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Gem Financial Service, Inc. v. City of New York

United States District Court, E.D. New York

March 29, 2018




         Plaintiff Gem Financial Service, Inc. (“Gem”), doing business as Gem Pawnbrokers, commenced the above-captioned action on March 28, 2013 against, among others, Defendants City of New York (the “City” or “Defendant”) and Police Officers John Doe # 1-10, (Compl., Docket Entry No. 1), and filed an Amended Complaint on May 2, 2014, alleging, inter alia, unlawful searches and seizures in violation of the Fourth Amendment, selective enforcement under the Equal Protection Clause of the Fourteenth Amendment, and malicious prosecution under New York state law, (Am. Compl., Docket Entry No. 25). Currently before the Court are the parties' cross-motions for summary judgment.[1] Defendant moves for summary judgment as to Plaintiff's (1) Fourth Amendment as-applied claim for search and seizure of collateral property, (2) Equal Protection claim for selective enforcement, (3) municipal liability claim, [2] and (4) state malicious prosecution claim. (Def. Mot. for Summ. J. (“Def. Mot.”), Docket Entry No. 86; Def. Mem. in Supp. of Def. Mot. (“Def. Mem.”), Docket Entry No. 86-9.) Plaintiff cross-moves for declaratory relief holding New York City Charter § 436 (“section 436”) and New York City Local Law No. 149 (“Local Law 149”) facially unconstitutional under both the United States and New York State Constitutions. (Pl. Mot. for Summ. J. (“Pl. Mot.”), Docket Entry No. 87; Pl. Mem. in Supp. of Pl. Mot. (“Pl. Mem.”), Docket Entry No. 87-2.) For the reasons discussed below, the Court grants in part and denies in part both motions for summary judgment.

         I. Background

         a. Factual background

         Plaintiff Gem is a licensed collateral loan broker, also known as a pawnbroker, and second-hand dealer. (Def. Statement of Material Facts Pursuant to Local R. 56.1 (“Def. 56.1”) ¶ 9, Docket Entry No. 86-1.) As of April of 2014, Gem had twenty separate retail stores throughout New York City. (Id. ¶ 10.)

         In New York City, pawnbrokers and second-hand dealers have been subject to a variety of state and local regulations that require the recording and reporting of certain transactional information. (Id. ¶¶ 1, 5-8.) Pursuant to statute, including section 436, Defendant has broad supervisory authority over pawnbrokers and second-hand dealers, including the authority to question employees, examine premises and the records and merchandise thereon, and may issue summons for failures to comply with the various requirements. (Id. ¶ 3.)

         Beginning in 2010, the New York City Police Department (“NYPD”) instituted a policy designed to “encourage” the use of LeadsOnline, a “web-based electronic data transfer” database which serves as a repository for information that pawnbrokers and second-hand dealers are required to record and store pursuant to statute. (Id. ¶ 22.) LeadsOnline allows police officers to download and view every uploaded transaction. (Memo re: Increase Voluntary Use of “LeadsOnline” Electronic Pawnshop Database (“Increase Use Memo”), annexed to Def. Mot. as Ex. R, Docket Entry No. 86-7.) The NYPD believed LeadsOnline would “allow for the gathering of information on crimes, criminals, and possibly the recovery of property.” (Id.) At the time, only sixteen out of approximately 145 pawnshops in New York City used LeadsOnline. (Id.)

         Gem was an early adopter of LeadsOnline. In 2007, Gem approached the NYPD about the potential use of LeadsOnline as “an effort to extend an olive branch and [desire to] develop a mutually beneficial relationship.” (Affidavit of Harold Dambrot in Supp. of Pl. Mot. (“Dambrot Aff.”) ¶ 2, annexed to Pl. Mot. as Ex. A, Docket Entry No. 87-4.) Accordingly, Gem used LeadsOnline in 2010. (Def. 56.1 ¶ 26.) However, Gem discontinued its use in February of 2011. (Id. ¶ 27.) Harold Dambrot, Gem's Senior Vice President for Legal Matters, explained that Gem discontinued the use of LeadsOnline because of the “constant” police holds, i.e., requests to hold onto property, and requests for photographs of collateral. (Id. ¶¶ 15, 29-30.)

