Amicus Curiae Brief — James Harper, Petitioner v. Michael Faulkender, Acting Commissioner of Internal Revenue Service, et al.

Supreme Court briefMar 28, 2025

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No. 24-922

In the Supreme Court of the United States

_________

J AMES H ARPER ,

Petitioner,

D OUGLAS O‘D ONNELL , A CTING C OMMISSIONER OF

I NTERNAL R EVENUE S ERVICE , ET AL .,

Respondents.

_________

On Petition For A Writ Of Certiorari

To The United States Court Of Appeals

For The First Circuit

_________

BRIEF OF X CORP. AS AMICUS CURIAE

IN SUPPORT OF PETITIONER

_________

AMY P EIKOFF

Pacific Legal Foundation

555 Capitol Mall,

Suite 1290

Sacramento, CA 95814

(916) 419-7111

apeikoff@pacificlegal.org

MARK MILLER

Counsel of Record

Pacific Legal Foundation

4440 PGA Blvd.,

Suite 307

Palm Beach Gardens, FL

33410

(561) 691-5000

mmiller@pacificlegal.org

Counsel for Amicus Curiae X Corp.

QUESTION PRESENTED

The Internal Revenue Service used a subpoena to

obtain without a warrant from a cryptocurrency exchange three years of transaction records concerning

over 14,000 of the exchange’s customers, including Petitioner James Harper’s records. Mr. Harper’s contract with the exchange made clear that the records

belonged to him and that the exchange would protect

his privacy. The transaction records at issue opened

an especially intimate window into Harper’s life because they not only revealed his historical cryptocurrency transactions but also enabled tracking of his

transactions into the future. The court below relied

upon the third-party doctrine to hold that IRS’s warrantless search and seizure of Harper’s financial records did not violate the Fourth Amendment.

The question presented is:

Does the Fourth Amendment permit warrantless

searches of customer records held by third-party service providers if the records are contractually owned

by the customer, or if those records enable surveillance of future behavior? If not, does the third-party

doctrine need to be discarded or modified to prevent

such searches?

TABLE OF CONTENTS

Identity and Interest of Amicus Curiae ..................... 1

Introduction and Summary of the Argument ............ 2

Argument .................................................................... 7

I. The Third-Party Doctrine Originated In

“Secret Agent Cases,” Which the Common

Law Would Address under the Doctrine

of Illegal Contract. This Explains Why

There Was No “Reasonable Expectation

of Privacy” In Those Cases ............................... 8

II. The Common Law Of Contract Traditionally

Protected Privacy, And So Is A Proper Lens

Through Which To Analyze The Third-Party

Doctrine ........................................................... 12

III. This Approach Makes It Possible to Limit

the Third-Party Doctrine’s Application

Without Resorting To “Balancing . . .

Weighty or Incommensurable Principles” ...... 15

Conclusion ................................................................. 18

iii

TABLE OF AUTHORITIES

Page(s)

Cases

Byrd v. United States,

584 U.S. 395 (2018) ............................................... 6

Carpenter v. United States,

585 U.S. 296 (2018) ..................2–5, 7, 9–10, 12–18

Harper v. Werfel,

118 F.4th 100 (1st Cir. 2024) ............................ 2, 6

Katz v. United States,

389 U.S. 347 (1967) ............3, 5, 7, 9–10, 13, 16–17

Lange v. California,

594 U.S. 295 (2021) ......................................... 7, 15

Leaders of a Beautiful Struggle v. Balt.

