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Routhier v. Goggfns

United States District Court, D. Vermont

January 18, 2017

DONALD R. ROUTHIER and MICHELLE ROUTHIER, Plaintiffs,
v.
WILLIAM GOGGFNS and MICHAEL WELCH, Defendants.

          OPINION AND ORDER ON MOTION TO DISMISS (DOC. 21)

          Geoffrey W. Crawford, Judge

         Donald Routhier, the owner of a tavern in Barre, Vermont, and Michelle Routhier, a bartender at the tavern, have sued William Goggins and Michael Welch, agents of the Vermont Department of Liquor Control. The Routhiers allege that Goggins and Welch violated 10their civil rights by conducting a warrantless administrative search and by seizing a video recording and video player that were part of the tavern's security system. Defendants have moved to dismiss the amended complaint for failure to state a claim. (Doc. 21.) The court held a hearing on the motion on October 11, 2016.

         Background

         According to the complaint, Donald Routhier owns Jerry's Sports Tavern in Barre, Vermont, and holds a liquor license issued by the Department of Liquor Control. (Doc. 19 ¶ 5.) On March 21, 2016, without any prior notice, Welch entered the tavern and demanded that Michelle Routhier, who was working, turn over the "electronically stored video recording of an incident" that occurred at the tavern on March 11. (Id. ¶¶ 15-16, 27.) The complaint does not specify the nature of the "incident."[1] Michelle called Donald to see how she should respond.[2] (Id. ¶ 16.) Over the phone, Donald asked Welch for twenty-four hours to consult with an attorney before responding to the request. (Id. ¶ 17.) Welch then left the tavern without the video recording. (Id.)

         Welch, accompanied by, returned to the tavern later that day, around 3:30 p.m. (Doc. 19 ¶ 19.) Welch and Goggins "aggressively entered the bar" and again demanded that Michelle turn over the video recording. (Id. ¶ 20.) They escorted Michelle to the "kitchen area" of the bar and "demanded that she immediately surrender the video and video player that was part of the security system in place." (Id. ¶ 21.) Michelle asked the men to produce legal authorization for seizing the recording. (Id. ¶ 22.) They informed her that they did not need legal authorization because the Routhiers were licensees of the Department of Liquor Control. (Id.)

         Michelle called Donald again and handed the phone to Goggins. (Doc. 19 ¶ 23.) Over the phone, Donald again requested twenty-four hours to "consult with an attorney before responding to their demand" for the recording. (Id. ¶ 24.) Goggins told Donald that the agents had authority to seize the recording now and would not wait for him to consult an attorney. (Id. ¶ 25.) "Welch and Goggins then immediately . . . tore the videotape and video player from the wall, . . . seizing the same and rendering the entire security system inoperable." (Id. ¶ 26.) It cost Donald $400 to buy a new security surveillance system. (Id. ¶ 30.)

         Plaintiffs filed their initial complaint on April 15, 2016, three and a half weeks after the incident. (Doc. 1.) In their amended complaint, Plaintiffs assert several federal constitutional claims and related state-law claims. Counts I and II allege that Defendants violated Donald's Fourth Amendment rights in searching the tavern's electronic surveillance system and seizing the video recording and video player without lawful justification. (Doc. 19 ¶¶ 32-46.) Counts III and IV allege that Defendants' conduct also violated Donald's right to "procedural due process" and his "substantive property rights without due process." (Id. ¶¶ 47-51.) Count V alleges that Defendants' conduct violated Donald's right under the Vermont Constitution to be free from unreasonable search and seizure and Count VI is a claim for replevin of the videotape and video player. (Id. ¶¶ 52-62.) Two more counts, both titled "Count VII, " assert a claim of negligent infliction of emotional distress on behalf of Michelle and a general claim of gross negligence on behalf of both Plaintiffs. (Id. ¶¶ 63-71.) Count VIII is a request for punitive damages. (Id. ¶¶ 72-73.)

         Defendants have moved to dismiss the complaint, arguing that most counts fail to state a claim and that the court lacks jurisdiction over one of the state-law counts. (Doc. 21.)

         Analysis

         In evaluating a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6), the court accepts all facts as alleged in the complaint and "draw[s] all reasonable inferences in the plaintiffs favor. Doe v. Columbia Univ., 831 F.3d 46, 48 (2d Cir. 2016). "To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to 'state a claim to relief that is plausible on its face.'" Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)).

