Reply Brief — V-1 Oil Co. v. United States

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| oupreme Uourt, U.3.

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No. 95-1308 MAY 3 1996

ee CLERK

Supreme Court of the United States

October Term, 1995

V-1 OIL COMPANY, INC. d/b/a V-1 PROFANE,

Petitioner,

Vs.

UNITED STATES OF AMERICA,

Respondent.

On Petition for a Writ of Certiorari to the United States

Court of Appeals for the Ninth Circuit

REPLY BRIEF FOR PETITIONER

PETER STIRBA

Counsel of Record

LINETTE B. HUTTON

STIRBA & HATHAWAY

Attorneys for Petitioner

215 South State, Suite 1150

Salt Lake City, Utah 84111

(801) 364-8300

Ageia (800) 3 APPEAL « (800) 5 APPEAL « (800) BRIEF 21

ervices, inc.

TABLE OF CONTENTS

Page

Further Reasons for Granting the Writ .............. l

OR RC rs Fy a ey Ad ea ee See 10

TABLE OF CITATIONS

Cases Cited:

Colonnade Catering Corp. v. United States, 397 U.S. 72

CN ens Cemuawicd Cos Cxnacdaa shes bance ss 5,7,8,9

Donovan v. Dewey, 452 U.S.594(1981) ............ 5,7,8,9

Negonsott v. Samuels, 507 U.S. 99 (1993) ............ 2

New York v. Burger, 482 U.S.691 (1987) .... 1,2,4,5,6,7,8,9

Schusterman vy. United States, 63 F.3d 986 (10th Cir.

ae es nar i er oe De ea 2

United States v. Biswell, 406 U.S.311(1972) ...... 5,6,7,8,9

United States v. Kaiyo Maru No. 53, 669 F.2d 989 (9th Cir.

a 7

United States v. V-1 Oil, 63 F.3d 909 (9th Cir. 1995) ... 2,4,8

Statutes Cited:

49 U.S.C. § 1801 et seq. (1988 & Supp. V 1993) .......

Contents

Page

49 U.S.C. § 1802(11) (1988 & Supp. V 1993) ......... 3

49 U.S.C. § 1802(15) (1988 & Supp. V 1993) ......... 4

49U SX. § IGG 6. ccd ce cases seeds. 3,6,8,9

United States Constitution Cited:

Fourth: Aeneas oo. ko okclake ken eke ene 5

FURTHER REASONS FOR GRANTING THE WRIT

The arguments and analysis asserted in the government’s

Brief forthe United States in Opposition erroneously focuses on

V-1’s activities in interpreting the Hazardous Materials

Transportation Act (HMTA), 49 U.S.C. § 1801 et seq. (1988 &

Supp. V 1993) rather than the specific language of the Act itself

as required under Burger and its progeny. This Court has stated

that because an owner or operator of aclosely regulated business

has a reduced expectation of privacy, the traditional Fourth

Amendment analysis has a lessened application. New York v.

Burger, 482 U.S. 691, 702 (1987). However, any warrantless

inspection of a closely regulated business will be deemed

reasonable only if three criteria are met.

First there must be a_ substantial

governmental interest that informs the

regulatory scheme, pursuant to which the

inspection is made.

* * *

Second, the warrantless inspections must be

necessary to further the regulatory scheme.

* * *

Finally, the statute’s inspection program, in

termis of the certainty and regularity of its

application, must provide a constitutionally

adequate substitute for a warrant.

Id. at 702, 703 (quotations omitted).

In regards to this third prong, this Court stated:

In other words, the regulatory statute must

perform the two basic functions of a warrant: °

it must advise the owner of the commercial

premises that the search is being made

pursuant to the law and has a properly defined

scope, and it must limit the discretion of the.

inspecting officers. To perform this first

function, the statute must be sufficiently

comprehensive and defined that the owner of

commercial property cannot help but be

aware that his property will be subject to

periodic inspections undertaken for specific

purposes. In addition, in defining how a

statute limits the discretion of the inspectors,

we have observed that it must be carefully

limited in time, place and scope.

