Wanda Goodpaster v. City of Indianapolis , 736 F.3d 1060 ( 2013 )

In the
United States Court of Appeals
For the Seventh Circuit
No. 13-1629
WANDA GOODPASTER et al.,
Plaintiffs-Appellants,
v.
CITY OF INDIANAPOLIS, CITY-COUNTY
COUNCIL OF THE CONSOLIDATED CITY
OF INDIANAPOLIS, MARION COUNTY,
INDIANA, AND MAYOR OF INDIANAPO-
LIS, INDIANA,
Defendants-Appellees.
Appeal from the United States District Court for the
Southern District of Indiana, Indianapolis Division.
No. 1:12-cv-00669 — Richard L. Young, Chief Judge.
ARGUED SEPTEMBER 16, 2013 — DECIDED NOVEMBER 25, 2013
Before KANNE, ROVNER, and WILLIAMS, Circuit Judges.
KANNE, Circuit Judge. Appellants, who own bars in
Indianapolis-Marion County, Indiana, filed suit seeking
injunctive and declaratory relief against enforcement of the
2 No. 13-1629
2012 Indianapolis-Marion County smoking ordinance. The
district court denied the bar owners’ motion for a preliminary
and permanent injunction and entered judgment in favor of the
City. The bar owners now appeal.
I. BACKGROUND
In 2005, the City-County Council of Indianapolis and
Marion County passed an ordinance prohibiting smoking in
most buildings frequented by the general public. Indianapolis,
Ind. Mun. Code §§ 616-201–04 (2010) (amended 2012). The
City-County Council excepted several businesses from the ban,
including bars and taverns with liquor licenses that neither
served nor employed people under the age of eighteen, tobacco
bars, and bowling alleys. Id. at § 616-204.
Seven years later, in 2012, the City-County Council ex-
panded the 2005 ordinance by eliminating many of its excep-
tions. Indianapolis, Ind. Mun. Code § 616-204 (2013). As
amended, the ordinance included exceptions for private
residences, retail tobacco stores, tobacco specialty bars, and
private clubs that voted to permit smoking. Id. The amended
ordinance thus prohibited smoking in most Indianapolis bars
and taverns.
A group of Indianapolis-Marion County bar owners
affected by the ordinance then brought suit seeking declaratory
and injunctive relief from the ordinance. In their amended
complaint, they asserted due process, equal protection, takings
and freedom of association claims under both the federal and
Indiana constitutions. The bar owners filed a motion for a
preliminary injunction, and the City filed a motion to dismiss
for failure to state a claim. The district court consolidated the
No. 13-1629 3
hearing on the preliminary injunction with a hearing on the
merits.
At the hearing, several of the bar owners testified about the
negative economic effects of the ordinance. All who were
asked denied they were facing insolvency. The bar owners also
proffered an expert, Dr. John Dunn, to testify that secondhand
smoke exposure does not have negative health effects. Dr.
Dunn is an emergency room doctor and professor who
acquired his knowledge of epidemiology by reviewing the
relevant literature and by speaking with his colleagues who
were experts in the field. The bar owners submitted an expert
report on Dr. Dunn’s behalf titled “Dr. Dunn’s Report to the
Ohio Legislature.” When the court asked about this report, Dr.
Dunn said he didn’t realize the bar owners had represented it
as an expert report, and that he wouldn’t have submitted it as
such. During cross examination, Dr. Dunn readily acknowl-
edged an article he wrote for the Heartland Institute in which
he described those who opposed smoking as members of the
“High Church of Holy Smoke Haters” and characterized
Chicago, which had banned smoking, as “an anxious, slightly
overweight suburbanite fretting over cigarette smoke.”
The City also called an expert, Dr. Andrew Hyland, to
testify as to the health effects of secondhand smoke. Dr.
Hyland has a Ph.D. in epidemiology and has published more
than 100 peer-reviewed articles on the effects of secondhand
smoke. He testified that there had been scientific consensus
since 2000 that secondhand smoke causes disease. He based his
testimony primarily on the Surgeon General’s 2006 report, The
Health Consequences of Involuntary Exposure to Tobacco Smoke.
The City called a second expert, Dr. Terrell Zollinger, to
testify as to the economic cost to the City from secondhand
smoke. Dr. Zollinger is a professor of epidemiology at Indiana
University’s School of Public Health who has produced several
4 No. 13-1629
reports on the economic impact of secondhand smoke in
Marion County. To produce these reports, Dr. Zollinger first
developed an attributable risk (i.e. the percentage of the risk of
a disease that could be attributed to secondhand smoke
exposure) for a condition based on the existing epidemiological
research on secondhand smoke. Then, he multiplied this risk
by the approximate cost of healthcare for someone with that
particular diagnosis. This weighted cost estimate was then
multiplied by the number of people diagnosed with that
particular disease. He repeated this procedure for a number of
diagnoses associated with secondhand smoke exposure. His
final estimate of the costs of secondhand smoke exposure was
$195,332,995.
Additionally, the City called Chris Gahl, the vice president
of Visit Indy, an organization that promotes Indianapolis as a
tourist destination as well as a site for conventions and other
large events. He testified that Visit Indy supported the smok-
ing ordinance because it believed the ordinance would attract
new businesses, enhance visitors’ experiences, and protect
hospitality workers. Gahl further explained that when groups
seek a host city for an upcoming convention, they often prefer
cities with comprehensive smoking ordinances.
After the hearing, both the bar owners and the City filed
their proposed findings of fact and conclusions of law. On
March 6, 2012, the district court entered judgment in favor of
the City, finding that the bar owners could not establish actual
success on the merits of their claims. It also struck Dr. Dunn’s
testimony because he failed to provide an expert report as
required by Fed. R. Civ. P. 26(a)(2). The bar owners now
appeal.
