Dow Chemical Co. v. US, By and Through Gorsuch

• Decision Date: 19 April 1982
• Docket Number: Civ. No. 78-10044.
• Citation: 536 F. Supp. 1355
• Parties: The DOW CHEMICAL COMPANY, Plaintiff, v. UNITED STATES of America, By and Through Anne M. GORSUCH, Administrator, Environmental Protection Agency, Defendants.
• Court: U.S. District Court — Western District of Michigan

536 F. Supp. 1355

The DOW CHEMICAL COMPANY, Plaintiff, v. UNITED STATES of America, By and Through Anne M. GORSUCH, Administrator, Environmental Protection Agency, Defendants.

Civ. No. 78-10044.

United States District Court, E. D. Michigan, N. D.

April 19, 1982.

Jane M. Gootee, John Gleeson, Bernd W. Sandt, Haskell H. Shelton, Midland, Mich., for Dow Chemical Co.

Jose R. Allen, Dept. of Justice, J. Daniel Berry, EPA, Washington, D. C., for EPA.

MEMORANDUM OPINION AND ORDER

JAMES HARVEY, District Judge.

I. Introduction

This case involves a constitutional and statutory challenge to the use of warrantless aerial photography of a chemical manufacturing plant by the Environmental Protection Agency (EPA). The Dow Chemical Company (Dow) asserts that this activity by the EPA constitutes an unreasonable search in violation of the Fourth Amendment, a taking and misappropriation of trade secrets in violation of the Fifth Amendment, and the use of an inspection tool which is outside the scope of EPA's statutory authority under Sections 113 and 114 of the Clean Air Act, 42 U.S.C. §§ 7413-7414 (1980). Dow seeks a declaratory judgment and injunctive relief.

II. Facts

The Dow Chemical Company owns and operates a 2000 acre manufacturing plant in Midland, Michigan. In the latter part of 1977 EPA, the governmental agency primarily charged with administering and enforcing the federal pollution laws, was conducting an investigation of Dow to check emissions from the power houses located inside Dow's facility for possible violations of federal air quality standards.

In September of 1977, EPA made an on-site inspection of the power houses at Dow's plant. After the inspection EPA requested, and later received, schematic drawings of the power houses from Dow.

In December of 1977 EPA again contacted Dow and requested a subsequent entry for purposes of inspecting the power houses. Prior to making this request EPA had already begun preparations for a planned enforcement action against Dow.¹ EPA informed Dow that as part of the inspection it would be taking photographs of the Dow layout and facility. Dow objected to EPA's intention to take photographs and therefore denied EPA's request for entry. In response, EPA suggested to Dow that it would consider seeking a search warrant to gain entrance to the plant.

Rather than institute a civil action or seek a search warrant, EPA decided to obtain aerial photographs of Dow's facility. On February 6, 1978, EPA contracted with Abrams Aerial Survey Corporation (Abrams), a private company located in Lansing, Michigan, to take aerial photographs of the Dow plant. EPA specifically informed Abrams as to the altitude, location, and direction from which the photographs were to be taken.

In the afternoon of February 7, 1978 Abrams flew over Dow's plant as directed. The aircraft made at least 6 passes over the plant at altitudes of 12,000, 3,000, and 1,200 feet. Abrams used a sophisticated Wild RC-10 aerial mapping camera to take approximately 75 color photographs of various parts of the Dow plant.²

The Court has carefully examined all of the photographs and has been struck by their vivid detail and resolution. As amply demonstrated by Dow at a hearing before the Court, some of the photographs taken from directly above the plant at 1,200 feet are capable of enlargement to a scale of 1 inch equals 20 feet or greater, without significant loss of detail or resolution. When enlarged in this manner, and viewed under magnification, it is possible to discern equipment, pipes, and power lines as small as ½ inch in diameter. Many of these minute, but observable items are located in interior regions of the plant which are surrounded by buildings and other structures which make observation from anywhere but directly above, a near physical impossibility.³

Dow was not aware of the EPA flyover either before or during its occurrence. When it subsequently became aware of this event a few weeks later, from sources other than EPA, Dow immediately instituted this action.

III. Jurisdiction and Issues Presented

The Court has jurisdiction over the subject matter herein pursuant to 28 U.S.C. § 1331, 5 U.S.C. § 702, and 28 U.S.C. §§ 2201-2202.

This action presents 3 central issues for the Court's consideration:

I. Whether the EPA flyover and aerial photography of Dow's facilities constitutes an unreasonable search in violation of the Fourth Amendment;

II. Whether aerial photography of Dow's plant by EPA constitutes a taking of property (trade secrets) without due process in violation of the Fifth Amendment; and

III. Whether EPA exceeded its statutory authority under Sections 113 and 114 of the Clean Air Act in using warrantless aerial photography as an investigatory tool.

