Advanced Building & Fabricatio v. Curtis Ayers ( 2019 )


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  •                  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.