Police Dep’t,

2 F.4th 330 (4th Cir. 2021) .................................... 3

Smith v. Maryland,

442 U.S. 735 (1979) ......................2–3, 8–10, 16–18

United States v. Chatrie,

107 F.4th 319 (4th Cir. 2024) ............................ 4–5

United States v. Jones,

565 U.S. 400 (2012) ............................... 1, 6, 13, 17

United States v. Miller,

425 U.S. 435 (1976) ......................2–3, 8–10, 16–18

United States v. Smith,

110 F.4th 817 (5th Cir. 2024) ............................ 4–5

U.S. Constitution

U.S. Const. amend. IV ..... 1–2, 5–10, 12, 14–15, 17–18

Rules

Sup. Ct. R. 37.2 ........................................................... 1

Sup. Ct. R. 37.6 ........................................................... 1

Other Authorities

5 Williston, Samuel & Lord, Richard A.,

A Treatise on the Law of Contracts

§ 12:1 (4th ed. 2009) ............................................ 11

Amar, Akhil Reed, Fourth Amendment

First Principles,

107 Harv. L. Rev. 757 (1994) ................................ 7

Brandeis, Louis D. & Warren, Samuel

D., The Right to Privacy,

4 Harv. L. Rev. 193 (1890) ............................ 12–13

Conger, Kate, Elon Musk’s X Partners

With Visa to Provide Financial

Services, NY Times (Jan. 28, 2025),

https://tinyurl.com/yrk4y9bx................................. 1

Cuddihy, William J., The Fourth

Amendment: Origins and Original

Meanings 602-1791 (Oxford Univ.

Press 2009)............................................................. 6

Del Rosso, Christina & Bast, Carol M.

Protecting Online Privacy in the

Digital Age: Carpenter v. United

States and the Fourth Amendment’s

Third-Party Doctrine,

28 Cath. U. J. L. & Tech. 89 (2020) ..................... 12

Greenwald, Glenn, NSA collecting

phone records of millions of Verizon

customers daily, The Guardian (June

6, 2013), https://tinyurl.com/3rehu775............................................... 9

If These Walls Could Talk: The Smart

Home and the Fourth Amendment

Limits of the Third-Party Doctrine,

130 Harv. L. Rev. 1924 (2017) .............................. 8

Kerr, Orin S., The Case for the ThirdParty Doctrine,

107 Mich. L. Rev. 561 (2009)................................. 8

Logan A., Wayne & Linford, Jake,

Contracting for Fourth Amendment

Privacy Online,

104 M.N. L. Rev. 101 (2020)................................ 15

Peikoff, Amy L., Of Third-Party

Bathwater: How to Throw Out the

Third-Party Doctrine While

Preserving Government’s Ability to

Use Secret Agents,

88 St. John’s L. Rev. 349 (2014) .............. 11–12, 16

Wade, John W., et al., Prosser, Wade

and Schwartz’s Cases and Materials

on Torts (The Foundation Press

1994)..................................................................... 12

IDENTITY AND INTEREST OF

AMICUS CURIAE 1

“Awareness that the government may be watching

chills associational and expressive freedoms.” United

States v. Jones, 565 U.S. 400, 416 (2012) (Sotomayor,

J., concurring). X Corp., an American technology company headquartered in Bastrop, Texas, strives to protect the associational and expressive freedoms of users of its real-time information-sharing app and associated services. X understands that this means also

ensuring its users’ Fourth Amendment rights are respected regarding the data X collects and processes.

While providing services to users, X collects, processes, and stores multiple classes of sensitive user

data which could be the subject of broad, suspicionless

subpoenas by law enforcement or other government

agencies, including financial data. 2 X believes contractual promises, like those it makes to its users in

its Terms of Service, should be recognized as relevant

to the protection their data receives under the Fourth

Amendment.

1 Pursuant to Rule 37.2, Amicus Curiae provided timely notice

to all parties. Pursuant to Rule 37.6, Amicus Curiae affirms that

no counsel for any party authored this brief in whole or in part,

and no counsel or party made a monetary contribution intended

to fund the preparation or submission of this brief. No person

other than Amicus Curiae, their members, or their counsel made

a monetary contribution to its preparation or submission.

2 Currently, X collects, stores, and processes financial data pur-

suant to its sales of advertising, as well as its subscription and

advertising revenue-sharing features. And there are plans for its

affiliates to launch a range of financial services offerings, including peer-to-peer payments. See, e.g., Kate Conger, Elon Musk’s

X Partners With Visa to Provide Financial Services, NY Times

(Jan. 28, 2025), https://tinyurl.com/yrk4y9bx.

