Gordon v. Holder ( 2015 )

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
)
ROBERT GORDON, )
)
Plaintiff, )
)
v. ) Civil Action No. 10-1092 (RCL)
)
ERIC HOLDER, Attorney General of the )
United States, et al., )
)
Defendants. )
)
MEMORANDUM OPINION
Pending before the Court is plaintiff’s application for a permanent injunction and
declaratory relief. ECF No. 48. After considering this motion, the response and reply thereto, the
filings of various amicus curiae, the record, and the relevant authorities, the Court concludes that
this case must be dismissed as moot.
I. BACKGROUND
Plaintiff Robert Gordon owned a store and mail order business selling cigarettes. Joint
Stipulations ¶¶ 6, 8–9, ECF No. 47. He filed this lawsuit seeking an injunction to prevent
enforcement of many provisions of the Prevent All Cigarette Trafficking Act (“PACT Act” or “the
Act”) and a declaration that those provisions are unconstitutional. The Court previously dismissed
all but one of Gordon’s claims. Order, Dec. 5, 2011, ECF No. 37. A preliminary injunction was
entered, however, staying the enforcement of 15 U.S.C. § 376a(a)(3)(A)–(B), (4), and § 376a(d).
Id. That portion of the Act requires delivery sellers, like Gordon, to “comply with ‘all State, local,
tribal, and other laws generally applicable to sales of cigarettes or smokeless tobacco as if the
delivery sales occurred entirely within the specific State,’ meaning that they must collect any taxes
that state or local laws require in-state retailers to collect.” Gordon v. Holder, 721 F.3d 638, 642
(D.C. Cir. 2013) (quoting 15 U.S.C. § 376a(a)(3)). Gordon argues that this portion of the law runs
afoul of the Due Process Clause. The Court concluded that a preliminary injunction was warranted
as to this portion of the statute because Gordon demonstrated a sufficient likelihood of success on
the merits and he met the other preliminary injunction factors. Gordon v. Holder, 826 F. Supp. 2d
279, 297 (D.D.C. 2011). The Court of Appeals affirmed. Gordon, 721 F.3d at 657–58.
Between the Court’s entry of the preliminary injunction and the Court of Appeals’ decision
affirming it, Gordon’s business closed. Id. at 643. The Court of Appeals concluded, however, that
the case was not mooted by this event because Gordon’s wife, Marcia Gordon, “submitted a sworn
declaration that she and Gordon intend to reopen their business if they prevail, and that they remain
capable of doing so.” Id. The Court of Appeals based its conclusion on precedent holding that a
party’s “uncontroverted intention to operate in the future in ways that would violate” the
challenged government restriction maintains a lawsuit’s vitality. Unity08 v. FEC, 596 F.3d 861,
864 (D.C. Cir. 2010).
The Court of Appeals observed that, although its mootness determination was final, it was
possible that facts could arise later which would “moot the case in the future, at which point the
district court would be required to dismiss Gordon’s complaint.” Gordon, 721 F.3d at 643 n.3. In
fact, the circumstances surrounding this lawsuit have changed significantly in the intervening
period. Gordon now stipulates that he has no intention of reopening his business whether or not
he prevails in this lawsuit. Joint Stipulations ¶ 11. Additionally, Gordon is party to a consent
order in the Southern District of New York stating that he “shall not, directly or indirectly . . .
make, participate in, assist, aid or abet, or receive any direct benefit from any sale, shipment or
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delivery of cigarettes or tobacco products to any person.” City of New York v. Gordon, Order on
Consent ¶ 1, Civil Action No. 12-cv-4838 (VSB), 2014 WL 4471007 (S.D.N.Y. June 10, 2014).
Defendants have submitted evidence indicating that Gordon is highly unlikely to face
federal government initiated repercussions from his past conduct. Before the Court is the
declaration of Joseph Fox, Chief of the Alcohol and Tobacco Enforcement Branch, Bureau of
Alcohol, Tobacco, Firearms and Explosives, U.S. Department of Justice. Joseph Fox Decl. ¶ 1,
ECF No. 57-1. Fox has represented to the Court that ATF has no intention, based on all evidence
currently known to ATF, to “seek or recommend enforcement action against Gordon under the
PACT Act.” Id. ¶ 35. As Chief of the Alcohol and Tobacco Enforcement Branch at ATF, Fox is
“responsible for overseeing ATF’s alcohol and tobacco diversion programs.” Id. ¶ 33. His duties
include “oversee[ing] and review[ing] investigations and potential enforcement actions, mak[ing]
decisions about which ones warrant such actions, and develop[ing] and administer[ing] alcohol
and tobacco enforcement priorities for ATF.” Id. The Attorney General has “delegated principal
enforcement authority for the PACT Act” to ATF. U.S. Dep’t of Justice, Bureau of Alcohol,
Tobacco, Firearms and Explosives, ATF 2013 PACT Act Report at 1 (Mar. 5, 2013), ECF No. 57-
10.