The matter is presently before the Court on cross motions for summary judgment. Dow seeks summary judgment on the Fourth Amendment and statutory issues, and EPA seeks entry of summary judgment on all issues.

This case is appropriate for summary judgment on the Fourth Amendment and Clean Air Act questions, since the material facts relative to these claims are not in dispute, and a decision thereon can be rendered as a matter of law. F.R.Civ.P. 56(c). See Felix v. Young, 536 F.2d 1126, 1130 (CA 6, 1976). As to the Fifth Amendment claim, however, and for reasons more fully described later in this opinion, infra, genuine issues of material fact exist which render disposition of that question by summary judgment inappropriate. See Willetts v. Ford Motor Co., 583 F.2d 852, 855 (CA 6, 1978).

For the reasons stated below, the Court concludes that the EPA flyover and aerial photography violated Dow's rights under both the Fourth Amendment and the Clean Air Act. Partial summary judgment on these issues will therefore be entered in favor of Dow and against EPA.

IV. Discussion

FOURTH AMENDMENT

The first clause of the Fourth Amendment to the United States Constitution 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..." As the very language of this amendment makes clear, the Constitution does not proscribe all governmental searches and seizures, only those that are unreasonable.

Dow puts forth at least 3 analytical arguments in support of its position that the overhead flight and aerial photography by EPA constituted an unreasonable search: first, under Coolidge v. New Hampshire, 403 U.S. 443, 91 S.Ct. 2022, 29 L.Ed.2d 564 (1971), that a warrantless search is per se unreasonable; second, under Marshall v. Barlow's Inc., 436 U.S. 307, 98 S.Ct. 1816, 56 L.Ed.2d 305 (1978) that this was an unreasonable warrantless inspection; and third, under Katz v. United States, 389 U.S. 347, 88 S.Ct. 507, 19 L.Ed.2d 576 (1967), that EPA violated Dow's reasonable expectation of privacy. The Court will separately address each of these contentions.

Before turning to Dow's first assertion, the Court wishes to point out that the EPA has admitted, both in its briefs and at oral argument, that the flyover constituted both a "quest for evidence"⁴ and a "search" of Dow's plant. (EPA Brief at 9; Transcript of oral argument at 44).⁵ EPA has also admitted that the search was conducted without first securing a warrant. Id. With these two premises established, the Court need only determine whether the search was unreasonable within the meaning of the Fourth Amendment.

A. Per Se Unreasonable

Subject only to "a few specifically established and well-delineated exceptions," warrantless searches have been recognized as per se unreasonable and therefore violative of the Fourth Amendment. Katz v. United States, 389 U.S. 347, 357, 88 S.Ct. 507, 514, 19 L.Ed.2d 576 (1967); Schneckloth v. Bustamonte, 412 U.S. 218, 219, 93 S.Ct. 2041, 2043, 36 L.Ed.2d 854 (1973); Coolidge v. New Hampshire, 403 U.S. 443, 454-455, 91 S.Ct. 2022, 2031-2032, 29 L.Ed.2d 564 (1971). On the basis of this principle, Dow asserts that EPA's aerial search of its facility, without prior judicial scrutiny or oversight, is per se unreasonable.⁶ Relying upon Donovan v. Dewey, 452 U.S. 594, 101 S.Ct. 2534, 69 L.Ed.2d 262 (1981), EPA responds that warrantless searches of commercial establishments are not per se prohibited by the Fourth Amendment, but are only impermissible if they violate a legitimate expectation of privacy.

In the area of administrative inspections, wherein this case "roughly" fits, the Supreme Court appears to have retreated somewhat from the hard and fast conclusion that warrantless searches are per se unreasonable.⁷ In Marshall v. Barlow's Inc., 436 U.S. at 313, 98 S.Ct. at 1820, the Court, in tracing some of its earlier decisions, used the phrase "generally unreasonable" to describe warrantless administrative searches. Later in the same opinion the Court stated that "the reasonableness of a warrantless search ... will depend upon the specific enforcement needs and privacy guarantees of each statute." Id. at 322, 98 S.Ct. at 1825. In its most recent decision in this area, the Court in Donovan v. Dewey, 452 U.S. at 599, 101 S.Ct. at 2538, 69 L.Ed.2d at 269-270, announced that:

... the Fourth Amendment protects the interest of the owner of property in being free from unreasonable intrusions onto his property by agents of the government. Inspections of commercial property may be unreasonable if they are not authorized by law or are unnecessary for the furtherance of federal interests.

. . . . .

... a warrant may not be constitutionally required when Congress has reasonably determined that warrantless searches are necessary to further a regulatory scheme and the federal regulatory presence is sufficiently comprehensive and defined that the owner of commercial property cannot hell) but be aware that his property will be subject to periodic inspections undertaken for specific purposes.⁸

On the basis of this authority, the Court agrees with EPA that, under the facts of this case,...