         The NYPD encouraged officers to “actively recruit[]” pawnshops, second-hand dealers, and other businesses to use LeadsOnline. (March 30, 2011 Leads Online Recruitment and Survey (“March 30, 2011 Memo”), annexed to Def. Mot. as Ex. R, Docket Entry No. 86-7.) Officers were also instructed to “approach [pawnbrokers] . . . to explain the benefits and operation” of LeadsOnline. (May 12, 2010 Expansion of Voluntary Participation of Pawnbrokers in the “LeadsOnline” Database (“May 12, 2010 Memo”), annexed to Def. Mot. as Ex. R, Docket Entry No. 86-7.)

         According to Gem, after it discontinued use of LeadsOnline, there was a noticeable increase in the police presence at its stores, beginning in the summer of 2011. (See Dambrot Aff.¶ 3.) Joseph Taranto, a manager at one Gem store, testified that the number of police visits at his particular location increased from one to two times per day in 2010, to four to five times per day in the following years, pursuant to the efforts to increase the number of stores using LeadsOnline. (Joseph Taranto Dep. (“Taranto Dep.”) 18:25-19:1, annexed to Pl. Mot. as Ex. II, Docket Entry No. 87-38.) Dambrot, Taranto, and other Gem employees also testified at their depositions that such interactions were often hostile, accompanied by threats of arrest, and business disruption.[3] (See, e.g., Karan Ragoo Dep. in Supp. of Pl. Mot. (“Ragoo Dep.”) 53:14- 19, annexed to Pl. Mot. as Ex. JJ, Docket Entry No. 87-39 (“The nature of the threat was as soon as he came in he says you are not using LeadsOnline and he could shut me down.”).) The NYPD also issued Gem seven criminal summonses for various violations during this time. (Gem Summons, annexed to Def. Mot. as Ex. S, Docket Entry No. 86-7.) One summons, issued on September 19, 2012, was dismissed on December 21, 2012 after Gem appeared in court before Judge Raciti at the Criminal Court of the City of New York in Kew Gardens, New York. (See December 21, 2012 Hr'g Tr. 5:18-22, annexed to Def. Mot. as Ex. GG, Docket Entry No. 86-8.)

         Other pawnshops have testified to similar experiences. Joseph Buoninfante, the senior manager of Quick Cash USA, LLC, a pawnbroker chain with nearly twenty stores in New York City, explained that their stores experienced a sharp increase in the number of police visits beginning in 2012. (Joseph Buoninfante Aff. in Supp. of Pl. Mot. (“Buoninfante Aff.”) ¶ 2, annexed to Pl. Mot. as Ex. J, Docket Entry No. 87-13.) According to Buoninfante, these visits were accompanied by threats and orders to hold jewelry. (Id.) As a result, Quick Cash USA gave in to the NYPD's demands to use LeadsOnline. (Id. ¶ 3.) Upon doing so, the alleged harassment ceased. (Id.) Likewise, David Kaminsky, the president of EZ Pawn Corp., a pawnbroker chain with fourteen different stores in New York City, explained their stores were subject to an increased police presence, threats, harassment, and bullying, upon cancellation of their service with LeadsOnline on two separate occasions, in 2012 and May of 2015. (David Kaminsky Aff. in Supp. of Pl. Mot. (“Kaminsky Aff.”) ¶¶ 2, 5, annexed to Pl. Mot. as Ex. I, Docket Entry No. 87-12.)

         In addition to the asserted hostile nature of the police visits, Gem also complains more generally about officers' seizure and holds of pledged items. Gem has specifically identified eight seizures and holds as examples of problematic police conduct. (Def. 56.1 ¶¶ 31, 52.) Gem contends that the specifically identified seizures and holds are only examples of a much larger number of such actions. (Dambrot Aff. ¶¶ 2-3, 6-10; Sandra Lopez Dep. (“Lopez Dep.”) 32:13- 19, annexed to Pl. Mot. as Ex. KK, Docket Entry No. 87-40; Ragoo Dep. 26:24-27:5; Khariton Popilevsky Dep. (“Popilevsky Dep.”) 30:19-25, annexed to Pl. Mot. as Ex. GG, Docket Entry No. 87-36.)