Id. at 703 (emphasis added) (citations omitted).

In addressing the constitutional validity of the HMTA, itis

the language of the statute itself which must warn an owner of

commercial property “that his property will be subject to

periodic inspections.” Burger, 482 U.S. at 703. When

interpreting a statute, the reviewing court must first look to the

plain meaning of the statute, and if the words are unambiguous,

the inquiry ends. Negonsott v. Samuels, 507 U.S. 99, 104, (1993).

Further, courts will give effect to the plain meaning of the

language of astatute. Schusterman v. United States, 63 F.3d 986,

989 (10th Cir. 1995). As Justice Noonan, of the Ninth Circuit

stated, “The dicta from Marshall v. Barlows are clearly qualified

by the standard laid down in Donovan and Burger: there has to be

a constitutionally adequate substitute for a warrant, and that

substitute must be the statute being enforced.” United States v.

V-1 Oil, 63 F.3d 909, 914 (9th Cir. 1995) (citation omitted)

(quotation omitted).

At issue is § 1808(c) of the HMTA that allows for the

unannounced and warrantless inspections of a business.

Specifically, the HMTA states:

The Secretary may authorize any officer,

employee, or agent to enter upon, inspect,

and examine, at reasonable times and in a

reasonable manner, the records and

properties of persons to the extent such

records and properties relate to —

*x * *

(2) the transportation or shipment by any

person of hazardous materials incommerce.

49 U.S.C. App. § 1808(c) (1988).

“Person,” “transportation” and “hazardous materials” have

all been defined within the HMTA. A person, capable of

transporting hazardous materials, is defined as:

an individual, firm, copartnership,

corporation, company, association, joint-

stock association, including any trustee,

receiver, assignee, or similar representative

thereof, or government, Indian tribe, or

agency or instrumentality of any government

or Indian tribe when if offers hazardous

materials for transportation in commerce or

transports hazardous materials in

furtherance of acommercial enterprise.

49U.S.C. § 1802(11) (1988 & Supp. V 1993). Transportation is

defined as “any movement of property by any mode, and any

loading, unloading, or storage incidental thereto.” 49 U.S.C.

§ 1802(15) (1988 & Supp. V 1993).

Ninth Circuit Justice Noonan observed that the HMTA

defines as hazardous over 2,000 materials. United States v. V-1

Oil, 63 F.3d at 913. In addition to the poisonous, flammable and

corrosive items listed, many of the items such as, batteries, dry

ice, matches, extracts or electric wheelchairs, not normally

thought of as hazardous, are included in the hazardous materials

list. 49 C.F.R. § 172.101. According to the plain language of the

statute then, anyone who transports hazardous materials,

regardless of whether it is vanilla extract or propane, is subject

to warrantless inspections. Justice Noonan noted this problem

when he stated:

[t]he businesses involved in manufacturing,

fabricating, marking, maintaining, recondi-

tioning, repairing, and testing of packages or

containers for use in the transportation of

such materials must be legion. The list of the

materials is so long and so many businesses

must be involved in the transportation of the

materials in commerce that no business

within the enumerated categories could be

sure if it would ever be visited by inspectors.

United States v. V-] Oil, 63 F.3d at 913,914.

It is this broad, all-encompassing language that fails to

adequately notify the owner of a business that his property and

records will be subject to periodic inspections. Both the Ninth

Circuit and the government, however, erroneously assert that

there is some type of language in the statute that meets this third

prong of Burger. However, neither the Ninth Circuit nor the

government in its Brief in Opposition has offered an analysis

within the framework provided by this Court that shows how the

FRA “statute” [is] sufficiently comprehensive that the owner of

commercial property cannot help but be aware that his property

will be subject to periodic inspections.” Burger, 482 U.S. at 703

(quoting Donovan v. Dewey, 452 U.S. 594, 600 (1981)). Rather,

the government states that V-1’s own activities provide adequate

notice that it may be subject to periodic inspections rather than

focusing on the language of the statute. This is a complete

misapprehension of the criterion set forth by this Court and

overlooks completely the Fourth Amendment standard of

reasonableness for a government search “even in the context of

a pervasively regulated business.” Burger, 482 U.S. at 702. See

also United States v. Biswell, 406 U.S. 311 (1972); Colonnade

Catering Corp. v. United States, 397 U.S.72, 73,n.1,2.(1970);

Donovan, 452 U.S. at 596.

