Marilley v. Bonham, 13–17358.

• Decision Date: 18 September 2015
• Docket Number: No. 13–17358.,13–17358.
• Citation: 802 F.3d 958
• Parties: Kevin MARILLEY; Salvatore Papetti; Savior Papetti, individually and on behalf of all others similarly situated, Plaintiffs–Appellees, v. Charlton H. BONHAM, in his official capacity as Director of the California Department of Fish and Game, Defendant–Appellant.
• Court: U.S. Court of Appeals — Ninth Circuit

802 F.3d 958

Kevin MARILLEY; Salvatore Papetti; Savior Papetti, individually and on behalf of all others similarly situated, Plaintiffs–Appellees

v.Charlton H. BONHAM, in his official capacity as Director of the California Department of Fish and Game, Defendant–Appellant.

No. 13–17358.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted July 7, 2015.

Filed Sept. 18, 2015.

Stuart G. Gross (argued) and Jared M. Galanis, Gross Law, P.C., San Francisco, California; Todd R. Gregorian and Tyler A. Baker, Fenwick & West LLP, Mountain View, CA, for Plaintiffs–Appellees.

Kamala D. Harris, Attorney General, Robert W. Byrne, Senior Assistant Attorney General, Annadel A. Almendras, Supervising Deputy Attorney General, Gary Alexander and M. Elaine Meckenstock (argued), Deputy Attorneys General, Office of the Attorney General, Oakland, CA, for Defendant–Appellant.

Appeal from the United States District Court for the Northern District of California, Donna M. Ryu, Magistrate Judge, Presiding.

Before: SUSAN P. GRABER and PAUL J. WATFORD, Circuit Judges, and PAUL L. FRIEDMAN, District Judge.^*

Opinion by Judge FRIEDMAN; Dissent by Judge GRABER.

OPINION

FRIEDMAN, District Judge:

Commercial fishers in California are subject to a bevy of fees. For certain fees, however, non-residents are charged two to three times more than residents. Plaintiffs represent a class of non-resident commercial fishers who contend that California's discriminatory fees violate the Privileges and Immunities Clause of the United States Constitution. Because California has failed to offer a closely related justification for its discrimination against non-residents, we agree with plaintiffs and therefore affirm the district court's grant of summary judgment to the plaintiff class.

BACKGROUND

The named plaintiffs are commercial fishers residing outside California. They represent a class of non-residents who, since 2009, have purchased commercial fishing licenses, registrations, or permits from California and paid higher fees than residents. Plaintiffs sued Charlton Bonham, in his official capacity as the Director of the California Department of Fish and Game, alleging that the differential fees violate the Privileges and Immunities and Equal Protection Clauses of the United States Constitution.

Plaintiffs challenge four specific fees: general commercial fishing license fees, commercial fishing vessel registration fees, Herring Gill net permit fees, and Dungeness Crab vessel permit fees.See Cal. Fish & Game Code §§ 7852, 7881, 8550.5, 8280.6. While the parties dispute the prevalence of Herring Gill and Dungeness Crab permits, it is undisputed that, at a minimum, non-resident commercial fishers must purchase the general license to fish in California waters and a vessel registration to do so from a boat they own or operate. See id. §§ 7852, 7881. In 2012–13, the relevant fees were as follows:

• Commercial fishing license: $130.03 for residents; $385.75 for non-residents;

• Commercial fishing vessel registration: $338.75 for residents; $1,002.25 for nonresidents;

• Herring Gill net permit: $359.00 for residents; $1,334.25 for non-residents;

• Dungeness Crab vessel permit: $273.00 for residents; $538.00 for non-residents.

All four licenses would set a resident back $1,100.78, but a non-resident $3,260.25.

Following discovery, the parties filed cross-motions for summary judgment. The district court concluded that California had failed to demonstrate a genuine issue of material fact and granted summary judgment to the plaintiff class on its Privileges and Immunities Clause claim. The district court then entered final judgment as to plaintiffs' Privileges and Immunities Clause claim pursuant to Rule 54(b) of the Federal Rules of Civil Procedure.¹

STANDARD OF REVIEW

We have jurisdiction under 28 U.S.C. § 1291. We review a grant of summary judgment de novo. See Pac. Shores Props., LLC v. City of Newport Beach, 730 F.3d 1142, 1156 (9th Cir.2013). Viewing the evidence in the light most favorable to the State, we must decide whether there are any genuine disputes of material fact and whether the district court correctly applied the substantive law. See Olsen v. Idaho St. Bd. Of Med., 363 F.3d 916, 922 (9th Cir.2004).