II. LEGAL STANDARD
A. Mootness
Mootness doctrine arises out of Article III of the Constitution and its limitation on judicial
power to the consideration of “cases” or “controversies.” See Iron Arrow Honor Soc’y v. Heckler,
464 U.S. 67, 70 (1983). “Simply stated, a case is moot when the issues presented are no longer
live or the parties lack a legally cognizable interest in the outcome.” Cnty. of L.A. v. Davis, 440
U.S. 625, 631 (1979) (internal quotation marks omitted). The basic premise of the doctrine is that
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the “requisite personal interest that must exist at the commencement of the litigation (standing)
must continue throughout its existence (mootness).” United States Parole Comm'n v. Geraghty,
445 U.S. 388, 397 (1980) (quoting Henry P. Monaghan, Constitutional Adjudication: The Who
and When, 82 Yale L.J. 1363, 1384 (1973)). If a case is moot and, therefore, does not conform to
the requirements of Article III, the Court must dismiss for lack of subject matter jurisdiction. Iron
Arrow, 464 U.S. at 70.
“The burden of demonstrating mootness is a heavy one.” Davis, 440 U.S. at 631 (internal
quotation marks omitted). “A case becomes moot only when it is impossible for a court to grant
any effectual relief whatever to the prevailing party.” Decker v. Nw. Envtl. Def. Ctr., 133 S. Ct.
1326, 1335 (2013) (internal quotation marks omitted). The key determinant is whether relief
would be effectual as to the parties before the Court. Cf. Burke v. Barnes, 479 U.S. 361, 364
(1987) (holding that respondents could not overcome mootness by pointing to a possible future
lawsuit; that dispute, if it arose, “would not be between the parties to this case”).
B. Prudential Mootness
The type of mootness discussed in the preceding section has a mandatory effect and is
rooted in constitutional requirements. The closely related doctrine of prudential mootness is also
relevant to this case.
Prudential mootness arises out of a court’s discretion to decline to grant equitable relief.
Penthouse Int’l, Ltd. v. Meese, 939 F.2d 1011, 1019–20 (D.C. Cir. 1991). Even when a case is not
moot in the Article III sense, it will sometimes be “so attenuated that considerations of prudence
and comity for coordinate branches of government counsel the court to stay its hand, and to
withhold relief it has the power to grant.” Chamber of Commerce of U.S. v. U.S. Dep’t of Energy,
627 F.2d 289, 291 (D.C. Cir. 1980) (describing this doctrine as the “remedial counterpart” to
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mootness and as “a mélange of doctrines relating to the court’s discretion in matters of remedy
and judicial administration”). In light of the equitable foundation of this doctrine, a court may
withhold injunctive or declaratory relief in reliance upon it. Id. at 292.
The inquiry governing prudential mootness “cannot be cabined by inflexible, formalistic
rules, but instead require[s] a case-by-case judgment regarding the feasibility or futility of effective
relief should a litigant prevail.” In re AOV Indus., Inc., 792 F.2d 1140, 1147–48 (D.C. Cir. 1986).
Nonetheless, one guiding principle is that considerations favoring prudential mootness are
heightened when withholding equitable relief would “avoid the premature adjudication of
constitutional issues.” Penthouse Int’l, 939 F.2d at 1020.
III. APPLICATION
A. Mootness
Defendants argue that Gordon’s suit is now moot because of the events described above.
In part, Gordon does not dispute this contention. He concedes that the allegedly unconstitutional
portion of the PACT Act at issue in this case can no longer have any effect on his future conduct.
Pl.’s Appl. for Permanent Inj. and Declaratory Relief 15, ECF No. 48. He has stipulated that he
has no intention of reentering the business of selling tobacco products and he is bound by a court
order to the same effect.
Gordon argues that this case is not moot, however, because he could still face enforcement
proceedings related to his past violations of the Act’s tax provisions. Id. He points to hypothetical
enforcement proceedings that might be brought by federal, state, or local authorities. Id. at 15–18.