INTRODUCTION AND

SUMMARY OF ARGUMENT

The First Circuit’s opinion, which is the subject of

the petition before this Court, exemplifies the confusion about the third-party doctrine that exists in the

wake of this Court’s ruling in Carpenter v. United

States, 585 U.S. 296 (2018). By granting Petitioner

James Harper a writ of certiorari, this Court can clear

up the confusion and restore Fourth Amendment protections for individuals guilty of nothing more than

participating in an increasingly specialized and technologically advanced economy.

In its review of the district court’s dismissal of

Harper’s suit, the First Circuit affirmed, holding that

Harper had no cognizable Fourth Amendment interest in his Coinbase records. It held that the thirdparty doctrine applied in this case, and therefore the

Fourth Amendment was not implicated when: (1)

Harper shared sensitive financial information with

“third-party” Coinbase; (2) Harper used Coinbase’s exchange to deposit and conduct transactions in Bitcoin;

and then (3) Coinbase, after first resisting the IRS’s

dragnet subpoena, eventually shared Harper’s information—along with that of 14,354 other Coinbase customers—with the IRS, after a court ordered it to obey

a scaled back version of that subpoena. Harper v.

Werfel, 118 F.4th 100, 107 (1st Cir. 2024) (relying on

Smith and Miller to conclude “the account information

obtained by the [IRS] in this case falls squarely within

this ‘third party doctrine’ line of precedent.”). Amicus

X Corp. agrees with Petitioner Harper that the First

Circuit failed to correctly interpret and apply the limitations of the third-party doctrine established in

Carpenter.

Nevertheless, disagreements about the application

of the third-party doctrine post-Carpenter do not surprise. As Justice Gorsuch noted in his dissent, the

Carpenter majority left lower courts “two amorphous

balancing tests, a series of weighty and incommensurable principles to consider in them, and a few illustrative examples.”

Carpenter, 585 U.S. at 397

(Gorsuch, J., dissenting).

The first test is the infamous Katz “reasonable expectation of privacy” test. Katz v. United States, 389

U.S. 347, 361 (1967) (Harlan, J., concurring). The second is new, formulated by a majority evidently reluctant to further extend the third-party doctrine—previously extended in the 1970s cases Smith v.

Maryland, 442 U.S. 735 (1979) and United States

v. Miller, 425 U.S. 435 (1976)—to its logical extreme.

Narrowing those cases’ holdings, the Carpenter majority established “a second Katz-like balancing inquiry,

asking whether the fact of disclosure to a third party

outweighs privacy interests in the ‘category of information’ so disclosed.” Carpenter, 585 U.S. at 397

(Gorsuch, J., dissenting).

As a result, judges are left asking questions such

as:

• How long is the “long term” to which data must

correspond before an expectation of privacy in

it becomes “reasonable”? See, e.g., Leaders of a

Beautiful Struggle v. Balt. Police Dep’t, 2 F.4th

330, 341 (4th Cir. 2021) (interpreting Carpenter

to “solidif[y] the line between short-term tracking of public movements—akin to what law enforcement could do ‘[p]rior to the digital age’—

and prolonged tracking that can reveal intimate details through habits and patterns.”);

•

How “sensitive” must the data be? See, e.g.,

United States v. Smith, 110 F.4th 817, 832 (5th

Cir. 2024) (quoting Carpenter among other

precedents noting that location data provides

“an intimate window into a person’s life, revealing not only his particular movements, but

through them his ‘familial, political, professional, religious, and sexual associations.’ ”) (citations omitted);

How “intrusive” is the invasion? See, e.g.,

United States v. Chatrie, 107 F.4th 319, 331

n.18 (4th Cir. 2024) (rejecting Chatrie’s argument that “the accuracy with which [Google]

Location History can estimate a user’s location”

made the invasion intrusive enough to outweigh the fact that information about an “individual trip viewed in isolation” does not “reveal

intimate details through habits and patterns.”).

