DONOVAN v. LONE STEER, INC.
Legal provision: Amendment 4: Fourth Amendment
ORAL ARGUMENT OF ALAN I. HOROWITZ, ESQ., ON BEHALF OF APPELLANTS
Chief Justice Warren E. Burger: Mr. Horowitz, I think you may proceed whenever you are ready.
Alan I. Horowitz: Thank you Mr. Chief Justice, and may it please the Court:
This case is here on direct appeal under 28 U.S.C. 1252 from the United States District Court for the District of North Dakota.
Under review is the District Court's decision holding unconstitutional the investigative provisions of the Fair Labor Standards Act, specifically the Court's holding that the Fourth Amendment prohibits the use of an administrative subpoena for the inspection of documents and rather requires that a search warrant be obtained before any documents may be examined.
Because some of the briefs here have generated some confusion about the issue presented I think it would be useful to summarize briefly the background of this litigation.
On January 6, 1982 Al Godes, the Wage Hour compliance officer, telephoned Appellee, a restaurant-motel, located in Steele, North Dakota to schedule an inspection for the following day and to ask that certain wage and payroll records be made available for inspection at that time.
When Appellee's manager informed Godes that the time was not convenient he rescheduled the inspection for the following week.
In the interim Appellee's counsel wrote to Mr. Godes stating that Appellee would not consider the request for an inspection until it was informed of either the nature of the complaint that triggered the investigation or the scope of the investigation.
The government responded with a letter outlining the general scope of a fair labor standards investigation and declining to give the reason for this particular investigation.
In this letter the government rescheduled the inspection for two weeks hence.
The letter also requested Appellee to inform the government whether it would decline to permit the inspection so that an administrative subpoena could be obtained in that event.
Appellee responded that permission would be refused under the authority of Marshall v. Barlow's and thereafter Appellee was served with a subpoena duces tecum requiring production of specified payroll records at the Department of Labor's Wage Hour Offices in Bismarck, North Dakota.
Appellee's counsel informed the Department of Labor that it would not comply with the subpoena on the ground that it was invalid under Barlow's, and to date it has not produced the subpoena documents.
Justice Sandra Day O'connor: Mr. Horowitz, do the Appellees suggest that maybe this was really an attempt by the government to get unauthorized entry into the premises?
Would you comment on that?
Alan I. Horowitz: I just do not think there is any support for that in the record.
All we know is that they phoned and... The government phoned and said that it wanted to conduct an inspection the next day.
Appellee obviously did not feel compelled to comply with this.
It simply first stated that it wasn't convenient and then later declined to permit the government to enter.
In the brief--
Justice Sandra Day O'connor: The question is not really before us here, of course, but do you think the statutory authority under the Act to enter and inspect the premises is possibly invalid under Barlow's?
Alan I. Horowitz: --Well, it has never come up because the general practice of the Labor Department is not to conduct these entries without consent so they did not try to do it here.
They have never tried to do it.
If they did--
Justice Sandra Day O'connor: Do you think it is possibly invalid?
Alan I. Horowitz: --If they did I think unlike this case Barlow's would be quite relevant and there would be a serious question under Barlow's, but the question would be whether Barlow's was distinguishable or not.
It might be difficult to distinguish.
Barlow's itself was careful to confine itself to the OSHA context so arguably it might be distinguishable, but it would certainly be a close case.
Unidentified Justice: Well, did the subpoena here actually request entry?
Alan I. Horowitz: No.
The subpoena specifically said that it was returnable off the premises, that the documents were to be produced at the Labor Department's office in Bismarck, North Dakota.
I should say also in response to Justice O'Connor's original question the Appellee has said and the briefs in this Court have characterized the Department of Labor's initial phone call as sort of a demand for entry and tried to paint the picture that we were trying to force our way in.
That's something that's come up in the course of litigation.
I think if you look at the more contemporaneous discussion of what was going on the letter that I just referred to that Appellee sent to the government that is reproduced at page 13 of the Joint Appendix Mr. Peterson stated
"I represent Lone Steer Cafe. "
"Before we consider your request to conduct an inspection we would like the following information. "
So I think at least at the time everyone understood that this was just a request to enter the premises.
It was only later that this has been characterized more as a demand.
