Court Opinion

ID: 4250178
Source: CourtListenerOpinion
Date Created: 2018-02-28 21:23:43.495514+00
Date Added: 2024-06-11T14:44:13.652563
License: Public Domain

IN THE SUPREME COURT OF IOWA
                            No. 90 / 04-1271

                           Filed April 20, 2007

STATE OF IOWA,

      Appellee,

vs.

KENNETH DALE CARTER,

      Appellant.

      On review from the Iowa Court of Appeals.

      Appeal from the Iowa District Court for Webster County, Fredrick E.

Breen, District Associate Judge.

      Defendant appeals from conviction of possession of marijuana in

violation of Iowa Code section 124.401(5) (1997). DECISION OF COURT OF

APPEALS VACATED; JUDGMENT OF DISTRICT COURT REVERSED;

CASE REMANDED.

      Mark C. Smith, State Appellate Defender, Shellie L. Knipfer, Assistant

State Appellate Defender, and Travis Johnson, Drake Student Intern, for

appellant.

      Thomas J. Miller, Attorney General, Karen Doland, Assistant Attorney

General, Timothy N. Schott, County Attorney, and Jonathan Beaty,

Assistant County Attorney, for appellee.
                                      2

LARSON, Justice.

      Kenneth Carter appealed his conviction for drug possession, claiming

that evidence seized from his home was erroneously admitted into evidence.

The district court rejected his argument, as did the court of appeals. On

further review, we vacate the decision of the court of appeals, reverse the

judgment of the district court, and remand.

      I. Facts and Prior Proceedings.

      Kenneth Carter was charged with drug offenses based on evidence

seized in a March 1997 search of his home. That case was dismissed on

application of the State and is not involved in this appeal. After the case

was dismissed, the Iowa Department of Revenue and Finance (department)

began proceedings under Iowa Code chapter 453B (1997) to collect drug

taxes in the amount of $6060, based on Carter’s possession of marijuana

plants observed during the March 1997 search. Despite the fact that the

criminal case arising out of that possession had been dismissed, the

department, on December 4, 1997, obtained an administrative search

warrant to search Carter’s home again. A representative of the department

and a police officer served the warrant and, in the process, noted marijuana

odor and a marijuana pipe. Based on this information, the police officer

applied for, and obtained, a criminal search warrant to search Carter’s

home again. This search yielded the marijuana that provided the basis for

the present prosecution. Carter was convicted, and he appealed. His

conviction was affirmed by this court in an unreported decision in 1999. In

that decision, we reserved his ineffective-assistance claim for possible

postconviction relief proceedings.

      On Carter’s postconviction application, the district court set aside his

conviction and ordered a new trial. Prior to the new trial, Carter filed a

motion to suppress, claiming that the marijuana evidence was seized in
                                     3

violation of his federal and state constitutional rights. The motion did not

provide specific grounds for the constitutional arguments, but the district

court at the hearing on the motion put the issue in sharp focus:

            My understanding is that the legal issue is rather
      narrowly defined, that says if the officer had the right to be in
      the place where he was when he made the observations at the
      time of the execution of the administrative warrant, then the
      criminal warrant is not invalid. If, on the other hand, he had
      no right to be where he was because of something improper
      about the execution or granting of the administrative warrant,
      then the criminal warrant is no good.

      As the district court noted, the administrative search warrant provided

the basis for the later issuance of the criminal warrant. Carter contends

that the administrative warrant was invalid, and the evidence seized as a

result of it was therefore inadmissible under the principle of fruit of the

poisonous tree.
      II. Standard of Review.

      We review challenges to the constitutionality of a statute de novo.

State v. Seering, 701 N.W.2d 655, 661 (Iowa 2005). Statutes are presumed

to be constitutional, and a challenger must prove unconstitutionality

beyond a reasonable doubt. Id.; Schroeder Oil Co. v. Dep’t of Revenue & Fin.,

458 N.W.2d 602, 603 (Iowa 1990).         The challenger must refute every

reasonable basis upon which the statute could be found constitutional, and

if the statute may be construed in more than one way, we adopt the

construction that does not violate the constitution. Iowa Code § 4.4 (“In

enacting a statute, it is presumed that:         (1) Compliance with the

Constitutions of the state and of the United States is intended.”); Seering,
701 N.W.2d at 665.