If the Court were to rule in Gordon’s favor, he argues, the possibility of his being liable in these
proceedings would be foreclosed. Id. at 18.
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The Supreme Court and D.C. Circuit Court of Appeals have previously evaluated the
continuum of circumstances where mootness issues might arise in the context of possible
prosecution or enforcement proceedings. At one end of the spectrum, an explicit statement from
a government official before the court that there is a present intent to prosecute can preserve a
case’s vitality. Clarke v. United States, 915 F.2d 699, 702 (D.C. Cir. 1990) (citing Edgar v. MITE
Corp., 457 U.S. 624, 630 (1982)). At the other end, “the risk [of prosecution] may be great enough
where the record on intent to prosecute is a blank.” Id. (citing Charles v. Daley, 749 F.2d 452,
457 (7th Cir. 1984)). Finally, when the government concedes for the record that there exists a
“complete and adequate defense” to prosecution and that “no one has ever suggested that there
would be” a prosecution, the case is likely moot. Id. at 701–02.
Here, defendants have submitted Joseph Fox’s declaration that ATF has no intent to seek
or recommend enforcement action against Gordon pursuant to the PACT Act. Thus, the record on
intent to prosecute is not “blank” in this case. Instead, ATF has affirmatively set forth its lack of
intent to seek or bring enforcement proceedings against Gordon. Fox’s declaration has substantial
force, given that he heads the division of ATF responsible for bringing and steering PACT Act
enforcement actions and in light of the fact that ATF has primary enforcement responsibility for
the Act.
While there is some risk that future federal officials might change enforcement priorities,
the test for mootness is not whether there is “zero risk” of future prosecution. See id. at 702.
Federal authorities are well aware of Gordon’s activities. Indeed, he has conceded in this litigation
that he violated the PACT Act’s taxing provisions. See Joint Stipulations ¶ 9 (“When Gordon was
actively in the business of delivery selling cigarettes, he sold cigarettes that did not have State or
local cigarette excise taxes paid on the cigarettes which corresponded to the State or locality in
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which the cigarettes would be delivered.”). It is wholly speculative to imagine that facts would
come to the government’s attention in the future that would change its present enforcement intent
or that a future holder of Fox’s office would have a different view as to Gordon’s conduct. Cf.
Babbitt v. United Farm Workers Nat’l Union, 442 U.S. 289, 298 (1979) (internal quotation marks
omitted) (holding plaintiffs are not proper when their fears of prosecution are only “imaginary or
speculative”).
In seeking to blunt the impact of the Fox declaration, Gordon points to Mesa Petroleum
Co. v. Cities Service Co., 715 F.2d 1425 (10th Cir. 1983). There, an Oklahoma official claimed
that plaintiff’s suit to enjoin enforcement of an Oklahoma statute as unconstitutional was moot
because the plaintiff had ceased the conduct made unlawful by the statute. Id. at 1426, 1431.
Plaintiff responded that the possibility the state would bring legal action against it for a past
violation kept the case alive. Id. at 1431. The Oklahoma official said in reply that he had no intent
to prosecute plaintiff. Id. The court found this reply unpersuasive. Id. It held that the “putative
enforcement intent of a particular state official is too slender a reed on which to rest our decision
as to whether a live controversy is presented.” Id.
While the Fox declaration bears some similarity to the rejected statement in Mesa
Petroleum, the Court concludes that the case is distinguishable and that the controversy between
Gordon and the defendants is moot. First, the D.C. Circuit, sitting en banc in Clarke, noted that
the agency in Mesa Petroleum informed the district court that “state law is determinative of [its]
enforcement intentions.” Clarke, 915 F.2d at 702 (quoting Mesa Petroleum, 715 F.2d at 1431).
The Clarke court concluded that this statement could have been interpreted by the 10th Circuit
panel as a “deliberate equivocation,” thus further reducing the import of the purported concession.
Id. at 702–03. No similar equivocation is presented on this record.
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Also, it is unclear whether the D.C. Circuit would decide Mesa Petroleum in the same
fashion as the 10th Circuit. In fact, a close reading of Clarke suggests that Mesa Petroleum would
come out differently here. The Clarke court explicitly observed that the case before it was mooted
despite the existence of some prosecution risk. Id. at 702. This risk sprang in part from the
possibility that “[l]ater government representatives” might attempt to renege on their prior
representations that prosecution was not being contemplated and that the plaintiff had a complete
defense to any potential prosecution. Id. While the government’s concession in Clarke was
stronger than that presented here or in Mesa Petroleum, the Circuit’s opinion appears to
contemplate that the enforcement intent of government officials is sturdy enough to sustain a
conclusion of mootness. For these reasons, Gordon’s reliance on Mesa Petroleum is unpersuasive.
