*1 July 30, 1981.] En Banc. 46865-6. [No. Petitioner, v. Les N. Sjoholm, Peters, Gene al, Respondents. et DeJean, Richard F. petitioner. for General, Montgomery, Gorton, Greg Attorney Slade g72
Assistant, respondents. for Department petition- J. —The of Revenue seized
Utter, payment er's bank account taxes under delinquent 82.32.210, RCW .220 and The trial court granted .235. *2 State, in summary judgment employee, favor of the its the defendant bank. We affirm. business,
Following of petitioner an audit Gene Peters' Department the found him delinquent his excise taxes $1,505.14. the Department amount The issued a tax delinquency copy assessment for the peti- and mailed a to tioner. RCW satisfy 82.32.050. When Peters failed to the warrant, delinquency, Department the issued a tax under seal, its official commanding Peters the sheriff of County levy upon any petitioner's Lewis property. RCW 82.32.210. petitioned Department
Peters the for review of its assessment decision. RCW 82.32.160. After a conference Peters, Department with the its ruled earlier decision was correct and compliance Depart- ordered the division of the ment to collect the tax warrants. These warrants had been Superior County filed Court for RCW Lewis under 82.32.220, State v. upon and created a property. lien Peters' Foods, Inc., Hi-Lo Wn.2d P.2d Electrovation, Inc., Weitz v. 48 Wn.2d Department, employee, addition through its bank, respondent upon N. Sjoholm, petitioner's Les served Bank, Puget Sound National a notice and order to withhold order, and deliver. RCW 82.32.235. Under the bank required any to deliver to the Department belonging Department Peters. The bank sent the a check $89.98, for represented the funds account. Peters' Peters commenced this action against Sjoholm Puget Sound National on grounds Bank that the seizure of his bank account was an search unwarranted and seizure constitutions; contravention both the state and federal and that requirements the seizure violated the fundamental
§73 motion court defendants' process. granted of due The trial summary Appeals Court of affirmed. judgment, and the that of funds from Petitioner first contends seizure fourth to the his bank account amendment violated section 7 United States Constitution and article unnecessary We find Washington State Constitution. decide this issue. to bank
The of the Fourth Amendment applicability Corp. v. United Leasing In G.M. is unclear. deposits (1977), S. Ct. (IRS) taxpayer's Revenue Service seized a Internal constitutional, account. The district court held it was aspect Court did not address that but court, however, did that the full panoply case. The state protections applies to IRS seizures As taxpayer's privacy. which intrude for all other upon seizures, only implied that there must IRS the court belong taxpayer. probable cause that seized items to whether subsequent law is divided as case *3 only to seizures applies means the Fourth Amendment v. see Brunwasser on taxpayer's private premises, made the Jacob, (W.D. 1978), F. Pa. whether Supp. regardless to all of where applies generally IRS seizures Lemans, 1975 Pontiac made. See States One (1st 1980). from F.2d 444 the disagreement Cir. The stems treatment, of the IRS approval, court's abbreviated if in court that public places. seizure of The stated vehicles there that such vehicle probable is cause believe it without a belongs taxpayer, may the IRS seize require warrant. the court did not the existence Because (which Fourth Amendment any the exigent circumstances the involving contexts require has been read to other the Fourth cars), have said parked seizure of some courts conducted not unless apply Amendment must to seizures One Jacob taxpayer's private premises. on the 1975 Pontiac Lemans. Murray ex Den dem. by is
Such conclusion buttressed How.) (18 Co., & Improvement v. Hoboken Land (1856), L. Ed. 372 upon the case extensively relied Leasing. Murray G.M. by stated that the Amend- ment apply does not to civil proceedings recovery for the law, debts. If probable that is the the requirement cause may all explainable seizures pro- mandated due cess, Leasing, rather than the Fourth Amendment. G.M. at 252. possible justifications why
There
several
are
the Fourth
only
apply
involving
should
to seizures
the
taxpayer's
private premises,
not seizures of bank
deposits. One is
that once
tax assessment and subse-
quent
levy activity
begin,
effect becomes
a co-owner in
to be seized. See United States
property
Bluhm,
(7th
1969),
It person seems clear to us who writes or passes that a bad check drawn on his or her account cannot any have justifiable expectation that the status account will private. at time remain McCray, State v. supra at 816. That same analysis could be applied to this case.
