59th & State Street Corp. v. Emanuel

2016 IL App (1st) 153098SIXTH DIVISION
Opinion filed: December 23, 2016
No. 1-15-3098
______________________________________________________________________________
IN THE
APPELLATE COURT OF ILLINOIS
FIRST DISTRICT
59th & STATE STREET CORPORATION, JOSE ) Appeal from the
VASQUEZ, President, ) Circuit Court of
) Cook County
Plaintiff-Appellant, )
)
v. ) No. 13 CH 18191
)
RAHM EMANUEL, Mayor of the City of Chicago and )
Local Liquor Control Commissioner; MARIA )
GUERRA, Acting Director of the Department of )
Business Affairs; THE LOCAL LIQUOR CONTROL )
COMMISSION OF THE CITY OF CHICAGO; )
DENNIS M. FLEMING, Chairman of the License )
Appeal Commission of the City of Chicago; and )
Members of the License Appeal Commission of the )
City of Chicago, ) Honorable
) Rita M. Novak,
Defendants-Appellees. ) Judge, Presiding.
______________________________________________________________________________
PRESIDING JUSTICE HOFFMAN delivered the judgment of the court, with opinion.
Justices Cunningham and Rochford concurred in the judgment and opinion.
OPINION
¶1 The plaintiff, 59th & State Street Corporation, appeals from orders of the circuit court of
Cook County, affirming a final administrative decision of the License Appeal Commission of the
City of Chicago (LAC) which affirmed an order of the Local Liquor Control Commission of the
City of Chicago (LLCC) which revoked its retail liquor license for the premises at 5901 South
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State Street and imposed fines totaling $17,000 against it for firearms related violations of State
statutes and Chicago municipal ordinances. For the reasons which follow, we affirm.
¶2 The plaintiff has not argued that any of the factual findings upon which the order of the
LLCC is based are against the manifest weight of the evidence. As a consequence, the following
factual recitation is taken from the factual findings of the deputy hearing commissioner who
presided over the hearing held in connection with the disciplinary proceedings regarding the
plaintiff's liquor license and the transcript of those proceedings contained within the record.
¶3 The City of Chicago (City) issued a license to the plaintiff for the sale of liquor on the
first floor at 5901 South State Street. 1 On January 21, 2011, at approximately 5:44 p.m., a task
force of City employees arrived at the store to conduct an inspection. The task force consisted of
seven police officers, one fire inspector, two health inspectors, one building inspector, and one
official from the Department of Business Affairs and Consumer Protection. Carlos Vasquez, the
plaintiff's corporate secretary, was at the store when the task force arrived.
¶4 The front portion of first floor of the building at 5901 South State Street contained a sales
area. Located within the sales area were shelves of food; coolers containing beer, soda, and
frozen food items; and a cash register. A doorway in the rear of the sales area provided access to
stairs leading to the second floor, stairs leading to the basement, and a first-floor storage area.
The first-floor storage area contained cases of liquor, supplies, and a large safe. A door leading
to a small first-floor office was located near the rear of the building.
1
The first sentence of the Statement of Facts contained in the defendants' brief states that
"Jose and Carlos Vasquez, doing business as 59th & State St. Corp. were licensed to operate a
packaged goods and liquor store known as Mr. Jack's Food and Liquor on the first floor of 5901
S. State St." However, the copy of the license appearing in the page of the record cited by the
defendants in support of that sentence reflects that the license was issued to 59th and State Street
Corporation, d/b/a Mr. Jack's Food and Liquor.
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¶5 One of the Chicago police officers, Greg Golucki, went through the doorway at the rear
of the sales area and ascended the stairs to the second floor. According to Officer Golucki, the
second floor consisted of a large open space with six doors along two of the walls. He testified
that none of the doors were locked, and he entered each of the rooms. One of the rooms was an
office in which he found documents relating to the first-floor business and a safe containing a
gutter-like spout running through the floor to the cash register area on the first floor. Another
room was a bathroom. The remaining rooms appeared to be bedrooms, each containing a box
spring, a mattress, and a desk.