Cf., Smith, 110 F.4th at 833 (“While it is true

that geofences tend to be limited temporally,

the potential intrusiveness of even a snapshot

of precise location data should not be understated.”) (citations and quotations omitted);

How “voluntary” must the sharing be to outweigh other “reasonableness” factors? Chatrie,

107 F.4th at 319 (finding, after noting that

Google’s Location History sharing feature was

turned off by default, could be reset to that default at any time, and that ample notice of the

effect of turning on this feature was given, that

“unlike with CSLI [at issue in Carpenter], a

user knowingly and voluntarily exposes his Location History data to Google.”). Cf. Smith, 110

F.4th at 835 (“As anyone with a smartphone

can attest, electronic opt-in processes are

hardly informed and, in many instances, may

not even be voluntary. . . . [In] Google’s Location History opt-in process . . . users are bombarded multiple times with requests to opt-in

across multiple apps. . . . Even Google’s own

employees have indicated that deactivating Location History data based on Google’s ‘limited

and partially hidden warnings’ is ‘difficult

enough that people won’t figure it out.’ ”) (citations omitted); and

• Should courts focus on “capabilities” of the relevant technology, or look only at “results,” the

data shared in a given case? See id. at 834 n.8

(disagreeing with the Fourth Circuit’s interpretation of Carpenter in Chatrie, that standing to

challenge geofencing on Fourth Amendment

grounds depends on one “contend[ing] that the

warrant revealed his own movements within

his own constitutionally protected space,” i.e.,

the results achieved, and noting that, by contrast, the Carpenter majority “analyzed the general capabilities of CSLI, and asked whether

the ability for CSLI ‘to chronicle a person’s past

movements through the record of his cell phone

signals’ created an expectation of privacy”)

(citation omitted).

And so on. This miasma is, as Gorsuch noted, “where

Katz inevitably leads.” Carpenter, 585 U.S. at 397

(Gorsuch, J., dissenting).

Besides causing judicial headaches, the third-party

doctrine enables government to gather broad swaths

of information without first obtaining a warrant based

on probable cause and particularized suspicion. This

undermines property rights and privacy—necessary

for enjoyment of associational and expressive freedoms—and contradicts the Founders’ understanding

of our Fourth Amendment protections. See William J.

Cuddihy, The Fourth Amendment: Origins and Original Meanings 602-1791 776 (Oxford Univ. Press

2009) (“[Individualized warrants] preponderated as

the orthodox protocol of search and seizure in

1791. . . . [W]arrants enjoyed the overriding mandate

of established usage” by 1800.) (citation omitted).

Moreover, it prevents “third parties” like Coinbase

and X Corp. from acting according to their own judgment in relation to both government and their users.

Coinbase and X Corp. should not be coerced into helping governments undermine their users’ privacy and

property rights through an end run around the Fourth

Amendment.

Amicus X Corp. urges this Court to grant Petitioner

Harper’s Petition for a Writ of Certiorari. This case

presents an opportunity for the Court to clarify this

area of constitutional law by tethering its decision to

the Fourth Amendment’s original meaning: all

searches of private property require warrants based

on probable cause and particularized suspicion, Jones,

565 U.S. at 404-10 (holding a search occurred when

government obtained information by means of trespass on a constitutionally protected “effect”) 3, and a

search occurs when government gains access to

“houses, papers [or] effects,” U.S. Const. amend. IV,

that belong to a person under the law. Byrd v. United

3 The First Circuit declined to find for Petitioner Harper based

on this rationale, describing such a theory as “novel,” and stating,

incorrectly, that Harper had “ma[de] no effort in his opening brief

to explain the legal source of the interest he asserts.” Harper,

118 F.4th at 111.

States, 584 U.S. 395, 403-04 (2018) (“[Katz] supplements, rather than displaces, the traditional propertybased understanding of the Fourth Amendment.”) (internal citation and quotation omitted).

On this view—and even on an alternative originalist view centering on the Amendment’s promise that

all searches and seizures be “reasonable” 4—this tethering is achieved by recourse to the common law. See

Lange v. California, 594 U.S. 295, 310 (2021) (noting

the common law may be instructive as to what sort of

searches the Founders would consider reasonable, and

the Fourth Amendment must be interpreted to “provide at a minimum the degree of protection it afforded

when it was adopted”) (internal citations and quotations omitted).

