Advanced Building & Fabricatio v. Curtis Ayers ( 2019 )

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
ADVANCED BUILDING & No. 17-16618
FABRICATION, INC., a California
corporation; ROBERT HONAN, D.C. No.
Plaintiffs-Appellees, 2:13-cv-02380-
MCE-CKD
v.
CALIFORNIA HIGHWAY PATROL; OPINION
JOHN WILSON,
Defendants,
and
CURTIS AYERS,
Defendant-Appellant.
Appeal from the United States District Court
for the Eastern District of California
Morrison C. England, Jr., District Judge, Presiding
Argued and Submitted December 19, 2018
San Francisco, California
Filed March 13, 2019
2 ADVANCED BLDG. & FABRICATION V. AYERS
Before: Milan D. Smith, Jr. and Jacqueline H. Nguyen,
Circuit Judges, and Jane A. Restani, * Judge.
Opinion by Judge Nguyen
SUMMARY **
Civil Rights
The panel affirmed the district court’s denial, on
summary judgment, of qualified immunity to Curtis Ayers,
a former employee of the California State Board of
Equalization, in an action brought against him by plaintiff
Robert Honan and his business alleging Ayers violated
clearly established law by participating in a search of
plaintiff’s business following an altercation between Ayers
and plaintiff.
Ayers, who had mistaken plaintiff’s business for another
business, arrived at plaintiff’s premises without an
appointment, and identified himself as a Board of
Equalization employee, but did not present his ID badge. A
verbal altercation ensued and Ayers alleged that as he was
leaving, plaintiff tackled him and pushed him through the
door, resulting in Ayers dropping and damaging his laptop.
Ayers reported the incident and the California Highway
Patrol subsequently obtained a search warrant to search the
*
The Honorable Jane A. Restani, Judge for the United States Court
of International Trade, sitting by designation.
**
This summary constitutes no part of the opinion of the court. It
has been prepared by court staff for the convenience of the reader.
ADVANCED BLDG. & FABRICATION V. AYERS 3
premises of plaintiff’s business on the grounds that plaintiff
committed felony threats and vandalism against Ayers.
California Highway Patrol executed the warrant and Ayers
participated in the search, during which he allegedly
searched through plaintiff’s personal property.
Plaintiff sued Ayers and other defendants, including
California Highway Patrol officers, alleging claims for state-
law conversion and other tort claims, as well as a federal
claim under 42 U.S.C. § 1983. The panel affirmed the denial
of qualified immunity to Ayers and resolved the remaining
claims against the other defendants in concurrently filed
memorandum dispositions.
The panel rejected Ayers’ contention that there was no
Fourth Amendment violation because California law permits
State Board of Equalization employees to request inspection
of sales records from any business, and that therefore his
participation in the search would qualify under the
“administrative search” exception to the warrant
requirement. The panel held that none of the state provisions
cited by Ayers authorized forcible entry or searches.
Moreover, even assuming that state law permitted
warrantless inspections of business records, the intrusive
search here would not withstand scrutiny under the Fourth
Amendment. The panel further held that Ayers’s presence
was not necessary to aid in the officers’ execution of the
warrant, which had the purpose of seizing evidence relating
to allegations of criminal threats and vandalism. Because
Ayers’s presence was not related to the objective of the
search warrant, his conduct violated plaintiff’s Fourth
Amendment rights. The panel remanded for further
proceedings consistent with the panel’s opinion.
4 ADVANCED BLDG. & FABRICATION V. AYERS
COUNSEL
Michael von Loewenfeldt (argued) and Daniel J. Veroff,
Kerr & Wagstaffe LLP, San Francisco, California, for
Defendant-Appellant.
Polly J. Estes (argued), Estes Law Group, San Rafael,
California, for Plaintiffs-Appellees.
OPINION
NGUYEN, Circuit Judge:
Curtis Ayers, a former employee of the California State
Board of Equalization (“BOE”), appeals the district court’s
denial of qualified immunity in a suit brought against him by
Plaintiffs Robert Honan and his business, Advanced
Building & Fabrication, Inc. (“Advanced Building”). The
allegations in the complaint stem from an altercation
between Ayers and Honan, which led to the execution of a
search warrant at Advanced Building by officers of the
California Highway Patrol (“CHP”). Honan contends that
Ayers violated clearly established law by participating in the
search. We agree. Because the administrative search
exception does not apply and Ayers’s presence was not
necessary to aid in the officers’ execution of the warrant, we
affirm the district court’s denial of qualified immunity. 1
1
Honan sued numerous other defendants in addition to Ayers,
including CHP Officer John Wilson and the CHP itself. Citing numerous
factual disputes, the district court denied summary judgment and
immunity to all the defendants. We address only Ayers’s appeal of the
denial of qualified immunity in this opinion, and resolve the remaining
ADVANCED BLDG. & FABRICATION V. AYERS 5
I.
