STATE OF NEW HAMPSHIRE SUPREME COURT

2012-0481

STATE OF NEW HAMPSHIRE

v.

RICHARD GNESS

Appeal From A Final Judgment Of The Merrimack County Superior Court

DEFENDANT’S BRIEF

Andrew R. Schulman, Esq. (NH Bar 2276) GETMAN, SCHULTHESS & STEERE, P.A. 1838 Elm Street Manchester, NH 03110 (603) 634-4300 (603) 626-3647 (fax) aschulman@gss-lawyers.com Fifteen Minutes Oral Argument Request

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TABLE OF CONTENTS Table Of Authorities ...................................................................................................................... iii Text Of Relevant Authorities ......................................................................................................... iv Questions Presented ........................................................................................................................ 1 Statement of the Case ...................................................................................................................... 2 Statement of the Facts ..................................................................................................................... 3

I. Background ..................................................................................................................... 3

II. Evidence Introduced At The Suppression Hearing ....................................................... 3

II. Evidence Introduced At Trial ........................................................................................ 9

Summary of Argument ................................................................................................................. 13 Argument ...................................................................................................................................... 16

I. Standard Of Review...................................................................................................... 16

II. Overview ..................................................................................................................... 16

III. The Administrative Inspection Exception .................................................................. 17 Conclusion .................................................................................................................................... 27  Request For Oral Argument .......................................................................................................... 27  Certificate of Service .................................................................................................................... 27 

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TABLE OF AUTHORITIES Cases:

Appeal of Morgan, 144 N.H. 4 (1999) .............................................................................. 16, 19, 23

Arizona v. Gant, 556 U.S. 332, 129 S.Ct. 1710, 173 L.Ed.2d 485 (2009) ............................................................................................................... 16 Colonnade Corp. v. United States, 397 U.S. 72, 90 S. Ct. 774, 25 L. Ed. 2d 60 (1970) ................................................................................................................. 20 Katz v. United States, 389 U.S. 347, 88 S. Ct. 507, 19 L. Ed. 2d 576 (1967). .............................................................................................................. 16 Liquor Shop, Inc. v. State Liquor Authority, 249 N.E.2d 440, 301 N.Y.S.2d 584, 24 N.Y.2d 647 (N.Y. 1969) ......................................................................................................... 24

Manning v. Mayes, 2010 U.S. Dist. LEXIS 72500, 2010 WL 2858455 (W.D. Ky. July 19, 2010) ............................................................................................................. 26 New York v. Burger, 482 U.S. 691, 107 S. Ct. 2636, 96 L. Ed. 2d 601 (1987) ................................................................................................... 19, 20, 24 People v. Galvadon, 103 P.3d 923 (Colo. 2005) .......................................................................... 20

State v. Joyce, 159 N.H. 440 (2009) ............................................................................................. 16

State v. Kousounadis, 159 N.H. 413 (2009) ................................................................................. 16

State v. LaBarre, 160 N.H. 1 (2010) ............................................................................................. 16

State v. Livingston, 153 N.H. 399 (2006) ..................................................................................... 19

State v. Plante, 134 N.H. 585 (1991) ............................................................................................ 19

State v. Saunders, 164 N.H. 342 (2012) ....................................................................................... 16

State v. Smith, 163 N.H. 427 (2012) ............................................................................................. 16

State v. Turmelle, 132 N.H. 148 (1989) ................................................................................ passim

State v. VFW Post 3562, 525 N.E.2d 773, 37 Ohio St. 3d 310 (Ohio 1988) ................... 20, 25, 26

Thorobred, Inc. v. Louisville/Jefferson County Metro Gov't, 2005 U.S. Dist. LEXIS 22116, 2005 WL 2429079 (W.D. Ky. Sept. 30, 2005) .......................... 26

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Turner v. Dammon, 848 F.2d 440 (4th Cir. 1988) ........................................................................ 26

United States v. Gonsalves, 435 F.3d 64 (1st Cir. 2006 ) .............................................................. 20

United States v. Maldonado, 356 F.3d 130 (1st Cir. 2004) ........................................................... 20

Statutes:

RSA 176:9 ..................................................................................................................... 4, 14, 20, 24

RSA 176:14 ................................................................................................................................... 24

RSA 178:1 ....................................................................................................................................... 4

RSA 179:35 ................................................................................................................................... 22

RSA 179:57 ............................................................................................................................ passim

RSA 179:58 ..................................................................................................................................... 4

RSA 179:59 ..................................................................................................................................... 4

RSA 318-B:2 ................................................................................................................................... 2

RSA 318-B:26 ................................................................................................................................. 2

RSA Chapter 595-B ...................................................................................................................... 23

RSA Title 13 ......................................................................................................................... 4, 5, 20

Rules:

N.H. Code of Administrative Rules, Liq. 600.01 et. seq. ............................................................. 24

Constitutional Provisions:

New Hampshire Constitution, Part 1, Article 19 .................................................................... 13, 16 United States Constitution, Amendment IV ........................................................................... 13, 16

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TEXT OF RELEVANT AUTHORITIES

RSA 176:9: Liquor Investigator; Training. – I. The commission may, subject to rules adopted by the director of personnel,

employ and dismiss liquor investigators. Liquor investigators shall, under the direction of the commission, investigate any or all matters arising under this title.

II. Any new liquor investigator employed by the commission under this section

after August 13, 1985, shall, within 6 months of employment, satisfactorily complete a preparatory police training program as provided by RSA 188-F:27, unless he has already completed such a program.

III. Any member of the commission, assistant, or liquor investigator may enter

any place where liquor, beverages, or tobacco products are sold or manufactured, at any time, and may examine any license or permit issued or purported to have been issued under the terms of this title. They shall make complaints for violations of this title.