         Defendant contends that officers had probable cause to believe the seized items were stolen, except for one pledged item for which it could not verify NYPD involvement. (Def. 56.1 ¶¶ 31-45; Def. Mem. 8 n.5.) The NYPD acknowledges that where an item is not in plain view, and they do not obtain consent to search, the premises must be secured and a warrant obtained before any search and seizure beyond that of an ordinary administrative inspection can be effectuated. (Joseph J. Esposito Dep. (“Esposito Dep.”) 34:5-13, annexed to Pl. Mot. as Ex. O, Docket Entry No. 87-16.) Similarly, holds of collateral are to be temporary in nature, designed to “freeze the location” so that a search warrant may be obtained. (Patrick Timlin Dep. (“Timlin Dep.”) 65:2-7 (describing an order requiring a store owner to hold collateral “indefinitely” as “inappropriate”), annexed to Pl. Mot. as Ex. P, Docket Entry No. 87-19;[4] Esposito Dep. 34:14-21 (“[I]f we feel that we want to apply for a search warrant to seize that property, part of the process would be to freeze the location so that the property could not be disposed of while we were applying for a warrant.”).) The NYPD concedes that it has never secured a warrant to seize any item from Gem between 2010 and June 21, 2016, and has never obtained a warrant to search Gem's premises. (June 21, 2016 Letter re: Supplemental Demands (“Supplemental Demands”) 2, 4, annexed to Pl. Mot. as Ex. W, Docket Entry No. 87-26.) The NYPD also does not maintain records of hold requests for collateral in the possession of pawnbrokers. (Def. Resp. to Pl. First Set of Interrogs. (“Def. Resp. to Interrogs.”) 5, annexed to Pl. Mot. as Ex. V, Docket Entry No. 87-25.)

         Defendant contends that Dambrot, as Gem's authorized employee, consented to every hold and seizure. (Def. Mem. 3.) Dambrot testified that he never voluntarily consented to any seizure or hold request, only relenting after being given “the typical warning [that he could] be arrested for possession of stolen property, or interference with governmental administration.” (Dambrot Aff. ¶ 7.) Dambrot explained that he consistently requested a warrant when the NYPD sought to seize collateral, and generally requested a warrant or further information when the NYPD sought to place holds on property.[5] (Id.) Despite his initial protests, Dambrot testified that his resolve was eventually overcome by threats of arrest, harassment of customers, and disruption of business more generally. (Id.; Harold Dambrot Dep. (“Dambrot Dep.”) 92:1-3, annexed to Def. Mot. as Ex. D, Docket Entry No. 86-4.) Gem also explains it was under no legal obligation to keep such records of NYPD's hold and seizure requests, and visits by officers. (Dambrot Aff. ¶ 4.)

         b. The regulatory scheme governing warrantless searches

         i. The statutory framework

         Collateral loan brokers and second-hand dealers in New York City operate under a regulatory framework that includes several provisions of the New York State General Business Law, the New York City Charter, the New York City Administrative Code, and the Rules of the City of New York (“RCNY”). At the state level, Chapter 20, Article 5 of the General Business Law regulates collateral loan brokers. See N.Y. Gen. Bus. Law Ch. 20, Art. 5. Section 43 of the General Business Law requires collateral loan brokers to keep a book with specific information concerning loans and collateral. N.Y. Gen. Bus. Law Ch. 20, Art. 5 § 43. Section 45 of the same law discusses inspection of such records and states in pertinent part:

The said book and any and all other books and records regularly kept by such collateral loan broker shall at all reasonable times be open to the inspection of the attorney general, the state comptroller, the mayor or local licensing authority, all judges of the criminal courts, the superintendent of police, police inspectors, captains of police and police justices of such cities, or any or either of them, or of any person who shall be duly authorized in writing for that purpose by any or either of them, and who shall exhibit such written authority to such collateral loan broker.

N.Y. Gen. Bus. Law Ch. 20, Art. 5 § 45.

         New York City law also affords the NYPD Police Commissioner (the “Commissioner”) the authority to conduct administrative searches of certain trades, including pawnbrokers and second-hand dealers. Section 436 of the New York City Charter discusses the Commissioner's search power and states in pertinent part:

The commissioner shall possess powers of general supervision and inspection over all licensed or unlicensed pawnbrokers . . . dealers in second-hand merchandise . . . and in connection with the performance of any police duties he shall have power to examine such persons, their clerks and employees and their books, business premises, and any articles of merchandise in their possession. A refusal or neglect to comply in any respect with the provisions of this section on the part of any pawnbroker . . . dealer in second-hand merchandise . . . or any clerk or employee of any thereof shall be triable by a judge of the criminal court and punishable by not more than thirty days' imprisonment, or by a fine of not more than fifty dollars, or both.

