Patel v. City of L. A., Corp.

• Decision Date: 24 December 2013
• Docket Number: No. 08–56567.,08–56567.
• Citation: 738 F.3d 1058
• Parties: Naranjibhai PATEL; Ramilaben Patel, Plaintiffs–Appellants, v. CITY OF LOS ANGELES, a municipal corporation, Defendant–Appellee.
• Court: U.S. Court of Appeals — Ninth Circuit

738 F.3d 1058

Naranjibhai PATEL; Ramilaben Patel, Plaintiffs–Appellants,

v.CITY OF LOS ANGELES, a municipal corporation, Defendant–Appellee.

No. 08–56567.

United States Court of Appeals,Ninth Circuit.

Argued and Submitted En Banc June 24, 2013.

Filed Dec. 24, 2013.

Frank A. Weiser (argued), Law Offices of Frank A. Weiser, Los Angeles, CA, for Plaintiffs–Appellants.

Todd T. Leung (argued), Deputy City Attorney; Rockard J. Delgadillo, City Attorney; Laurie Rittenberg, Assistant City Attorney, Office of the City Attorney, Los Angeles, CA, for Defendant–Appellee.

Appeal from the United States District Court for the Central District of California, Dale S. Fischer, District Judge, Presiding. D.C. No. 2:05–cv–01571–DSF–AJW.

Before: ALEX KOZINSKI, Chief Judge, and DIARMUID F. O'SCANNLAIN, RAYMOND C. FISHER, MARSHA S. BERZON, RICHARD C. TALLMAN, RICHARD R. CLIFTON, CONSUELO M. CALLAHAN, MILAN D. SMITH, JR., MARY H. MURGUIA, MORGAN CHRISTEN and PAUL J. WATFORD, Circuit Judges.

OPINION

WATFORD, Circuit Judge:

Los Angeles Municipal Code § 41.49 requires hotel and motel operators to keep records with specified information about their guests. Plaintiffs, motel owners in Los Angeles, challenge a provision of § 41.49 authorizing warrantless, onsite inspections of those records upon the demand of any police officer. We are asked to decide whether this provision is facially invalid under the Fourth Amendment.

I

Section 41.49 requires hotel and motel operators to collect and record detailed information about their guests in either paper or electronic form. The records must contain: the guest's name and address; the number of people in the guest's party; the make, model, and license plate number of the guest's vehicle if the vehicle will be parked on hotel property; the guest's date and time of arrival and scheduled date of departure; the room number assigned to the guest; the rate charged and the amount collected for the room; and the method of payment. L.A. Mun.Code § 41.49(2)(a). For cash-paying and walk-in guests, as well as any guest who rents a room for less than twelve hours, the records must also contain the number and expiration date of the identification document the guest presented when checking in. § 41.49(4). For guests who check in using an electronic kiosk, hotel operators must record the guest's name, reservation and credit card information, and the room number assigned to the guest. § 41.49(2)(b). These records must be “kept on the hotel premises in the guest reception or guest check-in area or in an office adjacent to that area” for a period of 90 days. § 41.49(3)(a).

Plaintiffs do not challenge these requirements. But they do challenge § 41.49's warrantless inspection requirement, which states that hotel guest records “shall be made available to any officer of the Los Angeles Police Department for inspection,” provided that, “[w]henever possible, the inspection shall be conducted at a time and in a manner that minimizes any interference with the operation of the business.” Id.¹ The city stipulated that this provision authorizes police officers to inspect hotel guest records at any time without consent or a search warrant. Failure to comply with an officer's inspection demand is a misdemeanor, punishable by up to six months in jail and a $1000 fine. L.A. Mun.Code § 11.00(m).

Plaintiffs have been and will continue to be subjected to warrantless record inspections under § 41.49. They filed this action under 42 U.S.C. § 1983 seeking declaratory and injunctive relief barring continued enforcement of § 41.49's warrantless inspection provision, on the ground that it is facially invalid under the Fourth Amendment. Following a bench trial, the district court rejected plaintiffs' facial challenge and entered judgment for the City of Los Angeles.

II

The first question raised by plaintiffs' facial challenge is whether a police officer's non-consensual inspection of hotel guest records under § 41.49 constitutes a Fourth Amendment “search.” We have little difficulty concluding that it does.

The Fourth Amendment protects the right of the people to be secure in their “persons, houses, papers, and effects” against unreasonable searches and seizures. U.S. Const. amend. IV. A search occurs for Fourth Amendment purposes when the government physically intrudes upon one of these enumerated areas, or invades a protected privacy interest, for the purpose of obtaining information. United States v. Jones, ––– U.S. ––––, 132 S.Ct. 945, 949–51, 181 L.Ed.2d 911 (2012); Katz v. United States, 389 U.S. 347, 360–61, 88 S.Ct. 507, 19 L.Ed.2d 576 (1967) (Harlan, J., concurring). The “papers” protected by the Fourth Amendment include business records like those at issue here. See Hale v. Henkel, 201 U.S. 43, 76–77, 26 S.Ct. 370, 50 L.Ed. 652 (1906).

