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July 11, 1985


The opinion of the court was delivered by: Kocoras, District Judge:


This matter comes before the Court on the plaintiffs' motion for summary judgment. Plaintiffs seek an order declaring Illinois' Thoroughbred Rule 322 and Harness Racing Rule 25.19 unconstitutional under the Fourth and Fourteenth Amendments, permanently enjoining defendants from engaging in certain acts under the authority of those Rules, and holding defendants liable for authorizing and conducting unlawful stops and searches. Defendants oppose plaintiffs' motion and request summary judgment in their favor. For the reasons which follow, the plaintiffs' motion is granted in part and denied in part.

The plaintiffs in this action are Don Serpas, Raymond Johnson, and Carl Waters, individually and on behalf of the class of all occupation licensees of the Illinois Racing Board who serve as exercise persons, grooms, and hotwalkers at Illinois race-tracks (the plaintiffs).*fn1 Each named plaintiff lives in residential quarters at Arlington Park Racetrack provided to him in connection with his work. The defendants are former and present members of the Illinois Racing Board, the director of the Illinois Department of Law Enforcement (IDLE), and unknown agents of IDLE. On a motion for a preliminary injunction, the plaintiffs challenged the constitutionality of certain searches conducted under the authority of Thoroughbred Rule 322 and Harness Rule 25.19 (the Rules).*fn2 The plaintiffs made three arguments against the Rules' application and challenged: (1) the warrantless searches of their residences; (2) the investigatory stops and searches of their persons within the race track enclosure; and (3) the conditioning of their occupation licenses upon their consent to such searches. On June 16, 1983, this Court granted the plaintiffs' motion and preliminarily enjoined the challenged activities. Serpas v. Schmidt, Memorandum Opinion (N.D.Ill. June 16, 1983) (hereinafter Mem. Op.).*fn3

Plaintiffs now move for summary judgment and defendants have made a cross-motion for summary judgment as well. Summary judgment shall be granted when the record shows that "there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Fed.R.Civ.P. 56. The underlying facts and all inferences to be drawn from them must be viewed in the light most favorable to the party opposing the motion. Fitzsimmons v. Best, 528 F.2d 692, 694 (7th Cir. 1976). A material question of fact is one which is outcome determinative under the governing law. Egger v. Phillips, 710 F.2d 292, 296 (7th Cir. 1983). Whether there is a disputed question of fact to be presented to the trier of fact is, in the first instance, a question of law for the Court to determine.

The legal issues in the action fall into three parts: (1) whether Fourth Amendment protection is afforded plaintiffs during warrantless searches of their living quarters; (2) whether the investigatory stops and searches of the plaintiffs' person while in the race track enclosure are unconstitutional under the Fourth Amendment; and (3) whether the Rules unconstitutionally condition the occupation license on consent to the searches.

I. Warrantless Residential Searches

In issuing the preliminary injunction, this Court placed the burden upon the defendants to show their warrantless residential searches, taken pursuant to the Rules, fell into a recognized exception to the warrant requirement of the Fourth Amendment. See Camara v. Municipal Court, 387 U.S. 523, 87 S.Ct. 1727, 18 L.Ed.2d 930 (1967). In opposing the plaintiffs' summary judgment motion, defendants now contest the initial premise that the Fourth Amendment is applicable at all to the plaintiffs' allegations. Defendants assert that the searches take place within the context of the horse racing industry, an industry with such a long history of regulation that "no reasonable expectation of privacy exists within the industry." United States v. Harper, 617 F.2d 35 (4th Cir. 1980). Therefore, defendants argue, plaintiffs are without any reasonable expectations of privacy and are necessarily outside the scope of Fourth Amendment protection. Defendants rely upon a variety of factors — a long history of warrantless racetrack searches, the public and plaintiffs' knowledge of the searches, and the "commercial" nature of the plaintiffs' living quarters. This reliance is misplaced.