BACKGROUND
Robert Honan owns and operates Advanced Building, a
metal fabrication business that makes metal machines and
specialized metal parts. On May 7, 2012, Curtis Ayers, who
at that time was employed by the BOE, arrived at Advanced
Building without a prior appointment. Ayers identified
himself as a BOE employee, but he did not present his ID
badge and had mistaken Advanced Building for another
business. Honan suspected Ayers of a “fraudulent scam”
and, after a brief exchange of words, Honan told Ayers to
“Get the F* out.”
The parties dispute what happened next, but, as Ayers
was leaving (or being thrown out of) the building, his laptop
dropped and sustained damaged. According to Honan,
Ayers must have heard Honan approaching and “became
startled and stumbled out the exit door, falling to the
ground.” Ayers, on the other hand, claimed that Honan
tackled him and pushed him through the door as he was
leaving. In the process, Ayers alleges, the laptop flew out of
his hands, the monitor broke, and the laptop was rendered
inoperable.
Ayers contacted his supervisor, Dwayne Sims to report
the incident. Sims recommended that Ayers contact the
police, and they ultimately reported the incident to the CHP.
CHP Officer John Wilson responded and interviewed Ayers.
Officer Wilson subsequently detained Honan along the
claims of state law immunity raised by Ayers on appeal in a
memorandum disposition filed concurrently with this opinion.
Similarly, we resolve Officer Wilson’s and the CHP’s separate appeal,
No. 17-16669, in a separately filed memorandum disposition.
6 ADVANCED BLDG. & FABRICATION V. AYERS
highway, searched his truck, and interviewed him. Honan
offered to discuss the incident and invited Officer Wilson
and his partner back to Advanced Building. Honan gave
them a tour of Advanced Building and “showed them some
of the things Advanced was working on, including [an]
ammunition reloader,” and “a couple gold nuggets from [his]
collection.” The parties also dispute whether, during the
tour, Honan claimed to Officer Wilson that he had
surveillance video that would corroborate his version of the
incident with Ayers.
Officer Wilson subsequently obtained a search warrant
authorizing “any sheriff, marshal or police officer in the
county of Butte” to lawfully search the premises of
Advanced Building. To obtain the warrant, Officer Wilson
recounted in an affidavit the events as described to him by
both Ayers and Honan, and indicated that there was probable
cause to believe that Honan committed felony threats and
vandalism against Ayers. The warrant issued for officers to
search for and seize (1) items “capable of storing . . . video
and audio media,” (2) “indicia proving [Honan’s] ownership
and control” of the business, and (3) “evidence of
correspondence” that would corroborate the alleged felonies.
Officer Wilson indicated to Sims that “he wanted us, me and
Curtis [Ayers] to . . . complete the inspection” during the
execution of the search warrant because it was “important
that [the BOE] complete [their] inspection and not allow this
business or owner to get away with anything.” Sims
accepted the invitation, and told Ayers that he would like the
two of them to go during the search.
On May 30, 2012, the CHP executed the search warrant
at Advanced Building. Sims and Ayers waited in the car
until the CHP confirmed they could enter. They “did not
assist the CHP in their search efforts nor were [they] asked
ADVANCED BLDG. & FABRICATION V. AYERS 7
to do so,” though Ayers did at one point identify Honan and
show Officer Wilson where the assault occurred. Honan
asserts that he saw Ayers searching through a file cabinet of
personal records. Ayers acknowledged that he examined
any “sales permits or records [they] saw,” but denied taking
or damaging any property. Honan alleges that a substantial
amount of gold and silver was taken that day, as well as a
number of additional items and personal effects.
Honan and Advanced Building collectively filed a
complaint against the CHP, Officer Wilson, Ayers, and other
unnamed individuals, alleging state-law claims for
conversion and other tort claims, as well as a federal claim
under 42 U.S.C. § 1983. Ayers moved for summary
judgment, including on the grounds of federal- and state-law
immunity. The district court denied summary judgment due
to “overwhelming” material factual disputes, and Ayers and
the other defendants timely appealed.
II.
