People v. Paulson

• Decision Date: 04 January 1990
• Docket Number: No. A044696,A044696
• Citation: 216 Cal.App.3d 1480,265 Cal.Rptr. 579
• Court: California Court of Appeals Court of Appeals
• Parties: The PEOPLE, Plaintiff and Respondent, v. Lee Stewart PAULSON, Defendant and Appellant.

Page 579

265 Cal.Rptr. 579

216 Cal.App.3d 1480

The PEOPLE, Plaintiff and Respondent, v. Lee Stewart PAULSON, Defendant and Appellant.

No. A044696.

Court of Appeal, First District, Division 2, California.

Jan. 4, 1990.

Review Denied March 29, 1990.

Arthur C. Lipton, David B. Harrison, San Francisco, for defendant and appellant.

John K. Van de Kamp, Atty. Gen., Richard B. Iglehart, Chief Asst. Atty. Gen., John H. Sugiyama, Sr. Asst. Atty. Gen., Herbert F. Wilkinson, David D. Salmon, Deputy Attys. Gen., San Francisco, for plaintiff and respondent.

KLINE, Presiding Justice.

INTRODUCTION

Lee Stewart Paulson appeals his conviction following his plea of nolo contendere to one count of possession of cocaine. (Health & Saf.Code, § 11350, subd. (a).) The court suspended imposition of sentence and placed him on probation for three years on condition he serve 90 days in the county jail. He filed a timely appeal, challenging the lawfulness of the search. Specifically, he contends that the warrantless search of his bar by an officer of the Department of Alcoholic Beverage Control (hereafter Department) exceeded the scope of administrative searches permissible under Business and Professions Code sections 25753 and 25755. ¹ In the alternative, he contends those statutes are unconstitutional.

STATEMENT OF FACTS

On February 11, 1988, an anonymous informer tipped the Department that narcotic sales were occurring on the premises of the "My House" bar in San Francisco, and that the narcotics were kept in a safe behind the bar on the premises. A month later, on March 11, 1988, Jerry Meyer, a special investigator for the Department, went to the bar during its hours of operation, entered, identified himself, telephoned appellant (the holder of the liquor license at the premises), informed appellant he was conducting an inspection, and asked appellant to provide access to a safe and locked storage facility. When appellant arrived Meyer, who did not have a search warrant, asked him to open the safe. Appellant did so. Meyer did not seek to obtain consent, although appellant did not object. Twenty-two bindles of cocaine, totaling 5.5 grams, were found in the safe.

At the suppression hearing, Meyer testified that he searched the premises solely

because of the tip regarding a narcotics violation. Further, he maintained that the search was conducted under authority of Business and Professions Code sections prohibiting "any kind of illegal activity on licensed premises...."

DISCUSSION

I.

The Fourth Amendment's prohibition on unreasonable searches and seizures applies to commercial premises, as well as to private homes. (New York v. Burger (1987) 482 U.S. 691, 699, 107 S.Ct. 2636, 2642, 96 L.Ed.2d 601; Marshall v. Barlow's, Inc., (1978) 436 U.S. 307, 312, 98 S.Ct. 1816, 1820, 56 L.Ed.2d 305; See v. City of Seattle (1967) 387 U.S. 541, 543, 546, 87 S.Ct. 1737, 1741, 18 L.Ed.2d 943.) "However, unlike searches of private homes, which generally must be conducted pursuant to a warrant in order to be reasonable under the Fourth Amendment, legislative schemes authorizing warrantless administrative searches of commercial property do not necessarily violate the Fourth Amendment. See, e.g., United States v. Biswell, 406 U.S. 311, 92 S.Ct. 1593, 32 L.Ed.2d 87 (1972); Colannade Catering Corp. v. United States, 397 U.S. 72, 90 S.Ct. 774, 25 L.Ed.2d 60 (1970). The greater latitude to conduct warrantless inspections of commercial property reflects the fact that the expectation of privacy that the owner of commercial property enjoys in such property differs significantly from the sanctity accorded an individual's home, and that this privacy interest may, in certain circumstances, be adequately protected by regulatory schemes authorizing warrantless inspections. United States v. Biswell, supra, 406 U.S. at 316, 92 S.Ct. at 1596." (Donovan v. Dewey (1981) 452 U.S. 594, 598-599, 101 S.Ct. 2534, 2537-2538, 69 L.Ed.2d 262; Kim v. Dolch (1985) 173 Cal.App.3d 736, 742, 219 Cal.Rptr. 248.)

The Supreme Court has recognized an exception to the warrant requirement for administrative searches of certain "closely regulated industries which, by their very nature, require unannounced visits from government agents." (Terry York Imports, Inc. v. Department of Motor Vehicles (1987) 197 Cal.App.3d 307, 319, 242 Cal.Rptr. 790.) ² As the Supreme Court observed in Marshall v. Barlow's, Inc., supra, 436 U.S. 307, 313, 98 S.Ct. 1816, 1820: "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." (See also, New York v. Burger, supra, 482 U.S. 691, 700, 107 S.Ct. 2636, 2642.)

