Art & Antique Dealers League of Am., Inc. v. Seggos
| Citation | 523 F.Supp.3d 641 |
| Decision Date | 05 March 2021 |
| Docket Number | 18 Civ. 2504 (LGS) |
| Parties | The ART AND ANTIQUE DEALERS LEAGUE OF AMERICA, INC., et al., Plaintiffs, v. Basil SEGGOS, et al., Defendants. |
| Court | U.S. District Court — Southern District of New York |
Alan Edward Sash, McLaughlin and Stern, LLP, New York, NY, for Plaintiffs.
Elizabeth Morgan, New York State Office of the Attorney General, New York, NY, for Defendants.
Plaintiffs The Art and Antique Dealers League of America, Inc. (the "Dealers League") and The National Antique and Art Dealers Association of America, Inc. (the "Dealers Association") bring this action against Defendant Basil Seggos, the Commissioner of the New York State Department of Environmental Conservation ("DEC"). Plaintiffs challenge the constitutionality of the "State Ivory Law," New York State Environmental Conservation Law § 11-0535-a, and DEC licenses issued pursuant to that law. Plaintiffs move for summary judgment seeking (1) a declaratory judgment that the State Ivory Law is unconstitutional and therefore void and (2) a permanent injunction preventing DEC from enforcing the State Ivory Law. Defendant cross-moves for summary judgment seeking dismissal of this action in its entirety. For the reasons discussed below, Defendant's motion is granted, and Plaintiffs’ motion is denied.
The summary below is taken from the Plaintiffs’ Rule 56.1 statement as well as materials filed in support of the motions.1
Plaintiffs are trade organizations representing art and antique dealers. Plaintiffs’ members, some of whom have expertise in antique elephant and mammoth ivory from Africa and Asia, "have an economic and professional interest in, among other things, the purchase and sale of antique elephant ivory in interstate and international commerce." Defendant is the Commissioner of the New York State DEC.
In 2014, New York enacted the State Ivory Law, which provides that "no person shall sell, offer for sale, purchase, trade, barter or distribute an ivory article." N.Y. Env't. Conserv. Law § 11-0535-a(2) (McKinney 2014). The statute defines "ivory article" as "any item containing worked or raw ivory from any species of elephant or mammoth." Id. § 11-0535-a(1)(b). This prohibition is subject to various exceptions, see id. § 11-0535-a(3), which are more limited than the analogous exceptions to the ban on commerce in ivory outlined in the Endangered Species Act, 16 U.S.C. § 1531 et seq. (the "ESA") -- the practical implication being that some ivory permitted to be sold interstate or internationally may not be sold intrastate in New York. The DEC issues licenses that authorize trade in ivory pursuant to the State Ivory Law's exceptions. See id. § 11-0535-a(3). Trading in ivory without a license may constitute a Class D Felony and can carry substantial civil penalties. See id. §§ 71-0924(4), 71-0925(16). The licenses issued by DEC restrict the licensees’ advertisement and display of ivory products. Licensees may not "physically display for sale" any item not authorized for intrastate sale (i.e., not covered by one of the State Ivory Law's exceptions) (the "Display Restriction"). However, such items may be displayed in advertisements, catalogues and online, provided that the photographs are accompanied by a notice stating that the item "Cannot be [P]urchased or Sold within New York State."
The implementation of the Display Restriction has adversely affected Plaintiffs and their members. For example, Anthony Blumka -- a member and officer of the Dealers Association who owns Blumka Gallery Ltd. -- has shipped all the ivory he owns overseas because of the Display Restriction. In his declaration, Captain Antone Jess Paluch, an Investigative Captain of the DEC, stated that the State Ivory Law and the Display Restriction has made commerce in ivory in New York less appealing, and that the Display Restriction is operating as intended. He explained that it is impossible to assess the genuineness or condition of ivory without inspecting it in person, and buyers of ivory of significant value are unwilling to make a purchase without an inspection. Captain Paluch states that, as a result, the Display Restriction has made it more likely that sellers of ivory will comply with the State Ivory Law, because prospective buyers cannot inspect, and then immediately buy, ivory that is illegal for sale in New York.
