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The Law Firm of Robert J. Frank & Associates, LLC.
By Robert J. Frank

In today’s increasingly complex economy, the government’s interest in protecting the consumer has led to greater regulation of business activity. Increased regulation often includes an expansion of the government’s ability to enter and inspect a business property without a warrant and without probable cause to believe a crime has been committed. While these “administrative inspections” serve a legitimate regulatory purpose, they are also subject to abuse. When an administrative inspection is used for the purpose of conducting a criminal investigation or justifying an otherwise unlawful warrantless search, rather than to merely further a regulatory scheme, it becomes a “pretextual administrative search” violative of the Fourth Amendment to the United States Constitution.

The Fourth Amendment’s prohibition on unreasonable searches and seizures is applicable to commercial premises, as well as to private homes. [1] An owner or operator of a business has an expectation of privacy in commercial property. [2] However, a commercial property owner’s expectation of privacy and attendant Fourth Amendment protections become more “attenuated” when the property is used for a “closely regulated” business. [3] Closely regulated businesses generally include businesses in which regulation is pervasive and long standing. [4] Businesses involved in such wide ranging activities as the sale of liquor, sale of firearms, pawn shops, commercial trucking, and auto salvage operations have been deemed “closely regulated” businesses.

A closely regulated business may properly be subject to reasonable entry and inspection without warrant by persons acting under color of state law. The regulation providing for warrantless inspections of a pervasively regulated business must meet three criteria: (1) “there must be a ‘substantial’ government interest that informs the regulatory scheme pursuant to which the inspection is made”; (2) “the warrantless inspections must be ‘necessary to further the regulatory scheme'”; and (3) “‘the statute’s inspection program, in terms of the certainty and regularity of its application, must provide a constitutionally adequate substitute for a warrant.'” [5] The administrative inspection scheme “must perform the two basic functions of a warrant: it must advise the owner of the commercial premises that the search is being made pursuant to the law and has a properly defined scope, and it must limit the discretion of the inspecting officers.” [6] Generally, limitations as to time place and scope are seen as a sufficient limitation on an officer’s discretion. [7]

The scope of any search, including an administrative inspection, must be “strictly tied to and justified by” the circumstances which rendered its initiation permissible. [8] A search which is “reasonable at its inception may violate the Fourth Amendment by virtue of its intolerable intensity and scope.” [9] An administrative inspection becomes intolerable in intensity and scope when it becomes a pretext to conduct a search in criminal activity, is conducted in furtherance of a criminal investigation, or is used as a justification for an otherwise unlawful warrantless search.

An administrative ordinance may not be used as a pretext to search for suspected criminal activity. If the “primary object of the search is to gather evidence of criminal activity, a criminal search warrant may be obtained only on a showing of probable cause to believe that relevant evidence will be found in the place to be searched.” [10] In addressing the importance of the issue, the United States Supreme Court has stated:

In the law of administrative searches, one principle emerges with unusual clarity and unanimous acceptance: the government may not use an administrative inspection scheme to search for criminal violations. [11]

Courts are cautioned to offer “stern resistance” to any “deliberate use by the Government of an administrative warrant for the purpose of gathering evidence in a criminal case.” [12]

Pretextual administrative search issues are most often seen when governmental agents defend a claim of unlawful search and seizure by arguing their conduct was justified by a statute or ordinance that allowed warrantless entry and search. The recent Fifth Circuit case of Club Retro, LLC v. Hilton [13] provides a strong example. In Club Retro a local sheriff’s department SWAT team, together with alcohol control agents, raided a popular night club. The stated purposes of the raid included searching for narcotics and issuing citations for violation of alcohol and beverage control ordinances. The officers barricaded the doors to the club and executed a “dynamic entry” with 40 heavily armed officers, many in ski masks. All persons within the club were seized and were subject to pat down searches and searches by drug sniffing canines.

The owners of the club, and all persons within the club at the time of the raid, brought unlawful search and seizure claims against the officers planning and executing the raid. In defending these claims the officers claimed their conduct was authorized by administrative inspection provisions in multiple local ordinances including alcohol control laws and ordinances, fire safety codes, and state firearm laws. [14] The trial court, as well as the Fifth Circuit, conducted a detailed analysis of the ordinances involved, looking at each to determine the purpose of the inspection scheme, the nature and scope of the inspection allowed, and the notice given by statute to the owner of the property as to the nature and scope of the inspection. [15] The Fifth Circuit determined that reference to the local administrative inspection ordinances was a mere pretext to conduct a narcotics raid and that:

The inspection statutes and ordinances do not grant law enforcement officers unfettered discretion to conduct searches of business premises through any means of their choosing and do not provide notice to bar owners that their business, employees, and patrons are subject to armed S.W.A.T. team raids, physical assault, threats at gunpoint, and prolonged detention. [16]