¶6 Officer Golucki testified that he found a .38 caliber bullet in an ashtray located on a
nightstand in the first bedroom which he entered. He did not see any personal items located in
the room. Officer Golucki returned to the first floor where he showed the bullet to Officer Brian
Kavanaugh. When Officer Golucki asked Carlos who occupied the room in which the bullet was
found, Carlos responded "nobody." Officer Kavanaugh asked Carlos if there were any firearms
on the premises. Carlos responded in the negative, after which Officer Kavanaugh asked him to
open the large safe located in the rear storage room. Claiming not to know the combination,
Carlos declined. In response to an inquiry by Officer Kavanaugh, Carlos stated that his brother,
Jose Vasquez, knew the combination. After calling his brother, Carlos opened the safe. When
the safe was opened, the officers discovered what Officer Kavanaugh described as two "assault
type weapons:" an Iver Johnson Arms .320 caliber pistol with an eight-inch barrel and an AA
Arms, model AP9, 9 millimeter Luger. Also discovered in the safe was a quantity of
ammunition.
¶7 After the weapons were discovered in the safe, Officer Golucki asked Carlos to open the
door to the first-floor office. Carlos complied, and upon entering the office, Officer Golucki
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observed papers, file cabinets and a computer with a surveillance feed from the sales area. In
addition, Officer Golucki found a Remington shotgun next to one of the file cabinets. Following
the discovery of the weapons on the first floor, Officer Golucki returned to the second floor and
entered the office located on that floor where he found a Dan Wesson Arms .357 Magnum pistol
in a cabinet and a quantity of ammunition in a sack beneath the gun.
¶8 Following the discovery of the guns, the officers determined that Carlos did not have an
Illinois Firearm Owner Identification (FOID) card and that none of the recovered weapons were
registered with the City. Carlos was arrested and charged criminally.
¶9 As a consequence of the discovery of the firearms and ammunition, the City initiated
disciplinary proceedings against the plaintiff regarding its liquor license, charging 12 firearms
related violations of the City's ordinances and State statutes. Pursuant to notice, a hearing was
conducted over seven days before a deputy hearing commissioner (hearing officer) appointed by
the City's Department of Business Affairs and Consumer Protection. At the beginning of the
hearing, the plaintiff attempted to present a motion seeking the suppression of all evidence
obtained during the warrantless search of its premises on January 21, 2011. The City objected on
the grounds that the plaintiff had failed to provide it with a copy of the motion in advance of the
hearing. The hearing officer denied the motion, and the City presented evidence in support of
the charges against the plaintiff which included the testimony of Officers Golucki and
Kavanaugh, photographs of the areas where the firearms and ammunition were found, a
certification from the Illinois State Police stating that Carlos had not been issued a FOID card,
and a certification from the Chicago police department stating that none of the weapons found at
the plaintiff's premises were registered.
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¶ 10 Due to the pending criminal charges, Carlos did not testify at the hearing, and the
plaintiff offered no exculpatory evidence. Rather, in closing argument, the plaintiff urged the
hearing officer to strike and disregard the City's evidence as having been obtained as the result of
an unlawful warrantless search of portions of its property which were not part of the licensed
premises.
¶ 11 Following the hearing, the hearing officer issued written findings of fact and
recommendations. Addressing the plaintiff's request that he strike the testimony of Officers
Golucki and Kavanaugh and suppress the evidence obtained as a result of their search of its
premises, the hearing officer found that the provisions of section 4-4-290 of the Chicago
Municipal Code (Code) (Chicago Municipal Code § 4-4-290 (amended Nov. 19, 2008)) and
section 4-4(2) of the Liquor Control Act of 1934 (Liquor Control Act) (235 ILCS 5/4-4(2) (West
2010)) allowed the officers to enter upon the plaintiff's licensed premises "at any time to
investigate any potential violations of the law." As a consequence, he concluded that the search
of the plaintiff's premises was "conducted legally" and relied upon the evidence presented by the
City which established the existence of firearms on the plaintiff's premises in support of his
findings and recommendation. Finding the testimony of Officers Golucki and Kavanaugh
"credible and reliable," the hearing officer concluded that the City sustained its burden of
proving all 12 of the charges against the plaintiff and recommended the revocation of the
plaintiff's "business license" and the assessment of fines totaling $17,000.