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RSA 179:57 Suspension or Revocation; Administrative Fines. – I. The commission shall cause frequent inspections to be made of all the

premises with respect to which any license has been issued under the provisions of this title. If any licensee violates any of the provisions of law or any of the rules of the commission adopted under this title or fails to superintend in person or through a manager approved by the commission the business for which the license was issued or allows the premises with respect to which the license was issued to be used for any unlawful purposes or knowingly designates to be in charge of the premises any person who has been convicted of a felony, unless the person has been approved by the commission pursuant to RSA 179:23, V, or otherwise fails to carry out in good faith the purposes of this title or if the premises are regularly the site of violence the license of such licensee may be suspended or revoked after notice and hearing, in accordance with RSA 541-A:31-36. Notwithstanding any other provisions of this chapter, the commission after the appropriate hearing may impose a fine of a specific sum, which shall not be less than $100 nor more than $5,000 for any one offense. Such a fine may be imposed instead of, or in addition to, any suspension or revocation of a license by the commission.

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I-a. Notwithstanding any other provision of law, the commission may accept at any time, a petition from the governing body of a city or town who has voted to accept the provisions of RSA 663:5, I(b), (c) and (d), to revoke a license to sell alcoholic beverages held by a licensee who is located within that community. Any petition filed under this paragraph shall state with particularity all relevant facts and circumstances that sustain the opinion of the petitioner to revoke a license. A licensee against whom a petition is filed shall be entitled to a public hearing before any decision by the commission. All proceedings conducted in conjunction with this paragraph shall conform to the requirements of RSA 541-A.

II. Appeals from a decision of the commission shall be in accordance with RSA

541. III. The commission shall, upon notification by the commissioner of the

department of revenue administration of a tobacco tax violation, suspend or revoke any tobacco license issued under RSA 178. Any challenge to such suspension or revocation shall be made to the commissioner of the department of revenue administration.

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RSA 179:59

Prosecutions.- The commission shall appoint liquor investigators whose primary function shall be the proper prosecution of this title. The liquor investigators shall have all the powers of the sheriff in any county, with reference to enforcement of all laws either in cooperation with, or independently of, the officers of any county or town. The commission shall have the primary responsibility for the enforcement of all liquor and beverage laws upon premises where liquor and beverages are lawfully sold, stored, distributed, or manufactured. Any person violating the provisions of any law may be prosecuted by the commission or any of its investigators as provided in this section, or by county or city attorneys, or by sheriffs or their deputies, or by police officials of towns.

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New Hampshire Constitution, Part 1, Article 19

Searches and Seizures Regulated. Every subject hath a right to be secure from all unreasonable searches and seizures of his person, his houses, his papers, and all his possessions. Therefore, all warrants to search suspected places, or arrest a person for examination or trial in prosecutions for criminal matters, are contrary to this right, if the cause or foundation of them be not previously supported by oath or affirmation; and if the order, in a warrant to a civil officer, to make search in suspected places, or to arrest one or more suspected persons or to seize their property, be not accompanied with a special designation of the persons or objects of search, arrest, or seizure; and no warrant ought to be issued; but in cases and with the formalities, prescribed by law.

* * *

United States Constitution, Amendment IV

The right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures, shall not be violated, and no warrants shall issue, but upon probable cause, supported by oath or affirmation, and particularly describing the place to be searched, and the persons or things to be seized.

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QUESTIONS PRESENTED

I. DOES THE ADMINISTRATIVE INSPECTION EXCEPTION TO THE WARRANT REQUIREMENT IN PART I, ATRICLE 19 OF THE NEW HAMPSHIRE CONSTITUTION AND THE FOURTH AMENDMENT TO THE UNITED STATES CONSTITUTION ALLOW WARRANTLESS SEARCHES OF EVERY DESK DRAWER AND FILE CABINET IN EVERY OFFICE ON THE PREMISES OF EVERY STORE, RESTAURANT AND LOUNGE THAT SELLS ALCOHOL?

Preserved by motion to suppress, A,13-20, memorandum of

law, A,22-34, and ruling, A, 49.1

1The trial court record is cited as follows: “A” refers to the Appendix to this Brief which contains the pertinent pleadings, motions,

objections and orders. “TS” refers to the transcript of the suppression hearing held on April 29, 2010. “JT” refers to the transcript of the three day jury trial held on April 4-6, 2012.

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STATEMENT OF THE CASE Defendant Richard Gness was indicted in the Merrimack County Superior Court for (a)

Possession Of the Controlled Drug Psilocin With Intent To Distribute; (b) Possession Of

Marijuana With Intent To Distribute; and (c) Possession of Cocaine, all in violation of RSA 318-

B:2 and 26. A,1-3.

Prior to trial Gness moved to suppress all evidence, including the alleged drugs, derived

from a warrantless and non-consensual search of his office desk by agents of the New Hampshire

Liquor Commission. A,13. The State objected to the motion. A,35, 39. Following an

evidentiary hearing, the trial court denied the motion to suppress, concluding that the

administrative inspection exception to the warrant requirement applied. A,43-49.

The case was then tried to a jury. The jury convicted Gness of the Psilocin and Cocaine

charges. T,317. The jury acquitted Gness of Possession of Marijuana With Intent To Distribute

but convicted him of the lesser included offense of simple possession. T,318.

This appeal follows.

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STATEMENT OF THE FACTS

I. Background Richard Gness owned and operated a country store in Danbury, New Hampshire that does

business as Dick’s General Store. TS,34. As its name implies, Dick’s General Store sold items

such as such as sodas, snacks, cheese, meats, stationary supplies, aspirin, beer, wine, cigarettes

and gas. JT, 37, 43-44, 71, 228. Gness was licensed by the New Hampshire Liquor Commission

to sell beer and wine for consumption off premises.2 TS, 33.

Gness lived above the store in a small apartment. TS, 34-35. He maintains an office on

the first floor behind the customer area of the store. T,42.

II. Evidence Introduced At The Suppression Hearing

A.

The Liquor Commission conducts an annual “premises inspections” of every licensee,

including not only convenience stores but also restaurants, clubs, supermarkets and other

concerns that sell alcohol for use on or off premises. TS,14, 28-29. The Commission also

conducts additional “premises checks,” to follow up on complaints of possible license violations.

TS, 10. “Premises checks,” may be conducted to investigate not only allegations of “minor

violations,” but also complaints of serious crimes such as “money laundering, gambling,

prostitution” and “service to minors.” TS,9.

