Phillip Killgore v. City of South El Monte ( 2021 )

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
PHILLIP KILLGORE, DBA Lavender No. 20-55666
Massage,
Plaintiff-Appellant, D.C. No.
2:19-cv-00442-
v. SVW-JEM
CITY OF SOUTH EL MONTE; COUNTY
OF LOS ANGELES, a municipal OPINION
corporation; G. FURUYAMA; C.
SCIACCA; M. OLMEDO; C. PRESTON;
D. FENDER; M. VEGA; M. VAN DINE;
R. CATANO; N. TARIO; B.
COMPARAN; T. HARRIS; V. PENA; O.
GARCIA; A. TORRES; J. MARTINEZ;
K. TAO; R. WILLIAMS; M. QUEZADA;
V. VARGAS; K. RIVAS; DOES, 1–10
inclusive; B. HALL; G. LUKEHART,
Defendants-Appellees.
Appeal from the United States District Court
for the Central District of California
Stephen V. Wilson, District Judge, Presiding
Argued and Submitted May 11, 2021
Pasadena, California
Filed July 8, 2021
2 KILLGORE V. CITY OF SOUTH EL MONTE
Before: John B. Owens, Ryan D. Nelson, and
Bridget S. Bade, Circuit Judges.
Opinion by Judge Owens
SUMMARY *
Civil Rights
The panel affirmed the district court’s dismissal, for
failure to state a claim, of an action brought pursuant to
42 U.S.C. § 1983 alleging that the City of South El Monte
violated plaintiff’s Fourth Amendment rights when
authorities, without a warrant, searched his massage
business.
The panel first held that the California massage industry
is a closely regulated industry and accordingly the Fourth
Amendment’s warrantless search exception for
administrative searches of businesses applied. Applying the
factors articulated in New York v. Burger, 482 U.S. 691(1987), the panel next held that the warrantless inspections
were reasonable under the Fourth Amendment because
(1) there was no question that curtailing prostitution and
human trafficking were substantial government interests;
(2) the warrant exception was necessary to further the
regulatory scheme considering the potential ease of
concealing violations; and (3) the City ordinance governing
massage establishments and the conditional use permit
*
This summary constitutes no part of the opinion of the court. It
has been prepared by court staff for the convenience of the reader.
KILLGORE V. CITY OF SOUTH EL MONTE 3
sufficiently restrained the City in both the time and purpose
of each inspection.
COUNSEL
Frank A. Weiser (argued), Los Angeles, California, for
Plaintiff-Appellant.
D. Dennis La (argued), Aleshire & Wynder LLP, El
Segundo, California; Stephen R. Onstot, and Jamie L.
Traxler, Aleshire & Wynder LLP, Riverside, California; for
Defendants-Appellees.
OPINION
OWENS, Circuit Judge:
In his federal lawsuit, Phillip Killgore alleged that the
City of South El Monte (“City”) violated his Fourth
Amendment rights when authorities, without a warrant,
searched his massage business. 1 The district court dismissed
his complaint for failure to state a claim. We have
jurisdiction under 28 U.S.C. § 1291, and we affirm. 2
1
This opinion only concerns California businesses that qualify as a
“massage establishment” under California Business and Professions
Code section 4601(f). We render no opinion on businesses outside
California or that do not qualify as a massage establishment under
section 4601(f).
2
This opinion only addresses the Fourth Amendment issue. A
concurrently filed memorandum disposition resolves the remaining
issues on appeal.
4 KILLGORE V. CITY OF SOUTH EL MONTE
I. BACKGROUND
A. Lavender Massage, California’s Regulatory
System, and the Conditional Use Permit
Since 2013, Killgore owned and operated the Lavender
Massage Center. While he initially ran the business under a
series of City licenses, in July 2017, the City approved a
conditional use permit (“CUP”) for his massage
establishment. The CUP set out a series of extensive
conditions, including the hours of operation, the
qualifications of employees, limits on altering the interior of
the building, and provided that Killgore “must allow
2 inspections a year . . . to ensure compliance of all
conditions of approval.”
