The Art & Antique Dealers League of Am., Inc. v. Seggos

121 F.4th 423

• Court: Court of Appeals for the Second Circuit
• Decided: November 13, 2024
• Docket: 21-569
• Status: Published

Opinion

21-569 The Art & Antique Dealers League of Am., Inc. v. Seggos

UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT

August Term, 2021

(Argued: March 4, 2022 Decided: November 13, 2024)

Docket No. 21-569

_____________________________________

THE ART AND ANTIQUE DEALERS LEAGUE OF AMERICA, INC., THE NATIONAL ANTIQUE AND ART DEALERS ASSOCIATION OF AMERICA, INC.,

Plaintiff-Appellants,

v.

BASIL SEGGOS, in his official capacity, as the Commissioner of the New York State Department of Environmental Conservation,

Defendant-Appellee,

and

THE HUMANE SOCIETY OF THE UNITED STATES, CENTER FOR BIOLOGICAL DIVERSITY, NATURAL RESOURCES DEFENSE COUNCIL, INC., WILDLIFE CONSERVATION SOCIETY,

Intervenor-Defendant-Appellees. *

______________________________

* The Clerk of Court is respectfully directed to amend the caption to the form above, so as to reflect the correct name of the National Antique and Art Dealers Association of America, Inc., as well as the correct party status of the Humane Society of the United States, Center for Biological Diversity, Natural Resources Defense Council, Inc., and Wildlife Conservation Society as Intervenor-Defendant-Appellees, as above.

1 Before:

LEVAL, SULLIVAN, and PÉREZ, Circuit Judges.

In their suit challenging New York State Environmental Conservation Law § 11-0535-a (the “State Ivory Law”), Plaintiffs The Art and Antique Dealers League of America, Inc. and The National Antique and Art Dealers Association of America, Inc. appeal from the judgment of the United States District Court for the Southern District of New York (Schofield, J.) in favor of Defendant Basil Seggos, the Commissioner of the New York State Department of Environmental Conservation. The district court dismissed Plaintiffs’ claim that the State Ivory Law is preempted by the federal Endangered Species Act (“ESA”), 16 U.S.C. § 1531 et seq., and its implementing regulations, and granted summary judgment for Defendant on Plaintiffs’ claim that the State Ivory Law violates free speech rights guaranteed by the First Amendment, while denying Plaintiffs’ motion for summary judgment on the First Amendment claim. We AFFIRM the dismissal of the preemption claim. On the other hand, we REVERSE the grant of summary judgment on the constitutional claim and direct the district court to grant summary judgment in favor of Plaintiffs.

JUDGE SULLIVAN dissents in a separate opinion.

CALEB R. TROTTER, Pacific Legal Foundation, Sacramento, CA (James M. Manley, Pacific Legal Foundation, Phoenix, AZ, Alan E. Sash, McLaughlin & Stern, LLP, New York, NY, on the brief), for Plaintiff-Appellants.

GRACE X. ZHOU, Assistant Solicitor General (Barbara D. Underwood, Solicitor General, Steven C. Wu, Deputy Solicitor General, on the brief), for Letitia James, Attorney General, State of New York, New York, NY, for Defendant- Appellee.

2 RALPH E. HENRY (Rebecca A. Cary, on the brief), The Humane Society of the United States, Washington, DC, for Intervenor-Defendant-Appellees.

LEVAL and PÉREZ, Circuit Judges:

In their suit challenging New York State Environmental Conservation

Law § 11-0535-a (the “State Ivory Law”), The Art and Antique Dealers League

of America, Inc. and The National Antique and Art Dealers Association of

America, Inc. (together, the “Dealers” or “Plaintiffs”) appeal from the

judgment of the United States District Court for the Southern District of New

York (Schofield, J.) in favor of Defendant Basil Seggos (“Defendant” or the

“State”), sued as the Commissioner of the New York State Department of

Environmental Conservation (“DEC”). Plaintiffs seek relief from the State’s

enforcement against them of the State Ivory Law and a licensing restriction

thereunder, which prohibits licensees from “physically display[ing] for sale

within New York State any [ivory] item that is not authorized for Intrastate

sale” (the “Display Restriction”). App’x at 100. Plaintiffs contend that they are

entitled to this relief on two grounds: First, because pertinent portions of the

State Ivory Law are preempted by the federal Endangered Species Act

3 (“ESA”), 16 U.S.C. § 1531 et seq., and its implementing regulations, and,

second, because the Display Restriction violates their free speech rights under

the First Amendment. The district court dismissed Plaintiffs’ preemption

claim, granted summary judgment for Defendant on the First Amendment

claim, and denied Plaintiffs’ motion for summary judgment on the First

Amendment claim. We affirm the dismissal of the preemption claim. On the

other hand, we reverse the grant of Defendants’ motion for summary

judgment on the constitutional claim and direct the entry of judgment in

favor of Plaintiffs, barring Defendant from enforcing the Display Restriction

against Plaintiffs’ members. 1

BACKGROUND

I. The Pertinent Rules Governing Commerce in Ivory

In 1973, Congress enacted the ESA, restricting commerce in products

made from endangered and threatened species. 16 U.S.C. § 1538. Pursuant to

that statute, the United States Fish and Wildlife Service (“FWS”) has

promulgated regulations, which classify Asian elephants and most species of

1Because barring enforcement of the Display Restriction is based in part on Defendant’s decision not to contest an issue of law that is an essential element of the claim, we need not and do not rule on whether the Display Restriction is in fact consistent with the First Amendment.

4 rhinoceros to be “endangered species.” See 50 C.F.R. § 17.11. In addition, the

FWS classified African elephants as a “threatened species” and issued special

rules regulating commerce relating to them in a manner similar to the

prohibitions governing endangered species. See id. § 17.40(e).

The ESA prohibits the import and export of endangered species and

any part or product derived from them, 16 U.S.C. § 1538(a)(1)(A); id. § 1532(8),

as well as their sale, offering for sale, or movement in interstate and foreign

commerce, id. § 1538(a)(1)(D)–(F). Similar prohibitions apply to African

elephant products. 50 C.F.R. § 17.40(e).

These restrictions are subject to exceptions, two of which are relevant

here. First, § 1539(h) of the ESA, which the statute characterizes as an

“exception” to its prohibitions, see 16 U.S.C. § 1539(h)(2) (“Any person who

wishes to import an article under the exception provided by this subsection

shall submit . . . .” (emphasis added)), provides that the ESA’s prohibitions do

not apply to certain qualifying “antique articles” that are at least 100 years of

age (the “Antiques Exception”), see id. § 1539(h)(1), which may be imported

into the United States by one who obtains a federal permit, id. § 1539(h)(2).

Second, FWS’s regulation governing African elephants prohibits the sale or

5 offer for sale “in interstate or foreign commerce” of ivory, except for certain

items containing “de minimis” amounts of ivory (the “De Minimis

Exception”). 50 C.F.R § 17.40(e)(3). This regulation is also characterized as an

“exception.” Id. § 17.40(e) (“[p]ersons seeking to benefit from the exceptions

provided in this paragraph (e) must demonstrate . . . ” (emphasis added)).

The De Minimis Exception is satisfied if, among other things, 1) the ivory

makes up no more than 50 percent of the object’s volume or value; 2) the total

weight of its ivory component is less than 200 grams; and 3) it was

manufactured or handcrafted before July 6, 2016. Id. § 17.40(e)(3)(iii), (v)–(vii).

The State Ivory Law, enacted in 2014, provides that, subject to specified

exceptions, “no person shall sell, offer for sale, purchase, trade, barter or

distribute an ivory article or rhinoceros horn.” N.Y. Env’t Conserv. Law § 11-

0535-a(2). New York’s exceptions are narrower than the federal exceptions.

For example, the State Ivory Law authorizes the DEC to “issue licenses or

permits for the sale, offering for sale, purchase, trading, bartering or

distribution” of certain “bona fide antique[s]” (“DEC licenses”). Id. § 11-0535-

a(3). To qualify as a “bona fide antique,” an item must be at least 100 years

6 old, and the ivory or horn component must make up less than twenty percent

of the item’s total volume. Id. § 11-0535-a(3)(a).

These exceptions to the State’s prohibitions differ from the exceptions

to the federal prohibitions in two important ways. First, the State law’s

exception for antiques applies only to items consisting of less than twenty

percent ivory, while the ESA’s Antiques Exception contains no such

limitation. Accordingly, commerce in antique products consisting of twenty

percent ivory or more runs afoul of the State Ivory Law but not necessarily of

the ESA. Second, the State Ivory Law, unlike the federal regulation, does not

include a de minimis exception for items containing small amounts of African

elephant ivory that are not necessarily antiques.

The State Ivory Law authorizes the DEC Commissioner to issue licenses

or permits for the sale of certain ivory articles. Id. § 11-0535-a(3). Trading in

ivory without a DEC license or permit may incur civil and criminal penalties.

Id. §§ 71-0924(4), 71-0925(16). These licenses contain a number of conditions

that bind the licensees. One such condition, the Display Restriction, provides

that licensees “shall not physically display for sale within New York State any

item that is not authorized for Intrastate sale.” App’x at 100. Licensees may

7 advertise these items in print or online, as long as they include a notice that

the items may not be bought or sold in the State of New York. Id.