Using the government’s logic, and applying the broad

language of the HMTA, owners of a “mom and pop” business

whoreceive and unload their inventory of matches and batteries

from a supplier and then either offer them for sale or move them

from one store to another will be subject to inspection. There is

no limit as to who or what may be inspected, so long as that

person or entity transports or ships hazardous materials in

commerce. The mere fact that V-1 unloads and stores propane

should not be determinative of the constitutional validity of the

HMTA.

In applying the three criteria set forth in Burger, this Court

focused strictly on the specific statute which purported to

authorize warrantless searches. The same analysis must take

place in this case. In Burger, the Court found that the language of

the challenged statute itself was sufficient to give business

operators notice that they would be subject to inspections.

Burger, 482 U.S. at 703. Specifically, New York’s warrantless

inspection statute of junkyards stated that the search of records

applied only to “vehicles or parts of vehicles for which a

certificate of title has been issued. . .” Jd. at693,n. 1. The statute

further stated, “Every person required to be registered pursuant

to this section shall maintain a record of all motor vehicles,

trailers, and major component parts thereof, coming into his

possession together with a record of the disposition. . .” Jd. The

statute also stated that inspections will take place during the

agent’s or officer’s “regular and usual business hours.” Jd.

Finally, in examining the language of the statute, it was

determined that inspections could only be made of vehicle-

dismantling and related industries and that inspectors could only

examine the records as well as any vehicles or parts of vehicles

that were subject to the record keeping requirements of the

statute. Jd. at 712.

Upon examining the language of § 1808(c), it becomes clear

that such specificity, as was found in Burger, is lacking. Where

specific records that could be inspected were listed in Burger,

there is only a general description of “records” in the HMTA. 49

U.S.C. App. § 1808(c) (1988). Where the time for an inspection

was listed, “during regular and usual business hours,” there is

only the general description of “reasonable times.” Burger, 482

U.S. at 694, 49 U.S.C. App. § 1808(c). Finally, where there was

a specific statement of what could be inspected, in addition to the

records, namely any vehicles or vehicle parts subject to the

record keeping, the HMTA makes a general statement that

“records and properties” may be inspected. Burger, 482 U.S. at

694,49 U.S.C. App. § 1808(c) (1988).

Each statute this Court has examined and found

Constitutionally valid has been similarly specific in describing

what was to be searched and when. In Biswell, the statute in

question authorized official entry into the premises, including

storerooms, during “business hours” of any “firearms or

ammunition dealer” for the purpose of examining the records

kept in relation to the business as well as any firearms or

ammunition kept or stored. Biswell, 406 U.S. at311,312.Inlight

of the specificity of the statute, this Court stated that “[t]he dealer

is not left to wonder about the purposes of the inspector or the

limits of his task.” Jd. at 316.

In Colonnade, the inspection statutes allowed for inspection

during “business hours” of any “retail liquor dealer” for the

purposes of inspecting records pertaining to the sale of “distilled

spirits, wines, or beer” and to examine such objects or articles.

Colonnade, 397 U.S. at 73,n. 1, 2.

In Donovan, federal mine inspectors were required to

inspect “underground mines at least four times a year and surface

mines at least twice a year” toensure compliance with health and

safety standards. If any violations were discovered, follow-up

inspections were authorized. Donovan, 452 U.S. at 596. In light

of the specificity of the statutory language, as well as the

certainty and regularity of its application, this Court determined

that the statutes in question were a constitutionally adequate

substitute for a warrant. Jd. at 603. In view of this Court’s

analysis, it is clear that the HMTA fails the third prong in the

Burger test. There is no certainty orregularity in its application.