The CUP also referenced California’s Massage Therapy
Act (“Act”), a comprehensive certification and regulatory
scheme adopted in 2014 that sets forth several requirements
and authorizes local governments to establish their own
regulations. Cal. Bus. & Prof. Code §§ 4600–21. The Act,
which builds upon a more than 40-year-old licensing system
in California, vests local governments with the power to
“manage [massage] establishments in the best interests of the
individual community.” Id. § 4600.5(b).
In 2015, under the powers granted by the Act, the City
enacted Ordinance No. 1195 (the “Ordinance”) governing
massage establishments. Its purpose was “to better control
illicit operations and protect and promote the public health,
safety and welfare by imposing stricter requirements on
massage practitioners, therapists, and establishments.” The
Ordinance also mandated CUPs for massage establishments,
which led to the CUP at issue in this case.
KILLGORE V. CITY OF SOUTH EL MONTE 5
B. The Investigation of Lavender Massage
In August 2017, law enforcement officers began
investigating Lavender Massage for prostitution and sent in
an undercover officer as a patron. The officer claimed that
he was propositioned for sex, and a search warrant was
executed on the business.
According to Killgore, in February 2018, City officials
entered Lavender Massage on three separate occasions
without consent or a court order and searched non-public
areas for violations of the CUP. Although no criminal
charges were filed, the City eventually revoked Killgore’s
CUP for multiple violations of the Act and Ordinance.
C. The District Court’s Dismissal of Killgore’s
Complaint
In January 2019, Killgore filed the instant 42 U.S.C.
§ 1983 action alleging that the City and several employees
executed warrantless searches in violation of the Fourth
Amendment. After permitting Killgore multiple
amendments to his complaint, the district court dismissed the
action in a well-reasoned order.
Reviewing California’s extensive regulation of the
massage industry, and citing cases including New York v.
Burger, 482 U.S. 691 (1987), and United States v. 4,432
Mastercases of Cigarettes, More or Less, 448 F.3d 1168 (9th
Cir. 2006), the district court concluded that the massage
industry in California qualified as a “closely regulated”
industry, meaning that the Fourth Amendment’s warrantless
search exception for administrative searches of businesses
applied. The district court rejected Killgore’s argument that
the Supreme Court’s decision in City of Los Angeles v. Patel,
576 U.S. 409 (2015), which refused to extend the “closely
6 KILLGORE V. CITY OF SOUTH EL MONTE
regulated” industry doctrine to hotels, fundamentally altered
this long-established line of cases. Killgore then appealed.
II. DISCUSSION
A. Standard of Review
We review de novo a district court’s dismissal for failure
to state a claim under Federal Rule of Civil Procedure
12(b)(6). Brown v. Stored Value Cards, Inc., 953 F.3d 567,
572 (9th Cir. 2020).
B. The Fourth Amendment Permitted the
Warrantless Searches of Lavender Massage
1. The Law of Closely Regulated Industries
The Fourth Amendment’s general prohibition against
warrantless searches extends to commercial businesses.
4,432 Mastercases of Cigarettes, 448 F.3d at 1176. “The
United States Supreme Court, however, has carved out a
limited number of contexts within which a warrant is not
required,” such as administrative searches of “‘closely
regulated’ industries.” Id.To determine whether an industry is “closely regulated,”
we look to “the pervasiveness and regularity of the . . .
regulation and the effect of such regulation upon an owner’s
expectation of privacy.” Id. (citation omitted). “We do not
require a warrant in such situations because the . . .
regulatory presence is sufficiently comprehensive and
defined that the owner of the commercial property cannot
help but be aware that his property will be subject to periodic
inspections undertaken for specific purposes.” Id. (internal
quotation marks and citation omitted); see also Marshall v.
Barlow’s, Inc., 436 U.S. 307, 313 (1978) (“Certain industries
KILLGORE V. CITY OF SOUTH EL MONTE 7
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.” (internal
citation omitted)).
The Supreme Court has held liquor distribution, the sale
of sporting weapons, stone quarrying and mining, and
automobile junkyards to be “closely regulated” industries. 3
We also have held that salmon fishing, commercial fishing,
family day care homes, transportation of hazardous
materials, veterinary drugs, foreign trade zones, and
commercial trucking are “closely regulated” industries. 4
We are not the first court to examine whether the
California massage industry falls within this exception.