The liquor industry, the quintessential "closely regulated" business, provided the first opportunity for the Supreme Court to articulate the exception. In Colonnade Corp. v. United States, supra, 397 U.S. 72, 90 S.Ct. 774, the court "considered a warrantless search of a catering business pursuant to several federal revenue statutes authorizing the inspection of the premises of liquor dealers. Although the Court disapproved the search because the statute provided that a sanction be imposed when entry was refused, and because it did not authorize entry without a warrant as an alternative in this situation, it recognized that 'the liquor industry [was] long subject to close supervision and inspection.' Id., 397 U.S. at 77, 90 S.Ct. at 777." (New York v. Burger, supra, 482 U.S. 691, 700, 107 S.Ct. 2636, 2642.) The court recognized that with respect to the liquor industry, Congress has broad authority to fashion standards of reasonableness for searches and seizures. (Colonnade Corp. v. United States, supra, 397 U.S. at p. 77, 90 S.Ct. at p. 777.)

The closely regulated business exception, however, does not always operate to eliminate the warrant requirement. Nor is a long tradition of close government supervision a dispositive consideration in this regard. (Donovan v. Dewey, supra, 452 U.S. at p. 606, 101 S.Ct. at p. 2542; Bionic Auto Parts and Sales, Inc. v. Fahner (7th Cir.1983) 721 F.2d 1072, 1079.) The warrantless inspection of closely regulated business premises will be deemed unreasonable unless three criteria are met. "First, there must be a 'substantial' government interest that informs the regulatory scheme pursuant to which the inspection is made." (New York v. Burger, supra, 482 U.S. 691, 702, 107 S.Ct. 2636, 2644.) In Colonnade, for example, a substantial federal interest was identified "in protecting the revenue against various types of fraud." (397 U.S. at p. 75, 90 S.Ct. at p. 776.) "Second, the warrantless inspections must be 'necessary to further [the] regulatory scheme.' " (New York v. Burger, supra, 482 U.S. 691, 702, 107 S.Ct. 2636, 2644, quoting Donovan v. Dewey, supra, 452 U.S., at p. 600, 101 S.Ct. at p. 2538.) "Finally, 'the statute's inspection program, in terms of the certainty and regularity of its application, [must] provid[e] a constitutionally adequate substitute for a warrant.' [Donovan v. Dewey, 452 U.S., at p. 603, 101 S.Ct., at p. 2540.] In other words, the regulatory statute must perform the two basic functions of a warrant: it must advise the owner of the commercial premises that the search is being made pursuant to the law and has a properly defined scope, and it must limit the discretion of the inspecting officers. [Italics added.] [Citations.] To perform this first function, the statute must be 'sufficiently comprehensive and defined that the owner of commercial property cannot help but be aware that his property will be subject to periodic inspections undertaken for specific purposes.' Donovan v. Dewey, 452 U.S., at 600, 101 S.Ct., at 2538. In addition, in defining how a statute limits the discretion of the inspectors, we have observed that it must be 'carefully limited in time, place and scope.' [Italics added.]" (New York v. Burger, supra, 482 U.S. 691, 703, 107 S.Ct. 2636, 2644, quoting United States v. Biswell, supra, 406 U.S. at p. 315, 92 S.Ct. at p. 1596.)

It is for purposes of this case important to understand that a warrantless search may be upheld even though the administrative provisions proscribe conduct which is also criminal. In New York v. Burger, supra, 482 U.S. 691, 107 S.Ct. 2636, the Supreme Court upheld the warrantless search of an automobile junkyard pursuant to a statute authorizing such inspections. The statute was clearly aimed at controlling traffic in stolen vehicles and parts. (482 U.S. 691, 708, 107 S.Ct. 2636, 2647.) Concluding that the business was "closely regulated," the court found the statute satisfied the three applicable criteria and rejected the conclusion of the New York Court of Appeals that the statute violated the Fourth Amendment as it had no truly administrative purpose but was " 'designed simply to give the police an expedient means of enforcing penal sanctions for possession of stolen property.' [Citation.]" (482 U.S. at p. 698, 107 S.Ct. at p. 2641.) The Supreme Court observed that "a State can address a major social problem both by way of an administrative scheme and through penal sanctions. Administrative statutes and penal laws may have the same ultimate purpose of remedying the social problem, but they have different subsidiary purposes and prescribe different methods of addressing the problem. An administrative statute establishes how a particular business in a 'closely regulated' industry should be operated, setting forth rules to guide an operator's conduct of the business and allowing government officials to ensure that those rules are followed. Such a regulatory approach contrasts with that of the penal laws, a major emphasis of which is the punishment of individuals for specific acts of behavior." (482 U.S. at pp. 712-713, 107 S.Ct. at pp. 2649-2650, emphasis in original.) The court declared the statute there at issue "serves the regulatory goals of seeking to ensure that...