Chamber of Commerce of the U.S. v. City of Seattle

• Decision Date: 01 August 2017
• Docket Number: No. C17–0370RSL,C17–0370RSL
• Citation: 274 F.Supp.3d 1155
• Parties: CHAMBER OF COMMERCE OF the UNITED STATES of America, et al., Plaintiffs, v. The CITY OF SEATTLE, et al., Defendants.
• Court: U.S. District Court — Western District of Washington

274 F.Supp.3d 1155

CHAMBER OF COMMERCE OF the UNITED STATES of America, et al., Plaintiffs,

v.The CITY OF SEATTLE, et al., Defendants.

No. C17–0370RSL

United States District Court, W.D. Washington, at Seattle.

Signed August 1, 2017

Christian G. Vergonis, Jacqueline M. Holmes, Michael A. Carvin, Robert Stander, Jones Day, Lily Fu Claffee, Steven P. Lehotsky, Warren Postman, U.S. Chamber Litigation Center, Kathryn Comerford Todd, Chamber of Commerce, Washington, DC, Timothy J. O'Connell, Stoel Rives, Robert J. Maguire, Douglas C. Ross, Davis Wright Tremaine, Seattle, WA, for Plaintiffs.

P. Casey Pitts, Stacey Leyton, Stephen P. Berzon, Altshuler Berzon LLP, San Francisco, CA, Gregory Colin Narver, Josh Johnson, Michael K. Ryan, Sara O'Connor-Kriss, Seattle City Attorney's Office, Seattle, WA, for Defendants.

ORDER GRANTING DEFENDANTS' MOTION TO DISMISS

Robert S. Lasnik, United States District Judge

This matter comes before the Court on "Defendants' Motion to Dismiss." Dkt. # 42. Having reviewed the Amended Complaint and the memoranda submitted by the parties and having heard the arguments of counsel, the Court finds as follows:

In January 2016, City of Seattle Ordinance 124968 came into effect. The Ordinance provides a mechanism through which for-hire drivers in Seattle can collectively bargain with the companies that hire, contract with, and/or partner with them. The Ordinance applies only to for-hire drivers who are independent contractors, not employees. Pursuant to the procedures set forth in the Ordinance, Teamsters Local 117 notified three Chamber of Commerce members¹ that it would like to represent their drivers in collective bargaining. The Chamber, acting on behalf of its members, filed this action arguing that the Ordinance violates and is preempted by the Sherman Antitrust Act, is preempted by the National Labor Relations Act, violates 42 U.S.C. § 1983, is unauthorized by state law, violates the Washington Consumer Protection Act, and violates the Washington Public Records Act.

On April 4, 2017, the Court temporarily enjoined enforcement of the Ordinance because the Chamber had raised serious questions regarding its antitrust claim. Before the Court issued the injunction, defendants filed this motion seeking dismissal of all of the Chamber’s claims. Only the response and reply memorandum therefore make reference to the Court’s preliminary ruling. On April 11, 2017, the complaint was amended to add Rasier, LLC, a wholly-owned subsidiary of Uber Technologies, Inc., and Chamber member, as a plaintiff.²

Defendants seek dismissal of certain claims on standing or ripeness grounds: those challenges implicate the Court’s subject matter jurisdiction and are considered under Fed. R. Civ. P. 12(b)(1). Where defendants challenge the adequacy of plaintiffs' claims under Fed. R. Civ. P. 12(b)(6), the Court must determine whether plaintiffs have alleged facts that state a claim for relief that is plausible, not merely possible. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007).

A. ANTITRUST CLAIM

1. Standing

The judicial power of the federal courts extends to "Cases" and "Controversies" pursuant to Article III, Sec. 2 of the United States Constitution. An Article III case or controversy exists if plaintiff can show that "(1) it has suffered an ‘injury in fact’ that is (a) concrete and particularized and (b) actual and imminent, not conjectural or hypothetical; (2) the injury is fairly traceable to the challenged action of the defendant[s]; and (3) it is likely, as opposed to merely speculative, that the injury will be redressed by a favorable decision." Friends of the Earth, Inc. v. Laidlaw Envtl. Servs. (TOC), Inc., 528 U.S. 167, 180–81, 120 S.Ct. 693, 145 L.Ed.2d 610 (2000) (quoting Lujan v. Defenders of Wildlife, 504 U.S. 555, 560–61, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992) ). An association, such as the Chamber, can sometimes bring suit on behalf of its members even if it has not itself suffered an injury in fact. Associational standing exists "when: (a) [the association’s] members would otherwise have standing to sue in their own right; (b) the interests it seeks to protect are germane to the organization’s purpose; and (c) neither the claim asserted nor the relief requested requires the participation of individual members in the lawsuit." Hunt v. Wash. State Apple Advertising Comm'n, 432 U.S. 333, 343, 97 S.Ct. 2434, 53 L.Ed.2d 383 (1977).