II. This Litigation

The Dealers’ complaint alleges that the State Ivory Law is preempted

by the ESA and its implementing regulations. It also asserts that the Display

Restriction, a condition of DEC licenses, violates the First Amendment. The

Humane Society of the United States, Center for Biological Diversity, Natural

Resources Defense Council, Inc., and Wildlife Conservation Society

(“Intervenors”) intervened as defendants. The district court dismissed

Plaintiffs’ preemption claim. Art & Antique Dealers League of Am., Inc. v. Seggos,

394 F. Supp. 3d 447 (S.D.N.Y. 2019). Following discovery, the district court

denied Plaintiffs’ motion for summary judgment and granted summary

judgment to Defendant on the First Amendment claim. Art & Antique Dealers

League of Am., Inc. v. Seggos, 523 F. Supp. 3d 641 (S.D.N.Y. 2021). Plaintiffs

brought this appeal.

8 DISCUSSION

I. Preemption

We turn first to the question of preemption. The Dealers contend that

the district court erred in rejecting their claim that the State Ivory Law is

preempted by the ESA and its implementing regulations. Having reviewed

the grant of a motion to dismiss de novo, Fink v. Time Warner Cable, 714 F.3d

739, 740–41 (2d Cir. 2013), we agree with the district court that the State Ivory

Law is not preempted. 2

The Supremacy Clause provides that federal law “shall be the supreme

Law of the Land; and the Judges in every State shall be bound thereby, any

Thing in the Constitution or Laws of any State to the Contrary

notwithstanding.” U.S. Const. art. VI, cl. 2. Under the doctrine of federal

preemption, “state and local laws that conflict with federal law are without

effect.” N.Y. SMSA Ltd. P’ship v. Town of Clarkstown, 612 F.3d 97, 103–04 (2d

2 In their briefs to this court, the Dealers allude to a second argument—that the Display Restriction is also preempted. This argument does not appear to have been raised below, and the district court did not address it. Furthermore, because we grant Plaintiffs an injunction against enforcement of the Display Restriction against them, Plaintiffs’ claim of preemption of that provision is moot. We do not address it.

9 Cir. 2010) (internal quotation marks omitted). There are three types of

preemption:

(1) express preemption, where Congress has expressly preempted local law; (2) field preemption, where Congress has legislated so comprehensively that federal law occupies an entire field of regulation and leaves no room for state law; and (3) conflict preemption, where local law conflicts with federal law such that it is impossible for a party to comply with both or the local law is an obstacle to the achievement of federal objectives.

Id. at 104 (internal quotation marks omitted). Because Plaintiffs have

abandoned their field preemption argument on appeal, we consider only

express and conflict preemption. Appellants’ Br. at 23 n.7.

A. Express Preemption

Express preemption occurs where “Congress . . . withdraw[s] specified

powers from the States by enacting a statute containing an express

preemption provision.” Arizona v. United States, 567 U.S. 387, 399 (2012); see

also CSX Transp., Inc. v. Easterwood, 507 U.S. 658, 664 (1993).

The ESA includes an express preemption clause. It reads as follows:

Any State law or regulation which applies with respect to the importation or exportation of, or interstate or foreign commerce in, endangered species or threatened species is void to the extent that it may effectively (1) permit what is prohibited by this chapter or by any regulation which implements this chapter, or (2) prohibit what is authorized pursuant to an exemption or permit provided

10 for in this chapter or in any regulation which implements this chapter. This chapter shall not otherwise be construed to void any State law or regulation which is intended to conserve migratory, resident, or introduced fish or wildlife, or to permit or prohibit sale of such fish or wildlife. Any State law or regulation respecting the taking of an endangered species or threatened species may be more restrictive than the exemptions or permits provided for in this chapter or in any regulation which implements this chapter but not less restrictive than the prohibitions so defined.

16 U.S.C. § 1535(f).

This appeal requires us to interpret the first sentence of the preemption

provision. We begin with the text of the statutory provision and its

surrounding context. The first sentence (relating to state laws and regulations

that concern importation, exportation, and interstate and foreign commerce)

is in two clauses. Clause 1 addresses state law that is more permissive than

the ESA, in that it purports to allow conduct that is prohibited by federal law.

Clause 2, the clause that concerns us here, addresses state law that is stricter

than the ESA, in that it prohibits conduct that is allowed under federal law.

The Dealers argue that Clause 2 preempts the State Ivory Law, or at

least those provisions of it that effectively prohibit transactions that the ESA

allows (such as the interstate sale of certain antique products consisting of

more than twenty percent ivory and of non-antiques containing a de minimis

11 amount of African elephant ivory). They argue that “Congress used

exceedingly broad language” in its express preemption provision. Appellants’

Br. at 30. We disagree. The scope of the pertinent portion of the ESA’s

preemption clause is narrower than the Dealers recognize, and the

preemption provision as a whole expresses a clear intention of Congress to

allow state law to be more protective of endangered species than the ESA.

Clause 1, relating to more permissive state law, does indeed use very

broad language. It voids any state law that “permit[s] what is prohibited by

this chapter.” 16 U.S.C. § 1535(f). If Congress had intended, as the Dealers

(and the dissenting opinion) contend, that Clause 2 preempt equally broadly,

voiding any state law to the extent that it prohibits conduct that the ESA

permits, the natural way to draft Clause 2 would have been to employ the

same broad formula as used in Clause 1. The clause would likely have read,

“Any state law . . . is void to the extent that it may . . . prohibit what is

authorized by this chapter.” Congress, however, did not employ such broad

language. Clause 2 employs what appear to be far more narrow terms. It

voids state law only to the extent that it “may effectively prohibit what is

authorized pursuant to an exemption or permit provided for under this

12 chapter . . . .” Id. (emphasis added). In our view, Congress did not add the

phrase “pursuant to an exemption or permit provided for” without reason.

The Dealers and the dissent argue that the change of language does not

matter—that the terminology Congress employed communicates the same

meaning as it would have if it had expressly voided provisions of state law

that “may prohibit what is authorized by this chapter.” Evaluating the

Dealers’ argument requires that we examine the taxonomy established in the

ESA to determine what the Act means by “authorized pursuant to an

exemption or permit.” Id. We find that this inquiry is answered by § 1539 of

the ESA. Id. § 1539. In § 1539, the terms “exemption” and “permit” are

employed in a narrow and precise fashion that distinguishes them from other

limitations on the scope of the ESA’s regulatory sweep. See id. § 1539(a), (b),

(d), (f). The section suggests an altogether rational justification for why

Congress, in Clause 2, expressly preempted state laws that prohibit conduct

authorized by these precise exemptions and permits, but not state laws that

prohibit conduct that the ESA does not regulate.

Section 1539 sets out “exceptions” to the ESA’s prohibitions. Included

among these “exceptions” are “exemptions” and “permits,” as well as other

13 categories of “exceptions” that are not “exemptions” or “permits.” Certain

exceptions (other than exemptions and permits) result from simple

application of the terms of the statute or the regulations promulgated under

it. These provisions expressly narrow the Acts’s prohibitions. “Exemptions”

and “permits,” which are particular categories of “exceptions,” are different.

They refer to administrative actions, taken by the Secretary of the appropriate

Department, 3 that expressly grant an applicant authorization to engage in

conduct that the ESA otherwise prohibits. “Exemptions” and “permits” do

not result from simple application of the terms of the statute (or the

regulations promulgated under it), but from administrative individualized

grants of authority by the Secretary of the empowered Department.

Various subsections of §§ 1536 and 1539 confirm this interpretation of

“exemption” by explaining the administrative procedure for obtaining an

exemption. For example, § 1539(f), for certain endangered species parts

owned prior to the Act’s passage, explains that “Any person seeking an

exemption described in paragraph (2) of this subsection shall make

application therefor to the Secretary in such form and manner as he shall

3 The statute’s references to the “Secretary” mean in different instances the Secretary of the Interior, of Commerce, or of Agriculture. See 16 U.S.C. § 1532(15).

14 prescribe . . . .” Id. § 1539(f)(3). This section also requires that the Secretary

“publish notice in the Federal Register of each application for an exemption or

permit which is made under this section” and “invite the submission [of

comments] from interested parties.” Id. § 1539(c). It places the burden of

proving that an “exemption” or “permit” is applicable and valid on “any

person claiming the benefit of any exemption or permit.” Id. § 1539(g).

Section 1539(b)(1), pertaining to “[h]ardship exemptions,” provides that “the

Secretary, in order to minimize [undue economic] hardship, may exempt such

person from the application of section 1538(a) of this title to the extent the

Secretary deems appropriate if such person applies to him for such

exemption . . . .” Id. § 1539(b)(1). Likewise, § 1536 discusses “exemptions” at

length, outlining that an “exemption” is an expressly designated

authorization by the Secretary which is issued in response to an application.

See, e.g., id. § 1536(g)(1) (“[A] permit or license applicant may apply to the

Secretary for an exemption for an agency action . . . .”). All these references

combine to make clear that, in the Act’s terminology, “exemptions,” like

“permits,” are administrative grants of authorization, unlike provisions of the

15 Act which, by their terms, automatically provide exclusions from the scope of

the Act’s coverage.

The Act repeatedly uses “exemption” in this fashion. More than eighty

times in §§ 1536 and 1539, the Act uses forms of the word “exemption”

(including “exempt,” “exempted,” and “exemptions”) to refer to the

Secretary’s administrative grant of an application. See generally 16 U.S.C.

§§ 1536, 1539. In every instance (save one, which we discuss below) of those

more than eighty references to “exemptions,” the word refers to an

administrative individual grant of authorization by the Secretary and not to

an authorization that results from a categorical, self-executing application of

the terms of the statute, such as the Antiques Exception and De Minimis

Exception.

