State Real Estate Commission v. Roberts

Dissenting Opinion by

Mb. Justice Cohen :

The State Real Estate Commission, under the majority’s opinion, is permitted to impose sanctions on a broker who attempted to withstand a warrantless invasion of his privacy. As early as 1886, in Boyd v. United States, 116 U.S. 616, 29 L. ed. 746 (1886), the United States Supreme Court held that Fourth Amendment protections extend in civil, as well as criminal, actions. More recently, in See v. City of Seattle, 387 U.S. 541, 18 L. ed. 2d 943 (1967), the Court laid down the general rule that the businessman has a constitutional right to go about his business free from unreasonable intrusions by governmental officials on his business property and that that right i& jeopardized by allowing the official in the field to enforce the regulatory laws without official authority evidenced by a warrant.¹

“It is now settled that, when an administrative agency subpoenas corporate books or records,- the •Fourth Amendment requires that the subpoena be sufficiently limited in scope, relevant in purpose, and specific in directive so that compliance will not be unreasonably burdensome, [citing in footnote, inter alia, United States v. Morton Salt Co., 338 U.S. 632 (1950); Oklahoma Press Publishing Co. v. Walling, 327 U.S. 186 (1946) ]. The agency has the right to conduct all reasonable inspections of such documents which are contemplated by statute, but it must delimit the confines of a search by designating the needed documents in a formal subpoena. . . . [T]he subpoenaed party may obtain judicial review of tbe reasonableness of tbe demand prior to suffering penalties for refusing to comply-

“. . . Tbe agency’s particular demand for access will of course be measured, in terms of probable cause to issue a warrant, against a flexible standard of reasonableness that takes into account tbe public need for effective enforcement of the particular regulation involved. But tbe decision to enter and inspect will not be tbe product of tbe unreviewed discretion of tbe enforcement officer in tbe field.” Id. at 511-15, 18 L. ed. 2d at 917. (Emphasis supplied).

Tbe most recent decision in this area is The Colonnade Catering Corp. v. United States, 397 U.S. 72, 25 L. ed. 2d 60 (1970). Colonnade was a licensed New York liquor dealer whose premises were inspected for possible violations of federal law by federal agents acting without a search warrant. Tbe inspection provisions of tbe statute invoked provided for a |500 fine to be imposed upon any retail liquor dealer who refused to allow agents to inspect bis premises. Colonnade refused tbe agent entry into a locked storeroom and tbe inspectors broke the lock and seized bottles of liquor. Tbe district court ordered tbe seized bottles returned and suppressed as evidence, but tbe court of appeals for tbe second circuit reversed. Tbe Supreme Court reversed tbe second circuit and held that since Congress selected a standard for enforcing tbe inspection provisions of tbe statute which did not include forcible entry without a warrant, such procedure may not be allowed and tbe licensee should have been fined as required by the statute. The Supreme Court decided that Congress has broad power to establish inspection procedure under the liquor laws because of the long recognized interest of governmental control in the liquor industry and the equally long history of governmental regulation in the field. The Supreme Court then reaffirmed its holding in See v. City of Seattle for areas other than the liquor industry.

It is thus clear that a subpoena or warrant is required when an administrative agency wishes to inspect business premises, books and records, even if required to be kept by statute. The Real Estate Brokers License Act does contain a subpoena provision, §13, 63 P.S. §443, but that was not used here. The Commission has the duty to insure compliance with the Act, but that duty does not authorize circumvention of the Fourth Amendment’s guarantee that a person be secure in his person, house and effects. Thus, appellant’s license could not be constitutionally suspended because of his refusal to accede to the warrantless demand of the Commission’s investigator in the field.

The majority does not concern itself with the constitutionality of the inspection procedure alone, however, because they also hold that acceptance of a broker’s license constitutes a waiver of constitutional rights. The United States Supreme Court has not recognized that theory, however, and has in fact held that mere acceptance of a license is not such a waiver. Spevack v. Klein, 385 U.S. 511, 17 L. ed. 2d 574 (1967). See also, Garrity v. New Jersey, 385 U.S. 493, 17 L. ed. 2d 562 (1967); Gardner v. Broderick, 392 U.S. 273, 20 L. ed. 2d 1082 (1968). It has long been recognized that a waiver of constitutional rights must be knowing, intelligent and voluntary. Johnson v. Zerbst, 304 U.S. 458, 82 L. ed. 1461 (1938). Even Shapiro v. United States, 335 U.S. 1, 92 L. ed. 1787 (1948), involved the production of records pursuant to a subpoena. If a policeman, Garrity v. New Jersey, supra, and a lawyer, Spevack v. Klein, supra, and a teacher, Slochower v. Board of Higher Education of New York City, 350 U.S. 551, 100 L. ed. 692 (1956), “are not relegated to a watered-down version of constitutional rights,” 385 U.S. at 500, 17 L. ed. 2d at 567, we should not hold that a real estate broker is. A waiver of constitutional protection may not be implied from the mere acceptance of a license, nor may it be forced upon a licensee in such, a manner as to make the exercise of his constitutional rights costly. Spevack v. Klein, supra; Griffin v. California, 380 U.S. 609, 14 L. ed. 2d 106 (1965). Here, a waiver is not present and the exercise of a constitutional right is made costly. Such action should not be permitted.

I would reverse the Commission's order and reinstate appellant’s license.

I dissent.

Mr. Justice Eagen joins in this dissenting opinion.

1 Camara v. Municipal Court of the City and County of San Francisco, 387 U.S. 523, 18 L. ed. 2d 930 (1967), was the companion case to See. That case held that an individual, in his residence, has the right to insist that government inspectors, e.g., housing code inspectors or fire department inspectors, obtain a warrant to search and that an individual may not be constitutionally convicted for refusing to consent to a warrantless inspection of his residence by such official. See thus served to extend that requirement to business premises. See also, United States v. Stanack Sales Co., Inc., 387 F. 2d 849 (3d Cir. 1968), where the Third Circuit held that the Fourth Amendment protections enunciated in See v. City of Seattle extend to business records, at least requiring a carefully delimited subpoena to obtain them.