Culinary Workers Union v. Del Papa

200 F.3d 614

• Court: Court of Appeals for the Ninth Circuit
• Decided: December 27, 1999
• Docket: No. 96-16407
• Status: Published

Opinions

Per Curiam Opinion; Dissent by Judge BRUNETTI.

PER CURIAM:

This is an action brought under 42 U.S.C. § 1983 seeking declaratory and injunctive relief on the ground that a state attorney general’s threat to enforce a statute that criminalizes the -willful and malicious making of derogatory statements about banks violates the First Amendment of the United States Constitution. The district court dismissed the action after the attorney general claimed that she did not have authority to enforce the statute. We conclude that the district court erred; there is a case and controversy sufficient to permit the district court to exercise jurisdiction over the constitutional claim. Accordingly, we reverse and remand to the district court for further proceedings.

I.

Members of the Culinary Workers Union Local 226 (“union”), embroiled in a labor dispute, began distributing handbills criticizing the management and financial performance of the Commercial Bank of Nevada. The Office of the Attorney General of Nevada (“attorney general”) responded to the union’s activity by sending a letter notifying the union that one of its handbills, “Commercial Bank Loses Money Again,” violated Nevada Revised Statute (“NRS”) § 668.105, in that it was “an attempt to adversely affect the financial condition of Commercial Bank of Nevada.” The letter quoted NRS § 668.105 in full:

Willful and malicious making of derogatory reports: Penalty.

Any person who willfully and maliciously makes, circulates or transmits to another or others any statement, rumor or suggestion, written, printed or by word of mouth, which is directly or by inference derogatory to the financial condition, or affects the solvency or financial standing of any bank, or who counsels, aids, procures or induces another to state, transmit or circulate any such statement or rumor is guilty of a gross misdemeanor, and upon conviction thereof shall be fined or imprisoned, or both, in the discretion of the court.

The letter continued, “[i]n addition, any other attempt by the Culinary Union to adversely affect the financial condition of a state chartered bank by use of such derogatory statements will similarly be viewed by this office as a violation of law.” Finally, the letter warned that “[i]f this office obtains information indicating the continuation of such activities after the date of your receipt of this letter, we shall refer that information to local criminal authorities for appropriate action as well as take appropriate action on behalf of the Nevada Department of Business and Industry, Financial Institutions Division.”

Upon receiving the letter, the union stopped distributing the handbill. The union thereafter filed this action, seeking injunctive and declaratory relief to prevent the attorney general from threatening to enforce NRS § 668.105 on the ground that the statute is an unconstitutional restraint on free speech, both on its face and as applied to the union. The attorney general opposed the union’s application for a TRO, arguing that “if the Attorney General were restrained from enforcing the law, the bank, its customers and the public at large could be subject to harm” and “[tjhere is no other way the State can prevent the harm that may result from such statements except by prohibiting them.” The attorney general concluded that “[tjhe State in this case has threatened to apply the challenged statute against Plaintiff Union based upon the malicious false statements and implications raised in the flyer.... ” In fact, as the record indicates, all of the representations made in the handbill were true at the time of its distribution.

The district court granted the TRO “based on the irreparable injury to the first amendment rights of plaintiff if NRS 668.105 is enforced.” After the district court granted the TRO, the attorney general filed a motion to dismiss. In the motion, the attorney general argued, for the first time, that the union’s lawsuit presented no case or controversy because only local prosecutors have the power to initiate criminal prosecutions of NRS § 668.105 under Nevada law. The district court agreed and granted the motion to dismiss, concluding “that the attorney general lack[s] specific authority to criminally prosecute plaintiff, and therefore, this action does not rise to the level of an Article III case or controversy.” Our review is de novo. See Sable Communications of California, Inc. v. FCC, 827 F.2d 640, 642 (9th Cir.1987).

II.

Article III of the federal Constitution requires that we decide only “cases” or “controversies.” This requirement precludes the exercise of jurisdiction by a federal court unless the plaintiff has suffered some actual injury or faces a threatened injury, and the injury is fairly traceable to the action challenged and is likely to be redressed by a favorable decision. See Valley Forge Christian College v. Americans United for Separation of Church and State, Inc., 454 U.S. 464, 472, 102 S.Ct. 752, 70 L.Ed.2d 700 (1982). Moreover, whenever a plaintiff seeks declaratory and injunctive relief, we have held that there must be a “substantial controversy ... of sufficient immediacy and reality to warrant the issuance of a declaratory judgment.” Ross v. Alaska, 189 F.3d 1107, 1114 (9th Cir.1999) (internal quotation and emphasis omitted). All of these justiciability limitations are reflected in the doctrines of standing, mootness, and ripeness. See Lee v. State of Oregon, 107 F.3d 1382, 1387 (9th Cir.1997). We address today, however, only a very limited application of these doctrines, namely whether the attorney general’s claim that she lacks authority to carry out her threat renders this pre-enforcement action nonjusticiable.