A second possible justification government's is that strong its collecting taxpay- interest taxes overrides the Leasing, G.M. 352; er's in the property. seized Lemans, One 1975 Pontiac at 450. government may *4 upon person's intrude when interest is privacy its See State v. stronger right the of privacy. than individual's Lesnick, 940, 942, 530 P.2d In 84 Wn.2d the seizures, in strong case of tax the has a interest preventing being the from removed before can
§75
if
had
problem
could be a
the
be seized. This
requirements.
Fourth Amendment
fully comply
with the
hand,
in
prop
the individual's
interest
On the other
hearing,
erty
adequately protected
postseizure
can be
Ingraham
required by
process.
which is
statute or due
Wright,
651, 696,
711,
L. Ed. 2d
97 S. Ct.
430 U.S.
Leasing).
G.M.
(1977)
(interpreting
the individual's
case, any injury
taxpayer
improper
to the
as a result of an
Moreover,
seizure can be remedied after the fact.
the tax
in
only
privacy
of
his or
payer
expectation
has
a minimal
in
deposits.
deposited
general
her bank
Once
account,
bank,
money passes
bank
title to the
depositor
relationship
the bank and the
assume
Kies,
Carlson v.
creditor,
respectively.
debtor
Wash.
Fabricators,
Inc.
171, 134
Allied Sheet Metal
P.
Bank,
v. Peoples Nat'l
530,
App.
10 Wn.
The the Fourth Amendment to extinguishes seizures of bank accounts is that such a seizure obligation pay taxpayer. the bank's to that sum to the "[Pjayment pursuant levy to notice to the Government and any subsequent by complete is a to claim the tax defense" payer. Bath, v. Nat'l Bank 442 F. DiEdwardo First 1977). (E.D. taxpayer Supp. extent, To this Pa. ownership owed a form of the debt has him/her generally Ownership interests are sufficient the bank. prohibition unrea invoke the Fourth Amendment's lawfully pos An individual "who owns sonable searches. have a will all likelihood sesses or controls legitimate right expectation virtue of this supra Illinois, v. 144 n.12. exclude." Rakas the Fourth not decide whether We however need counterpart constitution, Amendment, in our state or its agree deposits. applies as to The cases of bank seizures procedure of a bank followed for a seizure must be what they may disagree although to which valid, account to be agency requires provision must have it. The constitutional belongs probable to the fund the bank cause to believe that supra e.g., taxpayer. States, at 1174- See, v. United Flores ordinary search and sei It, however, does not need an 75. supra; States, Brun v. United See Flores zure warrant. requirement probable supra. Jacob, cause wasser regardless exists, of whether Leasing Corp. process. applies, G.M. of due because may agency, supra. therefore, seize States, The tax complies relevant statutes with the bank funds when belong probable funds the bank to believe has cause taxpayer. speedy collection effectual
To ensure sovereign may, inherent under its taxes, the summary G.M. fashion. power, in a collect taxes assess Phillips supra; Corp. v. Commis Leasing v. United S. Ct. 608 596-97, sioner, 283 U.S. Superior Court, 22 rel. Mulhausen State ex (1945). This A.L.R. Wn.2d require summitry not violate collection does method of during proceed point process if, of due at some ment opportunity given ings, taxpayer has an notice and "is *6 by existing procedure heard, if established to the substantially and collection". followed assessment law is supra also G.M. Mulhausen, at 817. State ex rel. Leasing; 67, 90-92, Shevin, Fuentes v. summary Department bench, utilized
In the case at delinquency. response to tax method of collection Peters' process however, satisfied, in that it followed Due gave procedures 82.32, RCW Peters established under against him, Peters of the and afforded notice tax assessed liability. hearing of his tax an administrative on the matter opportunity challenge petitioner Moreover, to had the paid. could had been He the tax assessment after the taxes applied to for and for a conference examine have a refund appealed liability, 82.32.170, or to and review the tax RCW County Superior refund, RCW for a Court Thurston constitutionally collection, it is 82.32.180. the area of tax hearing postpone opportunity for a until after sound payment delinquent See Fuentes taxes. supra Shevin, at 91-92. jury
Lastly, petitioner to a claims that he entitled any prior imposition of tax trial and enforcement by jury. liability. right Dexter to a trial There is such King County, Bldg. 10 Wn.2d Horton Co. v. respondents' granting
We affirm the trial court's decision summary motion for judgment.