¶ 12 After considering the hearing officer's written findings of fact and recommendation, the
commissioner of the City's Department of Business Affairs and Consumer Protection and the
City's local liquor control commissioner issued a joint "Order of Revocation and Fine," finding
that all 12 of the charges against the plaintiff were sustained and ordering that the retail liquor
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license, and all other licenses, issued to the plaintiff for the premises at 5901 South State Street
be revoked and assessing $17,000 in fines against the plaintiff.
¶ 13 The plaintiff filed a timely administrative appeal before the LAC and again argued that
the warrantless search of its premises was unlawful, and the evidence obtained during that search
should have been suppressed. On May 29, 2013, the LAC issued its decision, finding that the
evidence of record supports the hearing officer's factual findings and affirming the LLCC's
decision revoking the plaintiff's liquor license and assessing $17,000 in fines. The LAC
specifically declined to address the plaintiff's arguments concerning the "validity" of the search
of its premises, stating that the issue was not within the scope of its jurisdiction.
¶ 14 Thereafter, the plaintiff filed a timely complaint for administrative review in the circuit
court. In its order of May 28, 2015, the circuit court found section 4-4(2) of the Liquor Control
Act (235 ILCS 5/4-4(2) (West 2010)) and section 4-4-290 of the Code (Chicago Municipal Code
§ 4-4-290 (amended Nov. 19, 2008)) unconstitutional as applied to the search of the plaintiff's
premises, but nevertheless denied the plaintiff's request that it suppress the evidence obtained as
a result of that search. The circuit court affirmed the LAC's final administrative decision with
respect to 8 of the City's charges which resulted in the revocation of the plaintiff's retail liquor
license and $7000 in fines. Noting that section 8-20-020(a) of the Code (Chicago Municipal
Code § 8-20-020(a) (added July 2, 2010)) upon which the remaining four counts were based had
been repealed, the circuit court remanded those four counts back to the LLCC to consider the
effect that the repeal of the ordinance had upon those counts and the fines imposed thereon.
¶ 15 Following the circuit court's order of May 28, 2015, the defendants filed a motion for
reconsideration of that portion of the order relating to the remanded counts, asserting that the
repeal of section 8-20-020(a) of the Code took effect after the LAC issued its final administrative
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decision. Based upon the general savings clause contained in section 1-4-160 of the Code
(Chicago Municipal Code § 1-4-160 (added June 7, 1990)), the defendants argued that the repeal
of section 8-20-020(a) did not act to void penalties assessed prior to its repeal. In addition, the
defendants argued that the plaintiff's failure to seek a declaratory judgment as to the
constitutionality of section 8-20-020(a) resulted in a forfeiture of the constitutional issue. On
September 25, 2015, the circuit court granted the defendants' motion for reconsideration,
amended its order of May 28, 2015, to affirm the fines levied against the plaintiff on the four
previously remanded counts, and affirmed the LAC's final administrative decision. This appeal
followed.
¶ 16 In urging reversal, the plaintiff argues that the circuit court erred in refusing to suppress
the evidence upon which the revocation of its liquor license and fines were based, as the
evidence was obtained during a warrantless search of its premises conducted pursuant to a
constitutionally infirm ordinance. The argument involves two issues: (1) the constitutionality of
the municipal ordinance and State statute authorizing warrantless searches of premises licensed
for the sale of liquor that were in effect on the date that the plaintiff's premises was searched; and
(2) whether the evidence obtained as a result of that warrantless search should have been
suppressed in the administrative proceeding which resulted in the revocation of the plaintiff's
liquor license and the assessment of monetary penalties against it.
¶ 17 On the first issue, the plaintiff argues that both the municipal ordinance and State statute
which authorized a warrantless search of its premises were unconstitutional as applied because
they gave the City "an unlimited ability to conduct any inspections at any time, place and
manner." The defendants appear to have conceded the issue as they failed to even address it in
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the brief which they filed in this appeal. Conceded or not, we agree with the plaintiff's argument
on this issue, as did the circuit court.