In contrast, the statute uses the word “exception” to denote (in addition

to “exemptions” and “permits”) provisions that categorically narrow the

scope of the Act’s coverage by simple application of the statutory terms

without need for administrative action. Thus, the Antiques Exception refers to

itself as an “exception” and categorically excludes certain transactions from

the coverage of the Act by simple application of the Act’s provisions. See id.

16 § 1539(h)(2). The De Minimis Exception similarly provides that sale or

transportation of ivory in interstate or foreign commerce is prohibited

“[e]xcept for antiques and certain manufactured or handcrafted items

containing de minimis quantities of ivory.” 50 C.F.R § 17.40(e)(3) (emphasis

added). Neither is referred to as an “exemption” or “permit.”

Our conclusion that the ESA’s use of the word “exemption” refers to

such an administrative grant of authority is further reinforced by the Act’s

similar usage of the word “permit,” with which the term “exemption” is

paired in the preemption clause. A “permit,” according to dictionary

definition, is an individualized act of authorization: “[a] certificate evidencing

permission; an official written statement that someone has the right to do

something.” Permit, Black’s Law Dictionary (12th ed. 2024). The ESA uses the

term “permit” exclusively to refer to such written individual authorizations.

See, e.g., 16 U.S.C. § 1539(a)(2)(C) (“The Secretary shall revoke a permit issued

under this paragraph if he finds that the permittee is not complying with the

terms and conditions of the permit.”). The noscitur a sociis canon of statutory

interpretation suggests as a guide to interpretation of statutory ambiguities

that a word should be “known by the company it keeps.” Gustafson v. Alloyd

17 Co., 513 U.S. 561, 575 (1995). Although our interpretation of “exemption” does

not depend upon it, the canon sensibly suggests here, because of the statute’s

coupling of “exemption” with “permit,” that both words refer to

administrative individualized authorizations issued in response to an

application. Further, the other two instances in which the ESA uses the phrase

“exemption or permit” refer to individualized administrative authorizations,

and both appear directly after a subsection outlining individualized

exemptions for which an application to the Secretary is required. See 16 U.S.C.

§ 1539(c) (referring to “each application for an exemption or permit” (emphasis

added)); id. § 1539(g) (“[A]ny person claiming the benefit of any exemption or

permit under this chapter shall have the burden of proving that the exemption

or permit is applicable, has been granted, and was valid and in force at the

time of the alleged violation.” (emphasis added)).

It remains for us to apply the definitions derived from § 1539 to the

words of the express preemption provision of § 1535 and to consider the

meaning that Congress intended. We have discussed at some length the first

sentence of the preemption provision and the meaning of its second clause.

However, the meaning is best understood if one takes into account the

18 entirety of the provision, rather than only the clause in contention. As a

whole, the preemption provision’s three sentences complement one another

and clarify Congress’s desired goal.

The first sentence addresses state laws relating to importation,

exportation, or interstate or foreign commerce in endangered or threatened

species. See 16 U.S.C. § 1535(f). With respect to these activities, Clause 1 voids

state laws that would permit conduct that is prohibited by the ERA. Id. If the

ESA prohibits conduct that state law allows, the federal law prevails, and the

state law purporting to allow the conduct is void. The statute, however, has

no comparable provision voiding any state law that is more protective of

endangered species than the ESA. Clause 2 deals with this sort of conflict

between state and federal law in a precise, narrowly tailored way. When the

state law purports to prohibit conduct for which a Secretary has issued an

express individualized authorization (in the form of an exemption or a

permit), only then must the state law yield. Id. The primacy of federal law is

preserved so that the recipient of the Secretary’s exemption or permit will be

19 allowed to do what the Secretary has expressly authorized by an exemption

or permit.

Congress’s limitation on the scope of Clause 2 was purposeful, a

conclusion that the preemption provision’s second sentence bolsters. The next

sentence expressly states, in part, “This chapter shall not otherwise be

construed to void any State law or regulation which is intended to conserve

migratory, resident, or introduced fish or wildlife . . . .” Id. This emphasizes

that the policy of the ESA, with respect to preemption, is not to compel the

states to adopt standards that conform to the federal statute. To the contrary,

protection of endangered species is the Act’s goal, so that state laws that

protect the endangered species more fully than the ESA are allowed to remain

in force notwithstanding the disparity, unless preempted in the narrow

circumstances detailed in Clause 2.

The final sentence of the preemption provision further clarifies this

policy goal. The final sentence concerns “the taking of an endangered

species.” Id. The Act’s intention to protect endangered species from takings is

even stronger than its intention to protect them from “importation or

exportation . . . or interstate or foreign commerce.” Id. Thus, the final sentence

20 is more protective of endangered and threatened species than Clause 2 of the

first sentence. It provides, “Any State law or regulation respecting the taking

of an endangered species or threatened species may be more restrictive than

the exemptions or permits provided for in this chapter or in any regulation

which implements this chapter but not less restrictive than the prohibitions so

defined.” Id. In other words, where state laws and the ESA are in conflict

with respect to a taking, in that the state law forbids a taking that is

permissible under the ESA, the state-law prohibition is not preempted; it

remains valid even when the particular taking has been expressly authorized

by a permit or exemption granted by the Secretary.

Thus, all three sentences of the ESA’s express preemption provision

take pains to provide that state laws establishing protections for endangered

and threatened species beyond those established by the ESA are not voided.

The fact that Congress intended to so empower states to enact protections of

endangered species going beyond those adopted in the ESA is underlined in

the House Report. We look to this legislative history to confirm our

interpretation of the text. The House Report clearly expresses Congress’s

intention that “states would and should be free to adopt legislation or

21 regulations that might be more restrictive than that of the Federal

Government and to enforce the legislation.” H.R. Rep. No. 93-412, at 7 (1973).

The preemption provision of § 1535(f) is consistent with this expressed

intention to preserve, rather than preempt, state regulation that is more

protective of endangered or threatened species than the ESA.

Finally, Congress’s distinction between “exceptions” on the one hand,

and “exemptions and permits” on the other, makes logical sense, especially

when considering Congress’s declared intention, noted above, to leave states

free to protect species more broadly than the ESA does. Through the express

preemption provision, Congress gave effect to individualized decisions made

by federal officials, via an exemption or permit, notwithstanding a contrary

provision of state law. As a result, state law may be more protective of

endangered and threatened species than the federal law, unless the state law

would countermand a considered, individualized decision of a department of

the federal government. Our interpretation of the preemption clause would

countenance states enacting legislative protections of protected species

broader than the protections enacted in the ESA, but would preempt states

from nullifying particular individualized decisions made by the Secretary, on

22 the assumption that the Secretary presumably had good reasons based on

federal policy for granting such exemptions and permits.

For all these reasons, we conclude that the phrase “authorized pursuant

to an exemption or permit provided for in this chapter,” 16 U.S.C. § 1535(f),

refers to grants of individualized authorization by the Secretary and not to

self-executing, categorical exceptions carved out from the scope of the ESA’s

prohibitions. As such, the De Minimis and Antiques Exceptions are not

“exemptions or permits” that can give rise to express preemption. Because

neither the De Minimis Exception nor the Antiques Exception is an

“exemption or permit,” the ESA’s preemption clause does not void state

statutes that prohibit conduct that those exceptions carve out from the scope

of the statute’s prohibitions.

Plaintiffs finally point to the ESA’s savings clause in the second

sentence of the express preemption provision. They argue that the clause’s

preservation of state power to “permit or prohibit sale” of “migratory,

resident, or introduced fish or wildlife,” 16 U.S.C. § 1535(f), suggests that

Congress meant to allow states to enact their own measures to conserve

resident species, while leaving the regulation of non-resident and foreign

23 species to the federal government. Such an inference would be contrary to the

legislative history discussed above, and there is no need to rely on it here. The

ESA’s preemption clause explicitly lays out the criteria for preemption. As

discussed above, the Antiques and De Minimis Exceptions, as they are not

“exemption[s] or permit[s] provided for in [the ESA or its implementing

regulations],” id., do not meet those criteria.

We therefore find that the ESA’s express preemption clause does not

expressly preempt the State Ivory Law.

B. Response to the Arguments of the Dissenting Opinion

The dissenting opinion relies on several arguments regarding express

preemption, each of which we find unpersuasive. First, it relies on a

dictionary definition of “exemption”— “[f]reedom from a duty, liability, or

other requirement; an exception,” Exemption, Black’s Law Dictionary (11th ed.

2019)—to show that the word means nothing different in this context from an

“exception.” Because those two words can be used to mean the same thing,

the dissent argues that the statute uses the two words interchangeably,

without differentiation, so that, for any usage in the statute of either word, the

other could be substituted without affecting the meaning. Because, according

24 to dictionary definition, to be “exempted” from obligations is to be

“excepted” from them, the dissent argues that the two words necessarily have

the same meaning and are used interchangeably in the ESA.

We do not dispute that an “exemption” is an “exception.” Indeed, the

ESA treats an “exemption” as an “exception.” But Congress is free to use

words in statutes with an assigned meaning, and it has done so in the ESA. It

has chosen to establish “exemptions” (as well as “permits”) as subcategories

of “exceptions.” “Exceptions” include both statutory provisions that diminish

the scope of the statute’s prohibitions and individualized grants by the

Secretary that authorize one to act in a manner that might otherwise violate

the statute’s terms. “Exemptions,” in contrast, are limited to the latter. And in

the preemption provision of § 1535, which preempts state law only when it

prohibits conduct that a federal official has authorized by means of an

“exemption or permit,” the distinction between “exception” and “exemption”

becomes crucial. 16 U.S.C. § 1535(f). The fact that Congress could have used

the words interchangeably does not mean that it did.