Justice John Paul Stevens: May I ask was the subpoena ever served?
Alan I. Horowitz: Yes, the subpoena was served.
Justice John Paul Stevens: Did you ever file a motion for contempt for failing--
Alan I. Horowitz: We filed as I was about to say we filed a petition with the District Court to compel Appellees to comply with this subpoena.
Justice John Paul Stevens: --The judge's order does not rule on that though does it?
Alan I. Horowitz: Well, the cases were consolidated so the order does rule on it.
It is a little cryptic.
Justice John Paul Stevens: But he does not mention it?
Alan I. Horowitz: He does not mention it, no.
Justice John Paul Stevens: All he denies... Really all he says you have no right to enter the premises.
Alan I. Horowitz: Well, that is what the order says.
In the course of the court's opinion he states that the Appellee's contention is that they are not required to turn over these documents in response to this subpoena so the court seems to have understood that what this case was about was a subpoena, but then when it gets to drafting the order it just says that government can't enter on the premises.
At that point the government filed a motion to amend the judgment pointing out to the court that all we wanted was for the documents to be turned over at our offices.
The court did not really address that very well either so perhaps the District Court did not exactly focus on what was going on here, but I think it is made clear enough in all the papers that have been filed.
When Appellee declined to permit the inspection originally the government responded with a letter that outlined the general scope of the investigation of a fair labor standards general investigation but declined to give the reason for this particular investigation, and as I said we requested that Appellee inform the government whether it would consent... decline to permit the inspection so the subpoena could be obtained.
When Appellee declined to permit the inspection a Department of Labor officer went to the premises on February the 2nd and served him with the subpoena.
The Appellee brought this law suit seeking declaratory and injunctive relief on the grounds that the Fair Labor Standards Act was unconstitutional and quoting from the complaint
"insofar as it purports to authorize a warrantless inspection of records by way of administrative subpoena after entry to inspect has been denied. "
This action was consolidated with the government's action as discussed earlier petitioning the District Court to compel Appellee to comply with the subpoena, and the District Court found for the Appellee without really explaining why.
The court's opinion relied exclusively on Marshall v. Barlow's and accepted the Appellee's contention that the subpoena was invalid under Barlow's.
Unidentified Justice: I did not find that the court referred to Oklahoma Press at all.
Alan I. Horowitz: No.
Unidentified Justice: Was this pressed upon the court by the United States Attorney?
Alan I. Horowitz: --It certainly was featured quite heavily in the government's motion for summary judgment, the Oklahoma Press case, but it was not really discussed by the Appellee and the court did not see fit to discuss it either.
Unidentified Justice: Judge Van Sickle had Oklahoma Press.
Alan I. Horowitz: Yes, he did.
As we've stated in our briefs we view this as a straightforward case governed by principles that have been well settled by this Court.
Justice John Paul Stevens: Mr. Horowitz, maybe I've already asked it but I just want to be sure.
Not only in his judgment but also in his opinion all he mentions is the right to enter.
He did not write another opinion that somehow did not get in the papers did he because the strangest thing to me about this case is the judge's total failure to mention anything about complying with the subpoena.
Alan I. Horowitz: Well, it is certainly strange.
At the beginning of the court's opinion or at least at the beginning of discussing the issues at the bottom of page 6A in framing the issue the court says in the last paragraph there on page 6A
"Lone Steer asserts that the statutory scheme is constitutionally impermissible and that the records described in the administrative subpoena issued in this case need not be produced except in response to a warrant. "
So the court certainly took cognizance there of the fact that there had been a subpoena issued, and that's what was involved.
But then the court just goes on to discuss Barlow's and then kind of falls back onto this discussion of entry onto the premises.
Unidentified Justice: You thought it was so strange that you suggested summary reversal.
Alan I. Horowitz: We did suggest summary reversal, but the court did not see fit to act on that suggestion.
The case is here today because of the direct appeal provisions of Section 1252 in light of the District Court's finding of unconstitutionality.
It is not because this case presents an unsettled constitutional question.
I would like if I might briefly to emphasize just a few points in this connection.
At the outset let me emphasize again that the only issue presented in this case is the constitutionality of the subpoena duces tecum served upon Appellee, that is, requiring the production of documents off premises without resort to a search warrant.
