Warrants Examined by Appeals Court in Costa Case

by Vanessa Nelson  
Friday, 07 December 2007

SAN FRANCISCO, CA – Medical marijuana activist Dustin Costa finally got his day in court on December 3rd, 2007, when the 9th Circuit Court of Appeals heard argument about the trio of warrants used in his case.

The hearing was a long time coming for Costa, but the 61-year old appellant wasn’t there to see it. Instead, he passed the day inside a Texas prison, where he has been incarcerated since last spring. But being locked away is nothing new for Costa -- counting a series of earlier stays in county jails and federal holding centers, he has not set foot in the free world for nearly two and a half years.
Dustin Costa
Dustin Costa
Costa was arrested and thrown into Fresno County Jail in August 2005, when county prosecutors in Merced turned his marijuana cultivation case over to the U.S. Attorney. This change of jurisdiction stripped him of the defense he had been using in state court, since federal authorities have refused to recognize California’s laws regarding medical marijuana.

Given the 908-plant garden and the presence of a firearm, the defendant faced substantial prison time if convicted in federal court. Unable to secure bail, he was forced to remain in county jail for the entire 15 months it took for his trial to commence, hindering his ability to prepare his defense.

Though imprisoned, Costa did not take things sitting down. Along with federal defender Robert Rainwater, he fought his case aggressively, and was granted an evidentiary hearing in February 2006. This allowed Rainwater to present witnesses to challenge the warrants used in the bust, and, if successful, have the case dismissed prior to trial. Instead, U.S. District Judge Anthony Ishii let the warrants stand, clearing the path to Costa’s November 2006 jury trial and the guilty verdicts that followed.

Judge Ishii handed down a 15-year prison sentence, and Costa immediately began the process for putting the questionable warrants up for consideration by the appellate court. His hope was that, when presented with the same evidence, a panel of three 9th Circuit Court judges would rule differently on the matter than the trial judge. And Rainwater gave them plenty of reason to do so, arguing the case articulately and fielding questions with confidence during the appeals hearing last Monday.

The defense attorney summarized the investigation of the Costa case back in early 2004, during which time officers used three separate warrants for three different purposes. The first warrant was to obtain Pacific Gas & Electric records in order to establish the levels of energy use at Costa’s residence, the second was for thermal imaging of the property to determine the presence of heat sources, and the third was for the actual search of the location. Affidavits were submitted to the magistrate judge in order to secure these warrants, and the defense attorney zeroed in on five different statements made in those affidavits that were, in his judgment, false and misleading.

First off, Rainwater took issue with a claim made on the affidavits for all three warrants that Costa’s criminal history showed a prior conviction for cultivation and possession of marijuana. The defense attorney maintained that his client had not been convicted on these charges, but instead judgment had been deferred in exchange for Costa’s successful completion of a drug program. The officer who wrote the affidavits for the warrants, Jesus Lopez of the Merced/Mariposa Narcotic Task Force, testified at the February 2006 evidentiary hearing that he had experience reading criminal histories. Based on that fact, Rainwater argued, the officer should have known the difference between a conviction and a referral to drug court, and it was a deliberate misrepresentation to write on the affidavit that Costa had a prior conviction for marijuana cultivation.

The defense attorney made the same accusation of deceptive language when it came to another issue: the use of the term “confidential informant.” In the affidavits for the first two warrants, Lopez wrote that an anonymous citizen informant, which he abbreviated as “CI,” had provided him with the address of a possible indoor marijuana grow and also told him that Costa was living at that address. During the 2006 evidentiary hearing, however, Lopez described receiving the tip in a much different manner, saying the information had come from a fellow officer who received a call from an unidentified source. Lopez also testified to knowing the difference between an anonymous caller, a citizen informant and a confidential informant, even though he identified the tipster inaccurately in the first two affidavits. “A citizen informant implies someone who has no ax to grind in the case, who doesn’t have a prior criminal record,” Rainwater explained. “He testified to putting on the term “CI,” which is commonly referred to as a confidential informant, which happens to have even more credibility.” Rainwater reminded the judges that the source was just an unidentified caller, with less credibility than other informants, but Lopez misrepresented this fact when he used the term “CI” on the affidavits. “I don’t think there’s any doubt that, in warrants one and two, the affiant exaggerated his probable cause.”

Rainwater then focused on Officer Lopez’s testimony that, during several stages of the investigation, he had been unable to establish a link between Costa and the address of the suspected grow operation. Lopez had tried to follow up on the informant’s tip that Costa lived at that address, but checks of Department of Motor Vehicles records indicated that Costa resided at a different address. This discovery was omitted from the first two affidavits; however, as Lopez instead wrote that he had been unable to find driver’s license records tying Costa to the address of the suspected marijuana grow. “It’s evidence the magistrate should have considered in deciding to issue the warrant,” Rainwater argued, “whether or not there was information that he lived there, whether or not they were unable to find information that he lived there, or whether they had information that he lived someplace else.”