DISCUSSION

The Privileges and Immunities Clause provides that “[t]he Citizens of each State shall be entitled to all Privileges and Immunities of Citizens in the several States.” U.S. Consti. art. IV, § 2, cl. 1. This clause “was designed ‘to place the citizens of each State upon the same footing with citizens of other States, so far as the advantages resulting from citizenship in those States are concerned.’ ” Sup. Ct. of Va. v. Friedman, 487 U.S. 59, 64, 108 S.Ct. 2260, 101 L.Ed.2d 56 (1988) (quoting Paul v. Virginia, 75 U.S. (8 Wall.) 168, 180, 19 L.Ed. 357 (1869) ); see also Toomer v. Witsell, 334 U.S. 385, 395, 68 S.Ct. 1156, 92 L.Ed. 1460 (1948) (The Clause “was designed to insure to a citizen of State A who ventures into State B the same privileges which the citizens of State B enjoy.”). The Clause thus “establishes a norm of comity” between residents and non-residents of a State, Austin v. New Hampshire, 420 U.S. 656, 660, 95 S.Ct. 1191, 43 L.Ed.2d 530 (1975), to create “a national economic union,” Council of Ins. Agents & Brokers v. Molasky–Arman, 522 F.3d 925, 934 (9th Cir.2008) (quoting Sup. Ct. of N.H. v. Piper, 470 U.S. 274, 280, 105 S.Ct. 1272, 84 L.Ed.2d 205 (1985) ).²

The Clause, however, “is not an absolute.” Molasky–Arman, 522 F.3d at 934 (quoting Toomer, 334 U.S. at 396, 68 S.Ct. 1156 ). “While it bars ‘discrimination against citizens of other States where there is no substantial reason for the discrimination beyond the mere fact that they are citizens of other States ... it does not preclude disparity of treatment in the many situations where there are perfectly valid independent reasons for it.” Id. (quoting Toomer, 334 U.S. at 396, 68 S.Ct. 1156 ). We therefore employ a two-part test to determine whether disparate treatment violates the Clause. “First, the activity in question must be ‘sufficiently basic to the livelihood of the Nation’ ... as to fall within the purview of the Privileges and Immunities Clause.” Friedman, 487 U.S. at 64, 108 S.Ct. 2260 (quoting United Bldg. & Constr. Trades Council v. Mayor and Council of Camden, 465 U.S. 208, 221–22, 104 S.Ct. 1020, 79 L.Ed.2d 249 (1984) ). “Second, if the challenged restriction deprives nonresidents of a protected privilege, we will invalidate it only if we conclude that the restriction is not closely related to the advancement of a substantial state interest.” Id. at 65, 108 S.Ct. 2260 (citing Piper, 470 U.S. at 284, 105 S.Ct. 1272 ). California contends that the differential license fees pass muster under both parts of this test. We disagree.

A

California does not dispute that plaintiffs' right to pursue “a common calling is one of the most fundamental of those privileges protected by the Clause.” Camden, 465 U.S. at 219, 104 S.Ct. 1020 ; see also Toomer, 334 U.S. at 403, 68 S.Ct. 1156 (“Thus we hold that commercial shrimping in the marginal sea, like other common callings, is within the purview of the privileges and immunities clause.”). It instead argues that, in addition to demonstrating that the affected activity is protected, plaintiffs must make two additional showings.

First, California argues that our decision in International Organization of Masters, Mates, & Pilots v. Andrews, 831 F.2d 843 (9th Cir.1987), requires plaintiffs to show that the differential fees exclude them, in whole or in part, from commercial fishing. This showing cannot be made, California claims, because the percentage of non-resident commercial fishers in California has increased, not decreased. In Andrews, we held that the Clause was not violated by a statute regarding cost of living wage adjustments because the statute was “designed to provide equity between the wages of [citizen] and non-[citizen] workers.” Andrews, 831 F.2d at 846. The statute in Andrews thus created equality, not inequality, and therefore did not run afoul of the Privileges and Immunities Clause because, we said, “the appellants ha[d] not shown that they are prevented or discouraged by the State from pursuing employment.” Id.

California contends that our choice of the words “prevented or discouraged” upset decades of precedent and added an exclusion requirement to the first part of the test. We disagree. As we recited in Andrews just two paragraphs before, the first step requires only that “we determine first whether [the statute] burdens” rights protected under the Clause. Id. at 845. An exclusion requirement would undermine the purpose of the Clause because permitting a State to freely discriminate against non-residents up to the point they are driven out would not “place the citizens of each State upon the same footing with citizens of other States.” Lunding v. N.Y. Tax Appeals Tribunal, 522 U.S. 287, 296, 118 S.Ct. 766, 139 L.Ed.2d 717 (1998) (quoting Paul, 75 U.S. (8 Wall.) at 180). And, to any extent that Andrews may have implied that a plaintiff must demonstrate exclusion from pursuing their common calling, the Supreme Court's subsequent statement in Friedman makes clear that “[n]othing in [its] precedents ... supports the contention that the Privileges and Immunities Clause does not reach a State's discrimination against nonresidents when such discrimination does not result in their total exclusion from the State.” 487 U.S. at 66, 108 S.Ct. 2260.³

Second, California argues that McBurney v. Young, ––– U.S. ––––, 133 S.Ct. 1709, 185 L.Ed.2d 758 (2013), the Supreme Court's most recent Privileges and Immunities Clause decision, requires that plaintiffs show that the differential fees were enacted for a “protectionist purpose.” The Supreme Court in McBurney did note that prior cases “struck laws down as violating the privilege of pursuing a common calling only when those laws were enacted for the protectionist purpose of burdening...