“Premises inspections” and “premises checks” are conducted by law enforcement officers

employed by the Liquor Commission’s Division of Enforcement as Investigators. TS,8. These

2The trial court record does not include a clear explanation of the corporate structure of

Dick’s General Store. While this is in no way important to the outcome of the case, it should be noted that a search of the New Hampshire Secretary Of State’s website, conducted by appellate counsel, reveals that Dick’s General Store was a trade name owned and used by Gness. Thus, it appears that the store was a sole proprietorship.

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enforcement officers must attend and graduate from the New Hampshire State Police Standards

And Training Academy. T,28, 50-51. See, RSA 179:6,II (requiring Division of Enforcement

Investigators to complete the State Police Academy). Once appointed, they have the same

powers as sheriffs and police officers with respect to the enforcement of RSA Title 13 (relating

to alcoholic beverages). TS,8. See, RSA 179:59.

Every violation of the statutes enforced by the Division of Enforcement, and every

violation of the Commission’s rules constitutes a criminal offense. RSA 179:58. Such offenses

are always classified as felonies if committed by corporate entities and may be either felonies or

misdemeanors if committed by natural persons. RSA 179:58. Of particular importance to this

case, the unlicensed sale of hard liquor is classified as a Class B felony regardless of whether the

defendant is a natural person or a corporation. RSA 178:1. Division of Enforcement

Investigators may act as non-lawyer police prosecutors with respect to these crimes. RSA

179:59. Thus, they have statutory authority to conduct criminal investigations, decide what

charges to bring, present the State’s case and argue sentencing, just like any other law

enforcement agency.

Licensees who violate any provision of Title 13 and/or the Commission’s rules may also

be subject to license suspension and revocation. RSA 159:57. Therefore, absent a a priori

decision that an investigation will not lead to criminal prosecution, every Division of

Enforcement investigation has the potential to result in administrative and/or criminal charges.

B.

On October 3, 2009, three Division of Enforcement officers arrived at Dick’s General

Store. TS, 30, 32. They were there to conduct an annual premises inspection, TS, 30, 32, and

also to investigate specific complaints that Gness was selling hard liquor in violation of both the

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store’s license and RSA Title 13. TS,20, 40. According to the Chief of the Division of

Enforcement, other law enforcement agencies had received information about the sale of hard

liquor and the enforcement officers were there to “confirm whether [Mr. Gness] was in

violation.” TS, 40.

The factual basis for law enforcement’s suspicions is not apparent from the record. One

Division of Enforcement officer testified that he heard “rumor[s]” of hard liquor sales from a

number of different police departments but he was not aware of any named witness who claimed

to have seen an exchange. TS, 43. No evidence was presented concerning (a) the identity of the

individual(s) who provided tips to law enforcement, (b) the observations made by those

individual(s) or (c) their reliability and credibility. TS, 43.

The October 3, 2009 “inspection” was not the first effort that the Division of

Enforcement made to investigate the rumors of hard liquor sales. Two months earlier, two of the

same officers attempted to make an undercover purchase of hard liquor from Gness. TS, 62.

They visited the store, engaged Gness in conversation without identifying themselves as law

enforcement agents, and then asked to purchase hard liquor. TS, 62. Gness told them that he did

not carry hard liquor and that they would need to go to a State Liquor store if they wished to

purchase it. TS, 62.

The Division of Enforcement did not attempt any other controlled buys or stings.

Instead, the Division decided that it would combine its investigation into hard liquor sales with

its annual “premises inspection” of Gness’ store. (See, Testimony of the Chief of the Division of

Enforcement at TS,19-20 Q: Was this particular inspection prompted by any allegations of

criminal activity on the part of Mr. Gness? A: It is my understanding that they went there to

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confirm whether he was in violation of an administrative requirement that he be licensed in the

sale of spirits.”)

As noted above, the sale of hard liquor without a license is a Class B felony. RSA 178:1.

Thus, had the Division of Enforcement found evidence of hard liquor sales, Gness could have

been prosecuted by the Division and ultimately sentenced to the New Hampshire State Prison.

C.

Before entering the store on October 9, 2009, the officers noted an illuminated sign

advertising Budweiser beer on the outside of the building. TS,33, 52-53. This was a violation of

the Commission’s rules. TS, 33. After noting this, two of the officers went inside and

introduced themselves to Gness while a third officer remained outside. TS, 33, 53. They spoke

for approximately five minutes concerning the layout of the store and other matters pertinent to

the annual inspection. TS, 34.

The officers then looked around and confirmed by eyesight that the store had a grocery

inventory with a wholesale value of at least $3,000 as required by statute. TS, 34, 54. They

asked Gness, and received his permission to enter a back storage room for the purpose of

observing the inventory of beer and groceries. TS, 35. They entered a second storage area and

likewise looked around. TS, 36. The officers did not notice any violations relating to the

inventory of beer, wine and groceries.

They confirmed that the store’s license to sell beer and wine was properly posted. TS,

34. They noted that Gness’ small apartment was not separated from the store by a locked door,

as required by the Commission’s rules. TS, 36. But aside from this, and the illuminated sign

described above, the officers did not find any other violations by walking around the store.

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Thus, their annual “premises inspection” was completed although they intended to ask Gness to

fetch the invoices for the beer and wine inventory for their review. TS, 37.

D.

At this point, a customer came into the store and requested a certain brand of vodka. TS,

37. Gness responded that he did not sell that product and he looked at one of the officers.

TS,37. This caused the customer to look at the officer as well. TS, 37. The customer said

nothing and left the store. TS, 37.

The officer then asked Gness for his beer and wine invoices. TS, 37. Gness produced the

beer invoices but could not locate the wine invoices. TS, 36-37. The Commission’s rules

require licensees to keep at least sixty days’ of beer and wine invoices available for inspection.

TS, 37.

Another officer peered inside a box that contained a paper bag. TS, 54. He then peered

inside the paper bag and observed some wine and piece of paper. TS, 54. He then removed the

paper from the bag and observed it to be a New Hampshire State Liquor Commission receipt for

both wine and vodka. TS, 54. The receipt was issued approximately three and a half weeks

before the agents’ inspection and search of Gness’ store. TS, 55.

Mr. Gness did not use his Commission license number to purchase the wine and vodka.

