The Volokh Conspiracy - Second Circuit rules in favor of firearms dealers on procedural due process:

Spinelli v. City of New York was decided on August 7, by Judges Calabresi and Walker. Judge Sotomayor had been on the panel, but did not participate in the decision, due to her elevation to the Supreme Court.

Angela Spinelli had been doing business a licensed firearms dealer in the Bronx for decades. Pursuant to New York City law, the police conducted an unannounced inspection of her premises in October 2001. They found security violations, seized all her firearms, and suspended her license for selling firearms. Spinelli fixed the security violations, and 58 days after the suspension, her license and firearms were restored.

In the lawsuit arising from the NYCPD conduct, the Second Circuit ruled:

1. There was no Fourth Amendment violation to the unannounced search, because it was conducted pursuant to the NYC Code, and because firearms dealers, as a pervasively regulated business, have little expectation of freedom from warrantless inspection.
2. Spinelli was not entitled to due process prior to the license suspension and the seizure of her inventory, because of the necessity for rapid action to protect public safety.

3. Spinelli was entitled to post-seizure due process, including notice (of what the specific security violations were) and a hearing. New York City refused to provide this, and accordingly, summary judgement should be entered against the City on this issue, and the district court should make a determination regarding damages. The fact that Spinelli was able to hire a lawyer to negotiate with the City does not cure the City's due process violation.

4. Spinelli had a property interest in her firearms business license. In contrast to a NY State handgun carry license (for which there is nearly unlimited discretion for revocation), a firearms dealer license is a property right, because the grounds for revocation are limited.

5. Because Spinelli has a valid federal claim (post-seizure due process), the federal district court also has jurisdiction over Spinelli's state law claim of tortious interference with business relations. The case in district court should proceed forward on this issue.

Items 3-5 reversed the decision of district court Judge Richard Casey. I have not read the briefs in this case, so it is possible that there are problems in the decision which are not obvious merely from reading the appellate opinion. However, within the four corners of the opinion, the decision seems generally correct based on existing precedent. Not that I necessarily agree with all the precedent, but the Second Circuit's application of that precedent appears reasonable.

FURTHER THOUGHTS: Commenters are arguing a lot about #1, which is fine, although as a matter of law this is well settled. Upon further reflection, I think that if there's a part of the opinion where the Second Circuit could reasonably have ruled the other way, it's #2. The Circuit is of course right that preventing guns from getting stolen (the security violations) is a very important government interest, and all the more so immediately post-9/11. So too, however, is the acquisition of firearms by law-abiding citizens, and all the more so post-9/11. The firearms seizures prevented the acquisition of guns by some customers who had already paid for them (and who were going through the NYC registration process). Accordingly, the better course of action for the NYCPD would have been to tell Spinelli immediately what the violations were (broken fence in the backyard, counter not under constant supervision, safes open), and then give Spinelli the opportunity continue business operations if she immediately cured the security defects. For example, she could have hired 24-hour security guards for the backyard until the fence was repaired; she could have hired another guard to stay at the counter every moment that the store was open, while the store interior was being reconfigured to keep the ocunter in view at all times. And so on. Even if the case did not involve constitutionally-protected items for which lawful sale to the public is itself a matter of improving public safety (e.g., if Spinelli owned a liquor store rather than a gun store), then offering the opportunity for an immediate cure would seem to be the better course for the regulators. Whether the failure to offer the option of an immediate cure rather than a suspension constitutes a violation of constitutional due process is perhaps a more difficult question than the Second Circuit realized, although I would not say that the Second Circuit's decision was plainly wrong as a matter of law.

	[David Kopel, August 17, 2009 at 12:40pm] Trackbacks Second Circuit rules in favor of firearms dealers on procedural due process: Spinelli v. City of New York was decided on August 7, by Judges Calabresi and Walker. Judge Sotomayor had been on the panel, but did not participate in the decision, due to her elevation to the Supreme Court. Angela Spinelli had been doing business a licensed firearms dealer in the Bronx for decades. Pursuant to New York City law, the police conducted an unannounced inspection of her premises in October 2001. They found security violations, seized all her firearms, and suspended her license for selling firearms. Spinelli fixed the security violations, and 58 days after the suspension, her license and firearms were restored. In the lawsuit arising from the NYCPD conduct, the Second Circuit ruled: 1. There was no Fourth Amendment violation to the unannounced search, because it was conducted pursuant to the NYC Code, and because firearms dealers, as a pervasively regulated business, have little expectation of freedom from warrantless inspection. 2. Spinelli was not entitled to due process prior to the license suspension and the seizure of her inventory, because of the necessity for rapid action to protect public safety. 3. Spinelli was entitled to post-seizure due process, including notice (of what the specific security violations were) and a hearing. New York City refused to provide this, and accordingly, summary judgement should be entered against the City on this issue, and the district court should make a determination regarding damages. The fact that Spinelli was able to hire a lawyer to negotiate with the City does not cure the City's due process violation. 4. Spinelli had a property interest in her firearms business license. In contrast to a NY State handgun carry license (for which there is nearly unlimited discretion for revocation), a firearms dealer license is a property right, because the grounds for revocation are limited. 5. Because Spinelli has a valid federal claim (post-seizure due process), the federal district court also has jurisdiction over Spinelli's state law claim of tortious interference with business relations. The case in district court should proceed forward on this issue. Items 3-5 reversed the decision of district court Judge Richard Casey. I have not read the briefs in this case, so it is possible that there are problems in the decision which are not obvious merely from reading the appellate opinion. However, within the four corners of the opinion, the decision seems generally correct based on existing precedent. Not that I necessarily agree with all the precedent, but the Second Circuit's application of that precedent appears reasonable. FURTHER THOUGHTS: Commenters are arguing a lot about #1, which is fine, although as a matter of law this is well settled. Upon further reflection, I think that if there's a part of the opinion where the Second Circuit could reasonably have ruled the other way, it's #2. The Circuit is of course right that preventing guns from getting stolen (the security violations) is a very important government interest, and all the more so immediately post-9/11. So too, however, is the acquisition of firearms by law-abiding citizens, and all the more so post-9/11. The firearms seizures prevented the acquisition of guns by some customers who had already paid for them (and who were going through the NYC registration process). Accordingly, the better course of action for the NYCPD would have been to tell Spinelli immediately what the violations were (broken fence in the backyard, counter not under constant supervision, safes open), and then give Spinelli the opportunity continue business operations if she immediately cured the security defects. For example, she could have hired 24-hour security guards for the backyard until the fence was repaired; she could have hired another guard to stay at the counter every moment that the store was open, while the store interior was being reconfigured to keep the ocunter in view at all times. And so on. Even if the case did not involve constitutionally-protected items for which lawful sale to the public is itself a matter of improving public safety (e.g., if Spinelli owned a liquor store rather than a gun store), then offering the opportunity for an immediate cure would seem to be the better course for the regulators. Whether the failure to offer the option of an immediate cure rather than a suspension constitutes a violation of constitutional due process is perhaps a more difficult question than the Second Circuit realized, although I would not say that the Second Circuit's decision was plainly wrong as a matter of law.