Erik Autor v. Penny Pritzker , 740 F.3d 176 ( 2014 )

United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued October 25, 2013 Decided January 17, 2014
No. 12-5379
ERIK O. AUTOR, ET AL.,
APPELLANTS
v.
PENNY SUE PRITZKER, IN HER OFFICIAL CAPACITY AS
SECRETARY OF COMMERCE, ET AL.,
APPELLEES
Appeal from the United States District Court
for the District of Columbia
(No. 1:11-cv-01593)
Charles A. Rothfeld argued the cause and filed the briefs
for appellants. With him on the briefs was Joseph P. Minta.
Michael S. Raab, Attorney, U.S. Department of Justice,
argued the cause for appellees. With him on the brief were
Stuart F. Delery, Acting Assistant Attorney General, Ronald
C. Machen Jr., U.S. Attorney, Mark B. Stern and Daniel
Tenny, Attorneys.
Before: TATEL and BROWN, Circuit Judges, and
EDWARDS, Senior Circuit Judge.
Opinion for the Court filed by Circuit Judge TATEL.
2
TATEL, Circuit Judge: President Obama, seeking to reduce
the “culture of special interest access,” directed executive
agency heads to bar federally registered lobbyists from serving
on advisory committees. Appellants, federally registered
lobbyists wishing appointment to one type of advisory
committee—Industry Trade Advisory Committees
(ITACs)—challenge the constitutionality of the presidential
ban. Because the ban requires Appellants to limit their exercise
of a constitutional right—in this case, the First Amendment
right to petition government—in order to qualify for a
governmental benefit—in this case, ITAC membership—we
reverse the district court’s premature dismissal of the
complaint and remand for that court to determine in the first
instance whether the government’s interest in excluding
federally registered lobbyists from ITACs outweighs any
impingement on Appellants’ constitutional rights.
I.
Created by the Trade Act of 1974, which requires the
President to “seek information and advice from representative
elements of the private sector . . . with respect to” trade policy,
19 U.S.C. § 2155(a)(1), ITACs play a significant role in
shaping international trade agreements. See id. § 2155(c)(2).
The sixteen industry-specific ITACs run the gamut of
industrial interests from Aerospace Equipment to Consumer
Goods to Service and Financial Industries. See International
Trade Administration, List of Industry Trade Advisory
Committees, available at
www.ita.doc.gov/itac/committees/index.asp (last visited Jan.
10, 2014). In addition to meeting “at the call of the United
States Trade Representative,” 19 U.S.C. § 2155(d), ITACs
prepare reports for the President, Congress, and the Trade
Representative on whether proposed trade agreements provide
for “equity and reciprocity within” the committees’ sector, id.
3
§ 2155(e)(1), (3). Although ITAC advice is non-binding, the
Act requires the Trade Representative to “inform the advisory
committees of significant departures from such advice or
recommendations made.” Id. § 2155(i)(2).
Unlike many advisory committees, ITACs exist for the
very purpose of reflecting the viewpoints of private industry.
According to the Trade Act, the “committees shall, insofar as is
practicable, be representative of all industry, labor,
agricultural, or service interests.” Id. § 2155(c)(2). Applicants
for ITAC membership must be sponsored by a firm or
organization engaged in trade or trade policy. See Request for
Nominations for the Industry Trade Advisory Committees
(ITACs), 75 Fed. Reg. 24,584, 24,585 (May 5, 2010). ITAC
members serve in a “representative capacity presenting the
views and interests of a U.S. entity or U.S. organization.” Id. It
should thus come as no surprise that the Aerospace Equipment
ITAC includes representatives of Boeing, Pratt & Whitney,
Gulfstream, General Electric, Lockheed Martin, and Bell
Aerospace. Likewise, the Energy and Energy Services ITAC
includes representatives of Halliburton, Chevron, General
Electric, the National Mining Association, and the Nuclear
Energy Institute. See International Trade Administration, List
of Industry Trade Advisory Committees, available at
www.ita.doc.gov/itac/committees/index.asp (last visited Jan.
10, 2014).
Although Congress created ITACs to represent the views
of the private sector, President Obama directed “the heads of
executive departments and agencies not to make any new
appointments or reappointments of federally registered
lobbyists to advisory committees.” Presidential Memorandum,
Lobbyists on Agency Boards and Commissions, 75 Fed. Reg.