TS, 38. He was supposed to use the license number for every inventory purchase. TS, 38. Had

he used the license number to purchase vodka, the Division of Enforcement would have been

notified. TS, 38.

The receipt listed a total of six 750 milliliter bottles Zhenka brand vodka. TS, 38, 41;

Suppression Hearing Ex. 1. The agents interrogated Gness about the vodka, asking him “where

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it was, what it was being used for, was he selling it, those type of questions.” TS,54. Gness said

that he had purchased the six bottles for his personal use. TS,38.

Gness first told the officers that the vodka was in his residence upstairs, but when he was

asked to retrieve it, he said it was not there. TS,56. Gness then said that he drank all of the

vodka, TS,38, 56. However, after the officers questioned whether he really drank six bottles of

vodka in three weeks, Gness said that he only drank some of the vodka. TS, 39, 56. Gness then

said that the remaining vodka was at somebody else’s house. TS, 40.

The officers did not believe Gness so they “continued the administrative inspection to

look for the vodka.” TS,56. See also, TS, 41. One officer told Gness, in essence, that they

would search until they either found the vodka or determined that it was not on premises: “I told

him if he—if the vodka was on the premise he should tell us otherwise we would continue with

our inspection.” TS, 47. That officer searched the main store area and found nothing. TS, 41.

He then went into the office and approached Gness’ desk. TS,41. He opened up a drawer that he

believed was large enough to hold several 750 milliliter bottles. TS, 41.

The officer who opened the desk drawer conceded that Gness never consented to the

search of his desk. TS, 45 (“Q: …[Y]ou went into the back room where that desk was located

and you searched that desk drawer without the consent of Mr. Gness, right? A Yes.”). Indeed,

the officer testified that he made no effort to gain Mr. Gness’ consent. TS, 46 (“Q: You never

even asked him, right? A: No.”). The officer believed that he was entitled to search “anywhere

and everywhere” within the store, including inside closed containers and desk drawers during the

course of a “premises inspection.” TS, 44-45, 49.

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When the officer opened the desk drawer, he did not find vodka. TS, 41. Instead, he saw

several plastic bags containing a green vegetative matter and he smelled what he believed to be

marijuana. TS, 41. The officers then decided to apply for a search warrant. TS, 57.

II. Evidence Introduced At Trial The evidence at trial concerning the Division of Enforcement’s inspection and search, up

until the point where the desk drawer was opened, was largely similar to that presented at the

suppression hearing. JT, 34-51, 87-94. However, the jury was not told that one of the purposes

of the inspection was to further an open investigation into possible unlawful (and felonious) sales

of hard liquor. JT, 73. The testimony before the jury was that three Division of Enforcement

agents went to Dick’s General Store for the purpose of conducting an annual premises

inspection. JT, 34, 85.

After the desk drawer was opened, and the putative drugs were observed, a liquor

enforcement officer who had been waiting outside the store, came inside to examine the

vegetative matter. JT, 51, 116. This officer was a trained Drug Recognition Expert (DRE), JT,

105, with substantial drug investigation experience. JT, 110. He was familiar with marijuana

and he opined that the material in the plastic bag was likely marijuana. JT, 115-116. Further,

because the material was packaged in several small plastic bags which were placed inside a

larger plastic bag, JT,116, this officer opined that it was intended for distribution rather than

personal use. JT, 120-121.

This officer remained with Gness and safeguarded the store while the other two liquor

enforcement officers traveled to the Bristol Police Department to type up a search warrant

application. Additional officers were summoned to participate in the search and a State Police

canine unit was asked to assist. JR, 122.

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Once the warrant was obtained, the officers began their search in Gness’ upstairs

apartment. JT, 123. In the bedroom they found what appeared to be marijuana, cocaine and

psilocybin mushrooms. JT, 68-69, 123-124. Subsequent laboratory testing confirmed that the

officers had seized actual controlled drugs. JT, 214-219.

All told, the following controlled drugs were found in the following locations and

packaged as follows:

-Approximately one ounce of marijuana was found in two bags in a desk drawer in

Gness’ bedroom. JT,132, 144, 205. This was in addition to the marijuana that was found in

multiple small bags in the downstairs office desk. The officers also observed paraphernalia

commonly used for marijuana consumption in the bedroom. JT, 208.

-Psilocybin mushrooms were found in a desk drawer. JT, 61-62, 144. The mushrooms

were in small bags placed inside a larger bag. JT, 125. The smaller bags appeared to be marked

for sale. JT, 125, 127. Somebody had used a sharpie to indicate the price and quantity for each

bag. JT, 100. Some of the bags were marked “$30” while others were marked “$60.” JT, 125.

-A small quantity of cocaine, consistent with personal use was found in two small plastic

bags located in the bedroom dresser drawer. JT, 57-58, 144.

The officers also found a lot of cash. They found approximately $3,700 on Mr. Gness’

person, JT, 66-67, over $3,000 in his bedroom, JT, 69, and approximately $500 in the store’s

cash register, JT, 68. Additionally, the officers located four cell phones, JT, 172, 192, and

several firearms. JT, 152-153, 172-173. Finally, the officers found and seized the Zhenka

Vodka bottles described above. JT,173.

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E.

Gness testified in his own defense. He admitted that he knowingly possessed the

marijuana, cocaine and psilocybin mushrooms. JT, 267-268. However, except as described

below, he denied having any intent to distribute. JT.

Gness admitted that the cocaine belonged to him. JT, 267. He said that he had it for over

five years. JT, 267.

He admitted that the marijuana belonged to him. JT, 268. However, he said that all of

the marijuana was given to him by customers in return for being allowed to charge gas. JT, 268.

As explained below, Gness often extended credit to customers that he knew. He described the

bags of marijuana as “samples” given to him in consideration for this courtesy. JT, 268. Gness

denied ever selling or distributing marijuana. JT, 268. He admitted to consuming marijuana.

JT, 269.

