Petition for Writ of Certiorari — Tracy Chang and Howard Hsu, Petitioners v. United States

No.______________

In The

Supreme Court of the United States

TRACY CHANG AND HOWARD HSU,

Petitioners,

v.

THE UNITED STATES OF AMERICA,

Respondent.

On Petition for Writ of Certiorari

To the United States Court of Appeals

For the Ninth Circuit

PETITION FOR WRIT OF CERTIORARI

Robert E. Barnes, Esq.

Counsel of Record

BARNES LAW

601 South Figueroa St., Suite 4050

Los Angeles, C.A. 90017

(310) 510-6211

robertbarnes@barneslawllp.com

Counsel for Petitioners

i

QUESTIONS PRESENTED

1. Defendants requested instructions on their theory

of defense, that they relied in good faith upon the

professional advice of their CPAs when preparing

the tax returns at issue in this matter, tax return

preparers who publicly marketed themselves as

being able to reduce taxes dramatically, when all

returns were prepared, signed and submitted by

the tax return preparers. May a court refuse to give

an instruction concerning a criminal defendant’s

theory of defense by asserting that the instruction

concerning the elements of the charged crime

encompasses the defendant’s theory of defense?

2. May a search warrant—which did not limit the

search by time or criminal activity, which sought

twenty broad categories including “all electronic

devices,” and which the district court recognized

afforded discretion to the officers executing the

search—be upheld based on modifications imposed

by the district court after the search was conducted

and all the seized items analyzed?

3. Does an individual have standing under the Fourth

Amendment to contest the search of a house in

which he stored personal and business effects in

closed containers outside of commons areas,

maintained a bedroom, and occasionally slept in; he

was a specific target of the search warrant; and his

personal and business effects were seized?

ii

PARTIES TO THE PROCEEDING BELOW

All the parties are listed in the caption.

RULE 29.6 STATEMENT

None of the petitioners is a nongovernmental

corporation. None of the petitioners has a parent

corporation or shares held by a publicly traded

company.

iii

TABLE OF CONTENTS

QUESTIONS PRESENTED .................................... i

PARTIES TO THE PROCEEDING BELOW ......... ii

RULE 29.6 STATEMENT....................................... ii

TABLE OF CONTENTS ........................................ iii

TABLE OF AUTHORITIES .................................. vi

OPINIONS BELOW................................................ 1

JURISDICTION ...................................................... 1

STATUTORY PROVISIONS INVOLVED ............. 1

STATEMENT OF THE CASE ................................ 3

REASONS FOR GRANTING THE WRIT ........... 13

THIS COURT SHOULD GRANT REVIEW OF

THE COURT OF APPEALS’ DECISION

BECAUSE IT CONFLICTS WITH THE

DECISIONS OF OTHER CIRCUITS................... 13

A.

This Court Should Grant Certiorari To

Resolve A Split Among the Circuits As To

Whether And When A Court Must Instruct

The Jury Regarding Good-Faith Reliance As A

Theory Of Defense In Federal Tax Fraud

Cases 13

B.

This Court Should Grant Certiorari To

Resolve The Conflict Between The Ninth

Circuit’s Decision And The Many Decisions Of

Other Circuits, Following Guidance of This

Court, Stressing The Importance Of Limiting

The Discretion Of The Officer Executing A

Search Warrant .............................................. 19

iv

C.

This Court Should Grant Certiorari To

Resolve The Conflict Between The Ninth

Circuit’s Decision And The Many Decisions Of

Other Circuits Concerning Who Has Standing

To Contest A Fourth Amendment Search ..... 26

CONCLUSION ...................................................... 31

APPENDIX

Memorandum, United States Court of Appeals for the

Ninth Circuit, June 17,

2018………………………………………..…………App. 1

Judgment of Howard Hsu, United States District

Court for the Northern District of California,

June 2, 2017…………..………...…………. App. 7

Judgment of Tracy Chang, United States District

Court for the Northern District of California,

June 2, 2017……………………………… App. 22

Order Denying Tracy Chang and Howard Hsu’s

Motion to Suppress, United States District

Court for the Northern District of California,

September 1, 2016…………………….… App 37

Order Denying Petition for Rehearing and Rehearing

En Banc, Ninth Circuit, September 5,

v

2018……………………….…….......................… App. 59

Jury Instructions, United States District Court for

the Northern District of California, February

13, 2018………………………………….… App 61

Search and Seizure Warrant, United States District

Court for the Northern District of California,

March 18, 2011……………….………….. App. 77

Trial Exhibit 716, Northern District Court of

California, Entered February 8,

2017……….…………………….………..… App.93

Trial Exhibit 740, Northern District Court of

California, Entered February 8,

2017…………………...…………………. App. 105

vi

TABLE OF AUTHORITIES

CASES

Application of Lafayette Academy, Inc., 610 F.2d 1

(1st Cir. 1979) ................................................. 26

Cheek v. United States, 498 U.S. 192 (1991)............ 15

Dow Chemical Co. v. United States, 476 U.S. 227

(1986) ........................................................ 24, 28

In re 6509 Fifth Ave. & Related Props., 830 F.3d 66

(2d Cir. 2016) .................................................. 22

Jones v. United States, 362 U.S. 257 (1960) ............ 27

Mancusi v. DeForte, 392 U.S. 364 (1968) ................. 29

Marron v. United States, 275 U.S. 192 (1927) ... 20, 21

Matthews v. United States, 485 U.S. 58 (1988) ....... 14

Mink v. Knox, 613 F.3d 995 (10th Cir. 2010) ........... 25

Minnesota v. Carter, 525 U.S. 83 (1998) .................. 29

Minnesota v. Olson, 485 U.S. 91 (1990) ................... 29

Rakas v. Illinois, 439 U.S. 128 (1978) ...................... 29

Rawlings v. Kentucky, 448 U.S. 98 (1980) ............... 29

Riley v. California, 134 S.Ct. 2473 (2014) ......... 24, 28

Silverthorne Lumber Co. v. United States, 251 U.S.