35,955 (June 18, 2010). In so directing, the President sought to
further his commitment to change “the culture of
4
special-interest access” that is furthered by lobbyists’ “service
in privileged positions within the executive branch.” Id. “My
administration,” the President explained, “is committed to
reducing the undue influence of special interests that for too
long has shaped the national agenda and drowned out the
voices of ordinary Americans.” Id. Pursuant to the President’s
directive, and setting the stage for this litigation, the
Commerce Secretary and the Trade Representative prohibit
federally registered lobbyists from serving on ITACs. See
Request for Nominations for the Industry Trade Advisory
Committees (ITACs), 75 Fed. Reg. at 24,585.
Contrary to popular belief, only certain lobbyists are
required to be federally registered. The Lobbying Disclosure
Act of 1995 (LDA) requires that lobbyists register if they (1)
are employed by a client for compensation, (2) have made
more than one lobbying contact on behalf of such client, and
(3) have spent at least twenty percent of their time for that
client working on lobbying activities during a three-month
period. 2 U.S.C. § 1602(10). In other words, lobbyists have no
obligation to register if they limit their lobbying activities to at
most twenty percent of their time working for any particular
client.
Appellants, six federally registered lobbyists wishing to
serve on ITACs, sued to enjoin the ban. Relying on Perry v.
Sindermann, 408 U.S. 593 (1972), which limits the
government’s power to condition governmental benefits on
recipients’ relinquishment of constitutionally protected rights,
Appellants alleged that the ban violates the First Amendment
and the equal protection guarantee of the Fifth Amendment by
“denying the benefit of committee service to individuals whose
exercise of the right to petition triggers the LDA’s registration
requirement.” Complaint ¶ 44.
5
The district court dismissed the complaint pursuant to
Federal Rule of Civil Procedure 12(b)(6). The court first found
Appellants’ claims foreclosed by Minnesota State Board for
Community Colleges v. Knight, 465 U.S. 271 (1984), in which
the Supreme Court held that “the Constitution does not grant
members of the public any particular right to be heard by
public bodies making policy decisions.” Autor v. Blank, 892 F.
Supp. 2d 264, 273–74 (D.D.C. 2012) (citing Knight, 465 U.S.
at 283). The court went on to conclude that even if Knight left
open Appellants’ unconstitutional conditions claim, the
complaint nonetheless failed to establish both “that service on
an ITAC is a valuable government benefit,” id. at 275, and that
Appellants were denied this benefit “on a basis that infringes
upon their constitutionally protected rights,” id. at 268. Finding
that the lobbyist ban implicated no fundamental rights, the
court also rejected Appellants’ Fifth Amendment equal
protection claim. See id. at 282–84.
On appeal, Appellants challenge the dismissal of both
their First Amendment and Fifth Amendment claims. We
review Rule 12(b)(6) dismissals de novo, see St. Marks Place
Housing Co., Inc. v. U.S. Department of Housing & Urban
Development, 610 F.3d 75, 79 (D.C. Cir. 2010), “accept[ing] as
true all of the factual allegations contained in the complaint and
draw[ing] all inferences in favor of the nonmoving party,” City
of Harper Woods Employees’ Retirement System v. Olver, 589
F.3d 1292, 1298 (D.C. Cir. 2009).
II.
At the outset, we think it important to put the issue
before us in its proper context. Reading the government’s brief
and listening to oral argument, during which counsel asserted
that the Constitution imposes “very, very few restrictions” on
the “President’s [power to] choos[e] [his] advisors,” Oral Arg.
Tr. 16, one might get the impression that this case is about the
6
President’s ability to select his Chief of Staff or White House
Counsel. Nothing could be further from the truth. The question
before us concerns only the President’s choice of individuals to
serve on congressionally created advisory committees—more
specifically, Industry Trade Advisory Committees.
According to Appellants, we may resolve this case
through a straightforward application of Perry’s
“unconstitutional conditions” doctrine. See Perry, 408 U.S. at
597. If, as they allege, ITAC service qualifies as a
governmental benefit and the registered-lobbyist ban requires
them to curtail their right to petition government to receive this
benefit, then, they contend, the government has
unconstitutionally burdened their exercise of this right. Before
addressing this question, however, we must consider the
government’s antecedent argument, embraced by the district
court, that the Supreme Court’s recognition in Knight of the
government’s freedom to choose its advisors forecloses
application of the unconstitutional conditions doctrine here.
Knight concerned a Minnesota law requiring public
employers to “meet and confer” with their professional
employees on employment-related policy issues. Knight, 465
U.S. at 274. But if an employee bargaining unit had an
exclusive bargaining representative, i.e., a union, the law
prohibited the employer from “meeting and conferring” with
anyone other than the union’s representatives. Id. at 274–75. In
Knight, community college teachers who had declined to join
their union and were therefore prohibited from “meeting and
conferring” with their employer on their own challenged this
provision. Although the union allowed both union and
nonunion members “to nominate candidates, to run for
election, and to vote for” each “meet and confer”
representative, id. at 280 n.5, the teachers alleged that
Minnesota unconstitutionally burdened their First Amendment
7
rights by limiting participation in the “meet and confer”
process to representatives chosen by the union, id. at 279.