N.Y. City Charter § 436. Several sections of the New York City Administrative Code expressly govern the operations of second-hand dealers and pawnbrokers. Section 20-277 discusses the reporting requirements of pawnbrokers which has changed since the commencement of this litigation. At the commencement of this litigation, Section 20-277 stated:

The police commissioner, at such times as he or she may prescribe in a written notice served upon any pawnbroker by a member of the police department, may require such pawnbroker to report to such commissioner, upon blank forms to be furnished by the police department, a description of all goods, articles or things, or any part thereof, pawned or pledged in the course of business of such pawnbroker during the days specified in such notice, stating the numbers of the pawn tickets issued therefor, the amounts loaned thereon, and such identifying marks as may be on the goods pawned. If such notice from the police commissioner so prescribes, such pawnbroker, until he or she is notified to discontinue so doing, shall keep and furnish on such forms, a general description as to sex, color and apparent age of every person depositing such pledges.

N.Y. City Code § 20-277.[6] Section 20-267 is an analogous provision directed at second-hand dealers. See N.Y. City Code § 20-267. Section 20-272(b) addresses lost or stolen goods and stated in pertinent part:

Every dealer in second-hand articles who shall have or receive any goods, or articles lost or stolen, or alleged or supposed to have been lost or stolen, shall exhibit the same, on demand, to the commissioner or departmental inspector . . . to any police officer, or to any person, duly authorized in writing by the commissioner . . . who shall exhibit such written authority to the dealer.

N.Y. City Code § 20-272. Section 20-273 discusses the information second-hand dealers are required to keep and stated that pawnbrokers must keep a “book in which [that information] shall be legibly written in English . . . .”[7] See N.Y. City Code § 20-273(a)-(b). Subsection (d) discusses police inspection of said books and stated in pertinent part:

Such book, at all reasonable times, shall be open to the inspection of any police officer, to the commissioner or departmental inspector . . . or any person duly authorized in writing for such purposes by the commissioner . . . who shall exhibit such written authority to the dealer.

N.Y. City Code § 20-273(d).[8] A violation of “any of the provisions of this subchapter or any rule or regulation issued thereunder” is a class A misdemeanor. See N.Y. City Code § 20-275. In addition, 6 RCNY § 1-16 authorizes the Department of Consumer Affairs (“DCA”) to conduct inspections of on-site books and records required to be maintained by licensees under the New York City Administrative Codes. The DCA inspections are to be “conducted at least once in every two-year period” and the licensees must make records available “during business hours.” 6 RCNY § 1-16.

         In 2013, after the commencement of this action, the New York City Council enacted Local Law 149, requiring pawnbrokers and second-hand dealers to report transactions electronically, amending sections 20-267, 20-273, and 20-277. (See Local Law No. 149, annexed to Def. Reply in Supp. of Def. Mot. (“Def. Reply”), Docket Entry No. 88, as Ex. LL, Docket Entry No. 88-3.) On June 3, 2015, a New York State Supreme Court enjoined the various statutes including section 436 and Local Law 149, granting a preliminary injunction while finding the statutes likely to be facially unconstitutional under Article 1 § 12 of the New York State Constitution. Collateral Loanbrokers Ass'n of New York, Inc. v. City of New York, 18 N.Y.S.3d 578 (Sup. Ct. 2015), rev'd, 46 N.Y.S.3d 600 (App. Div. 2017). After granting a stay of the Supreme Court's ruling pending appeal, the New York Appellate Division, First Department, reversed, finding the plaintiffs unlikely to succeed on the merits. Collateral Loanbrokers Ass'n of New York, Inc. v. City of New York, 46 N.Y.S.3d 600, 605 (App. Div. 2017), appeal dismissed, 29 N.Y.3d 974 (2017). In its analysis, the Appellate Division distinguished between Local Law 149 and its transactional reporting requirements and other statutes that oversee physical inspections of commercial premises. Id. at 604.

