RECOMMENDED FOR FULL-TEXT PUBLICATION Pursuant to Sixth Circuit Rule 206 2 Ammex, Inc. v. Cox Nos. 01-2392/2518 ELECTRONIC CITATION: 2003 FED App. 0424P (6th Cir.) File Name: 03a0424p.06 _________________ COUNSEL UNITED STATES COURT OF APPEALS ARGUED: Craig L. John, DYKEMA GOSSETT, FOR THE SIXTH CIRCUIT Bloomfield Hills, Michigan, for Appellant. Tracy A. _________________ Sonneborn, OFFICE OF THE ATTORNEY GENERAL, Lansing, Michigan, for Appellee. ON BRIEF: David D. AMMEX , INC., X Smyth III, STEPTOE & JOHNSON, Washington, D.C., for Plaintiff-Appellant/ - Appellant. Tracy A. Sonneborn, OFFICE OF THE ATTORNEY GENERAL, Lansing, Michigan, for Appellee. Cross-Appellee, - - Nos. 01-2392/2518 - _________________ v. > , OPINION - _________________ MICHAEL A. COX , - Defendant-Appellee/ - ROGERS, Circuit Judge. The Attorney General of Cross-Appellant. - Michigan issued a Notice of Intended Action (“NIA”) to - Ammex, Inc. informing it that its advertising might result in N the Attorney General filing an enforcement action under the Appeal from the United States District Court Michigan Consumer Protection Act (“MCPA”). In response, for the Eastern District of Michigan at Detroit. Ammex sought a declaratory judgment against the Attorney No. 00-73427—George C. Steeh, District Judge. General, asserting that the Attorney General could not enforce the MCPA against it because (1) federal law preempted the Argued: August 8, 2003 MCPA with respect to Ammex, and (2) any enforcement of the MCPA against Ammex would abrogate the restrictions Decided and Filed: December 3, 2003 placed upon states by the Commerce Clause. The district court eventually dismissed the action as moot based upon the Before: BATCHELDER and ROGERS, Circuit Judges; Attorney General’s withdrawal of the NIA. Both Ammex and RUSSELL, District Judge.* the Attorney General appeal the district court’s decision. Although the action was not technically mooted by events subsequent to the initiation of the action, we affirm the judgment of the district court because the action was not ripe.
* The Honorable Thomas B. Russell, United States District Judge for the Western District of Kentucky, sitting by designation.
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FACTS alleging that Ammex falsely advertised that its goods could be purchased at the Ambassador Bridge store free of state and Ammex is a Michigan corporation that operates a United federal taxes. This claim of false advertisement was based on States Customs Class 9 bonded warehouse and duty-free store statements that Ammex published on its website to the effect in Detroit, adjacent to the Ambassador Bridge to Canada. that the “tax-free” nature of goods sold at the Ammex store The Ammex store is “sterile” in that customers leaving resulted in significant savings to Ammex customers. The Ammex’s Ambassador Bridge store may only depart by roads NIA pointed out that Ammex continued to publish these that lead to Canada. In other words, goods sold in the statements after it had learned from the letter rulings and the Ammex store may only reach the United States after they Michigan Court of Appeals decision that its sales of gasoline have first been exported to Canada because the Ammex store and diesel fuel were subject to both state and federal taxes. is located beyond the “point-of-no-return” on the United Further, the NIA noted that Ammex sold gasoline for prices States-Canadian border. At the Ambassador Bridge store, as high as or higher than its competitors in the Detroit area, Ammex sells a wide array of duty-free merchandise, as well implying that, contrary to Ammex’s advertising, Ammex as gasoline and diesel fuel. At one point, Ammex’s customers were not reaping any savings on gasoline. advertising claimed that its goods could be purchased with Through the NIA the Attorney General provided Ammex with “no state tax, no federal tax.” Ammex’s sales of gasoline and the opportunity to cease and desist its allegedly unlawful diesel fuel and its advertising lie at the heart of this action. practices and invited Ammex to confer with the Attorney General. Finally, the NIA warned Ammex that unless Since January 1, 1994, Ammex has paid, under protest, Ammex submitted a formal assurance that it would Michigan state sales taxes and motor fuel taxes on its sales of discontinue the allegedly unlawful practice or the Attorney motor fuel. Ammex, Inc. v. Dep’t of Treasury, 603 N.W. 2d General determined that there was no cause for action, the 308, 311 (Mich. Ct. App. 1999), cert. denied, 534 U.S. 827 Attorney General would be authorized to file a lawsuit under (2001). Ammex filed an action seeking a refund of the state the MCPA, which lawsuit might result in an injunction and/or taxes that it paid under protest. Id. On September 14, 1999, a $25,000 fine. the Michigan Court of Appeals concluded that Ammex was