The DEA was conducting an investigation of Mr. Moreno, using information from a reliable confidential informant. The CI made arrangements for Moreno to sell a kilo of cocaine at a particular truck stop. Moreno told the CI that he would be bringing a driver along. On the day the transaction was to take place, the DEA watched Moreno drive his own truck to a house, which he left shortly afterwards as a passenger in Chavez's truck. When the pair stopped at a gas station, the DEA instructed the CI to call Moreno again. Moreno told the CI that he had just left, and was on his way to the truck stop.
In order to protect the secrecy of their investigation, and the identity of the CI, the DEA contacted a K9 officer with the New Mexico State Police. They described the truck to the officer (including the appearance, license number, and number of occupants), told the officer that the truck was transporting coke, and instructed him to find his own reason to stop the truck. The officer found Chavez's truck, and conducted a traffic stop for failing to turn on its headlights in a safety zone. The trouble is, although the officer believed this to be a violation, it wasn't.
The officer wrote Chavez (who was driving) a ticket for the imaginary violation and for NPOI, and then told Chavez and Moreno that they were free to go. Before they left, he started talking to them again and eventually asked for consent to search the car. When asked what would happen if they refused, he told Chavez and Moreno that if they refused he would have the dog sniff their truck before allowing them to leave (so apparently both "consent" and "free to go" mean something different to that officer than they mean to me. Whatever). Chavez and Moreno each signed consent forms, and the officer searched the truck. He found the cocaine. Chavez and Moreno were arrested, and later moved to suppress the cocaine. They argued that the cocaine had been found as a result of an unlawful stop, because the NMSP officer who made the stop wasn't aware of the facts which would have justified it; he just knew that the DEA said there was reason to stop the car. The trial court denied the motion to suppress. Chavez entered a conditional guilty plea, and appealed the denial of the suppression.
The Tenth Circuit applied the collective knowledge doctrine (also known as the fellow officer rule) to this case, and described two different ways that officers impart the requisite knowledge to each other: horizontally and vertically.
Knowledge may be imparted horizontally in cases where different officers learn different facts during the same investigation, and if you put all the information together then it amounts to probable cause (or reasonable suspicion, if that's what you're going for). In cases like that, the important question is whether the officers actually communicated with each other and pooled their knowledge. The courts won't assume that just because one officer knows something every other officer does to. That may sound obvious, but it has to be said because someone already screwed it up (in US v. Shareef, which is referred to in this decision).
Knowledge may be imparted vertically if one officer tells another that there is PC for a search (or RS for a stop). In cases like this, the important question is whether or not the first officer really had PC. If so, the stop is good. If not, the stop is bad through no fault of the arresting officer's (like in Whitely v. Warden).
Applying this reasoning to the case at hand, the court didn't bother to address whether or not the NMSP officer could stop Chavez for the imaginary violation, or whether or not he obtained valid consent, or any of that. The court held that the facts known to the DEA were sufficient to establish probable cause, and that they had effectively communicated this to the NMSP officer, so he was entitled to act based on their probable cause. This is also a case that illustrates that an officer's subjective intent is not relevant, so long as the actions he takes are objectively reasonable based on the information available to him at the time.