, either generally or with specific reference to this case, that FBI
and U.S. Attorney supervisors, when reviewing search warrant
applications, do not routinely rely on their subordinates to report
accurately the statements made to them by cooperating witnesses.
Nor do they—or could they—suggest that doing so is reckless.14
The district court, relying on our panel decision in Turkmen v. Hasty,
14
789 F.3d 218 (2d Cir. 2015), concluded that “it seems entirely plausible that [non‐
supervisor] defendants would have run such a decision [to misrepresent
Adondakis’s statements] ‘up the ladder’ in shaping the Affidavit,” Ganek v.
Leibowitz, 167 F. Supp. 3d at 646 n.19. Turkmen, however, has been reversed by
Ziglar v. Abbasi, 137 S. Ct. at 1869. In any event, the Supreme Court had earlier
made clear that plausible does not equate to merely possible. See Ashcroft v. Iqbal,
556 U.S. at 681–82. Where an obvious explanation exists for challenged
conduct—in this case, a supervisor’s reliance on a subordinate’s report of what
the subordinate had heard a cooperator say—more than an allegation of careful
supervisory review is necessary to plead the supervisor’s individual
35
In sum, because Ganek has failed to state cognizable Fourth
Amendment, procedural due process, and failure‐to‐intercede
claims, and, in any event, because Ganek has failed to plead
sufficient facts as to each supervisor defendant’s personal
involvement in the submission of the alleged misstatement to the
magistrate judge, the supervisor defendants are entitled to dismissal
of these claims.
CONCLUSION
To summarize, we conclude that all defendants are entitled to
qualified immunity and, therefore, to dismissal of all Ganek’s
claims.
1. Ganek fails to plead a plausible Fourth Amendment
claim of unreasonable search and seizure because a corrected
affidavit supports both probable cause for and the scope of the
challenged search.
2. Ganek fails to plead a plausible Fifth Amendment claim
that fabricated evidence (in the search warrant affidavit) deprived
him of property without due process because the warrant would
have issued on a corrected affidavit and thus any deprivation of the
seized property was not the result of the fabricated evidence.
3. Because Ganek fails to plead plausible Fourth and Fifth
Amendment claims, he cannot plausibly plead that defendants’
alleged failure to intercede in the challenged search caused him
preventable constitutional harm.
responsibility for the falsehood. See id. (identifying “more likely” non‐
discriminatory motive in concluding that pleading was insufficient).
36
4. Ganek fails to plead any clearly established right to
have federal officials state in a search warrant affidavit whether each
referenced person is or is not then a target of investigation, nor a
right to have federal officials so state after the fact if the search
becomes public knowledge.
5. Moreover, Ganek fails to plead sufficient facts as to the
supervisor defendants’ personal involvement in the submission of
any misstatements to the magistrate judge.
Accordingly, that part of the district court order denying
defendants’ dismissal motion in part is hereby REVERSED, and the
case is REMANDED to the district court for entry of judgment in
favor of defendants on all claims.
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