U.S. Court of Appeals rejects California tax employee’s qualified immunity defense
The U.S. Court of Appeals for the Ninth Circuit recently denied former California State Board of Equalization employee Curtis Ayers qualified immunity for participating in an unreasonable search of a business taxpayer. In Advanced Building & Fabrication, Inc. et al. v. California Highway Patrol et al., the court rejected Ayers’ contention that there was no Fourth Amendment violation. The three-judge panel instead held that there were no provisions in California law that would authorize Ayers’ forcible entry and search of the business taxpayer asserting its rights.
The Ayers-Honan Altercation
Plaintiffs Robert Honan and his business set forth claims stemming from an altercation that occurred between him and Curtis Ayers. On May 7, 2012, Ayers arrived at Honan’s metal fabrication business without a prior appointment. Although Ayers verbally identified himself as a California Board of Equalization employee he failed to present his ID badge. Ayers had also mistaken Advanced Building for a different business. Suspecting Ayers of a “fraudulent scam” Honan told Ayers to “get *** out.” Although both parties dispute what happened after the brief exchange of words, each agrees that Ayers’ laptop sustained significant damage.
After the initial altercation, Ayers ultimately reported the incident to the California Highway Patrol (CHP). After Ayers was interviewed by a CHP Officer, the officer subsequently detained Honan, searched his truck, and interviewed him. During the interview, Honan offered to discuss the incident and gave CHP Officers a tour of Advanced Building. The officer then issued a search warrant, in which the officer indicated there was probable cause Honan committed felony threats and vandalism against Ayers. The warrant authorized officers to search for items capable of storing video and audio, evidence Honan owned Advanced Building, and evidence of correspondence that would corroborate the alleged felonies. Although neither Ayers nor his supervisor assisted the CHP with the search efforts, Ayers did show officers where the assault occurred and examined “any sales permit or records [they] saw.”
Honan and his Business File Suite
After the search, Robert Honan sued multiple defendants, including Curtis Ayers, CHP Officer John Wilson and the CHP itself. Honan’s complaint alleged state law claims for conversion and other tort claims, as well as a federal law claim under 42 U.S.C. § 1983. Specifically, Honan stated that Ayers violated clearly established law by participating in the search of his business.
The Court’s rejection of Qualified Immunity
The Court of Appeals first set forth the law when a government actor makes a qualified immunity defense. To overcome qualified immunity, the plaintiff must show that the right was violated and the right was clearly established at the time of the alleged misconduct.
Was a right violated?
Ayers argued that he did not violate plaintiffs’ Fourth Amendment rights because California law allows Board of Equalization employees to request inspection of sales records from any business, and thus qualifies under the administrative search exception to the warrant requirement. The Ninth Circuit rejected this argument, holding that none of the California statutes and regulations allow for forcible entry or searches nor offer broad authorization to conduct warrantless searches and seizures of records without first requesting them from the business owners. Ayers admitted that typical protocol for BOE employees was to leave and come back another time if an inspector was asked to leave.
Even if we assume that state law had permitted warrantless inspections, the Ninth Circuit held that the search at issue could not withstand scrutiny under the Fourth Amendment. The Supreme Court has only authorized searches such as these when either there is pervasive regulation or special governmental interests. The Ninth Circuit found that neither exception applied, because if it did, every business in California would be subject to a warrantless search.
Additionally, the court considered if Ayers could participate in the search at the invitation of the CHP. The Supreme Court held in Wilson v. Layne that it is a violation of the Fourth Amendment to bring third parties into a home during the execution of a warrant when the presence of the third parties was not in aid of the execution of the warrant. Ayers’ presence during the search to complete his inspection was “obviously not in the aid of the execution of the warrant” and the Court therefore that his presence was impermissible.
Was the right clearly established?
The Ninth Circuit found that this right to not have third parties present during the execution of warrants was clearly established following the Supreme Court’s holding in Wilson. The Ninth Circuit held that the rights under Wilson were sufficiently clear that a reasonable officer would understand that what he was doing violated the plaintiffs’ Fourth Amendment rights in the current case. Ayers attempted to argue that he was acting at the direction of his supervisor but, according to the court, failed to sufficiently show that a supervisor’s instruction would “somehow obviate a clear constitutional violation.”
For these reasons the Court of Appeals rejected Ayers’ qualified immunity defense to the plaintiffs’ Fourth Amendment claims. The case could be a cautionary tale for overzealous state tax auditors across the country.