Stafford, Dolliver, Hicks, Williams, JJ., concur. Brachtenbach, J. I (concurring) agree with the —While I majority, my analysis result of the differs. conclude that the government's levying private bank accounts consti- tutes a "search and seizure" for the purposes the fourth amendment of the United States Constitution and a "dis- Const, or turbance" "intrusion" art. 7 terms.2 These § violated, however, provisions constitutional were not because the government actions were reasonable under the circumstances this case. Petitioner also was accorded all him rights process owed under the due clause. matter,
As preliminary note the context which the challenged personal conduct occurred. Funds from Peters' checking Department account were transferred by Revenue as required a notice to withhold and deliver to satisfy delinquent tax assessment. RCW 82.32.235. The government's taking gather was not evi- dence, remove instrumentalities return fruits of a crime. Nor was the subject magis- tax warrant issued a neutral trate, but the Department of Revenue. RCW 82.32.210. addition, petitioner exclusionary does not seek the remedy. atypical, Because these circumstances are *7 standard search and applied seizure tests should be dis- criminately, in light underlying governing of the values principles.
I history, purpose applications The and of the Fourth Amendment its require application levies under RCW 82.32.235. Bill
Among
provisions
of the
Fourth
Rights,
history
revealing
Amendment's
is richest and most
of its
"vary
2Although
provisions
slightly
language,
[they]
in
these
in
are identical
Miles,
921, 926,
substance",
State v.
purpose
Wn.2d
190 P.2d
and
740
Smith,
(1977),
State v.
in
88 Wn.2d
P.2d 970
and will be discussed as one
opinion.
this
and the
and Seizure
Search
Landynski,
J.
intended effect.
(1966).
of tax collectors and
Court abuses
The
were of
America
in
and colonial
England
customs officers
constitution.
of our federal
to the framers
concern
central
and
general
warrants
power
intrusions under
Their
Taylor,
T.
despised.
particularly
of assistance were
writs
Interpretation
in Constitutional
Two Studies
for and seize
used to search
country
in
were
writs
The
Taylor, at 35.
laws.
the revenue
to evade
goods smuggled
case,
present
in the
tax warrant
RCW 82.32.210
Like the
authority,
(1)
executive,
judicial,
not
issued
they were:
(3)
seizure,
(2)
place
as to the time
indefinite
to attachment.
subject
which assets were
silent as to
attention before
judicial
little
received
The amendment
States,
v. United
Boyd
landmark decision
issue before
Ct. 524
6 S.
require pro-
could
that court was whether the
pro-
forfeiture
by defendants
duction of documents
Fourth Amendment
ceeding.
declaring
While
"seizures",
prin-
underlying
such nonliteral
scrutinizes
announced:
ciples
were
doors,
the rum-
breaking
person's]
not the
It is
[a
drawers,
the essence of
his
that constitutes
maging of
right
offence;
the invasion of his indefeasible
but
liberty
private property,
security, personal
personal
where that
tion of some
by his convic-
been forfeited
right
has never
offence,
. .
