Anvar v. Tanner

549 F.Supp.3d 235

Kambis ANVAR and Michelle Drum, Plaintiffs,

v.Elizabeth TANNER, in her official capacity as Director of R.I. Department of Business Regulation, and Peter Neronha, in his official capacity as Attorney General of Rhode Island, Defendants.

C.A. No. 19-523-JJM-LDA

United States District Court, D. Rhode Island.

Signed July 16, 2021

James A. Tanford, Joseph Beutel, Robert D. Epstein, Epstein Cohen Seif & Porter, LLP, Indianapolis, IN, Scott J. Summer, Lawyers Collaborative, Providence, RI, for Plaintiffs.

Andrea M. Shea, Lauren E. Hill, Rhode Island Office of the Attorney General, Ryan M. Gainor, Hinckley, Allen & Snyder LLP, Providence, RI, for Defendant Elizabeth Tanner.

Andrea M. Shea, Lauren E. Hill, Rhode Island Office of the Attorney General, Providence, RI, for Defendant Peter Neronha.

MEMORANDUM AND ORDER

JOHN J. MCCONNELL, JR., United States District Chief Judge.

This is a civil rights action brought pursuant to 42 U.S.C. § 1983 challenging the constitutionality of R.I. Gen. Laws § 3-4-8(a) and 230 R.I. Admin. Code 30-10-1.4.19(B)(1), which prohibit out-of-state alcohol retailers from selling, shipping, and delivering alcohol directly to Rhode Island residents, and R.I. Gen. Laws §§ 3-5-10, 3-5-11, 3-5-15, 3-5-17, and 3-7-18, and 230 R.I. Admin. Code 30-10-1.4.10(B) and 30-10-1.4.27, which Plaintiffs allege have the practical effect of preventing out-of-state retailers from lawfully selling and delivering alcohol to Rhode Island consumers. Plaintiffs assert that these provisions unlawfully benefit in-state sellers to the detriment of out-of-state business interests, in violation of the Commerce Clause of the United States Constitution. Defendants move to dismiss under Rule 12(b)(1) for lack of subject-matter jurisdiction.

I. BACKGROUND

Plaintiffs Kambis Anvar and Michelle Drum are Rhode Island residents and wine consumers over the age of twenty-one who wish to purchase wine from out-of-state sources and have it delivered to their homes. Plaintiffs have contacted out-of-state sellers by telephone and the Internet seeking Rhode Island wine delivery, ECF No. 1, ¶ 18. The retailers have, in turn, declined invitations to place such orders.¹ Id. Plaintiffs allege that because Rhode Island law does not mandate that in-state alcohol purchases be made in person and permits direct-to-consumer orders from out-of-state wineries, the only justification for barring out-of-state retail shipments is thus impermissible protectionism. Id. , ¶¶ 22-23.

Plaintiffs filed suit seeking a declaratory judgment that this regulatory scheme violates the Commerce Clause of the United States Constitution. Id. at 6. Plaintiffs further ask this Court to enjoin Defendants from enforcing the relevant statutory and regulatory provisions and direct Defendants to permit direct-to-consumer wine sales, shipments, and deliveries. Id.

Defendants filed an Answer (ECF No. 15) and requested a stay as to expert discovery to allow for briefing on the issue of subject-matter jurisdiction (ECF No. 35).

Defendants subsequently filed a Motion to Dismiss for lack of standing. ECF No. 40. Along with their motion, Defendants included excerpts of Plaintiffs’ depositions and answers to interrogatories from discovery that pre-dated the Court's stay of the scheduling order. ECF No. 40-1 – 40-4. Defendants attack standing by virtue of a challenge controverting the Complaint's factual underpinnings. ECF No. 40 at 8-9.

In responding to the Motion to Dismiss, Plaintiffs submitted personal declarations expanding on their depositions and responses to interrogatories, among other materials. ECF No. 41-2, 41-3. Additionally, Plaintiffs filed declarations containing the results of counsel's research as to out-of-state retailers’ desire to deliver wine to Rhode Island residents if the law so permitted, as well as to the purported unavailability of certain wines in the Rhode Island marketplace. ECF No. 41-4, 41-7.

Defendants Move to Strike the declarations as inadmissible hearsay and on other grounds. ECF No. 43.

II. STANDARD OF REVIEW

Defendants have Moved to Dismiss the claims against them under Rule 12(b)(1). Generally, "[t]he proper vehicle for challenging a court's subject-matter jurisdiction is Federal Rule of Civil Procedure 12(b)(1)." Valentin v. Hosp. Bella Vista , 254 F.3d 358, 362 (1st Cir. 2001). If a plaintiff "lacks Article III standing to bring a matter before the court, the court lacks subject matter jurisdiction to decide the merits of the underlying case." Dubois v. U.S. Dep't of Agric. , 102 F.3d 1273, 1281 (1st Cir. 1996) (citing FW/PBS, Inc. v. City of Dall. , 493 U.S. 215, 231, 110 S.Ct. 596, 107 L.Ed.2d 603 (1990) ).

The procedural posture here is unique. Defendants fashion their Rule 12(b)(1) Motion to Dismiss as a factual challenge to standing, rather than a facial one. In a facial challenge, "the court must credit the plaintiff's well-pleaded factual allegations," draw all reasonable inferences in the plaintiff's favor, and adjudicate the challenge accordingly. Valentin , 254 F.3d at 363. By contrast, in a factual challenge, the plaintiff disputes "the accuracy (rather than the sufficiency) of the jurisdictional facts asserted by the plaintiff and proffer[s] materials of evidentiary quality in support of that position." Id. In the context of such a challenge, a plaintiff's facts are entitled to "no presumptive weight," and the court may delve into auxiliary submissions beyond the pleadings. Id. "The attachment of exhibits to a 12(b)(1) motion does not convert it" to a motion for summary judgment. Gonzalez v. United States , 284 F.3d 281, 288 (1st Cir. 2002).

