Does Louisiana’s “secondhand dealer law” violate the Fourth amendment to the Unites States Constitution? In addition to banning cash transactions, Louisiana’s Revised Statute 37:1861 et seq. poses a myriad of problems including a potential violation of the U.S. Constitution by allowing for and even requiring unlawful searches and seizures. R.S. 37:1861 et seq. regulates those considered secondhand dealers, however, the definition of a secondhand dealer is so broad that it may encompass anyone from Amazon.com to a housewife trading used baby clothing. A secondhand dealer is defined as “… Anyone, other than a non-profit entity, who buys, sells, trades in or otherwise acquires or disposes of junk or used or secondhand property more frequently than once per month from any other person, other than a non-profit entity, shall be deemed as being in the business of a secondhand dealer. ”
The Fourth Amendment to the United States constitution reads- “The right of the people to be secure in their persons, house, 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.” (U.S. Const. Amend. IV)
The Fourth Amendment protects citizens from unwarranted and unreasonable search and seizures when such actions are conducted by governmental entities/agents. Generally, if a citizen has an expectation of privacy, and this expectation of privacy is “reasonable” according to societal expectations, then the government must issue a warrant backed by probable cause prior to initiating a search or seizure. If no warrant is issued, the governmental search or seizure may only be appropriate in light of certain exceptions to the warrant requirement (ie. Search incident to arrest, automobile search, emergency search, inventory search, consent, plain view, stop and frisk or valid administrative searches).
Most business people fully understand that business records and customer lists are private proprietary business assets, and their value is due in large part to the information remaining private. Additionally, both society and the law protect and value the privacy of contracts and the particulars of private business transactions. Economic privacy and the protection of personal papers and effects is a long standing tradition in the United States.
LA R.S. 37:1861 et seq. and the recent additions made to this part of the law by Louisiana House Bill 195 (Act 389), require that secondhand dealers turn over their business records to local law enforcement on a daily basis for transactions where the secondhand dealer purchases any used or secondhand property. In the name of tracking stolen goods and criminals, the state has created a system in which to conduct business a secondhand dealers must collect their clients personal information (Name, Picture, Address, Driver’s License #, ect.), a detailed description of the merchandise purchased and transaction information, and then turn this information over to the government. Regardless if there is any probable cause that the item(s) purchased are stolen or the seller is involved in any criminal activity, a secondhand dealer must allow for a search and seizure of their private business records by the state or face criminal consequences. Failure to collect and deliver this private transaction information is prima facie evidence that the purchaser is buying items with knowledge that they are stolen goods.
Has the state of Louisiana now attempted to extend the notion that transacting in used or secondhand property is sufficient probable cause to suspect criminal activity?
Not only may the secondhand dealer be subject to an unreasonable search and seizure of their proprietary business asset, an individual selling their property is subject to having their personal information and business records delivered to the government by the purchaser. Although the purchaser is technically not a governmental actor, they are required to essentially act like an agent of the government.
Private Citizens Acting As Government Agents
U.S. courts have long held that private citizens can be acting as a government agent in violation of the Fourth Amendment. The extent of the private citizen’s involvement is the crucial inquiry. If the involvement is too great, the private individual’s actions can be considered in kind to a governmental agent. Factors that courts consider include: 1. whether the government knew and acquiesced in the intrusive conduct, and 2. whether the party performing the search intended to assist law enforcement efforts or to further his own ends.
Louisiana’s secondhand dealer law mandates that for a secondhand dealer to purchase used or secondhand property, they are required to obtain a seller’s personal information and to deliver this along with the business transaction information to the police. A seller of used or secondhand property is simply not afforded the right to contract for confidentiality with the secondhand dealer in the sale of their property. Reasonable minds may inquire if this type of action may be viewed as a government action though a private citizen.
As a closing point of inquiry, consider the consequences of an environment where the state can require that any private business must gather and disclose their business relationships, transactions and private papers as a prerequisite to completing transactions, and where an individual’s transaction history is tracked and stored by the government. Should Walmart have to disclose their business transactions simply because it is possible that the items or medium of payment could have at some point been stolen? Should the state make Walmart an agent of the government that is required by law to assist law enforcement in tracking all transactions even in the absence of probable cause?
The enrolled version of Act 389 of the 2011 Louisiana legislative session can be found HERE
Thad D. Ackel, Jr. serves as lead counsel at Ackel & Associates L.L.C., Broker of Tribute Real Estate and works as a legislative lobbyist with The Liberty Lobbying Group. He may be reached by email @ email@example.com
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