not entitled to a refund and that Michigan could levy state In February of 2000, in response to the NIA, Ammex filed taxes on Ammex’s sales of gasoline and diesel fuel. See id. the declaratory judgment action that is the subject of the In addition, the United States Customs Service (“Customs”) present appeal. In its complaint Ammex alleged that the determined in two letter rulings that Ammex could not sell Attorney General was prevented from enforcing the MCPA gasoline or diesel fuel on a duty-free basis. See J.A. at 16E, because (1) federal law relating to duty-free stores preempts 16J. the MCPA (Count I); (2) any attempt to enforce the MCPA against Ammex would exceed the restrictions placed on the Two months after the state-court ruling, in November 1999, states by the Commerce Clause with regard to foreign the Michigan Attorney General issued an NIA1 to Ammex, commerce (Count II); and (3) any MCPA action against
1 At least ten days prior to the commencement of an action under the MCPA, the Attorney General must “notify the person of [the] intended general in person, by counsel, or by other representative as to the action and give the person an opportunity to cease and desist from the proposed action before the proposed filing date,” absent a court waiver alleged unlawful metho d, act, o r prac tice or to confer with the attorney upon a sho wing of good cau se. M ICH . C O M P . L A W S § 445.90 5(2). Nos. 01-2392/2518 Ammex, Inc. v. Cox 5 6 Ammex, Inc. v. Cox Nos. 01-2392/2518
Ammex based on its Internet advertising would be contrary to The present action by Ammex against the Attorney General the restrictions placed on the states by the Commerce Clause continued with the Attorney General’s answering Ammex’s with regard to both foreign and interstate commerce (Count complaint and filing a motion to dismiss. The motion to III).2 dismiss alleged that Ammex’s complaint contained a number of jurisdictional defects. The district court eventually denied Meanwhile, Ammex was also challenging the letter rulings the Attorney General’s motion to dismiss with regard to issued by Customs that determined that Ammex could not sell Counts I, II, and III. gasoline and diesel fuel on a duty-free basis. In August of 2000, the Court of International Trade ruled that the letter At the close of discovery, the Attorney General filed with rulings were contrary to law and that Customs acted the district court a withdrawal of the NIA against Ammex. unlawfully by denying duty-free status to Ammex’s sales of The withdrawal stated that the Attorney General would not gasoline and diesel fuel based on the reasoning employed in reinstate the NIA, nor issue a new NIA with regard to the letter rulings. See Ammex, Inc. v. United States, 116 F. Ammex’s advertising, unless the following “changed Supp. 2d 1269, 1272-75 (CIT 2000) (“Ammex I”). On circumstances” occurred: September 5, 2000, Customs authorized Ammex to sell gasoline and diesel fuel duty-free. Ammex, Inc. v. United 1. A final judgment is entered in a tax case for tax States, 193 F. Supp. 2d 1325, 1327 (CIT 2002), aff’d, 334 periods including, or following, the issuance of the F.3d 1052 (Fed. Cir. 2003) (Ammex II). Customs would later [Ammex I]decision in which it is determined that: revoke the authorization letter, concluding that gasoline and (a) State sales tax applies in connection with retail diesel fuel could not be sold duty-free based upon a rationale sales of items other than motor fuel by Ammex; OR different from that which supported the earlier letter rulings. (b) State sales tax and/or state motor fuel taxes apply Id. at 1054-55.3 in connection with retail sales of motor fuel by Ammex. OR 2. It is conclusively determined, whether by final administrative order (including appeal), judicial order 2 The complaint also included a fourth count that asked the district (including appeal), or by federal legislation or treaty, or court to enjoin aspects of M ichigan’s sales tax act. The d istrict court in any other conclusive manner, that Ammex may not dismissed the fourth count and A mmex has not ap pealed that decisio n. sell motor fuel free of duty, notwithstanding the [Ammex I] decision) [sic]. 3 Ammex sought to bar the revocation by invoking res judicata against Customs. See Amm ex II, 334 F.3d at 1055. T he Federal Circuit J.A. at 330-31. Based on the withdrawal, the Attorney Court of Ap peals found that res judicata did no t bar Customs from General then filed a motion that asserted, inter alia, that the concluding, based on different reasoning, that gasoline and diesel fuel action was moot. A magistrate judge recommended that the could not be sold d uty-free. See id. at 1055-58. The Fed eral Circuit’s ruling, which dealt primarily with the res judicata issue, did not address court deny the motion to dismiss, but the Attorney General the underlying merits of Customs’s new rationale, although it did state did not file objections to the recommendation. that there was “a reasonable basis for Customs’s action.” Id. at 1058. It is unclear from the Federal Circuit opinion to what extent Ammex may After the magistrate judge issued his recommendation, now challenge the new rationale for prohibiting the sale of gasoline and Ammex and the Attorney General filed cross-motions for diesel fuel duty-free should it so cho ose. Nos. 01-2392/2518 Ammex, Inc. v. Cox 7 8 Ammex, Inc. v. Cox Nos. 01-2392/2518