On March 20, 2018, Plaintiffs filed this action, challenging the constitutionality of the State Ivory Law on preemption and First Amendment grounds. Intervenor Defendants comprise The Humane Society of the United States, Center for Biological Diversity, Natural Resources Defense Council, Inc. and Wildlife Conservation Society.2 On February 1, 2019, the Court granted Defendant's motion to dismiss for lack of subject matter jurisdiction for lack of standing. See Art & Antique Dealers League of Am., Inc. v. Seggos , No. 18 Civ. 2504, 2019 WL 416330, at *1 (S.D.N.Y. Feb. 1, 2019). On March 19, 2019, Plaintiffs filed the Third Amended Complaint ("TAC"), which cured the standing deficiencies. On August 14, 2019, the Court granted in part and denied in part Defendant's and Intervenors’ cross-motions to dismiss the TAC and denied without prejudice to renewal Plaintiffs’ motion for summary judgment. See Art & Antique Dealers League of Am., Inc. v. Seggos , 394 F. Supp. 3d 447, 450 (S.D.N.Y. 2019). The parties have now completed discovery and their cross-motions for summary judgment are now before the Court.
When parties cross-move for summary judgment, the Court analyzes the motions separately, "in each case construing the evidence in the light most favorable to the non-moving party."
Wandering Dago, Inc. v. Destito , 879 F.3d 20, 30 (2d Cir. 2018). Summary judgment is appropriate where the record establishes that "there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a). "A genuine issue of material fact exists if ‘the evidence is such that a reasonable jury could return a verdict for the nonmoving party.’ " Nick's Garage, Inc. v. Progressive Cas. Ins. Co. , 875 F.3d 107, 113 (2d Cir. 2017) (quoting Anderson v. Liberty Lobby, Inc. , 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986) ). When the movant properly supports its motions with evidentiary materials, the opposing party must establish a genuine issue of fact by "citing to particular parts of materials in the record." Fed. R. Civ. P. 56(c)(1)(A). "[A] party may not rely on mere speculation or conjecture as to the true nature of the facts to overcome a motion for summary judgment." Fed. Trade Comm'n v. Moses , 913 F.3d 297, 305 (2d Cir. 2019) (internal quotations omitted). "Only admissible evidence need be considered by the trial court in ruling on a motion for summary judgment." Porter v. Quarantillo , 722 F.3d 94, 97 (2d Cir. 2013) ; accord Starr Indem. & Liab. Co. v. Brightstar Corp. , 388 F. Supp. 3d 304, 323 (S.D.N.Y. 2019). It is the government's burden to justify its rules as consistent with the First Amendment. See Sorrell v. IMS Health Inc. , 564 U.S. 552, 571-72, 131 S.Ct. 2653, 180 L.Ed.2d 544 (2011).
This dispute concerns New York's restriction of Plaintiffs’ commercial speech -- "expression related solely to the economic interests of the speaker and its audience." Cent. Hudson Gas & Elec. Corp. v. Pub. Serv. Comm'n of N.Y. , 447 U.S. 557, 561, 100 S.Ct. 2343, 65 L.Ed.2d 341 (1980). The parties do not dispute that the Display Restriction regulates commercial speech. See Seggos , 394 F. Supp 3d at 459 (). Under Central Hudson , the appropriate constitutional standard of review of commercial speech is intermediate scrutiny, even when the speech restrictions are content-based as they are here. See Vugo, Inc. v. City of N.Y. , 931 F.3d 42, 49 (2d Cir. 2019), cert. denied , ––– U.S. ––––, 140 S. Ct. 2717, 206 L.Ed.2d 854 (2020). In Vugo , the Second Circuit expressly held "that the Central Hudson test still applies to commercial speech restrictions," and rejected a strict scrutiny standard even for commercial speech restrictions that are content-based. Id. at 49.3
Plaintiffs disagree and argue that, because the Display Restriction is content-based, it is subject to strict scrutiny even though it regulates commercial speech. Plaintiffs acknowledge that this is not the view of the Second Circuit Court of Appeals, whose holdings are binding on this Court. In their reply memorandum of law, Plaintiffs also suggest that the Supreme Court's recent plurality decision in Barr v. Am. Ass'n of Pol. Consultants, Inc. , ––– U.S. ––––, 140 S. Ct. 2335, 207 L.Ed.2d 784 (2020), supports the application of strict scrutiny here. But the Barr plurality, in applying strict scrutiny, clarified that the ordinance before it was not purely commercial speech, distinguishing "impermissible content-based speech restrictions from traditional or ordinary economic regulation of commercial activity that imposes incidental burdens on speech," and stating, "[o]ur decision is not intended to expand existing First Amendment doctrine or otherwise affect traditional or ordinary economic regulation of commercial activity." Id. at 2347. In other words, Barr does not disturb the holding of Central Hudson that intermediate scrutiny applies to restrictions on commercial speech.
The State Ivory Law engages in ordinary economic regulation of commercial activity -- the sale of ivory within the State of New York. By prohibiting the in-store display of ivory that may not be sold intrastate, the Display Restriction imposes an incidental burden on "speech" -- i.e., the offering for sale of a product not permitted to be sold in New York. See Seggos , 394 F....
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