According to the defense attorney, there were many instances of misleading omissions and false statements being used to obtain warrants in this case. In the affidavit for the second warrant, Officer Lopez was very specific. He wrote that he had talked to Detective Kirschman of the Los Banos Police Department about the electrical usage in a grow Kirschman had investigated, and this usage was 3500 kilowatts per month. But the language changed in the affidavit for the third warrant, with the officer adding that he had spoken with other officers about multiple grow locations. Although the affidavit for the third warrant implied that Lopez had obtained information on electrical records for these multiple grow operations, he admitted during the February 2006 evidentiary hearing that these conversations did not yield any figures about energy usage. He and the other officers had merely spoken about the grow locations in, as he put it, “general terms.” Rainwater argued to the appellate judge panel that the statement on the affidavit was false and misleading, designed to artificially inflate the appearance of probable cause.

Finally, in what may be the defense’s strongest point, Rainwater brought up inaccuracies about the way Officer Lopez had compared Costa’s electricity consumption to the energy use in similar homes without marijuana grows. Lopez wrote in the affidavit for the second warrant that he had checked several PG&E bills of individuals with homes similar in size to Costa’s residence. During the 2006 evidentiary hearing, however, Lopez testified that he had not actually obtained or checked any electric bills of other homes. Instead, the officer admitted, he had simply called up people he knew and asked them about their energy consumption. He never saw any of these bills, nor did he have any way to determine the accuracy of what was reported to him. In addition, Lopez had no way of knowing how comparable these other homes were to Costa’s residence. As Rainwater pointed out, there could easily be variations due to the size of the home, the location of the home, and the season of the billing cycle.

The defense attorney’s argument on this point inspired discussion from the judges, some of whom attempted to draw inferences about Costa’s energy usage. One judge insisted the high rate of use made the property unique, speculating that “some kind of industry or business is being conducted over and above normal living consumption of electric power.” Rainwater answered by returning directly to his declaration that there was no evidence of customary power usage for a comparable residence, due to the shoddy investigatory work in the affidavits.

It was Judge Jerome Farris, however, who had the most fundamental question on the issue. One of the more-widely known judges in the court, Farris was appointed to the 9th Circuit amidst a shower of publicity for being its first African American judge. But that feel-good fame has been overshadowed by darker controversy over the past four years, during which time Judge Farris has made headline after headline in a legal struggle with the City of Seattle. It’s a case that began when Farris’s attempt to enhance his mansion’s view of Lake Washington led to the unauthorized leveling of over a hundred trees from a nearby public park. The saga later climaxed with reports of a half-million dollar settlement, but dragged on as the judge stalled for years to make payments. True to character, Judge Farris approached the Costa hearing in a typical pattern – quick to cut to the heart of the matter, but slow and cyclical after that.

“So, if we say, ‘All right – you’re right,’ then do we say, ‘So, the search warrant must be quashed because there’s not significant basis if you ruled out the false information for issuing the warrant?’” Judge Farris asked in his slow Alabama drawl.

“I’m not saying that necessarily,” Rainwater began, only to be interrupted by a hearty exclamation from the judge.

“I would hope you’re not,” Judge Farris broke in, “because it seems to me that’s what we boil down to. Don’t we have to look at that and say, ‘Is there enough?’ Even if we rule out the false statement, is there enough?”

For Rainwater, there was no doubt on the matter. “Even if we include the false statement, I think there’s not enough, ” the defense attorney said with certainty. “The relevance of the false statements is we must first exclude them and then we analyze the warrant.”

Dustin Costa, U.S. Marine
Dustin Costa, U.S. Marine

But it was more challenging to explain why the district court judge had upheld the warrants, even after the 2006 evidentiary hearing convinced him that the affidavits did indeed contain false statements. Attempting simplicity, Rainwater chalked it up to a misunderstanding of the law on Judge Ishii’s part. “The district court found that it was not false in the sense that it was intended to mislead the magistrate,” the defense attorney said. “But I think that is an incorrect understanding of the falsity necessary under Franks. Basically, it only requires the affiant knowingly or recklessly misleads the judge with false information… If it misleads the judge, then it’s a Franks violation and should be excluded from the warrant.”

The government predictably argued otherwise, relying heavily on the district court’s ruling. Assistant U.S. Attorney Karen Escobar, who prosecuted the case during trial, filed a voluminous opposition to the appeal. And though the tone of the written argument conveyed a sense of assurance, Escobar presented a less confident image during her time before the appellate judges last Monday.

Escobar began by noting to the judges that the trial had been “emotionally-charged,” although she did nothing to explain what would make feelings run high in a case such as this. Instead, the prosecutor went quickly to justifying the statements made by Officer Lopez in the affidavits. As she presented her side, she alternated between rushed recitations of her notes and episodes of nervous hesitation.

On the issue of the misrepresentation of Costa’s criminal record, Escobar maintained that the affidavits were truthful. There may be tiny technical differences between legal terms here, she conceded, but the result was the same in the end. “As this court has indicated, not long after the sentencing of the defendant in this case, in June of this year, such crimes where there is a guilty plea or a no lo contendre plea, successful participation in a drug program, even though there’s a dismissal, it is a conviction. So the officer was not wrong.”

The prosecutor also denied that Lopez had falsely implied that he discussed with other officers the electricity usage at various grow operations. “Officer Lopez testified that, between the time he obtained the search warrant for the thermal imaging and the time he obtained the warrant to actually search the residence, he talked to four other officers, and he named them in the Franks hearing,” Escobar explained. “He named them by name, other narcotics officers, and compared what would be normal kilowatt usage for other indoor grows.”

