Just Puppies, Inc. v. Frosh

438 F.Supp.3d 448

JUST PUPPIES, INC., et al., Plaintiffs,

v.Brian E. FROSH, et al., Defendants.

Civil Action No. ELH-19-2439

United States District Court, D. Maryland.

Signed February 7, 2020

Jonathan P. Kagan, Meagan Cooper Borgerson, Stephen B. Stern, Kagan Stern Marinello & Beard, LLC, Annapolis, MD, for Plaintiffs.

Jennifer L. Katz, Ryan Robert Dietrich, Office of the Attorney General of Maryland, Baltimore, MD, for Defendants,

MEMORANDUM OPINION

Ellen Lipton Hollander, United States District Judge

This case concerns a challenge to the State of Maryland's "No More Puppy-Mill Pups Act" (the "Act" or "Puppy-Mill Act"), Md. Code (2015 Repl. Vol, 2019 Supp.), § 19-701 et seq. , of the Business Regulation Article ("Bus. Reg."). Under the Act, which went into effect on January 1, 2020, retail pet stores located in Maryland "may not offer for sale or otherwise transfer or dispose of cats or dogs." Id. § 19-703.

Four pet stores, a dog breeder, and a dog broker have filed suit, seeking, inter alia , an injunction prohibiting enforcement of the Act as well as a declaration that the Act is unconstitutional under the Commerce Clause and the Equal Protection Clause of the Constitution. ECF 1 ("Complaint"). The plaintiffs are Just Puppies, Inc. d/b/a Just Puppies Towson; Just Puppies of Maryland, Inc. d/b/a Just Puppies Rockville (collectively, "Just Puppies"); Charm City Puppies, LLC d/b/a Charm City Puppies & Boutique ("Charm City Puppies"); Today's Pet, Inc. d/b/a Today's Pet; Jodie Hancock, a dog breeder located in Missouri; and, Sobrad, LLC d/b/a Pinnacle Pet, a Missouri-based broker of dogs ("Pinnacle Pet"). They have sued Brian E. Frosh, in his capacity as the Attorney General of Maryland; the Consumer Protection Division of the Office of the Maryland Attorney General (the "CPD"); and the Maryland House Economic Matters Committee and the Maryland State Senate Finance Committee, as part of the Maryland General Assembly (collectively, the "Committee Defendants"). At times, I shall refer to the defendants collectively as the "State."

Plaintiffs filed their Complaint on August 23, 2019, about fifteen months after the Act was signed into law and a few months prior to its effective date. It contains eight counts. Counts I, II, and III allege that the Puppy-Mill Act violates the implied limits on state power imposed by the Commerce Clause of the Constitution. Id. ¶¶ 92-123; see U.S. Const. art. I, § 8, cl. 3. Count IV asserts that the Act is preempted by the Animal Welfare Act of 1966, codified at 7 U.S.C. § 2131 et seq. ECF 1, ¶¶ 124-29. In Count V, plaintiffs allege that the Act violates the Equal Protection Clause of the Fourteenth Amendment to the Constitution. Id. ¶¶ 130-36; see U.S. Const. amend. XIV. Count VI alleges that the Puppy-Mill Act gives unregulated breeders and animal shelters a monopoly to sell pets to Maryland residents, in violation of Article 41 of the Maryland Declaration of Rights. ECF 1, ¶¶ 137-46. In Count VII, plaintiffs seek a declaratory judgment, pursuant to 28 U.S.C. § 2201, that the Puppy-Mill Act violates federal law. ECF 1, ¶¶ 147-50. And, in Count VIII, plaintiffs request preliminary and permanent injunctive relief. Id. ¶¶ 151-54.

The State has moved to dismiss the Complaint, pursuant to Fed. R. Civ. P. 12(b)(1), on sovereign immunity grounds, and under Fed. R. Civ. 12(b)(6), for failure to state a claim. ECF 5. The motion is supported by a memorandum of law (ECF 5-1) (collectively, the "Motion") and one exhibit. ECF 5-2. Plaintiffs oppose the Motion (ECF 18, "Opposition"), supported by five exhibits. ECF 18-2 to ECF 18-6. Defendants have replied. ECF 24.

On October 23, 2019, plaintiffs filed a motion for preliminary injunction, seeking to stay the enforcement of the Puppy-Mill Act pending the resolution of this case. ECF 20 ("Preliminary Injunction Motion" or "P.I. Motion"). Defendants oppose the P.I. Motion (ECF 25), and plaintiffs replied. ECF 26.

In addition, several amici curiae have filed memoranda. The Humane Society of the United States ("HSUS" or "Humane Society") filed a brief in support of defendants (ECF 10), to which plaintiffs responded. ECF 19. And, the Pet Industry Joint Advisory Counsel and Citizens for Responsible Pet Ownership filed a brief in support of plaintiffs. ECF 33.

On January 29 and January 30, 2020, the Court held an evidentiary hearing on the P.I. Motion. The Court also heard oral argument as to the P.I. Motion and the Motion.

For the reasons that follow, I shall grant the Motion (ECF 5). Accordingly, I shall deny the Preliminary Injunction Motion (ECF 20).