      III. The Statutes.

      A. The drug-tax statute in general. Iowa Code chapter 453B imposes

an excise tax on dealers of certain controlled substances, including
                                       4

marijuana. See Iowa Code §§ 453B.1(3)(c) (covering marijuana plants),

453B.7 (imposition of tax). The statute does not require a conviction, or

even an arrest, for drug dealing in order to impose the excise tax. Id.; see

State v. Eames, 565 N.W.2d 323, 324 (Iowa 1997) (conviction of mere

possession). At the time of the administrative search in this case, there was

not even a pending criminal case.

      B. Jeopardy assessments in general.         Iowa Code section 422.30

provides for the collection of taxes through jeopardy assessments:

              If the director believes that the assessment or collection
      of taxes will be jeopardized by delay, the director may
      immediately make an assessment of the estimated amount of
      tax due, together with all interest, additional amounts, or
      penalties, as provided by law. The director shall serve the
      taxpayer by regular mail at the taxpayer’s last known address
      or in person, with a written notice of the amount of tax,
      interest, and penalty due, which notice may include a demand
      for immediate payment. Service of the notice by regular mail is
      complete upon mailing. A distress warrant may be issued or a
      lien filed against the taxpayer immediately.

A jeopardy assessment, which is in the nature of an emergency-collection

procedure, is defined as “[a]n assessment by the [taxing authority]—without

the usual review procedures—of additional tax owed by a taxpayer who

underpaid, based on the [tax authority’s] belief that collection of a deficiency
would be jeopardized by delay.” Black’s Law Dictionary 112 (7th ed. 1999).

Jeopardy assessments are part of what we have described as “the

department’s sweeping tax collection authority.” Lumbermens Mut. Cas. Co.

v. State, 564 N.W.2d 431, 434 (Iowa 1997).

      C. Drug taxes and the jeopardy assessment statute. Section 422.30,

our general jeopardy assessment statute quoted above, is limited by its

terms to cases in which collection by ordinary means will be jeopardized by

delay. However, Iowa Code section 453B.9 creates a special presumption

that all assessments in drug-tax cases are jeopardy assessments:
                                      5
             All assessments of taxes made pursuant to this chapter
      shall be considered jeopardy assessments or collections as
      provided in section 422.30. The director shall assess a tax,
      interest, and applicable penalties based on knowledge or
      information available to the director; serve the taxpayer by
      regular mail at the taxpayer’s last known address or in person,
      a written notice of the amount of tax, interest, and penalty due,
      which notice may include a demand for immediate payment;
      and immediately proceed to collect the tax, interest, and
      penalty by any method prescribed in section 422.30. The
      period for examination, determination of amount of tax owed,
      and assessment is unlimited. Service of the notice by regular
      mail is complete upon mailing.

(Emphasis added.) The effect of this statute is to eliminate in all drug cases

any requirement that the director establish the need for the jeopardy

assessment or even that he “believes” the assessment is in jeopardy as

required by Iowa Code section 422.30 for other jeopardy assessments.
      D. The administrative search.       Pursuant to section 453B.9, the

director issued a distress warrant, directed to the sheriff, ordering him

      to forthwith distrain, seize, garnish or levy upon . . . any and
      all real or personal property belonging to the above said
      delinquent account . . . sufficient to satisfy said Tax Liability,
      plus sheriff & court costs, and to make due and prompt return
      to the Department of Revenue and Finance in Des Moines, Iowa
      or the District Court under Chapters 626 & 642, all taxes,
      penalty, interest penalty, interest and accrued costs so
      collected . . . .

      To assist the sheriff in locating assets from which to satisfy the

amount of drug tax due, the department applied for an administrative

search warrant under Iowa Code section 453B.11:

      The director may petition the district court or a magistrate for
      an administrative search warrant as authorized by section
      808.14 to execute a distress warrant authorized by section
      422.26.

      Section 808.14, in turn, provides authority for courts to issue

administrative search warrants “in accordance with the statutory and

common law requirements for the issuance of such warrants.”
                                     6

      IV. The Issue.

      The issue is whether the criminal search warrant, which yielded the

evidence in question in this case, was valid, and that, in turn, depends on

whether the administrative search that preceded it was valid.         If the

administrative search was not valid, the fruits of that search were

inadmissible under the principles of the fruit of the poisonous tree. See

Wong Sun v. United States, 371 U.S. 471, 83 S. Ct. 407, 9 L. Ed. 2d 441

(1963); cf. Adams v. State, 762 N.E.2d 737, 744 (Ind. 2002) (preliminary

search under distress warrant revealed drugs leading to criminal warrant).