385 (1920) ....................................................... 29

United States v. $40,955.00 in U.S. Currency, 554

F.3d 752 (9th Cir. 2009) ..................... 11, 28, 30

United States v. Abboud, 438 F.3d 554 (6th Cir. 2006)

........................................................................ 21

United States v. Abrams, 615 F.2d 541 (1st Cir. 1980)

........................................................................ 21

United States v. Anderson, 154 F.3d 1225 (10th Cir.

vii

1998) ............................................................... 29

United States v. Bridges, 344 F.3d 1010 (9th Cir.

2003) ............................................................... 24

United States v. Brimberry, 961 F.2d 1286 (7th Cir.

1992) ............................................................... 15

United States v. Condon, 132 F.3d 653 (11th Cir.

1998) ......................................................... 14, 15

United States v. Falon, 959 F.2d 1143 (1st Cir. 1992)

.................................................................. 24, 29

United States v. Ford, 184 F.3d 566 (6th Cir.1999) 21

United States v. Galpin, 720 F.3d 436 (2d Cir. 2013)

............................................................ 23, 24, 25

United States v. Ganias, 824 F.3d 199 (2d Cir. 2016)

(en banc) ......................................................... 23

United States v. George. 420 F.3d 991 (9th Cir. 2005)

.......................................................................... 8

United States v. Gourde, 440 F.3d 1065 (9th Cir.

2006) (en banc) ............................................... 12

United States v. Haddock, 956 F.2d 1534 (10th Cir.

1992) ............................................................... 16

United States v. Harwood, 470 F.2d 322 (10th Cir.

1972) ......................................................... 29, 30

United States v. Haydel, 649 F.2d 1152 (5th Cir.

1981) ............................................................... 30

United States v. Humphrey, 204 F.3d 65 (5th Cir.

1997) ......................................................... 24, 29

United States v. Johnson, 713 F.3d 654 (11th Cir.

1983) ............................................................... 17

viii

United States v. Kokenis, 663 F.3d 919 (7th Cir.

2011) ................................................... 14, 15, 18

United States v. Kottwitz. 614 F.3d 1241 (11th Cir.

2010) ............................................. 10, 16, 17, 18

United States v. Kouba, 822 F.2d 768 (8th Cir. 1987)

........................................................................ 16

United States v. Kow, 58 F.3d 423 (9th Cir. 1995) . 11,

12, 22

United States v. Leary, 846 F.2d 592 (10th 1988) ... 23

United States v. Lindo, 18 F.3d 353 (6th Cir. 1994) 14

United States v. Mancini, 8 F.3d 104 (1st Cir. 1993)

........................................................................ 30

United States v. Morris, 20 F.3d 1111 (11th Cir.

1994) ............................................................... 16

United States v. Onero, 563 F.3d 1127 (10th Cir.

2009) ............................................................... 23

United States v. Pomponio, 429 U.S. 10 (1976) ....... 15

United States v. Roberts, 852 F.2d 671 (2d Cir. 1988)

........................................................................ 24

United States v. Roche, 614 F.2d 6 (1st Cir. 1980) .. 23

United States v. Rosa, 626 F.3d 56 (2d Cir. 2010) ... 25

United States v. Rozin, 664 F.3d 1052 (6th Cir. 2012)

........................................................................ 16

United States v. Salvucci, 449 U.S. 83 (1980) ... 27, 29

United States v. Sarno, 73 F.3d 1470 (9th Cir. 1995)

.................................................................passim

United States v. Sassak, 881 F.2d 276 (6th Cir. 1989)

........................................................................ 19

ix

United States v. Spilotro, 800 F.2d 959 (9th Cir.

1986) ............................................................... 26

United States v. Stubbs, 873 F.2d 210 (9th Cir. 1989)

........................................................................ 25

United States v. Wells, 519 U.S. 482 (1997)............. 16

Voss v. Bergsgaard, 774 F.2d 402 (10th Cir. 1985) . 23

STATUTES

18 U.S.C § 371 ........................................................... 13

18 U.S.C. § 3231 ........................................................ 13

26 U.S.C. § 7206 ........................................................ 13

28 U.S.C. § 1291 ........................................................ 13

OTHER AUTHORITIES

2 Wayne R. LaFave, Search and Seizure: A Treatise

on the Fourth Amendment § 4.6(a) (5th ed.

2012) ............................................................... 25

Eighth Circuit Model Criminal Jury Instructions,

Instruction 9.08B ........................................... 16

1

Tracy Chang and Howard Hsu respectfully

petition for a writ of certiorari to review the decision of

the United States Court of Appeals for the Ninth

Circuit.

OPINIONS BELOW

The Memorandum of the Court of Appeals is

unreported and is found at Appendix, App. 1. The

district court’s final judgment against Petitioners is

found at App. 7 and 22. The order of the United States

District of Northern California denying Petitioners’

motion to suppress is unreported and is found at App.

37. The Court of Appeals’ order denying Petitioners’

timely petition for rehearing and rehearing en banc

was entered September 5, 2018, and is found at App.

59. The district court’s instructions to the jury is found

at App. 61.

JURISDICTION

Petitioners seek review of the decision of the

United States Court of Appeals for the Ninth Circuit

entered on July 17, 2018. Timely petitions for

rehearing and rehearing en banc were denied on

September 5, 2018. App. 59–60. This Court’s

jurisdiction rests on 28 U.S.C. § 1254(1).

STATUTORY PROVISIONS INVOLVED

United States Constitution, Amendment 4

The right of the people to be secure in their

2

persons, houses, papers, and effects, against

unreasonable searches and seizures, shall not be

violated, and no Warrants shall issue, but upon

probable cause, supported by Oath or affirmation, and

particularly describing the place to be searched, and

the persons or things to be seized.

18 U.S.C. § 371 – Conspiracy to commit offense or

to defraud United States

If two or more persons conspire either to commit

any offense against the United States, or to defraud

the United States, or any agency thereof in any

manner or for any purpose, and one or more of such

persons do any act to effect the object of the conspiracy,

each shall be fined under this title or imprisoned not

more than five years, or both.

If, however, the offense, the commission of

which is the object of the conspiracy, is a misdemeanor

only, the punishment for such conspiracy shall not

exceed the maximum punishment provided for such

misdemeanor.