Gness admitted that he possessed the psilocybin mushrooms. JT, 269. However, he

claimed that they belonged to another individual and he was simply storing them for her. JT,

269. Gness explained that he knew a woman named Miranda Bohmer for approximately ten

years. JT, 269. She owed Gness $350, possibly for store credit. JT, 269. According to Gness,

Bohmer appeared at the store and asked him to hold on to the psilocybin mushrooms because she

was living with her parents and they might throw them out. JT, 269. Bohmer was going to take

the mushrooms back in approximately one month. JT, 269. Bohmer stated that she would repay

Gness after she sold the mushrooms. JT, 243,

Gness presented testimony from a former Danbury Police Chief who said he was in the

store when Bohmer gave the mushrooms Gness to hold. JT, 243. This witness, who was not in

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law enforcement at the time, understood that Gness was going to hold the mushrooms as

collateral. JT, 243, 269.

Gness explained that he had a large amount of cash because he runs a cash business and

makes deposits only once a week. JT, 262. Although many convenience store items cost only a

few dollars, Gness also sold gasoline and it costs upwards of $70 to fill some pick-up trucks. JT,

262. Additionally, Gness functioned as a de facto bank for many of his customers. JT, 262. He

would cash checks for customers who he knew, saving them from a half hour trip to the ATM.

JT, 264. He also made small loans to some of his customers (and he explained he was holding

the cell phones seized by the police as collateral for some of these loans). JT, 265. Finally,

Gness explained that he often accepts post-dated checks from customers that he trusts. JT, 265-

166.

Gness explained that he kept firearms because he keeps a lot of cash in the store, on his

person and in his apartment. JT, 266. He also testified that one of the alleged firearms was a

starter’s pistol that only fires blanks. JT, 266.

Based substantially on this evidence, defendant Richard Gness was (a) convicted of

possession of psilocybin mushrooms with intent to distribute; (b) convicted of possession of

cocaine; and (c) acquitted of possession of marijuana with intent to distribute but convicted of

the less included offense of simple possession of marijuana.

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SUMMARY OF ARGUMENT A warrantless search of a commercial establishment is per se unreasonable and violative

of the Fourth Amendment and Article 19 unless it is supported by either a warrant or a well-

recognized exception to the warrant requirement. In this case, the trial court found that the

search of Gness’ desk drawer was justified under the administrative inspection exception to the

warrant requirement. This was error because two of the essential elements of that exception

were lacking.

The administrative inspection exception was defined in State v. Turmelle, 132 N.H. 148

(1989), for State Constitutional purposes, and New York v. Burger, 482 U.S. 691, 703 (1987),

for federal Constitutional purposes. Read together, those cases require the State to prove five

elements in cases involving inspections of commercial premises by regulatory agencies:

(A) That the operator of the commercial premises is a participant in a closely regulated

industry;

(B) That the inspections are carried out pursuant to a statutory scheme;

(C) That a substantial government interest is served by this statutory scheme;

(B) That warrantless inspections are necessary to further the statutory, regulatory scheme;

and

(D) That the implementation of the statutory inspection program provides a

constitutionally adequate substitute for a warrant. This element is satisfied by limitations on the

timing, location, and scope of the inspections. Such limitations cabin the discretion of the

inspecting officers and protect against arbitrary and unreasonable enforcement.

The search in this case does not meet the last two criteria:

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Warrantless inspections of desk drawers, file cabinets and the like, located in office areas

are not necessary to carry out the regulatory scheme. The regulatory purpose is well served by

(a) warrantless spot checks and inspections of the public areas, kitchens, bar wells and storage

areas and (b) the ability to command the production of invoices and other documents, and to

punish non-production through the administrative and/or criminal process. In the absence of

probable cause, the likelihood of finding anything of value in a desk drawer is de minimus. If

probable cause exists then a warrant may be obtained within a couple of hours or, quite likely,

another warrant exception, such as exigent circumstances or voluntary consent will apply.

Of equal importance, desk drawers, filing cabinets and computers located in office areas

are likely to contain private and confidential materials. Even in a commercial setting, individuals

keep personal and family materials in their desks. Additionally, one would expect to find trade

secrets, confidential business records and personnel related documents in office settings. There

is clearly no necessity to peruse these materials as part of a Liquor Commission inspection.

Further the statutory inspection regime provides no meaningful limits as to time or scope.

The pertinent statutes provide only that (a) “frequent inspections…be made” of licensed

“premises”, RSA 175:57 and (b) the actual license to sell wine and beer may be examined at any

time. RSA 176:9. Although the Liquor Commission is authorized to enact an inspection

protocol through administrative rules, it has chosen not to do so. Instead, the Division of

Enforcement reads the statute broadly, claiming the right to forcibly open every closed and

locked container found in every store, restaurant and lounge that sells alcohol. This reading

invites uncertain and even arbitrary enforcement and is, therefore, not a constitutionally adequate

substitute for a warrant.

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For these reasons, the administrative inspection exception to the warrant requirement

does not apply. Accordingly, the search of Gness’ desk draw violated the Fourth Amendment

and Article 19. The trial court’s ruling to the contrary should be reversed and the case remanded

with an instruction to grant Gness’ motion to suppress.

16

ARGUMENT

I. STANDARD OF REVIEW When reviewing a trial court's ruling on a motion to suppress, this court accepts its

factual findings unless they lack support in the record or are clearly erroneous. State v. Smith,

163 N.H. 427, 428 (2012); State v. Joyce, 159 N.H. 440, 444 (2009). The trial court's legal

conclusions are reviewed de novo. Smith, 163 N.H. at 428; Joyce, 159 N.H. at 444; State v.

Kousounadis, 159 N.H. 413, 418 (2009).

II. OVERVIEW A search conducted by a governmental agency is per se unreasonable and violative of

Part 1, Article 19 of the New Hampshire Constitution and the Fourth Amendment to the United

States Constitution unless it is supported by either a warrant or a “well recognized exception” to

the warrant requirement. Appeal of Morgan, 144 N.H. 4, 49 (1999) (“Absent a recognized

exception, a warrantless search by a government body is per se unreasonable and invalid.”); State

v. Saunders, 164 N.H. 342, 353-354 (2012); (“[W] arrantless searches are per se unreasonable

unless they fall within the narrow confines of a judicially crafted exception.”); State v. LaBarre,

160 N.H. 1, 7 (2010); Arizona v. Gant, 556 U.S. 332, 338 (2009); Katz v. United States, 389

U.S. 347, 357 (1967).