In making this argument, the dissenting opinion does not confront

evidence of Congress’s intent, which undermines its reading. For starters, it

25 would be needlessly confusing for Congress to use different words

interchangeably to mean the same thing, without any reason to do so. The

dissent suggests no reason why Congress would have wished to sow needless

confusion in this manner. As we have explained above, examination of the

actual usage of the two words reveals that Congress used them to mean

slightly different things. See supra pp. 13–18.

The dissent does not ask, much less answer, why, in § 1539, entitled

“Exceptions,” Congress would have switched to the word “exemption” when

discussing individualized grants by the Secretary of “exceptions” that

resemble “permits,” if the change of words meant nothing. See id. § 1539(b).

The opinion, furthermore, brushes aside as meaningless the fact that for more

than eighty times (with only one exception), Congress used “exemption” in

the ESA to refer to this particular type of exclusion, akin to the grant of a

permit.

Second, based on the single instance in which the ESA uses

“exemption” to refer to a categorical, self-executing exception from the Act’s

prohibitions, the dissent argues that this single nonconforming use among

26 more than eighty shows Congress’s intention to use the two words

interchangeably. Dissenting Opinion at 5–6 (citing 16 U.S.C. § 1538(b)).

The argument is not convincing. Where Congress has 1) clearly

documented, as in § 1539, its intention to use “exemption” as a narrower

subcategory of “exception” to mean an individualized authorization by the

Secretary; 2) adhered to that formula more than eighty times throughout the

ESA to create a carefully structured preemption schema, allowing state

prohibitions broader than that of the ESA’s prohibitions except when the

federal authorization results from an individualized grant by the Secretary;

and 3) confirmed in the House Report its intention to leave states free to enact

broader protections of endangered species than those established by the Act,

it seems far more reasonable to view this single deviation as an

understandable slip-up, rather than as a nullification of what Congress so

carefully crafted. We do not agree with the dissent’s argument that this one

nonconforming use of “exemption” changes the meaning of the more than

eighty statutory usages of the term and thereby nullifies a highly sensible,

carefully structured scheme of preemption.

27 Third, the dissent notes that the implementing regulations of the ESA

do not adhere to the taxonomy, which is so scrupulously followed in the Act

itself, but appear to use “exception” and “exemption” interchangeably to

mean the same thing. The dissent then argues that we should interpret the

Act as using those terms interchangeably as they are used in the regulations.

This argument is certainly not frivolous. We would be on firmer

ground if the regulations adhered to § 1539’s taxonomy, using “exemption”

with a narrower meaning than “exception.” Nonetheless we do not find the

argument convincing.

Since the Supreme Court’s decision in Loper Bright Enterprises v.

Raimondo, 144 S. Ct. 2244 (2024), terminating the era of Chevron U.S.A. Inc. v.

Natural Resources Defense Council, Inc., 467 U. S. 837 (1984), the importance of

agency interpretations of statutes is much diminished. “The [Administrative

Procedure Act] . . . codifies,” the Loper Court wrote, “for agency cases the

unremarkable, yet elemental proposition reflected by judicial practice dating

back to Marbury: that courts decide legal questions by applying their own

judgment.” 144 S. Ct. at 2261. An administrative agency does not have

authority to pass regulations that are inconsistent with the meaning of a

28 statute. The fact that the implementing regulations at times fail to observe the

distinction drawn by the Act between “exception” and “exemption” does not

mean that the statute uses these words interchangeably. In the post-Chevron

era, regardless of whether a statute is deemed to be ambiguous or

unambiguous, interpretation of the statute is a question of law, and

accordingly, it is the court, and not the administrative agency, that determines

its meaning. See id. While the court may of course be persuaded by the

correctness of the agency’s interpretation, see Skidmore v. Swift & Co., 323 U.S.

134, 139–40 (1944), the court is not required to defer to the agency’s

interpretation. Id. The court makes its own determination of the meaning of

ambiguous provisions. Loper Bright, 144 S. Ct. at 2273.

For this instance, we have no doubt, given the care with which

Congress structured the relationship between “exceptions” and

“exemptions,” and the consequence it intentionally gave to the difference

between them with respect to preemption, that Congress did not give the two

words the same meaning in the ESA.

We recognize that the one, perhaps only, circumstance in which

consequences attach to distinctions between “exception” and “exemption” is

29 the operation of the preemption provisions of § 1535. No regulation was

drafted to help implement it. It is therefore entirely possible that, in drafting

of the regulations, the agency failed to perceive the importance of the precise,

narrow meaning the Act gives to “exemption.”

Finally, the dissent argues that its interpretation is supported by the

fact that the Marine Mammal Protection Act, which is cross-referenced in the

ESA, does not distinguish between “exceptions” and “exemptions.” Dissent at

7. We are not persuaded. The Marine Mammal Protection Act is a distinct act.

Its usages do not override the system of usages carefully established in the

ESA.

C. Conflict Preemption

The Dealers further contend that the State Ivory Law is nullified by

virtue of the doctrine of conflict preemption. Even if the State Ivory Law is

not expressly preempted by the ESA, under the doctrine of conflict

preemption, state law is preempted “where it is impossible for a private party

to comply with both state and federal law and where . . . [the state law] stands

as an obstacle to the accomplishment and execution of the full purposes and

objectives of Congress.” Crosby v. Nat’l Foreign Trade Council, 530 U.S. 363,

30 372–73 (2000) (internal quotation marks and citations omitted). The Dealers

argue that the State Ivory Law is an obstacle to the purposes and objectives of

the ESA.

The State, however, recognizing a potential for conflict, does not apply

its law’s prohibitions within the area of conflict and grants licenses to

interstate and international sales that are in compliance with the federal law.

Seggos, 394 F. Supp. 3d at 451. In view of the State’s concession, we find there

is no further category of transactions where the State law either permits

transactions prohibited by federal law or prohibits transactions that are

permitted by federal law.

The Dealers nonetheless argue that the State law stands as an obstacle

to the ESA’s objective of allowing interstate sales of objects within the scope

of the ESA’s exceptions, because the State’s prohibition of intrastate sales of

these objects renders it difficult to conduct profitably a business in interstate

sales. We agree with the district court that the Dealers’ arguments fail to make

a case of conflict preemption. “[F]ederal law does not preempt state law

under [conflict] preemption analysis unless the repugnance or conflict is so

direct and positive that the two acts cannot be reconciled or consistently stand

31 together.” Marentette v. Abbott Lab’ys, Inc., 886 F.3d 112, 117 (2d Cir. 2018)

(first alteration in original) (internal quotation marks omitted). It is possible,

even likely, that a restriction on intrastate sales could make it much less

profitable to be an interstate ivory dealer in New York. However, there is not

an irreconcilable conflict between allowing the out-of-State sale of some items

and prohibiting the sale of those same items within the State. As discussed

above, the DEC will not deny permits for interstate or foreign sales of ivory.

Because Plaintiffs are free to sell these items across state lines in accordance

with the ESA, there is no basis to conclude that the State Ivory Law

undermines the regulatory scheme established in federal law.

We therefore affirm the district court’s dismissal of Plaintiffs’

preemption claim.

II. First Amendment

Under the State Ivory Law, those seeking to engage in the “sale,

offering for sale, purchase, trading, bartering or distribution of ivory articles”

must obtain a license from the DEC. N.Y. Env’t Conserv. Law § 11-0535-a(3).

The license contains the Display Restriction, which provides that licensees

may not “physically display for sale within New York State any item that is

32 not authorized for Intrastate sale.” App’x at 100. Plaintiffs contend that this

restriction violates the First Amendment’s limited protection of commercial

speech.

This claim raises two essential questions. The first question is whether a

dealer’s display of an ivory product to a potential customer to aid in making a

sale, although such display involves neither oral nor written communication,

nonetheless constitutes speech protected as such by the First Amendment.

Plaintiffs bear the burden on this question. Plaintiffs, however, are relieved of

that burden in this case by the fact that Defendant (and Intervenors) conceded

the issue by acknowledging that the Display Restriction restrains commercial

speech. Defendant and Intervenors do not argue otherwise.

The second question is whether the State-imposed restriction on

Plaintiffs’ speech passes the test prescribed by the Supreme Court in Central

Hudson Gas & Electric Corporation v. Public Service Commission, 447 U.S. 557

(1980), for such restrictions on commercial speech. The Central Hudson test, as

discussed below, raises several issues, and for different issues the burden falls

on different parties. The district court rejected Plaintiffs’ claim of a First

33 Amendment violation. It granted the State’s motion for summary judgment.

We respectfully disagree with the district court’s disposition.

The First Amendment, of course, protects speech. Ordinarily, it does

not protect conduct. However, in some circumstances, conduct is sufficiently

communicative that it can qualify as protected speech. See Lorillard Tobacco Co.

v. Reilly, 533 U.S. 525, 567 (2001). Plaintiffs’ claim that the Display Restriction

violates the First Amendment inevitably raises the question of whether a

dealer's display of ivory products to a potential customer is speech in the first

place. Compare Cent. Hudson Gas & Elec. Corp., 447 U.S. at 564 (“The First

Amendment's concern for commercial speech is based on the informational

function of advertising.”), with United States v. O’Brien, 391 U.S. 367, 376 (“We

cannot accept the view that an apparently limitless variety of conduct can be

labeled ‘speech’ whenever the person engaging in the conduct intends

thereby to express an idea.”).