26 U.S.C. § 7206 – Fraud and false statements

Any person who—

(1) Declaration under penalties of perjury

Willfully makes and subscribes any return,

statement, or other document, which contains or is

verified by a written declaration that it is made under

the penalties of perjury, and which he does not believe

to be true and correct as to every material matter; or

(2) Aid or assistance

3

Willfully aids or assists in, or procures,

counsels, or advises the preparation or presentation

under, or in connection with any matter arising under,

the internal revenue laws, of a return, affidavit, claim,

or other document, which is fraudulent or is false as to

any material matter, whether or not such falsity or

fraud is with the knowledge or consent of the person

authorized or required to present such return,

affidavit, claim, or document; or

[. . .]

shall be guilty of a felony and, upon conviction thereof,

shall be fined not more than $100,000 ($500,000 in the

case of a corporation), or imprisoned not more than 3

years, or both, together with the costs of prosecution.

STATEMENT OF THE CASE

The Internal Revenue Service (“IRS”) initiated

a criminal investigation into an internet affiliatemarketing 1 business, Didsee Corporation (“Didsee”),

for the 2007, 2008, and 2009 tax years, which resulted

in criminal charges for tax evasion against Didsee’s

two owners and operators, Tracy Chang (“Chang”) and

Howard Hsu (“Hsu”), mother and son (collectively,

“Petitioners”). The United States alleged that Hsu

conspired with Chang to defraud the United States in

1

Affiliate marketing is the process of earning a

commission by promoting other people’s (or companies')

products.

4

violation of 18 U.S.C. § 371. Chang was also charged

with willfully making and subscribing a false 2008

corporate income tax return for Didsee in violation of

26 U.S.C. § 7206(1). Hsu was also charged with three

counts of willfully aiding and assisting in the

preparation of a false tax return related to the 2008

tax return, the 2009 tax return, and the amended 2007

tax return for Didsee, each in violation of 26 U.S.C.

§ 7206(2).

Search Warrant

In the course of the IRS investigation, a search

warrant was obtained and executed for a single-family

residence at 3435 Clement Street, San Francisco,

California—the current residence of Chang and the

second home of Hsu, where he maintained a bedroom,

where he occasionally slept, where he received mail,

and where he stored personal and business papers and

effects in locked containers outside of common areas.

The search warrant specifically targeted ten

“persons, entities, or addresses”, including Chang and

Hsu. App. 81–82 The warrant then authorized the

seizure of twenty broad categories of documents

comprising all business records, including all: (16)

passwords or other similar information to access

computers; (17) electronic devices; (18) computer

software; (19) instructions relating to any electronic

device; and (20) “stored electronic data that might help

identify who was using a computer at a particular

time.” App. 82–86. The warrant instructed the

5

searching officers to search for documents “including

the time period December 2006 until January 2010”

and to search for “records, documents, files, or

materials, in whatever form…” App. 81–82. The

warrant did not specify any alleged criminal activity

for which the search was being conducted. See App.

77–92. Though the IRS special agent’s affidavit in

support of the application for the search warrant

specifically identified the suspected crimes, as well as

other specific information absent from the Description

of Items to be Seized in the search warrant itself—

including financial account numbers, time frames,

sums, names, and email addresses—this information

was not contained in the search warrant and the

supporting affidavit was not attached to the search

warrant given to the searching officers. See ibid.

According to search warrant inventory,

personal records and documents of both Chang and

Hsu were seized, including: a daily planner with a

black leather cover from the master bedroom; a copy of

Hsu’s driver’s license (dated September 10, 1998); a

social security statement; news articles from 2000

through 2011; an unspecified business proposal from

the year 2000; 2007 and 2008 federal tax returns; a

2009 tax return for John Hsu and Chang; personal

communications between Chang and Hsu sent after

January 1, 2010; bank statements and bills from

multiple bank accounts from 2006 to 2010; accounts in

the name of various individuals and Didsee

6

Corporation; utility bills and personal expenditures of

Hsu; a document written in Chinese re: tax matters;

one imaged HP Pavilion computer; one imaged Acer

Aspire laptop; and an external Seagate hard drive.

App. 89–92. No effort was made to sequester seizable

information from the computers at the property, as the

warrant instructed, and the government never

destroyed seized data that fell outside the warrant’s

scope. See App 87–89.

On August 4, 2016, Petitioners jointly moved to

suppress evidence obtained from the search. In a

written order, the District Court denied Hsu standing

to contest the search warrant, then held that “evidence

pertaining to categories 4, 6, 10, 16, 18, and 20 of the

search warrant, as well as evidence not pertaining to

the time period December 2006 to January 2010, is

suppressed as to Chang,” but total suppression was not

required because the “defective categories concerned

‘only a specific subset of items . . . and the lion’s share

of the categories did not violate the Fourth

Amendment.’” App. 54, 37–58.

Evidence at Trial

During the jury trial, the prosecution called

various IRS special agents who were involved in the

search conducted at 3435 Clement Street. These

officers testified that they imaged “bit-for-bit” the

laptops and hard drives seized from 3435 Clement

Street, even though Chang protested to the officers

executing the search, and that the images from the

7

computers were and are retained by the IRS. The

prosecution relied on evidence from these computers

during trial.

Petitioners presented evidence that they relied

upon the advice of two Certified Public Accountants

whom they had hired to prepare Didsee’s 2007, 2008,

2009, and amended 2007 tax returns. Petitioners

introduced evidence that Hsu first approached the

CPA to prepare the 2007 federal income tax return,

which was not part of the criminal charges against

Petitioners, and the CPA used that as a platform to

persuade Petitioners that they were overpaying tax

and the CPA could provide “a step-by-step action plan

to position yourself and using tax loopholes so you can

legally lower your tax” by, on average, $20,000 to

$150,000 per year. App. 93–104. In response, Hsu

expressed concern that he did not want to move

“personal expenses, which are minimal, over to

[Didsee]” to minimize his taxes, but the CPA assured

him that he can still lower his taxes without shifting

personal expenses and persuaded Hsu to fill out a

questionnaire that she provided. Ibid. Throughout

these memorialized conversations, Hsu answered

every question and provided the information that the

CPA requested; the CPA never expressed concern that

information was withheld. Ibid. The CPA then

provided to Hsu a detailed memorandum explaining

how Hsu should create three new entities to shift his

expenses, such as “out-of-pocket medical expenses as a

8

business expense,” and begin royalty payments among

these companies to reduce his taxes. App. 105–170.