¶ 18 The fourth amendment to the United States Constitution (U.S. Const. amend. IV), made
applicable to the States pursuant to the fourteenth amendment (U.S. Const. amend XIV),
prohibits unreasonable searches and seizures. Mapp v. Ohio, 367 U.S. 643, 654-55 (1961). This
prohibition is applicable to commercial premises. New York v. Burger, 482 U.S. 691, 699
(1987). "An owner or operator of a business thus has an expectation of privacy in commercial
property." Id. "This expectation exists not only with respect to traditional police searches
conducted for the gathering of criminal evidence but also with respect to administrative
inspections designed to enforce regulatory statutes." Id. at 699-700. However, when
commercial property is being used in a closely regulated business, this expectation of privacy is
attenuated. Id. at 700. As a consequence, the warrant and probable cause requirements of the
fourth amendment standard of reasonableness are lessened in the context of administrative
inspections of such businesses. Id. at 702.
¶ 19 The sale of intoxicating liquor is a closely regulated business. See Daley v. Berzanskis,
47 Ill. 2d 395, 397-98 (1971). As such, a warrantless inspection of commercial premises
licensed to sell liquor conducted pursuant to a regulatory statute or ordinance may well be
reasonable within the meaning of the fourth amendment. See Burger, 482 U.S. at 702. In
Burger, the Supreme Court held that the warrantless inspection of a pervasively regulated
business will be deemed reasonable under the fourth amendment "only so long as three criteria
are met." Id. First, there must be a substantial governmental interest underlying the regulatory
scheme pursuant to which the inspection is made. Second, the warrantless search must be
necessary to further that regulatory scheme. Third, the statutes inspection program must provide
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No. 1-15-3098
an adequate substitute for a warrant by advising the owner of the commercial premises that its
property will be subject to periodic inspections undertaken for specific purposes and limiting the
discretion of the inspectors in time, place and scope. Id. at 702-03.
¶ 20 On the date of the warrantless search of the plaintiff's premises, section 4-4-290 of the
Code (Chicago Municipal Code § 4-4-290 (amended Nov. 19, 2008)) authorized investigators
and employees of the City's Department of Business Affairs and Consumer Protection designated
by the commissioner of that department to, "at any time," enter any business for which a license
is required for the purpose of ascertaining whether the provisions of the Code applicable to the
licensed premises have been complied with. The provisions of section 4-4(2) of the Liquor
Control Act (235 ILCS 5/4-4(2) (West 2010)) also granted a local liquor control commissioner
the authority to authorize law enforcement officers to, "at any time," enter upon any premises
licensed to sell liquor to determine if any provisions of the Liquor Control Act or any rules or
regulations adopted by the commissioner have been, or are being, violated.
¶ 21 In this case, the first and second criteria set forth in Burger are not in dispute. There is a
substantial governmental interest in regulating the sale of intoxicating liquor (Berzanskis, 47 Ill.
2d at 397-98), and the warrantless search of premises where liquor is sold is arguably necessary
to protect the safety of the public from the dangers attendant to the sale of intoxicating liquor.
However, we find that the municipal ordinance and statute authorizing the warrantless search of
premises licensed to sell liquor which were in effect when the plaintiff's premises was searched
failed to satisfy the third criteria for reasonableness identified by the Supreme Court in Burger,
as neither placed a limit on the timing of an administrative search. See Hansen v. Illinois Racing
Board, 179 Ill. App. 3d 353, 359 (1989). Therefore, we conclude, as did the circuit court, that
the provisions of both section 4-4-290 of the Code and section 4-4(2) of the Liquor Control Act
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in effect when the plaintiff's premises was searched failed to satisfy the reasonableness
requirement for a search under the fourth amendment.
¶ 22 We are not unmindful of the fact that section 4-4-290 of the Code has been amended to
limit the inspecting officer's right of entry to "reasonable times" as defined in the Code (Chicago
Municipal Code § 4-4-290 (added May 9, 2012)). However, the issue of whether a warrantless
administrative search conducted pursuant to a regulatory ordinance or statute satisfies the
reasonableness requirement of the fourth amendment must be judged based upon the provisions
of that ordinance or statute on the date of the search, not based upon the provisions of the
ordinance or statute as amended at some later date.
¶ 23 Having determined that the municipal ordinance and State statute in effect on the date
that the plaintiff's premises was searched which authorized warrantless searches of premises
licensed for the sale of liquor failed to satisfy the reasonableness requirement of the fourth
amendment, we next address the issue of whether the evidence recovered as a result of that
search should have been suppressed in the underlying administrative proceedings.