         ii. NYPD guidance

         In 1998, George A. Grasso, then-Deputy Commissioner of Legal Matters of the NYPD, promulgated a memorandum entitled “Guidelines for the Inspection of Pawnbroker and Secondhand Dealers Businesses, ” (“Grasso Memo, ” annexed to Pl. Mot. as Ex. C, Docket Entry No. 87-6). The Grasso Memo, addressed to “Chief of Detectives, ” discusses the various laws governing pawnbrokers and second-hand dealers and establishes guidelines “in order to insure that the administrative searches . . . conducted by this Department survive constitutional challenge . . . .” (Id. at 2.) The Grasso Memo advises officers, inter alia, to visit stores during regular business hours and request to inspect required books and records. (Id. at 5.) The Grasso Memo further advises that if an officer develops probable cause to believe that criminal activity is afoot during an inspection, the premises “should be secured and a search warrant obtained before a search of the premises is commenced.” (Id.) Finally, the Grasso Memo reiterates that an officer may seize property only if “its evidentiary or contraband nature” is apparent and the property is in plain view. (Id.)

         More recently, on August 1, 2013, the NYPD promulgated Patrol Guide Procedure No. 214-38, (“Patrol Guide, ” annexed to Pl. Mot. as Ex. D, Docket Entry No. 87-7). The Patrol Guide's purpose is “[t]o establish a systemic inspection of pawnbrokers and second-hand dealers by patrol precincts.” (Id.) The Patrol Guide reiterates aspects of the Grasso Memo concerning the warrantless inspection of pawnbrokers and second-hand dealers. (Id.) In addition, the Patrol Guide provides guidelines to officers on the retention and review of electronic records uploaded by pawnbrokers and second-hand dealers to an online database. (Id.) Pursuant to the Patrol Guide, officers are directed to inspect on-site records at least once every ten days if those records are not maintained electronically. (Id.) Electronic records, however, are to be reviewed weekly. (Id.)

         On August 5, 2016, certain aspects of the Grasso Memo and the Patrol Guide were codified in 38 RCNY § 21-11. Under 38 RCNY § 21-11(a), officers are to examine the “last twenty articles purchased or received in pledge . . . that are still in inventory, ” “[c]ompare the articles to the description . . . listed in the” store records, and review the entries for “completeness, accuracy, and legibility.” These inspections “must occur regularly, and in no event less often than once per quarter during the calendar year.” 38 RCNY § 21-11(a).

         c. Procedural background

         Gem and former Plaintiff Mitchell Kaminsky filed the original Complaint on March 28, 2013 against Defendants the City, Police Officers John Doe # 1-10, and former Defendant the NYPD, alleging unlawful search and seizure, malicious prosecution, differential treatment (under a class one theory) in violation of the Fourth and Fourteenth Amendments, and municipal liability. (Compl.) Gem and Kaminsky also alleged claims under the New York State Constitution, the New York Civil Rights Law (“NYCRL”) and New York state common law for malicious prosecution and tortious interference.

         Defendants moved to dismiss the Complaint on July 12, 2013. At oral argument on March 6, 2014, the Court dismissed Kaminsky from the action and dismissed all claims against the NYPD. (Minute Entry dated March 6, 2014.) By Memorandum and Order dated March 17, 2014 (the “March 17, 2014 Decision”), the Court granted in part and denied in part Defendants' motion to dismiss. Gem Fin. Serv., Inc. v. City of New York, No. 13-CV-1686, 2014 WL 1010408, at *16 (E.D.N.Y. Mar. 17, 2014) (“Gem I”). The Court granted Defendants' motion to dismiss Gem's class of one Equal Protection claim, federal malicious prosecution claim, NYCRL claim, and tortious interference claim. (Id.) The Court denied Defendants' motion to dismiss Gem's Fourth Amendment claim, state law malicious prosecution claim, municipal liability claim, and request for equitable relief. (Id.) In denying the motion to dismiss as to the Fourth Amendment claim, the Court assumed, for purposes of the motion to dismiss, that section 436 was constitutional and held that the seizures and holds fell outside even the expansive scope of that statute. See Gem I, 2014 WL 1010408, at *6. Rather than dismiss Gem's as-applied challenge against the warrantless inspections of its stores, the Court reasoned that the NYPD's alleged actions went even beyond the broad authorization in section 436. See Id. at *7-8. The Court did not limit or dismiss any portion of Gem's Fourth Amendment claim.[9]

         Gem filed an Amended Complaint on May 2, 2014, adding Keith Watts[10] as a Plaintiff. In addition to its Fourth Amendment, [11] state malicious prosecution, and municipal liability claims, Gem also alleged a selective enforcement claim in violation of the Equal Protection Clause. (See generally Am. Compl.)

