AL Post 763 v. Ohio Liquor Control Commission

694 N.E.2d 905, 82 Ohio St. 3d 108

• Court: Ohio Supreme Court
• Decided: June 17, 1998
• Docket: Nos. 96-1269, 96-1572, 96-1575 and 96-2797
• Status: Published

Opinions

Cook, J.

The Second District Court of Appeals has decided a series of cases holding that agents of the Enforcement Division of the Department of Liquor Control must identify themselves and their purpose for entry prior to conducting a warrantless administrative search of a class D-4 liquor permit premises. We disagree. Agents may conduct constitutional, warrantless administrative searches of liquor permit premises pursuant to Ohio Adm.Code 4301:1-1-79, without first knocking, announcing their presence, and stating an intent to conduct a search.³

WARRANTLESS SEARCHES

“ ‘[T]he underlying command of the Fourth Amendment is always that searches and seizures be reasonable.’ ” Wilson v. Arkansas (1995), 514 U.S. 927, 931, 115 S.Ct. 1914, 1916, 131 L.Ed.2d 976, 980, quoting New Jersey v. T.L.O. (1985), 469 U.S. 325, 327, 105 S.Ct. 733, 740, 83 L.Ed.2d 720, 727. The Fourth Amendment provides no protection against searches that are reasonable, but serves only to prohibit those searches that are recognized as unreasonable. Stone v. Stow (1992), 64 Ohio St.3d 156, 164, 593 N.E.2d 294, 300. Warrantless searches are generally considered unreasonable. State v. Penn (1991), 61 Ohio St.3d 720, 723, 576 N.E.2d 790, 792, citing Marshall v. Barlow’s, Inc. (1978), 436 U.S. 307, 311-312, 98 S.Ct. 1816, 1820, 56 L.Ed.2d 305, 311. Accordingly, evidence obtained by means of a warrantless search is subject to exclusion, unless the circumstances of the search establish it as constitutionally reasonable.

Certain warrantless searches have been judicially recognized as reasonable notwithstanding the presumption of unreasonableness dictated by the Fourth Amendment. Administrative searches are included among these exceptions to the warrant requirement. Stone v. Stow, 64 Ohio St.3d at 164-165, 593 N.E.2d at 300, fn. 4.

Ohio Adm.Code 4301:1-1-79 provides for warrantless administrative searches by authorized agents of the Department of Liquor Control. Because the permit holders do not challenge the constitutionality of that administrative provision, we presume it complies with the New York v. Burger (1987), 482 U.S. 691, 107 S.Ct. 2636, 96 L.Ed.2d 601, standard of constitutional acceptability. Doyle v. Ohio Bur. of Motor Vehicles (1990), 51 Ohio St.3d 46, 47, 554 N.E.2d 97, 98. See, also, R.C. 1.47. Nevertheless, the dissent engages in an analysis that confuses inquiry into the constitutionality of the administrative provision with the narrower question that is proper here. The only question before this court is whether an agent’s deceptive means of entry renders an otherwise valid warrantless administrative search unreasonable.

The Second District hinges its determination that all unannounced warrantless entries into class D-4 establishments are unreasonable on the vulnerable conclusion that D-4 permit holders possess an expectation of privacy greater than privacy expectations held by all other classes of liquor permit holders. See Bill’s Corner Cafe, Inc. v. Ohio Liquor Control Comm. (Mar. 28, 1997), Clark App. No. 96-CA-93, unreported, 1997 WL 156575 (Second District refused to extend the “knock and announce” rule to all permit holders.). Analysis of the relevant case law leads us to the contrary conclusion — that private club liquor permit holders, subject to the same pervasive governmental regulation as other liquor industry businesses, cannot reasonably expect any greater level of privacy from governmental intrusion. See Stone v. Stow, 64 Ohio St.3d at 164-165, 593 N.E.2d at 300.

EXPECTATIONS OF PRIVACY

In assessing what constitutes a reasonable search under the Fourth Amendment, courts consider the defendant’s reasonable expectation of privacy in the premises searched. The reasonable expectation of privacy in liquor permit premises is minimal because permit holders, regardless of permit class, consent to inspection of the premises by authorized agents through the provisions of the Liquor Control Act and accompanying administrative rules and regulations. Solomon v. Liquor Control Comm. (1965), 4 Ohio St.2d 31, 36, 33 O.O.2d 339, 342, 212 N.E.2d 595, 599. Contrary to the dissent’s suggestion, these rules and regulations do not require liquor agents to suspect a violation prior to entering a permit premises during business hours to conduct an inspection pursuant to Ohio Adm.Code 4301:1-1-79(A)-(C).