.
public
Chadwick,
1, 11
United States
630;
433 U.S.
Boyd, n.6,
Ct. 2476
L. Ed. 2d
Ed.
In Katz United
(1967)
beyond the con-
went
again
the court
By placing personal locker, that expectation an manifested respondents No public from examination. remain free contents would doors of his home who locks the less than one intruders, personal possessions his safeguards who one Fourth Amend- of the protection is due the this manner ment Warrant Clause. Chadwick, supra 11. United States expectation important Similarly, citizens manifest bank. money the local their by depositing privacy of their disposition they can control Because alone they if the security, just as would funds, rely on this people By moving mattresses. their own cash were stashed security, it cannot be purpose for the bank in their to be secure right people said that "[t]he Const, (U.S. effects, ..." houses, papers, and persons, therefrom, 4) due protection and the amend. evaporates. specific functional
Katz at times the what is exemplified Katz protected against amendment. eavesdropping, through voice "seizure" his unreasonable through visual observance unprotected against but was Katz, too should at 352. So of the booth. glass walls money will not be removed that their depositors be secure control over exclusive they will maintain unreasonably, regarding presence its information while the disposition, its impli- can be disseminated the bank without value Miller, States cating the amendment.
435, 71, Ct. 96 S. 1619 48 Miller, v. supra, In United States the court ruled that legitimate expectation bank of depositors have checks, and bank deposit slips of their statements. copies and Therefore, there no Fourth Amendment search was when the revealed this information federal seizure (1) on: absence of authorities. decision based seized, ownership possessory items (2) information, of public being character after (3) channels, passed through voluntary and commercial information. Miller is of nature disclosure this dis- from much tinguishable this case. Its criticized rationale against gov- protections should not be extended erode removal of funds bank accounts. private ernment Miller, (Brennan, J., Marshall, J., dissent- at 447-56 and Search and Seizure 411 LaFave, (1978); ing); 1 W. Huf- Things: Intangible Invisible Searches stedler, for Regulation Gathering, Governmental 127 of Information A Comment, Bank Customer (1979); U. L. Rev. Pa. 1483 Bank Expectation Privacy Has No Reasonable Miller, v. Records: U.S. 14 L. 414 Diego San Rev. Comment, Government to Bank Access Records v. Miller the Tax United States Reform Aftermath of Act 1976, 14 L. Rev. Hous. most Money in a bank be an individual's might account it all and ser- important possession. goods for exchange necessary commonly procured. Technical vices to live are purposes of the funds as a "debt" characterization should not affect constitutional banking law Katz and Miller spe- suggest. one as given majority ownership regarding cifically rejected traditional rules Katz, scrutiny. 352- at boundaries of Fourth Amendment (tort Illinois, supra Rakas property 53. at Cf. boundary for rejected law characterizations as a event, signifi- any depositors have rights). creditor, Aberdeen v. cant interest as demand Co., National Sur. P. A.L.R. Wash. (1929), clearly and the Fourth Amendment protects more Hayden, Warden v. tangible than property. 387 U.S. (1967), Wong Sun 18 L. Ed. 2d 87 S. 471, 484-86, Ct. 407 importantly, Most the characterization it to expect prop- irrelevant because is reasonable erty, which intimately identity is so tied with one's welfare, will be under one's exclusive control. This power exclude others can give "legitimate expectation rise to a Illinois, supra privacy" protection. Rakas warrants at 144 n.12. public thereby
The funds were not made destroying its private nature as were the checks and bank records Miller. While the bank public reporting is a vehicle of Miller, information, 442-43, deposit performs no such *10 function of appropriating funds.
