In Dailey, the defendant attempted to steal some DVDs and a computer from a Wal-Mart. He concealed the DVDs in his coat pocket, put a computer in a shopping cart, and dashed towards the exit. Store security tried to stop the defendant, but (like Peter Rabbit) he was able to wiggle out of his jacket and escape.
The security guard discovered a cell phone in the jacket. He gave the jacket to the police. The police charged the phone and reviewed the contact list. By speaking to a person on the list, they were able to identify the defendant.
The court held that the search of the contents of the cell phone was permissible because the defendant abandoned the jacket and its contents. As a result, the court reasoned, he no longer retained a reasonable expectation of privacy with regards to the cell phone.
I have previously written about State v Smith, the case from the Ohio Supreme Court invalidating a search of a cell phone incident to arrest. A scholarly article on the subject will appear in the University of Memphis Law Review this fall. The Dailey court distinguished Smith on the grounds that "voluntary abandonment is a prime example of when a warrantless search of a cell phone may be conducted since it is clear that a defendant lacks standing to object to a search and seizure of property that he has voluntarily abandoned."
I don't necessarily agree with this analysis. The Dailey court failed to distinguish between a physical search of the cell phone and a search of the contents of a cell phone. Experience suggests that people maintain a reasonable expectation of privacy in the contents even in lost or abandoned cell phones. Cell phones (like the locked footlocker in Chadwick, perhaps) have the capacity for storing immense amounts of private information, including calendars, voice and text messages, email, video and pictures. Indeed, the Dailey decision could have very far reaching consequences. Under this precedent, any time someone leaves behind an iPhone, the police have the ability to search the entire contents of that iPhone.