         I. Fourth Amendment Claims

         A. Constitutional Violation

         Under most circumstances, the Fourth Amendment requires a state actor to obtain a warrant based on probable cause before conducting a search. Kentucky v. King, 563 U.S. 452, 459 (2011). There are exceptions to this rule, including an exception for administrative searches of the premises of a closely regulated business. City of Los Angeles v. Patel, 135 S.Ct. 2443, 2452 (2015). But while administrative searches maybe conducted without a warrant, they are not exempt from the Fourth Amendment's requirement that they be reasonable. New York v. Burger, 482 U.S. 691, 702 (1987); Bruce v. Beary, 498 F.3d 1232, 1243 (11th Cir. 2007) ("[Administrative searches are an exception to the Fourth Amendment's warrant requirement, but they are not an exception to the Fourth Amendment's requirement for reasonableness.").

         In Burger, the Supreme Court offered three criteria for determining when a warrantless administrative search is reasonable. 482 U.S. at 702-03. These criteria are: first, whether there is a "substantial government interest that informs the regulatory scheme"; second, whether warrantless inspections are "necessary to further the regulatory scheme;" and third, whether the administrative scheme's "inspection program . . . provides a constitutionally adequate substitute for a warrant" by both "advis[ing] the owner of the commercial premises that the search is being made pursuant to the law and has a properly defined scope" and "limit[ing] the discretion of the inspecting officers." Id. (internal quotation marks, alterations, and citations omitted); see also Anobile v. Pelligrino, 303 F.3d 107, 117-18 (2d Cir. 2001). An administrative search under a scheme that meets these criteria nonetheless can be unreasonable under the Fourth Amendment if it exceeds its statutorily authorized scope. Club Retro, L.L.C v. Hilton, 568 F.3d 181, 201 (5th Cir. 2009); Bruce, 498 F.3d at 1248; United States v. Knight, 306 F.3d 534, 536 (8th Cir. 2002).

         The court agrees with Defendants that the sale of alcohol in Vermont is a closely regulated industry for which warrantless administrative searches are permitted. The courts have long recognized that regulation of the production, distribution, and sale of alcohol is informed by a substantial government interest, see Colonnade Catering Corp. v. United States, 397 U.S. 72 (1970), and Vermont is no exception. See In re DLC Corp., 167 Vt. 544, 547-48, 712 A.2d 389, 391-92(1998).

         Regulation of the sale of alcohol in Vermont is comprehensive. The liquor control statutes prohibit the importation, distribution, or sale of alcohol except as authorized, 7 V.S.A. § 61; establish a licensing regime, id. §§ 221-42; authorize the Liquor Control Board to enforce the statutes and promulgate regulations, id. §§ 104, 108; and authorize imposition of a fine or suspension or revocation of a license if a licensee fails to abide by applicable laws and regulations, id. § 236. The Liquor Control Board has also issued detailed "General Regulations" by which licensees must abide. 14-1 Vt. Code R. § 3. These regulations govern many aspects of operating a licensed premises. They also require licensees to allow inspection of their licensed premises and records at any time. Id. § 3(7).

         Warrantless inspections also may be "necessary to further the regulatory scheme." Unannounced inspections are essential to ensuring that regulations prohibiting the sale of alcohol to minors or those already intoxicated are strictly enforced. See Crosby v. Paulk, 187 F.3d 1339, 1346-47 (11th Cir. 1999).

         The regulatory scheme also places licensees on notice that they are subject to warrantless administrative search and limits who may conduct the search and what locations and items are subject to search:

Licensees and licensee employees shall allow at any time, a member of the Liquor Control Board, the Commissioner, and/or any of their assistants or Investigators to examine the licensed premises as well as all records, papers, stock, merchandise or equipment in reference to the operation of the license, and shall retain such items for inspection. All licensees shall keep on their licensed premises for a period of two years a complete record covering the operation of their license, including all invoices covering the purchase of alcoholic beverages and/or tobacco, and all financial records including but not limited to daily receipts for the sale of alcohol and/or tobacco. If any licensee has more than one licensed location, the licensee may keep all records in one centralized business location in the State of Vermont and the Department shall be notified in writing, in advance, ...

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