Perhaps because the validity of such subpoena is so clearly established by this Court's precedent Appellee and the amicae supporting it have sought to cloud this issue by suggesting that this case involves an attempted nonconsensual entry onto private premises.
This is simply not so.
There is no question here of an entry onto private premises without consent as there was in Barlow's.
The government never made any attempt to enter and the Department of Labor's general policy is not to make such entries.
From the time the subpoena was served almost every document in the record perhaps with the exception of the District Court's opinion confirms that this litigation has focused on the validity of the subpoena.
Only one week after the subpoena was served Appellee wrote the government, sent a copy of this letter to the District Court stating that it would not comply with the subpoena because it was invalid under Barlow's.
Appellee's complaint, the government's petition to enforce this subpoena, the District Court's own description of the issue presented in its opinion and the motions for summary judgment all focus on the issue of the validity of the subpoena.
On this issue Appellee's contention is foreclosed by a long line of precedent of this Court.
In Oklahoma Press this Court unequivocally held that an administrative subpoena, indeed in that case a subpoena issued under the very statute involved here, the Fair Labor Standards Act, a subpoena is not governed by the requirements of the warrant clause.
That is, neither a warrant nor probable cause is required for the issuance of a subpoena.
The Court explained that a subpoena does not involve any actual search of private matters.
It is a search only in a theoretical sense, what the Court termed a constructive search.
The Court concluded, therefore, that a subpoena is reasonable within the meaning of the Fourth Amendment if the request is authorized by law, is not indefinite or unduly burdensome and seeks documents that are relevant to the investigation.
This rule has been reaffirmed by this Court in Morton Salt and several other subsequent cases and has been routinely and uniformly applied to administrative subpoenas for the last 40 years.
Neither Appellee or the District Court discusses Oklahoma Press and its progeny.
No defect in the reasoning of the Court in those cases nor any reason for concluding that those cases were wrongly decided has been suggested.
The sole basis for the decision below and for Appellee's argument is the assumption that this long line of cases has been wiped off the books overruled sub silentio by Barlow's.
There is absolutely no basis for this assumption.
Barlow's has nothing to do with this case or with Oklahoma Press.
Barlow's involved an actual search, an entry onto a manufacturer's private business premises and a search of those premises for evidence of safety and health violations.
This is the precise sort of investigative tool with which the Court in Oklahoma Press contrasted a subpoena and drew a distinction.
Barlow's did not suggest any erosion of the traditional distinction between subpoenas and actual searches.
Indeed Barlow's relied heavily on See v. City of Seattle an earlier case where the Court had established a warrant requirement for fire inspections, inspections that required an entry onto private premises.
In the course of that decision, however, the Court expressly reaffirmed the distinction drawn in Oklahoma Press between subpoenas and actual searches and reaffirmed the standards set forth there under which such subpoenas are to be judged.
Barlow's and following See did not interfere with these standards.
Morever, the problems with OSHA inspections primarily concerned the Court in Barlow's.
That is, the unbridled expression of officers in the field to conduct inspections and the unlimited nature of the search involved do not exist with subpoenas.
The subpoena is not open ended.
It specifically identifies the documents sought.
The subpoena is not left to the unbridled discretion of the officer in the field.
It may be issued only by the Wage Hour administrator and enforced only by resort to adversary court proceedings.
In short, nothing in Barlow's casts any doubt on the continued validity of Oklahoma Press or on the validity of the subpoena returnable off premises that was issued in this case.
Thus, to repeat we believe that well settled Supreme Court precedent clearly controls the disposition of this case and requires reversal of the judgment below.
Unless there are any questions, I will reserve the remainder of my time.
Justice Sandra Day O'connor: I have one, Mr. Horowitz.
Again, I do not think it is really raised here but do you think there are any limits in addition to those spelled out in Oklahoma Press on the government's subpoena power?
Could a person whose records are being subpoenaed, for example, seek a protective order from the court on the grounds that he'd been singled out or was being harassed and, therefore, the subpoena wouldn't issue?
Are there any limits?
Alan I. Horowitz: I am not sure whether the Fourth Amendment would give any protection or not against sort of being singled out.
It might be that the due process clause or something could have some sort of selective prosecution kind, but I think it would be a difficult standard to meet certainly.