Because the opposing parties have conceded that speech protected by

the First Amendment is restrained by the Display Restriction, the question

whether Plaintiffs prevail on this issue is, in one sense, simplified, but is, in

another sense, complicated.

34 Defendant’s and the Intervenors’ concession that the Display

Restriction implicates speech simplifies the determination as to whether

Plaintiffs prevail with respect to this essential element of their case. Because

the adverse parties do not claim otherwise, there is no dispute as to whether a

display of ivory products for sale constitutes speech on which this court must

rule. The court is entitled to treat the concession as dispositive of the issue so

that, if the ultimate judgment turns on this question, Plaintiffs win.

The court’s reliance on this concession does complicate the effect such a

ruling has on the law with respect to this issue. A party’s concession of an

issue of law on which the adversary bears the burden may eliminate the issue

from the case by relieving the adversary of its burden. Such a concession is

not, however, the equivalent of the court’s reaching a decision on a

controverted issue. Otherwise put, a party’s concession on a disputed issue of

law may control the outcome of the particular dispute between the parties,

but it does not necessarily establish a legal precedent, which, under the rule of

stare decisis, will control the decision of other unrelated cases.

We explore below the significance of the concession. For the moment, it

is sufficient to note that the concession can suffice to ensure that Plaintiffs will

35 prevail on their First Amendment argument if they succeed on all other

elements of their claim.

It is the function of federal courts under the Cases and Controversies

Clause of Article III of the Constitution, U.S. Const. art. III, § 2, cl. 1, to rule on

disputes among litigants—not to issue proclamations of law. See Muskrat v.

United States, 219 U.S. 346, 359 (1911). Because Defendant and the Intervenors

concede that a dealer’s display of an ivory product to a potential customer is

speech protected by the First Amendment, there is no dispute among any

litigants before us.

Furthermore, unless the answer to the question is obvious, a court is

disadvantaged in attempting to reach a reliable conclusion on a question on

which no conflicting arguments have been presented. At times, of course, the

answer to a question is sufficiently obvious that a court rules on it

notwithstanding the absence of dispute, and at other times courts undertake,

notwithstanding the concession, to explore the question fully and reach a

decision on it without the benefit of opposing arguments.

In this case, we do not believe that the answer to whether a dealer’s

display is protected speech is obvious. Because the parties have put forth no

36 disagreement on the question and have not furnished us with arguments on

either side disputing the question, our court need not, and does not, reach a

conclusion on the undisputed issue.

There are many circumstances in which a court may, and should, grant

(or deny) relief as between parties based on concessions by the adverse party

or deficiencies in the adversary’s advocacy, without reaching a conclusion on

the merits of the legal question. The most obvious of these occurs where the

defendant defaults, in failing either to answer the complaint, or to comply

with the court’s directions, or to respond to the plaintiff’s motion for

summary judgment. In such cases, it can be appropriate for the court to grant

the relief demanded in the complaint to the plaintiff based on the defendant’s

failure, without needing to decide whether the law is necessarily as the

plaintiff contends.

In such circumstances, the court may lack an adequate basis for

reaching a conclusion of law, much less for making a precedential ruling on

the question. While a plaintiff might be entitled to relief, such as an injunction

or an award of damages, if points of law essential to the plaintiff’s case have

been conceded or forfeited by the defendant and the plaintiff has prevailed in

37 proving the remaining essential elements, a court might be well advised to

grant the plaintiff relief while refraining from establishing a precedent of law

to the effect that the facts of the case constituted a violation of law.

We here find that to be the prudent path. We do not think the answer is

obvious whether the Display Restriction affects speech or only non-speech

conduct. The failure to argue that speech is not affected has effectively waived

that argument and conceded the issue. However, it does not necessarily

follow that speech is affected by the restriction. Had contrary arguments been

presented to us, we cannot say with confidence that we would not have been

persuaded by them. At times, it is difficult to be confident of a conclusion

made in the absence of argument to the contrary. We have clear justification

(relying on the concession) for deeming Plaintiffs to have prevailed on this

essential element of their claim without our reaching a substantive conclusion

on the question.

Lawyers’ concessions on points of law (and forfeitures by failing to

argue them) are tricky and at times inscrutable. They are sometimes tactical in

the sense that a lawyer may refrain from making one argument lest it detract

from the court’s focus on (or even tend to contradict) another argument that

38 the lawyer considers more important. They can also result from a lawyer’s

error in judgment—in failing to recognize the strength of an available

argument. Accordingly, for courts to proclaim a governing legal precedent

based on an adverse party’s concession on a point of law creates a significant

risk of establishing a bad law, and all the more so when the concession is

inferred solely based on the adverse party’s failure to argue the point. See

Horne v. Coughlin, 191 F.3d 244, 246–47 (2d Cir. 1999). A court has a

responsibility in establishing a legal precedent to get the law right, especially

when the validity of a statute or regulation is at stake. A party’s concession on

an issue of law may well furnish an adequate basis for granting relief to the

adverse party, but is often not an adequate basis for a court to establish a legal

precedent that would bind the court and future litigants on the issue.

We accordingly conclude that, by virtue of their adversaries’

concessions that the Display Restriction affects speech that is protected by the

First Amendment, Plaintiffs are relieved of the responsibility of

demonstrating that point. We can therefore assume for the resolution of this

case that the restriction affects speech and implicates the First Amendment

without establishing a precedent to that effect.

39 The next questions are what degree of protection is afforded to this

commercial speech—intermediate or strict scrutiny, and ultimately whether

the Display Restriction is offensive to the First Amendment. Plaintiffs contend

that the Display Restriction’s interference with their conduct, which was

infused with speech, calls for strict scrutiny. Nonetheless, they argue that,

even if this speech is less vigorously protected, so that the interfering

restriction is judged only under intermediate scrutiny, the restriction

nonetheless violates the First Amendment. We examine that contention first.

As a general matter, restrictions on commercial speech are subject to

intermediate scrutiny, as set forth in Central Hudson. Under the Central Hudson

test, courts assess “whether (1) the expression is protected by the First

Amendment; (2) the asserted government interest is substantial; (3) the

regulation directly advances the government interest asserted; and (4) the

regulation is no more extensive than necessary to serve that interest.” Vugo,

Inc. v. City of New York, 931 F.3d 42, 44 (2d Cir. 2019) (citing Cent. Hudson, 447

U.S. at 566). On this issue, it is Plaintiffs who have made a concession that the

State has a substantial interest in stopping illegal sales of ivory goods in New

York, and that the restriction advances this interest. Therefore, only the final

40 prong of the Central Hudson test—whether the regulation is no more extensive

than necessary—is in dispute.

In determining whether this fourth prong of the Central Hudson test is

met, we must consider the “fit between the legislature’s ends and the means

chosen to accomplish those ends.” Rubin v. Coors Brewing Co., 514 U.S. 476,

486 (1995) (internal quotation marks omitted). We require “a fit that is not

necessarily perfect, but reasonable; that represents not necessarily the single

best disposition but one whose scope is in proportion to the interest served;

that employs not necessarily the least restrictive means but . . . a means

narrowly tailored to achieve the desired objective.” Bd. of Trs. of State Univ. of

N.Y. v. Fox, 492 U.S. 469, 480 (1989) (internal quotation marks and citation

omitted). The State “bears the burden of justifying its restrictions.” Id.

The State contends that there is a reasonable fit between the Display

Restriction and the State’s interest in preventing illegal sales of ivory. It

explains that, if the object for sale, the buyer, and the seller were all physically

present in the same location, the risk that the seller would purchase the item

on the spot, thereby engaging in an illegal intrastate sale, would be high. By

preventing the seller from displaying the ivory object for the buyer’s

41 inspection, the Display Restriction “impedes the immediate consummation of

such sales.” Appellee’s Br. at 49.

Nevertheless, we find, on this record, assuming as the State concedes

that the Display Restriction impinges on speech, that the restriction is more

extensive than necessary to serve the State’s interest. The State argues that the

Display Restriction leaves “open ample channels of communication,”

comparing it to the restrictions that the Supreme Court upheld in Lorillard.

Appellee’s Br. at 43–45 (quoting Lorillard, 533 U.S. at 569). There, the Supreme

Court upheld restrictions that required retailers to place tobacco products

behind counters and required customers to have contact with a salesperson

before handling the products. Lorillard, 533 U.S. at 569–70. The Court found

that the restrictions were an “appropriately narrow means” of advancing the

state’s substantial interest in preventing minors’ access to tobacco products.

Id. at 569.

But the Display Restriction is undeniably broader than the restrictions

upheld in Lorillard. Rather than merely regulating the way in which the items

are displayed, as the Lorillard restrictions did, the Display Restriction prevents

any display of the product for sale, including ivory goods for lawful interstate

42 or international sale. If a New Jersey customer is interested in a product

offered by a New York dealer, for example, that customer cannot travel to

New York to see that item before purchasing. Instead, if the customer wants

to inspect the item before purchase, that customer and the dealer must

arrange for a viewing of the item outside of New York State. The State argues

that this is not excessively burdensome because the Dealers can communicate

in any other manner—for example, by displaying the item in print or posting

information online. The State also notes that “nothing prevents [the Dealers]

from physically displaying those products outside New York.” Appellee’s Br.

at 43.