         Defendant moved for reconsideration of the March 17, 2014 Decision as to the Fourth Amendment and state malicious prosecution claims and moved to dismiss the selective treatment Equal Protection claim. (Def. Mot. for Reconsideration and to Dismiss (“Def. Reconsideration”) 1, Docket Entry 37.) By Memorandum and Order date March 31, 2015 (“March 31, 2015 Decision”), the Court denied Defendants' motions in their entirety. Gem Fin. Serv., Inc. v. City of New York, No. 13-CV-1686, 2015 WL 1475853, at *10 (E.D.N.Y. Mar. 31, 2015) (“Gem II”).

         II. Discussion

         a. Standard of review

         Summary judgment is proper only when, construing the evidence in the light most favorable to the non-movant, “there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a); Wandering Dago, Inc. v. Destito, 879 F.3d 20, 30 (2d Cir. 2018); see also Cortes v. MTA NYC Transit, 802 F.3d 226, 230 (2d Cir. 2015). The role of the court “is not to resolve disputed questions of fact but only to determine whether, as to any material issue, a genuine factual dispute exists.” Rogoz v. City of Hartford, 796 F.3d 236, 245 (2d Cir. 2015) (first quoting Kaytor v. Elec. Boat Corp., 609 F.3d 537, 545 (2d Cir. 2010); and then citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249-50 (1986)). A genuine issue of fact exists when there is sufficient “evidence on which the jury could reasonably find for the plaintiff.” Anderson, 477 U.S. at 252. The “mere existence of a scintilla of evidence” is not sufficient to defeat summary judgment. Id. The court's function is to decide “whether, after resolving all ambiguities and drawing all inferences in favor of the nonmoving party, a rational juror could find in favor of that party.” Pinto v. Allstate Ins. Co., 221 F.3d 394, 398 (2d Cir. 2000).

         b. Section 1983 claims

         Plaintiff asserts the following claims against Defendant under section 1983: (1) as-applied and facial challenges under the Fourth Amendment for unlawful searches and seizures, (2) selective enforcement action under the Equal Protection Clause, and (3) municipal liability. Defendant moves for summary judgment as to all claims.

         Under section 1983, individuals may bring a private cause of action against persons “acting under color of state law” to recover money damages for deprivations of their federal or constitutional rights. Matusick v. Erie Cty. Water Auth., 757 F.3d 31, 55 (2d Cir. 2014) (quoting 42 U.S.C. § 1983). To establish a viable section 1983 claim, a plaintiff must show “the violation of a right secured by the Constitution and laws of the United States” and that “the alleged deprivation was committed by a person acting under color of state law.” Vega v. Hempstead Union Free Sch. Dist., 801 F.3d 72, 87-88 (2d Cir. 2015) (citations and internal quotation marks omitted).

         i. As-applied Fourth Amendment claim

         Plaintiff brings an as-applied claim under the Fourth Amendment for unlawful searches and seizures for warrantless administrative inspections of its commercial premises. In addition, Plaintiff asserts a claim for seizures and holds of collateral property, both independent and as part of its overall claim regarding the inspections.[12] Defendant specifically challenges the claim for seizure and holds of collateral property on four bases: (1) Plaintiff has no reasonable expectation of privacy in the pledged items, records, and the information therein; (2) the pledged items were seized pursuant to voluntary consent; and/or (3) the plain view doctrine; and (4) there was no practice or policy to form the basis of municipal liability. The Court separately discusses each challenge below.