The real difficulty for the government, though, was defending Lopez’s misstatement about checking other PG&E bills of comparable homes. Nonetheless, the prosecutor gave it a go. “The basis of that statement was that he obtained verbal information – he talked to homeowners of homes of comparable size. The government would argue that that statement is subject to interpretation,” Escobar attempted. “I would argue that it was inarticulate, it was perhaps negligent, how he stated what he did, but in any event I don’t believe that it arises to the level of deliberate misrepresentation.”

Having made an effort at championing Officer Lopez, the prosecutor then did some work at insuring her position. “If the statements were false, this court is of course allowed to excise them from the warrant to determine whether or not the remaining factors still establish probable cause,” Escobar said.

As to what those factors were, however, the judicial panel had a few questions, and the soft-spoken Judge Sidney Thomas took control of the inquiries. Though Thomas’s voice was pleasant and soothing, the content of his questions left the prosecutor flustered. When Escobar found herself unable to produce the case authority that the judge sought, her poise disintegrated even further. She clung onto a few weak claims like a life preserver, repeating them over and over again, but in spite of her mantras and her floatation devices, it was clear the prosecutor was drowning.
“I assume you’re not contending that high energy usage, coupled with an anonymous tip, is enough to establish probable cause,” Judge Thomas asked. “Right?”

Escobar submitted that those two factors would not be enough to support a warrant, and went on to list the other elements of the case that, in her view, established probable cause. She mentioned surveillance done on the property that revealed two exhaust fans atop a metal cargo container, as well as material that concealed the property from view, such as sheet metal atop a high fence and a blue tarp on a wooden out-building. Ultimately, however, the prosecutor got cut off by the judges’ questions about relevance.

“That’s not enough,” Judge Thomas declared. “Concealment by a fence is not enough. A blue tarp’s not enough. So what tips this over?”

“The totality of the circumstances,” Escobar answered vaguely, starting to stammer.

“Besides that,” the judge said, dismissing the prosecutor’s attempt. “Take it one at a time. So you have – you know a tip’s not enough, energy usage is not enough, fencing’s not enough…”

“Well, I think you can consider energy usage,” the prosecutor argued. “But even if you excise that out, you still have a criminal history that the defendant, Dustin Costa, was involved in cultivation in the past, of marijuana.”

“I’m trying to get down to the specifics of your argument,” Judge Thomas explained, his gentle voice still betraying skepticism. “Are you saying that criminal history, then, coupled with all that, is enough?”

Escobar again emphasized Costa’s record, as well as the efforts he made to conceal his activities from public view. But the prosecutor also decided to add a new factor to her argument, speaking about the significance of the country setting in determining probable cause. “The fact, even, that it’s in a rural environment, out in Winton, California – a little farming community, tucked away, which the state judge was well aware of that particular area—”

Judge Thomas interrupted the prosecutor here. “Living in a rural area can’t be indicia of probable cause,” he corrected. “Otherwise, my whole state’s in trouble.”

There were muted titters of laughter in the courtroom. If Escobar had expected a panel of city slickers as the audience for her theory, she had forgotten about the Montana born-and-bred Judge Thomas. “No…no…but I think the all the factors and—”

The judge didn’t let her get very far, and his comment was incisive. “It seems to me the only one you’ve come up with that’s unique is the exhaust fan.”

Escobar tried to regroup. “No, the tall fence, in a community where, really, there are no fences, out in the country, you know, I think, draws suspicion.”

But Judge Thomas wanted citations. “What’s your best case that says fencing is enough?”

“You know, this case has a unique set of factors,” the prosecutor mused, looking pained. “I can’t point to—”

“Does that mean there’s no case?” the judge asked pointedly.

“Perhaps there is,” Escobar managed. “I don’t—”

“I don’t mean to interrupt,” Judge Thomas said, blatantly interrupting. “I gather you don’t have a case that says fencing is important. True?”

“There are cases that, that I may have cited to you, cases that say that steps taken to conceal may be considered.” The prosecutor was clearly disconcerted. She attempted a reiteration of her previous assertions about criminal records, and spoke about the importance of according deference to the judgment of officers trained and experienced in narcotics investigations. Summing up, Escobar subtly tried to slip in the suggestion that the court might not have jurisdiction to decide the matters it had been discussing. “The credibility, again, of Officer Lopez is a matter that is generally reserved for the district court, and he found – Judge Ishii found – that Officer Lopez was not lying, was credible, did not make any deliberate misinterpretations.”

Escobar came fully back into her own when given the chance to make a final statement, which she used as an opportunity to attack Costa’s integrity. “The government believes that the only deliberate misrepresentation in this case was the defendant’s presentation of a personal use defense, knowing full well that the 908 marijuana plants found in this case, and the 8.8 pounds of marijuana that were seized from his residence, were intended for distribution,” she said with zeal.

“As we’ve indicated in our brief, when this case was at state level, before it was adopted for federal prosecution – and we have submitted this before the court – a list of all the people to whom he was distributing for medicinal marijuana purposes. There was also lots of evidence found within the residence that we submitted, obviously, at trial, indicating that the marijuana was not for personal use, and this included, besides packaging material, and triple – uh, digital scales, and that sort of thing, there were labels that were used on little bottles for distribution that stated: ‘grown by D.C. hisself.’ Dustin Costa, hisself!” Escobar seemed to hurl the appellant’s own name at him like a weapon, even though Costa was obviously nowhere in sight. Then, she wrapped up her speech very primly by repeating the thesis, “That, we would submit, is the only deliberate misrepresentation.”