Over 30 years ago, a California state appellate court held that
the massage industry is pervasively regulated and that an
ordinance permitting warrantless inspections of massage
parlors did not violate the Fourth Amendment. Kim v.
Dolch, 219 Cal. Rptr. 248, 251 (Ct. App. 1985). Concluding
“that the expectation of privacy that the owner of
3
See Colonnade Catering Corp. v. United States, 397 U.S. 72, 74
(1970) (liquor distribution); United States v. Biswell, 406 U.S. 311, 316
(1972) (sale of sporting weapons); Donovan v. Dewey, 452 U.S. 594,
600–02 (1981) (stone quarrying and mining); Burger, 482 U.S. at 703–
04 (automobile junkyards).
4
See United States v. Raub, 637 F.2d 1205, 1209–11 (9th Cir. 1980)
(salmon fishing); Balelo v. Baldrige, 724 F.2d 753, 765 (9th Cir. 1984)
(commercial fishing); Rush v. Obledo, 756 F.2d 713, 714 (9th Cir. 1985)
(family day care homes); United States v. V-1 Oil Co., 63 F.3d 909, 911
(9th Cir. 1995) (transportation of hazardous materials); United States v.
Argent Chem. Lab’ys, Inc., 93 F.3d 572, 575 (9th Cir. 1996) (veterinary
drugs); 4,432 Mastercases of Cigarettes, 448 F.3d at 1176 (foreign trade
zones); United States v. Delgado, 545 F.3d 1195, 1202 (9th Cir. 2008)
(commercial trucking).
8 KILLGORE V. CITY OF SOUTH EL MONTE
commercial property enjoys . . . 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,” the court upheld the “comprehensive”
ordinance as reasonable. Id. at 250–51.
With the adoption of the Massage Therapy Act in 2014,
which “created additional certification requirements for new
massage professional applicants and impos[ed] greater
statewide regulations on all certified massage therapists and
practitioners,” regulation of the massage industry in
California now exceeds its 1985 level. The Act “completely
regulate[s] the environment in which [massages are]
provided” through detailed certification requirements, see
Rush, 756 F.2d at 720, and is thus a textbook application of
the “closely regulated” industry doctrine. 5
In addition to the Act’s comprehensive requirements,
Killgore’s business was further regulated by the City’s
Ordinance and the CUP conditions, both of which illustrate
the City’s heavy regulation of this industry and the
diminished expectation of privacy of massage establishment
owners. The Ordinance mirrored several of the Act’s
provisions, authorized reasonable inspections, and required
Killgore to obtain a CUP, which the City could suspend or
5
The Act provides for certification and regulation of massage
therapists and practitioners and provides for the regulation of massage
establishments that hire certified massage practitioners. Cal. Bus. &
Prof. Code §§ 4600–21. It further provides that the “owner[s] or
operator[s]” of certified massage establishments may be disciplined “for
the conduct of all individuals providing massage for compensation on
the business premises,” id. § 4607, and regulates massage practitioners
by, among other things, limiting the areas of the body that they may
massage and their attire, id. § 4609.
KILLGORE V. CITY OF SOUTH EL MONTE 9
revoke for specific violations. 6 And under the CUP, which
required compliance with the Massage Therapy Act and
other state and local laws, Killgore was subject to
16 conditions that governed the hours of operation,
appearance, and cleanliness of the massage establishment,
and included strict reporting, hygiene, and advertising
requirements. “These numerous and specific regulations [in
the Act, Ordinance, and CUP] should have provided
sufficient notice to [Killgore] that [his] property . . . will
from time to time be inspected by government officials.”
See 4,432 Mastercases of Cigarettes, 448 F.3d at 1177–78
(internal quotation marks and citation omitted).