I. Background¹

The retail model for cats and dogs typically involves three categories of players. ECF 1, ¶¶ 89-90. Breeders produce litters of puppies and kittens. See id. ¶ 89. Some breeders sell their inventory to retail stores or consumers, while others sell to brokers, who then re-sell the animals. Id. ¶¶ 89-90. At the end of the supply chain, brick-and-mortar stores sell cats and dogs to the public.

Breeders and brokers who sell cats and dogs in interstate commerce must comply with the Animal Welfare Act of 1966 ("AWA"), 7 U.S.C. § 2131 et seq. , and its implementing regulations, issued by the Secretary of the United States Department of Agriculture ("USDA"). The AWA does not govern retail pet stores. But, as discussed, infra , retail pet stores in Maryland are subject to Maryland regulation.

A. The Animal Welfare Act of 1966

Congress enacted the AWA, in part, to "ensure that animals intended ... for use as pets are provided humane care and treatment[.]" 7 U.S.C. § 2131 ; see also ECF 1, ¶ 16. To achieve this goal, the AWA regulates animal "dealers," which it broadly defines as "any person who, in commerce, for compensation or profit, delivers for transportation, or transports, except as a carrier, buys, or sells, or negotiates the purchase or sale of ... any dog or other animal whether alive or dead for research, teaching, exhibition, or use as a pet[.]" 7 U.S.C. § 2132(f). Notably, the AWA's definition of dealer explicitly excludes retail pet stores. Id.

Under the AWA, a dealer must possess a valid license to buy, sell, or transport in commerce a cat or dog intended for use as a pet. See id. § 2134. But, the AWA does not establish a detailed regulatory scheme, instead authorizing the USDA Secretary to craft the details. See id. § 2133 (granting authority to prescribe licensing process); id. § 2143(a)(1) (providing that "[t]he Secretary shall promulgate standards to govern the humane handling, care, treatment, and transportation of animals by dealers"); id. § 2146(a) (directing the Secretary to "make such investigations or inspections as he deems necessary to determine whether any dealer ... has violated or is violating [the AWA]").

Pursuant to this authority, the USDA Secretary has created three licensing categories. 9 C.F.R. § 1.1. Two are implicated here. A "Class ‘A’ licensee" is any dealer subject to licensure under the AWA "whose business involving animals consists only of animals that are bred and raised on the premises." Id. A "Class ‘B’ licensee" is any regulated dealer "whose business includes the purchase and/or resale of any animal," including "brokers ... [who] negotiate or arrange for the purchase, sale, or transport of animals in commerce." Id.² Breeders who have four or fewer breeding females and sell only their offspring are exempt from the AWA's licensing requirements. Id. § 2.1(a)(3)(iii).

Licensees must abide by certain standards of care. Id. § 2.3(a). These requirements include housing dogs and cats in structurally appropriate enclosures, id. §§ 3.1-3.6; feeding them at least once a day, id. § 3.9; and ensuring that their environment is sanitary and free of pests. Id. § 3.11.³ Licensees must also maintain detailed records of each animal they buy or sell, id. § 2.75, and they must provide the USDA Secretary with sales information on an annual basis. Id. § 2.7. In addition, licensees are subject to random inspections by USDA officials. Id. § 2.126. Licensees who violate the AWA or USDA regulations face civil penalties and the suspension or revocation of their license. 7 U.S.C. §§ 2147, 2149. USDA regulations provide that "[a]ny person whose license has been suspended or revoked shall not buy, sell, transport, exhibit, or deliver for transportation, any animal during the period of suspension or revocation." 9 C.F.R. § 2.10(c).

Significantly, the AWA expressly contemplates state and local regulation of commerce in animals. The statute authorizes the USDA Secretary "to cooperate with the officials of the various States or political subdivisions thereof in carrying out the purposes of this chapter and of any State, local, or municipal legislation or ordinance on the same subject." 7 U.S.C. § 2145(b). Further, the AWA provides that its grant of authority to the USDA Secretary to issue regulations "govern[ing] the humane handling, care, treatment and transportation of animals by dealers," id. § 2143(a)(1), "shall not prohibit any State (or a political subdivision of such State) from promulgating standards in addition to those standards[.]" Id. § 1243(8).

B. Maryland Regulation of Pet Sales Before the Puppy-Mill Act

Many states, including Maryland, have sought to regulate the sale of pets in an effort to address the harms associated with "puppy mills." ECF 1, ¶ 18; see also Rebecca F. Wisch, Table of State Commercial Pet Breeder Laws , MICH. ST. U. C. OF L.: ANIMAL LEGAL & HISTORICAL CTR. (2017), archived at https://perma.cc/G8XK-M7QM (cataloging states' breeder regulations).⁴ The pejorative term "puppy mill" is used by the animal rights community to describe high-volume breeding operations where dogs are kept in overcrowded and unsanitary conditions and are treated inhumanely. See Katherine C. Tushaus, Note, Don't Buy the Doggy in the Window: Ending the Cycle that Perpetuates Commercial Breeding with Regulation of the Retail Pet Industry , DRAKE J. OF AGRIC . L. 501, 502-03 (2009).

In 2012, Maryland...