It was an odd use of the otherwise dignified platform of addressing a panel of appellate judges, but the cattiness appeared to enliven Escobar, and she finished with a fresh glow of vibrancy. The attorneys were then thanked and excused, left to wait in months of suspense for the deliberation and the ruling. But even with the reform community watching the case with eager eyes, and even with loving family members tying their hopes to the appeal, no one will wait for the ruling with greater anticipation than Costa hisself.

Dustin Costa Appeal to the 9th Circuit Court Transcript

by Vanessa Nelson  
Wednesday, 05 December 2007


No one has motivated activist sensibilities of central California like Dustin Costa. A former Marine and union leader, Costa brought a wealth of organizing skills and experience to the advocacy work he did on behalf of the medical marijuana movement. From his base near Merced, California, he led a group of nearly 300 volunteers on actions like citizen lobbying, protesting at important court hearings, and engineering community improvement efforts like graffiti removal. Costa was initially prosecuted on the state level for his cultivation of a collective garden of nearly 900 plants. After nearly 20 court appearances, however, local authorities handed the case over to the U.S. Attorney and the prosecution began all over again on the federal level. Costa went to jury trial in November 2006 and was found guilty on charges of the manufacture of marijuana, possession with the intent to distribute, and possession of a firearm. He has been incarcerated since his federal indictment, and is currently serving time in Big Spring, Texas. Unless he wins his current appeal, Costa is expected to be imprisoned until 2018. The hearing was held Dec 3rd and Vanessa's transcript follows. 9th Circuit Court: United States v. Costa, 3 Dec 2007

Transcript by Vanessa Nelson

JUDGE: It's a pleasure to be here, and we'll proceed with the first case on the oral argument calendar, which is United States v. Costa. Counsel?

RAINWATER: Thank you. My name is Robert Rainwater. I represent the appellant, Dustin Costa. I'd like to start off by discussing the issues raised in the motion to suppress that was filed in the district court. In this particular case, there was a series of three particular search warrant applications, including affidavits, over a short period of time. The first was for an application to obtain PG&E records for suspected residents, the second was for an application for a thermal imaging scan of that residence, and finally the third one was to actually search the residence. Prior to the motion to suppress, the defense raised the issue that under Franks, there were false and recklessly misleading allegations in the affidavits. That was based upon exhibits that we attached to our motion to suppress, the difference in statements in the three different affidavits, and a declaration that had been submitted to the court by the officer who prepared the three different affidavits. The Court granted a Franks hearing after comparing that information based upon our representations that there were false statements. We focused on five different areas where we believe there were false statements on the affidavits. The first one was a statement in all three affidavits that a criminal history showed a prior arrest and conviction for cultivation and possession of marijuana, when in fact, the officer testified at the hearing that he had a criminal history for the defendant....which indicated that there was a notation on his prior record that an arrest had been made and that there had been a drug court referral, deferred judgment, and a successful term. That's all the information that was in there. The officer testified that he's had experience reading these criminal histories -- he knows that, usually, if there's a conviction, it says conviction to a particular count, and there's a sentence there, and in this case, he knew there was not that information, and therefore his reference in all three warrants to the fact that there was a criminal history showing arrest and conviction for both counts was false, according to the officer's own testimony. The district court, in fact, found that that was a false statement, but went on to hold that, apparently, the district court found that it was not false in the sense that it was intended to mislead the magistrate. But I think that is an incorrect understanding of the falsity necessary under Franks. Basically, it only requires the affiant knowingly or recklessly misleads the judge with false information. I've cited case law in the brief where it says an affiant states I had the information different than what I put it in the warrant. That's a false statement. And if it misleads the judge, then it's a Franks violation and it should be excluded from the warrant. So I think that first area, the criminal history representation, should be excluded from all three warrants.

The second area we focused on was in the second warrant, after they got the PG&E bills, the officer stated that he checked several PG&E bills of individuals with homes of comparable size and learned that there was a certain kilowatt usage more than what was in there, when in fact --

JUDGE: Wait a minute, it's not just more, it's substantially more, right?

RAINWATER: Correct

JUDGE: It's practically an industrial level usage in a residential area.

RAINWATER: Or it could be considered as a different usage, because it's more than what would normally be required for a marijuana grow. There's several different inferences. I don't think the inference that, by itself, and there's case law that says an inference of high usage by itself --

JUDGE: -- not marijuana but it spells heavy usage and some kind of industry or business is being conducted over and above normal living consumption of electric power.

RAINWATER: Yes, I would agree with that, but in this case we don't have any indication that it's anything that was illegal. There's nothing to establish that this usage was different than other residences in the area.

JUDGE: It does establish that this residence is unique among other residences in the area.

RAINWATER: Well, I don't think we have any evidence that he checked other-- That's the point of the argument. He didn't actually check other residences in the area. What his testimony was was he asked people he knew, who he believed had similar houses, what their bills were, and he never actually checked any actual bills to see what their usage was. He never checked any --We don't have any indication whether these the same area or not. This is a rural area where it occurred. It was wintertime. We don't have any evidence about whether or not they checked their usage for an average over the whole year, their usage during the summer, the usage during the wintertime. There could be, obviously, variations.