Chief Justice Warren E. Burger: Mr. Peterson.
ORAL ARGUMENT OF RICHARD G. PETERSON, ESQ., ON BEHALF OF APPELLEE
Richard G. Peterson: Mr. Chief Justice, and may it please the Court:
First of all, this is not a simple subpoena case.
Such characterization is misleading and erroneous.
It is somewhat glib, and it is made by government appellate attorneys from afar.
Those who have been directly involved with this case including the District Court judge were intimately aware of the facts.
The issues basically involved entry, and if you look at the facts and the facts were stipulated there were at the outset unilateral scheduling of an inspection appointment date.
Justice William H. Rehnquist: Mr. Peterson.
Richard G. Peterson: Yes.
Justice William H. Rehnquist: Where do we find the stipulation?
In the briefs or the appendix?
Richard G. Peterson: I believe it is in the--
Justice William H. Rehnquist: Is it in the appendix somewhere?
Richard G. Peterson: --Yes, it is in the appendix, Justice Rehnquist.
Unidentified Justice: Page 11.
Richard G. Peterson: Right.
The Labor Department basically was informing Lone Steer that it was about to enter and inspect the premises, question employees and generally conduct its normal investigation.
Justice Thurgood Marshall: Did they enter?
Richard G. Peterson: Yes, they did ultimately.
The issue became--
Justice Thurgood Marshall: When did they enter?
Richard G. Peterson: --They entered I believe it was February 2nd of 1981.
Justice Thurgood Marshall: What is that in relation to this case?
Richard G. Peterson: Excuse me?
Justice Thurgood Marshall: Was that when the hearing was had?
Richard G. Peterson: They entered following the institution of a law suit by Lone Steer to get a declaratory judgment on Section 11.
Justice Thurgood Marshall: Well, does that apply to this case?
Richard G. Peterson: Yes, it does, Your Honor.
Justice Thurgood Marshall: Is it in the record?
Richard G. Peterson: Yes, it is, Your Honor.
The Labor Department, a compliance officer, Mr. Godes from Bismarck together with some high ranking Labor Department official flown in from Denver entered the Lone Steer to attempt to conduct the investigation on the premises showing, attempting to show that Section 11--
Justice Thurgood Marshall: Well, did they enter?
You now said they attempted to enter.
Richard G. Peterson: --Well, they entered and attempted to conduct the investigation.
Justice Thurgood Marshall: Isn't there a difference between entering and attempting to enter?
Richard G. Peterson: They entered the Lone Steer Cafe in Steele, North Dakota and sought to conduct an investigation there.
Justice Thurgood Marshall: A cafe?
They entered it?
Richard G. Peterson: They did enter it.
Justice Thurgood Marshall: And they were excluded.
Richard G. Peterson: They were turned away, right.
Justice Thurgood Marshall: They were turned away.
Richard G. Peterson: Right.
Justice William H. Rehnquist: Mr. Peterson, you used the word "enter" as if to give almost a feeling of breaking down the door.
Your paragraph 10 of the stipulation says that at approximately 10:30 a.m. Godes and Hill entered the Lone Steer establishment to attempt to conduct an investigation.
They asked for Ms. White and were told she was not available but expected shortly.
They were offered some coffee and waited in the lobby area.
After 20 to 30 minutes when Ms. White had not appeared Mr. Godes served an administrative subpoena on employee Karen Arnold.
Do you mean by the use of the word "entered" kind of entered against the will of the parties?
Richard G. Peterson: No, Your Honor, and I certainly did not seek to give the Court that impression.
If I could give you a short scenario of what exactly happened--
Chief Justice Warren E. Burger: Well, is it something different from the stipulation in paragraph 10?
Richard G. Peterson: --Only from a... No, it is not, Your Honor.
It is basically in the stipulated facts.
We had two instances where Lone Steer's attorney told the Labor Department that they did not have authority or consent to conduct its investigation on the premises of Lone Steer.
Chief Justice Warren E. Burger: Are you suggesting they had no authority to enter to serve the subpoena?
Richard G. Peterson: No, Your Honor, definitely not.
Chief Justice Warren E. Burger: You are not arguing that?
Richard G. Peterson: No.
