Saginaw Cnty. v. Stat Emergency Med. Servs., Inc.

• Decision Date: 10 January 2020
• Docket Number: No. 19-1424,19-1424
• Parties: SAGINAW COUNTY, MICHIGAN, Plaintiff-Appellant, v. STAT EMERGENCY MEDICAL SERVICES, INC., Defendant-Appellee.
• Court: U.S. Court of Appeals — Sixth Circuit

946 F.3d 951

SAGINAW COUNTY, MICHIGAN, Plaintiff-Appellant,

v.STAT EMERGENCY MEDICAL SERVICES, INC., Defendant-Appellee.

No. 19-1424

United States Court of Appeals, Sixth Circuit.

Argued: December 11, 2019

Decided and Filed: January 10, 2020

ARGUED: Douglas W. Van Essen, SILVER & VAN ESSEN, P.C., Grand Rapids, Michigan, for Appellant. Derek S. Wilczynski, BLANCO WILCZYNSKI PLLC, Troy, Michigan, for Appellee. ON BRIEF: Douglas W. Van Essen, Elliot J. Gruszka, SILVER & VAN ESSEN, P.C., Grand Rapids, Michigan, for Appellant. Derek S. Wilczynski, Orlando L. Blanco, BLANCO WILCZYNSKI PLLC, Troy, Michigan, for Appellee.

Before: SUTTON, NALBANDIAN, and READLER, Circuit Judges.

SUTTON, Circuit Judge.

By ordinance, Saginaw County permits just one ambulance service to operate within its borders. STAT Emergency Medical Services is not that ambulance service. It objects to the exclusivity. STAT has complied with all of the Michigan requirements for providing ambulance services in the State, and proceeded several years ago to offer its services in the county anyway. Rather than enforce its ordinance against STAT, Saginaw County filed this declaratory judgment action in federal court against the company, seeking a ruling that the County’s chosen means of delivering local ambulance services complies with state law, the Sherman Antitrust Act, and the U.S. Constitution. The district court dismissed the case for lack of jurisdiction. Because federal courts have the power to tell parties what the law is, Marbury v. Madison , 5 U.S. (1 Cranch) 137, 177, 2 L.Ed. 60 (1803), not what it might be in a potential enforcement action by the government, Steel Co. v. Citizens for a Better Env’t , 523 U.S. 83, 101–02, 118 S.Ct. 1003, 140 L.Ed.2d 210 (1998), no jurisdiction exists. We affirm.

I.

Located in central Michigan, Saginaw County is home to nearly 200,000 residents. Under local law, a single company provides the county’s ambulance services. The contractor responds to residents’ medical emergencies from start to finish. It handles the 911 calls, operates the county’s emergency dispatch service, and staffs the ambulances. The County signed its first contract along these lines in 2009, when it selected Mobile Medical Response for the job. As is often true of exclusivity arrangements, the two sides benefitted from the deal. The County guaranteed Mobile Medical the exclusive right to operate within its borders. In return, Mobile Medical pledged to serve all eight of Saginaw County’s cities and incorporated villages, and, perhaps most importantly, all twenty-seven of its rural townships.

In 2011, STAT Emergency Medical Services, a competing ambulance company, entered the Saginaw market. It initially provided only patient-transport services for insurer Health Plus as part of a contract that covered six Michigan counties. But STAT’s work for Health Plus caught the attention of several municipalities dissatisfied with Mobile Medical’s response times and fees. Birch Run, a township within Saginaw County, decided to hire STAT in place of Mobile Medical. After clearing a few local hurdles, STAT began operations.

When Saginaw County proposed to extend Mobile Medical’s contract in 2013, STAT objected at two public meetings. According to the County, STAT threatened to "take legal action if the contract were renewed" on the theory that the arrangement violated state law, federal antitrust law, and the Fourteenth Amendment. R. 10 at 8. But STAT’s threats had no effect on the deliberations, and the County approved the new agreement with Mobile Medical in October 2013.

In 2016, the County enacted a new ordinance that codified the exclusivity arrangement and regulated the provision of ambulance services.

Between October 2016 and January 2017, STAT and Saginaw County corresponded about the company’s desire to increase its business in the area. The County maintained that, under its ordinance implementing the 911 Service Plan, STAT could not provide any ambulance services in Saginaw County without the Board of Commissioners’ approval "through contract or resolution." Id. at 94. But the County never enforced the ordinance. STAT continued to insist that Michigan law permitted it to offer ambulance services and denied that the County had the authority to enact the ordinance or to sign an exclusive contract with Mobile Medical.

Saginaw County sued STAT in federal court. It asked the court for a declaratory judgment that Michigan law authorizes its exclusive contract with Mobile Medical and that the County does not violate federal antitrust laws or the U.S. Constitution by prohibiting STAT from operating in the county.

The district court ruled that the County failed to establish an actual or imminent injury and dismissed the case for lack of jurisdiction.

II.

