In a recent letter to members of the U.S. Senate Finance Committee, dated February 18, 2021, the United States Treasury Inspector General for Tax Administration (the “Inspector General”) outlined a potential disagreement with the Criminal Investigations Division of the Internal Revenue Service (“Criminal Investigations”) regarding the need for a search warrant to utilize databases containing cell phone users’ GPS data. On one hand, the Inspector General indicated that courts may use “similar logic” to expand a 2018 Supreme Court decision requiring a search warrant to access cell-site location information to likewise apply to GPS data provided to applications operated by third parties. On the other hand, the letter provides the stated position of Criminal Investigations, which asserts that “Cell Site Location Information  is distinct from  opt-in app data,” in apparent reference to the division’s prior claim that GPS data collected by cell phone applications does not require a search warrant because it has been “voluntarily” provided to a third-party.
On September 24, 2020, Senators Ron Wyden and Elizabeth Warren sent a letter to the Inspector General raising concerns about Criminal Investigation’s prior warrantless use of databases containing GPS data (including a database compiled and sold by a government contractor named Venntel Inc.) and requesting a legal analysis regarding any current or future use of such databases in light of the United States Supreme Court’s decision in Carpenter v. United States, 138 S. Ct. 2206 (2018).
In Carpenter, the Supreme Court held that cell site location data collected by wireless carriers constituted a search under the Fourth Amendment, and therefore generally required a search warrant. Id. at 2223. In denying the government’s argument that cell-site location information was voluntarily shared with a third-party, the Court first noted that “cell phones and the services they provide are such a pervasive and insistent part of daily life that carrying one is indispensable to participation in modern society.” Id. at 2220. The Court also highlighted the virtual impossibility operating a phone without creating an information trail, as cell phone location data is even generated by passively receiving texts or emails. Id. Given the effective need to have a phone and the virtual impossibility to avoid providing wireless carriers with frequent location updates, the Supreme Court ruled that cell-location data is not voluntarily given to wireless carriers and therefore generally cannot be utilized by law enforcement without a search warrant.
In his letter, the Inspector General noted that on September 9, 2017, Criminal Investigations purchased from Venntel a one-year subscription license of location information from cell phone users. The Venntel database included a compilation of GPS information collected by smart phone applications (as opposed to the cell-site location information gathered by wireless carriers discussed in Carpenter). According to the letter, Criminal Investigations claims that it last used the Venntel database in March 2018; however, “the IRS did not track the subscription usage or maintain an access log.” While the Inspector General stops short of explicitly acknowledging the possibility that Criminal Investigations used the database after March 2018, the opaque reference to the lack of privacy protocols is conspicuous.
Furthermore, Criminal Investigations currently has eight other live subscription agreements with contractual language broad enough to cover cell phone location data. The letter notes that Criminal Investigations assured that it is “not currently using any web-based subscription services/tools similar to Venntel and have no plans at this time for using either [GPS] or [cell-site location information] phone data.” However, unlike the Venntel database, the Inspector General’s letter provides no indication of when these other databases were last used, leaving open a possibility that they were used after the Carpenter decision was issued in June 2018.
While not currently using commercial databases, Criminal Investigations’ stated position is that it may use such databases without a warrant. In response to an inquiry from the Inspector General, Criminal Investigations noted that Carpenter “concerned historical Cell Site Location Information which is distinct from the opt-in app data available on the Venntel platform.” The Inspector General noted the possibility that courts may apply to GPS data logic similar to that outlined in the Carpenter decision concerning cell site location information.
The Inspector General’s logic is fairly sound. In Carpenter, the Supreme Court provided two reasons for denying the government’s argument that cell-site location data was voluntarily provided: (i) the difficulty of operating in modern society without a cellphone, and (ii) the virtual impossibility of using one’s phone without providing traceable information. In recent years, cellphone applications have grown exponentially in number and use, particularly in the pandemic as more Americans rely on applications for everything from non-public transportation to grocery delivery. It is entirely reasonable that a future court could determine that a smartphone user did not voluntarily provide GPS data because the practical need to use the applications rendered their use involuntary. Such a finding would defeat the sole argument provided by Criminal Investigations for the warrantless use of cell phone GPS databases.
Importantly, the Inspector General explains on numerous occasions throughout his letter that Criminal Investigations’ decision to cease using the GPS database information had nothing to do with the Supreme Court’s decision in Carpenter. Rather, the Inspector General claims “that the web-based subscription access to cell phone location information did not produce useful results.”
Accordingly, the Inspector General’s letter may raise more questions than it answers. Despite the Carpenter decision, Criminal Investigations still maintains that it can utilize third-party databases of cell phone users’ GPS locations without a warrant. In fact, it appears that the only reason Criminal Investigations ceased using these expansive databases is a lack of efficiency. However, in the rapidly evolving information environment, it is all but certain that app developers and marketers will continue to compile ever-expanding GPS databases to be sold at a considerable profit to both private and public entities. Thus, it is entirely possible that Criminal Investigations (and other law-enforcement agencies) may soon find renewed efficacy in these databases and resume their warrantless use of GPS phone data.
Contact the authors and other attorneys in the Data Security and Privacy team at Atkinson Andelson Loya Ruud & Romo to help you navigate a government investigation involving you or your business. AALRR has a team of data privacy litigators well-versed in civil, regulatory, and white collar matters who are ready to step in and defend you.
This AALRR post is intended for informational purposes only and should not be relied upon in reaching a conclusion in a particular area of law. Applicability of the legal principles discussed may differ substantially in individual situations. Receipt of this or any other AALRR presentation does not create an attorney-client relationship. The Firm is not responsible for inadvertent errors that may occur in the publishing process.
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Adam Snyder advises clients on complex commercial disputes involving intellectual property, and data security and privacy, as well as white collar defense and investigations. He handles litigation in state and federal courts ...
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