JUDGE: So, your argument, essentially, this is normal, customary usage in this neighborhood, correct?

RAINWATER: No, my argument is that he lied to the magistrate, and there's not enough information to make a determination that that information leads to criminality here. And in fact, he indicated in the affidavit that he filed with the court and in his testimony that he never actually checked any bills. And in the third warrant, he makes a completely different statement, he admits that. Because in the third warrant he says the amount of kilowatt usage in a residence -- and I would underline 'a,' meaning a single residence -- that did not have an indoor grow was significantly less. I think it's disingenuous by the government to argue that when he says 'I checked several bills,' it doesn't really mean that. That's a false statement. The district court, magistrate, made a factual ruling -- that was a false statement. Again, I think the district court misunderstood that there's some additional requirement that the defense show that he did it on purpose to mislead the magistrate or of some ill intent. But I think the law is that if he doesn't do it by accident, in other words, if he had other information that he put in there, and if he did it by accident, or if he had other information and didn't know, that's not knowing or reckless.

JUDGE: If you had to summarize, what would you think the reason for those rulings are? That there's no basis for issuing a warrant unless there's a lie?

RAINWATER: I'm sorry -- maybe I don't understand the question.

JUDGE: I gather that you're arguing that he got his search warrant based on false information.

RAINWATER: Correct

JUDGE: So, if we say, 'All right -- you're right", then do we say, 'So, the search warrant must be quashed because there's not sufficient basis if you ruled out the false information for issuing the warrant"?

RAINWATER: I'm not saying that necessarily --

JUDGE: I would hope not, because it seems to me that's what we boil down to. Don't we have to look at that and say -- is there enough? Even if we rule out the false statement, is there enough?

RAINWATER: Even if we include the false statement, I think there's not enough. And in fact the district court found there's not enough. But the relevance of the false statement is that we have to first exclude them and then we analyze the warrant. And also it deals with whether there's a good faith exception to the warrant requirement. If there's a false statement, then we don't have a Leon issue and then there's no good faith compliance. So it's relevant on those two reasons. All I'm arguing is that we should exclude those statements when we consider the warrant, and then we consider there's probable cause, and then it goes to the Leon issue of whether there was good faith compliance, whether or not they made reckless or false statements. I don't know whether that answers the question, but that's the best I can do.

The next area we focused on was the fact that in the first two warrants this affiant said, and I quote, an anonymous citizen informant and he put in parentheses "CI," had notified him of a possible indoor marijuana grow at the address and that Mr. Costa resided at that address. When in fact he testified that the information he had was from a fellow officer who got a call from someone who was unidentified in any way, who said, this person told me there's a possible marijuana grow at a certain residence and Mr. Costa lives there. And in fact, in a final third warrant, he put down correctly the information by saying he received a tip regarding that address and the defendant resided at that address and the person, he or she, believed that there was growing marijuana at the residence. And I would point out that the officer testified that he knows the difference between, number 1, citizen informant, which implies someone who has no ax to grind in the case, who doesn't have a prior criminal record, and he testified to putting on the term "CI," which is commonly referred to as a confidential informant, which happens to have even more credibility. I don't think there's any doubt that in warrants 1 and 2, the affiant exaggerated his probable cause. And in fact, it's pretty consistent through the warrants, as he gets more information, he gets the PG&E, he gets the thermal imaging, he thinks he has more probable cause, he corrects the statements that he made that were false in the beginning warrants. For example, he doesn't need the anonymous citizen informant anymore, or CI statement, and he goes in the third warrant to what it actually is, an anonymous tip. I think it pretty clearly shows that during the course of the warrants, he began to be more confident about his probable cause, and became more truthful. And as he needed to be untruthful, he was untruthful to the magistrate in several areas.

The next area that we focused on was his statement that he was unable to locate a driver's license history for Mr. Costa at the marijuana grow address. In the first and second warrants he put that information in there, when he testified in fact that he knew that the driver's license information was that Mr. Costa had a residence that was at a different location. And in fact in the third warrant, again when he thought he had more probable cause, he put down that he had located a driver's license history with an address different from the one where the marijuana was supposedly grown, which was information which is the only information linked directly to the informant's tips -- information that Mr. Costa resided at that residence. Now, I'm not arguing that it's conclusive evidence, but it's evidence the magistrate should have considered in deciding to issue the warrant -- whether or not there was information that he lived there, whether or not they were unable to find information that he lived there, or whether they had information that he lived someplace else. And in fact the district court found that that that was an omission that was false and misleading, but then found that was not material. And I think the district court misunderstood the meaning of material. It seems to me that this definition of material was that if that had been left out, would the magistrate or the issuing judge have found probable cause. But that's not materiality. I think materiality in this context is whether or not it goes to a decision about probable cause. It's not an issue of whether a magistrate who read the affidavit wouldn't have found probable cause because of that change, but did he consider it. That makes it material, and if it's false, then it has to be excluded from the equation--

JUDGE: But the findings of the district court are findings of fact, right?

RAINWATER: Yes, the district of court made a finding of fact that there was an omission but it found it was not material, but --

JUDGE: But--

RAINWATER: -- but the materiality is not a finding of fact.

JUDGE: Excuse me, counsel.

RAINWATER: Yes.