People place often have little choice but to their bank. The California State Court has stated: practical purposes, by For all the disclosure individuals or business firms of their financial affairs to a bank is not volitional, entirely impossible since it is to participate contemporary society the economic life of without main- taining permit a bank account. ... To a police officer merely any . . . upon request, judicial access control his without relevancy requirements as or other traditional . . . legal process opens of the door to a vast and unlim- range very police power. ited of real of abuses Court, Superior Burrows v. 238, 247, Cal. 3d 529 P.2d Comment, Government Rptr. 118 Cal. Records, to Bank Access L.J. 1439 That Yale Miller, court confronted but unan- posed the same issue imously protected privacy ruled that individuals do have a in their Division One of our bank account records. McCray, State Wn. Appeals agrees. App. Court of Miller). (decided (1976) before majority suggests that once a tax assessment made, a co-owner of the levy are becomes depositor's legitimate property, thereby extinguishing levy the RCW 82.32.210 of Because expectations privacy. identified, is any piece of power before is created delinquent taxpayer expect cannot that does that mean any assets? Does privacy of his/her McCray held everything of owns? become co-owner he/she legiti- checks should bad knowingly passed one who that checking Here that account. mately expect privacy less govern- the basis for the had no relation to the account against taxpayer. ment’s claim privacy" were somewhat "expectations Even if one's of diminished, narrowly on misleading to focus too would be Katz phrase. specified that the Fourth Katz, protects just "right privacy". more than one's expectations always gauge are an accurate 350. Neither example, high For in a protections. Fourth Amendment may expectation no crime area citizens have reasonable unmo- parked on the will remain their new cars street any pro- offer less lested. Should the Fourth Amendment police breaking into cars because tection those Do Fourth Amendment expected their owners better? intru- protections perceptions agent diminish of revenue question The central widespread? sion and abuses become becomes one of values. rev- whether, bank funds taxpayer's
It if [seizure liability] judicial determination agents enue before a restraints, unregulated constitutional permitted the amount would go remaining to citizens and freedom with the compass to a inconsistent diminished society. a free open aims Amendment, on the Fourth Perspectives Amsterdam, *11 Minn. L. Rev. security, and welfare pension,
Many persons' social accounts their bank deposited mailed checks are if jeopardized Their would be regular on a basis. survival cen- seized. Because of the unreasonably those were funds lives, entirely it is consis- trality bank account our hold and values to traditions tent with Fourth Amendment and seizures searches that unreasonable thereof are forbidden.
II
Once it
is determined
the Fourth Amendment
"
applies
inquiry ...
or
fundamental
is whether
not a
[o]ur
search
seizure is reasonable under all the circumstances.
Cooper California,
United States v.
(1967)",
U. S.
Chadwick,
Prouse,
supra
at 9. Delaware v.
440 U.S.
653-54,
59 L. Ed. 2d
State v.
338, 352-53, 97 Ct. S.
In this case there were two at which stages a neutral magistrate might have Department scrutinized the Rev- if required. First, enue's actions a warrant were magis- a trate could have demanded that tax authorities show that legitimately taxes assessed to were Peters Sec- owed. ond, magistrate required a could have showing prob- a cause able that Peters' assets were the bank to which the notice and order to withhold and deliver was directed.
The determination liability the existence of a tax the most crucial for the stage taxpayer. this case Peters 82.32.050, deficiency, notified of the RCW given administrative conference to review the assessment deci- sion. RCW 82.32.160. had opportunity Peters also seek review court, of the administrative determination although payment after By of his tax. RCW 82.32.180. interposing magistrate into the tax assessment and col- procedure lection taxpayer before the seizure the would gain protection. little additional Where the tax gains assessment force a judgment by filing the tax court, 82.32.220, warrant with the clerk of magis- RCW trate, would have upon reject no basis which to a warrant Lemans, United States One 1975 Pontiac application. (1st 1980). 621 F.2d Cir. To require judicially cases, therefore, authorized in such warrant would serve no useful function.
