880 F.3d 274
6th Cir.2018Background
- Ohio's Precious Metals Dealers Act (PMDA) requires licensing, detailed purchase records, daily police reporting forms for licensees, and authorizes state inspections; accompanying Ohio Admin. Code § 1301:8-6-03(D) permits inspection “at all times.”
- Plaintiffs Liberty Coins (an unlicensed coin dealer) and Worthington Jewelers (a licensed jeweler) sued under 42 U.S.C. § 1983, challenging four warrantless-search provisions: O.R.C. §§ 4728.05(A), 4728.06, 4728.07, and Ohio Admin. Code § 1301:8-6-03(D).
- Plaintiffs pressed facial and as-applied Fourth Amendment claims arguing the PMDA forces a choice between compliance (turning over records/inventory) and criminal sanction without precompliance, neutral review.
- The district court held all challenged warrantless-search provisions facially unconstitutional (relying heavily on City of Los Angeles v. Patel) and enjoined enforcement.
- The Sixth Circuit affirmed in part and reversed in part: it found §§ 4728.05(A) and the Admin. Code provision facially unconstitutional (striking only the warrantless-search language), but upheld §§ 4728.06 and 4728.07 as facially constitutional and dismissed as-applied claims to those provisions as not ripe.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether PMDA affords precompliance (neutral) review before criminal penalties for refusing warrantless searches | PMDA lacks any precompliance, neutral-review mechanism and thus is like the ordinance in Patel, making searches unconstitutional | State contends criminal enforcement is unlikely and inspectors lack power to prosecute directly; administrative remedies suffice | Held: No adequate precompliance review exists; Patel controls — provisions that punish refusal without review are problematic |
| Whether precious metals dealing is a "closely regulated" industry | Plaintiffs: Patel narrows the class; precious-metals dealing is not closely regulated like the historical Burger categories | State: PMDA’s pervasive, longstanding regulation (licensing, records, inspections, penalties) parallels Burger’s junkyard regulation | Held: Precious-metals dealing is a closely regulated industry under Burger factors |
| Whether §§ 4728.06 and 4728.07 (daily police forms; recordkeeping and on-demand production of listed articles) satisfy Burger’s necessity and substitute-for-warrant requirements | Plaintiffs: Even in a closely regulated industry, these warrantless searches are overbroad and lack limits | State: These provisions are narrowly tailored to deter/rescue stolen items; unannounced inspections are necessary given the transitory nature of goods | Held: §§ 4728.06 and 4728.07 are facially constitutional — they satisfy Burger’s necessity and provide an adequate substitute for a warrant; as-applied claims not ripe |
| Whether § 4728.05(A) and Ohio Admin. Code § 1301:8-6-03(D) pass Burger’s test | Plaintiffs: These provisions authorize sweeping, unlimited businesswide searches (including non-licensees) without limits or necessity | State: Inspections are for compliance; process-based remedies (subpoenas, civil orders) and rare prosecutions reduce the constitutional concern | Held: These provisions are facially unconstitutional — unnecessary for enforcement and too broad in scope; the court struck the warrantless-search language (other recordkeeping duties remain) |
Key Cases Cited
- City of Los Angeles v. Patel, 135 S. Ct. 2443 (2015) (ordinance requiring warrantless inspections of hotel registries invalid where no precompliance neutral review)
- New York v. Burger, 482 U.S. 691 (1987) (tests for warrantless administrative searches in closely regulated industries)
- Camara v. Municipal Court, 387 U.S. 523 (1967) (administrative-search doctrine; warrant requirement ordinarily applies but can be relaxed for regulatory needs)
- Marshall v. Barlow’s, Inc., 436 U.S. 307 (1978) (warrant requirement applies to commercial premises; consent and exceptions discussed)
- Katz v. United States, 389 U.S. 347 (1967) (reasonable expectation of privacy principle)
- United States v. Biswell, 406 U.S. 311 (1972) (permitting warrantless inspections of firearms dealers in closely regulated context)
- Donovan v. Dewey, 452 U.S. 594 (1981) (upholding warrantless mine inspections where safety risks made surprise inspections essential)
- Warshak v. United States, 532 F.3d 521 (6th Cir. 2008) (ripeness and standing principles for as-applied Fourth Amendment challenges)