Opinion ID: 1199170
Heading Depth: 1
Heading Rank: 4

Heading: the validity of the commission's process for inspection of lincoln's financial records

Text: The Commission's authority to examine a person's records for abandoned property is not purely discretionary. The enforcing agency must have reason to believe that the person has failed to report property presumed abandoned by the Unclaimed Property Act. [42] The trial court found that the Commission had no reason to believe that the Bank had failed to comply with the Act. Under the standard adopted today for determining the validity of the Commission's process for pre-dispute inspection of documents pursuant to the Unclaimed Property Act, we hold that the statutory reason-to-believe requirement is satisfied. The standard to be applied for testing the underlying basis of the Commission's reason to believe (or reasonable believe that any person has failed to comply with the Act is no stricter than that which the U.S. Supreme Court applies in cases where the administrative agency seeks a search warrant to inspect a regulated business for compliance with governing statutes and regulations. In Marshall v. Barlow's, Inc. [43] the Court held that, after access is refused, the Occupational Safety and Health Administration must secure a warrant or other process, with or without prior notice. Although the Commission need not obtain a warrant here, entitlement to inspect ... [does] not depend on... [a demonstration of] probable cause to believe that [the law has been violated]... . Probable cause in the criminal law sense is not required. For purposes of an administrative search...[, like that attempted by the Commission], probable cause ... may be based not only on specific evidence of an existing violation but also on a showing that `reasonable legislative or administrative standards for conducting an ... inspection are satisfied... .'  [44] (Citation omitted and emphasis added.) An inspection by the Commission is hence permissible and meets the statutory reasonable belief requirement when the suspected holder of unreported abandoned property has been chosen on the basis of a general administrative plan for the enforcement of the Act derived from neutral sources. [45] Because the trial court sat in equity when it permanently enjoined the Commission, the standard for appellate review is whether its decision is clearly contrary to the weight of the evidence. [46] If it is, this court will render a decision that accords with the applicable legal norms and with the weight of the proof. [47] The evidence relevant to this inquiry consists of, for example, testimony by a witness for the Commission that non-compliance with the requirements of the Unclaimed Property Act is widespread among banks in this state. According to undisputed testimony an audit program began in 1982 when the legislature appropriated funds sufficient to boost the enforcement effort. [48] Once the inspections started, the number of reporting banks tripled. Lincoln's own reporting history contributed to the need for examination. Of the reports that it had submitted, reference was made only to checking and savings accounts and, on occasion, to interest checks, while reports from other banks referred to one or more of the following additional sources: cashiers' checks, certificates of deposit, safe deposit boxes, collateral and escrow accounts. At the time of trial 42% of Oklahoma's banks did not submit any reports, and, of the 260 banks that did, 48 indicated an absence of unclaimed property. Out of the 75 banks that have been examined, all had unreported abandoned property. This is perhaps the strongest indication that the Commission's state wide inspection program is not tainted by any discriminatory enforcement criteria or motives. Lincoln does not argue, and the record is devoid of any indication, that the Commission chose to investigate the Bank based on any non-neutral source. Moreover, the evidence considered today is undisputed. We conclude that the Commission had reason to believe Lincoln failed to comply with the Unclaimed Property Act. The burden of showing a neutral, nondiscriminatory pattern of enforcement has been met, and Lincoln's district court challenge to the pre-dispute inspection process in suit must hence fail. THE TRIAL COURT'S PERMANENT INJUNCTION DECREE IS REVERSED; CASE IS REMANDED WITH DIRECTIONS TO DISSOLVE THE INJUNCTION AND TO ENFORCE THE COMMISSION'S ADMINISTRATIVE PROCESS IN ACCORDANCE WITH THIS PRONOUNCEMENT. HODGES, V.C.J., and LAVENDER, HARGRAVE, ALMA WILSON and SUMMERS, JJ., concur. DOOLIN and KAUGER, JJ., dissent. SIMMS, J., dissents.