Tatoma, Inc. v. Newsom

• Decision Date: 08 March 2022
• Docket Number: 3:21-cv-098-BEN-JLB
• Court: U.S. District Court — Southern District of California
• Parties: TATOMA, INC., a California Corporation, DBA Atelier Aucoin Salon et al., Plaintiffs, v. GAVIN NEWSOM, in his official capacity as Governor of California, et al., Defendants.

TATOMA, INC., a California Corporation, DBA Atelier Aucoin Salon et al., Plaintiffs,
v.
GAVIN NEWSOM, in his official capacity as Governor of California, et al., Defendants.

No. 3:21-cv-098-BEN-JLB

United States District Court, S.D. California

March 8, 2022

ORDER GRANTING DEFENDANTS' MOTIONS TO DISMISS [ECF NOS. 16, 31, 34]

Hon. Roger T. Benitez United States District Judge.

“[B]inding authority is very powerful medicine.” Hart v. Massanari, 266 F.3d 1155, 1171 (9th Cir. 2001). While it was not the case when the Complaint was filed, there is now binding authority that Plaintiffs' constitutional claims are dead. Because a lower court may not disregard binding authority even if it would decide the issue differently, the case is dismissed. Id. at 1175 (“A district court bound by circuit authority . . . has no choice but to follow it, even if convinced that such authority was wrongly decided.”).

1

I. BACKGROUND

A. The Plaintiffs

Plaintiff Tatoma Inc. is a hair salon in La Jolla, California. Plaintiff Thomas L. Aucoin is the owner of Tatoma. Plaintiff So Cal Fitness Clubs, LLC is a fitness center in La Jolla, California. Each business has been subject to the myriad COVID-19 related health and shutdown orders issued by the Defendants during the years 2020 and 2021.

B. The Defendants

The Defendants are state, county, and city officials who played a part in either issuing or enforcing the health and shutdown orders.^[1]

C. The COVID-19 Related Orders^[2]

In early 2020, Governor of California Gavin Newsom proclaimed a State of Emergency due to a health crisis caused by the spread of SARS-CoV-2, the virus that causes COVID-19. Coinciding with the State of Emergency proclamation, California's Public Health Officer issued a directive severely restricting public activities throughout the state. This directive included the mandatory closure of several categories of businesses, including hair salons and fitness centers. Governor Newsom then issued an order directing all California residents to heed the State Public Health Officer's directive

2

to stay home, except those working at jobs deemed essential. Private and public enterprises were ordered to close unless deemed to be essential industries.

After a few months of being closed, hair salons and fitness centers were permitted to re-open. RJN, ECF No. 6-2, Ex. 6. A couple of months after that, a resurgence of COVID-19 cases led to government orders for hair salons and fitness centers to operate outdoors only. RJN, ECF No. 6-2. Ex. 7. In December 2020, San Diego County non-essential indoor business operations were once again ordered closed in accordance with statewide Regional Stay-at-Home Orders. In January 2021, the December Regional Stay-at-Home Order was lifted and hair salons and fitness centers were permitted to reopen under the conditions set forth in the Governor's newly designed “Blueprint to a Safer Economy” plan which was linked to county-wide COVID-19 cases and hospitalizations. RJN, ECF No. 6-12, Ex. 14. This lawsuit followed.

II. Motions to Dismiss

The legal standards to be applied to a motion to dismiss under Rule 12(b)(6) are well known and need no elaboration here. See generally Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007); Stacy v. Rederite Otto Danielsen, 609 F.3d 1033, 1035 (9th Cir. 2010); Zixiang Li v. Kerry, 710 F.3d 995, 999 (9th Cir. 2013) (quoting Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)). The reason for dismissal here is the lack of a cognizable legal theory and the absence of plausible facts alleged under a cognizable legal theory.

III. Discussion

Plaintiffs set out three federal constitutional claims and three state law claims for relief. One or more Defendants move to dismiss each of the six claims. Because the federal constitutional claims are being dismissed, as discussed below, the Court declines to exercise jurisdiction over the pendant state law claims.

A. First Claim for Relief: 14^th Amendment Due Process

Plaintiffs assert the State, County, and City Defendants have violated federal constitutional rights arising under both substantive due process and procedural due process theories.

3

1. Substantive Due Process

Plaintiffs allege a fundamental property interest in conducting a lawful business. Plaintiffs allege Defendants lack a compelling interest for depriving Plaintiffs of their right to pursue work. Plaintiffs further allege that even if Defendants possessed a legitimate or compelling interest, that the orders are not rationally related nor narrowly tailored to achieve such interests. Plaintiffs had a solid argument at one time. Indeed, this Court had recognized that citizens enjoy a constitutional right to work for a living under the Due Process Clause based on manifold statements made in Supreme Court decisions. See Bols v. Newsom, 515 F.Supp.3d 1120, 1126-28 (S.D. Cal. 2021) (“‘It requires no argument to show that the right to work for a living in the common occupations of the community is of the very essence of the personal freedom and opportunity that it was the purpose of the [Fourteenth] Amendment to secure.' Truax v. Raich, 239 U.S. 33, 41 (1915); see also Meyer v. Nebraska, 262 U.S. 390, 399 (1923).”).