      The defendant argues the searches were invalid under the Fourth

Amendment to the United States Constitution and article 1, section 8 of the

Iowa Constitution. For purposes of this opinion, we will refer to the rights

protected by the federal and state constitutions collectively as “Fourth

Amendment rights.” The Fourth Amendment provides:

            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.

The scope and purpose of Iowa’s search and seizure clause is coextensive

with the federal court’s interpretation of the Fourth Amendment. State v.

Loyd, 530 N.W.2d 708, 711 (Iowa 1995). In State v. Eames, we examined

section 453B.9 from a standpoint of procedural due process and found that

it was constitutional. 565 N.W.2d at 328. However, Fourth Amendment

issues were not involved in Eames.
      Administrative searches, like searches for evidence of crime, are

encompassed by the Fourth Amendment. Michigan v. Tyler, 436 U.S. 499,

504-05, 98 S. Ct. 1942, 1947, 56 L. Ed. 2d 486, 495 (1978). In fact, “one of

the primary evils intended to be eliminated by the Fourth Amendment was
                                     7

the massive intrusion on privacy undertaken in the collection of taxes

pursuant to general warrants and writs of assistance.” G.M. Leasing Corp.

v. United States, 429 U.S. 338, 355, 97 S. Ct. 619, 630, 50 L. Ed. 2d 530,

545 (1977). Nevertheless, administrative searches are treated differently,

for Fourth Amendment purposes, because generally the intrusion on

privacy is reduced. See Camara v. Mun. Ct. of San Francisco, 387 U.S. 523,

537, 87 S. Ct. 1727, 1735, 18 L. Ed. 2d 930, 940 (1967). An administrative

search warrant does not require the probable cause necessary for a criminal

warrant.   See O’Connor v. Ortega, 480 U.S. 709, 107 S. Ct. 1492, 94
L. Ed. 2d 714 (1987). According to O’Connor,

      “[w]here a careful balancing of governmental and private
      interests suggests that the public interest is best served by a
      Fourth Amendment standard of reasonableness that stops
      short of probable cause, we have not hesitated to adopt such a
      standard.”    We have concluded, for example, that the
      appropriate standard for administrative searches is not
      probable cause in its traditional meaning. Instead, an
      administrative warrant can be obtained if there is a showing that
      reasonable legislative or administrative standards for conducting
      an inspection are satisfied.

Id. at 723, 107 S. Ct. at 1500, 94 L. Ed. 2d at 726 (emphasis added)

(quoting New Jersey v. T.L.O., 469 U.S. 325, 341, 105 S. Ct. 733, 742, 83
L. Ed. 2d 720, 734 (1985)). Based on this principle, and as applicable to

the present case, the validity of an administrative warrant turns on whether

“reasonable legislative or administrative standards for conducting an area

inspection are satisfied with respect to a particular dwelling.” Camara, 387
U.S. at 538, 87 S. Ct. at 1736, 18 L. Ed. 2d at 941; accord Marshall v.

Barlow’s, Inc., 436 U.S. 307, 320-21, 98 S. Ct. 1816, 1824, 56 L. Ed. 2d
305, 316 (1978).

      With these general principles in mind, we look to the proceedings

underlying the administrative search in this case. The application for the

administrative warrant was very brief, stating only:
                                      8
             The Department would urge that a finding of the
      following factual elements would support the issuance of an
      administrative search warrant:
            1)    that an assessment of tax has been made against
      the taxpayer,
            2)    that notice and demand have been mailed to the
      taxpayer, and service will be attempted at time of activity,
            3)    pursuant to section 453B.9 . . . this assessment is
      a jeopardy assessment and subject to immediate collection,
             4)    the property subject to seizure[] presently exists at
      the premises sought to be searched and that the property
      either belongs to the taxpayer or is property upon which a lien
      exists for the payment of the taxes.

