Slidewaters LLC v. Wash. State Dep't of Labor & Indus.

4 F.4th 747

SLIDEWATERS LLC, Plaintiff-Appellant,

v.WASHINGTON STATE DEPARTMENT OF LABOR AND INDUSTRIES; Jay Robert Inslee, Governor, in his official capacity, Defendants-Appellees.

No. 20-35634

United States Court of Appeals, Ninth Circuit.

Argued and Submitted June 7, 2021 Seattle, Washington

Filed July 8, 2021

Sydney Phillips (argued) and Robert A. Bouvatte Jr., Freedom Foundation, Olympia, Washington, for Plaintiff-Appellant.

Brendan Selby (argued) and Zackary Pekelis Jones, Assistant Attorneys General, Complex Litigation Division; Jeffrey T. Even, Deputy Solicitor General; Robert W. Ferguson, Attorney General; Office of the Attorney General, Seattle, Washington; for Defendants-Appellees.

Before: Ronald M. Gould, Richard R. Clifton, and Eric D. Miller, Circuit Judges.

CLIFTON, Circuit Judge:

Plaintiff Slidewaters LLC operates a waterpark in Chelan County, Washington. In response to the COVID-19 pandemic, the State of Washington imposed restrictions which prohibited the waterpark from operating during 2020. Slidewaters has been permitted to open in 2021, but the restrictions continue to impact Slidewaters by limiting the number of patrons in the waterpark. Slidewaters contends that the restrictions are unlawful under Washington state law and also violate Slidewaters’ federal constitutional rights. It sought a preliminary injunction to restrain Defendants, Governor Jay Inslee and the State Department of Labor and Industries ("L&I"), from enforcing the restrictions. The district court denied injunctive relief and dismissed Slidewaters’ action with prejudice. Slidewaters appeals that decision on the merits and adds several procedural objections to the district court's treatment of the case.

We conclude that Defendants have the authority under Washington law to impose the restrictions and that doing so does not violate Slidewaters’ asserted rights under the U.S. Constitution. Slidewaters’ application for injunctive relief was properly denied and its claims were properly dismissed. We also conclude that the district court did not err in consolidating Slidewaters’ motion for preliminary injunction with a hearing on the merits or in reaching Slidewaters’ state law claims. We affirm the judgment of the district court.

I. Background

COVID-19 is a novel, potentially deadly, severe acute respiratory illness caused by a virus that is most commonly transmitted person to person. See S. Bay United Pentecostal Church v. Newsom , ––– U.S. ––––, 140 S. Ct. 1613, 1613, 207 L.Ed.2d 154 (2020) (Roberts, C.J., concurring in denial of application for injunctive relief). Transmission can occur even when the infected person does not have symptoms and does not know of the infection. Id. Governments at all levels instituted restrictions to curb the transmission of the virus. See, e.g. , id. Even with the restrictions, it is estimated that over 114.6 million people in the United States became infected. CDC, Estimated Disease Burden of COVID-19 (May 19, 2021), https://www.cdc.gov/coronavirus/2019-ncov/cases-updates/burden.html (last visited June 29, 2021). Over 600,00 people in the United States have died from COVID-19. CDC, COVID Data Tracker, https://covid.cdc.gov/covid-data-tracker/#datatracker-home (last visited June 29, 2021). In Washington, there have been over 451,200 cases, 25,400 hospitalizations, and 5,900 deaths. Wash. State Dep't of Health, COVID-19 Data Dashboard , https://www.doh.wa.gov/Emergencies/COVID19/DataDashboard (last visited June 29, 2021).

In response to the initial COVID-19 outbreak in Washington, Governor Inslee declared a State of Emergency in Proclamation 20-05, on February 29, 2020. The proclamation instructed state departments to "utilize state resources and to do everything reasonably possible to assist affected political subdivisions in an effort to respond to and recover from the outbreak." Additional proclamations have been issued since then as the pandemic has continued, but Proclamation 20-05 remains in effect.

L&I promulgated an emergency rule, Washington Administrative Code § 296-800-14035 (the "L&I COVID-19 Rule"), as part of the state's efforts to curb the COVID-19 pandemic. The rule creates an enforcement mechanism for the proclamations’ restrictions on businesses by prohibiting employers from allowing employees to work if the business activity is prohibited. Wash. Admin. Code § 296-800-14035 (2020). If an employee is found working when the business activity is prohibited under the proclamations, the employer can be issued a citation that could result in a fine.