However, the United States Court of Appeals for the Ninth Circuit has arrived at a contrary conclusion. It has decided that the right to pursue a common calling is not a fundamental constitutional right. See Slidewaters LLC v. Wash. State Dep't of Labor & Indus., 4 F.4th 747, 758 (9th Cir. 2021) (“The right to pursue a common calling is not considered a fundamental right.”) (citations omitted). Along the same lines, it is now clear that Tatoma has no constitutional right to use its property as a hair salon and So Cal Fitness Clubs has no constitutional right to use its real estate as a fitness center. Id. (“The right to use property as one wishes is also not a fundamental right.”) (citation omitted). Surprisingly, neither the right to earn a living, nor the right to use real property to run a business to make a living, are protected by the United States Constitution. Instead, both rights have been held to be merely economic in nature. Id. Because the rights are not fundamental, the proper test for judging the constitutionality of the orders regulating economic activity is the deferential standard of whether the legislation bears a rational relationship to a legitimate state interest. Id. Because Slidewaters is binding authority, Plaintiffs cannot make out a cognizable Due Process claim.

4

Of course, not every sentence that is found in an appellate decision is binding authority. Sometimes there are statements “made casually and without analysis, uttered in passing . . . done as a prelude to another legal issue that commanded the panel's full attention” that may be considered non-controlling dicta. California Trucking Assn. v. Bonta, 996 F.3d 644, 662 (9th Cir. 2021).^[3] But that is not the situation in Slidewaters. The decision there arose from a similar case involving a state-ordered shutdown of plaintiff's water park business in order to reduce the spread of Covid-19. The plaintiff made a similar claim that state executive branch orders impinged on a constitutional Due Process right to earn a living and use one's property to earn that living. The constitutional issue in Slidewaters was front and center and arose in the same Covid-19 context as the case here. Consequently, no matter how much this Court may disagree, it cannot be disregarded as non-binding dicta.

So, this Court must take its medicine. Hart, 266 F.3d at 1171. Plaintiffs substantive Due Process claim is not cognizable and is dismissed without leave to amend. See also BK Salons, Ltd. Liab. Co. v. Newsom, 2021 U.S. Dist. LEXIS 147226, at *11, 2021 WL 3418724 (E.D. Cal. Aug. 4, 2021) (“Indeed, the Ninth Circuit has recently confirmed that this is not a fundamental right.”) (citing Slidewaters). Even if Plaintiffs were to amend their complaint to allege a non-constitutional economic interest, based on Slidewaters, Plaintiffs' claims would be viewed under a rational basis standard. Under this standard, Plaintiffs must show that the Defendants' actions are “clearly arbitrary and unreasonable, having no substantial relation to the public health, safety, morals, or general welfare.” Samson v. City of Bainbridge Island, 683 F.3d 1051, 1058 (9th Cir. 2012) (quoting Kawaoka v. City of Arroyo Grande, 17 F.3d 1227, 1234 (9th Cir. 1994)). However, preventing the spread of Covid-19 is a legitimate state interest. See Roman Cath Diocese of Brooklyn v. Cuomo,

5

141 S.Ct. 63, 67 (2021) (“Stemming the spread of COVID-19 is unquestionably a compelling interest . . .”). Here, like the defendants in Slidewaters, the government officials issued a series of orders throughout the ongoing COVID-19 pandemic based on the changing landscape of infection rates, hospitalization rates, and their interpretations of general scientific understanding of how transmission of the disease worked. States (and local governments) are given “great leeway in adopting summary procedures to protect public health and safety.” Mackey v. Montrym, 443 U.S. 1, 17 (1979). This is true “even in the absence of an emergency in the usual sense.” Sinaloa Lake Owners Ass'n v. City of Simi Valley, 882 F.2d 1398, 1406 (9th Cir. 1989) (quoting Mackey), overruled on other grounds by Armendariz v. Penman, 75 F.3d 1311 (9th Cir. 1996) (en banc). Slidewaters assessed the State of Washington's plan for responding to COVID-19 - a plan that grouped businesses into categories based on their types of activities - and decided that it was a rational approach, “particularly in dealing with an emergency that calls for prompt action.” 4 F.4th at 758-59.

The same applies here. “The state is not required to draw a perfect line in determining which individual businesses can safely open and which cannot. Cf. Vance v. Bradley, 440 U.S. 93,...