summary judgment, each addressing Counts I, II, and III of F.2d 305, 308 (6th Cir. 1990).4 Here, Ammex’s complaint Ammex’s complaint. At the hearing regarding the motions alleged that federal law preempts the MCPA “with respect to for summary judgment, the district court raised the mootness Foreign Trade Zones, duty-free stores and their business issue sua sponte. The district court determined that the activities.” R. 1, Complaint, ¶ 26, J.A. at 26. Ammex also Attorney General’s withdrawal of the NIA mooted the action, alleged that the MCPA as applied to Ammex’s advertising and ordered the case dismissed. Both the Attorney General violated the Commerce Clause. Id., ¶¶ 34, 38, J.A at 28. and Ammex have appealed the district court’s decision to this Finally, Ammex asked that the Attorney General be enjoined court. from enforcing the MCPA against Ammex based on these violations of its federal rights. Id., ¶1, J.A. at 31. Ammex’s I. Ammex’s Complaint Established the Existence of Subject complaint, therefore, properly invokes federal subject matter Matter Jurisdiction. jurisdiction. Before we reach the issue of mootness, the Attorney The Attorney General asks this court, however, to consider General claims that this court does not have subject matter the Second Circuit’s opinion in Fleet Bank, National jurisdiction over Ammex’s preemption claim. Although the Association v. Burke, 160 F.3d 883 (2d Cir. 1998), in Attorney General did not raise this question below, “the analyzing whether subject matter jurisdiction exists in this existence of federal jurisdiction may be questioned at any case. In Fleet Bank, the plaintiff, Fleet Bank, National point in the course of litigation and . . . parties cannot waive Association (“Fleet”), filed a complaint that alleged that the the requirement of subject matter jurisdiction.” Riggs v. Connecticut Commissioner of Banking (the “Commissioner”) Island Creek Coal Co., 542 F.2d 339, 343 (6th Cir. 1976). had “adopted an arbitrary, capricious, and erroneous view” of Contrary to the Attorney General’s position, the district court Connecticut statutes dealing with the imposition of ATM did have federal subject matter jurisdiction over Ammex’s surcharges and, alternatively, that the relevant Connecticut claims. We review the existence of subject matter jurisdiction statutes were preempted by federal law. Id. at 885. On these de novo. Ullmo ex rel. Ullmo v. Gilmour Acad., 273 F.3d grounds, Fleet sought a declaratory judgment that it could 671, 680 (6th Cir. 2001). impose the contested surcharge and an injunction to enjoin the Commissioner from interfering with the imposition of the The Supreme Court’s decision in Shaw v. Delta Air Lines, surcharges. Id. On appeal, the Commissioner questioned Inc. makes clear that a federal court has subject matter whether the Second Circuit had subject matter jurisdiction jurisdiction when a person seeks to enjoin state officials from over the case, arguing that Fleet was trying to skirt the well- enforcing a state regulation against the person on the ground pleaded complaint rule and invoke federal jurisdiction by that the regulation violates federal rights. See Shaw v. Delta Air Lines, Inc., 463 U.S. 85, 96 n. 14 (1983); see also Verizon Md. Inc. v. Pub. Serv. Comm’n of Md., 535 U.S. 635, 642 4 (2002) (stating, with respect to an action for declaratory and W hether federal subject ma tter jurisdiction ex ists when the plaintiff seeks merely declaratory relief from state regulation on enforcement injunctive relief against a state commission order on grounds, however, is not as clear. See Fleet Bank, Nat’l Ass’n v. Burke, preemption grounds, “[w]e have no doubt that federal courts 160 F.3d 883, 888 -889 (2d Cir. 1998 ) (discussing Lawrence County v. have jurisdiction under [28 U.S.C.] § 1331 to entertain such Lead Dead wood School D istrict No. 40-1, 469 U.S. 256, 259 n.6 (1985) a suit”); Alltel Tenn., Inc. v. Tenn. Pub. Serv. Comm’n, 913 and the doubtful continued significance of language in Public Service Co mm ission v. Wycoff Co., 344 U.S. 237 (1952)). This suit, however, doe s not see k merely declaratory relief. Nos. 01-2392/2518 Ammex, Inc. v. Cox 9 10 Ammex, Inc. v. Cox Nos. 01-2392/2518