Declining to “recognize a constitutional right to
participate directly in government policymaking [that] would
work a revolution in existing government practices,” id. at 284,
the Supreme Court rejected the teachers’ “principal claim . . .
that they ha[d] a right to force officers of the State” to listen to
them, id. at 282. “Absent statutory restrictions,” the Court
elaborated, “the State must be free to consult or not to consult
whomever it pleases.” Id. at 285. The Court then rejected the
teachers’ claim that the union’s ability to exclude nonmembers
from participation in the “meet and confer” sessions burdened
nonmember teachers’ speech and associational rights. The
Court reasoned that the union’s ability to choose
“representatives who share[d] its views on the issues to be
discussed with the State . . . no more unconstitutionally
inhibit[ed] [the teachers’] speech than voters’ power to reject a
candidate for office inhibits the candidate’s speech,” id. at 289,
and that any pressure the teachers might have felt to join the
union was constitutionally insignificant because it was the
same pressure any individual feels to join a privileged group,
id. at 289–90.
The government argues that Knight controls this case.
Like the state in Knight, the government insists it has “simply
restricted the class of persons to whom it will listen in its
making of policy.” Appellee’s Br. 14 (quoting Knight, 465
U.S. at 282) (internal quotation marks omitted). Moreover, the
government argues, it makes no difference if its decision
pressures Appellants to limit their lobbying activities, as
Knight found this very type of pressure constitutionally
insignificant. According to the government, therefore, it
violated no constitutional right when it “determin[ed] that it
would make best use of the advisory committee mechanism by
8
receiving information and advice from persons who are not
already paid to regularly share their views with federal
officials.” Appellee’s Br. 14–15.
Knight does not control this case. Acknowledging they
have no constitutional right to make the government listen to
them, Appellants argue that the government—required by the
Trade Act to establish ITACs for the very purpose of hearing
the views of industry—may not deny them the benefit of ITAC
service based on their exercise of the constitutional right to
petition government. Unlike in Knight, in which the alleged
burden on the teachers’ First Amendment rights resulted from
the union’s exclusion of them from the “meet and confer”
committees, here any burden on Appellants’ constitutional
rights results directly from the government’s decision to bar
them from ITAC membership. True, the state in Knight was
indirectly responsible for the alleged burden on the teachers’
constitutional rights, but as the Court explained, any indirect
burden was inherent in the state’s decision to listen to some but
not all. See Knight, 465 U.S. at 289–90. Put another way,
although the Supreme Court recognized that the government
may choose to hear from some groups at the expense of others,
it never addressed the question we face here—whether, in so
doing, the government may also limit the constitutional rights
of those to whom it chooses to listen.
The situation before us is more analogous to cases in
which the government sought to curtail the First Amendment
rights of government employees than it is to Knight. Although
the government generally has authority to choose whom it
hires, the Supreme Court has repeatedly subjected employment
conditions restricting fundamental rights to constitutional
scrutiny, at least when the government fills non-partisan,
non-policymaking positions. See, e.g., Elrod v. Burns, 427
U.S. 347, 372–73 (1976) (holding patronage dismissals of
9
non-policymaking public employees unconstitutional);
Pickering v. Board of Education, 391 U.S. 563, 574–75 (1968)
(holding unconstitutional city’s restriction on employee speech
on matter of public concern); see also Williams v. Rhodes, 393
U.S. 23, 29 (1968) (recognizing that although “the Constitution
is filled with provisions that grant Congress or the States
specific power[s] . . . these granted powers are always subject
to the limitation that they may not be exercised in a way that
violates other specific provisions of the Constitution”). Indeed,
were the government correct about Knight, it would be free, as
its counsel virtually conceded at oral argument, to exclude
committee members based on race, gender, or political
expression. Oral Arg. Tr. 14–16.
Having rejected the government’s Knight argument, we
turn to Appellants’ claim that the lobbyist ban imposes an
unconstitutional condition on their right to petition
government. As formulated in Perry v. Sindermann, the
unconstitutional conditions doctrine provides that “even
though a person has no ‘right’ to a valuable governmental
benefit and even though the government may deny him the
benefit for any number of reasons, . . . [it] may not deny a
benefit to a person on a basis that infringes his constitutionally
protected interests.” 408 U.S. at 597. The district court
dismissed this claim, finding that the ban neither deprived
Appellants of a valuable benefit nor burdened their right to
petition. We disagree on both counts.
