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Recently, a New York–based private investigator reached out to me about conducting surveillance in a neighboring state in which he was not licensed.

So, here was the question (edited for clarity):

I am licensed in New York state as a private investigator. If there is a case that is “venued” in New York state, and the person moves to any other state, am I allowed to conduct surveillance in the other state, as long as the case is initiated in New York state?

The person was injured in New York state and there is ongoing litigation in New York state. The person recently moved to New Jersey. An attorney who I am working with is questioning the legality of initiating a surveillance in New Jersey with someone who is not licensed in New Jersey.

I have some top attorney firms that send me out of state for work, and they all say it’s legal. I can’t find a statute that says that I can work in New Jersey.

I don’t do any surveillance work, and I don’t pretend to be qualified enough to answer legal questions. But doing work in other states does come up quite a bit with fellow investigators, and my answer is pretty clear-cut: My understanding is that if you started a surveillance in New York (where the case originated) and the person drove into New Jersey, you are always OK.

When I say OK, I mean that this was not a typical situation; the person happened to drive into a neighboring state. You don’t need to stop doing surveillance because you are not licensed in that state. I don’t think any court of law is going to throw out the evidence because you happened to be driving through a state in which you were not licensed. Likewise, you will be hard-pressed to find any licensing body sanctioning someone for temporarily traveling through their state.

But if you are starting a surveillance in New Jersey, you need to be licensed in New Jersey—not necessarily where the case was filed or venued.

Each state’s licensing board wants to make sure that everyone who is operating in the state has a license and acts within the bounds of the law. It also helps protect the local private investigators from out-of-state competition.

What’s the risk if you do operate in another state?

To be perfectly frank, if you are operating in another state without a license, there is also not a whole lot of risk involved. Like I said, I have never heard of a licensing body sanctioning a firm for operating out of state. Also, there is very little enforcement going on within state regulatory bodies.

For God’s sake, absolutely nothing has been done to Black Cube, which operated in New York and all over the country on behalf of Harvey Weinstein with some extraordinarily shady and illegal tactics. And what about, in fact, the licensed private investigator who was doing the shady/illegal stuff for Black Cube? He still has an ACTIVE private investigator license and has not been sanctioned, according to a few of my sources.

BUT (there is a big BUT there), if whatever you are collecting may end up in court and may end up getting thrown out because it would not be collected by a licensed professional, you might want to think twice.

I realize that this answer may be different depending on which part of the country you are living in. For example, some states have reciprocity laws, in which you can enter a neighboring state as long as it’s temporary. As far as I am aware, there is no reciprocity agreement between New York and New Jersey.

Because I was not completely satisfied with my own answer, I reached out to a few New York–licensed private investigators, who also happen to be attorneys, who added some excellent points.

Most legal practitioners know little about private investigator licensing

In the original question, the private investigator pointed out that he works with some top attorney firms that have sent the investigator out of state and that employ lawyers who say it is legal. On that point, your typical legal practitioner knows little about private investigator licensing. David Boies of Boies Schiller Flexner, who at the time was one of the top lawyers in the country, hired the firm Black Cube for Harvey Weinstein. Not only was Black Cube doing all kinds of unethical things, but it was sending operatives all around the United States, to places where they do not have offices, let alone any licensing. 

As an attorney, if it was a case that could potentially go forward in either state, I would also want to be sure I had someone licensed in each state. The risk seems pretty minimal in most cases, but it really only takes one bad situation for it to come back and bite you in the a$$.

State statutes will probably not be helpful

State statutes relating to private investigator licensing typically will have some language that requires you to have a private investigator license if you are conducting/engaging in investigative services for a fee in that particular state. So, in this case, if you are in the act of conducting or engaging in investigative services for a fee in that particular state, you need to be licensed. I don’t think you will find a specific state statute that says, “You can’t come into New Jersey if you are licensed in New York.”

Case law

There is, perhaps, some case law that will support crossing state lines, but I am not aware of any. If anyone in the investigative community knows of any, please let me know.

What if you need to cross state lines?

First, I would check the local state reciprocity agreements, as well as local licensing. For example, North Carolina has limited reciprocal agreements with seven states and California has reciprocity agreements with five states, but in California you have to fill out a form and notify the state. New York, as far as I know, does not have any reciprocity agreements.

Many investigative firms will hire a local investigator in the local jurisdiction, and have one of the investigators from out of state tag along. This offers protection with regard to local licensing laws. This would typically be in a situation in which you needed to conduct interviews, especially in cases with some complexity, and for which getting a local investigator up-to-speed would be difficult. Or cases in which the investigator from out-of-state has some institutional knowledge of a case that might be hard to replicate.

Having said all of this, I don’t think that crossing state lines in every situation requires you to jump through hoops and to get a license. For example, if I am going to pick up some court records in Connecticut, doing some historical news media research in a library in New Jersey or dropping off a request to a police station in Pennsylvania, I am all set; I personally would not be worried about being licensed in that state in any of these scenarios.