anticipating a federal defense through a declaratory judgment comparable grounds. See Verizon Md., Inc., 535 U.S. at 642 action. See id. at 885-86. (“We have no doubt that federal courts have jurisdiction under [28 U.S.C.] § 1331 to entertain such suit.”); Shaw, 463 In concluding that the district court did not have subject U.S. at 96 n. 14. Subject matter jurisdiction exists in those matter jurisdiction over the action, the Second Circuit noted cases despite the fact that if one were to examine closely the that, unlike the case before it, none of the Shaw plaintiffs, or nature of the complaint in such a case, the asserted the plaintiffs in the cases upon which Shaw relied, raised preemption claim would often be remarkably similar to an issues that required the interpretation of state law. Id. at 889. anticipation of a federal defense through a declaratory action, The court found that this distinction mattered, reasoning that which generally does not create subject matter jurisdiction the interpretation of state law would implicate complicated under the well-pleaded complaint rule. See Public Serv. abstention doctrines and Eleventh Amendment concerns, Comm'n v. Wycoff Co., 344 U.S. 237, 248 (1952); see also while also risking “a major and unwarranted incursion on the Playboy Enters., Inc. v. Pub. Serv. Comm’n, 906 F.2d 25, 30 authority of state courts to construe state statutes.” Id. at 891- (1st Cir.1990) (noting that in Shaw the Supreme Court limited 92. Consequently, the Fleet Bank court refused to extend the Wycoff rule “[w]ithout explaining exactly why”). Shaw “beyond instances where the plaintiff, seeking an Assuming that Fleet Bank was correctly decided, we decline injunction on the ground of preemption, does not dispute the to read it so broadly as to preclude subject matter jurisdiction meaning and application of state law.” Id. at 893. The over Ammex’s claims. Attorney General asserts that this case falls within the holding of the Fleet Bank decision. II. The Attorney General’s Withdrawal of the NIA Did Not Moot Ammex’s Claim. Fleet Bank, however, is distinguishable from this case. Here Ammex did not seek a declaratory judgment that its The district court dismissed this action on the ground that advertising does not violate the MCPA, nor did it ask the it was mooted by the Attorney General’s withdrawal of the district court to interpret Michigan law. Rather Ammex’s NIA. While the district court properly dismissed on complaint only asked the court to determine if the MCPA justiciability grounds, as we explain in part III, it was not violated its federal rights and, if so, to enjoin the Attorney proper for the district court to rely on the mootness doctrine, General from enforcing the MCPA against Ammex. In short, inasmuch as the Attorney General’s withdrawal did not make in Ammex’s federal pleading, it did not dispute the meaning it absolutely clear that the allegedly wrongful conduct could or application of state law. The Attorney General, however, not be reasonably expected to recur. We review de novo a urges us to consider what Ammex would have pleaded had it district court’s decision that an action has been mooted. waited for the commencement of a state enforcement action. NAACP v. City of Parma, 263 F.3d 513, 530 (6th Cir. 2001), The Attorney General contends that it is unimaginable in such cert. denied, 535 U.S. 971 (2002). circumstances that Ammex would have pleaded only a preemption defense. “Under Article III of the Constitution, [a federal court’s] jurisdiction extends only to actual cases and controversies. Accepting such an argument would expand Fleet Bank to [A federal court has] no power to adjudicate disputes which such an extent that it would render meaningless the Supreme are moot.” McPherson v. Mich. High Sch. Athletic Ass'n, Court’s repeated holdings that federal jurisdiction extends to Inc., 119 F.3d 453, 458 (6th Cir.1997) (en banc) (quotation suits to enjoin state enforcement on federal preemption and omitted). “It is well settled that ‘a defendant’s voluntary Nos. 01-2392/2518 Ammex, Inc. v. Cox 11 12 Ammex, Inc. v. Cox Nos. 01-2392/2518
cessation of a challenged practice does not deprive a federal The court also concluded that the confinement of the court of its power to determine the legality of the practice.’ immigrant was not reasonably likely to recur based on the . . . ‘[I]f it did, the courts would be compelled to leave [t]he sworn statement of an INS official that “[a]bsent Picrin’s defendant . . . free to return to his old ways.’” Friends of the reinvolvement with the criminal justice system, a change in Earth, Inc. v. Laidlaw Envtl. Servs. (TOC), Inc., 528 U.S. the Cuban government enabling him to return to Cuba, or the 167, 189 (2000) (alteration in original) (quoting City of willingness of a third country to accept him, he will be Mesquite v. Aladdin’s Castle, Inc., 455 U.S. 283, 289 & n.10 paroled for another year.” Id. at 776 (alteration in original) (1982)). Here the district court concluded that the Attorney (quoting government dismissal motion). Thus, having found General’s withdrawal of the NIA mooted Ammex’s the voluntary cessation test satisfied, the Ninth Circuit declaratory judgment action. A case may be mooted by a dismissed the case as moot. defendant’s voluntary conduct only “if subsequent events made it absolutely clear that the allegedly wrongful behavior We are reluctant to rely upon Picrin-Peron here because it could not reasonably be expected to recur,” Friends of the is different in some important respects. The instant case is of Earth, 528 U.S. at 189 (quoting United States v. Concentrated course not a habeas corpus case, and Ammex arguably does Phosphate Export Ass’n, Inc., 393 U.S. 199, 203 (1968), and not enjoy all of the relief that the court could enter. “interim relief or events have completely and irrevocably Moreover, the Attorney General’s withdrawal of the NIA here eradicated the effects of the alleged violation.” County of Los is different from the sworn statement in Picrin-Peron in a Angeles v. Davis, 440 U.S. 625, 631 (1979). The heavy significant way. In Picrin-Peron there was no indication that burden of demonstrating mootness rests on the party claiming the INS knew at the time of its statement that any of the mootness. Friends of the Earth, 528 U.S. at 189. On the “changed circumstances” were reasonably likely to occur. other hand, we have noted that “‘cessation of the allegedly Here, the Attorney General’s withdrawal acknowledges that illegal conduct by government officials has been treated with related litigation is ongoing and might reasonably be expected more solicitude by the courts than similar action by private to lead to the “changed circumstances” articulated in the parties.’” Mosley v. Hairston, 920 F.2d 409, 415 (6th withdrawal. See J.A. at 330 (stating that the Attorney General Cir.1990) (quoting Ragsdale v. Turncock, 841 F.2d 1358, would “forbear from issuing similar notices of intended action 1365 (7th Cir. 1988)). or filing suit on the basis of the matters raised in the [NIA] under the [MCPA] until the effect of [Ammex I’s] ruling on Against this legal backdrop, the district court, principally tax matters has been conclusively resolved” (emphasis relying on Picrin-Peron v. Rison, 930 F.2d 773, 775-76 (9th supplied)). The Attorney General’s withdrawal thus does not Cir. 1991), held that the Attorney General’s withdrawal of the make it absolutely clear that the enforcement action is not NIA was sufficient to moot this action. In Picrin-Peron, the reasonably likely to recur. Consequently, the mootness Ninth Circuit considered the habeas corpus petition of an doctrine, without more, does not provide a sufficient basis for excludable Cuban alien who, during the pendency of his dismissing this case. habeas appeal, had been placed on immigration parole. See id. at 774-75. The Ninth Circuit found that, due to the limited III. Ammex’s Claims Are Not Ripe. relief courts may grant under the writ of habeas corpus, it was without power to grant relief beyond the freedom from Although Ammex’s claims were not technically mooted by confinement that had already been effected. Id. at 775-76. the Attorney General’s withdrawal of the NIA, Ammex’s This led the court to conclude that the case was mooted. Id. claims are not ripe. Accordingly, we affirm the district Nos. 01-2392/2518 Ammex, Inc. v. Cox 13 14 Ammex, Inc. v. Cox Nos. 01-2392/2518
court’s judgment on ripeness grounds. We review issues of be weighed. The first two deal with the “fitness of the issues justiciablity, such as ripeness, de novo. NRA of Am. v. for judicial determination.” One aspect of the “judicial fitness Magaw, 132 F.3d 272, 278 (6th Cir. 1997). of the issues” is the extent to which the legal analysis would benefit from having a concrete factual context. The second The ripeness inquiry arises most clearly when litigants seek aspect of the “judicial fitness of the issues” is the extent to to enjoin the enforcement of statutes, regulations, or policies which the enforcement authority’s legal position is subject to that have not yet been enforced against them. Recent change before enforcement. The third consideration deals holdings of the Supreme Court make clear the continuing with the “hardship to the parties of withholding court validity in that context of the three-part test for ripeness in the consideration.” See Abbott Labs., 387 U.S. at 148-49; see companion cases of Abbott Laboratories v. Gardner, 387 U.S. also Ohio Forestry Ass’n, 523 U.S. at 733. Together these 136 (1967) and Toilet Goods v. Gardner, 387 U.S. 158 considerations weigh against ripeness in this case. (1967). See Nat’l Park Hospitality Ass’n v. Dept. of the Interior, 123 S.Ct. 2026, 2030-2032 (2003); Ohio Forestry A. Judicial fitness: the benefit to the court of a concrete Ass’n