As to the first issue, the government does not defend the
district court’s conclusion that ITAC service fails to qualify as
a governmental benefit. Indeed, ITAC membership comes with
many important benefits. For example, ITAC members are
able to play a significant role in shaping national trade policy:
they consult with top-government officials before, during, and
after the conclusion of trade negotiations; they submit reports
10
assessing the impact of trade agreements on industry; and the
Trade Representative is required to respond to these reports.
See 19 U.S.C. § 2155(d), (e)(1),(3), (i). Also, as Appellants
explained to the district court, ITAC members receive
“valuable expertise,” “experience,” and “a resume-enhancing
characteristic.” Autor, 892 F. Supp. 2d at 276. True, as the
district court pointed out, such benefits may not be quantifiable
in the same way as tax exemptions, welfare payments, and
other benefits the Supreme Court has found to implicate the
unconstitutional conditions doctrine. See id. at 277. But as the
district court also acknowledged, “neither the Supreme Court
nor this Circuit has required the benefit in an unconstitutional
conditions claim to have measurable economic worth.” Id. at
275. This is hardly surprising given that the doctrine’s
foundational principle—that the government “may not deny a
benefit to a person on a basis that infringes his constitutionally
protected interests . . . to produce a result which (it) could not
command directly,” Perry, 408 U.S. at 597 (internal quotations
omitted)—does not turn on whether the benefit has economic
worth. Even if it has none, so long as it has value to those who
seek it, as ITAC membership does to Appellants, then the
government can use its power to withhold the benefit to
pressure Appellants to forgo constitutionally protected
activity. Our sister circuits have thus extended the doctrine to a
broad range of non-monetary benefits and none, to our
knowledge, has found a benefit too insignificant. See, e.g.,
Cuffley v. Mickes, 208 F.3d 702, 707 (8th Cir. 2000)
(participation in adopt-a-highway program); Hyland v.
Wonder, 972 F.2d 1129, 1135–36 (9th Cir. 1992) (volunteer
position).
As to the second basis for the district court’s decision, the
government acknowledges, as it must, that registered lobbyists
are protected by the First Amendment right to petition. See
Liberty Lobby, Inc. v. Pearson, 390 F.2d 489, 491 (D.C. Cir.
11
1968) (holding lobbying is protected by the right to petition
government); see also Riley v. National Federation of the Blind
of North Carolina, Inc., 487 U.S. 781, 801 (1988) (holding that
First Amendment rights are “not lost merely because
compensation is received”). Its disagreement with Appellants
centers on whether the ban infringes this right. For its part, the
district court concluded that the ban “does not curtail protected
activity,” reasoning that “the statutory duty to register is not
directly correlated with the amount, nature, or content of any
lobbyist’s protected activity.” Autor, 892 F. Supp. 2d at 281–
82. Again, the government does not defend the district court’s
reasoning. Instead, it argues that the ban imposes no
unconstitutional burden, citing in support Lyng v. International
Union, 485 U.S. 360 (1988), one of a series of decisions
holding that “when the government appropriates public funds
to establish a program,” Rust v. Sullivan, 500 U.S. 173, 194
(1991), its “decision not to [use program funds to] subsidize
the exercise of a fundamental right does not infringe the right.”
Lyng v. International Union, United Automobile, Aerospace &
Agricultural Implement Workers of America, 485 U.S. 360,
368 (1988) (quoting Regan v. Taxation with Representation of
Washington, 461 U.S. 540, 549 (1983)) (internal quotation
marks omitted). In Lyng, the Supreme Court held that the
government could deny food stamp increases to striking
workers without running afoul of the First Amendment. Id. at
369–73; see also Regan, 461 U.S. at 551 (upholding denial of
tax exemption). But unlike in Lyng and the other subsidy cases,
in which the government withheld a financial benefit from the
plaintiffs, here the government pays ITAC members nothing.
They serve as volunteers, absorbing even their out of pocket
expenses. See Request for Nominations for the Industry Trade
Advisory Committees (ITACs), 75 Fed. Reg. at 24,585. The
Supreme Court has never extended the subsidy doctrine to
situations not involving financial benefits, and the government
12
offers no reason, nor can we think of one, why we should do so
here.
The government also cites Lyng for the proposition that
the lobbyist ban cannot “be thought to constitute significant
pressure to give up one’s status as a paid registered lobbyist.”
Appellee’s Br. 17. As Appellants point out, however, this
argument is premature. In their complaint, Appellants
plausibly alleged that the ban pressures them to limit their
constitutional right to petition, and given that the district court
dismissed the complaint pursuant to Rule 12(b)(6)—by
contrast, the Supreme Court resolved Lyng at summary
judgment—we must accept this allegation as true. See City of
Harper Woods, 589 F.3d at 1298.
