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April 30, 2019

What We're Reading This Week

Author: Thad Schlaud

Topics: News, Industry Ideas

Unlawful Search

While I don’t often read legal briefs on local parking ordinances, one came out of Saginaw last month that caught my eye.

Alison Taylor sued the city of Saginaw over the use of chalk on her car in order to enforce parking ordinances. If you are unfamiliar with the practice, parking enforcement officers will mark a parked car with chalk to figure out if it has violated lot time limits. If the car and chalk mark are there when the officer returns to the lot, then they know to issue a ticket.

Apparently, Alison Taylor, “a frequent recipient of parking tickets,” sued Saginaw on the grounds that chalking her tires amounted to an unconstitutional trespass of her vehicle. Back in 2017, the courts sided with the city but on April 22, 2019, the Sixth Circuit Court of Appeals found in her favor! The decision, made by a federal court, is now binding in four states: Michigan, Ohio, Kentucky, and Tennessee.

So, here’s the breakdown. The court finds that chalking a car is tantamount to a search of the car based on precedent. Specifically, it is a “trespass” on the car with the intent to obtain information:

“In accordance with Jones, the threshold question is whether chalking constitutes common-law trespass upon a constitutionally protected area. Though Jones does not provide clear boundaries for the meaning of common-law trespass, the Restatement offers some assistance. As defined by the Restatement, common-law trespass is ‘an act which brings [about] intended physical contact with a chattel in the possession of another.’ Restatement (Second) of Torts § 217 cmt. e (1965). Moreover, ‘[a]n actor may . . . commit a trespass by so acting upon a chattel as intentionally to cause it to come in contact with some other object.’ Id. Adopting this definition, there has been a trespass in this case because the City made intentional physical contact with Taylor's vehicle. As the district court properly found, this physical intrusion, regardless of how slight, constitutes common-law trespass. This is so, even though ‘no damage [is done] at all.’ Jones, 565 U.S. at 405 (quoting Entick v. Carrington, 95 Eng. Rep. 807, 817 (C.P. 1765)).”

And…

“[O]nce we determine the government has trespassed upon a constitutionally protected area, we must then determine whether the trespass was ‘conjoined with . . . an attempt to find something or to obtain information.’ Id. at 408 n.5. Here, it was. Neither party disputes that the City uses the chalk marks for the purpose of identifying vehicles that have been parked in the same location for a certain period of time. That information is then used by the City to issue citations. As the district court aptly noted, ‘[d]espite the low-tech nature of the investigative technique . . . , the chalk marks clearly provided information to Hoskins.’ This practice amounts to an attempt to obtain information under Jones.”

There isn’t really anything finance related here, I just found this fascinating. Additionally, the court didn’t really find that the city couldn’t issue tickets to people based on parking time limits, it simply agreed with the plaintiff that the city had gone about doing so in an illegal way. I’m not sure what happens to tickets that were issued under the prior system, but the city of Saginaw will now have to find a new way to enforce parking regulations. Maybe that’s the connection to finance? Cities typically have parking ordinances as a way to derive revenue for the city. Suing the city and winning means that the municipality will likely need to adopt some sort of electronic surveillance system to administer parking regulations. Ostensibly, this system will cost more than pieces of chalk, thereby increasing the city’s need for revenue and ultimately making it harder to circumvent the enforcement system.

If one wants to avoid a ticket under the prior system, one would simply need to check one’s car every few hours for a chalk mark and move said vehicle before the officer returns. I would assume, electronic surveillance would be harder to evade. Certainly, if you struggle with the chalk system, you won’t fare any better under a more sophisticated system.

This reminds me a lot of a particularly odd aspect of modern finance, whereby investors sue a company and win. Typically, investors only sue companies when they have been harmed. Specifically, when someone from the company misrepresents materially relevant information that causes people to invest in a business that ultimately loses their money. Seeking redress, the litigants take the firm to court, where the corporation is assessed (sometimes) hefty fines for fraud. The fines are usually paid to regulators, further damaging the financial health of the company and ultimately, further harming the shareholders.

 

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