JURISDICTION AND STANDARD OF REVIEW
We have jurisdiction under 28 U.S.C. § 1291 to review
an order denying summary judgment on the grounds of
qualified immunity. Plumhoff v. Rickard, 572 U.S. 765,
771–73 (2014). However, “the scope of our review over the
appeal [in this context] is circumscribed.” George v. Morris,
736 F.3d 829, 834 (9th Cir. 2013). We may not consider “a
fact-related dispute about the pretrial record,” that is,
“whether or not the evidence in the pretrial record was
sufficient to show a genuine issue of fact for trial.” Johnson
v. Jones, 515 U.S. 304, 307 (1995). Accordingly, we have
jurisdiction only where “the issue appealed concerned, not
which facts the parties might be able to prove, but, rather,
whether or not certain given facts showed” that immunity
8 ADVANCED BLDG. & FABRICATION V. AYERS
would apply. See id. at 311 (quoting Mitchell v. Forsyth,
472 U.S. 511, 528 (1985)).
Here, although Plaintiffs’ claim under § 1983 alleges a
number of constitutional violations by Defendants, we
consider just one issue: whether Ayers’s participation in the
May 2012 search at Advanced Building violated clearly
established law. Ayers’s claim of qualified immunity does
not turn on the resolution of any factual dispute, and thus we
have jurisdiction to review the district court’s denial of
qualified immunity. 2
III.
DISCUSSION
To survive a claim of qualified immunity, the plaintiff
must show: “(1) that the right was violated; and (2) that the
right was clearly established at the time of the alleged
misconduct.” Isayeva v. Sacramento Sheriff’s Dep’t,
872 F.3d 938, 946 (9th Cir. 2017).
A.
Ayers argues that he did not violate Plaintiffs’ Fourth
Amendment rights because he claims California law permits
a BOE employee to request inspection of sales records from
any business, and his participation in the search would thus
qualify under the “administrative search” exception to the
2
Ayers suggested at oral argument that “it’s not in the record here,
[but] one of the reasons he was asked to come along [was] to show where
the altercation occurred.” Indeed, the record is silent as to this purported
rationale, but instead confirms that the purpose of inviting Ayers and
Sims was for them to “complete the inspection” of Advanced Building’s
business records.
ADVANCED BLDG. & FABRICATION V. AYERS 9
warrant requirement. See, e.g., Cal. Rev. & Tax Code
§§ 7053–54; 18 Cal. Code Regs. § 1698(b)(1)). Ayers’s
reliance on these state provisions is a nonstarter because
none of the state statutes or regulations on which he relies
authorizes forcible entry or searches. For example, 18 Cal.
Code Regs. section 1698(b)(1) merely mandates a taxpayer
to “make available for examination . . . all records necessary
to determine the correct tax liability.” As Honan correctly
points out, section 1698.5 (which immediately follows the
section cited by Ayers) details the audit procedures and sets
forth a process for conferring and providing requested
documentation. Id. § 1698.5. The regulation even goes so
far as to impose a duty on BOE staff to “not directly access
the taxpayer’s computer system if the taxpayer objects to
such access, except in the case of a search warrant.” Id.
§ 1698.5(b)(4)(D). Nowhere in the regulation is there broad
authorization to conduct a warrantless search and seizure of
business records without first requesting them from the
business owner. Ayers acknowledges that, consistent with
these regulations, BOE protocol if an inspector is asked to
leave would be to “see if we can call back at a better time.”
Therefore, we conclude that Ayers’s conduct is not
authorized by any state statute or regulation.
Even assuming that state law permits warrantless
inspection of business records, the intrusive search here
would not withstand scrutiny under the Fourth Amendment.
Ayers argues that “[a]dministrative searches of a
commercial location pursuant to statute can present an
exception to the general warrant requirement.” However, his
reading of precedent is too broad to support application of
such an exception to the warrant requirement here. For
example, in New York v. Burger, the Supreme Court
considered the diminished privacy expectations for
“pervasively regulated business[es],” upholding warrantless
10 ADVANCED BLDG. & FABRICATION V. AYERS
inspections only where “necessary to further [the] regulatory
scheme.” 482 U.S. 691, 702 (1987) (alteration in original)
(quoting Donovan v. Dewey, 452 U.S. 594, 600 (1981)).
Similarly, in United States v. Biswell, the Court upheld a
warrantless inspection of a federally licensed weapons
dealer because “close scrutiny of [firearm] traffic is
undeniably of central importance to federal efforts to prevent
violent crime.” 406 U.S. 311, 315 (1972).