In particular, this case and others involving

searches of financial and other sensitive data held by

third parties should be viewed through the lens of the

common law of contract as understood by our Founders. This approach will provide a clear, bright-line rationale for limiting the third-party doctrine’s scope in

a manner both consistent with the Carpenter result

and appropriate for our technological age.

4 See Akhil Reed Amar, Fourth Amendment First Principles,

107 Harv. L. Rev. 757 (1994) (presenting and arguing for a “refurbished” Fourth Amendment, with reference to both the

amendment’s text and extensive analysis of the common law).

But see Carpenter, 585 U.S. at 355-58 (Thomas, J., dissenting)

(comparing “reasonable” as used in the text of the Fourth Amendment to the term’s use and significance in the Katz test). “Suffice

it to say, the Founders would be confused by this Court’s transformation of their common-law protection of property into a ‘warrant requirement’ and a vague inquiry into ‘reasonable expectations of privacy.’ ” Id. at 356-57.

ARGUMENT

The Third-Party Doctrine Originated In

“Secret Agent Cases,” Which the Common

Law Would Address under the Doctrine of

Illegal Contract. This Explains Why There

Was No “Reasonable Expectation of Privacy” In Those Cases

The third-party doctrine in its pre-Carpenter form

says the Fourth Amendment is not implicated when:

(1) you share information with a third party—for example, your bank, your phone company, Coinbase, or

X Corp.—even for a limited purpose; and (2) the third

party then shares the information with the government. Orin S. Kerr, The Case for the Third-Party Doctrine, 107 Mich. L. Rev. 561, 563 (2009). It is important, however, to recall the historical underpinnings of the doctrine to understand its appropriate

scope. The genesis of the doctrine is a series of midtwentieth century “secret agent” cases involving criminals or criminal organizations. Id. at 567-68 (discussing “secret agent” cases heard by the Supreme Court

between 1952 and 1971). Think of Tony Soprano divulging information about his illegal businesses to a

“business associate” turned government informant,

and a prosecutor using the informant’s disclosures to

indict and convict Soprano. But then, in the 1970s, in

Smith and Miller, the scope of the doctrine was drastically expanded to apply not only to mafia dons, but

also to any ordinary, innocent citizen who shares information with third parties, whether while doing

business, or simply enjoying life.

Alarm bells did not ring immediately. Back then

we shared exponentially less information with third

parties than we do today. See Note If These Walls

Could Talk: The Smart Home and the Fourth Amendment Limits of the Third-Party Doctrine, 130 Harv. L.

Rev. 1924, 1925 (2017) (“Our daily activities increasingly involve turning over information to third parties

in order to undertake basic transactions, such as

online banking, email, internet browsing, and cell

phone use.”). But the digital age brought about a new

set of pernicious consequences the Court could never

have anticipated. In 2013 the world learned, for example, that the National Security Agency had continuously collected phone record metadata of all Verizon

customers for several years. See Glenn Greenwald,

NSA collecting phone records of millions of Verizon

customers daily, The Guardian (June 6, 2013). 5 Attempts to chisel away at the third-party doctrine followed, but without overturning Smith and Miller outright.

Carpenter, with its additional balancing test, is a

prime example. Yes, it’s true that Carpenter’s result

is consistent with the original meaning and protections of the Fourth Amendment. Further, a court that

properly applied Carpenter’s complex rubric should

reach the conclusion that the IRS violated the rights

of Harper and 14,354 of his fellow Coinbase customers

in this case. But the law in this area is, to be blunt, a

mess. Amicus X Corp. believes this Court should

grant Petitioner Harper’s writ of certiorari to finish

what it started in Carpenter. This Court, with the

benefit of decades of hindsight on the effects of its

post-Katz expansion of the third-party doctrine,

should clarify the law in this area and at the very least

continue to narrow or distinguish Smith and Miller,

5 https://tinyurl.com/3rehu775.

as both failed to justify the third-party doctrine in its

pre-Carpenter form. 6

6 The only justification offered by this Court in Miller for extending the doctrine beyond the context of the secret agent cases

was that Congress had “assumed” the “lack of any legitimate expectation of privacy concerning the information kept in bank records” in enacting the Bank Secrecy Act, which had “a high degree

of usefulness in criminal, tax, and regulatory investigations and

proceedings.’ ” Miller, 425 U.S. at 442-43 (citations omitted).