         1. Reasonable expectation of privacy

         Defendant argues that Plaintiff does not have a reasonable expectation of privacy in the records or the pledged items because they are subject to inspection under the administrative scheme applicable to pawnbrokers and second-hand dealers. (Def. Mem. 7; Def. Reply 25-26.) With respect to the content of the records, Defendant argues that Plaintiff has no reasonable expectation of privacy because the information therein is provided by customers, and is required and subject to review by statute. (Def. Mem. 7.) While unclear, Plaintiff appears to assume a reasonable expectation of privacy in the records, the information therein, and the pledged items based on language from New York v. Burger, 482 U.S. 691 (1987) (“Burger”).[13]

         The Fourth Amendment protects “[t]he right of the people to be secure in their persons, houses, papers, and effects against unreasonable searches and seizures.” U.S. Const. amend. IV. “A search occurs when the Government acquires information by either ‘physically intruding on persons, houses, papers, or effects, ' or otherwise invading an area in which the individual has a reasonable expectation of privacy.” United States v. Ganias, 755 F.3d 125, 133 (2d Cir. 2014) (citations omitted). “A seizure occurs when the Government interferes in some meaningful way with the individual's possession of property.” Id. (citations omitted).

         Generally, as a threshold matter, there must be a reasonable expectation of privacy in the places or items for there to be a search or seizure within the meaning of the Fourth Amendment. See California v. Ciraolo, 476 U.S. 207, 211 (1986) (“The touchstone of Fourth Amendment analysis is whether a person has a ‘constitutionally protected reasonable expectation of privacy.'” (citation omitted)); United States v. Simmonds, 641 F. App'x 99, 104 (2d Cir. 2016) (“It is well established that the Fourth Amendment applies only to spaces in which an individual has a reasonable expectation of privacy.”); Shaul v. Cherry Valley-Springfield Cent. Sch. Dist., 363 F.3d 177, 184 (2d Cir. 2004) (finding no search or seizure claim because plaintiff had no reasonable expectation of privacy in personal property maintained in classroom after being suspended); United States v. Moran, 349 F.Supp.2d 425, 467 (N.D.N.Y. 2005) (“Where there is no legitimate expectation of privacy, there is no search or seizure within the ambit of the Fourth Amendment.” (citation omitted)); see also Fla. v. Jardines, 569 U.S. 1, 11 (2013) (“The Katz [v. United States, 389 U.S. 347 (1967), ] reasonable-expectations test ‘has been added to, not substituted for, ' the traditional property-based understanding of the Fourth Amendment.” (citation omitted)). In assessing the legitimacy of an expectation of privacy, courts employ a “two-part” inquiry from Katz: “first, has the individual manifested a subjective expectation of privacy in the object of the challenged search? Second, is society willing to recognize that expectation as reasonable?” Ciraolo, 476 U.S. at 211.

         “One who owns or lawfully possesses or controls property will in all likelihood have a legitimate expectation of privacy by virtue of th[e] right to exclude.” Rakas v. Illinois, 439 U.S. 128, 143 n.12 (1978). Under Katz, this property-based expectation of privacy extends to “private” business records containing “the kind of commercially sensitive information” that society does not “ordinarily . . . expect[] to [be] disclose[d].” Patel v. City of Los Angeles, 738 F.3d 1058, 1062 (9th Cir. 2013), aff'd sub nom. City of Los Angeles, Calif. v. Patel, 576 U.S. __, __, 135 S.Ct. 2443 (June 22, 2015); United States v. AJS Merch., Inc., 90-CR-121, 1993 U.S. Dist. LEXIS 21320, at *24-26 (W.D.N.Y. May 24, 1993); see also United States v. Torres, 949 F.2d 606, 608 (2d Cir. 1991) (“Neither possession nor ownership of property establishes a legitimate expectation of privacy unless the party vigilantly protects the right to exclude others.”).

         Despite the expectation of privacy in certain private, commercially sensitive business records, the Second Circuit has held that “records required to be kept pursuant to valid regulatory programs have a ‘public aspect' for purposes of constitutional analysis, and thus are not private papers entitled to the protection of the [F]ourth or [F]ifth amendments.” Donovan v. Mehlenbacher, 652 F.2d 228, 231 (2d Cir. 1981) (applying the “required records” doctrine to documents required to be kept by labor regulations); Sec. & Exch. Comm'n v. Olsen, 243 F.Supp. 338, 339 (S.D.N.Y. 1965) (holding production of SEC required documents to be “quasi-public records” and did not constitute an unreasonable search and seizure under the Fourth Amendment); Glenwood TV, Inc. v. Ratner, 480 N.Y.S.2d 98, 102-03 (App. Div. 1984) (“It is clear that ‘the modern businessman has little or no expectation of privacy in his business records, especially those documents prepared in ...

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