The State’s arguments are unpersuasive in light of undisputed facts in

the record. While it is true that ivory dealers remain free to advertise their

products in print and online, these modes of communication fail to convey

adequately information needed by purchasers about the items’ quality and

authenticity, two factors that are likely of great importance to interested

buyers. Indeed, the declaration of the State’s own witness, DEC Captain

Antone Paluch, corroborates the importance of physical inspection for a

purchaser of ivory: “In my experience, it is impossible to assess the

43 genuineness or the condition and value of ivory without inspecting it in

person, and therefore buyers of ivory of significant value are unwilling to

make a purchase of ivory that they have not inspected in person.” App’x at

144. If it is, as Captain Paluch suggests, impossible to assess quality and

authenticity without physical inspection, 4 then the State’s Display Restriction

amounts to a near-total ban within the State of New York on the conveyance

of certain vitally important information about goods for lawful interstate or

international sale.

Accordingly, prevention of the display and handling of ivory products,

many of which include artistic carvings, is far more detrimental to the sale of

ivory than requiring that a salesperson act as intermediary to a customer’s

handling of a pack of cigarettes is to the sale of cigarettes. The restriction on a

customer’s handling of a pack of cigarettes does not deny the customer

information necessary to the customer’s decision to purchase.

4 The State admitted below that “[i]t is impossible to assess the genuineness or the condition and value of ivory without inspecting it in person, and therefore buyers of ivory of significant value are unwilling to make a purchase of ivory that they have not inspected in person.” App’x at 186; see also id. at 180–81 (admitting that “customers are unlikely to buy ivory objects they are unable to inspect in person”). This fact is undisputed. See Appellee’s Br. at 41–42 n.11.

44 The burden of the Display Restriction is only slightly alleviated by the

Dealers’ ability to arrange for out-of-state inspections. Where certain speech is

banned within a particular state, an individual’s freedom to engage in that

speech outside state borders does not nullify the burden imposed by the

restriction. Otherwise, any state restriction on speech, no matter how severe,

could be said to be constitutional on the basis that individuals are free to

leave the state to engage in the contested speech.

Given the State’s concession that exhibiting ivory objects offered for

sale falls within the scope of commercial speech, the Display Restriction thus

amounts to “suppression of [the] commercial speech” of the Dealers. Bad Frog

Brewery, Inc. v. N.Y. State Liquor Auth., 134 F.3d 87, 101 (2d Cir. 1998). While

we generally afford a state “considerable leeway . . . in determining the

appropriate means to further a legitimate governmental interest, even when

enactments incidentally limit commercial speech,” Clear Channel Outdoor, Inc.

v. City of New York, 594 F.3d 94, 105 (2d Cir. 2010) (internal quotation marks

omitted) (omission in original), that latitude has its limits.

We find, on this record, that the Display Restriction is more extensive

than reasonably appropriate to promote the State’s interest in preventing

45 illegal transactions. The Dealers have proposed an alternative solution, which

they refer to as “Segregation and Labeling,” which would require stores to

segregate ivory permitted for sale in interstate or international commerce

with a notice informing the viewer that the item cannot be sold in New York. 5

While it is not necessary that the State show that such an alternative would be

wholly ineffective, 6 the State must make a “showing . . . that a more limited

restriction . . . would not serve adequately the State’s interests.” Cent. Hudson,

447 U.S. at 570. The State has not done so here.

The State relies on a single anecdote in which Captain Paluch described

how he, acting in an undercover capacity, purchased an ivory item in an

illegal intrastate transaction, despite a sign stating that the item was not for

5 We interpret this proposal to suggest that, while the ivory items at issue would be stored separately, they would be available for inspection upon request. Plaintiffs have also suggested other alternatives, such as the simple segregation of items behind a counter, glass, or rope, a requirement that galleries display a visible notice informing viewers of the State Ivory Law’s prohibitions, or a requirement that each ivory item be displayed with a notice stating that it cannot be sold in New York.

6 Plaintiffs argue that the State must show that the proposed alternative is ineffective. We reject that contention. Under intermediate scrutiny, it is not necessary that a state show that an alternative would not advance the state’s interest at all. Rather, intermediate scrutiny requires “a fit that is not necessarily perfect, but reasonable.” Fox, 492 U.S. at 480.

46 sale. 7 The State contends that this incident illustrates the ineffectiveness of the

Dealers’ proposed alternative. As Plaintiffs note, however, the merchant in

that instance was unlicensed (and therefore had not agreed to abide by the

terms of the DEC license, which included the Display Restriction), and the

item was not licensed for either interstate or intrastate sale. This single

anecdote does not satisfy the State’s burden, particularly in light of the

alternative measures the Dealers have proposed. See Fla. Bar v. Went For It,

Inc., 515 U.S. 618, 632 (1995) (“[T]he existence of ‘numerous and obvious less-

burdensome alternatives to the restriction on commercial speech . . . is

certainly a relevant consideration in determining whether the “fit” between

ends and means is reasonable.’” (omission in original) (quoting City of

Cincinnati v. Discovery Network, Inc., 507 U.S. 410, 417 n.13 (1993))). The

7 The State argues that the usefulness of the Display Restriction is additionally supported by the fact that, since the enactment of the State Ivory Law and the accompanying Display Restriction, “the amount of commerce in ivory in New York State has fallen dramatically,” with the number of items displayed for sale falling from over 11,000 in 2006 to 224 in 2016. Appellee’s Br. at 42–43 (quoting App’x at 145). But this statistic says nothing about how any proposed alternative would fare in comparison to the Display Restriction. The fact that the Display Restriction succeeds in diminishing intrastate sales is not inconsistent with Plaintiffs’ contention that a less severe restriction on speech would also adequately serve the State’s interest.

47 Display Restriction also does not prevent a dealer from violating the

restriction in the course of conducting an illegal sale.

The district court found that Plaintiffs’ proposed alternative would not

advance the State’s interest “as effectively” as the Display Restriction. Seggos,

523 F. Supp. 3d at 648. But this misstates what constitutes a “reasonable fit”

under the Central Hudson test. The question is not whether the operative

restriction is the most effective disposition or is more effective than proposed

alternatives. Instead, the relevant question is whether the “scope [of the

operative restriction] is in proportion to the interest served.” Long Island Bd. of

Realtors, Inc. v. Village of Massapequa Park, 277 F.3d 622, 627 (2d Cir. 2002)

(quoting Fox, 492 U.S. at 480); see also N.Y. State Ass’n of Realtors, Inc. v. Shaffer,

27 F.3d 834, 844 (2d Cir. 1994) (“Central Hudson requires us to evaluate not

merely the existence of a particular type of harm but the scope of the

restriction in light of the degree of the harm.”). Therefore, were the State to

impose an extraordinarily severe restriction on speech where a much less

intrusive alternative would have been nearly as effective in achieving the

State’s asserted interest, this court could very well find that the fit between

the restriction and the interest was not reasonable.

48 Here, the State has enacted a restriction that prohibits the

communication of information that is crucially important to a potential lawful

buyer (namely, the quality and authenticity of the item offered for lawful sale)

within the State. That restriction places an excessive burden on what we

assume, based on the State’s concession, is speech. The State has failed to

show that its interests would not be adequately served by other measures that

would be less burdensome. See Bad Frog Brewery, 134 F.3d at 101 (finding that

defendant “gave inadequate consideration to alternatives to [a] blanket

suppression of commercial speech”). We conclude that the restriction “lacks a

reasonable fit” with the State’s asserted interest in preventing illegal

transactions, id. (internal quotation marks omitted), and thus fails the Central

Hudson test. 8

We rule that the Dealers are entitled to relief in the form of an

injunction barring enforcement against their members of the Display

Restriction. For the reasons explained above, however, in so ruling, we rely

8 Plaintiffs contend, based on a footnote in this court’s record decision Vugo, Inc., 931 F.3d at 50 n.7, that strict scrutiny, rather than intermediate scrutiny, might apply to these circumstances. See Appellants’ Br. at 47. As we conclude that Plaintiffs prevail under the intermediate scrutiny test and strict scrutiny would be more favorable to Plaintiffs, we have no need to decide that question.

49 on the State’s concession that the Dealers’ display of ivory products to

potential customers is speech. We reach no conclusion and state no precedent

on whether, if this issue were contested, we would find such display to be

speech protected by the First Amendment, and whether we would find the

Display Restriction to violate the First Amendment.

CONCLUSION

For the foregoing reasons, we AFFIRM the district court’s dismissal of

Plaintiffs’ preemption claim and REVERSE the district court’s grant of

summary judgment to Defendant on Plaintiffs’ constitutional claim. We direct

the district court to grant injunctive relief barring the enforcement of the

Display Restriction against Plaintiffs and their members. We leave it to the

district court whether to issue, in addition, a declaratory judgment that the

State may not enforce the Display Restriction against Plaintiffs and their

members and whether to grant other relief not inconsistent with this opinion.

50 RICHARD J. SULLIVAN, Circuit Judge, dissenting:

Although I happen to agree with the majority’s conclusion that the Display

Restriction impermissibly restricts commercial speech under the test enunciated

by the Supreme Court in Central Hudson Gas & Electric Corp. v. Public Service

Commission of New York, 447 U.S. 557 (1980), I see no reason to even reach that issue

since, in my view, the Endangered Species Act (the “ESA”), 16 U.S.C. § 1531 et seq.,

clearly preempts the New York State Ivory Law (the “NYSIL”), N.Y. Env’t

Conserv. Law § 11-0535-a. For that reason, I respectfully dissent.