Burger 482 U.S. at 702. See also United States v. Kaiyo Maru No.

53, 669 F.2d 989, 996 (9th Cir. 1983) (Inspections conducted

once every three weeks were sufficient to notify owners of

vessels that they would be searched.)

For fifteen years, no attempt was made to inspect V-1

facilities. However, this is only one element to be considered in

determining whether there is any certainty or regularity in the

application of the HMTA. The Court must also look to see

whether there are adequate limits placed on the inspectors.

Burger, 482 U.S. at 703.As discussed supra, statutes that passed

a Fourth Amendment analysis contained language as to when

inspections could be held, (during regular business hours, id. at

694; during business hours, Biswell, 406 U.S. at311; Colonnade,

397 U.S. at 72; at least four times a year for underground mines

and at least twice a year for surface mines, Donovan, 452 U.S. at

594.) There is no such limitation in the language of the HMTA.

It simply mandates that inspections be conducted at reasonable

times. 49 U.S.C. App. § 1808(c) (1988). It is not until one

examines the FRA’s enforcement manual to see what

“reasonable times” means. An FRA inspector may conduct an

inspection at any time during his own normally assigned hours,

regardless of whether or not those are the same hours a business

might operate. If the inspector decides to conduct an inspection

outside his normal hours, he need only contact his supervisor

first. (App. H, 58a). In addition, these guidelines are subject to

change at the FRA’s discretion and without warning to V-1 orany

other entity ostensibly subject to the HMTA.

The Ninth Circuit attempted to downplay this fact when it

discussed the FRA manual. To give the illusion that the HMTA

States that inspections may only take place during regular

business hours, the Ninth Circuit cited to Burger and its language

that limited New York inspectors toconducting inspections only

during the regular and usual business hours. United States v.

V-1 Oil, 63 F.3d at 912, 913. However, upon examining the

language of § 1808(c), itis clear that this language is missing. 49

U.S.C. § 1808(c) (1988). —

The government further attempts to mislead this Court by

mischaracterizing V-1’s inspection deficiencies. Respondent’s

Brief at 10. V-1 does not dispute the fact that there were

deficiencies. However, the government attempts to categorize

these deficiencies as extreme safety violations or violations that

can be quickly corrected. Respondent’s Brief at 10. The only

deficiencies noted in the FRA’s inspections of V-1, dealt with the

wrong form being used, a form that is issued by the railroad,

incorrect wording on the form, the size of the lettering on

placards and other minor, non-safety related errors. (App. I,

59a-61a). Also, V-1 never refused to allow an inspection of

its facilities. Respondent’s Brief at 5. It did request that

FRA inspectors complete a questionnaire, designed to ascertain

the inspector’s qualifications. Rather than complete the

questionnaire and pursue the inspection, the inspectors left

the premises. It is these types of examples of how the government

is attempting to mislead this Court.

In each of the cases that went into the formulation of the

criteria set forth in Burger, namely Colonnade Corp. v. United

States; United States v. Biswell; Donovan v. Dewey, as well as

others cited by the Court, were all premised on warrantless

inspection statutes that provided enough specificity that each

business involved was placed on notice that they would be

subject to inspection. The way § 1808(c) currently reads, the

requirement that the “statute must be sufficiently comprehensive

and defined that the owner of commercial property cannot help

but be aware that his property will be subject to periodic

inspections” is wholly lacking. Burger, 482 at 703. If this

language is allowed to remain in force and agencies such as the

FRA are allowed to continue to conduct unannounced and

warrantless inspections under the auspices of its validity, the

whole premise and principle of this Court’s holding in Burger

will be destroyed.

CONCLUSION

For this reason, as weil as those cited in Petitioner’s Brief,

the writ should be granted.

Respectfully submitted,