The government next argues that the availability of a
“wide variety of alternative settings”—such as public
meetings, hearings, and trade “road shows”—in which
“registered lobbyists remain free” to participate in shaping
trade policy, Appellee’s Br. 18, “underscore the absence of any
First Amendment concerns,” Appellee’s Br. 20. But as
Appellants point out, their ability to participate in trade policy
in a variety of other ways is no answer to their argument that
banning them from ITAC membership deprives them of “an
especially effective way to affect government policy.”
Appellants’ Reply Br. 19. In support, Appellants
cite—properly in our view—Healy v. James, 408 U.S. 169
(1972), in which the Supreme Court held that a public
university’s decision to deny a student organization official
recognition burdened the student group notwithstanding the
group’s ability to associate in other ways. See id. at 183. The
government has no answer to Healy.
To sum up, then, Appellants have pled a viable First
Amendment unconstitutional conditions claim. That is, they
13
allege that the government has conditioned their eligibility for
the valuable benefit of ITAC membership on their willingness
to limit their First Amendment right to petition government.
But this does not end our inquiry. The Supreme Court has
long sanctioned government burdens on public employees’
exercise of constitutional rights “that would be plainly
unconstitutional if applied to the public at large.” United States
v. National Treasury Employees Union, 513 U.S. 454, 465
(1995) (citing Pickering, 391 U.S. 563). Although ITAC
service differs from public employment, the government’s
interest in selecting its advisors, see Knight, 465 U.S. at 285,
implicates similar considerations that we believe may justify
similar restrictions on individual rights. As the Supreme Court
explained in Pickering v. Board of Education, the “problem in
[these cases] is to arrive at a balance between the interests of
the [individual] . . . and the interest of the State.” 391 U.S. at
568. And where, as here, the government imposes a “blanket”
ban on protected activity, its “burden is greater” than in an
ordinary Pickering case. National Treasury Employees Union,
513 U.S. at 468.
The government justifies the ban on the grounds that it
“directly relates to the purposes and efficacy of the ITACs as
advisers” by “enabl[ing] the government to listen to
individuals who have experience in the industry but who are
not registered lobbyists, and are thus not otherwise as actively
engaged in the political and administrative process.”
Appellee’s Br. 16–17. This rationale, Appellants respond, is
“barely intelligible” because ITAC members “serve in a
representative capacity.” Appellants’ Reply Br. 13 (emphasis
added). Appellants also urge us to undertake the Pickering
balancing ourselves. But given that the issue is virtually
unbriefed, that the district court dismissed the complaint
pursuant to Rule 12(b)(6), and that the challenged ban
14
represents a major presidential initiative, we believe the wisest
course of action is to remand for the district court to develop a
factual record and undertake the Pickering analysis in the first
instance. In so doing, the district court should ask the parties to
focus on the justification for distinguishing, as the lobbyist ban
does, between corporate employees (who may represent their
employers on ITACs) and the registered lobbyists those same
corporations retain (who may not). The court may also want to
ask the government to explain how banning lobbyists from
committees composed of representatives of the likes of Boeing
and General Electric protects the “voices of ordinary
Americans.” Presidential Memorandum, 75 Fed. Reg. at
35,955.
We have one loose end to tie up. As noted at the outset, in
addition to their First Amendment claim, Appellants pled a
Fifth Amendment equal protection claim. Because they have
plausibly alleged that the ban denies them a benefit available to
others on account of their exercise of a fundamental right, we
must reverse the district court’s dismissal of their equal
protection claim as well. See Tele-Communications of Key
West, Inc. v. United States, 757 F.2d 1330, 1340 (D.C. Cir.
1985) (allegation of differential treatment without satisfactory
justification states equal protection claim); see also Police
Department of City of Chicago v. Mosley, 408 U.S. 92, 94–95
(1972) (analyzing city’s differential treatment of plaintiff’s
picketing under Equal Protection Clause). Although we can
think of good reasons why the Pickering balancing test should
apply to both claims, see Rogers v. Corbett, 468 F.3d 188,
193–94 (3d Cir. 2006) (abandoning traditional tiers of equal
protection scrutiny and applying Anderson v. Celebrezze, 460
U.S. 780 (1983), balancing test to equal protection claim
challenging ballot access restriction), this issue is also
unbriefed, and we think it best to leave it too for the district
court to wrestle with should the parties choose to pursue it.
15
III.
We reverse and remand for further proceedings consistent
with this opinion.
So ordered.