¶ 24 The plaintiff argues that the circuit court erred in refusing to suppress the evidence
obtained as a result of the unlawful search of its premises, contending that the circuit court
"failed to give adequate consideration to several factors in applying the balancing test [applicable
to a determination of whether the exclusionary rule should apply in an administrative hearing]
and overlooked the trend of applying the exclusionary rule in proceedings related to punishment
of liquor licensees." According to the plaintiff, application of the exclusionary rule and
suppression of the evidence obtained during the warrantless search of its premises is necessary to
deter future "deviant behavior" on the part of the police. Relying upon the reasoning of the
Rhode Island Supreme Court in Board of License Commissioners of the Town of Tiverton v.
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Pastore, 463 A.2d 161, 166 (1983) and the New York Court of Appeals in Finn's Liquor Shop,
Inc. v. State Liquor Authority, 24 N.Y.2d 647, 653-55 (1969), the plaintiff argues that evidence
obtained as the result of an illegal search should not be admissible in an administrative hearing in
which the forfeiture of a liquor license is sought. It maintains that suppression of unlawfully
obtained evidence in such proceedings is the only available way to deter the police from
conducting future unlawful warrantless searches and using the evidence discovered against their
targeted victim. It also contends that the evidence discovered as a result of the search of its
premises should have been suppressed because "the search conducted was an egregious violation
of the Fourth Amendment[,]" exceeding even the scope of a search authorized under the then
existing provisions of section 4-4-290 of the Code. According to the plaintiff, its liquor license
was specifically issued for the first floor of the property at 5901 South State Street, and as such,
section 4-4-290 only authorized a warrantless search of the first floor, not the second floor where
Officer Golucki discovered the bullet "that prompted the officers to look further and insist upon
searching the safe in a non-retail area of the first floor, and to search a non-licensed premises on
the second floor." We are not persuaded.
¶ 25 Although the fourth amendment prohibits unreasonable searches and seizures, it does not
provide that evidence procured in violation of the proscription is inadmissible in either a criminal
prosecution or a civil proceeding. The use of evidence obtained in violation of the fourth
amendment does not itself violate the Constitution. Pennsylvania Board of Probation and
Parole v. Scott, 524 U.S. 357, 362 (1998). However, in order to deter illegal searches and
seizures, the Supreme Court created the exclusionary rule. United States v. Calandra, 414 U.S.
338, 347 (1974). Under the rule, "evidence obtained in violation of the Fourth Amendment
cannot be used in a criminal proceeding against the victim of the illegal search and seizure." Id.- 11 ­
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"Despite its broad deterrent purpose, the exclusionary rule has never been interpreted to
proscribe the use of illegally seized evidence in all proceedings or against all persons." Id. at
348.
¶ 26 In United States v. Janis, 428 U.S. 433, 453-54 (1976), the Supreme Court set forth a
balancing test for determining the types of non-criminal proceedings in which application of the
exclusionary rule is appropriate. Under that test, the likely social benefits of excluding
unlawfully seized evidence must be weighed against the likely costs of its exclusion. Id.; see
also Scott, 524 U.S. at 363; Immigration and Naturalization Service v. Lopez-Mendoza, 468 U.S.
1032, 1041 (1984).
¶ 27 The Supreme Court has consistently declined to extend the exclusionary rule to
proceedings other than criminal trials. See Scott, 524 U.S. at 365 (parole revocation
proceedings); Lopez-Mendoza, 468 U.S. at 1050 (deportation proceedings); Janis, 428 U.S. at
447-48 (civil tax proceedings); Stone v. Powell, 428 U.S. 465, 493-94 (1976) (habeas corpus
proceeding); Calandra, 414 U.S. at 343-46 (grand jury proceedings). In each of the cases in
which the Supreme Court determined that the exclusionary rule did not bar the introduction of
unconstitutionally obtained evidence in the civil or administrative proceeding at issue, the
Supreme Court weighed the likely benefits of excluding unlawfully seized evidence against the
likely costs of its exclusion and determined that application of the rule would not result in
appreciable deterrence of future official misconduct. See Scott, 524 U.S. at 363-65. The
reviewing courts of this State have also declined to extend the exclusionary rule to a number of
non-criminal proceedings. See People v. Dowery, 62 Ill. 2d 200, 208 (1975) (probation
revocation proceeding); U.S. Residential Management and Development, LLC v. Head, 397 Ill.
