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Ohio Precious Metal Dealers Act Searches Ruled Unconstitutional

Posted On: July 11th, 2016   |   Posted by: Luftman, Heck & Associates LLP

According to a recent ruling by a federal court in Columbus, key provisions of the Ohio Precious Metal Dealers Act (PMDA) are unconstitutional. The challenged law allows the authorities to search the premises of precious metal dealers without a warrant to inspect their licenses and sales records. Judge Michael H. Watson ruled that giving the police these extra powers violates the 14th amendment’s prohibition of unreasonable searches and seizures.

The case arose out of two incidents in which the state’s Division of Financial Institutions accused businesses of selling precious metals without a license and demanded to see their sales records. The two businesses, Liberty Coins of Delaware and Worthington Jewelers, refused to be searched and comply with the demands. They eventually sued the government with the assistance of a local nonprofit group.

Warrantless Searches of Gold Dealers Violate the 14th Amendment

The 14th Amendment of the U.S. Constitution prohibits the government from conducting unreasonable searches. In practice, this means that the police can only search a private home or business when:

  • They have a warrant describing the place to be searched and the items expected to be found
  • The owner or a competent occupant consents to the search
  • The police have reason to believe the occupants are destroying evidence
  • There is reasonable cause to believe that an occupant’s life is in danger
  • There is probable cause to believe that a fugitive is going to escape

Under the PMDA, however, the authorities have the right to inspect a precious metal dealer’s license and records, even if this means entering and searching the premises without a warrant. The act even goes further in providing that a failure to comply with a search request is a crime.

The PMDA violates the Constitution because it adds an exception to the 14th amendment’s warrant requirement that goes far beyond the narrow exceptions currently recognized by the courts. Doing away with the warrant requirement is akin to treating these businesses as criminal enterprises even in situations where there is no indication of wrongdoing.

Will Other Kinds of Business Be Protected?

The precious dealers were represented in this case by the 1851 Center for Constitutional Law, a Columbus nonprofit group whose goal is to defend Ohioans against government misconduct. The group believes that other business that operate under state-issued licenses may also benefit from the recent court ruling.

According to Maurice Thompson, the center’s executive director, Ohio needs to stop enforcing all laws that allow warrantless searches of businesses. Alternatively, the legislature should review and rewrite questionable provisions of the laws that regulate businesses in the state. If the state won’t budge, Thompson said, the center may sue the government again.

How a Columbus Criminal Defense Attorney Can Help

At Luftman, Heck & Associates, we help our clients through the criminal justice system by aggressively advocating on their behalf. To better serve our clients’ interests, we stay abreast of the latest changes in Ohio’s legal landscape. If you’ve been charged with any criminal offense, call us today at (614) 500-3836 for a free and confidential case consultation.

I can FINALLY breathe easy now. I want to thank Mr. Bowen and all the attorneys that helped me with this case.

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