Without doubt, defendants accurately assert that horse racing is a highly regulated industry and that the State has an interest in maintaining the industry's integrity. Phillips v. Graham, 86 Ill.2d 274, 427 N.E.2d 550 (1981). Moreover, the Supreme Court has clearly recognized that warrantless searches in closely regulated industries can be reasonable. Donovan v. Dewey, 452 U.S. 594, 600, 101 S.Ct. 2534, 2538-39, 69 L.Ed.2d 262 (1981). Under this exception to the Fourth Amendment's warrant requirement, courts have found that by accepting the benefits of a highly regulated trade, an individual also accepts the burden of regulation and thereby consents to administrative investigations or inspections. Marshall v. Wait, 628 F.2d 1255, 1258 (9th Cir. 1980). Therefore, the individual operating within a highly regulated industry can have no reasonable expectation of privacy as least as to administrative inspections. Id. (emphasis added).

From this administrative inspection case law, defendants conclude that plaintiffs cannot have a reasonable expectation of privacy in their living quarters located within the racetrack grounds. To accept this conclusion, this Court must accept defendants' necessary first premise — that the warrantless searches of plaintiffs' living quarters are administrative inspections. This court cannot accept the characterization of the residential searches as administrative inspections because: (A) the warrantless searches are conducted on private, residential premises, not commercial premises; (B) the statute's language in this case does not provide an adequate substitute for a warrant; (C) the regulatory scheme present does not provide an adequate substitute for a warrant; and (D) a balance of plaintiffs' privacy interests and the Government's enforcement needs favors the plaintiffs.

(A) Residential Nature of Plaintiffs' Quarters

The detailed description of the dorm rooms does not persuade this Court that they qualify as a commercial premise for purposes of the Fourth Amendment. The crucial quality which the rooms possess is their exclusive residential use. Serpas v. Schmidt, Mem.Op. at 8-10. The other details of the plaintiffs' living conditions cannot deprive them of their constitutional rights to be free of unreasonable searches in their homes. The courts have viewed rooms similar to plaintiffs' quarters as homes. These rooms include hotel rooms, boarding house rooms, and college dormitory rooms. See, e.g., Stoner v. State of California, 376 U.S. 483, 84 S.Ct. 889, 11 L.Ed.2d 856 (1964); Smyth v. Lubbers, 398 F. Supp. 777 (W.D.Mich. 1975). Such private rooms have been found to be homes and residences although they share the very qualities the defendants argue make them "commercial": they are small, temporary, and accessible by a master key. The plaintiffs' rooms' proximity to the barns and stalls do not make them commercial; they are used for residential purposes exclusively.

Defendants, however, analogize the warrantless searches of plaintiffs' rooms to the warrantless searches of the baggage of persons boarding airlines, United States v. Bonstein, 521 F.2d 459 (2d Cir. 1975), cert. denied 424 U.S. 918, 97 S.Ct. 1121, 47 L.Ed.2d 324 (1976); of persons entering courtrooms, McMorris v. Alioto, 567 F.2d 897 (9th Cir. 1978); of prison guards, United States v. Sihler, 562 F.2d 349 (5th Cir. 1977); and of a parolee's residence pursuant to a consent provision in his parole terms, United States v. Dally, 606 F.2d 861 (9th Cir. 1979). These cases do not change the nature of the plaintiffs' quarters. The cases generally involve searches on public property — an airport, a courtroom, a prison. The search of a parolee in Dally was governed by the terms of a search consent which was a condition of a prisoner's parole. The Dally search was not characterized as an administrative inspection. Plaintiffs' situation is not analogous to individuals on parole from prison.

Therefore, the plaintiffs' living quarters are residential, not commercial. Their temporary and crowded conditions do not change their nature. Although employed in a highly-regulated industry, the plaintiffs possess the constitutional right to be from unreasonable searches in their homes.

(B) Statutory Authority for the Searches

In other highly regulated industries, warrants are not required where statutory language authorizes the terms and conditions of searches of particular premises. Donovan v. Dewey, 452 U.S. 594, 101 S.Ct. 2534, 69 L.Ed.2d 262 (1981) (mining industry); United States v. Biswell, 406 U.S. 311, 92 S.Ct. 1593, 32 L.Ed.2d 87 (1972) (gun dealers); Colonnade Catering Corp. v. United States, 397 U.S. 72, 90 S.Ct. 774, 25 L.Ed.2d 60 ...

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