But, if at any point in your out-of-state work you are considering doing interviews, surveillance, witness canvassing, scene photographs, “door knocks,” or any other activities that would be considered (or even may be considered) under the private investigator law (I am thinking of things like computer forensics) in a state in which you are not licensed, especially for a case that may end up in a court of law, I would be sure to consult with an attorney.

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There are many things to consider when a law firm is hiring a private investigator.

Below is a guide to some best practices.

Licensed and Insured

There has been a troubling trend of unlicensed private investigators, so the first thing that a law firm should do is confirm licensing status with the local regulatory body.

In the United States, 43 of the 50 states have statewide licensing requirements for private investigators/private detectives.

As of June 2011, there are no licensing requirements in Colorado, Idaho, Mississippi, South Dakota or Wyoming; Alabama and Alaska have requirements in certain cities.

Prior to commencing an assignment, the law firm should request proof of liability insurance to protect the firm in case something does go wrong.

Communicate Your Needs

It is critical to communicate to the private investigator as much information as possible from the outset, no matter how minute the details may be.

It is also important for the law firm to understand what information is potentially attainable and what may not be, within the confines of the law.

Subject Matter Expertise

The private investigator should have subject matter expertise relating to the situation at hand.

If the investigation calls for surveillance, finding a witnessintelligence gatheringdue diligence investigationcomprehensive background investigationasset investigation or an expert witness background investigation, a private investigator should be able to provide the law firm with examples of previous work done on similar matters.

Establish a Budget and Deliverables

The private investigator should prepare a descriptive agenda of your objectives and what efforts the investigative firm will make to accomplish those goals.

The investigation should be conducted in stages, with deliverables provided upon completion of each stage, so the law firm can have a measuring stick to gauge the progress of the assignment.

Engagement Letter

Included in the engagement letter should be an indemnity agreement in case the private investigator engages in professional misconduct or violates the law.

Additionally, the scope of the work, the agreed-upon budget, any agreed-upon retainer agreement and a termination clause should be included in the engagement letter.

Documentation of the parameters in an engagement letter can alleviate future disputes over objectives, timing and fees.

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Not every person, corporation or law firm needs to hire a private investigator on a regular basis.  Realistically and thankfully, a private investigator is not someone that everyone has on speed dial.

But if a situation requires one, before you hire a private investigator, take into consideration these questions:

What is your objective?

Are you trying to find someone, collect on a judgment, determine if it’s worth suing someone or perhaps investigate a complex matter? With some cases, the specific objective may be obvious, but often clients are not sure what they really want. Having an ultimate goal or objective before you hire a private investigator can help control costs and focus the investigator in the right direction.

Do you need subject matter expertise?

Investigators often have a specialty. These include surveillance, matrimonial cases, insurance disability matters, internal fraud investigations, adoption, computer forensics, forensic accounting, litigation support, due diligence investigation and background checks.  Hiring the wrong investigator for the wrong job may doom your case from the start. Before you hire a private investigator make sure the investigator you hire has a proven track record in the area you present to them.

What do you already know?

It’s important to collect every relevant piece of written or electronic information in your possession to provide to the investigator. Also, be sure to tell them everything you know—even if it’s not written down. This insures that the investigator has the best tools to be effective and efficient so that they can hit the ground running.

How will the information be used?

Are you trying to get information for your own use or do you anticipate litigation relevant to the information?  In the first instance, it may be appropriate to deal directly with the investigator, but if there is litigation in the works, your investigator should be retained by an attorney to protect work product privilege.

What are your expectations?

We all love a good Sherlock Holmes novel or an old episode of Colombo, but it’s called fiction for a reason. Understanding what the investigator can legally, properly and ethically do will save you from unrealistic expectations and trouble down the road.

What are the risks if inquiries become known?

What if the investigator is caught digging around? If the inquiries the investigator is making are exposed, what’s the backlash?  Think this through. This is key to developing a leak proof investigative strategy to avoid embarrassment or worse.  An investigative approach depends on the sensitivity of the case—make sure you and the investigator are on the same page about technique. Is it necessary to take every precaution and be sensitive or can the investigator go in with guns blazing?

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A pre-litigation asset search can provide you or your client with valuable information to determine if a lawsuit is worth filing or to gain leverage in the course of negotiations prior to filing a lawsuit.

Going through litigation is expensive.  There is nothing worse than racking up tens of thousands of dollars in attorney’s fees only to find the person or company you are suing doesn’t have anything of value.  In other cases, you may be in the midst of negotiating a settlement prior to filing a lawsuit and want to see how far you can push the negotiations, or if you should cut your losses and settle.