We begin by acknowledging that the parties heatedly dispute whether the attorney general has the power to prosecute alleged violations of NRS § 668.105. The attorney general argues that there is no statutory authority to permit her to initiate a criminal prosecution under NRS § 668.105. The union counters by arguing that the state’s banking laws are enforced by the Commissioner of Financial Institutions, NRS § 658.105, who “may sue and prosecute or defend in any action or proceeding in any court of this state,” NRS § 658.195 (emphasis added), and that the attorney general is the exclusive representative of the Commissioner, NRS § 228.110. Thus, the union asserts, if the Commissioner is to fulfill his statutory duty of enforcing the criminal provisions of the state’s banking code, he must act through the attorney general. Moreover, the union contends the attorney general also has the power to initiate criminal prosecutions whenever a statute allows her to act in a criminal matter, NRS § 228.120(5), and that she has the authority to “[ajppear in, take exclusive charge of and conduct any prosecution in any court of this state for a violation of any law of this state, when ... necessary,” NRS § 228.120(3). Taken together, the union argues that these statutory provisions would permit the attorney general to pursue her threat to prosecute union members for allegedly violating NRS § 668.105.

Although an interesting issue of state law is presented to us, we conclude that it is unnecessary for us to resolve this local dispute. “When contesting the constitutionality of a criminal statute, ‘it is not necessary that [the plaintiff] first expose himself to actual arrest or prosecution to be entitled to challenge [the] statute that he claims deters the exercise of his constitutional rights.’ ” Babbitt v. United Farm Workers Nat’l Union, 442 U.S. 289, 298, 99 S.Ct. 2301, 60 L.Ed.2d 895 (1979) (quoting Steffel v. Thompson, 415 U.S. 452, 459, 94 S.Ct. 1209, 39 L.Ed.2d 505 (1974)). Rather, under Babbitt, to establish “a dispute susceptible to resolution by a federal court,” plaintiffs must allege that they have been ‘“threatened with prosecution, that a prosecution is likely, or eveh that a prosecution is remotely possible.’ ” Id. at 299, 99 S.Ct. 2301 (quoting Younger v. Harris, 401 U.S. 37, 42, 91 S.Ct. 746, 27 L.Ed.2d 669 (1971)).

Here, there has clearly been a specific threat of prosecution; the attorney general’s letter to the union is precise and exact — she will cause the statute to be enforced unless the union ceases distribution of the handbill. In our view, such an express threat instills a fear of criminal prosecution that cannot be said to be “imaginary or wholly speculative.” See Babbitt, 442 U.S. at 302, 99 S.Ct. 2301; see also San Diego County Gun Rights Comm. v. Reno, 98 F.3d 1121, 1127 (9th Cir.1996) (noting that a “specific warning of an intent to prosecute” rather than a “general threat of prosecution” is required). Moreover, the attorney general threatened alternatively to refer prosecution to “local criminal authorities.” We have reasoned that a “case or controversy” may exist when it is demonstrated that the state attorney general intends either to enforce a statute or to “encourage local law enforcement agencies” to do so. See Long v. Van de Kamp, 961 F.2d 151, 152 (9th Cir.1992).