In this case, the trial court found that the warrantless search of Gness’ desk drawer was

justified under the warrant exception for administrative inspections. A,45-47, citing State v.

Turmelle, 132 N.H. 148 (1989). This ruling was error and should be reversed because two of the

essential elements of this warrant exception are lacking:

(A) The Liquor Commission’s inspection regime fails to limit the inspecting officer’s

discretion. Therefore, as applied to non-consensual searches of closed drawers and cabinets in

17

offices, the inspection regime lacks the regularity and certainty that may serve as "a

constitutionally adequate substitute for a warrant.” Turmelle, 132 N.H. at 150, citing New York

v. Burger, 482 U.S. 691, 703 (1987).

(B) Warrantless searches of closed drawers and cabinets in offices are not necessary to

further the State’s regularity scheme. Turmelle, 132 N.H. at 150. In those rare circumstances in

which there is a compelling justification for a non-consensual search of an office desk drawer,

either (i) another exception to the warrant requirement may apply (e.g. exigent circumstances

accompanied by probable cause) or (ii) the premises may be secured for the brief time that it

takes to obtain a warrant.

This brief is not a wholesale challenge to the Liquor Commission’s ability to perform

warrantless annual inspections and premises checks. Warrantless visual inspections of public

areas, storage rooms, bar wells and restaurant kitchens are both necessary to the regulatory

scheme and sufficiently limited in scope to qualify under the warrant exception. However, if the

Chief of the Division of Enforcement is taken at his word, his investigator/prosecutors can

rummage, with or without an iota of probable cause, through every desk drawer, every computer

and every stack of paper in every office of every restaurant, lounge, convenience store,

supermarket and other establishment where alcohol is sold in the State. That is a bridge too far.

III. THE ADMINISTRATIVE INSPECTION EXCEPTION

In Turmelle this court adopted the administrative inspection exception to the State

Constitutional warrant requirement. Turmelle involved an almost archetypical administrative

inspection. A U.S. Department of Agriculture plant quarantine officer inspected a package at an

airport in Hawaii. Turmelle, 132 N.H. at 150. The quarantine officer’s job to was to prevent the

spread of harmful species and associated plant diseases and insect infestations to the continental

18

United States. Turmelle, 132 N.H. at 153. He was making inspections pursuant to federal

regulations that allowed him to open a package only upon a “reasonable belief” that it contained

the type of agricultural contraband specified in the regulations. Id. This officer determined that

the package in question had the “weight and feel” associated with an agricultural product. Id.

He also opined that, for other reasons, it might well contain agricultural contraband. Id. When he

opened the package he discovered controlled drugs that were eventually traced to an individual

in New Hampshire. That individual was then charged with a drug offense and he filed a

suppression motion arguing that the quarantine officer made an unlawful warrantless search.

The facts of Turmelle prove the need for the administrative inspection exception. The

government had a substantial and compelling interesting in quarantining harmful species. The

quarantine could not possibly be enforced if USDA officers needed a judicial branch warrant and

probable cause to carry out inspections. The inspections at issue were limited to cargo going to

the continental United States that did not bear agricultural permit stamps, for which there was

reasonable suspicion of contraband.

The holdings in Turmelle fit hand in glove with these facts. Under Turmelle, a search

warrant is not required if, and only if, three essential elements are met:

(A) There must be a substantial government interest in the regulatory scheme pursuant to

which the inspection is made;

(B) Warrantless inspections must be necessary to further that regulatory scheme; and

(C) The implementation of the statutory inspection program must provide a

constitutionally adequate substitute for a warrant.

Turmelle, 132 N.H. at 153. With respect the last element, a statutory inspection scheme provides

a constitutionally adequate substitute for a warrant only if it is sufficiently limited in time, place,

19

and scope to protect against arbitrary enforcement. Appeal of Morgan, 144 N.H. at 50 (applying

Turmelle to pharmacy inspections). See also, State v. Livingston, 153 N.H. 399, 403-404 (2006)

(applying Turmelle to commercial vehicle inspections); State v. Plante, 134 N.H. 585, 588-589

(1991) (citing Turmelle and approving limited warrantless searches on entry to courthouses).

Turmelle adopted both the reasoning and the wording used by the U.S. Supreme Court in

New York v. Burger, 482 U.S. 691, 703 (1987). However, Turmelle did not address two

additional limits that Burger placed on the Fourth Amendment administrative inspection

exception. Under Burger, the exception only applies in the context of “closely regulated

industries” and only then when inspections are carried out pursuant to a regulatory “statutory

scheme.” Burger, 482 U.S. at 702. The Burger court reasoned that the owners and operators of

commercial enterprises that are subject to pervasive regulation have a reduced—but still

legitimate and Constitutionally enforceable—expectation of privacy that can coexist with a

properly tailored statutory scheme for administrative inspections. Burger, 482 U.S. at 702.

Presumably, the requirements of “close and pervasive regulation” and a “statutory scheme” also

apply under Article 19, at least in cases of inspections of commercial premises by regulatory

agencies.

Burger involved a statutory inspection of an automobile junkyard in which Vehicle

Identification Numbers were recorded. The U.S. Supreme Court had no difficulty finding that

(a) the junk yard industry was closely regulated in New York, (b) the inspection was carried out

pursuant to a statutory scheme, (c) the government had a substantial interest in preventing the

trafficking in stolen vehicles and their parts, (d) warrantless inspections of VIN numbers were

necessary as part of the regulatory scheme to prevent such trafficking, and (e) the statutory

inspections were sufficiently limited in time, place and scope by statute. See also, United States

20

v. Gonsalves, 435 F.3d 64 (1st Cir. 2006) (applying the Burger elements to inspections for

misbranded or adulterated drugs ); United States v. Maldonado, 356 F.3d 130, 135 (1st Cir. 2004)

(applying Burger to roadside interstate trucking inspections).

Each of the Burger/Turmelle elements is addressed below as applied to the facts of this

case. The first three elements are conceded. The latter two are contested.

Closely Regulated Industry: There is no question but that the manufacture, distribution

and sale of alcohol is closely and pervasively regulated in New Hampshire. See, RSA Title 13.