The U.S. Constitution limits the jurisdiction of federal courts to "Cases" and "Controversies." U.S. Const. art. III, § 2. Article III’s bill of lading allows federal courts to deliver judgments on real disputes, not hypothetical ones, to resolve concrete disputes, not to pronounce judgments on theoretical disputes that may or may not materialize and, if they do, may appear in a variety of forms. Steel Co. , 523 U.S. at 101–03, 118 S.Ct. 1003. That rules out advisory pronouncements, which the case-or-controversy requirement has long forbidden. Summers v. Earth Island Inst. , 555 U.S. 488, 492–93, 129 S.Ct. 1142, 173 L.Ed.2d 1 (2009) ; DaimlerChrysler Corp. v. Cuno , 547 U.S. 332, 341–42, 126 S.Ct. 1854, 164 L.Ed.2d 589 (2006) ; Muskrat v. United States , 219 U.S. 346, 361–63, 31 S.Ct. 250, 55 L.Ed. 246 (1911).

The Declaratory Judgment Act does not alter these rules or otherwise enable federal courts to deliver "an expression of opinion" about the validity of laws. Muskrat , 219 U.S. at 362, 31 S.Ct. 250. Only in "case[s] of actual controversy" may the federal courts "declare" the parties’ "rights and other legal relations" without granting traditional remedies such as damages or an injunction. 28 U.S.C. § 2201(a). The Act does not "change the essential requisites for the exercise of judicial power." Ashwander v. Tenn. Valley Auth. , 297 U.S. 288, 325, 56 S.Ct. 466, 80 L.Ed. 688 (1936). All it does is create an alternative remedy—a declaratory judgment—for existing cases or controversies, a point confirmed by the Supreme Court’s long equation of the Act’s "actual controversy" requirement with Article III’s case-or-controversy imperative. Aetna Life Ins. Co. v. Haworth , 300 U.S. 227, 239–40, 57 S.Ct. 461, 81 L.Ed. 617 (1937).

Even when a claimant seeks declaratory relief, then, he must satisfy the prerequisites of the Declaratory Judgment Act and Article III’s standing baseline. He must plausibly allege facts that, "under all the circumstances, show that there is a substantial controversy, between parties having adverse legal interests, of sufficient immediacy and reality to warrant the issuance of a declaratory judgment." MedImmune, Inc. v. Genentech, Inc. , 549 U.S. 118, 127, 127 S.Ct. 764, 166 L.Ed.2d 604 (2007) (quotation omitted).

There are three ways to think about Saginaw County’s claim in the context of these requirements. Each one asks us to do something we cannot.

First way. Put aside that Saginaw County is a governmental entity. Start by thinking about it as no different from any other private entity or individual who has a legal quarrel with someone else. Like these other potential claimants, the County must show an imminent or actual injury before it enters the federal courts. It cannot sue simply to avoid a "possible future injury." Clapper v. Amnesty Int’l USA , 568 U.S. 398, 409, 133 S.Ct. 1138, 185 L.Ed.2d 264 (2013) (quotation omitted). The harm must be actual or "certainly impending." Id. at 410, 133 S.Ct. 1138.

Whether one looks to the ordinance that contemplates an exclusive ambulance-services arrangement, the County’s contract with Mobile Medical that puts that arrangement in place, or the limited access to 911 dispatches, Saginaw County cannot point to an imminent harm on which to hang Article III standing. STAT has complained about all of these things, yes. And it has said once or twice that they violate federal antitrust and constitutional law. But there is a world of difference between talking about potential legal claims and acting on them. By all indications, STAT remains in the first camp. It first threatened legal action some six years ago, and yet it still has not sued the County. Saginaw County pleads nothing more than a "speculative fear" that STAT might institute a lawsuit at some time in the future. Id. That is not enough to state an injury in fact.

The Supreme Court’s recognition of jurisdiction in MedImmune does not cut against this conclusion. It supports it. A patent licensee, who continued to pay royalties under a disputed patent license, asked for a declaration that the underlying patent was invalid. The Court held that, to demonstrate standing, the licensee did not need to show an imminent threat of a lawsuit. MedImmune , 549 U.S. at 137, 127 S.Ct. 764. But, in doing so, the Court did not jettison the requirement that claimants have an actual or imminent injury. The licensee faced a choice between paying the licensing fees now or potentially paying treble damages later. Either way, the licensee suffered an actual or imminent harm in the form of an immediate or threatened economic loss. Id. at 128, 127 S.Ct. 764. Article III, the Court held, does not require the plaintiff to "bet the farm" to obtain relief. Id. at 129, 127 S.Ct. 764.

While the MedImmune injury arose from a breach of contract that concretely confined the scope of the dispute, Saginaw County cannot say what conduct STAT’s claims will reach because no enforcement action has occurred, and it will not occur unless and until the County opts to enforce its law against STAT. In contrast to the claimant in MedImmune , Saginaw County sits in the driver’s seat. It can either enforce the law (which may lead to federal or...