The district court relied on Southern Pac. Transp. Co. v. Brown, 651 F.2d 613 (9th Cir.1980), to reach its conclusion that no justiciable claim exists. In that case, we reasoned that a state attorney general’s power to direct and advise local prosecutors was insufficient to create a justiciable controversy against the attorney general. There was, however, no actual threat of enforcement in that case. The plaintiff received no letter threatening either enforcement of the challenged statute or referral to local authorities. Similarly, in Snoeck v. Brussa, 153 F.3d 984, 986 (9th Cir.1998), a case decided after the district court’s decision in this case, we explained that “a generalized duty to enforce state law or general supervisory power over the persons responsible for enforcing the challenged provision will not subject an official to suit.” But again, there was no specific threat of enforcement. See Snoeck, 153 F.3d at 987 (“Any supposed threat ... by the Commission, and there has never been one, can therefore be seen to be no more than ‘imaginary, speculative or chimerical.’ ”) (emphasis added). Here, of course, the attorney general undisputedly threatened the union with enforcement of NRS § 668.105, and fervently continued to do so until after the district court granted the union’s request for a TRO. We do not agree with the state that the attorney general’s subsequent disavowal of her authority can be construed to eliminate either the “credibility,” the “genuineness,” or the “effectiveness” of her threat. See Socialist Workers Party v. Leahy, 145 F.3d 1240, 1246 (11th Cir. 1998) (“despite [defendants’] disavowal of their authority to enforce ... we find ... that a credible threat of application remains”); see also Americans for Medical Rights v. Heller, 2 F.Supp.2d. 1307, 1313 (D.Nev.1998) (finding adequate threat of prosecution by Secretary of State even though actual enforcement must be initiated by local district attorney).

We also reject the contention that the attorney general’s letter was not a “genuine threat” because it failed to “chill” the union’s exercise of First Amendment rights. There is no dispute that the union stopped distributing the contested handbill as soon as it received the attorney general’s letter. This is substantially more than a subjective chilling effect. See San Diego County Gun Rights Comm., 98 F.3d at 1129. Moreover, we do not require, especially in the context of First Amendment cases, that the plaintiff risk prosecution by failing to comply with state law. See Doe v. Bolton, 410 U.S. 179, 188, 93 S.Ct. 739, 35 L.Ed.2d 201 (1973); Bland v. Fessler, 88 F.3d 729, 736-37 (9th Cir.1996). Rather, we seek to encourage a plaintiffs “commendable respect for the rule of law” by affording a pre-enforcement opportunity to test the constitutionality of a challenged statute. See Bland, 88 F.3d at 737.

Finally, we examine the contention that the union’s lawsuit violates the Eleventh Amendment of the Constitution, construed to prohibit federal courts from entertaining suits brought by a state citizen against the state or its instrumentality in the absence of consent. See Edelman v. Jordan, 415 U.S. 651, 662-63, 94 S.Ct. 1347, 39 L.Ed.2d 662 (1974). It is settled law, however, “that the Eleventh Amendment does not bar an action seeking prospective relief from enforcement of an unconstitutional statute.” San Francisco County Democratic Central Comm. v. Eu, 826 F.2d 814, 825 (9th Cir.1987) (citing Ex parte Young, 209 U.S. 123, 28 S.Ct. 441, 52 L.Ed. 714 (1908)), aff'd, 489 U.S. 214, 109 S.Ct. 1013, 103 L.Ed.2d 271 (1989). Thus, the Eleventh Amendment would generally present no barrier to the union’s request for declaratory and injunctive relief. See id. Nevertheless, an exception may apply, namely that the state official sued “must have some connection with the enforcement of the act” to avoid making that official a mere representative of the state. Ex parte Young, 209 U.S. at 157, 28 S.Ct. 441. We have no difficulty, however, concluding that the requisite “connection” exists here for the same reasons that the union has demonstrated that a case and controversy exists. See Okpalobi v. Foster, 190 F.3d 337, 347 (5th Cir.1999) (explaining that Article III justiciability and Eleventh Amendment analysis present “a closely related — indeed, overlapping — inquiry”). The attorney general’s acts of sending the letter to the union, threatening either to enforce the statute on behalf the Banking Commissioner or to refer the matter to a local prosecutor, and defending her authority and power to do so during much of the proceedings before the district court, establishes, in our opinion, an ample “connection with the enforcement” of the challenged statute.

III.

We conclude that the district court erred by dismissing the union’s lawsuit based on a perceived lack of case and controversy. We further conclude that the Eleventh Amendment presents no bar to this action. While the state raises the specter of mootness, we believe it provident to permit the district court to first entertain, if necessary, any contention that a controversy between the parties no longer exists. See Steffel v. Thompson, 415 U.S. 452, 460, 94 S.Ct. 1209, 39 L.Ed.2d 505 (1974) (permitting court on remand to determine whether a continuing controversy exists in light of subsequent events). Finally, we decline the union’s invitation to reach the merits of its constitutional challenge to NRS § 668.105. We agree with the state that proper resolution of this case may require a fuller development of the record.

REVERSED and REMANDED for further proceedings.