      Significantly, the application did not recite facts or even claim that

facts existed from which the court could find that the collection of taxes was

in jeopardy.    In fact, the application did not even state that the

administrator “believed” (in the words of section 453B.9) that the

assessment was in jeopardy. Exigency, which could show an assessment

was in jeopardy, did not seem to be a factor, considering that the

department was informed of Carter’s possession of marijuana “soon after”

the March 1997 search, but did not apply for the administrative warrant

until December 4, 1997. See G.M. Leasing Corp., 429 U.S. at 359, 97 S. Ct.

at 631, 50 L. Ed. 2d at 547 (two-day delay between observation of materials

and entry of premises for purposes of seizure found to defeat claim of

exigency).
      The administrative search warrant that was issued by the court in

response to the department’s application merely stated that “[b]ased on

sworn application made to the court, I have found that probable cause

exists to believe” that at the residence of the defendant, property and

records may be found relative to the tax assessment. The court made no

finding regarding jeopardy.
                                      9

      V. Validity of the Administrative Search.

      A. General principles regarding administrative searches. The Supreme

Court, in G.M. Leasing Corp., held that a warrantless intrusion into an area

protected by the Fourth Amendment was not justified merely because the

search was conducted to enforce tax laws. The Court assumed the tax

assessments and levies were proper, and the facts “necessarily establish[ed]

probable cause to believe that assets held by petitioner were properly

subject to seizure in satisfaction of the assessments.” Id. at 351, 97 S. Ct.

at 628, 50 L. Ed. 2d at 542-43. The Court held, however, that the federal

statute allowing seizure of property to satisfy tax obligations by “distraint

and seizure by any means” “does not refer to warrantless intrusions into

privacy.” Id. at 357, 97 S. Ct. at 631, 50 L. Ed. 2d at 546. It stated:

             The respondents urge that the history of the common law
      in England and the laws in several States prior to the adoption
      of the Bill of Rights support the view that the Fourth
      Amendment was not intended to cover intrusions into privacy
      in the enforcement of the tax laws. We do not find in the cited
      materials anything approaching the clear evidence that would
      be required to create so great an exception to the Fourth
      Amendment’s protections against warrantless intrusions into
      privacy.

Id. at 355, 97 S. Ct. at 630, 50 L. Ed. 2d at 545.         In answer to the

government’s argument in G.M. Leasing Corp. that Boyd v. United States,

116 U.S. 616, 6 S. Ct. 524, 29 L. Ed. 746 (1886), required a different result,

the Court stated:

      We do not find in Boyd any direct holding that the warrant
      protections of the Fourth Amendment do not apply to invasions
      of privacy in furtherance of tax collection. Insofar as language
      in Boyd might be read so to state, we decline to follow those
      dicta into rejection of the basic governing principle that has
      shaped Fourth Amendment law.

Id. at 356, 97 S. Ct. at 630, 50 L. Ed. 2d at 546.
                                     10

      G.M. Leasing Corp. drew a clear line between seizures from areas

protected by the Fourth Amendment, such as homes, and seizures from

public areas, such as streets.

      It is one thing to seize without a warrant property resting in an
      open area or seizable by levy without an intrusion into privacy,
      and it is quite another thing to effect a warrantless seizure of
      property, even that owned by a corporation, situated on private
      premises to which access is not otherwise available for the
      seizing officer.

Id. at 354, 97 S. Ct. at 629-30, 50 L. Ed. 2d at 545.

      Adams is also analogous to the present case in that, during the

search of the defendant’s home pursuant to an administrative distress

warrant to seize property for drug taxes, officers found illegal drugs. The

Indiana statute, like Iowa’s section 453B.9, provided that all assessments

for taxes due were considered jeopardy assessments. See Ind. Stat. 6-7-3-

13 (“An assessment for the tax due under this chapter is considered a

jeopardy assessment. The department shall demand immediate payment

and take action to collect the tax due as provided by [statute].”). In Adams

the court held that a search pursuant to this section, in which the

assessment was deemed per se to be a jeopardy assessment, was

unreasonable under the Fourth Amendment because the law gave officers

“boundless discretion to intrude upon the privacy of the home,” and noted

that there was nothing in the record to suggest the defendant was about to

abscond, hide assets, or destroy documents. Adams, 762 N.E.2d at 744.

Adams, relying on the principle of fruit of the poisonous tree under Wong

Sun, held that evidence seized during the administrative search was

inadmissible at the criminal trial because the administrative search that

yielded the evidence was unreasonable. Adams, 762 N.E.2d at 745.

      G.M. Leasing Corp. and Adams are distinguishable from the present

case in that those cases did not involve searches based on court-ordered
                                    11

warrants. G.M. Leasing Corp. involved a search of a premises under the

authority of a federal tax collection statute. Adams involved a search of a

home under the authority of a state tax collection warrant. While these

cases are distinguishable, they are significant because they illustrate the

solicitude of courts for Fourth Amendment rights in the face of sweeping

tax collection statutes. Moreover, if the administrative search warrant in

this case was invalid, as we later conclude it was, the warrant must be

disregarded in assessing the Fourth Amendment intrusion.

