Patrick Novak v. United States

795 F.3d 1012, 2015 A.M.C. 2906, 2015 U.S. App. LEXIS 13271, 2015 WL 4568442
CourtCourt of Appeals for the Ninth Circuit
DecidedJuly 30, 2015
Docket13-16383
StatusPublished
Cited by168 cases

This text of 795 F.3d 1012 (Patrick Novak v. United States) is published on Counsel Stack Legal Research, covering Court of Appeals for the Ninth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Patrick Novak v. United States, 795 F.3d 1012, 2015 A.M.C. 2906, 2015 U.S. App. LEXIS 13271, 2015 WL 4568442 (9th Cir. 2015).

Opinions

Opinion by Judge CLIFTON; Concurrence by Judge FRIEDLAND.

OPINION

CLIFTON, Circuit Judge:

This action challenges the constitutionality of the Jones Act’s cabotage provisions, which prohibit foreign competition in the domestic shipping market. Plaintiffs allege that these provisions impair interstate trade between Hawaii and the rest of the United States to such an extent that they violate the Constitution. . The district court dismissed the action with prejudice, concluding that Plaintiffs failed to satisfy what it framed as prudential standing requirements because they alleged only generalized grievances shared with all residents and businesses in Hawaii.

We affirm the dismissal of this action. Plaintiffs have alleged more than generalized grievances and have demonstrated an “injury in fact,” but have not met their burden to show causation or redressability, the other two elements of Article III standing. Although it is possible that Plaintiffs could establish standing if they amended their complaint, any amendment would be futile because Plaintiffs’ challenge to the Jones Act would fail on the merits. An amended complaint' would, we conclude, be subject to dismissal for failure to state a claim because the enactment of the Jones Act was not beyond the authority assigned to Congress under the Commerce Clause. To the contrary, that statute is precisely the kind of legislation, a regulation of interstate commerce, that the Commerce Clause empowers Congress to enact.

I. Background

Plaintiffs are six individuals and one corporation.1 All reside in Hawaii and claim to have suffered pecuniary injury when they purchased “domestic ocean cargo shipping services on west coast Hawaii routes.” They sued the United States, claiming that the root of their problem is found in the cabotage provisions of the Jones Act, formally known as the Merchant Marine Act of,1920. Cabotage is the transport of goods or passengers between two points in the same country. Black’s Law Dictionary 243 (10th ed.2014).

The purpose of the Jones Act is to support this country’s merchant marine and its shipbuilding and repair facilities, at least in part so they may be available in times of war or national emergency. 46 U.S.C. § 50101. One way the statute aims to accomplish this objective is by limiting the domestic shipping market to American [1017]*1017companies, excluding foreign competitors. Under the cabotage provisions, any ship carrying cargo between two points in the United States must have been “built in the United States,” 46 U.S.C. § 12112(a)(2)(A), and be “wholly owned by citizens of the United States,” id. § 55102(b)(1).

According to Plaintiffs, these provisions violate the basic tenets of the Commerce Clause because they have effectively “impaired, hindered, and substantially affected and completely cut off Hawaii from interstate commerce.” “In the absence of highways and railways,” the complaint alleges, “the Jones Act promises to nullify interstate commerce to the State of Hawaii.”

Plaintiffs’ theory is that, by excluding foreign competition, the cabotage provisions have created “an essentially monopolistic Hawaiian ocean shipping market” that has resulted in “high prices” and “a de facto duopoly” of two established firms in the Hawaii-mainland shipping market. Plaintiffs contend that all Hawaii residents and businesses, including themselves, have been harmed not only by the increased shipping costs, but also by the resultant inflated cost of doing business in Hawaii because higher shipping costs lead to higher prices for imported goods. Plaintiffs assert that interstate trade between Hawaii and the rest of the United States has been significantly stifled to such an extent that the effect of the Jones Act’s restrictions amounts to “an unlawful restraint of trade and interstate commerce, thereby violating the Commerce Clause of the United States Constitution.” Plaintiffs filed this action against the United States, asserting a single cause of action under the Commerce Clause.

The district court granted the government’s motion to dismiss the action with prejudice, holding that Plaintiffs failed to establish standing on prudential grounds because they alleged only generalized grievances. Specifically, the court concluded that “Plaintiffs assert only generalized claims on behalf of an extremely broad class of persons or entities that pay for interstate shipping or are consumers of goods that have been shipped in interstate commerce.... This type of broad, generalized allegation is simply insufficient to meet standing requirements.” The court’s order cited Arizonans for Official English v. Arizona, 520 U.S. 43, 64, 117 S.Ct. 1055, 137 L.Ed.2d 170 (1997), and United States v. Hays, 515 U.S. 737, 743, 115 S.Ct. 2431, 132 L.Ed.2d 635 (1995), among other authorities.

Plaintiffs appealed.

II. Discussion

We review de novo a district court’s determination on the issue of standing. Levine v. Vilsack, 587 F.3d 986, 991 (9th Cir.2009). “Where standing is raised in connection with a motion to dismiss,” we “accept as true all material allegations of the complaint, and construe the complaint in favor of the complaining party.” Id. (alteration, citation, and quotation marks omitted). We also “presume that general allegations embrace those specific facts that are necessary to support the claim.” Jewel v. Nat’l Sec. Agency, 673 F.3d 902, 907 (9th Cir.2011) (citation and quotation marks omitted). We may affirm on any proper ground supported by the record. Hartmann v. Cal. Dep’t of Corr. & Rehab., 707 F.3d 1114, 1121 (9th Cir.2013).

A. Standing

The “irreducible constitutional minimum” of Article III standing consists of (1) “injury in fact,” (2) “a causal connection between the injury and the conduct complained of,” and (3) a likelihood “that the injury will be redressed by a favorable decision.” Lujan v. Defenders of Wildlife, [1018]*1018504 U.S. 555, 560-61, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992) (quotation marks omitted). “The party invoking federal jurisdiction bears the burden of establishing these elements.” Id. at 561, 112 S.Ct. 2130.

1. Injury in Fact

“[A]n injury in fact” is “an invasion of a legally protected interest” that is “concrete and particularized” and “actual or imminent, not conjectural or hypothetical.” Id. at 560, 112 S.Ct. 2130 (quotation marks omitted). Because a generalized grievance is not a particularized injury, a suit alleging only generalized grievances fails for lack of standing. Lexmark Int’l, Inc. v. Static Control Components, Inc., — U.S. —, n. 3, 134 S.Ct. 1377, 1387 n. 3, 188 L.Ed.2d 392 (2014); Lance v. Coffman, 549 U.S. 437, 439-40, 127 S.Ct. 1194, 167 L.Ed.2d 29 (2007) (per curiam); Newdow v. Rio Linda Union Sch. Dist., 597 F.3d 1007, 1016 (9th Cir.2010).

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795 F.3d 1012, 2015 A.M.C. 2906, 2015 U.S. App. LEXIS 13271, 2015 WL 4568442, Counsel Stack Legal Research, https://law.counselstack.com/opinion/patrick-novak-v-united-states-ca9-2015.