As the majority notes, the ESA contains an express preemption clause,

which provides, in relevant part, that “[a]ny State law . . . which applies with

respect to . . . interstate or foreign commerce in[] endangered species or threatened

species is void to the extent that it may effectively . . . prohibit what is authorized

pursuant to an exemption or permit provided for” by the ESA or its implementing

regulations. 16 U.S.C. § 1535(f). The Dealers’ operative complaint explicitly limits

their challenges to “the intrastate sale of ivory” based on the Commissioner’s

concession that the NYSIL is preempted as to interstate and foreign commerce.

See, e.g., J. App’x at 86–87 ¶¶ 74–76, 96–97; see also Art & Antique Dealers League of

Am., Inc. v. Seggos, 394 F. Supp. 3d 447, 452 (S.D.N.Y. 2019). But it is clear from the pleadings that the term “intrastate sale[s]” is derived from the Commissioner’s

definition of that term under the NYSIL. To my mind, the critical question in

evaluating preemption is therefore whether the Commissioner’s definition of

“intrastate” commerce overlaps with the ESA’s definition of “interstate”

commerce. In my view, it does. For that reason, I would reverse the district court’s

dismissal of the Dealers’ preemption claim.

When construing a statute, we begin with the statutory text. See Engine Mfrs.

Ass’n v. S. Coast Air Quality Mgmt. Dist., 541 U.S. 246, 252 (2004). The ESA provides

that it is unlawful to, among other things, sell, offer for sale, or transport products

derived from endangered species “in interstate or foreign commerce.” 16 U.S.C.

§ 1538(a)(1)(E)–(F). The ESA then sets forth several exceptions to this prohibition,

two of which are relevant here. First, the ESA excepts “[c]ertain antique articles”

that are “not less than 100 years of age” (the “Antiques Exception”). Id. § 1539(h).

Second, the regulation establishing special rules for African elephants excepts the

sale of “certain manufactured or handcrafted items containing de minimis

quantities of ivory” (the “De Minimis Exception”). 50 C.F.R. § 17.40(e)(3).

The NYSIL similarly prohibits individuals from “sell[ing], offer[ing] for sale,

purchas[ing], trad[ing], barter[ing,] or distribut[ing]” ivory articles or rhinoceros

2 horns, subject to certain exceptions. N.Y. Env’t Conserv. Law § 11-0535-a(2). The

NYSIL also contains an exception for antique articles, but the NYSIL’s exception is

more restrictive than the ESA’s. Under the NYSIL, the article must not only be at

least “one hundred years old”; it also must be comprised of “less than twenty

percent” ivory by volume. Id. § 11-0535-a(3)(a). The NYSIL does not contain an

exception akin to the ESA’s De Minimis Exception.

These differences make plain that the NYSIL prohibits certain sales of ivory

that would otherwise be authorized under the ESA. Specifically, the NYSIL

prohibits the sale of antiques that contain more than twenty percent ivory and the

sale of non-antiques that contain de minimis amounts of ivory – transactions that

would be permissible under the ESA. Accordingly, at least with respect to

interstate commerce, the NYSIL patently “prohibit[s]” what is “authorized”

pursuant to “exemption[s]” provided for by the ESA, thereby falling squarely

within the ESA’s express preemption clause.

The majority contends that the Antiques and De Minimis Exceptions cannot

give rise to express preemption under the ESA because the preemption clause

refers to conduct authorized pursuant to an “exemption or permit,” rather than an

“exception[].” See Maj. Op. at 23. But the majority’s distinction between

3 “exemptions” and “exceptions” is belied by the ESA itself. As an initial matter,

the ESA does not include the words “exemption” or “exception” among its list of

defined terms. See 16 U.S.C. § 1532. Had Congress intended to limit the meaning

of these terms as the majority suggests, it could have easily done so. See F.D.I.C.

v. Meyer, 510 U.S. 471, 476 (1994) (“In the absence of . . . a definition, we construe a

statutory term in accordance with its ordinary or natural meaning.”). And because

the ESA’s preemption clause uses the terms “exemption” and “permit”

disjunctively, see 16 U.S.C. § 1535(f), the most natural interpretation of

“exemption” is a provision that relieves an individual of an otherwise applicable

prohibition or permit requirement. See Exemption, Black’s Law Dictionary (11th

ed. 2019) (defining “exemption” as “[f]reedom from a duty, liability, or other

requirement; an exception”). I therefore can see no convincing basis for the

majority’s contention that Congress intended to create some unspecified category

of “exceptions” that are not “exemptions” but merely “carve out[s] from the scope

of the statute’s prohibitions.” Maj. Op. at 23.

The text of the ESA reinforces this view. For example, subsection 1539(d) –

titled “[p]ermit and exemption policy” – provides that the Secretary “may grant

exceptions under subsections (a)(1)(A) and (b) of this section” in certain

4 circumstances. 1 16 U.S.C. § 1539(d) (emphasis added). Subsection 1539(a)(1)(A)

authorizes the Secretary to issue certain “[p]ermits,” and subsection 1539(b) allows

the Secretary to grant “[h]ardship exemptions” – both of which are classified as

“exceptions” in subsection 1539(d). Subsection 1539(d) further provides that, in

order for any such “exception[]” to be “grant[ed],” it must be “applied for in good

faith.” Id. § 1539(d) (emphasis added). Subsection 1539(d) thereby renders hollow

the majority’s contention that the terms “exemption” and “permit” are terms of art

referring to “administrative grants of authorization,” Maj. Op. at 15, while the term

“exception” is a distinct, broader term that encompasses “self-executing,

categorical . . . carve[] out[s] from the scope of the ESA’s prohibitions,” id. at 23.

Subsection 1539(d) confirms that the ESA does not meaningfully distinguish

between the terms “exemption” and “exception” when authorizing otherwise

prohibited conduct.

Subsection 1538(b)(1) uses the term “exemption” to refer to a self-executing,

categorical carve out from the ESA’s prohibitions – exactly what the majority

1The ESA defines the term “Secretary” as “the Secretary of the Interior or the Secretary of Commerce as program responsibilities are vested pursuant to the provisions of Reorganization Plan Numbered 4 of 1970; except that with respect to the enforcement of the provisions of this chapter . . . which pertain to the importation or exportation of terrestrial plants, the term also means the Secretary of Agriculture.” 16 U.S.C. § 1532(15). 5 claims the term “exemption” does not cover. See 16 U.S.C. § 1538(b). Specifically,

subsection 1538(b)(1) provides an “exemption” to the ESA’s explicit prohibitions

set forth in “subsections [1538](a)(1)(A) and (a)(1)(G)” so long as certain statutorily

prescribed conditions are met. Id. The exemption is automatic and does not

require an individual grant of authorization by the Secretary for the exemption to

apply, see id., belying the majority’s contention that the term “exemption[]” only

“refers to an administrative individual grant of authorization by the Secretary,”

Maj. Op. at 16.

The majority brushes aside this language as a regrettable oversight on the

part of Congress. See id. at 27. But we are not to infer such errors in the drafting

of laws. See E.P.A. v. EME Homer City Generation, L.P., 572 U.S. 489, 508–09 (“[A]

reviewing court’s task is to apply the text of the statute, not to improve upon it.”

(internal alterations and quotation marks omitted)). The statute makes no

distinction between “exceptions” and “exemptions,” and neither do the ESA’s

implementing regulations, which use the terms “exception” and “exemption”

interchangeably throughout. See 50 C.F.R. § 17.40(f), (g), (j), (n) (referring to

section 17.32 – titled “permits for threatened species” – as creating “exemptions”);

§ 17.40(e), (s), (t), (u) (referring to section 17.32 as creating “exceptions” from

6 prohibitions); § 17.41(e)(2) (describing “exemptions” from prohibitions

concerning the Elfin-woods warbler that do not require Secretary approval); id.

§§ 17.42(g)(2), 17.42(h)(2), 17.43(e)(2), 17.47(b)(3), 17.47(e)(vii)(B) (similar); see also

Loper Bright Enters. v. Raimondo, 144 S. Ct. 2244, 2262 (2024) (citing Skidmore v. Swift

& Co., 323 U.S. 134, 140 (1944) to explain that courts “may properly resort” to

agency interpretations of statutes “for guidance” to determine the meaning of a

statute). Furthermore, the Marine Mammal Protection Act – which was passed

one year before the ESA and which is repeatedly cross-referenced in the ESA, see,

e.g., 16 U.S.C. §§ 1536(b)(4), 1536(o), 1539(e)(4) – likewise uses the term

“exemption” to refer to certain categorical exceptions, see id. § 1371(b), (d); see also

United States v. Ressam, 553 U.S. 272, 275–77 (2008) (comparing two statutes enacted

within two years of each other to interpret a common word in the subsequently

enacted statute); A. Scalia & B. Garner, Reading Law: The Interpretation of Legal Texts

252 (2012) (“[L]aws dealing with the same subject . . . should if possible be

interpreted harmoniously.”); Felix Frankfurter, Some Reflections on the Reading of

Statutes, 47 Colum. L. Rev. 527, 539 (1947) (explaining that statutes should be

interpreted in light of related statutes).