Record inspections under § 41.49 involve both a physical intrusion upon a hotel's papers and an invasion of the hotel's protected privacy interest in those papers, for essentially the same reasons. “One of the main rights attaching to property is the right to exclude others, and one who owns or lawfully possesses or controls property will in all likelihood have a legitimate expectation of privacy by virtue of this right to exclude.” Rakas v. Illinois, 439 U.S. 128, 144 n. 12, 99 S.Ct. 421, 58 L.Ed.2d 387 (1978) (citation omitted). The business records covered by § 41.49 are the hotel's private property, and the hotel therefore has both a possessory and an ownership interest in the records. By virtue of those property-based interests, the hotel has the right to exclude others from prying into the contents of its records, which is also the source of its expectation of privacy in the records. Cf. Florida v. Jardines, ––– U.S. ––––, 133 S.Ct. 1409, 1418–19, 185 L.Ed.2d 495 (2013) (Kagan, J., concurring). That expectation of privacy is one society deems reasonable because businesses do not ordinarily disclose, and are not expected to disclose, the kind of commercially sensitive information contained in the records—e.g., customer lists, pricing practices, and occupancy rates. The hotel retains that expectation of privacy notwithstanding the fact that the records are required to be kept by law. See McLaughlin v. Kings Island, Div. of Taft Broad. Co., 849 F.2d 990, 995–96 (6th Cir.1988); Brock v. Emerson Elec. Co., 834 F.2d 994, 996 (11th Cir.1987).

The hotel's property and privacy interests are more than sufficient to trigger Fourth Amendment protection. As to the property-based rationale for our holding, which is grounded in a century-old line of Supreme Court precedent beginning with Hale, 201 U.S. at 76–77, 26 S.Ct. 370, the dissent is in complete agreement. See Clifton Dissent at 1070. As to the privacy-based rationale, the dissent asserts that plaintiffs were required to prove, as a factual matter, that their business records are subject to a reasonable expectation of privacy. Clifton Dissent at 1072–74. We do not believe business owners are required to prove that proposition, any more than homeowners are required to prove that papers stored in a desk drawer are subject to a reasonable expectation of privacy. So long as a business's records are “private,” as the Court held in Hale, 201 U.S. at 76, 26 S.Ct. 370, they fall within the scope of the “papers” protected by the Fourth Amendment.

No one contests here that plaintiffs' hotel records are in fact private. If the records were “publicly accessible,” as the dissent posits, Clifton Dissent at 1073, it is true they would not be protected by the Fourth Amendment, since “[w]hat a person knowingly exposes to the public, even in his own home or office, is not a subject of Fourth Amendment protection.” Katz, 389 U.S. at 351, 88 S.Ct. 507. But, by the same measure, if the records were publicly accessible, the police of course would not need to rely on § 41.49 to gain access to them.

That the hotel records at issue contain information mainly about the hotel's guests does not strip them of constitutional protection. To be sure, the guests lack any privacy interest of their own in the hotel's records. United States v. Cormier, 220 F.3d 1103, 1108 (9th Cir.2000); see United States v. Miller, 425 U.S. 435, 440, 96 S.Ct. 1619, 48 L.Ed.2d 71 (1976). But that is because the records belong to the hotel, not the guest, and the records contain information that the guests have voluntarily disclosed to the hotel. Cormier, 220 F.3d at 1108. It may be the case, as the dissent speculates, that the hotel in Cormier voluntarily consented to an inspection of its guest records. See Clifton Dissent at 1072–73. But that does not support the dissent's contention that hotels generally lack an expectation of privacy in such records. Otherwise, the fact that a defendant in one of our published decisions voluntarily consented to the search of his home would establish that the rest of us lack an expectation of privacy in our own homes.

A police officer's non-consensual inspection of hotel guest records plainly constitutes a “search” under either the property-based approach of Jones or the privacy-based approach of Katz. Such inspections involve both a physical intrusion upon the hotel's private papers and an invasion of the hotel's protected privacy interest in those papers for the purpose of obtaining information. See Jones, 132 S.Ct. at 951 n. 5. Whether the officers rifle through the records in paper form, or view the records on a computer screen, they are doing so to obtain the information contained in the records. That the inspection may disclose “nothing of any great personal value” to the hotel—on the theory, for example, that the records contain “just” the hotel's customer list—is of no consequence. Arizona v. Hicks, 480 U.S. 321, 325, 107 S.Ct. 1149, 94 L.Ed.2d 347 (1987). “A search is a search, even if it happens to disclose nothing but the bottom of a turntable.” Id.

III

The question we must next decide is whether the searches authorized by § 41.49 are...