Autoworld Specialty Cars, Inc. v. U.S.

• Decision Date: 31 March 1987
• Docket Number: No. 85-3850,85-3850
• Citation: 815 F.2d 385
• Parties: AUTOWORLD SPECIALTY CARS, INC.; Tom Joseph, Plaintiffs-Appellants, v. UNITED STATES of America, Secretary of Treasury, Commissioner of Customs, District Director of Customs for the District of Cleveland; Donald Charobee, Special Agent, Defendants-Appellees.
• Court: U.S. Court of Appeals — Sixth Circuit

Page 385

815 F.2d 385

55 USLW 2573

AUTOWORLD SPECIALTY CARS, INC.; Tom Joseph, Plaintiffs-Appellants, v. UNITED STATES of America, Secretary of Treasury,

Commissioner of Customs, District Director of

Customs for the District of Cleveland;

Donald Charobee, Special

Agent, Defendants-Appellees.

No. 85-3850.

United States Court of Appeals, Sixth Circuit.

Argued Oct. 14, 1986.

Decided March 31, 1987.

Samuel J. Ferruccio Jr., Samuel J. Ferruccio Jr. Co., LPA, Canton, Ohio, Richard A. Kulics (argued), Bloomfield, Mich., for plaintiffs-appellants.

James C. Lynch, Asst. U.S. Atty., Cleveland, Ohio, Dan A. Polster, Carla D. Moore, Ronald B. Bakeman (argued), Asst. U.S. Attys., for defendants-appellees.

Before ENGEL, JONES and KRUPANSKY, Circuit Judges.

KRUPANSKY, Circuit Judge.

Plaintiff-appellant Tom Joseph (Joseph) appealed from a final order of the district court denying the return of six automobiles seized by agents of the United States Customs Service (Customs).

At all times relevant to this case Joseph was engaged in the business of importing for resale foreign manufactured automobiles. He owned and operated a Canton, Ohio auto dealership known as Tom Joseph Enterprises (Joseph Enterprises) as well as its successor-in-interest Autoworld Specialty Cars, Inc. (Autoworld).

Pursuant to applicable statutes and regulations, an imported foreign automobile may not be sold or offered for sale unless the vehicle complies with safety standards mandated by the United States Department of Transportation (DOT) and air pollution standards set by the United States Environmental Protection Agency (EPA). Foreign automobiles that comply with DOT and EPA standards at the time of entry into the United States may be sold immediately upon release by the Bureau of Customs. If, however, a foreign vehicle does not comply with the agencies' standards at the time of entry, the importer must modify it to comply with those specifications before it is sold or offered for sale. Customs regulations permit an automobile dealer to conditionally import a non-conforming vehicle into the United States upon posting an entry bond and executing Customs form HS-7 (HS-7) attesting his awareness of the non-conforming condition of the vehicle and pledging that the vehicle will not be sold or offered for sale until such time as it has been modified to comply with all DOT and EPA standards and the bond securing the vehicle's conditional entry has been released. 19 C.F.R. Sec. 12.80(b)(1)(iii).

After an imported motor vehicle is inspected at its port of entry, DOT and EPA notify the importer of the required modifications to bring the vehicle into compliance with DOT and EPA specifications. To attain release of the entry bond, the importer must provide DOT and EPA with a "conformity package" consisting of affidavits describing the modifications performed on the vehicle and photographs of the modified vehicle. DOT and EPA, upon receipt of the "conformity package," advises Customs that the vehicle has been conformed whereupon it authorizes release of the entry bond and closes its file on the vehicle.

In January of 1985, Customs received information that Joseph was selling non-complying imported motor vehicles. Customs assigned Special Agent Donald Charobee (Charobee) to investigate the charges. Between January and May of 1985, Charobee, while working as an undercover agent, visited both Tom Joseph Enterprises and Autoworld. During those visits, Charobee observed several foreign vehicles displayed in the showrooms and was quoted a sale price for each vehicle from a salesperson.

Based upon his comparative examination of DOT records and Ohio title certificate files, Charobee concluded that Joseph, Joseph Enterprises and Autoworld had imported and sold at least 180 foreign vehicles between September of 1983 and May of 1985 and that a number of the imported vehicles had not conformed with DOT standards when they were initially inspected at their ports of entry. A comparison of the records disclosed that Joseph Enterprises had sold at least 33 of the vehicles prior to obtaining their release from bond. Accordingly, Charobee continued his investigation to determine if Joseph had engaged in a pattern of executing false declaration HS-7 forms with an intent to evade the law by selling vehicles without first bringing them into conformity with DOT and EPA standards.