Here, no analogously pervasive regulation or special
governmental interest justifies a diminished expectation of
privacy. Indeed, should Ayers be correct, it would seem that
every business in California “selling tangible personal
property” would be subject to a warrantless search at any
time. See Cal. Rev. & Tax Code § 7054. We conclude that
the “administrative search” exception does not apply to
Ayers’s presence at the search.
B.
We next consider whether Ayers could nevertheless
participate in the search at the invitation of the CHP. In
Wilson v. Layne, the Supreme Court held that “it is a
violation of the Fourth Amendment for police to bring . . .
third parties into a home during the execution of a warrant
when the presence of the third parties in the home was not in
aid of the execution of the warrant.” 526 U.S. 603, 614
(1999). There, police invited reporters on a “media ride-
along” to execute arrest warrants at a private residence. Id.
at 605, 607. The Court held that the reporters’ presence
constituted a violation of the plaintiff’s Fourth Amendment
rights because their presence “inside the home was not
related to the objectives of the authorized intrusion.” Id.
at 611. The Court distinguished situations where the third
parties “directly aided in the execution of the warrant,” such
as identifying stolen property that was the subject of the
ADVANCED BLDG. & FABRICATION V. AYERS 11
warrant, conduct that “has long been approved by [the] Court
and our common-law tradition.” Id. at 611–12. By contrast,
the Court rejected the presence of third parties serving only
to “further the law enforcement objectives of the police in a
general sense,” rather than the specific “purposes of the
search.” Id. at 612 (emphasis added). The Court clarified
that, in those situations, even if the police are lawfully
present, “the violation of the Fourth Amendment is the
presence of the [third party].” Id. at 614 n.2.
Under Wilson, Ayers’s participation in the search
violated Plaintiffs’ Fourth Amendment rights. The warrant
issued for officers to search specifically for (1) items
“capable of storing . . . video and audio media,” (2) “indicia
proving [Honan’s] ownership and control” of the business,
and (3) “evidence of correspondence” that would
corroborate the alleged felonies against Ayers. Ayers
acknowledged that he “attend[ed] the search to complete the
inspection” he had begun of Advanced Building’s business
licensing and tax records. Such an inspection was obviously
not “in aid of the execution of the warrant” to seize the above
evidence relating to the allegations of criminal threats and
vandalism. See Wilson, 526 U.S. at 614. Thus, because
Ayers’s presence was not “related to the objectives of the
authorized intrusion,” see id. at 611, his conduct violated
Plaintiffs’ Fourth Amendment rights.
Moreover, this right was “clearly established” following
the Court’s opinion in Wilson in 1999. While the Supreme
Court has cautioned against “defin[ing] clearly established
law at a high level of generality,” see Ashcroft v. al-Kidd,
563 U.S. 731, 742 (2011), Wilson held explicitly that officers
may not simply “bring members of the media or other third
parties . . . during the execution of a warrant” unless it was
“in aid of the warrant’s execution.” 526 U.S. at 614
12 ADVANCED BLDG. & FABRICATION V. AYERS
(emphasis added). Ayers argues that Wilson is not
sufficiently specific because that case involved reporters, not
other government agents. He contends that his position as a
government employee—one charged with inspecting
business records—distinguishes him from the journalists at
issue in Wilson.
In fact, his liability under § 1983 is premised on this very
distinction: private citizens (like reporters) are not ordinarily
liable under § 1983 for their presence during the execution
of a search warrant because they are not state actors. See
Brunette v. Humane Soc’y of Ventura Cty., 294 F.3d 1205,
1211 (9th Cir. 2002). Wilson did not rest constitutionality
on the third party’s employer, but rather drew a bright line at
whether their presence assisted execution of the warrant.
The “contours of the right” here were “sufficiently clear that
a reasonable official would understand that what he is doing
violates that right.” See Wilson, 526 U.S. at 615 (quoting
Anderson v. Creighton, 483 U.S. 635, 640 (1987)). And,
although Ayers claims that he was “acting at the direction of
his supervisor,” he did not cite to any binding precedent
holding that a supervisor’s instruction would somehow
obviate a clear constitutional violation. Accordingly, we
find that Ayers’s conduct violated Plaintiffs’ clearly
established rights under Wilson.
IV.
CONCLUSION
Because the administrative exception to the warrant
requirement does not apply, and Ayers’s presence was not in
aid of the execution of the search warrant, his presence and
search violated Plaintiffs’ clearly established constitutional
rights. We affirm the district court’s denial of qualified
ADVANCED BLDG. & FABRICATION V. AYERS 13
immunity and remand for proceedings consistent with this
opinion.
AFFIRMED.