Chief Justice Warren E. Burger: That is a public place.
Anyone could enter it, could they not?
Richard G. Peterson: --Yes, it is, Your Honor.
Chief Justice Warren E. Burger: How else would they serve the subpoena except to enter it?
Richard G. Peterson: Your Honor, in the first instance what they sought to do was to conduct the investigation.
Chief Justice Warren E. Burger: We are not concerned about what they thought to do.
What did they do?
Richard G. Peterson: They informed us by way of a letter that they were going to attempt to conduct the investigation and if they were prohibited... That was the word used... if they were prohibited from conducting the investigation they were going to leave an administrative subpoena.
Justice John Paul Stevens: Mr. Peterson, the stipulation goes on and says they did properly serve the subpoena.
Richard G. Peterson: Yes, Your Honor.
Justice John Paul Stevens: The subpoena commands the production of a person to testify and to bring with him certain records to the Federal Building in Bismarck.
Richard G. Peterson: Yes, Your Honor.
Justice John Paul Stevens: Why did you not do that?
Richard G. Peterson: Your Honor, at that point prior to that the issue was under Section 11 whether or not the inspection powers of the Labor Department were limited by the Fourth Amendment as interpreted by Barlow's, and the issue before the Court as the Court perceived it and as we perceived it we wanted a declaratory judgment as to whether or not the Labor Department did have the right to conduct the investigation without the consent of the owner.
Justice John Paul Stevens: Do you understand the District Court to have ruled that you did not have to comply with the subpoena.
Richard G. Peterson: Yes, Your Honor.
Justice John Paul Stevens: What reason did he give for that ruling?
Richard G. Peterson: He did not really give a reason for that ruling other than to say that the inspection power under Section 11 of the Fair Labor Standards Act was clearly in his mind at least subject to the warrant clause under the Fourth Amendment as interpreted in Barlow's.
Justice John Paul Stevens: He talked only of entries onto the premises.
Richard G. Peterson: Yes, Your Honor.
Justice John Paul Stevens: The subpoena asks for production elsewhere.
Is there any reason why you should not comply with a subpoena to produce elsewhere?
Richard G. Peterson: The subpoena as we understand the subpoena is an enforcement device as a part of Section 11's conferring of inspection powers to enter and inspect the premises.
Justice Thurgood Marshall: Had they not first tried to get in would you be making the same argument?
Richard G. Peterson: I believe, Your Honor, that either Section 11 is subject to the warrant clause or it isn't.
I believe that it is subject to Section 11, and the Labor Department did not or left undisturbed the judgment with respect to entry.
The judgement with respect to entry right now stands that Section 11 is subject to the warrant clause.
Justice Thurgood Marshall: Well, let me give you a hypothetical.
The same type of subpoena is issued to another corporation which has only been in business a week.
Would you be arguing the same thing?
Richard G. Peterson: I would argue--
Justice Thurgood Marshall: I said only been a week because I do not want anything in the past to have anything to do with it.
Richard G. Peterson: --I would argue there, Your Honor, that a subpoena is subject to Barlow principles.
A subpoena can be enforced under Barlow principles, and it would be subject to the--
Justice Thurgood Marshall: So they have no subpoena power.
Richard G. Peterson: --Yes, they have subpoena power which I believe was limited by Barlow's--
Justice Thurgood Marshall: How would they exercise the subpoena power?
Richard G. Peterson: --I think what this Court has to do consistent with Barlow's is to look at the entire investigatory scheme and see that a subpoena is being used and enforced in Federal District Court, and the test there would be whether or not the subpoena and an enforcement would be the functional equivalent of a warrant.
Justice Thurgood Marshall: And every subpoena would have to have court approval?
Richard G. Peterson: Ultimately in an enforcement action.
It could have in this case.
Justice Thurgood Marshall: Why does this type of subpoena need court action, others do not?
Richard G. Peterson: Because of the particular way the statute is postured in terms of entry.
Justice Thurgood Marshall: When it involves this particular statute?
Richard G. Peterson: Yes, Your Honor.
Justice Sandra Day O'connor: Mr. Peterson, does not Oklahoma Press clearly say that subject to the requirements spelled out there administrative subpoenas can issue without the concerns expressed in Barlow's?