JUDGE: The finding of fact made by the district court may have been erroneous, but could you have made any showing that the officer relied on the finding of the district court when executing the warrant?

RAINWATER: I'm not quite sure what you meant. I haven't gotten to the Leon issue yet, if that's what the court is addressing, in terms of the issue whether the officer had a good faith belief in the validity of the warrant --

JUDGE: This is the place where we're starting to get a mix of your position and the findings of fact made by the district court. That's my problem. You're saying the district court had a right to make a finding of fact, and you concede the findings of facts made by the district court were correct, or you don't.

RAINWATER: And I concede that the district court found that the criminal history was false, a finding of fact, that he checked several PG&E bills was false, and I agree that the driver's license history was an omission that was false. The district court made all those findings. The district court found that the omission was not material, which is a different finding, and which is reviewed de novo, because it is a mixed question of law and fact, and this court must then determine the law and the finding to determine whether or not it was material, and I think the court can review it de novo, and should review it de novo, under this court's previous decision in U.S. v. Luong. I am not challenging, in those cases, the district court's finding. I think the district court was erroneous in the area of the citizen informant and in the area I haven't gotten to yet which deals with the comparison to other grows.

And that's the next issue I wanted to talk about because in the second warrant, the affiant put down that he had talked with one detective in Los Banos who indicated that the usage amount in marijuana he had grown recently was 3500 kilowatts. And in the third warrant he changed that to say he knew of other indoor marijuana grow locations that showed usage higher than the known marijuana grows. In other words, he increased it to multiple marijuana grows, and he testified the reason he only put about the one in the second warrant, was that he only had exact information from one person. And in the third warrant, he said he had talked to people in general but didn't have specific kilowatt usage, he put down he increased it, even though he didn't have that information to put down, multiple locations, because that increased the probable cause and was a false statement.

Those are the five areas that I think show there were false omissions and false statements in this affidavit, or all three of the affidavits.

JUDGE: Let's assume, for the moment, leaving the question of materiality aside, that we agreed with the district court's factual finding, or at least didn't find the reversal under a clearly erroneous standard. Where does that leave you? Is that fatal to your case, or do you still think that you have enough that the warrant should be suppressed?

RAINWATER: I think even without excising any of the Franks information, under the Luong case that I cited, which indicated where you have an uncorroborated, anonymous tip as the lynchpin of your probable cause, with no other information to support it, you don't have any indicia of probable cause, and you can't rely on it under good faith. And I would point out particularly in terms of the third warrant just quickly, because I realize my time is running out, that all we have for probable cause is an anonymous tip that someone believed that Mr. Costa was growing marijuana at that residence, contradicted by the driver's license information, with no other information to substantiate that tip. For example, in other cases, we have informants saying, "I went in the residence, I've seen marijuana growing there." We don't even have that here.

JUDGE: What we have is high usage of electricity.

RAINWATER: Well, yes, with no explanation for it. In other cases where we have a stronger tip, or someone who went in the house, or more information. In other cases, we have high usage compared to similar houses in similar locations --

JUDGE: I think what Judge Farris is asking is, high usage plus an anonymous tip, if we assume that, is that enough?

RAINWATER: No, not under Leon.

JUDGE: I think that was his question.

RAINWATER: All right. I would reserve the rest of my time for rebuttal.

ESCOBAR: Good morning, Your Honors. I'm Karen Escobar. I represented the government in the district court...an emotionally charged case, and a lot of issues, but I think the only issue before the court, really, that requires analysis, because there are multiple layers of analysis with respect to the constitutionality of the warrants. It is our position that the first warrant, which sought solely the records from PG&E, there is no Constitutional issue, the defendant lacks standing because there is no reasonable expectation of privacy in the business records of a third party. The defendant has never conceded that the first warrant was not something that he could challenge. The second warrants, however, should be the focus of the Court's attention. The validity of the second warrant, which sought purely thermal imaging authorization, and the third warrant which sought the search of the residence, which was based on primarily many of the factors enunciated in the second search warrant along with the findings of the thermal imaging, which found that there was a high heat source emanating from the residence where the defendant resided. As Your Honor, Judge Farris, wrote in Motts, where the defendant makes a substantial preliminary showing that a false statement was deliberately or recklessly included in the affidavit, and was material to the magistrate's finding of probable cause, the court must hold a hearing to investigate the veracity of the affiant. It is the government's position that the defendant did not make a substantial preliminary showing to even warrant a Franks hearing in this case. Before the hearing was held, the only evidence that was submitted by the defendant was the memorandum, in his exhibits, primarily the declaration of the officer, the California Highway Patrol officer who was assigned to this narcotics task force in Merced, with eight years of experience in narcotics investigations, and participation in over a hundred marijuana cultivation cases. And in that declaration, the officer stated that, with respect to the issue of checking the PG&E bills of homes of comparable size that did not have indoor cultivation, that the bills were significantly lower -- the kilowatt usage was significantly lower. In that declaration, he stated that he did not obtain the bills and read those bills, he talked to homeowners of homes of comparable size. That is the only evidence, along with the rap sheet of the defendant, that the defendant submitted in support of a Franks hearing. The defendant identified, as he has indicated, that one of the false statements that he identified was that, in search warrants 1 and 2, the officer referred to an anonymous citizen informant --

JUDGE: Well, to get back to the PG&E bills, he said he checked several PG&E bills, that was wrong? He did not check the bills?