The dissent states that “Ohio Adm.Code 4301:1-1-79(D) provides that prior to conducting inspections (as opposed to mere entry) there must be a reasonable suspicion that a violation has in fact occurred.” Although the rule is portrayed by the dissent as having broad application, an observant reading of Ohio Adm.Code 4301:1-1-79(D) reveals a more tapered precept: there must be a reasonable suspicion that evidence of a violation will be found therein prior to “search and seizure of materials in locked closets, filing cabinets, cellars, attics, storage rooms, desks, * * * safes [and the like].” (Emphasis added.) The provision further explains that “[njothing in this rule shall be construed to contravene the plain view doctrine.” (Emphasis added.) The administrative rule does not require agents to possess a reasonable suspicion of a violation in order to enter liquor permit premises and conduct routine inspections, pursuant to Ohio Adm.Code 4301:1-1-79(A)-(C), of those items in plain view.

Fourth Amendment considerations respecting entry are implicated in the cases before us solely because many D-4 permit holders lock the entrance to the premises. The typical establishment holding a liquor permit is open to the public, and thus liquor agents and law enforcement officers can enter the permit premises during business hours without identifying themselves. But because D-4 permit holders are permitted to sell alcohol to members only, those establishments often lock the entrance to the permit premises during business hours. This enables the permit holder to limit ingress to the premises, thereby ensuring compliance with the R.C. 4303.17 prescript that alcohol be sold only to members.

The factors of a locked door and “members only” admittance policy spurred the Second District to accord a heightened privacy expectation to D-4 private clubs, one analogous to that enjoyed by an individual in his home. The Second District decisions focus on the club members’ expectations of privacy. The expectation of privacy possessed by individual club members is of no moment, however, in the context of an administrative search conducted to monitor compliance with Ohio liquor laws and regulations. Instead, we consider only the permit holder’s expectation of privacy. “[T]he expectation of privacy that the owner of commercial property enjoys in such property differs significantly from the sanctity accorded an individual’s home.” Donovan v. Dewey (1981), 452 U.S. 594, 598-599, 101 S.Ct. 2534, 2538, 69 L.Ed.2d 262, 269.

Regulating admittance to permit premises by locking the entrance cannot elevate the constitutional protection of a liquor permit holder. There is no language in R.C. 4303.17 requiring that a D-4 establishment lock its doors. A locked entrance door does not support imputing to those holding D-4 permits an expectation of privacy greater than that enjoyed by liquor permit holders of other classes. This is an artificially created privacy expectation. The pervasive regulation that is characteristic of the liquor industry, combined with the permit holder’s awareness of the extent of this regulation, compels this conclusion.

The United States Supreme Court explained the liquor proprietor’s reduced expectation of privacy in Marshall v. Barlow’s, Inc., supra, 436 U.S. 307, 98 S.Ct. 1816, 56 L.Ed.2d 305, as resulting from the heavily regulated nature of the industry. The court stated:

“Certain industries have such a history of government oversight that no reasonable expectation of privacy could exist for a proprietor over the stock of such an enterprise. Liquor and firearms are industries of this type; when an entrepreneur embarks upon such a business, he has voluntarily chosen to subject himself to a full arsenal of governmental regulation.

“ * * * ‘The businessman in a regulated industry in effect consents to the restrictions placed upon him.’ ” (Citations omitted.) Id. at 313, 98 S.Ct. at 1821, 56 L.Ed.2d at 312, quoting Almeida-Sanchez v. United States (1973), 413 U.S. 266, 271, 93 S.Ct. 2535, 2538, 37 L.Ed.2d 596, 601.

A proprietor must accept, along with the benefits, the burdens of being granted the privilege to sell alcohol in Ohio.

The warrantless administrative searches adopted to enforce the Liquor Control Act and the applicable administrative rules and regulations are a well-established fact of doing business in the liquor industry. See, e.g., Colonnade Catering Corp. v. United States (1970), 397 U.S. 72, 90 S.Ct. 774, 25 L.Ed.2d 60; State v. Akron Airport Post No. 8975 (1985), 19 Ohio St.3d 49, 19 OBR 42, 482 N.E.2d 606. The D-4 permit holder cannot thwart permitted, unannounced inspections on the theory that a locked entrance door prohibits them.

DECEPTIVE ENTRY

The opinions issued by the Second District Court of Appeals in the cases currently under consideration rely on that court’s earlier decision in Loyal Order of Moose Lodge 1044 of Troy v. Ohio Liquor Control Comm. (1995), 105 Ohio App.3d 306, 663 N.E.2d 1306. In Loyal, which in turn cited State v. Pi Kappa Alpha Fraternity (1986), 23 Ohio St.3d 141, 23 OBR 295, 491 N.E.2d 1129, the Second District determined that the liquor control agent could not deceptively gain entry to premises that were not a “commercial center of criminal activity” when an invitation to enter was not extended “for the purpose of conducting illegal activities.” Loyal at 311, 663 N.E.2d at 1309.

Pi Kappa Alpha, however, is distinguishable. Unlike the four cases at bar, Pi Kappa Alpha involved criminal charges resulting from the sale of alcohol without a permit. Law enforcement officers “deceptively” gained entry into a residence that had not been converted into a commercial center for criminal activity. Most important, the defendants in Pi Kappa Alpha were not liquor permit holders. Thus, Pi Kappa Alpha and Loyal fail to inform the issues at bar.