Richard G. Peterson: Your Honor, I believe that--
Justice Sandra Day O'connor: Barlow's did not overrule Oklahoma Press.
Richard G. Peterson: --No, I do not believe so, Your Honor.
I believe that Oklahoma Press Publishing was perhaps altered to a certain extent and perhaps certain grey areas were filled in in that a subpoena could issue but the test of reasonableness would involve Barlow substantive principles, for example, the issue of probable cause limiting properly the scope of the investigation to the purpose of the investigation.
Justice Sandra Day O'connor: Well, you have to read a lot into Barlow's to think that do you not?
Richard G. Peterson: No, Your Honor.
Unidentified Justice: To what extent did Barlow's deal with papers and records?
Richard G. Peterson: To the extent that the Labor Department there sought certain I believe it was health accident reports and so forth that are required by the OSHA law.
An inspection was sought of those documents.
Unidentified Justice: Did Barlow's even cite Oklahoma Press?
Richard G. Peterson: No, it did not, Your Honor.
However, in footnote 22 you pointed out that delineating the scope of a search with some care is particularly important where documents are involved.
At a certain point you indicated it is the secretary's position which we reject that an inspection of documents of this scope may be effective without a warrant.
Unidentified Justice: Well, you can get relief with respect to the scope of the subpoena under Oklahoma Press, under Walling.
Richard G. Peterson: We believe, Your Honor, that because of the entry provisions of this particular statute, Section 11, which there is no question in my mind, there is no question in the District Court's mind and apparently there is no question in the Labor Department's mind, is subject to the warrant clause on Barlow's.
It is very difficult for me to then say Section 11 is subject to the warrant clause; however, the subpoena is not which is the enforcement device.
I believe that essentially the cases are the same, Barlow's and Lone Steer.
The only difference occurred when entry was denied and an enforcement mechanism under a particular statute was utilized.
In the Barlow's case it involved a compulsory process to enter, and as I read Barlow's the Labor Department did not contend that that compulsory process was the equivalent of a warrant.
You did indicate that it could be viewed as such in one of your footnotes.
The same is true in this particular case.
We have to look at the enforcement mechanism of Section 11, and in this case it is the subpoena, a subpoena that is issued by the Labor Department itself without regard to probable cause and without properly limiting the scope of the investigation to the purpose or the probable cause involved.
Again, I would have to iterate and reiterate that the case involved a declaratory judgment at a particular time.
On February 1, 1981 there was a dispute as to whether or not the Labor Department had a right to come in and conduct an investigation over the objection of an owner.
When Lone Steer objected twice through its attorney that you cannot come in without a warrant or its functional equivalent, the Labor Department then cited in its letter its inspection powers under Section 11 to enter and conduct an inspection.
At that point there was a dispute as far as the District Court was concerned as to whether or not the Labor Department did in fact have a right to enter and inspect.
Following the initiation of that law suit the Labor Department despite all these protestations through the legal counsel and through the court system the Labor Department still sought to conduct that inspection on the premises of Lone Steer.
Unidentified Justice: So what you say is basically you are entitled to a declaratory judgment that would say the Labor Department does not have the authority to enter and inspect notwithstanding--
Richard G. Peterson: --Without the consent of--
Unidentified Justice: --Without the consent of the owner notwithstanding that we might resolve the subpoena question in favor of the government.
You see them as two distinct issues I take it.
Richard G. Peterson: --Yes, they are two distinct issues, but if Section 11 is subject to the warrant clause under a Barlow's test type of analysis it seems clear to me that you have to also apply that analysis to the enforcement mechanism of that right under Section 11.
In fact the Labor Department is saying that it is seeking to inspect the documents under the subpoena under Section 11.
They are citing Section 11 and Section 9.
I seriously question whether or not the Labor Department can conduct its investigation without utilizing the authority of Section 11 which is a right to enter provision.
Thank you, Mr. Chief Justice.
Chief Justice Warren E. Burger: Thank you.
Do you have anything further, Mr. Horowitz?
Alan I. Horowitz: I have nothing further unless there are any questions.
Chief Justice Warren E. Burger: Thank you, gentlemen.
The case is submitted.
Unidentified Justice: The Honorable Court is now adjourned until tomorrow at 10:00.