v. Sierra Club, 523 U.S. 726, 732-33 (1998). Where, factual context. as in this case, the statute at issue has not been enforced against Ammex, and indeed where a notice of intent to Ammex’s legal contention is that the MCPA does not apply enforce has been explicitly withdrawn, the ripeness doctrine to its activities because it is preempted by federal statutes and provides the appropriate analysis for determining whether this by the negative implications of the Commerce Clause. case should be heard at this time. Analysis of both issues would be significantly benefitted by the concrete context that would be afforded by an The ripeness doctrine “is drawn both from Article III enforcement action against a specific action by Ammex. limitations on judicial power and from prudential reasons for refusing to exercise jurisdiction.” Reno v. Catholic Soc. The issue in Abbott Laboratories was whether a particular Servs., Inc., 509 U.S. 43, 57 n. 18 (1993). The prudential regulation (requiring the generic name of a drug to discretion to decline jurisdiction over unripe cases derives accompany the brand name every time on drug labelling) was from the discretionary nature of injunctive and declaratory consistent with the Federal Drug and Cosmetic Act. 387 U.S. remedies. Abbott Labs., 387 U.S. at 148. The “basic at 137-39. Supporting its conclusion that the pre-enforcement rationale” of the ripeness doctrine is challenge was ripe, the Court found that the issue was purely legal, and moreover that “both sides have approached this to prevent the courts, through avoidance of premature case as one purely of congressional intent, and . . . the adjudication, from entangling themselves in abstract Government made no effort to justify the regulation in factual disagreements over administrative policies, and also to terms.” Id. at 149. In contrast, in the Toilet Goods protect the agencies from judicial interference until an companion case, the issue was whether it was statutorily administrative decision has been formalized and its permitted for the Food and Drug Administration to provide by effects felt in a concrete way by the challenging parties. regulation that the FDA could have access to manufacturing facilities on pain of suspending certification of the Abbott Labs., 387 U.S. at 148-49; see also Nat’l Park manufacturer. 387 U.S. at 161-62. Although the issue was a Hospitality Ass’n, 123 S.Ct. at 2030. In determining whether purely legal one, the Court found that the case was not ripe in a pre-enforcement challenge is ripe, three considerations must part because the validity of the regulation depended not only Nos. 01-2392/2518 Ammex, Inc. v. Cox 15 16 Ammex, Inc. v. Cox Nos. 01-2392/2518
upon specific legislative intent, but also on “an understanding With regard to the need for more factual development, this of what types of enforcement problems are encountered by case is more like Toilet Goods and Ohio Forestry Ass’n than the FDA, the need for various sorts of supervision in order to like Abbott Laboratories. The court’s need for more factual effectuate the goals of the Act, and the safeguards devised to development consideration thus weighs against ripeness in protect legitimate trade secrets.” Id. at 163-64. this case. Ammex is not challenging a specific rule or finding of the Michigan Attorney General, but rather the general Similarly, in Ohio Forestry Ass’n, the Supreme Court, applicability of a statutory scheme to its conduct. Analysis of unanimously reversing this court, held that a challenge to a any preemption or Commerce Clause issue would benefit U.S. Forest Service management plan was not ripe. 523 U.S. from knowledge of just what was forbidden by the MCPA, at 732, 739. The plan set logging goals, selected the areas and what the effects of the state’s regulation would be on the suited to timber production, and determined which probable policies underlying the Interstate and Foreign Commerce methods of timber harvest were appropriate, but did not itself Clauses and the federal statutes relied upon by Ammex. authorized the cutting of any trees. Id. at 729. With respect Unlike the claims that this court found to be ripe in NRA of to the “judicial fitness” question of whether the a court’s legal America v. Magaw, this is not a situation where “[n]o factual analysis would benefit from having a concrete factual context, development can change what the statute bans and what it the Court stated: protects.” 