Insights
Publications

The Fourth Amendment Implications of Sharing Server Space

7/19/2017 Articles

The prosecution of Martin Shkreli, whom the BBC has called “the most hated man in America,” reveals some important lessons about the Fourth Amendment protections against search and seizure in the digital corporate context: physical access to documents on a server may trump actual ownership of records.

In December 2015, former head of the pharmaceutical company Retrophin, Martin Shkreli, was indicted for conspiracy to commit securities fraud. Federal prosecutors in Brooklyn have alleged that Shkreli raided Retrophin to pay investors in two hedge funds he managed, MSMB Capital Management LP and MSMB Healthcare Management LP. In response to a government subpoena following Shkreli’s indictment, the publicly-traded Retrophin produced troves of MSMB Capital and MSBM Healthcare-related documents. Shkreli subsequently moved to suppress those documents, arguing their use violated his Fourth Amendment protection against searches and seizures.

Shkreli argued that, although he used his MSMB entities’ email to conduct Retrophin business, and although MSMB entity information was stored on Retrophin servers, the produced MSMB information was password protected and thus not accessible to Retrophin. Therefore, in accessing and producing password-protected information, Retrophin had violated Shkreli’s Fourth Amendment rights.

The government responded, sending the court a letter saying Retrophin had confirmed that no separate password was required to access MSMB entity emails stored on the Retrophin servers, and that Retrophin, not Shkreli or MSMB entities, paid for and maintained the servers that housed the documents at issue. Therefore, the government asserted Shkreli’s Fourth Amendment rights were not violated by the production of the MSMB entity data.

Judge Kiyo Matsumoto denied Shkreli’s suppression attempts, finding that Shkreli did not have a reasonable expectation of privacy in the documents at issue. Entities that share physical or server space should learn from Shkreli’s experience. To protect against unauthorized government searches and seizures, entities sharing servers should password protect distinct-entity documents and consider sharing the costs of hosting servers.

Firm Highlights

News

Farella Braun + Martel Shortlisted for Three 2021 Benchmark Litigation Awards

Northern California legal powerhouse Farella Braun + Martel has been shortlisted for three 2021 Benchmark Litigation awards. The firm was shortlisted for “San Francisco Firm of the Year” and in the California White-Collar Crime...

Read More
News

Farella Braun + Martel Elevates Five to Partner

Read More
News

Farella Braun + Martel Ranked Among “Best Law Firms” by U.S. News & World Report and Best Lawyers

SAN FRANCISCO, November 5, 2020: Farella Braun + Martel earned national and regional rankings across a number of practice areas in the U.S. News & World Report and Best Lawyers® release of the “Best...

Read More
Publication

Recommended Practices for Conducting Internal Investigations

William Keane served as the chair of the American College of Trial Lawyers’ Federal Criminal Procedure Committee, which drafted the white paper “ Recommended Practices for Conducting Internal Investigations ” published by the ACTL...

Read More
News

Farella’s Aviva Gilbert Honored With WWCDA Catherine M. O’Neil Mentoring Award

Read More
News

Sarah Good Appointed to California State Bar's Ad Hoc Commission on the Discipline System

Read More
Publication

Jurors, Justice and Technology

Douglas Young, Farella partner and president of the American College of Trial Lawyers, spoke with podcast host Howard Miller about requirements in jury selection and technology for jury and non-jury trials. Listen to the...

Read More
Publication

FCC Designates Huawei as National Security Threat

In the ongoing confrontation between the U.S. government and Chinese telecom giant Huawei, the U.S. has dealt another major blow. The Federal Communications Commission issued an order on June 30, effective immediately, declaring that...

Read More
Event

The Advocates’ Society Spring Symposium: The Advocate Making a Difference

Douglas Young is the keynote speaker at The Advocates’ Society Spring Symposium: The Advocate Making a Difference on April 28. The Advocates' Society and the American College of Trial Lawyers invite you to attend the...

Read More