Later this Court, in Smith, merely applied the Katz-mediated extension of the doctrine from Miller, without any reference to the

questionable rationale provided by the Miller Court. This facilitated the Smith Court’s evasion of the question-begging implications of this “justification,” pointed out not only by the dissenting

Justices, but also in this Court’s own majority opinion:

Situations can be imagined, of course, in

which Katz’ two-pronged inquiry would provide

an inadequate index of Fourth Amendment protection. For example, if the Government were

suddenly to announce on nationwide television

that all homes henceforth would be subject to

warrantless entry, individuals thereafter might

not in fact entertain any actual expectation of

privacy regarding their homes, papers, and effects. . . . In determining whether a “legitimate

expectation of privacy” existed in such cases, a

normative inquiry would be proper.

Smith, 442 U.S. at 740 n.5.

The mere existence of a statute, even one that is useful in

“criminal, tax, and regulatory investigations,” Miller, 425 U.S. at

442-43 (citations omitted), is not, without persuasive normative

argument, enough to vitiate one’s “legitimate expectation of privacy”—not to mention a property interest protected by the

Fourth Amendment. Especially considering the normative arguments against the third-party doctrine that have been raised

since the 1970s, including those presented by the instant case,

reconsideration of this Court’s rulings in Smith and Miller is appropriate.

Justification is due because, although few would

expect to retain a legitimate expectation of privacy

when they entrust information to confederates in

criminal activity, the same cannot be said of ordinary

individuals sharing information with service providers in their daily lives. The distinction lies in the common-law doctrine of illegal contract, which deems unenforceable any agreement made intentionally to

achieve an illegal end. See 5 Samuel Williston &

Richard A. Lord, A Treatise on the Law of Contracts

§ 12:1 (4th ed. 2009).

If Tony Soprano makes an “arrangement” with a

“business associate,” any collateral promises are unenforceable, including promises to keep it a secret.

But terms of service agreements between users and

Coinbase or X Corp. would not be deemed illegal contracts, merely because some users happened to have

also committed crimes or are otherwise properly subject to government investigation. See generally Amy

L. Peikoff, Of Third-Party Bathwater: How to Throw

Out the Third-Party Doctrine While Preserving Government’s Ability to Use Secret Agents, 88 St. John’s L.

Rev. 349 (2014). A fortiori, that one user breaks the

law does not entitle the government to trample on the

rights of other, law-abiding users ensnared by constitutionally insufficient, dragnet subpoenas or similarly

unreasonable searches. Accordingly, promises made

to users by these companies are enforceable under

common law, just as (to use another common law analogy) records entrusted to a bailee still belong to the

bailor. Carpenter, 585 U.S. at 399 (Gorsuch, J., dissenting). 7 Both users and bailors retain privacy and

property interests entitled to Fourth Amendment protection. Nothing less is “reasonable.” 8

II. The Common Law Of Contract Traditionally

Protected Privacy, And So Is A Proper Lens

Through Which To Analyze The Third-Party

Doctrine

“The Right to Privacy,” Louis D. Brandeis &

Samuel D. Warren, The Right to Privacy, 4 Harv. L.

Rev. 193 (1890), written by future Supreme Court justice Louis Brandeis and partner Samuel Warren, has

been credited with giving rise to a distinct “right of

privacy.” See John W. Wade et al., Prosser, Wade and

Schwartz’s Cases and Materials on Torts 947 (The

Foundation Press 1994). Their core thesis was that

this right of privacy was necessary to prevent or redress the publication, without the subject’s permission, of private facts, surreptitiously taken photographs, and the like. Brandeis & Warren, supra, at

195-96. Notably, the authors did not argue that the

Although Justice Gorsuch wrote in dissent in Carpenter, he

did so on the narrow ground that Carpenter did not invoke contract- or property-based arguments under the Fourth Amendment. To the extent Justice Gorsuch noted that such arguments

could potentially provide alternative bases for a Fourth Amendment violation, the Carpenter majority did not reach the issue.

8 See generally Peikoff, Third-Party, supra.