Cf: Colonnade Corp. v. United States, 397 U.S. 72 (1970) (noting the long history of regulation

of alcohol from colonial days to modern times); State v. VFW Post 3562, 525 N.E.2d 773 (Ohio

1988) (liquor industry is closely regulated for the purpose of the administrative inspection

exception to the Fourth Amendment); People v. Galvadon, 103 P.3d 923, 929 (Colo. 2005)

(same).

Existence Of A Statutory Inspection Scheme: RSA 179:57 provides, in pertinent part,

that “The [Liquor] commission shall cause frequent inspections to be made of all the premises

with respect to which any license has been issued under the provisions of this title.”

Additionally, RSA 176:9 provides that “Any member of the commission, assistant, or liquor

investigator may enter any place where liquor, beverages, or tobacco products are sold or

manufactured, at any time, and may examine any license or permit issued or purported to have

been issued under the terms of this title.” While these statutes provide scant guidance as to the

permissible scope of inspections, they certainly provide a statutory grounding for administrative

inspections.

Substantial Government Interest: The substantial government interest in regulating all

aspects of the alcohol industry is self-evident and conceded.

21

Necessity For Warrantless Inspections: This element is contested with respect to

searches of desk drawers, file cabinets and like in offices located on licensed premises. While a

strong argument can be made that more limited warrantless inspections and spot checks are

necessary to ensure compliance with the regulatory scheme, the need to rummage unimpeded

and unchecked through office desks, file drawers and computers is less compelling.

By making an unannounced inspection of the public areas, storage rooms, kitchens and

bar wells, and by demanding the production of invoices for inventory, the Liquor Commission

can verify virtually all aspects of compliance with Title 13. See e.g., JT, 33-34 (Testimony of

Division of Enforcement officer):

Q: When you go in on a premises inspection, are there certain regulations that you always look for?

A: Yes. Particular to that license, each license has different requirements. For

a combination license [as in Gness’ case], one of the main things we go and [sic] looking for is they are required to maintain $3,000 of wholesale value of inventory, having items from each of the food groups.

Q: Anything else that you're looking for? A: Particular to the combination license, they're required to have their license

posted. They're required to have an age poster posted in a conspicuous place within the premise as well. We check their inventory to make sure that they're purchasing inventory from the places they're supposed to be purchasing inventory from. We're looking to make sure they have their food items. And again within there, we're looking to make sure any of the patrons coming in are being ID'd if they look young, whether they're purchasing alcohol or tobacco. We're looking where the inventory is stored particular for that license.

Two aspects of the inspection process could involve recourse to documents typically

found in office drawers and cabinets. First, as noted above, the Division of Enforcements looks

to see that grocery stores (such as Dicks General Store) maintain an inventory with a wholesale

value of $3,000 or more. However, this appears to be done by eyeballing the inventory, rather

22

than by a meticulous review of the licensee’s invoices for food, which, of course would not even

disclose the whole value of the inventory. See e.g., JT, 36, 89-90 (officers explaining how they

visually confirmed the value of the food inventory by looking around Dick’s General Store). In

doubtful cases, the inspectors could demand the appropriate business records and, if they were

not produced, take administrative action to compel production.

Premises inspections also involve spot checks of invoices for alcoholic beverages.

However, all licensees have a statutory obligation to present those invoices for inspection. See,

RSA 179:35 (requiring “all sales slips and delivery slip” for the past sixty days to be “readily

available for examination.”). Thus, a licensee who either fails or refuses to produce such

documents may be subject to administrative and criminal sanctions. There is no need to have

law enforcement officers blindly perusing desks, filing cabinets and electronic files to locate

invoices.

Further, in the absence of particularized suspicion (and no suspicion is required under

RSA 179:57), the likelihood of finding anything of evidentiary value in a desk drawer is de

minimus. The likelihood of finding anything that would create an immediate and serious risk to

the public is even less than de minimus.

What would be likely, however, is the perusal and review of confidential and private

documents. Even in commercial settings, desk drawers, file cabinets and computers are

repositories of private information, ranging from personal documents and emails, to trade

secrets, confidential business correspondence and personnel records. The State’s interest in

regulating the sale of alcohol is not such that it needs round-the-clock, warrantless and

suspicionless access to the areas most likely to contain these materials.

23

Alternatively, when there is probable cause, either a search warrant or an administrative

inspection warrant, issued under RSA 595-B, can usually be obtained and executed within a

couple of hours. See e.g., JT,96 (officer explaining how he obtained a warrant almost

immediately after discovery the presumptive marijuana in Gness’ desk drawer). If obtaining a

warrant were impractical, other warrant exceptions, such as exigent circumstances or voluntary

consent might apply.

It is true that in Appeal of Morgan, 144 N.H. at 49-50, this court upheld an audit of

pharmacy records under the administrative search exception. However, Morgan can be

distinguished on two separate grounds. First, Morgan did not involve a search of desk drawers

and filing cabinets for the purpose of locating the pharmacy records. Rather it involved an audit

of records that, presumably, were produced for the audit by the pharmacy. Second, the statutory

scheme regarding the authorized sale of controlled drugs differs significantly from the statutory

scheme governing the sale of alcohol. Prescription drugs may only be dispensed to individuals

who have the appropriate physician’s orders and regulators should be able to track each pill via a

paper trail from the manufacturer all the way to the patient. In contrast, Gness was only not

required to keep records identifying each and every purchaser of beer and wine. He was only

required not to sell to minors and intoxicated individuals.

Because warrantless searches of desk drawers, file cabinets and computers in office areas

of licensed premises is not necessary to further the regulatory scheme governing the sale of wine

and beer, the search of Gness’ desk drawer cannot be justified under the administrative

inspection exception to the warrant requirement. For this reason alone, the trial court’s ruling

denying Gness’ motion to suppress must be reversed.

24

Limitation On Discretion: The Division of Enforcement’s premises inspection regime

places no limits on the inspecting officer’s discretion and therefore fails to provide the regularity

and certainty that both this Court and the U.S. Supreme Court require. The pertinent statutes say

nothing about the timing, scope, extent and nature of premises inspections. They provide only

that (a) “frequent inspections…be made” of licensed “premises”, RSA 175:57 and (b) the actual

license to sell wine and beer may be examined at any time. RSA 176:9. The statutes contain no

express authority for searching closed containers, desk drawers, filing cabinets and computers.

