The Fourth Amendment to the United States Constitution recognizes the sanctity of one’s home to be free of governmental intrusion by requiring the government to obtain a search warrant before barging in to conduct a search.
Such a prohibition against warrantless searches extends to commercial businesses as well. 4,432 Mastercases of Cigarettes, More or Less (9th Cir., 2006) 448 F. 3d 1168, at 1176; see also New York v. Burger (1987) 482 U.S. 691.
“The United States Supreme Court, however, has carved out a limited number of contexts within which a warrant is not required,” such as administrative searches of “closely regulated” industries. Id. To determine whether an industry is “closely regulated,” the court looks to “the pervasiveness and regularity of the . . . regulation and the effect of such regulation upon an owner’s expectation of privacy.” Id.
A warrant is not required in such situations because the . . . regulatory presence is sufficiently comprehensive and defined that the owner of the commercial establishment cannot help but be aware that his property will be subject to periodic inspections undertaken for specific purposes.” Id; see also Mitchell v. Barlow’s, Inc. (1978) 436 U. S. 307, 313 (“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.”).
For example, no search warrant is required for police to search businesses whose purpose is liquor distribution, the sale of sporting weapons, stone quarrying and mining and automobile junkyards as they are considered “closely regulated industries.”
In the City of South El Monte, Phillip Kilgore owned and operated the Lavender Massage Center. He had owned and operated it since 2013. While he initially ran the business under a series of City licenses, in July 2017, the City approved a conditional use permit (“CUP”) for his massage establishment. The CUP set out a series of extensive conditions, including hours of operation, the qualifications of employees, limits on altering the interiors of the building and that Killgore “must allow two inspections a year . . . to ensure compliance of all conditions of approval.”
The CUP also referenced California’s Massage Therapy Act, a comprehensive certification and regulatory scheme adopted in 2014 that authorizes local governments to establish their own regulations. California Business & Professions Code §§ 4600 – 4621. The act allows local governments with the power to “manage [massage] establishments in the best interests of the individual community.”
In 2015, the City of South El Monte enacted Ordinance No. 1195 governing massage establishments. Its purpose was “to better control illicit operations and promote the public health, safety and welfare by imposing stricter requirements on massage practitioners, therapists and establishments.”
In August 2017, law enforcement sent in an undercover officer as a patron. The officer claimed he was propositioned for sex and a search warrant was executed on the business. According to Kilgore, City officials entered Lavender Massage on three separate occasions without consent or a court order and searched non-public areas for violations of the CUP. Although no criminal case was filed, the City eventually revoked Killgore’s CUP for multiple violations of the Massage Therapy Act and the City of South El Monte Ordinance No. 1195.
Killgore then filed a federal lawsuit under 42 U.S.C. § 1983against the City of South El Monte, claiming it violated his Fourth Amendment rights when authorities, without a warrant, searched his massage business. Killgore’s main argument was that the U.S. Supreme Court’s decision in City of Los Angeles v. Patel (2015) 576 U.S. 409, which refused to extend the “closely regulated” industry doctrine to hotels, fundamentally altered a long line of “closely regulate” industry cases.
Judge Steven V. Wilson of the United States District Court for the Central District of California dismissed the complaint for failure to state a claim. It rejected Killgore’s Patel argument.
Killgore then appealed to the U.S. Ninth Circuit Court of Appeals in Pasadena, which affirmed Wilson’s ruling. The Ninth Circuit found that the massage industry in California qualified as a “closely regulated” industry, meaning that the Fourth Amendment warrantless search exception for administrative searches of businesses applied.
It explained that the massage industry had over 30 years of close government regulation and therefore, Killgore had no reasonable expectation of privacy. Barlow’s, Inc., supra, 436 U.S. at 313.