CA10: Kansas Pet Animal Act did not satisfy the closely regulated industries exception

The Kansas Pet Animal Act did not satisfy the closely-regulated-industries standards of Burger and Patel. Johnson v. Smith, 2024 U.S. App. LEXIS 14019 (10th Cir. June 10, 2024):

We highlight two important features of the Court’s application of the closely-regulated-business doctrine in Patel. First, the Court explicitly declined to consider the intrusiveness of the specific inspection provision under challenge in deciding whether the businesses had a reasonable expectation of privacy, saying that “[t]he City wisely refrains from arguing that [the challenged regulation] itself renders hotels closely regulated.” Id. at 425. Otherwise, the inspection provision would be self-justifying. See Free Speech Coalition, Inc. v. AG United States, 825 F.3d 149, 170 (3d Cir. 2016) (“We are doubtful that the Government can create the reduced expectation of privacy of a closely regulated industry to justify warrantless inspections by simply mandating those inspections, particularly where that industry existed long before the regulation’s enactment.”).

Second, the Court observed that every industry that it had held to be closely regulated was one that would pose a threat to public welfare if left unregulated. Unlike those industries, “nothing inherent in the operation of hotels poses a clear and significant risk to the public welfare.” Patel, 576 U.S. at 424. The Court said that the absence of such a threat argued against hotels being considered closely regulated. See id.

We would add, however, that by the same token, as the Court observed in Dewey, the existence of such a threat to the public welfare can also argue in the other direction. If the new industry presents a substantial new threat (such as the nuclear-power industry), it could still be considered closely regulated despite the absence of any history specific to the industry. See Dewey, 452 U.S. at 606. The rationale for considering the dangerousness of an industry to support or reject its characterization as closely regulated would seem to be that in determining whether a business owner can reasonably expect privacy, those who engage in dangerous activities can more likely expect to be subject to intrusive regulation and inspection.

We conclude from Patel and its precursors, particularly Burger, that the relevant factors for determining whether an industry is closely regulated are the history of warrantless inspections in the industry, the extensiveness and intrusiveness of the regulatory scheme, whether other jurisdictions impose similar regulatory schemes, and “whether the industry would pose a threat to the public welfare if left unregulated.” Zadeh v. Robinson, 928 F.3d 457, 465 (5th Cir. 2019).