132 F.3d at 291. Like the Supreme Court in Toilet Goods, “[w]e believe that judicial appraisal of these factors is [R]eview of the Sierra Club’s claims regarding logging likely to stand on a much surer footing in the context of a and clearcutting now would require time-consuming specific application of this [statute] than could be the case in judicial consideration of the details of an elaborate, the framework of the generalized challenge made here.” 387 technically based plan, which predicts consequences that U.S. at 164. may affect many different parcels of land in a variety of ways, and which effects themselves may change over B. Judicial Fitness: Permitting an Agency to Refine Its time. That review would have to take place without Policies benefit of the focus that a particular logging proposal could provide. Thus, for example, the court below in The second aspect of the judicial fitness inquiry is perhaps evaluating the Sierra Club’s claims had to focus upon the strongest against ripeness in this case. Courts should whether the Plan as a whole was “improperly skewed,” avoid pre-enforcement challenges that do not permit rather than focus upon whether the decision to allow enforcement agencies to refine their policies. In Abbott clearcutting on a particular site was improper, say, Laboratories the case was ripe where the challenge was to a because the site was better suited to another use or final regulation that the FDA was unlikely to change. There logging there would cumulatively result in too many was “no hint” that the regulation was tentative. 387 U.S. at trees’ being cut. 151. In contrast, although the regulation in Toilet Goods was technically a “final agency action” for purposes of the 523 U.S. at 736-37; see also Nat’l Park Hospitality Ass’n, Administrative Procedure Act, the challenge there was not 123 S.Ct. at 2032 (concluding that judicial resolution of issue ripe in part because at hand should be deferred until Court was presented with concrete dispute). [t]he regulation serves notice only that the Commissioner may under certain circumstances order inspection of Nos. 01-2392/2518 Ammex, Inc. v. Cox 17 18 Ammex, Inc. v. Cox Nos. 01-2392/2518
certain facilities and data, and that further certification of basis. See Ammex I, 116 F. Supp. 2d at 1271. Ammex would additives may be refused to those who decline to permit later prevail in this suit, id. at 1275-76, and would be issued a duly authorized inspection until they have complied in a letter granting its request to expand its duty-free operations that regard. At this juncture we have no idea whether or to the sale of gasoline and diesel fuel, Ammex II, 334 F.3d at when such an inspection will be ordered and what 1054. As long as Ammex can sell gas tax-free, there is no reasons the Commissioner will give to justify his order. basis for assuming that the Attorney General will enforce the MCPA against Ammex. And if Ammex is ultimately 387 U.S. at 163. forbidden from selling gasoline tax-free, it is still far from clear what the Attorney General’s policy would be with Similarly, in finding that the challenge to the forestry respect to enforcement of the MCPA against Ammex. management plan in Ohio Forestry Ass’n was not ripe, the Enforcement of the MCPA against Ammex is thus more Court relied upon several post-plan administrative actions to obviously tentative and subject to agency reconsideration than conclude that “the possibility that further consideration will the challenged regulation in Toilet Goods or the challenged actually occur before the Plan is implemented is not forestry management plan in Ohio Forestry Ass’n. This theoretical, but real.” 523 U.S. at 735. consideration strongly weighs against ripeness. The possibility that the agency will modify its position is C. The Hardship to Ammex in Waiting for Enforcement. far stronger here than it was in Toilet Goods or Ohio Forestry Ass’n. There is not even the “final agency action” that there Finally, whatever hardship Ammex incurs by waiting for was in Toilet Goods. The NIA was at most an initiation of enforcement is not enough to outweigh the above-considered proceedings, and a permissively worded one at that, allowing factors weighing against ripeness here. In Abbott that “unless an Assurance of Discontinuance is accepted, or Laboratories, the claim was ripe in part because the it is determined that there is no cause for action, the Attorney challenged regulation had a direct and immediate impact on General will be authorized to file a lawsuit against AMMEX, the day-to-day operations of the plaintiff drug company. The INC.” J.A. at 15 (emphasis supplied). Cf. FTC v. Standard drug companies either had to incur the enormous cost of Oil of Cal., 449 U.S. 232, 241-42 (1980) (holding that changing all their labels and promotional materials, or “risk initiation of an administrative complaint was not “final serious criminal and civil penalties for the unlawful agency action”). Moreover, the record shows that the NIA distribution of ‘misbranded’ drugs.” Abbott Labs., 387 U.S. was subsequently withdrawn, albeit with a reservation of the at 153. The government counsel, moreover, had represented possibility of reissuance on certain conditions. The Attorney in court that immediate compliance