Finally, a long history of government regulation is not
necessary, but duration is an “important factor.” Burger,
482 U.S. at 701 (citation omitted). “In Burger, the Supreme
Court held that a regulatory scheme far less comprehensive
and enacted more recently [(less than five years old)]
nonetheless rendered automobile junkyards ‘closely
regulated.’” 4,432 Mastercases of Cigarettes, 448 F.3d at
1178. Here, the California massage industry has been
6
Specifically, the Ordinance requires a massage establishment to
operate with a City business license and a “massage establishment
permit.” The Ordinance further provides that “owners and operators of
. . . massage establishment[s] are jointly and severally responsible for . . .
the conduct of anyone providing massage on the premises,” must provide
notice when new massage practitioners are hired or terminated, and “may
not record or allow recording of any massage services for
compensation.” Persons performing massages must have a “current,
unrevoked and unsuspended CAMTC [California Massage Therapy
Council] certificate.” The Ordinance also regulates the environment in
which massages are performed, including the appearance of glass
windows or doors at the entrance, circumstances under which exterior
doors may be locked, ventilation and minimum lighting requirements,
and numerous other requirements related to massage rooms and
equipment.
10 KILLGORE V. CITY OF SOUTH EL MONTE
regulated for over 30 years. See Kim, 219 Cal. Rptr. at 251.
And, as noted in the Ordinance, the state imposed additional
certification requirements and regulations on massage
therapists and allowed local governments greater authority
to regulate massage establishments. Killgore, as the owner
of a business with “such a history of government oversight,”
had “no reasonable expectation of privacy.” Barlow’s, Inc.,
436 U.S. at 313. Other appellate decisions are in accord.
See, e.g., Pollard v. Cockrell, 578 F.2d 1002, 1014 (5th Cir.
1978) (upholding a massage parlor administrative search
provision because massage establishments have “a history of
regulation” (citation omitted)); see also City of Indianapolis
v. Wright, 371 N.E.2d 1298, 1302 (Ind. 1978) (upholding an
ordinance regulating massage establishments in part because
the industry “has a history of regulation”); Gora v. City of
Ferndale, 576 N.W.2d 141, 147–48 (Mich. 1998) (holding
the massage industry is pervasively regulated).
According to Killgore, the Supreme Court’s refusal to
apply the “closely regulated” industry doctrine in Patel
prohibits its application here. 7 Yet Patel dealt with a very
different business – the hotel industry – one that the Supreme
Court has repeatedly recognized enjoys core Fourth
Amendment protections. See, e.g., Minnesota v. Olson,
495 U.S. 91, 99 (1990) (including guest in a “hotel room” as
someone with a reasonable expectation of privacy); Katz v.
United States, 389 U.S. 347, 359 (1967) (listing a “hotel
7
Killgore also argues that like in Patel, the Ordinance here should
fail because it does not afford massage establishments an opportunity for
precompliance review. But the Patel Court analyzed the ordinance in
that case under the general administrative search exception to the warrant
requirement after holding hotels are not “closely regulated.” Patel,
576 U.S. at 424–26. Because we conclude massage establishments in
California are “closely regulated,” we apply the Burger factors, which
do not require precompliance review. See id.
KILLGORE V. CITY OF SOUTH EL MONTE 11
room” as a place where a person is entitled to be “free from
unreasonable searches and seizures”); Stoner v. California,
376 U.S. 483, 490 (1964) (“[A] guest in a hotel room is
entitled to constitutional protection against unreasonable
searches and seizures.”); United States v. Jeffers, 342 U.S.
48, 51–52 (1951) (extending Fourth Amendment protection
to hotel rooms). Killgore does not cite any authority
suggesting that Patel detonated the long line of cases
applying the “closely regulated” industry doctrine to
additional businesses. Indeed, other courts of appeals have
continued to categorize industries as “closely regulated”
after Patel. See, e.g., Calzone v. Olson, 931 F.3d 722, 726
(8th Cir. 2019) (dump trucks); Liberty Coins, LLC v.
Goodman, 880 F.3d 274, 282 (6th Cir. 2018) (precious
metals); Owner-Operator Indep. Drivers Ass’n, Inc. v. U.S.
Dep’t of Transp., 840 F.3d 879, 894–95 (7th Cir. 2016)
(commercial trucking); Rivera-Corraliza v. Morales,
794 F.3d 208, 219 (1st Cir. 2015) (adult entertainment
games used for gambling); see also Cotropia v. Chapman,
978 F.3d 282, 287 (5th Cir. 2020) (assuming pain
management clinics are closely regulated). As the Sixth
Circuit explained when rejecting the argument that Patel
somehow limited this doctrine, “[w]hile Patel undoubtedly
clarified the application of Burger, we do not read Patel as
narrowly as plaintiff[] suggest[s].” Liberty Coins, 880 F.3d
at 284.