7 The majority also makes much of the fact that some variant of the word

“exemption” is used “[m]ore than eighty times in [sections] 1536 and 1539 . . . [to]

refer[] to an administrative individual grant of authorization by the Secretary,” as

opposed to “a categorical, self-executing application of the terms of the statute,

such as the Antiques Exception and De Minimis Exception.” Maj. Op. at 16. But

that comparison is misleading. Section 1536 specifically relates to “[i]nteragency

cooperation,” so it is no surprise that the references to “exemption” and its

derivatives in that section relate to exceptions granted by an agency. 16 U.S.C.

§ 1536. And as the majority itself concedes, section 1539 explicitly uses both

“exception” and “exemption” to describe administrative grants of authorization.

Maj. Op. at 26–27. So, in essence, the majority’s interpretation again requires the

conclusion that Congress made a mistake when drafting that section of the ESA.

In the face of these textual obstacles, the majority resorts to legislative

history and “logical sense” to argue that a narrow interpretation of “exemption”

best aligns with the “entirety” of subsection 1535(f) and, more generally,

Congress’s goal of protecting endangered species. Id. at 21–24. But

subsection 1535(f) is a preemption clause, the purpose of which is to maintain the

primacy of federal law. It is not our place to divine implicit goals as cues for the

8 narrow or broad interpretation of the word “exemption” when the plain and

ordinary meaning of the term will suffice. Nor does the majority explain why only

the Secretary – and not also Congress – must be the provider of exemptions. As

noted above, neither term is defined in the ESA, see 16 U.S.C. § 1532, and both

terms are used interchangeably, see, e.g., id. §§ 1538(b)(1), 1539.

For all these reasons, I remain convinced that the undefined term

“exemption” in subsection 1535(f) is not exclusively limited to “grants of

individualized authorization by the Secretary,” Maj. Op. at 23, and that it extends

to the Antiques and De Minimis Exceptions defined by Congress. I therefore turn

to the question of whether the NYSIL “prohibit[s] what is authorized” pursuant to

these exceptions. I believe that it does.

It is indisputably true that the Dealers’ operative complaint only explicitly

challenges the NYSIL’s application to “intrastate” – as distinct from interstate –

commerce in ivory. J. App’x at 86–87 ¶¶ 74–76, 96–97. But the use of the term

“intrastate sale[s]” clearly tracks the meaning of “intrastate sale[s]” as defined by the

Commissioner for purposes of enforcing the NYSIL. The district court appears to have

uncritically concluded that what the Commissioner considers to be “intrastate

commerce” in ivory necessarily falls outside of what the ESA would deem to be

9 “interstate or foreign commerce.” Id. at 22–23. But it is axiomatic that “[f]ederal

courts owe no deference to [a] state agency’s interpretation of federal law.” Bey v.

City of New York, 999 F.3d 157, 169 (2d Cir. 2021) (internal quotation marks

omitted). It is for us, then, to determine what the Commissioner means when he

refers to the intrastate sale of ivory.

The Commissioner’s briefing was, to say the least, inconsistent on this

point. 2 Nevertheless, at oral argument, the Commissioner clarified his position

that intrastate sales are those that are conducted within New York state – i.e.,

where the seller tenders the article and the buyer tenders payment within New

York’s state borders. He further clarified that the only sales he would characterize

as “interstate” – and thus exempt from the NYSIL – are those in which the ivory

article is delivered and payment for it is tendered across state lines. See Dorce v.

City of New York, 2 F.4th 82, 102 (2d Cir. 2021) (explaining that a party is bound by

counsel’s statements at oral argument). We must therefore determine whether

there is overlap between intrastate commerce as defined by the Commissioner –

2Compare Seggos Br. at 10–11 (defining “interstate or foreign sales” as sales involving either “out- of-state buyers” or “out-of-state sellers” (emphasis omitted)), with id. at 10 (contrasting “interstate or foreign sales” with sales conducted “within New York” (emphasis omitted)), and id. at 11 (defining “intrastate sales” as sales in which all “commercial activity [is] conducted wholly within New York State” (internal quotation marks and emphasis omitted)), and id. at 25–26 (contrasting “local retail sales” with “interstate or foreign shipments of products”). 10 i.e., in-person sales of ivory articles in New York state – and interstate commerce

as defined in the ESA. In my view, there clearly is.

For starters, the ESA treats the sale and offering for sale of ivory articles in

interstate or foreign commerce, see 16 U.S.C. § 1538(a)(1)(F), as a category of

activity distinct from “deliver[ing], receiv[ing], carry[ing], transport[ing], or

ship[ping]” such articles “in interstate or foreign commerce,” id. § 1538(a)(1)(E).

That, to me, strongly suggests that a person can “sell or offer for sale” an ivory

article “in interstate or foreign commerce,” id. § 1538(a)(1)(F), even if he does not

“deliver, receive, carry, transport, or ship” it across state lines, id. § 1538(a)(1)(E).

After all, if the interstate “deliver[y],” “transport[ation],” or “ship[ment]” of an

article were a necessary element of its sale “in interstate . . . commerce,” id.

§ 1538(a)(1)(E), then every sale prohibited under subsection (F) would already be

prohibited under subsection (E), making subsection (F) meaningless surplusage.

See United States v. Jicarilla Apache Nation, 564 U.S. 162, 185 (2011) (“As our cases

have noted in the past, we are hesitant to adopt an interpretation of a congressional

enactment which renders superfluous another portion of that same law.” (internal

quotation marks omitted)); Marx v. Gen. Revenue Corp., 568 U.S. 371, 386 (2013)

11 (“[T]he canon against surplusage is strongest when an interpretation would

render superfluous another part of the same statutory scheme.”).

Moreover, I agree with the Dealers that “because elephants and rhinos are

not native to New York,” any “trade in antiques and art containing ivory” is

“inherently . . . interstate commerce.” Dealers Br. at 31. Accordingly, I would find

that the NYSIL is expressly preempted as to any sale of ivory articles covered by

the Antiques and De Minimis Exceptions – including sales between New York

sellers and New York buyers that are executed wholly within New York state lines.

While I am not aware of any case in which a federal court has construed the

phrase “sell or offer for sale in interstate or foreign commerce” as used in the ESA,

16 U.S.C. § 1538(a)(1)(F), several courts, including our own, have interpreted

nearly identical language in the Lacey Act of 1900, 31 Stat. 187, a precursor and

companion of the ESA in “prohibit[ing] . . . interstate commerce [in] fish or wildlife

taken in violation of national, state, or foreign law,” Tennessee Valley Auth. v. Hill,

437 U.S. 153, 174 n.20 (1978). The Lacey Act, in relevant part, makes it unlawful to

“sell . . . or purchase in interstate . . . commerce . . . [any] wildlife taken, possessed,

transported, or sold in violation of any law or regulation of any State or in violation

of any foreign law.” 16 U.S.C. § 3372(a)(2)(A). Courts applying that language have

12 consistently recognized that what the Commissioner would call an “intrastate

sale” is still a sale “in interstate commerce” for purposes of federal law, so long as

the wildlife in question was shipped across state or international borders at some

point prior to its sale. See, e.g., United States v. Tempotech Indus., Inc., 100 F.3d 941,

1996 WL 14056, at *1 (2d Cir. 1996) (recognizing that presale transportation of

salmon eggs between New York and Michigan constituted “interstate

transportation and sale” for purposes of the Lacey Act); United States v. Gay-Lord,

799 F.2d 124, 125–26 (4th Cir. 1986) (upholding Lacey Act conviction based on

transaction that occurred wholly within state lines); United States v. Sylvester, 605

F.2d 474, 475 (9th Cir. 1979) (agreeing with district court’s holding that “it makes

little difference if the completion of the sale precedes or follows the carriage of

goods in interstate commerce[,] so long as the transportation or shipment is

directly related to the transaction” (internal quotation marks omitted)).

In light of the foregoing, it seems to me that any sale of artworks or antiques

containing ivory would constitute a sale “in interstate . . . commerce” under the

Lacey Act, 16 U.S.C. § 3372(a)(2)(A), even if the buyer and seller resided in the

same state and consummated their transaction wholly within the borders of that

state. The simple reason is that (as the Commissioner himself concedes)

13 “elephants and rhinoceros are not native to the United States,” such that any

“ivory or horn” in a product will necessarily have traveled across international

boundaries. 3 Seggos Br. at 7. In my view, the same must hold true under the ESA,

given how closely its operative language tracks that of the Lacey Act. Compare

16 U.S.C. § 1538(a)(1)(F) (“[I]t is unlawful for any person [to] . . . sell or offer for

sale in interstate or foreign commerce any [endangered] species.”), with id.

§ 3372(a)(2)(A) (“It is unlawful for any person . . . [to] sell . . . in interstate or

foreign commerce . . . any fish or wildlife taken . . . in violation of . . . State

or . . . foreign law.”). Accordingly, I would hold that the NYSIL – even “as

applied” only to what the Commissioner defines as “intrastate sale” of ivory

articles – “is expressly preempted by the ESA.” J. App’x at 87 ¶ 75.

* * *

For the reasons stated above, I believe that the Antiques and De Minimis

Exceptions are exemptions covered by the ESA’s preemption clause and that the

NYSIL impermissibly prohibits what is otherwise authorized by those exceptions.

I therefore respectfully dissent from the majority’s opinion and would reverse the

3Neither party has suggested that ivory or horn products have been or could have been harvested from elephants or rhinoceros born in the United States.

14 district court’s decision as to the Dealers’ preemption claim, without even reaching

their First Amendment claim.