In pre-litigation mode, attorneys don’t have the luxury of having the legal authority to access information about liquid assets such as bank accounts and investment accounts.  Attorneys need information quickly, discreetly and most importantly, legally.

What to consider?

Determining whether you should sue a person or a company has two parts – what they may own and what other potential liabilities they may have.  Of course there may be a whole host of hidden assets, but here are a few key assets and potential liabilities that can be identified quickly, discreetly and legally in a pre-litigation asset search:

Assets


Personal Assets

The most significant asset that people own is typically their home, but other assets that can be identified through open sources include motor vehicles, boats and airplanes.  Beyond the obvious assets held directly by a person, assets may also be held by a close associate, family trust, family member or shell company.  Real property assets may have also been recently transferred to other related parties or held overseas.

Business Assets

In addition to holding individual assets, assets may also be held in a corporate entity.   Identifying corporate affiliations through secretary of state filings and other research is an important step in identifying assets held by affiliated companies which may not be held by the subject directly.

Liabilities


Bankruptcy

Obviously, if the person or company has filed for bankruptcy protection, you will eventually be notified and you can file a claim in the bankruptcy proceeding.  What if you haven’t been notified yet?  If the person or company has a history of filing for bankruptcy protection, wouldn’t you want to know?

Civil Litigation

If other civil litigation has already been initiated against the person or company you are about to sue, you may be in a long line of creditors once your lawsuit has finally been settled.  It may also be a sign that you should settle fast.

Judgments/Liens

If the person or company has been subject to recent judgments and/or lien filings, this may be a sign that the company is already heading for trouble.

Final thought

Conducting a pre-litigation asset search can quickly identify assets and potential liabilities that can help you make a more informed decision about whether you should file a lawsuit or if you should cut your losses and settle prior to filing a lawsuit.

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An attorney may think that they do not have any need for an experienced private investigator because of the variety of skills and resources that they employ.  But have you ever found yourself staring at a computer screen and asking:

I know the answer is out there…Where do we go from here?

Although law school and career experience provide an attorney with a number of useful research techniques and litigation skill, they do have limits.

Consulting with a professional private investigator can help attorney’s to leverage your position and find creative and efficient ways to come out ahead of your adversary.

Here are 10 ways that an attorney can use a professional private investigator:

1 Locate People

It may be a witness or an heir. Perhaps it’s a former employee who can shed light on corporate misconduct. Or maybe you need to locate a witness in possession of the proverbial “smoking gun.” Whether you would like to interview, serve, or investigate someone, an investigator can help you to identify and locate the individual.

2 Locate Assets

Investigators are skilled at locating assets such as real estate, valuable property (artwork, antiques, collectibles, etc.), and vehicles (motor vehicles, aircraft, vessels, etc.). An investigator can also help attorneys to identify the location both domestic and offshore bank accounts (though the details of these assets may not necessarily be disclosed by banking institutions without court order or permission from the account holder – see our post 5 Myths: What a Private Investigator Cannot (Legally) Get.

3 Leverage for Negotiations

An investigator can pull together key sources and intelligence to inform your side during litigation, an M &A deal, internal investigation, or any other adversarial situation that can make the difference between a favorable settlement.

4 Enforce Judgments

A judgment is only useful if you are able to enforce it. An investigator can help attorneys to identify current assets and any efforts to hide or misrepresent them through the transfer to family members, friends or other parties.

5 Connect the Dots

Investigators can help you to know who is actually sitting on the other side of the table during litigation or a potential business deal. You can gain immeasurable negotiation power by identifying who is actually behind a faceless corporation or tying together undisclosed connections.

6 Predict Your Opponent’s Next Move

Through an investigation, you can learn your opponent’s history and patterns of behaviors so as to best predict how they will react under pressure. This will help you to be successful in litigation strategizing, during cross examination, or at the deal table.

7 Prep For Cross Examination

During preparation for a deposition or courtroom testimony, an investigator’s report detailing your witnesses’ weaknesses, background, and behavioral tendencies may be one of your most valuable tools. This can also be useful in identifying information against your client, so you can be prepared for what may come up during the course of the litigation.

8 Collect and review electronic evidence

Whether it is an adversarial matter or an internal investigation, investigators may be used to efficiently recover electronic files – including those that a subject believes he or she has successfully deleted. Investigators are frequently used to identify and analyze a subject’s emails, documents, or other files.

9 Trademark and Intellectual Property Monitoring

Investigators can be used to successfully police a company’s products throughout the world. Counterfeiting and improper diversion of products onto the grey market are just two of the most common areas where an investigator can provide intelligence and assistance.

10 Reconstruction

A historical reconstruction may be helpful in a number of different areas. Perhaps you need to review the history of a family to locate heirs. It could be a corporate history or a chain of title issue in a real estate matter. Whatever the issue, an investigator can help to identify and piece together long lost documents, facts and witnesses.

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