The United States Supreme Court recognizes that “unannounced, even frequent” inspections are essential to the effective enforcement of those statutes and rules governing highly regulated industries such as liquor and firearms. United States v. Biswell (1972), 406 U.S. 311, 316, 92 S.Ct. 1593, 1596, 32 L.Ed.2d 87, 92. Where the highly regulated commercial business keeps its doors locked during business hours, “unannounced” inspections are nearly impossible. The need to achieve unannounced inspections of highly regulated business premises that are kept locked during business hours creates a situation analogous to that of the undercover police officer attempting to infiltrate inaccessible centers of criminal activity. Realistically, “ ‘in the enforcement of vice, liquor or narcotics laws, it is all but impossible to obtain evidence for prosecution save by the use of decoys. There are rarely complaining witnesses. The participants in the crime enjoy themselves. * * * Therefore, the law must attempt to distinguish between those deceits and persuasions which are permissible and those which are not.’ ” Lewis v. United States (1966), 385 U.S. 206, 210-211, 87 S.Ct. 424, 427, 17 L.Ed.2d 312, 316, fn. 6, quoting Model Penal Code Tent. Draft No. 9 (1959) 16, Section 2.10, comment.

Although the Lewis case concerned a deceptive entry into Lewis’s home by a federal narcotics agent, we believe the court’s holding instructs as to which deceits and persuasions are tolerated by the Fourth Amendment. The Lewis court decided that Lewis had significantly decreased his privacy expectations by converting his home into a commercial center used to conduct illegal transactions. Id. at 211, 87 S.Ct. at 427,17 L.Ed.2d at 316.

Likewise, in the regulatory context, liquor permit holders possess a reasonable expectation of privacy analogous to that of individuals conducting commercial criminal transactions in residences. Applying the Lewis rationale, liquor control agents, authorized employees of the Department of Liquor Control, and peace officers attempting to enforce liquor industry laws and regulations may reasonably enter D^4 permit premises to conduct regulatory inspections though the entry is the result of some deception.

CONSENT

The Liquor Control Commission argues that the investigating agents entered the various post premises with consent, citing State v. Posey (1988), 40 Ohio St.3d 420, 534 N.E.2d 61. The D-4 permit holder’s consent, however, is unnecessary when an agent conducts a warrantless administrative search pursuant to a constitutionally acceptable statutory inspection program, and therefore is not relevant to the resolution of these cases.⁴

By participating in the highly regulated liquor industry, the D-4 permit holder’s consent to inspections of the permit premises is stipulated. See, e.g., Marshall v. Barlow’s, Inc., 436 U.S. at 313, 98 S.Ct. at 1821, 56 L.Ed.2d at 312; Solomon v. Liquor Control Comm., 4 Ohio St.2d at 36, 33 O.O.2d at 342, 212 N.E.2d at 599. Locking the doors to the premises neither creates a requirement for consent to enter nor negates the consent to search already given by virtue of applying for and accepting a liquor permit.

CONCLUSION

Accordingly, we hold that when conducting a warrantless administrative search pursuant to a constitutionally valid statutory inspection program, peace officers and authorized agents or employees of the Department of Liquor Control need not identify themselves prior to entering permit premises. Our holding is limited to those warrantless administrative searches conducted during the regular business hours of the permit premises of liquor permit holders of any class. Thus, in each of the four cases at bar, we reverse the judgment of the court of appeals.

Judgments reversed.

Moyer, C.J., concurs. Pfeifer and Lundberg Stratton, JJ., concur in the syllabus and judgment. Douglas, Resnick and F.E. Sweeney, JJ., dissent.

3 . The “knock and announce” rule has its origins in the English common-law protection of a man’s house as “ ‘his castle of defense and asylum.’ ” Wilson v. Arkansas, 514 U.S. at 931, 115 S.Ct. at , 131 L.Ed.2d at 980, quoting 3 Blaekstone, Commentaries (1768) 288. The Tule developed from the recognition that individuals should be afforded the opportunity to comply with the law and avoid the property destruction to the home occasioned by forcible entries. Richards v. Wisconsin (1997), 520 U.S. 385, —, 117 S.Ct. 1416, 1421, 137 L.Ed.2d 615, 624, fn. 5. Additionally, individuals should be given the opportunity to prepare themselves, as many forcible entries into the home occur late at night or in the early morning. Id. These considerations are not present in the cases at bar.

4 . Entry into D-4 permit premises by force may require prior announcement. However, even when force is used, not every entry requires an announcement. Wilson v. Arkansas, 514 U.S. at 934, 115 S.Ct. at 1918, 131 L.Ed.2d at 982. The reasonableness of the entry is still the ultimate inquiry. Id. Under certain circumstances, it is reasonable to enter by force without prior announcement. Richards v. Wisconsin, 520 U.S. at — - —, 117 S.Ct. at 1421-1422, 137 L.Ed.2d at 624.