Slidewaters is normally open in the summer, from the Saturday prior to Memorial Day to Labor Day. However, the applicable state plan, in the form of the "Safe Start, Stay Healthy Plan" followed by the "Healthy Washington – Roadmap to Recovery," prohibited Slidewaters from operating until its part of the state reached certain public health goals, including being below a given level of new cases and hospitalizations. That meant that Slidewaters was unable to operate legally in the summer of 2020 as the region including Chelan County never reached the public health goals which would have allowed Slidewaters to open.¹

Now, in the summer of 2021, conditions have improved such that, under the restrictions that currently apply, Slidewaters can operate, albeit subject to limits which include restricting its capacity to 50 percent. It reopened as scheduled on May 29, 2021, and Slidewaters reports that it is operating in accordance with the current Washington State requirements.

II. Procedural History

Slidewaters filed a complaint in the Superior Court for Chelan County in early June 2020. It was removed by Defendants to the U.S. District Court for the Eastern District of Washington a few days later, and the litigation proceeded thereafter in district court.

In its complaint, Slidewaters sought an injunction against Proclamation 20-05 and the emergency rule issued by L&I. Slidewaters filed a motion for a temporary restraining order, which was denied by the district court.

Shortly after the denial of the TRO, Defendants filed in the district court an answer to the complaint and a counterclaim under Washington law. The counterclaim sought a declaratory judgment that Slidewaters’ conduct violated Proclamation 20-05 and an injunction against Slidewaters operating its facilities in violation of the proclamation.

On the same day that Defendants’ responsive pleading was filed, Slidewaters filed a motion in the district court for a preliminary injunction and requested expedited treatment of that motion by the district court. The request for expedited treatment was granted, over opposition by Defendants. In granting that request, the district court announced that it was inclined to exercise its discretion to treat the request for a preliminary injunction as if it were a motion for a permanent injunction, and it set a schedule for the parties to supplement previous filings if they desired.

After receiving supplemental filings, the district court denied the requests for injunctive relief, both preliminary and permanent, and dismissed Slidewaters’ complaint with prejudice. In the order in which it dismissed Slidewaters’ complaint, the district court noted that the dismissal of the complaint, including its federal claim, meant that there was no longer a basis for the court to exercise supplemental jurisdiction over the remaining state law claim, namely the counterclaim asserted by Defendants. The district court remanded Defendants’ state law counterclaim. This claim was later dismissed by Defendants. See Motion to Dismiss by Defendants, Slidewaters v. L&I , No. 20-2-00389-04 (Wash. Super. Ct., Chelan Cnty. July 17, 2020).

III. Slidewaters’ State Law Claims

Slidewaters appeals the district court's denial of its motion for preliminary injunction and dismissal of its state law claims. Slidewaters raises four challenges to the legality of the emergency proclamations and the rule promulgated by L&I. First, Slidewaters argues that Proclamation 20-05 is unlawful because the COVID-19 pandemic does not meet the criteria in Revised Code of Washington § 43.06.010(12) to declare a state of emergency. Second, Slidewaters alleges that the L&I COVID-19 Rule, Washington Administrative Code § 296-800-14035, is unlawful because the rule's subject matter falls outside L&I's scope of rulemaking authority. Third, Slidewaters argues that Defendants’ actions violate the principle of separation of powers by usurping the power of the legislature through the emergency declaration and removing the judicial branch by having administrative agencies adjudicate violations of the L&I COVID-19 Rule. Finally, Slidewaters alleges that the state is improperly seizing power from local health departments in its efforts to curb the pandemic and that these local departments are the only entities that can regulate health under Washington law.

We review denial of an injunction for abuse of discretion, the underlying determination of the statutes’ constitutionality de novo, and any underlying findings of fact for clear error. Powell's Books, Inc. v. Kroger , 622 F.3d 1202, 1208 n.7 (9th Cir. 2010). The underlying facts do not appear to be in dispute here.

A. Proclamation 20-05

Slidewaters argues that the governor unlawfully declared a state of emergency under Revised Code of Washington § 43.06.010(12). The statute states: "The governor may, after finding that a public disorder, disaster, energy emergency, or riot exists within this state or any part thereof which affects life, health, property, or the public peace, proclaim a state of emergency in the area affected ...." Wash. Rev. Code § 43.06.010(12) (2014).

Slidewaters argues that the COVID-19 pandemic is not "a public disorder, disaster, energy emergency, or riot," so the governor exceeded his lawful authority when he declared a state of emergency in Proclamation 20-05. Defendants counter that the pandemic is both a "disaster" and a "public disorder," so the...