III. DISCUSSION

A. Properly Characterizing Defendants’ Dispositive Motion

A Rule 12(b)(1) motion to dismiss for lack of subject-matter jurisdiction "must be made before pleading if a responsive pleading is allowed." Fed. R. Civ. P. 12. Here, Defendants so moved after filing an Answer. Plaintiffs argue that this poor timing converted Defendants’ motion under Rule 12(b)(1) to a motion for summary judgment. But, where a lack of subject-matter jurisdiction is alleged in a post-answer Rule 12(b)(1) motion, a court may decide the jurisdictional issue under Rule 12(h)(3). That rule provides: "if the court determines at any time that it lacks subject-matter jurisdiction, the court must dismiss the action." Fed. R. Civ. P. 12(h)(3) ; see also Arbaugh v. Y&H Corp., 546 U.S. 500, 506, 126 S.Ct. 1235, 163 L.Ed.2d 1097 (2006) ; Greystone Bank v. Tavarez , No. 09-CV-5192 (SLT), 2010 WL 3325203, at *1 (E.D.N.Y. Aug. 19, 2010) (collecting cases). Thus, the Court will consider Defendants’ motion under Rule 12(h)(3).

B. Standing

Defendants contend that Plaintiffs lack standing to advance their claims. "[A] federal court may resolve only ‘a real controversy with real impact on real persons.’ " TransUnion LLC v. Ramirez , ––– U.S. ––––, 141 S.Ct. 2190, 2203, ––– L.Ed.2d –––– (2021) (quoting Am. Legion v. Am. Humanist Assn. , ––– U.S. ––––, 139 S. Ct. 2067, 2103, 204 L.Ed.2d 452 (2019) ). A plaintiff carries the jurisdictional burden, Mangual v. Rotger-Sabat , 317 F.3d 45, 56 (1st Cir. 2003).

To establish standing, a plaintiff must have "(1) suffered an injury in fact, (2) that is fairly traceable to the challenged conduct of the defendant, and (3) likely to be redressed by a favorable judicial decision." Spokeo, Inc. v. Robins , 578 U.S. 330, 136 S Ct. 1540, 1547, 194 L.Ed.2d 635 (2016), "Injury in fact" means an " ‘invasion of a legally protected interest’ " that is both " ‘concrete and particularized’ " as well as " ‘actual or imminent,’ " rather than " ‘conjectural or hypothetical.’ " Id. at 1548 (quoting Lujan v. Defenders of Wildlife , 504 U.S. 555, 560, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992) ). "For an injury to be ‘particularized,’ it ‘must affect the plaintiff in a personal and individual way,’ " Spokeo , 136 S. Ct. at 1548 (quoting Lujan , 504 U.S. at 560 n.1, 112 S.Ct. 2130 ), with a plaintiff possessing " ‘a personal stake’ in the case." TransUnion , No. 20-297, ––– U.S. at ––––, 141 S.Ct. at 2203 (quoting Raines v. Byrd , 521 U.S. 811, 819, 117 S.Ct. 2312, 138 L.Ed.2d 849 (1997) ), "A ‘concrete’ injury must be ‘de facto ’; that is, it must actually exist." Spokeo , 136 S. Ct. at 1548 (citing Black's Law Dictionary 479 (9th ed. 2009)). " ‘Concrete’ is not, however, necessarily synonymous with ‘tangible,’ " Spokeo , 136 S. Ct. at 1549 (citing Pleasant Grove City v. Summum , 555 U.S. 460, 129 S.Ct. 1125, 172 L.Ed.2d 853 (2009) (free speech); Church of Lukumi Babalu Aye, Inc. v. Hialeah , 508 U.S. 520, 113 S.Ct. 2217, 124 L.Ed.2d 472 (1993) (free exercise)).

Here, the traceability and redressability elements needed to establish standing are not in dispute. Rather, Defendants assail injury in fact.² In bringing their factual challenge, Defendants assert that since Plaintiffs did not intend to complete a purchase and did not desire particular wine brands or vintages when contacting the out-of-state suppliers, that Plaintiffs were not injured in a manner that confers standing.³ This argument inappropriately links intent and injury in fact and marginalizes long-held Commerce Clause jurisprudence.

The Supreme Court has consistently characterized the Commerce Clause as "conferring a ‘right’ to engage in interstate trade free from restrictive state regulation.’ " Dennis v. Higgins , 498 U.S. 439, 448, 111 S.Ct. 865, 112 L.Ed.2d 969 (1991) (citing Crutcher v. Kentucky , 141 U.S. 47, 57, 11 S.Ct. 851, 35 L.Ed. 649 (1891) ). "To carry on interstate commerce is not a franchise or privilege granted by the State; it is a right which every citizen of the United States is entitled to exercise under the Constitution and laws of the United States." Crutcher , 141 U.S. at 57, 11 S.Ct. 851. See also Granholm v. Heald , 544 U.S. 460, 473, 125 S.Ct. 1885, 161 L.Ed.2d 796 (2005) (recognizing citizens have the "right to have access to the markets of other States on equal terms"); W. Union Tel. Co. v. Kansas ex rel. Coleman ...