Petitioners used the same CPA, and her successor-ininterest, to file Didsee’s next three tax returns, which

comprised the basis of the criminal charges brought

against them. During cross-examination of the CPA,

counsel for Petitioners relied upon this theory of

defense and confirmed that the CPA wrote books

entitled “Secrets of a Tax-Free Life,” “Tax Breaks of

the Rich and Famous,” “Breaking the Tax Code – How

to Keep More of What you Earn,” and “You Can Deduct

That? – How Small Business Owners Can Transform

Ordinary Spending Into Tax Savings”.

Jury Instructions

Petitioners requested two jury instructions that

encompassed their theory of defense, one for good faith

and one for good-faith reliance. Petitioners’ proffered

good faith instruction read:

The government cannot establish the

element of willfulness or intent to

defraud without negating a defendant’s

claim that he was ignorant of the law,

that he misunderstood the law, or that he

held a good-faith belief his conduct did

not violate the law.

This was a direct quote from the Ninth Circuit case,

United States v. George. 420 F.3d 991, 999 (9th Cir.

2005). Petitioners’ proffered good-faith reliance

instruction read:

9

A complete defense to the charges in the

indictment is where the tax violation was

the result of a failure of an accountant to

exercise due care or diligence, and not the

result of the Defendants’ actions. Title

26, Code of Federal Regulations, Section

16694-1 provides that an accountant or

tax preparer who prepares taxes for a

person “may not ignore the implications

of information furnished to the preparer

or actually known by the preparer. The

preparer must make reasonable inquiries

if the information as furnished appears to

be incorrect or incomplete. The preparer

must make appropriate inquiries to

determine the existence of facts and

circumstances required by a[n] [Internal

Revenue] Code section or regulation as a

condition to the claiming of a deduction.”

If you find that an accountant or tax

preparer ignored any information, did

not make reasonable inquiries as to

whether any information provided to him

was complete and correct, or otherwise

was not diligent, thorough or careful to

the best of his ability, and that the failure

to exercise due care caused the tax

violations charged in the indictment, you

must acquit the Defendants.

10

This was derived directly from an instruction approved

by the Eleventh Circuit in United States v. Kottwitz.

614 F.3d 1241, 1269 (11th Cir. 2010), opinion

withdrawn and reissued in relevant part, 627 F.3d

1283 (11th Cir. 2010).

The district court rejected both of Petitioners’

requested instructions on their theory of defense. See

App. 61–76. Instead, the district court instructed the

jury only upon the elements of the charges and the

definition of willfulness:

In order to prove that the defendants

acted "willfully," the government must

prove beyond a reasonable doubt that the

defendants knew federal tax law imposed

a duty on him or her, and the defendants

intentionally and voluntarily violated

that duty.

App. 73.

On February 13, 2017, the jury returned a

guilty verdict on all counts. Final judgment was

entered on June 2, 2017. App. 7–36.

Ninth Circuit’s Decision

Petitioners each filed a timely appeal arguing

that the district court erred in its ruling on Petitioners’

motion to suppress and jury instructions, among other

issues. In their appeal, Petitioners’ relied on the many

cases reiterating the necessary limitations on officers

executing a search warrant, as well as recent case law

concerning theory of defense instructions, particularly

11

concerning good faith, in criminal tax cases.

The Ninth Circuit submitted the case without

oral argument and affirmed. App. 1–6. Regarding

Petitioners’ Fourth Amendment challenge, the Ninth

Circuit wrote:

First, the court correctly concluded that

Hsu lacks Fourth Amendment standing

to challenge the search of Chang’s house.

See United States v. $40,955.00 in U.S.

Currency, 554 F.3d 752, 757–58 (9th Cir.

2009) (holding that an adult who did not

live with her parents lacked Fourth

Amendment standing to challenge a

search of their house despite the fact that

she "had free access and a key to the

house . . . [and] stored items in [a] safe"

that was opened during the search).

Second, because the search warrant

limited the items that could be seized to

those related to a specific time period, it

was not a "general" warrant requiring

total suppression. See United States v.

Kow, 58 F.3d 423, 427 (9th Cir. 1995)

(holding that a warrant was defective

because, among other shortcomings, it

"did not limit the scope of the seizure to a

time frame within which the suspected

criminal activity took place"). The district

court correctly concluded that the

12

overbroad portions of the warrant were

severable and required only partial

suppression. See United States v. SDI

Future Health, Inc., 568 F.3d 684, 707

(9th Cir. 2009) (holding that partial

suppression was appropriate where "the

lion’s share of the [warrant] did not

violate the Fourth Amendment"); United

States v. Kow, 58 F.3d 423, 427 (9th Cir.

1995) (holding that a warrant was

defective

because,

among

other

shortcomings, it "did not limit the scope

of the seizure to a time frame within

which the suspected criminal activity

took place"). Finally, we agree with the

district court that the affidavit submitted

to obtain the warrant provided the judge

with a substantial basis to conclude that

there was probable cause to search

Chang’s house, including any computers

found there. United States v. Gourde, 440

F.3d 1065, 1069 (9th Cir. 2006) (en banc).

App. 2–3.

Regarding Petitioners’ challenge to the district

court’s jury instructions, the Ninth Circuit wrote, in

pertinent part:

Defendants were not entitled to either a

"good faith" or a "reliance" instruction,

because the court instructed the jury that

13

it could convict Defendants only if it

found that they "knew federal tax law

imposed a duty on [them], and the[y]

intentionally and voluntarily violated

that duty." See United States v. Sarno, 73

F.3d 1470, 1487–88 (9th Cir. 1995)

(holding that a defendant is not entitled

to either a good-faith or a reliance

instruction

where

an

adequate

instruction on specific intent is given).