Most cases are not as clear cut as Club Retro. Courts often have difficulty drawing the line between a pretextual administrative search, and an otherwise valid administrative inspection by an officer who has independent suspicion of criminal activity. An officer’s suspicion of criminal activity does not, by itself, render an administrative inspection pretextual. [17] While “subjective intentions play no role in ordinary, probable-cause Fourth Amendment analysis, [internal citation omitted] programmatic purposes may be relevant to the validity of Fourth Amendment intrusions taken pursuant to a generalized scheme without individualized suspicion.” [18] In these circumstances, a court is required to examine the “programmatic purpose” of the underlying search provision in light of the nature and scope of the search. [19] If the nature or scope of the search is beyond the “programmatic purpose” of the statute or ordinance authorizing the search, then it is pretextual in nature and is violative of the Fourth Amendment.

There are very practical steps a lawyer can take to analyze, and prove, a potential pretextual administrative search. First, one must consider whether the business searched is engaged in any closely regulated industry. While the range of business interests which are closely regulated is large and broad, this is still an element worth evaluating.

If you are dealing with a closely regulated industry, require the officers or entity conducting the search to delineate with particularity the administrative search provision on which they rely. Analyze the ordinance, rule or statute to determine if it provides a constitutionally acceptable substitute for a warrant; that it has a properly defined scope, and limits the discretion of the inspecting officers. [20] Next compare the nature of the search to the programmatic purpose of the statute. As an example, the use of drug sniffing canines would not seem to be programmatically appropriate to an administrative inspection designed to determine if under-aged persons were drinking in a bar. Drug sniffing canines, even well trained ones, rarely have the felicity with written language required to check government issued ID cards for age.

Examine the scope of the search to determine if it falls within strict parameters set forth in the authorizing ordinance. If, for example, the ordinance only allows the inspection of that portion of the business open to the public, search beyond public areas would be evidence of a pretextual search. Many law enforcement agencies provide briefing materials to officers prior to a search. These materials typically set forth the objectives of the search and the responsibilities of the participants in carrying out the raid. If the stated objective of the search is at odds with the programmatic purpose, or the stated responsibilities of the officers goes beyond that strictly authorized by ordinance, the search is pretextual.

Examine the manner in which the search is carried out. Non-criminal administrative inspections rarely (if ever) require the use of dynamic entry by SWAT teams. Look to see if the manner of execution is itself a violation of the authorizing statute. Blocking the exits to a busy nightclub for the stated purpose of checking for fire code violations (with the assistance of really smart drug sniffing dogs) is itself a violation of the fire code. If a municipality has to violate the ordinance justifying the search in order to conduct the search that is strong evidence of pretext.

A properly limited administrative inspection ordinance can be of significant value in protecting the consumer in a closely regulated industry. As with any governmental power, administrative searches are subject to abuse. It is up to civil trial lawyers, and the courts they appear in front of, to prevent and remedy such abuses.

[1] See v. City of Seattle, 387 U.S. 541, 543, 546 (1967)

[2] atz v. United States, 389 U.S. 347, 361 (1967) (Harlan, J., concurring)

[3] New York v. Burger, 482 U.S. 691, 699-700 (U.S. 1987)

[4] Colonnade Catering Corp. v. United States, 397 U.S. 72, 77, 90 S. Ct. 774, 25 L. Ed. 2d 60 (1970)

[5] Burger, 482 U.S. at 702-03

[6] Id. at 703

[7] United States v. Biswell, 406 U.S. 311, 315, 92 S. Ct. 1593, 32 L. Ed. 2d 87 (1972)); see also United States v. Harris Methodist Ft. Worth, 970 F.2d 94, 101-02 (5th Cir. 1992)

[8] Warden v. Hayden, 387 U.S. 294, 310 (1967) (MR. JUSTICE FORTAS, concurring)

[9] Kremen v. United States, 353 U.S. 346 (1957)

[10] Michigan v. Clifford, 464 U.S. 287, 294-295(U.S. 1984)

[11] Burger, 482 U.S. at 724-25

[12] Abel v. United States, 362 U.S. 217, 226 (1960)

[13] 568 F.3d 181 (5th Cir. La. 2009)

[14] Id. at 198

[15] Id. at 200

[16] Id.

[17] United States v. Thomas, 973 F.2d 1152, 1155-56 (5th Cir. 1990)

[18] City of Indianapolis v. Edmond, 531 U.S. 32, 45-46(U.S. 2000)

[19] Collins v. Ainsworth, 382 F.3d 529, 538-539(5 th Cir. 2004)

[20] See note 6, infra.

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