On May 23, 1985 Charobee applied to the United States District Court for the Northern District of Ohio for a warrant to search Autoworld for "documents" memorializing the purchase and sale of foreign made vehicles by Joseph, Joseph Enterprises, Autoworld or any of their agents. Charobee made no effort to seek prior judicial approval to search for or examine automobiles displayed in the showroom for compliance with DOT and EPA standards even though his sworn affidavit supporting the warrant application specifically stated that Charobee had "reasonable cause to believe ... that records and other evidence in the form of vehicles themselves may be found on the premises to search." Charobee requested the assistance of Senior Customs Inspector Richard Gow (Gow) on the day the search warrant was to be executed. Gow, who was regularly stationed in Newark, New Jersey, testified that he travelled to Canton, Ohio for the express purpose of inspecting vehicles to verify compliance with DOT requirements.

The warrant was executed on May 29, 1985. Charobee and Gow examined the vehicles on the showroom floor and ascertained their vehicle identification numbers (VIN's). Gow thereupon telephoned DOT to determine if its records reflected that those vehicles were secured by an entry bond pursuant to an executed form HS-7. After DOT informed Gow that a number of the vehicles remained secured by entry bonds, Gow and Charobee inspected the bonded vehicles. As a result of their inspections, Charobee and Gow ordered the seizure of five vehicles from the Autoworld showroom floor. ¹

In August of 1985, Charobee returned to Autoworld and seized a Porsche 930 that was parked in a public driveway behind the Autoworld showroom. Prior to seizing the Porsche, Charobee had reviewed a police report, filed by Joseph, stating that the vehicle had been offered for sale to an individual named David Morg (Morg) who had stolen it while on a "test" drive. Morg had previously informed Charobee that the vehicle was not in compliance with DOT requirements at the time it had been offered to him for sale and Charobee's investigation further disclosed that Customs had not released the entry bond securing that vehicle. After inspecting the VIN of the Porsche in the driveway and determining that it was the vehicle that had been offered for sale in a non-conforming condition, Charobee seized the automobile.

Autoworld and Joseph filed this motion for return of property and suppression of evidence pursuant to Fed.R.Crim.P. 41(e). In their motion, Autoworld and Joseph argued that the vehicles had been seized in violation of the Fourth Amendment. The district court concluded that the seizure of the five vehicles on May 29, 1985 was valid under the "plain view" doctrine and that the seizure of the sixth vehicle in August of 1985 was lawful under the automobile exception to the search warrant requirement. Accordingly, the district court upheld the warrantless seizures and refused to return the vehicles to Joseph.

On appeal, Joseph contended that the district court erred in concluding that the seizure of the five foreign automobiles on May 29, 1985 was justified pursuant to the plain view doctrine because the incriminating character of the non-conforming vehicles was not "immediately apparent" to the officers executing the search warrant at the time they first discovered the vehicles. Joseph urged that the officers unlawfully expanded a judicially approved search for "documents" into an exploratory search for non-conforming vehicles. The government responded that the incriminating character of the vehicles was immediately apparent to the officers at the time they entered the showroom and therefore, the seizure was lawful under the plain view doctrine.

In their arguments to this court, both parties have assumed that the officers' actions in examining the vehicles on the showroom floor constituted a warrantless "search" which had to be justified under one of the clearly delineated exceptions to the search warrant requirement. However, existing Supreme Court precedent compels the conclusion that the officers' actions in examining vehicles that were on public display in the Autoworld showroom did not constitute a "search" within the meaning of the Fourth Amendment.

In United States v. Jacobsen, 466 U.S. 109, 113, 104 S.Ct. 1652, 1656, 80 L.Ed.2d 85 (1984), the Supreme Court stated that the Fourth Amendment provides protection against both unreasonable "searches" and unreasonable "seizures":

The first Clause of the Fourth Amendment provides that the "right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures, shall not be violated...." This text protects two types of expectations, one involving "searches," the other "seizures." A "search" occurs when an expectation of privacy that society is prepared to consider reasonable is infringed. A "seizure" of property occurs when there is some meaningful interference with an individual's possessory interests in that property.

In evaluating Joseph's claim that his Fourth Amendment rights were infringed, this court must first consider whether, under the facts of this case, a "search" and/or "seizure" occurred. Assuming that this court concludes that a "search" and/or "seizure" occurred, it must then determine if that "search" and/or "seizure" was "reasonable" within the meaning of the Fourth Amendment.

In Maryland v. Macon, 472 U.S. 463, 105 S.Ct. 2778, 86 L.Ed.2d 370 (1985), an undercover police detective entered an adult bookstore, browsed...