App 3–4.

Jurisdiction

The Northern District of California had

jurisdiction over this matter pursuant to 18 U.S.C.

§ 3231; the causes of action were based on 18 U.S.C.

§ 371 and 26 U.S.C. § 7206. The Ninth Circuit had

jurisdiction pursuant to 28 U.S.C. § 1291; the appeal

was from a final judgment of the Northern District of

California entered on June 2, 2017.

REASONS FOR GRANTING THE WRIT

THIS COURT SHOULD GRANT REVIEW OF

THE

COURT

OF

APPEAL’S

DECISION

BECAUSE

IT

CONFLICTS

WITH

THE

DECISIONS OF OTHER CIRCUITS

A. This

Court

Should

Grant

Certiorari To Resolve A Split

14

Among the Circuits As To

Whether And When A Court Must

Instruct The Jury Regarding

Good-Faith Reliance As A Theory

Of Defense In Federal Tax Fraud

Cases

Following this Court’s guidance, Circuit Courts

agree that “a defendant is entitled to an instruction as

to any recognized defense for which there exists

evidence sufficient for a reasonable jury to find in his

favor.” See, e.g., Matthews v. United States, 485 U.S.

58, 63 (1988); United States v. Condon, 132 F.3d 653,

656 (11th Cir. 1998); Sarno, 73 F.3d at 1484; United

States v. Lindo, 18 F.3d 353, 356 (6th Cir. 1994). More

specifically, a defendant is entitled to an instruction on

his theory of defense if “(1) the instruction provides a

correct statement of the law; (2) the theory of defense

is supported by the evidence; (3) the theory of the

defense is not part of the government's charge; and (4)

the failure to include the instruction would deprive the

defendant of a fair trial.” See, e.g., United States v.

Kokenis, 663 F.3d 919, 929 (7th Cir. 2011).

There exists an exception to this general rule in

federal fraud cases: an instruction on a defendant’s

good faith defense need not be given if the jury is

properly instructed concerning the requisite specific

intent of willfulness. See e.g., United States v.

Pomponio, 429 U.S. 10, 12–13 (1976); see also Cheek v.

United States, 498 U.S. 192 (1991). This exception

15

exists because, in the context of fraud cases, a defense

of good faith is the inverse of the specific intent

required for the crime charged—a voluntary and

intentional violation of the law. See Pomponio, 429

U.S. at 12–13.

Since this exception was announced, Circuits

have split as to whether the exception applies equally

to a good-faith reliance defense and accompanying

instruction. 2 Notwithstanding the normal rules

governing ‘theory of defense’ requests, the Ninth and

Seventh Circuits have held that the failure to give an

instruction on a good-faith reliance defense “is not

fatal so long as the court clearly instructed the jury as

to the necessity of ‘specific intent’ as an element of a

crime” by way of a general instruction. Sarno, 73 F.3d

at 1487; United States v. Brimberry, 961 F.2d 1286,

1291 (7th Cir. 1992).

The Eleventh and Tenth Circuits disagree. 3

2

Circuits agree that, to be entitled to a good-faith reliance

instruction, “a defendant must show that (1) he fully disclosed all

material facts to his advisor, and (2) he relied in good faith on the

advice given to him.” Condon, 132 F.3d at 656. This may be

shown via circumstantial evidence and does not need to come

from a defendant’s own testimony. See, e.g., Kokenis, 662 F.3d at

929.

3

The Eighth and Sixth Circuits, while not having ruled on

this issue specifically, seem to lean toward the position that a

good-faith reliance defense may not be refused simply because

the jury is instructed as to the required specific intent for the

crimes at issue. See Eighth Circuit Model Criminal Jury

16

There, a good-faith reliance instruction may not be

refused simply because the court instructed the jury as

to the necessity of specific intent as an element of the

crime. Kottwitz, 614 F.3d at 1272; United States v.

Morris, 20 F.3d 1111, 1117 (11th Cir. 1994); United

States v. Haddock, 956 F.2d 1534, 1547 (10th Cir.

1992), abrogated on other grounds by United States v.

Wells, 519 U.S. 482 (1997) (“In this circuit, we have

held that general instructions on willfulness and

intent are insufficient to fully and clearly convey a

defendant's good faith defense to the jury.”). Rather,

“[w]hether the defendant fully disclosed the relevant

facts, failed to disclose all relevant facts, or concealed

information from his advisor, and relied in good faith

in his advisor are matters for the jury—and not the

court—to determine, under proper instruction.”

Kottwitz, 614 F.3d at 1272; see also United States v.

Johnson, 713 F.3d 654, 661 (11th Cir. 1983)

(“credibility choices lie within the province of the

jury.”).

Instructions, Instruction 9.08B, Committee Comments (“ ‘Good

faith’ is a theory of defense in tax evasion, failure to file a tax

return, employment tax, and false return cases. Where the

defendant has presented evidence of good faith, he or she is

entitled to a good-faith jury instruction. See Instruction 9.08A,

infra; United States v. Kouba, 822 F.2d 768, 771 (8th Cir.

1987).”); United States v. Rozin, 664 F.3d 1052, 1060–61 (6th Cir.

2012) (examining evidence presented at trial rather than

instruction concerning elements of crime and specific intent).

17

Both the district court and the Ninth Circuit

rejected Petitioners’ requested jury instructions on

their two theories of defense, good faith and good-faith

reliance, because “the court instructed the jury that it

could convict Defendants only if it found that they

‘knew federal tax law imposed a duty on [them], and

the[y] intentionally and voluntarily violated that

duty.’” 4 App. 4. Unlike the Eleventh or Seventh

Circuits, the Ninth Circuit disregarded the evidence

supporting Petitioners’ request. See ibid. Yet, when

considering that no instruction mentioned good faith,

the courts removed a question of fact from the jury in

a case where a reasonable jury could find that

Petitioners’ relied on the advice of their CPAs in good

faith, which is a complete defense to the charges

brought against them. Kottwitz, 614 F.3d at 1271.