App. 3d 156, 160-63 (2009) (forcible entry and detainer action); McCullough v. Knight, 293 Ill.
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App. 3d 591, 597-98 (1997) (vehicle impoundment proceeding); Grames v. Illinois State Police,
254 Ill. App. 3d 191, 201-02 (1993) (administrative discharge proceeding). Each of these cases
was resolved by balancing the benefits of excluding unlawfully seized evidence against the likely
costs of its exclusion. Dowery, 62 Ill. 2d at 204-06; U.S. Residential Management and
Development, 397 Ill. App. 3d at 161-63; McCullough, 293 Ill. App. 3d at 597-98; Grames, 254
Ill. App. 3d at 201-02.
¶ 28 The benefit derived from the application of the exclusionary rule "is to deter future
unlawful police conduct." Calandra, 414 U.S. at 347. However, the record in this case reveals
that the evidence at issue was suppressed in the criminal proceeding brought against Carlos, and
as a consequence, the deterrence of future police misconduct was reduced. See Janis, 428 U.S.
at 448.
¶ 29 In addition, the "deterrence rationale loses much of its force" when, as in this case, the
actions of the police in conducting a warrantless search was objectively reasonable based on a
good-faith reliance upon the then existing ordinance. Davis v. United States, 564 U.S. 229, 238,
(2011); Illinois v. Krull, 480 U.S. 340, 349-53 (1987). At the time of the search of the plaintiff's
premises, the municipal ordinance and the State statute authorizing the warrantless search of a
licensed premise had not been declared unconstitutional and were, therefore, entitled to a
presumption of validity. As for the scope of the search, the evidence established that the
stairway leading to the second floor was easily accessed from the first floor and documents
relating to the operation of the first-floor store were found in the second-floor office as was a
safe adapted to transmit money to, and from, the cash register area on the first floor. We
conclude, therefore, that the officers could have reasonably believed that the second floor of the
plaintiff's premises was subject to a warrantless search. See Daley v. El Flanboyan Corporation,
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321 Ill. App. 3d 68, 73-74 (2001). We find nothing in the record before us to support an
inference that the warrantless search of the plaintiff's premises was based upon anything other
than a good faith reliance upon section 4-4-290 of the Code and section 4-4(2) of the Liquor
Control Act.
¶ 30 On the cost side of the balance is the obvious effect that application of the exclusionary
rule would have on the truth-seeking function of the LLCC in this case. On the date that the
plaintiff's premises was searched, the possession of firearms in a place licensed to sell
intoxicating beverages was a violation of both section 24-1(a)(8) of the Criminal Code of 1961
(720 ILCS 5/24-1(a)(8) (West 2010)) and section 4-60-141(a) of the Code (Chicago Municipal
Code § 4-60-141(a) (added May 17, 1995)). Application of the exclusionary rule would have
prohibited the LLCC from considering evidence of illegal activity and hampered the City's
efforts to protect the public from the dangers attendant to the existence of guns in, or about, an
establishment where liquor is sold.
¶ 31 Balancing the diminished deterrence that application of the exclusionary rule in this case
would have had on future police misconduct against the significant social costs that exclusion of
the evidence obtained by the search of the plaintiff's premises would have had on the City's
efforts to protect the public from the obvious danger of mixing firearms and liquor, we agree
with the circuit court's conclusion that the exclusionary rule should not have been applied in the
instant case.
¶ 32 As a final issue, the plaintiff argues that the circuit court erred in denying its motion to
supplement the administrative record with a copy of its liquor license reflecting that the license
was issued for the sale of liquor on first floor of the premises at 5901 South State Street.
However, the defendants have never denied that the license was issued for the first floor and
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admitted that fact in their brief. Consequently, if there was any error in the denial of the
plaintiff's motion to supplement the administrative record, the error was harmless.
¶ 33 Based upon the foregoing analysis, we affirm the judgment of the circuit court which
affirmed the decision of the LAC.
¶ 34 Affirmed.
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