      B. The issuance of the administrative search warrant. Iowa Code

section 808.14 provides the statutory basis for administrative search

warrants:

            The courts and other appropriate agencies of the judicial
      branch of the government of this state may issue
      administrative search warrants, in accordance with the
      statutory and common law requirements for the issuance of
      such warrants, to all governmental agencies or bodies
      expressly or impliedly provided with statutory or constitutional
      home rule authority for inspections to the extent necessary for
      the agency or body to carry out such authority, to be executed
      or otherwise carried out by an officer or employee of the agency
      or body.

      Obviously, neither this statute, nor the Fourth Amendment, grant

carte blanche authority to courts to issue administrative search warrants.

Section 808.14 requires that administrative search warrants be issued “in

accordance with the statutory and common law requirements for the

issuance of such warrants.”       The Fourth Amendment requires that

“reasonable legislative or administrative standards for conducting an

inspection are satisfied” before an administrative search may be conducted.

O’Connor, 480 U.S. at 723, 107 S. Ct. at 1500, 94 L. Ed. 2d at 726.

      The problem in this case is that Iowa Code section 453B.9, on its

face, makes all drug tax assessments jeopardy assessments, thereby

opening the door to the issuance of administrative search warrants without
                                    12

the necessity of showing jeopardy and without any reasonable legislative or

administrative protections in place as required by the Fourth Amendment.

See O’Connor, 480 U.S. at 723, 107 S. Ct. at 1500, 94 L. Ed. 2d at 726. As

previously discussed, the application for the administrative search warrant

did not even claim the assessment was in jeopardy, and the court that

issued the warrant made no such finding. In fact, under section 453B.9, no

such showing or finding is required; drug tax cases are automatically put

on the fast track for collection proceedings, including searches.

      VI. The Constitutionality of Iowa Code Section 453B.9.

      If a statute is amenable to two interpretations—one that would make

it constitutional and the other that would make it unconstitutional—we

interpret it in the former manner. See 2A Norman J. Singer, Statutes and

Statutory Construction § 45.11, at 70-71 (2000 rev.).

            When possible, statutory provisions should be construed
      in such a way as to avoid unconstitutionality rather than
      simply void them on the basis of an interpretation which
      renders them constitutionally infirm. If the law is reasonably
      open to two constructions, one that renders it unconstitutional
      and one that does not, the court must adopt the interpretation
      that upholds the law’s constitutionality. It would also be
      preferable to construe the statute to support constitutionality
      rather than to rewrite or try to improve the statute in some
      other way.

Id.

      To construe section 453B.9 to allow the search of a residence without

any showing that the assessment is in jeopardy and without any showing of

“reasonable legislative or administrative standards” for conducting the

search (O’Connor, 480 U.S. at 723, 107 S. Ct. at 1500, 94 L. Ed. 2d at 726)

would doom the statute under the Fourth Amendment. We decline to

construe section 453B.9 that broadly; while the expedited drug tax

collection procedure might be permitted under other circumstances, when

the Fourth Amendment is not implicated (see G.M. Leasing Corp., 429 U.S.
13

at 354, 97 S. Ct. at 630, 50 L. Ed. 2d 545), it cannot be used under the

circumstances of this case to search a premises protected by the Fourth

Amendment.

      We need not decide whether section 453B.9, in other circumstances,

may constitutionally allow jeopardy assessments for the purpose of locating

assets or otherwise aiding in the collection of taxes. We agree with the

conclusion by the Indiana court, which limited the holding in Adams:

             Our holding that the search of Defendant’s home was
      unreasonable is a limited one. In this case, government
      officers intruded upon the privacy of a home. Our conclusion
      that this intrusion was unreasonable does not affect the
      Department’s ability to seize assets found in less private
      contexts. In fact, G.M. Leasing endorsed the government’s
      power to institute tax liens, seize assets found in public places,
      and take other basic measures to collect taxes so long as they
      do not involve warrantless intrusions into the home.

Adams, 762 N.E.2d at 746.

      For the reasons discussed, the administrative search violated Carter’s

Fourth Amendment rights, and the fruits of that search must be

suppressed. We vacate the decision of the court of appeals, reverse the

judgment of the district court, and remand for a new trial.

      DECISION OF COURT OF APPEALS VACATED; JUDGMENT OF

DISTRICT COURT REVERSED; CASE REMANDED.

      All justices concur except Hecht and Appel, JJ., who take no part.