As expounded above, Petitioners’ counsel

introduced evidence at trial that Petitioners’ did not

seek to minimize their taxes until persuaded to do so

by the CPA hired to file Didsee’s 2007 tax return. App.

4

In the Ninth Circuit, a failure to instruct the jury upon a

legally and factually cognizable defense is not subject to harmless

error analysis. Sarno, 74 F.3d at 1485. The legal adequacy of the

instructions actually given by the district court is reviewed de

novo, and the district court’s determination of the factual basis for

a requested instruction is reviewed under an abuse of discretion

standard. Ibid.; see also United States v. Chavin, 316 F.3d 666,

670 (7th Cir. 2002) (district court’s refusal to give a theory of

defense instruction reviewed de novo).

18

93–104. Petitioners’ counsel further introduced

evidence that Hsu responded to each of the CPA’s

questions, and the CPA never expressed concern over

the information provided. Ibid. The CPA then

prepared a detailed memorandum for Petitioners

explaining how to create new entities, shift expenses,

and begin royalty payments between the entities as a

proper and legal way to minimize their tax payments

by, on average, $20,000 to $150,000 annually. Ibid.;

App. 115–170. Petitioners then used the same CPA,

and her successor-in-interest, to file their next three

federal tax returns, which were the sole basis of the

charges against them. Based upon this evidence, “a

juror could find … evidence to conclude that

[Petitioners] provided all material facts to their

accountant, and … could find … evidence that

[Petitioners] relied in good faith on that accountant’s

advice and decisions.” Kottwitz, 614 F.3d at 1274; see

also Sarno, 73 F.3d at 1487 (“The quantum of evidence

sufficient to support a ‘theory of the case’ instruction is

slight indeed.”); Kokenis, 662 F.3d at 929 (“A

defendant ‘only needs to demonstrate a foundation in

the evidence, ‘however tenuous,’ to support his

theory…”).

Refusing to give Petitioners’ requested theory of

defense instruction despite this evidence is

tantamount to refusing an instruction on a theory of

defense simply because the jury is properly instructed

concerning the elements of the crime. This removes a

19

material question of fact from the jury’s consideration.

See United States v. Sassak, 881 F.2d 276, 279 (6th

Cir. 1989) (“It is undisputed that failure to properly

charge the jury as to the willfulness element of the

offense would have substantially impaired [the]

defense.”). Accordingly, this Court should grant review

to resolve the split between the Ninth Circuit—which

will refuse to instruct a jury concerning a good-faith

reliance defense in effectively every case—and the

Eleventh or Tenth Circuits—which submit the

question of good faith to the jury, under proper

instruction, as a question of fact.

B. This

Court

Should

Grant

Certiorari

To

Resolve

The

Conflict Between The Ninth

Circuit’s Decision And The Many

Decisions Of Other Circuits,

Following Guidance of This

Court, Stressing The Importance

Of Limiting The Discretion Of

The Officer Executing A Search

Warrant

As this Court held long ago: “The requirement

that warrants shall particularly describe the things to

be seized makes general searches under them

impossible and prevents the seizure of one thing under

a warrant describing another. As to what is to be

taken, nothing is left to the discretion of the officer

executing the warrant.” Marron v. United States, 275

20

U.S. 192, 196 (1927) (emphasis added). Yet, contrary

to this clear instruction, the Ninth Circuit upheld a

search warrant in this case that bestowed broad

discretion to the officers executing it, an outcome that

seemingly would not have been possible in other

Circuits.

The Ninth Circuit stated as follows: “[B]ecause

the search warrant limited the items that could be

seized to those related to a specific time period, it was

not a ‘general’ warrant requiring total suppression.”

App. 2. However, the warrant contained no such limit.

The warrant actually read: “The property sought to be

seized is limited to the records, documents, and items

described below including the time period December

2006 until January 2010...” App. 81 (emphasis added).

The word “included” has meaning—it cannot be

ignored or read out of the warrant. Quite clearly, it

directs the officers to seize documents outside the

specified dates; if the dates specified are included,

there must be documents on other dates that are also

included, so the warrant contained no temporal

limitation. Warrants without a temporal restriction

have been held overbroad, absent extenuating

circumstances. See, e.g., United States v. Abboud, 438

F.3d 554, 575–76 (6th Cir. 2006) (warrant held

overbroad for failure to limit business records by

relevant dates); United States v. Ford, 184 F.3d 566,

576 (6th Cir.1999) (“ ‘Failure to limit broad descriptive

terms by relevant dates, when such dates are available

21

to the police, will render a warrant overbroad.’”

(citations omitted)); United States v. Abrams, 615 F.2d

541, 543 (1st Cir. 1980) (warrant suppressed that

contained “no limitation as to time,” among other

shortcomings).

Unlike the Ninth Circuit, the district court

recognized the significance of the word “included.” It

stated: “while the opening paragraph included a date

range, it did so with clumsy language that could have

been read to either (1) limit the items to be seized to

the time period December 2006 until January 2010, or

(2) specify that items to be seized should include at

least the time period December 2006 until January

2010. See Search Warrant Attachment B.” App. 52.

While Petitioners disagree that the quoted language

could have served as a limitation, it doesn’t matter: a

warrant that can reasonably be read as specifying that

“items to be seized should include at least the time

period December 2006 until January 2010” gives the

executing officers discretion to treat the dates in the

warrant as license to seize documents outside the date

range. See Marron, 275 U.S. 192; Abboud, 438 F.3d at

575–76; Abrams, 615 F.2d at 543. In fact, the officers

executing the warrant did just that: they seized

emails, documents, entire computer hard drives, and

other personal information outside the specified time

period. App. 89–92. As evidenced by the documents

seized, the officers read the search warrant as

specifying that the items to be seized should include at

22

least the time period December 2006 until January

2010, not that the search was limited to that period.

Contrary to what the Ninth Circuit seemed to believe,

“[t]he government did not limit the scope of the seizure

to a time frame within which the suspected criminal

activity took place . . .” United States v. Kow, 58 F.3d

423, 427 (9th Cir. 1995).

