California businesses have Fourth Amendment rights that require warrants prior to government searches. That is, unless the business is a “closely regulated industry.” Massage parlors fall into this category, so undercover officers, posing as patrons, can enter to see whether sexual encounters are proposed by employees. The Ninth Circuit ruled that such actions are permissible due to a variety of state laws and local ordinances.

Writing for a unanimous panel on July 8, Judge Stephen V. Wilson affirmed the district court’s dismissal of a claim by Phillip Killgore, owner of Lavender Massage in South El Monte, California. When Killgore opened his business in 2017, he did so under a Conditional Use Permit (CUP), issued by the City. Under the CUP, the City was given the right to issue its own regulations in order “to better control illicit operations and protect and promote the public health, safety and welfare by imposing stricter requirements on massage practitioners, therapists, and establishments.

This local law isn’t the only governmental attempt to prevent sex-related activities in massage parlors. California even passed a special law, the Massage Therapy Act (MSA), which institutionalized over 40 years of empowering local governments to better “manage” massage businesses in the “best interests of the individual community.”

To protect these interests in South El Monte, the CUP that permitted Killgore to open Lavender Massage had 16 separate provisions. Thus, from the very beginning of Lavender Massage’s operation, Killgore knew that his business would be closely watched. The hours, the “qualifications of his employees,” and the building would be subject to governmental oversight. He knew that he had to allow two inspections a year to make sure Lavender Massage was operating legally. Under the CUP, other practices, such as hygiene and advertising, were also closely watched.

Therefore, Killgore had plenty of advance notice that a 2017 visit by an undercover law officer should not have included a “proposition for sex” by one of the masseuses. A warrant followed and Killgore’s license was revoked. He filed his claim that said his Fourth Amendment rights had been violated by the City’s warrantless searches in August 2017. The district court dismissed his action in what Wilson called a “well-reasoned order,” and this unsuccessful appeal followed. It was clear to the court that because of the multiple laws to which he was subjected, there was “no reasonable expectation of privacy” in his massage parlors.

Massage parlors, like liquor stores, sporting weapon outlets, stone quarries, salmon fishing, family daycare and automobile junkyards are examples of businesses that are classified as “closely regulated industries.” Because these establishments are operating under local CUPS, Wilson noted that they “cannot help but be aware” that they will be subject to regular inspections. The CUPs specifically state that. A string of cases and a review of the CUP, as well as the MSA, are cited as precedent by Wilson, all of which led the Ninth Circuit to the conclusion that the City’s search of Lavender Massage was “a textbook application of the ‘closely regulated’ industry doctrine.”

In his appeal Killgore tried to compare his massage parlor to hotels, which enjoy greater Fourth Amendment protection. His argument failed.

The main case on which the Ninth Circuit relied was one that upheld CUPs for automobile junkyards. That case created a three-part test to determine the reasonableness of a warrantless search of a closely regulated industry. Those conditions are (1) the presence of a substantial government interest; (2) the search must be necessary to further the regulation; and (3) the inspection must provide a “constitutionally adequate substitute for a warrant.”

Wilson concluded that all three conditions were met. He wrote that there are clear government interests in preventing “prostitution and human trafficking” and that the warrant exception is necessary to “further the regulatory scheme.” He also reasoned that many violations of law, such as a prohibition on sexual activities, would not be detected without an exception to warrant laws. In addition, he points out that the City’s actions are not given with “unfettered discretion.” CUPs put limits on the hours, number and circumstances that govern inspections.

Wilson’s 15-page opinion, joined by Judges John B. Owens and Bridget S. Bade, concluded, “Accordingly, the district court properly dismissed Killgore’s Fourth Amendment claim.”