ESCOBAR: He clarified then at the Franks hearing and in his declaration that was submitted in support of the request for the Franks hearing, that the basis of that statement was that he obtained verbal information, he talked to homeowners of homes of comparable size. The government would argue that that statement is subject to interpretation. The officer -- his checking with -- checking the PG&E bills, is what he said in the warrant, by that he meant he talked to people with homes of comparable size. I would submit that was a semantic, or perhaps an inarticulate, or not well-crafted statement of what in fact he did. He did not deliberately misrepresent to the district court at any stage, of what he meant. He did not, for example, submit a declaration that the defendant attached in support of his Franks request that, "oh yes, I did in fact obtain actual physical documents, PG&E records of homes of comparable size." He explained what he meant. He did not deliberately misrepresent to the district court what he meant. I would argue it was inarticulate, it was perhaps negligent, how he stated what he did, but in any event I don't believe that it arises to the level of deliberate misrepresentation. Nor did the district court after the Franks hearing, after assessing the credibility of Officer Lopez, find that it was a deliberate misrepresentation. It was perhaps negligent, but it did not arise to deliberate misrepresentation.

The other finding by the district court, which we disagree with actually, was the criminal history of the defendant. The court did find, as the defense states, that the officer misrepresented the criminal history of the defendant, stating that he had been convicted for the cultivation of marijuana in the past. In the search warrants, that's what he stated. The rap sheets that were submitted in support of the Franks hearing, indicated that the defendant was in fact arrested for the cultivation of marijuana, and that he participated in a drug program, a deferred entry of judgment was made, and the case was dismissed. The officer testified that, in his mind, he believed the conviction was valid, and that issue has been clarified recently by this court, by Judge Beezer, in Norberry, in June of this year, that those kinds of convictions -- deferred entry of judgment and deferred judgments after participating in a drug program -- where there has been a guilty plea, as there was in this case, do in fact constitute a conviction. The officer was not wrong when he characterized that as a conviction in the search warrants and at the Franks hearing. The court -- the district court -- was, we believe, incorrect in finding that the statement was false. That is a legal interpretation. The officer is not a lawyer, of course, but it was not false and he truthfully stated that he believed there was a conviction. As this court has indicated, long after the sentencing of the defendant in this case, in June of this year, such crimes where there is a guilty plea or a no lo contendre plea, successful participation in a drug program, even though there's a dismissal, it is a conviction. So the officer was not wrong. The only falsity in this case was the statement of the officer that he had checked PG&E bills of people with homes of comparable size that did not have indoor marijuana grows. We would submit that that does not constitute a substantial showing necessary to trigger a Franks hearing. Now the Franks, even though one was granted, the evidence that was produced at the hearing did not reveal anything more than what was already presented before.

JUDGE: How would you state the issue that is before the court? Or decision?

ESCOBAR: If there were any false statements, and the government maintains there was only one, or possibly only one, relating to checking the PG&E bills, none of the false statements were deliberate misrepresentations or in reckless disregard of the truth. And whether those statements were material to the probable cause finding. Because if the statements were false, this court is of course allowed to excise those from the warrant to determine whether or not the remaining factors still establish probable cause. And we believe there was more than ample evidence, or more than ample factors to support a probable cause determination for the second warrant and for the third warrant. There was more than just an anonymous tip and thermal imaging. There was, with respect to the probable cause determination in the second warrant, there was follow-up surveillance by Officer Lopez, who went to the location, in Winton it was, a little rural community near Merced. He saw two large exhaust fans on top of a metal cargo container attached to a wooden out-building behind the residence. And he indicated in his warrants that the wooden out-building was obscured from the street by a very tall fence, he stated in the second warrant. And he stated in the third warrant that there was some kind of metal, sheet metal, atop that tall fence, obscuring the wooden out-building, which was where, ultimately, the marijuana clones were found, from view. And on the wooden out-building, he observed the blue tarp, which further concealed the activities within. He also indicated in the warrants that the two large exhaust fans were consistent with having a sophisticated indoor grow operation which requires the output of a large amount of energy, necessitated by high-powered indoor lights, high-intensity lights necessary for the grow, etc. He articulated that in both of the warrants. He also set forth his training and experience, and, as you also indicated in Motts, that is to be accorded a great deal of respect and deference. In the Supreme Court, the training and experience of the officers is given a great deal of deference and accordance in the probable cause determination. So, his training and experience could be properly considered his statement that the power usage at the Mercedes residence was consistent with indoor cultivation of, quote, "a large amount of marijuana plants," should be accorded great deference. His observations, viewed through his training and experience, calculate in the probable cause determination, the average electrical usage for the Mercedes residence, 5520 kilowatts per month, was extremely high, particularly in comparison to the other indoor grow at the same time, that was the Detective Kirschman grow, which was 3500 kilowatts per month. At the hearing he testified, with respect to this issue of location, singular, versus locations, plural, Officer Lopez testified that between the time he obtained the search warrant for the thermal imaging and the time he obtained the search warrant to actually search the residence, he talked to four other officers, and he named them in the Franks hearing, he named them by name, other narcotics officers, and compared what would be normal kilowatt usage for other indoor grows.

JUDGE: But I assume you're not contending that high energy usage, coupled with an anonymous tip, is enough to establish probable cause, right?