A temporal restriction is not the only omission

in the warrant; the lack of particularity is worsened by

the absence of any reference to suspected criminal

activity to which the subsequent twenty broad

categories of documents relate. See App. 77–86; see

also, e.g., In re 6509 Fifth Ave. & Related Props., 830

F.3d 66, 99 (2d Cir. 2016) (“[F]or a warrant to meet the

particularity requirement, it must identify the alleged

crime for which evidence is sought.”). This also was

recognized by the district court but ignored by the

Ninth Circuit. App. 52 (“…the opening paragraph did

not identify what those alleged crimes were. The

government identifies no portion of the warrant that

included this information.”). Indeed, the warrant

provides even less guidance to searching officers than

warrants that simply seek evidence of the violation of

a specified statute, which have consistently been

struck down across the country as insufficient to meet

the Fourth Amendment’s particularity requirement.

See, e.g., United States v. Leary, 846 F.2d 592, 602

(10th 1988) (“An unadorned reference to a broad

federal statute does not sufficiently limit the scope of

23

a search warrant. Absent other limiting factors, such

a warrant does not comply with the requirements of

the fourth amendment.”); Voss v. Bergsgaard, 774 F.2d

402, 405–06 (10th Cir. 1985) (“Even if the reference to

[18 U.S.C.] section 371 is construed as a limitation, it

does not constitute a constitutionally adequate

particularization of the items to be seized. … [A]

warrant that simply authorizes the seizure of all files,

whether or not relevant to a specified crime, is

insufficiently particular.”) United States v. Roche, 614

F.2d 6, 8 (1st Cir. 1980) (limitation of the search at

issue to evidence relating to a violation of 18 U.S.C. §

1341 provided “no limitation at all”).

Without

any

temporal

limitation

or

specification of suspected criminal activity, the twenty

broad categories of documents sought by the warrant,

including an unbridled search and seizure of all

electronic devices, 5 is not sufficiently particular to pass

Fourth Amendment muster. See United States v.

5 See United States v. Galpin, 720 F.3d 436, 445, 447 (2d Cir.

2013) (“Where … the property to be searched is a computer hard

drive, the particularity requirement assumes even greater

importance.”); United States v. Onero, 563 F.3d 1127, 1132 (10th

Cir. 2009) (same); see also United States v. Ganias, 824 F.3d 199,

217 (2d Cir. 2016) (en banc) (the “seizure of a computer hard

drive, and its subsequent retention by the government, can give

the government possession of a vast trove of personal

information about the person to whom the drive belongs, much

of which may be entirely irrelevant to the criminal investigation

that led to the seizure.”).

24

Galpin, 720 F.3d 436, 445 (2d Cir. 2013) (warrant must

“specify the items to be seized by their relation to

designated crimes.”). Rather, the warrant’s expansive

categories are “so broad that it ‘encompassed every

business record that could be found on the premises.’”

United States v. Roberts, 852 F.2d 671, 672–73 (2d Cir.

1988); see also United States v. Bridges, 344 F.3d 1010,

1015–18 (9th Cir. 2003) (“The list is a comprehensive

laundry list of sundry goods and inventory that one

would readily expect to discovery in any small or

medium-sized business in the United States.”). It is

important to note that Chang’s home was searched—

the most private location of an individual’s life—and

Chang and her family were named targets of a warrant

lacking other guidance. See Riley v. California, 134

S. Ct. 2473, 2491 (2014) (noting sensitive nature of

records found in the home); Dow Chemical Co. v.

United States, 476 U.S. 227, 231 (1986) (discussing the

“intimacy, personal autonomy and privacy associated

with the home”); see also United States v. Falon, 959

F.2d 1143, 1148 (1st Cir. 1992); United States v.

Humphrey, 204 F.3d 65, 69 n.2 (5th Cir. 1997); 2

Wayne R. LaFave, Search and Seizure: A Treatise on

the Fourth Amendment § 4.6(a) (5th ed. 2012)

(property was not, by “its particular character,

contraband”).

This hazard, while concerning under any

circumstance, is only exacerbated by the fact that the

warrant explicitly targeted the contents of “all

25

electronic devices” without any instruction on what

the government sought from the computers. See App.

77–86; Galpin, 720 F.3d at 447–48; United States v.

Rosa, 626 F.3d 56, 61–63 (2d Cir. 2010) (“the warrant

directed officers to seize and search certain electronic

devices, but provided them with no guidance as to type

of evidence sought…. We therefore conclude that the

warrant failed to describe with particularity the

evidence sought and, more specifically, to link that

evidence to the criminal activity supported by probable

cause.”).

Petitioners were faced with the same situation

as Mr. Mink in the Tenth Circuit: “The warrant

authorized the search and seizure of all computer and

non-computer equipment and written materials in Mr.

Mink’s house, without any mention of any particular

crime to which they might be related, essentially

authorizing a ‘general rummaging’ through Mr. Mink’s

belongings for any unspecified ‘criminal offense.’”

Mink v. Knox, 613 F.3d 995, 1010–11 (10th Cir. 2010).

Warrants lacking meaningful parameters on an

otherwise limitless search, such as this one, do not

satisfy the particularity requirement. See, e.g., United

States v. Stubbs, 873 F.2d 210, 211–12 (9th Cir. 1989)

(lack of “objective standards by which an executing

officer could determine what could be seized” and “no

reference to any criminal activity” made the warrant

defective); United States v. Spilotro, 800 F.2d 959, 964

(9th Cir. 1986) (Judge Kennedy) (“The use of generic

26

descriptions … might not have been fatal had the

warrant more specifically identified the alleged

criminal activities in connection with which the items

were sought.”).

Though warrants like this one have been

routinely suppressed in other Circuits, the warrant in

this case was allowed to stand through a post-hoc

interpretation of plain language in the warrant to the

contrary: the word “included” does not serve as a

limitation, and a temporal limitation alone is

insufficient. See, e.g., Application of Lafayette

Academy, Inc., 610 F.2d 1, 5, n.4 (1st Cir. 1979).

This Court should grant review to resolve the

tension between the Ninth Circuit’s ruling—seemingly

holding that the district court’s super-imposed time

restriction suffices to correct any lack of particularity

in the search warrant—and this Court’s, and other

Circuits’, many decisions stressing the importance of

limiting the discretion of the officers executing the

search, not the discretion of the U.S. attorneys after

indictment.