with the regulation was General’s enforcement decision was, at least in part, based on expected. Id. at 152. This immediate impact was whether Ammex could sell its gasoline on a duty-free basis, distinguished in Toilet Goods, which held that a challenge to because if Ammex’s sales of gasoline and diesel fuel were regulations permitting FDA access to manufacturing facilities made duty-free, then the tendency of its advertising to be did not have any immediate direct effect until the FDA sought misleading would seem to be significantly less. At the time to enforce it, at which time it could be promptly challenged. this action was filed, on February 15, 2000, Ammex had 387 U.S. at 164-65; see also Ohio Forestry Ass’n, 523 U.S. at already filed suit in the Court of International Trade to 733-35 (holding challenge to forestry management plan not challenge the Customs letter rulings that determined that ripe in part because plaintiff had not shown how plan would Ammex could not sell gasoline or diesel fuel on a duty-free “force [plaintiff] to modify its behavior in order to avoid Nos. 01-2392/2518 Ammex, Inc. v. Cox 19 20 Ammex, Inc. v. Cox Nos. 01-2392/2518
future adverse consequences, as, for example, agency advertising conduct will be affected in a way that confronts regulations can sometimes force immediate compliance Ammex with a dilemma like that in Abbott Laboratories. through fear of future sanctions”). On the other hand, if Ammex is ultimately not permitted to The Supreme Court recently focused on the hardship factor sell gas on a tax-free basis, it may then be on the horns of a in finding that a challenge to a National Park Service dilemma as to the extent to which it may advertise that it is a regulation was not ripe. Nat’l Park Hospitality Ass’n, 123 “tax-free” facility without subjecting itself to significant fines. S.Ct. at 2030-32. The regulation stated that National Park In that event, Ammex may undergo some uncertainty as to concession contracts were not covered by the federal just how far it can go in publicizing its tax-free status without Contracts Disputes Act (CDA). Id. at 2029. The Supreme risking penalties under a Michigan statute that Ammex claims Court found that because the Park Service does not administer is not applicable to it. And while the Attorney General has the CDA, the regulation merely informed the public of its not asserted that he will seek the imposition of fines for view of CDA coverage, and did not “create ‘adverse effects activity preceding the issuance of an NIA, neither has the of a strictly legal kind.’” Id. at 2031 (quoting Ohio Forestry Attorney General’s counsel assured us that the Attorney Ass’n, 523 U.S. at 733). There was thus even less hardship General will not. than in Toilet Goods, where “the FDA regulation was more onerous than [the Park Service regulation] because failure to While this factor presents a closer question than the other comply with it resulted in the suspension of the producer’s two relevant factors, a weighing of the three factors together certification and, consequently, could affect production.” leads to the conclusion that this case is not ripe. At this stage Nat’l Park Hospitality Ass’n, 123 S.Ct. at 2031. the Attorney General has indicated in a very tentative way, in a notice that has been withdrawn, that a general consumer The hardship to Ammex in this case appears to fall between protection statute applies to Ammex, but indicated that under the situations in Abbott Laboratories and Toilet Goods. certain conditions the Attorney General will not seek to Unlike in Abbott Laboratories, there are no allegations of enforce the statute. The uncertainty that Ammex may huge immediate expense in temporarily complying with the (perhaps) face is not significantly different from that faced by requirements of the MCPA. There is also no asserted threat any regulated party claiming that it is immune from an entire of criminal liability. And while the possibility of $25,000 in scheme of regulation. fines is referred to in the (now-withdrawn) NIA, it is not clear that such fines would be imposed for actions prior to a valid CONCLUSION NIA. In Abbott Laboratories, in contrast, the agency affirmatively took the position that immediate compliance Because Ammex’s pre-enforcement challenge to the was required. 387 U.S. at 152. Moreover, unlike in Abbott applicability of the MCPA is not ripe, we AFFIRM the Laboratories, an external uncertainty affects Ammex’s judgment of the district court. current advertising conduct as much as the possibility of MCPA enforcement. The underlying taxability of gasoline products here is an issue that does not appear finally resolved, and would not be affected, much less resolved, by permitting this case to go forward. If Ammex ultimately can sell gas on a tax-free basis, it is very unlikely that Ammex’s primary