Although the Liquor Commission is authorized to enact administrative rules, RSA

176:14, it has not promulgated any enforceable protocols for premises inspections. See

generally, N.H. Code of Administrative Rules, Liq. 600.01 et. seq. (Enforcement Policy). The

individual most responsible for implementing the inspection regime, the Chief of the Division of

Enforcement takes the position that the phrase “frequent inspections…of all the premises” in

RSA 175:57 authorizes him to search “anything [a licensee] has a direct or indirect interest in”

that is located on the licensed premises, TS, 18, including in particular desk drawers. TS, 19.

See also, TS, 45 (Division of Enforcement officer opining that he has authority to break open

locked suitcases and forcibly open locked desk drawers without consent or a warrant); TS, 65

(Another officer opining that he has the right to “look[] in cabinets…and in desk drawers” during

premises inspections). But see, Liquor Shop, Inc. v. State Liquor Authority, 249 N.E.2d 440,

444-445 (N.Y. 1969) (criticizing liquor inspector’s belief that his statutory authority to “inspect”

“premises” allowed him to search inside the pocket of a coat hanging in a back room of a bar).

This court has not yet opined on whether RSA 175:57 sufficiently cabins the discretion of

the Division of Enforcement to satisfy Turmelle and Burger. However, at least one other

jurisdiction has found that a similarly worded inspection statute failed to provide constitutionally

25

adequate limits on the inspecting officer’s discretion. In State v. VFW Post 3562, 525 N.E.2d

773 (Ohio 1988), the Ohio Supreme Court ordered the suppression of evidence obtained during a

warrantless inspection conducted by that state’s Liquor Department. The facts and holdings of

the case are summarized below.

The VFW Post case arose from an investigation into reports of gambling on the premises

of a VFW post that served alcohol to its members and guests. Three Liquor Department

demanded entry and proceeded to inspect the club. They located video machines and accounting

records indicating that the machines were used for gambling. The club was prosecuted for

possession of gambling devices. It filed a motion to suppress arguing that the inspection was

unconstitutional because it was not conducted pursuant to a warrant or a recognized warrant

exception. The State claimed that the administrative inspection exception to the warrant

requirement applied.

The Ohio Supreme Court disagreed. The governing statute allowed the Liquor

Department to “[i]nspect, upon demand, the books, accounts, records, memorandums, and place

of business of any person” subject to Ohio’s alcohol licensing statutes. VFW Post, 525 N.E.2d at

775. The Court held that this broad language failed to adequately limit the scope, time and place

of the search:

Clearly, the United States Supreme Court and courts applying the law as announced by the Supreme Court have established a strict but reasonable requirement that where the premises of a person operating a licensed business are searched by agents of the licensing authority acting pursuant only to their administrative authority and without the sanction of a judge or magistrate, the search must be executed pursuant to statutory standards that limit the scope, time, and place of the search. In the present case, there were no restraints on the discretion of the investigators. [The Ohio statute] contains no limitations on the hours of administrative searches. It fails to delineate what may be searched. … The warrantless administrative search by agents of the Department of Liquor Control in this case, therefore, was unreasonable.

26

VFW Post , 525 N.E.2d at 777-778. See also, Thorobred, Inc. v. Louisville/Jefferson County

Metro Gov't, 2005 U.S. Dist. LEXIS 22116, 2005 WL 2429079 (W.D. Ky. Sept. 30, 2005)

(ordinance providing for inspection of establishments where alcohol is served held

unconstitutional because it failed to sufficiently limit the time and scope of inspections);

Manning v. Mayes, 2010 U.S. Dist. LEXIS 72500, 2010 WL 2858455 (W.D. Ky. July 19, 2010)

(questioning whether ordinance allowing inspection of places of amusement adequately limited

the inspecting officer’s discretion); Turner v. Dammon, 848 F.2d 440 (4th Cir. 1988)

(administrative inspection exception to warrant requirement did not apply to repeat and

disproportionate inspections of topless bar conducted under statute authorizing inspections of

places serving alcohol).

The New Hampshire statute is even more amorphous than the Ohio statute. It leaves the

definition of the terms “inspection” and “premises” to the eye of the beholder. While that

definition could have been narrowed through administrative rulemaking, it has not been. Instead,

it has been read particularly broadly by those charged with its enforcement to allow, depending

on the inspecting officer’s gut, anything from an unobtrusive look around to the forcible opening

of locked suitcases and desk drawers. Worse, the inspecting officers are all certified law

enforcement officers with the power to bring charges and prosecute offenders. They wear both

administrative and prosecutorial hats at the same time. In this case they were investigating

potential felony conduct, i.e. the unlicensed sale of hard liquor, and the record does not suggest

any pre-inspection determination that criminal charges were off the table. Thus, the

administrative inspection regime, as implemented by the Division of Enforcement, allows

discretionary, warrantless searches on less than probable cause of every nook and cranny of a

licensee’s office in the hope that the search will turn up evidence of felonies.

27

This court should hold that RSA 175:57 fails to provide constitutionally adequate limits

on the timing and scope of Division of Enforcement inspections. Therefore, this court should

find that the search of Gness’ desk drawer cannot be justified under administrative inspection

exception to the warrant requirement.

CONCLUSION The trial court’s order denying Gness’ motion to suppress should be reversed. The case

should be remanded with an instruction that the motion to suppress be granted.

Respectfully Submitted, ________________________ Andrew R. Schulman, Esq. N.H. Bar 2276 Getman, Schulthess & Steere P.A. 1838 Elm Street Manchester, NH 03104

603-634-4300

REQUEST FOR ORAL ARGUMENT

Defendant requests this court to schedule an oral argument. An oral argument may prove helpful to the court in light of the legal and factual issues presented in this case.

CERTIFICATE OF SERVICE I, Andrew R. Schulman, hereby certify on February 25, 2013, that I served two copies of this Brief on counsel for the State, by first class mail, postage prepaid, to Office of the Attorney General, 33 Capitol Street, Concord, NH 03301. ________________________________ Andrew R. Schulman