For these reasons, we hold that the California massage
industry is “closely regulated” and effectively reaffirm what
has been the law in California for over 30 years. 8 See Kim,
219 Cal. Rptr. at 251.
8
Killgore’s reliance on See v. City of Seattle, 387 U.S. 541, 546
(1967), Michigan v. Tyler, 436 U.S. 499, 504–05 (1978), Camara v.
12 KILLGORE V. CITY OF SOUTH EL MONTE
2. The Three February 2018 Searches Did Not
Violate the Fourth Amendment
Under Burger, a warrantless inspection of a commercial
business in a “closely regulated” industry is reasonable
under the Fourth Amendment provided three conditions are
met: (1) “there must be a substantial government interest that
informs the regulatory scheme pursuant to which the
inspection is made”; (2) “the warrantless inspections must
be necessary to further [the] regulatory scheme”; and
(3) “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.” 482 U.S.
at 702–03 (alterations in original) (internal quotation marks
and citations omitted).
The district court here properly concluded that all three
Burger requirements were met. First, there is no question
that curtailing prostitution and human trafficking is a
substantial government interest. Second, the warrant
exception is necessary to further the regulatory scheme
considering the potential ease of concealing violations. The
Act, Ordinance, and CUP conditions contain a variety of
internal facility requirements, including a prohibition on
unlicensed massage therapists, signage requirements,
hygiene standards, a prohibition on sexual activities on the
premises, and restrictions on permissible attire. These sorts
of violations could go easily undetected, and a warrant
requirement would only frustrate the government’s ability to
Municipal Court of the City & County of San Francisco, 387 U.S. 523,
538–39 (1967), Connor v. City of Santa Ana, 897 F.2d 1487, 1490–91
(9th Cir. 1990), and Patel v. City of Montclair, 798 F.3d 895, 899–900
(9th Cir. 2015), is misplaced because these cases do not involve “closely
regulated” industries.
KILLGORE V. CITY OF SOUTH EL MONTE 13
discover them. See 4,432 Mastercases of Cigarettes,
448 F.3d at 1179 (noting that “advance notice of inspections
could permit those violating [the regulations] ‘to temporarily
correct violations and frustrate enforcement efforts’”
(citation omitted)); Argent Chem. Lab’ys, Inc., 93 F.3d
at 576 (“[F]orcing inspectors to obtain a warrant before
inspection might frustrate the purpose of the Act by alerting
owners to inspections.”).
As to the third Burger requirement, Killgore argues it is
not met because the Ordinance “fails sufficiently to constrain
[the City officers’] discretion as to which [massage
establishments] to search,” “under what circumstances,” and
“how many times.” But the Ordinance does not give the City
unfettered discretion. The City may “conduct reasonable
inspections of any massage establishment during regular
business hours to ensure compliance with the Massage
Therapy Act, [the Ordinance], and other applicable fire,
health and safety requirements.” The City is further
constrained by the CUP, which limits the hours of operation
(10:00 am – 10:00 pm seven days a week), and specifies that
the “business owner must allow 2 inspections a year by the
Community Development Department to ensure compliance
of all conditions of approval.” Although the City here
conducted more than two inspections of Lavender Massage,
there is nothing in the Ordinance or CUP that forbids the
City from conducting necessary investigations to ensure
compliance with the law. In other words, two inspections
are the minimum, not maximum, that Killgore must allow.
The City was sufficiently restrained in both the time and
purpose of each inspection. The Ordinance and CUP
therefore reasonably restrict the City and we hold the third
Burger requirement is met.
14 KILLGORE V. CITY OF SOUTH EL MONTE
Accordingly, the district court properly dismissed
Killgore’s Fourth Amendment claim. 9
AFFIRMED.
9
The district court also properly determined Killgore failed to allege
with sufficient facts that the searches were conducted for a criminal
purpose. And because the search falls under the “closely regulated”
industry exception to the warrant requirement, the district court properly
dismissed as irrelevant Killgore’s argument that he did not consent to the
search. See Barlow’s, Inc., 436 U.S. at 313 (“The businessman in a
regulated industry in effect consents to the restrictions placed upon him.”
(citation omitted)).