Gateway 2000, Inc. v. Limoges

• Decision Date: 02 July 1996
• Docket Number: No. 19375,19375
• Citation: 552 N.W.2d 591,1996 SD 81
• Parties: GATEWAY 2000, INC., A Delaware Corporation, Plaintiff and Appellant, v. Daniel LIMOGES, in His Official Capacity as Sheriff of Union County, South Dakota, Defendant and Appellee.
• Court: South Dakota Supreme Court

Page 591

552 N.W.2d 591

1996 SD 81

GATEWAY 2000, INC., A Delaware Corporation, Plaintiff and Appellant, v. Daniel LIMOGES, in His Official Capacity as Sheriff of Union

County, South Dakota, Defendant and Appellee.

No. 19375.

Supreme Court of South Dakota.

Argued April 23, 1996.

Decided July 2, 1996.

Suzan E. Boden and Kent Vriezelaar, Vriezelaar, Tigges, Edgington, Rossi, Bottaro & Boden, Sioux City, IA, for plaintiff and appellant.

John P. Slattery, Union County State's Atty., Elk Point, for defendant and appellee.

SABERS, Justice.

¶1 Gateway 2000, Inc. appeals from a denial of an injunction and a grant of declaratory judgment to the sheriff of Union County, South Dakota. We reverse and remand.

FACTS

¶2 Gateway is a corporation with its principal place of business in North Sioux City, Union County, South Dakota. Gateway manufactures and distributes personal computers throughout the world and employs more than 6000 people. Approximately 4000 of those employees work at the North Sioux City facility. The employees reside in Iowa, Nebraska and South Dakota.

¶3 The sheriff comes to the Gateway facility in order to serve approximately thirty employees per week with civil process. The matters sought to be served upon Gateway employees are for the most part summonses, garnishments and executions based on judgments from South Dakota and neighboring states. In order to facilitate this service and cooperate with the sheriff, Gateway allows the sheriff to enter at the visitor's entrance. The sheriff advises the Gateway security staff of the names of individuals upon whom he seeks service of process. The employees are notified and informed that the sheriff is waiting at the visitor's entrance to serve papers on them. The employees have the option of going to the visitor's entrance to be served or remaining at their work station. Gateway management does not force its employees to accept service of civil matters. Each employee called for service of process results in approximately twenty minutes of lost productivity and sales to Gateway.

¶4 The sheriff now demands entry and access to the employee work stations at Gateway. The sheriff has notified Gateway that any person who interferes or denies access to him or his deputies will be arrested, charged and prosecuted for obstruction of justice. On one occasion, an employee refused to accept service at the visitor's entrance and the sheriff "inadvertently obtained access" to the employee's work station and served him in front of his co-workers. Gateway claims this causes undue disturbance and commotion in the private work areas.

¶5 Gateway sued the sheriff in his official capacity and requested an injunction and declaratory judgment. Gateway alleged violation of its

constitutional rights to be free and secure from unreasonable searches and seizures; its right to equal protection and due process of the law; and its right to privacy, all in violation of the First, Fourth and Fourteenth Amendments to the Constitution of the United States and Section 11, Article VI of the South Dakota Constitution.

The trial court denied the injunction and granted declaratory judgment to the sheriff, stating:

The case law gives Fourth Amendment rights to a person's home and to a lesser extent to business premises. Primarily the right applies to an area where there is an expectation of privacy. These would include lockers, bathrooms, areas set aside for personal use, or business files. There is no such expectation demonstrated for areas where employees congregate or perform their work.

Gateway appeals.

¶6 1. Whether there is a justifiable expectation of privacy in Gateway's employee work area.

¶7 The Fourth Amendment to the United States Constitution protects the rights of people against unreasonable intrusions by the State. " '[T]he security of one's privacy against arbitrary intrusion by the police' is fundamental to a free society and as such protected by the Fourteenth Amendment." Frank v. Maryland, 359 U.S. 360, 362, 79 S.Ct. 804, 807, 3 L.Ed.2d 877, 880 (1959) overruled on other grounds by Camara v. Municipal Court, 387 U.S. 523, 528, 87 S.Ct. 1727, 1730, 18 L.Ed.2d 930, 935 (1967) (quoting Wolf v. Colorado, 338 U.S. 25, 27, 69 S.Ct. 1359, 1361, 93 L.Ed. 1782, 1785 (1949) overruled on other grounds by Mapp v. Ohio, 367 U.S. 643, 655, 81 S.Ct. 1684, 1691, 6 L.Ed.2d 1081, 1090 (1961)). The Fourth Amendment of the United States Constitution provides:

The right of the people to be secure in their persons, houses, papers and effects, against unreasonable searches and seizures, shall not be violated; and no warrants shall issue but upon probable cause, supported by oath or affirmation, and particularly describing the place to be searched, and the persons or things to be seized.