ESCOBAR: Uh, I don't believe that would be enough.

JUDGE: That's not enough. Concealment by a fence is not enough. A blue tarp's not enough, so what tips this over?

ESCOBAR: The totality of the circumstances --

JUDGE: Besides that. Take it one at a time. So, you have -- you know that a tip's not enough, energy usage is not enough, fencing's not enough...

ESCOBAR: Well, I think you can consider energy usage, even if you're excising out the statement regarding average daily electrical usage at comparable residences, checking the PG&E of other comparable... Even if you excise that out, you still have a criminal history that the defendant, Dustin Costa, was involved in cultivation in the past, of marijuana, you have kilowatt usage that is extremely high, and he states, articulates, that based on his training and experience, which he sets forth in the warrant, with at least a hundred participation in --

JUDGE: Right, but we know from Clark that an anonymous tip plus high energy usage isn't enough. So, I'm trying to get down to the specifics of your argument. Are you saying that criminal history then, coupled with all that, is enough?

ESCOBAR: Criminal history, the steps taken to conceal the activities in the residence, the exhaust, indicative of indoor marijuana cultivation, the need to release the energy that's output by the high-power lights, the electrical timers, all those types of things. The fact, even, that it's in a rural environment, out of Winton, California, a little farming community, tucked away, which the state judge was well aware of the location of that particular area --

JUDGE: Living in a rural area can't be indicia of probable cause. Otherwise, my whole state's in trouble.

(JUDGE SIDNEY THOMAS, from Montana)

Muffled laughter.

ESCOBAR: No. No, but I think all the factors and --

JUDGE: It seems to me the only one you've come up with that's unique is the exhaust fan.

ESCOBAR: No, the tall fence, in a community where, really, there are no fences, out in the country, you know, I think, draws suspicion.

JUDGE: What's your best case that says fencing is enough?

ESCOBAR: You know, this case has a unique set of factors. I can't point to --

JUDGE: Does that mean there's no case?

ESCOBAR: Perhaps there is. I don't --

JUDGE: I don't mean to interrupt. I gather you don't have a case that says fencing is important. True?

ESCOBAR: There are cases that, that I may have cited to you, cases that say that steps taken to conceal may be considered.

JUDGE: Do you have any cases on exhaust fans?

ESCOBAR: Cases on equipment...um...then the third warrant is also adds, besides these factors besides these ones we've been discussing, is the results of the thermal imaging, which indicated a high heat source, so electrical usage, high heat source, training and experience, the observations viewed through the lens of training and experience, the rural community, the criminal history, the anonymous tip, as well, is considered in the calculus. Even in the absence of probable cause, however, I think the court, the district court, I think rightly found that the good faith exception did apply, and we would ask that this court uphold the -- either under good faith or probable cause -- the warrants. As in Freitas, which, again, Your Honor wrote, law enforcements who reasonably act in reliance on search warrants, should be entitled to rely on the Leon good faith exception for good faith. And it applies here. The only relevant exceptions to the good faith exception, which we need to be concerned with, are whether the affidavit was so lacking in indicia of probable cause as to render official belief in its existence entirely unreasonable, and whether the judge in issuing the warrants was misled. And, as we've argued, as the district court found, Officer Lopez did not mislead Judge Hanson for search warrants 2 and 3. There were no steps taken to deliberately misrepresent what he had done in the investigation and to support a probable cause determination. Whether the affidavit was so lacking in indicia of probable cause, well the district court, Judge Ishii, indicated that this was a close case, and I believe officers who executed the warrant reasonably relied on the warrant. They are not lawyers, obviously. I think there was enough in the warrant for them to believe that it was a valid warrant. They are not going to second guess a state judge's finding that there's sufficient probable cause in the two warrants. The good faith exception applies. The other exceptions, to the good faith exception, do not, in the absence of evidence that Officer Lopez was intentionally dishonest, rather than negligent, or simply inarticulate, the application of the extreme sanction of suppression is not appropriate. The credibility, again, of Officer Lopez, is a matter that is generally reserved for the district court, and he found, Judge Ishii found, that Officer Lopez was not lying, was credible, did not make any deliberate misrepresentations. The government believes that the only deliberate misrepresentation in this case was the defendant's presentation of a personal use defense, knowing full well that the 908 marijuana plants found in this case, and the 8.8 pounds of processed marijuana that were seized from his residence, were intended for distribution. As we've indicated in our brief, when this case was at state level, before it was adopted for federal prosecution, the defendant and his lawyer submitted, and we have submitted this before this court, a list of all the people to whom he was distributing for medicinal marijuana purposes. There was also lots of evidence found within the residence that we submitted, obviously, at trial, indicating that the marijuana was not for personal use, and this included, besides packaging material, and triple -- uh, digital scales, that sort of thing, there were the labels that were used on little bottles for distribution that stated "Grown by D.C. Hisself." Dustin Costa, hisself. That, we would submit, is the only deliberate misrepresentation. We would ask the court affirm the judgment and conviction. If there are further questions, with respect to any of the issues, I would be glad to assist in answering those questions. Thank you.

JUDGE: And we both understand there are a lot of issues in the case, and you have briefed those extensively and we've read the briefs, so the fact that you didn't argue them today is understandable. We wanted to, appropriately, hit the high points of the case. Thank you both for your arguments.