Section 16 of the Clayton Act, which governs claims for injunctive relief, provides that "[a]ny person, firm, corporation, or association shall be entitled to sue for and have injunctive relief ... against threatened loss or damage by a violation of the antitrust laws...." 15 U.S.C. § 26. By its very terms, § 16 authorizes suits by associations, but the association, like every other private litigant, must have standing. In other words, it must prove a threatened "injury of the type the antitrust laws were intended to prevent and that flows from that which makes defendants' acts unlawful." Brunswick Corp. v. Pueblo Bowl–O–Mat, Inc., 429 U.S. 477, 489, 97 S.Ct. 690, 50 L.Ed.2d 701 (1977). The Supreme Court has found that the same standing requirement applies to claims under § 4 and § 16 of the Clayton Act, noting that "[i]t would be anomalous ... to read the Clayton Act to authorize a private plaintiff to secure an injunction against a threatened injury for which he would not be entitled to compensation if the injury actually occurred" and that Congress did not intend such a result. Cargill, Inc. v. Monfort of Colo., Inc., 479 U.S. 104, 111, 107 S.Ct. 484, 93 L.Ed.2d 427 (1986). Personal injury is therefore a prerequisite to instituting a private antitrust action—regardless of whether monetary or injunctive relief is sought.

The question is whether the "personal injury" language of Cargill precludes an association from seeking an injunction against actions that cause antitrust injury to its members. There are very few post- Cargill cases analyzing the point of intersection between Cargill and Hunt. In Sw. Suburban Bd. of Realtors, Inc. v. Beverly Area Planning Ass'n, 830 F.2d 1374, 1377–78 (7th Cir. 1987), the Seventh Circuit cited Cargill for the proposition that the antitrust injury requirement applies to antitrust claims for injunctive relief under § 16. The fact that the plaintiff-association had not demonstrated a threat of antitrust injury to itself was not dispositive: the court proceeded to apply the three part Hunt test when determining whether the association had standing to seek an injunction based on threatened antitrust injuries to its members. Id. at 1380 and n.2. In Fin. & Sec. Prods. Assoc. v. Diebold, Inc., 2005 WL 1629813, at *3 (N.D. Cal. July 8, 2005), the district court came to the opposite conclusion:

[N]o appellate authority has ever extended [the Hunt ] rule to override the Brunswick/ Cargill requirements under federal antitrust laws.... In the absence of clear Ninth Circuit or Supreme Court authority extending Hunt to antitrust cases, this Court is reluctant to ignore the Brunswick/ Cargill requirement that a plaintiff must prove it has or will suffer antitrust injury itself. This alone is dispositive.

Given the split in what limited authority there is, it is not surprising that the parties in this litigation disagree whether Cargill has displaced the associational standing analysis of Hunt.

Having reviewed the parties' submissions and the relevant case law, the Court finds that Cargill does not resolve this issue. Cargill does not mention Hunt, nor does it discuss whether an association has standing to seek injunctive relief on behalf of its members. Defendants assert that Cargill effectively abrogated Hunt in the antitrust context, but do not explain why the associational standing analysis in antitrust claims would differ from that applied in other federal statutory schemes. It is true that the language of the antitrust statute presumes that the person bringing suit has been injured or threatened by conduct that violates the statute. But the same can be said for a wide array of federal legislation. Section 1983 of the Civil Rights Act of 1964, for example, makes every person who violates the statute "liable to the party injured in an action at law, suit in equity, or other proper proceeding for redress...." 42 U.S.C. § 1983 (emphasis added). Nevertheless, courts do not automatically reject § 1983 claims brought by an association simply because the association is seeking to vindicate the rights of its members. Rather, they apply Hunt’s three-part test to determine whether the association has standing. See, e.g., Ass'n of Am. Physicians & Surgeons, Inc. v. Tex. Med. Bd., 627 F.3d 547, 550–51 (5th Cir. 2010) ; Kan. Health Care Ass'n, Inc. v. Kan. Dep't of Soc. and Rehab. Servs., 958 F.2d 1018, 1021 (10th Cir. 1992). The Supreme Court deliberately expanded the universe of viable plaintiffs in Warth v. Seldin, 422 U.S. 490, 511, 95 S.Ct. 2197, 45 L.Ed.2d 343 (1975), when it held that "[e]ven in the absence of injury to itself, an association may have standing solely as the representative of its members." The test for associational standing was later set out in Hunt. The Court is not persuaded that the Supreme Court expressly or by implication overruled decades of jurisprudence when it determined in Cargill that a plaintiff seeking injunctive relief under § 16 must show antitrust injury. The Court therefore concludes that an association may seek an injunction under § 16 on behalf of its members as long as it satisfies the Hunt test.

An association "has standing to bring suit on behalf of its members when: (a) its members would otherwise have standing to sue in their own right; (b) the interests it seeks to protect are germane to the organization’s purpose; and (c) neither the claim asserted nor the relief requested requires the participation of individual members in the lawsuit."

Hunt, 432 U.S. at 343, 97 S.Ct....