C. This

Court

Should

Grant

Certiorari

To

Resolve

The

Conflict Between The Ninth

Circuit’s Decision And The Many

Decisions Of Other Circuits

Concerning Who Has Standing To

Contest A Fourth Amendment

Search

27

It is settled law that “in order to qualify as a

‘person aggrieved by an unlawful search and seizure’

one must have been a victim of the search or seizure,

one against whom the search was directed, as

distinguished from one who claims prejudice only

through the use of evidence gathered as a consequence

of a search or seizure directed at someone else.” Jones

v. United States, 362 U.S. 257, 261 (1960), overruled

on other grounds, United States v. Salvucci, 449 U.S.

83 (1980).

In affirming the district court’s conclusion that

Hsu lacks standing to challenge the search, the Ninth

Circuit disregarded facts in the record showing that

Hsu was far more than an occasional visitor to Chang’s

home: Hsu continuously maintained and occasionally

used a bedroom in the home as an overnight resident;

Hsu used the home as a business office by storing

business proposals, tax forms for Didsee Corporation,

personal and business records, and accounting for

utility expenditures in closed containers outside of

communal areas; and Hsu received mail at the home;

all with the blessing and knowledge of the owner and

operator of the property, Chang. These facts were

undisputed before the district court and admitted by

the government on appeal. See App. 40–42.

Despite this, the district court and the Ninth

Circuit likened Hsu to an adult who had simply moved

out of his parents’ house with no ongoing, continuous,

or independent relationship to the location. The Ninth

28

Circuit wrote:

the [district] court correctly concluded

that Hsu lacks Fourth Amendment

standing to challenge the search of

Chang’s house. See United States v.

$40,955.00 in U.S. Currency, 554 F.3d

752, 757–58 (9th Cir. 2009) (holding that

an adult who did not live with her

parents lacked Fourth Amendment

standing to challenge a search of their

house despite the fact that she "had free

access and a key to the house . . . [and]

stored items in [a] safe" that was opened

during the search).

The Ninth Circuit’s decision conflicts with past

opinions of this Court and other Circuits that have

conferred Fourth Amendment standing to contest a

search for similarly-situated individuals, even when

the searched location is solely a business office and not

a home at all. 6 See, e.g., Silverthorne Lumber Co. v.

United States, 251 U.S. 385, 388 (1920); Mancusi v.

DeForte, 392 U.S. 364 (1968); Minnesota v. Olson, 485

U.S. 91 (1990); Minnesota v. Carter, 525 U.S. 83, 102

6

See Riley v. California, 134 S.Ct. 2473, 2491 (2014) (noting

sensitive nature of records found in the home); Dow Chemical Co.

v. United States, 476 U.S. 227 (1986) (discussing the “intimacy,

personal autonomy and privacy associated with the home”); see

also United States v. Falon, 959 F.2d 1143, 1148 (1st Cir. 1992);

United States v. Humphrey, 204 F.3d 65, 69 n.2 (5th Cir. 1997).

29

(1998); see also Rakas v. Illinois, 439 U.S. 128, 143

(1978); Rawlings v. Kentucky, 448 U.S. 98, 104 (1980)

(considering all aspects of record in determining

whether the defendant held an expectation of privacy);

United States v. Anderson, 154 F.3d 1225, 1229–33

(10th Cir. 1998). In striking contrast, in the Tenth

Circuit, an individual that merely stored containers in

a friend’s garage, with the friend’s permission for

unfettered access to check the property, had standing

to challenge the search of both the friend’s house and

garage. United States v. Harwood, 470 F.2d 322 (10th

Cir. 1972); see also Salvucci, 448 U.S. at 91 (property

ownership is a “factor to be considered in determining

whether an individual’s Fourth Amendment rights

have been violated.”). Similarly, in the Fifth Circuit,

an individual had a reasonable expectation of privacy,

and thus standing to contest a search, in gambling

records stored under his parents’ bed even though “he

did not reside regularly at his parents’ home” because

“he kept clothing there and occasionally remained

overnight.” United States v. Haydel, 649 F.2d 1152,

1154–55 (5th Cir. 1981). In the First Circuit, a town

mayor was even found to have an expectation of

privacy in items he stored in the attic to the building

in which he maintained his office, even though the

attic was accessible by anyone in the building, because

the mayor took steps to segregate his personal items

in the attic and because of the personal nature of the

calendar book that was seized. United States v.

30

Mancini, 8 F.3d 104, 108–110 (1st Cir. 1993).

Even more than in Harwood, Haydel, or

Mancini, Hsu did more than merely store containers

in the garage, under the bed, or in the attic in Chang’s

home; Hsu used the home as a business office and a

second residence. Hsu is not attempting to assert

Fourth Amendment standing by virtue of his

relationship to his parents but in his own right. Cf.

United States v. $40,955.00 in U.S. Currency, 554 F.3d

752, 757–58 (9th Cir. 2009). Chang’s home was the

target of the search warrant precisely because Hsu

operated his small, family-owned business from that

location. As the record shows, all business activity for

Didsee took place at the searched location and all

records pertaining to the business were stored at that

location. The principal reason that location was the

subject of the search was that Hsu used that as the

location of the business of which he was the “owner

and operator.” See App. 38.

No place outside the Ninth Circuit would Hsu

have been denied standing to challenge the search of

these premises. This is a clear conflict among the

Circuits concerning a question of exceptional

significance in today’s world of extended families, bicoastal, and shared-custody arrangements—in short,

a world where the nuclear-family and single-family

home is fast becoming the exception rather than the

rule.

31

CONCLUSION

The petition for a writ of certiorari should be

granted.

Date of Original Filing: December 4, 2018

Date of Resubmission: February 11, 2019

Respectfully Submitted,

Robert E. Barnes, Esq.

BARNES LAW

601 South Figueroa St., Suite

4050

Los Angeles, California 90017

(310) 510-6211

robertbarnes@barneslawllp.com

Counsel for Petitioners