In 2016, the IRS discreetly ordered Coinbase to produce sensitive information and financial records about millions of its customers. Coinbase resisted that initial production order, but eventually the IRS obtained from Coinbase records about more than 14,000 account holders and millions of their cryptocurrency transactions. One account holder, James Harper, learned that the IRS seized and searched his records only after the IRS sent him a letter incorrectly suggesting that he had not paid taxes on his cryptocurrency income. Harper sued to compel the IRS to delete his records. He asserted that his Coinbase records are owned by him and that the IRS needed a warrant to seize and search them. However, after a perfunctory review of his arguments, the district court and the First Circuit held that Harper’s records are owned by Coinbase and thus fall within the third-party exception to the Fourth Amendment warrant requirement.

Fourth Amendment protections for your papers and effects do not automatically disappear just because you share them with third parties. The Supreme Court has been clear that the Fourth Amendment protects property and, therefore, courts need to determine whether a house, paper, or effect is yours under the law. If so, the Fourth Amendment is triggered and a warrant is required. Unfortunately, the courts below failed to properly consider whether Harper’s property interest in his Coinbase records affords them constitutional protection, and instead chose to hastily apply the third-party doctrine to declare Harper’s property interest nonexistent.

Now Cato has filed an amicus brief asking the Supreme Court to grant Harper’s petition. Our brief points out that financial surveillance is a massive and growing threat to privacy rights and our constitutional order. The government has relied on the third-party doctrine to circumvent the warrant requirement and obtain Americans’ most sensitive records, including emails, Google search histories, financial records, and location histories. Further, Harper’s case reveals that too many lower courts ignore state property laws and tech companies’ terms of service that treat digital records as the property of the user. Without judicial enforcement of Fourth Amendment protections, secretive and suspicionless digital record collection will become a routine tool of government regulation and control. The Court should reverse the decisions below and clarify that courts cannot mechanically apply the third-party doctrine when someone makes a plausible claim of ownership of digital records seized or searched by the government.