© 2017 The Texas Lawbook.
By Mark Curriden
(Aug. 23) – Armed federal agents raided a hangar at David Wayne Hooks Airport near Tomball on March 22, 2016, to seize tax records of Houston businessman Justin Smith and his company, ASI Aviation.
Court records show the IRS based the search on a sealed warrant in which an informant – believed by lawyers to be an employee who planned to start his own competing business – claimed something criminal was going on. IRS agents interviewed Smith’s employees and clients.
Sixteen months later, most of the private aviation company’s pilots and employees quit, Smith’s clients stopped using his business and Smith declared bankruptcy.
The IRS, however, has not charged Smith or the business with a crime. Despite so, the government will not even allow Smith or his lawyers to see the search warrant affidavit to find out why it raided his business or what laws he is suspected of violating.
“The search warrants killed his business,” says Houston criminal defense attorney Michael Minns. “The IRS interviewed his clients, workers and neighbors, telling them he is a criminal. They think he’s smuggling drugs or illegals across the border. It’s completely unfair.”
This week, the U.S. Court of Appeals for the Fifth Circuit issued an unheralded but potentially monumental opinion that some legal experts say could allow individuals and businesses greater access to court records in criminal investigations during the pre-indictment stages.
In a 23-page opinion, a three-judge panel rejected the arguments of federal prosecutors that there is no right to access of court records, including search warrants and affidavits, before criminal charges have been filed. The court ruled that judges should consider each request for access to records on a case-by-case basis with the presumption being that they are public, including those in the pre-indictment phase.
U.S. District Judge Xavier Rodriguez of San Antonio, sitting by designate on the Fifth Circuit panel, stated that there are “affirmative policy justifications behind the common law right of access to judicial documents.”
“In sum, we extend the case-by-case approach previously used by this court for assessing the common law qualified right of access to judicial records to situations involving an individual’s request to access pre-indictment warrant materials, such as the affidavits in this case,” the court ruled.
The Fifth Circuit’s decision reversed a lower court ruling that Judge Rodriguez said “made no mention of the presumption in favor of the public’s access to judicial documents” and “did not articulate any reasons that would support sealing the final order.”
Minns praised the Fifth Circuit opinion as a precedent that benefits everyone who favors open and transparent government.
“Search warrants are enormously powerful and can destroy people’s lives and destroy their reputations,” Minns says. “The craziness is shown in the government’s argument in this case that my client cannot see the sworn affidavit against him because the document contains private federal tax records in them.
“Yes, they are his own tax records, which he already has,” Minns says. “I believe there is something in those affidavits that they are afraid is wrong or bad and they don’t want us to find out about it.”
David Coale, an appellate law expert at Lynn Pinker Cox & Hurst, said the opinion is important because it requires federal judges to explain in detail why they are denying public access.
“We are entitled to know what the government is doing, especially in criminal cases,” Coale says. “If businesses or business leaders are the target of an investigation, they should be able to know why their businesses are being raided and who is pointing the finger at them.”
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