The South Dakota Constitution, Article VI, § 11, provides:

The right of the people to be secure in their persons, houses, papers and effects, against unreasonable searches and seizures shall not be violated, and no warrant shall issue but upon probable cause supported by affidavit, particularly describing the place to be searched and the person or thing to be seized.

¶8 The Fourth Amendment condemns "unreasonable searches and seizures" and protects two rights.

The first of these is the right to be secure from intrusion into personal privacy, the right to shut the door on officials of the state unless their entry is under proper authority of law. The second, and intimately related protection, is self-protection: the right to resist unauthorized entry which has as its design the securing of information to fortify the coercive power of the state against the individual, information which may be used to effect a further deprivation of life or liberty or property.

Frank, 359 U.S. at 365, 79 S.Ct. at 808, 3 L.Ed.2d at 881 (emphasis added).

¶9 The United States Supreme Court has held business premises are protected by the Fourth Amendment. G.M. Leasing Corp. v. United States, 429 U.S. 338, 353, 97 S.Ct. 619, 629, 50 L.Ed.2d 530, 544 (1977) (citing See v. City of Seattle, 387 U.S. 541, 87 S.Ct. 1737, 18 L.Ed.2d 943 (1967); Go-Bart Importing Co. v. United States, 282 U.S. 344, 51 S.Ct. 153, 75 L.Ed. 374 (1931); Silverthorne Lumber Co. v. United States, 251 U.S. 385, 40 S.Ct. 182, 64 L.Ed. 319 (1920)).

¶10 Gateway concedes that the expectation of privacy in commercial premises is less than that in a person's home. New York v. Burger, 482 U.S. 691, 700, 107 S.Ct. 2636, 2642, 96 L.Ed.2d 601, 612 (1987). The United States Supreme Court "has recognized that a business, by its special nature and voluntary existence, may open itself to intrusions that would not be permissible in a purely private context," like administrative searches in a highly regulated business. G.M. Leasing Corp., 429 U.S. at 353-54, 97 S.Ct. at 629, 50 L.Ed.2d at 544.

¶11 Despite concerns over privacy, two state intrusions are traditionally sanctioned: police searches for evidence and administrative inspections. Burger, 482 U.S. at 699-700, 107 S.Ct. at 2642, 96 L.Ed.2d at 612. However, the United States Supreme Court stated an intrusion to secure financial records and automobiles to enforce tax laws "was not based on the nature of its business, its license, or any regulation of its activities," G.M. Leasing Corp., 429 U.S. at 354, 97 S.Ct. at 629, 50 L.Ed.2d at 544, and "involves nothing more than the normal enforcement of the tax laws, and we find no justification for treating petitioner [business] differently [than a private person] in these circumstances simply because it is a corporation." Id. The Fourth Amendment prohibits intrusions into privacy, but allows special exceptions for gathering evidence and administrative inspections, presumably because of a proper state or federal interest in those activities. The sheriff admits he is not on the Gateway premises to enforce criminal law or to gather evidence for a criminal investigation, but claims his conduct is not a "search" within the meaning of the Fourth Amendment.

¶12 Whether the Fourth Amendment applies depends on whether Gateway

"can claim a 'justifiable,' a 'reasonable,' or a 'legitimate expectation of privacy' that has been invaded by government action. This inquiry ... normally embraces two discrete questions. The first is whether the individual, by his conduct, has 'exhibited an actual (subjective) expectation of privacy,' [Katz v. United States, 389 U.S. 347, 361, 88 S.Ct. 507 , 19 L.Ed.2d 576 (1967) ]--whether, in the words of the Katz majority, the individual has shown that 'he seeks to preserve [something] as private.' The second question is whether the individual's subjective expectation of privacy is 'one that society is prepared to recognize as "reasonable," ' ... whether, in the words of the Katz majority, the individual's expectation, viewed objectively, is 'justifiable' under the circumstances. [Katz, 389 U.S. at 353, 88 S.Ct. at 512]."

United States v. Knotts, 460 U.S. 276, 280, 103 S.Ct. 1081, 1084-85, 75 L.Ed.2d 55, 61 (1983) (quoting Smith v. Maryland, 442 U.S. 735, 740, 99 S.Ct. 2577, 2580, 61 L.Ed.2d 220, 226 (1979)).

¶13 The first question is whether the individual has exhibited a subjective expectation of privacy. Gateway maintains an internal security department and prohibits access beyond the visitor center to members of the public for security and safety reasons. It compares its visitor center with the front porch of a home--a place where the sheriff can present himself and request that employees come to the door. Beyond that, Gateway asserts "there is a clear expectation of privacy[,] the threshold of which cannot be crossed or violated absent the consent of the owner, a valid warrant, or an exigent circumstance." We agree.

¶14 The second question is whether society is prepared to recognize the individual's expectation of privacy as reasonable or justifiable under the circumstances. Gateway, like other businesses, has clearly-defined public areas. The...