Motel owners challenged a Los Angeles Municipal Code provision requiring hotel guest records to be made available to any Los Angeles Police Department officer for inspection. The United States Court of Appeals for the Ninth Circuit held that the portion of the ordinance that authorizes on-site, warrantless inspections of hotel guest records is unconstitutional. (Patel v. City of Los Angeles (--- F.3d ----, C.A.9, December 24, 2013).
Naranjibhai Patel and Ramilaben Patel are motel owners in Los Angeles. Los Angeles Municipal Code § 41.49 provides that operators of hotels and motels must collect and record detailed information about a guest including the guest’s name and address, the number of people in the party, arrival and departure information, the room number assigned to the guest, the rate and method of payment, and information about the guest’s vehicle. Other requirements are imposed if a guest pays with cash, rents a room for less than 12 hours, or uses an electronic kiosk to check in. The hotel must keep the information in the reception or guest check-in area or in an office adjacent to that area.
Section 41.49 allows for warrantless inspection of guest documents. Hotel guest records must “be made available to any officer of the Los Angeles Police Department for inspection.” However, § 41.49 provides that “[w]henever possible, the inspection shall be conducted at a time and in a manner that minimizes any interference with the operation of the business.” The City of Los Angeles (“City”) stipulated that § 41.49 “authorizes police officers to inspect hotel guest records at any time without consent or a search warrant.” Failure to comply with an officer’s demand for an inspection of guest records is a misdemeanor that is punishable by up to six months in jail and a $1,000 fine. The Patels filed a federal lawsuit asserting a Fourth Amendment facial challenge to the inspection requirement of § 41.49. The federal district court rejected their challenge and granted judgment in favor of the City.
The Ninth Circuit Court of Appeals reversed the decision of the trial court. A police officer’s non-consensual inspection of hotel or motel records constitutes a Fourth Amendment search because such inspections “involve both a physical intrusion upon a hotel’s papers and an invasion of the hotel’s protected privacy interest in those papers.” The court rejected the argument that the Patels were required to prove that their guest records are subject to a reasonable expectation of privacy. The court stated, “We do not believe business owners are required to prove that proposition, any more than homeowners are required to prove that papers stored in a desk drawer are subject to a reasonable expectation of privacy.” If business records are “private,” then “they fall within the scope of the ‘papers’ protected by the Fourth Amendment.”
After determining that a police officer’s non-consensual inspection of business records constitutes a Fourth Amendment sear, the Ninth Circuit next examined whether the searches authorized by §41.49 were unreasonable. The United States Supreme Court has concluded “to be reasonable, an administrative record-inspection scheme need not require issuance of a search warrant, but it must at a minimum afford an opportunity for pre-compliance judicial review.” The court concluded that this is “an element that § 41.49 lacks.”
If the government seeks access to a business’s non-public areas to enforce health and safety regulations, an administrative search warrant is generally required. Under some circumstances, § 41.49 authorizes the inspection of guest records in an office adjacent to the guest check-in area. “If that office were not open to the public, officers could not insist on conducting the inspection there without an administrative search warrant.” The court assumed without deciding that § 41.49 is “intended to authorize administrative record inspections, rather than ‘searches for evidence of crime,’ which would ordinarily require a warrant.” However, the court concluded that even applying the more lenient Fourth Amendment principles that govern the inspection of administrative records, § 41.49 is facially invalid.
The government may require a business to maintain certain records and make them available for routine inspection when such inspection is necessary to further a legitimate regulatory interest. However, “[t]he government may ordinarily compel the inspection of business records only through an inspection demand ‘sufficiently limited in scope, relevant in purpose, and specific in directive so that compliance will not be unreasonably burdensome.’” The party who is subject to the inspection demand must be given an opportunity to obtain judicial review of the reasonableness of the government’s demand before penalties can be imposed for failure to comply. Section 41.49 does not contain such a procedural safeguard because there is no provision for pre-compliance judicial review. In order to comply with the Fourth Amendment, the City must give hotel operators the opportunity to challenge the reasonableness of an officer’s demand for inspection before penalties may be imposed for non-compliance.