Gordon also argues that this case is not moot by pointing to enforcement proceedings that
might be brought by states and localities. This argument is unavailing. Possible actions of state
and local authorities are irrelevant to the determination of mootness here. The defendants in this
case are all federal agencies and officers. In deciding the question of mootness, a court must ask
whether it is capable of providing concrete, effectual relief to the prevailing party before it. Gordon
concedes that a permanent injunction would bind only the defendants before the Court. Pl.’s Reply
9, ECF No. 63. Instead, he argues that a declaratory judgment of facial unconstitutionality would
prevent a state or locality from seeking relief against Gordon under the PACT Act. Id. Such a
judgment, however, would not bind states or localities because they are not parties to this case.
See Parklane Hosiery Co. v. Shore, 439 U.S. 322, 327 n.7 (1979) (“It is a violation of due process
for a judgment to be binding on a litigant who was not a party or a privy and therefore has never
had an opportunity to be heard.”). It is insufficient for mootness purposes that a declaration of
facial unconstitutionality—assuming it was affirmed by the Court of Appeals—would have
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precedential effect in subsequent lawsuits. Cf. Comite de Apoyo a los Trabajadores Agricolas
(CATA) v. U.S. Dep’t of Labor, 995 F.2d 510, 514 (4th Cir. 1993) (“The fact that a declaratory
judgment may have persuasive or even precedential weight in a subsequent proceeding will not
alone suffice to confer standing upon a party seeking to invoke federal jurisdiction. Article III
requires more.”). If Gordon’s argument were the rule, it would fundamentally undermine the
foundational requirement that courts may not issue advisory opinions.
In short, Gordon’s case is moot and no longer presents an Article III case or controversy.
He no longer engages in the prohibited conduct and has conceded he never intends to again. The
risk that he will be subject to future federal enforcement of the Act for his past conduct is
speculative and remote in light of the Fox declaration and the lack of any pending threats of
enforcement. The risk of future state and local enforcement of the Act is also speculative and,
more important, irrelevant to the Court’s determination of the mootness question in this case.
B. Prudential Mootness
Even if the potential for enforcement action by federal, state, or local authorities were
sufficient to sustain this case for purposes of Article III, the Court would still be constrained to
dismiss it pursuant to the doctrine of prudential mootness.
By his own admission, a favorable ruling would have no effect on Gordon’s future conduct.
Therefore, an injunction or a declaration of facial invalidity would only have the effect of
forestalling a possible federal enforcement action. The argument that such an action is likely to
arise is, at best, speculative. The connection of equitable relief in this case with the potential
actions of state and local authorities is even more attenuated. No such authorities are before the
Court as parties.
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Additionally, Gordon seeks equitable relief that would invalidate part of a federal statute
on a novel constitutional basis. Gordon, 721 F.3d at 645 (concluding that Gordon’s challenge to
the tax collection portion of the PACT Act “presents two substantial and novel constitutional
questions”). He brings only a facial challenge to the taxing provision of the Act. Joint Stipulations
¶ 10.
These circumstances present the sort of situation where a court should stay its hand. For
the reasons already stated, it is wholly speculative that granting the requested equitable relief
would “actually relieve the injury” Gordon alleges. As a result, prudential mootness comes into
play; the Court should normally refrain from exercising its equitable powers in such a situation.
See Penthouse Int’l, 939 F.2d at 1019–20. Even greater caution is warranted because this case
requires consideration of a “constitutional issue of first impression.” See id. Furthermore, the
constitutional questions presented by Gordon’s suit arise from the disfavored posture of a facial
challenge. See Washington State Grange v. Washington State Republican Party, 552 U.S. 442,
450 (2008) (“Facial challenges are disfavored for several reasons.”). For these reasons, the Court
will exercise its discretion to decline to decide these difficult and important constitutional
questions until they are “squarely presented.” See Penthouse Int’l, 939 F.2d at 1020.
IV. CONCLUSION
For the foregoing reasons, the Court will dismiss this case as moot. It will also vacate its
previously issued preliminary injunction in light of this disposition.
A separate Order consistent with this Memorandum Opinion shall issue this date.
Signed by Royce C. Lamberth, United States District Judge, on March 26, 2015.
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