885 showing that the assets might require A warrant in a bank. The particular are claimed the requires Depart- already summary statute collection is in the posses- there to to believe that ment have "reason RCW taxpayer. assets owed person" sion of such to insure magistrate a detached Requiring 82.32.235. taxpayer's affect this would not such belief exists no cause exists and probable If no interests. If by undisturbed. privacy is present, assets are Peters' given, his to which notice is chance assets are the bank judicial warrant Requiring off.3 taxpayer is worse facts, create a worthless stage, under these would has burden. Court said administrative As the context searches, to inventory probable cause
noncriminal where irrelevant, not search warrants are search is textually is required, requirement linked as the warrant v. Opper- South Dakota probable-cause concept." man, (1976). 364, is U. S. n. so because 428 370 5 This salutary appli- have no simply functions of a warrant context; in that the constitutional reasonableness cation . . . must be determined on other bases. Chadwick, v. 1, n.5, 2d
United States
U.S.
10
53 L. Ed.
443
(1977).
538,
The standard
to balance "the need
search
rantless search and seizure is
which the search
the invasion
[or seizure]
seize]
[or
Court,
523, 537,
Camara v.
U.S.
18
Municipal
387
entails."
See United States
S. Ct. 1727
L. Ed.
87
616-19,
Ramsey,
S.
col-
in the
interest
efficient
strong
has a
recognized
long
been
of taxes
has
lection
Commissioner, 589, 596-97,
Phillips v.
judiciary.
Leasing Corp.
G.M.
Because in bank fungible, accounts is no there is damage to specific property taken. While removing checking assets from a account without could warning cause outstanding checks to be returned for insufficient funds otherwise cause cash flow hardships, plaintiff knew months in deficiency advance of his tax so could have pro tected against stated, this possibility. previously plain As tiff was given an hearing administrative which time he presented preseizure is, This evidence his behalf. hearing fact, more than an ex meaningful parte proceed warrant ing a magistrate addition, before neutral would be. levy away because the occurred plaintiff's from home or office, the intrusion into his security some Payton York, v. New what lessened. 445 U.S. 63 balance, levy S. reasonable.
By removing Peters' Department bank funds the also taking effected property, a subject to Fifth and Four- teenth Amendment process protection. due It is recognized away that the context of tax seizures from the taxpayer's premises, the constitutional determining balances for due process and Fourth Amendment are similar. G.M. Leasing Corp. supra at 352 n.18.
I concur with the majority's that finding Depart- procedures ment's See Com- comported with process. due missioner v. Shapiro, 614, 630-33, L. Ed. 2d S. Ct.
III applies while offer- Finding that already required by due beyond those ing protections import as to the legitimately are raised process, questions holding. requirement warrant First, the Fourth Amendment's pro- mechanism preventative understood should be limitation rather than a rights tecting Fourth Amendment prob- The fact on of the amendment. coverage mean- has little requirement magistrate able cause/neutral filed of an administrative determination ing the context correctness, given presumption with court which protected of the interests should not dictate the bounds and seizure. unreasonable search Second, centrally per- tied to bank accounts are because welfare, give could rise tampering sons' unreasonable Bivens v. Six Unknown tort, as in constitutional action Agents, Named 91 S. Ct. protect against The Fourth Amendment would withhold and deliver an RCW 82.32.235 notice to *14 deficiency, claimed exceeded the amount of the cf. Dionisio, States v. S. Ct. (1973) sweeping subpoena's too (condemning grand jury reasonable"). regarded its terms "to The standard of "reasonableness" Fourth Amendment's and seizure more before a search might provide clause, allows sei- process than the due hearing. preseizure without taxpayers' zure of assets Shevin, 67, 92, Fuentes of the Fourth Because of the orientation searches towards unreasonable preventing occur, war- by its usual they before as evidenced seizures prior require requirement, provision might rant given Peters. hearing administrative as was con- an Therefore, unreasonable assessment denial to a Fourth ference, might give rise RCW 82.32.160 hearing at which he Amendment violation. Without evidence, levying Peters' presented appeared account without the involvement of a neutral magistrate might have been unreasonable violation constitution. J., C.J.
Rosellini, Brachtenbach, concurs with July En Banc. 46999-7. [No. 1981.] Respondent, Washington, State of Mack Appellant. Thompson, Harris