No. 13-1629 5
II. ANALYSIS
A. Evidentiary Claims
The bar owners make several claims of evidentiary error,
challenging the district court’s decision to admit and credit the
testimony of the City’s experts Dr. Hyland and Dr. Zollinger,
its decision to strike Dr. Dunn’s testimony, and its findings that
the surgeon general released a study on the effects of second-
hand smoke and that the bar owners were not insolvent.
1. Expert Testimony
a. Dr. Hyland
The bar owners first assert that the court clearly erred when
it found that secondhand smoke causes disease. The court
based this finding on Dr. Hyland’s testimony, which it found
credible. Specifically, the bar owners challenge the court’s
understanding of relative risk and the methods behind the
Surgeon General’s report which Dr. Hyland used throughout
his testimony.
In a bench trial or hearing without a jury, the district court
judge acts as both gatekeeper and factfinder. He must deter-
mine both whether expert evidence is admissible under
Federal Rule of Evidence 702 and whether it is credible. See
Smith v. Ford Motor Co., 215 F.3d 713, 718 (7th Cir. 2000)
(“soundness of the factual underpinnings of the expert’s
analysis and the correctness of the expert’s conclusions based
on that analysis are factual matters to be determined by the
trier of fact.”).
These determinations, though often closely related to each
other, require different levels of appellate scrutiny. When
reviewing a district court’s application of Rule 702, we review
the court’s choice of legal framework governing expert
testimony de novo, while we review its decision to admit or
exclude the proffered expert testimony for abuse of discretion.
6 No. 13-1629
United States v. Parra, 402 F.3d 752, 758 (7th Cir. 2005). Expert
credibility determinations, on the other hand, are findings of
fact, Smith, 215 F.3d at 718, and are thus reviewed for clear
error. Furry v. United States, 712 F.3d 988, 992 (7th Cir. 2013).
Thus, to properly analyze the bar owners’ claims, we must
determine whether they go to Dr. Hyland’s credibility or the
admissibility of his testimony under Rule 702. Rule 702
analysis focuses on the expert’s methodology and the princi-
ples upon which his research rests. Daubert v. Merrell Dow
Pharmaceuticals, 509 U.S. 579, 595 (1993) (noting that the focus
of the Rule 702 inquiry is “solely on principles and methodol-
ogy, not on the conclusions that they generate.”). It is up to the
trier of fact, however, to evaluate the “soundness of the factual
underpinnings of the expert’s analysis and the correctness of
the expert’s conclusions based on that analysis.” Smith, 215
F.3d at 718.
The challenge to the court’s understanding of relative risk
is essentially a challenge to the court’s determination that Dr.
Hyland was credible. Dr. Hyland’s principles and method-
ology—epidemiology—provided a relative risk1 value for
secondhand smoke between 1.2 and 1.3. Dr. Hyland then
offered the conclusion that this was sufficient to support a
finding that secondhand smoke causes disease. The court
1
Relative risk is the ratio of the rate of disease in people exposed to a risk
factor to the rate of disease in people not exposed to the risk factor. Michael
D. Green et al., Reference Guide on Epidemiology, in Reference Manual on
Scientific Evidence 566 (3d ed. 2011). In this case, the relative risk compares
the rate of disease in those exposed to secondhand smoke to the rate of
disease in those without such exposure. A relative risk of one indicates no
relationship between the risk factor and the disease. Id. at 567. A relative
risk of less than one indicates a negative association between the risk factor
and the disease. Id. A relative risk greater than one indicates a positive
association. Id.
No. 13-1629 7
found this conclusion credible when it credited Dr. Hyland’s
testimony.
We give a district court’s credibility determinations of
expert witnesses “great weight.” United States v. Huebner, 752
F.2d 1235, 1245 (7th Cir. 1985). In this case, there is no reason
to disturb the district court’s finding that Dr. Hyland was
credible. He provided ample explanation for his conclusions;
given the record, it cannot be stated with any certainty that the
court’s conclusion was in error.
The bar owners’ challenge to the substance of the Surgeon
General’s report goes to the admissibility of Dr. Hyland’s
testimony, as it concerns his methodology and application of
epidemiological principles. Thus, it would be evaluated under
the abuse of discretion standard, were it properly preserved.
But the bar owners did not object to Dr. Hyland’s testimony on
these grounds at trial, and the claim is forfeited. See Jiminez v.
City of Chicago, – F.3d –, 2013 WL 5524787 (7th Cir. Oct. 7, 2013).
b. Dr. Zollinger
The bar owners next argue that because Dr. Zollinger’s
expert testimony about the economic consequences of second-
hand smoke was based on the epidemiological research
establishing causation, the findings by the district court that
credited Dr. Zollinger’s testimony were clearly erroneous. As
noted above, the district court did not clearly err in crediting
Dr. Hyland’s testimony that secondhand smoke causes disease;
thus, it could not have clearly erred in finding that the health
consequences of secondhand smoke had an adverse economic
impact.
c. Dr. Dunn
In its findings of fact and conclusions of law, the district
court found that Dr. Dunn was not an expert in epidemiology
and that his testimony was not credible. The court then
8 No. 13-1629
determined that the expert report he submitted, titled “Dr.
Dunn’s Report to the Ohio Legislature,” was not an expert
report for the purposes of Fed. R. Civ. P. 26(a)(2). It based this
determination largely on Dunn’s admissions at trial that the
report was produced for political purposes and that Dunn
himself would not have submitted it as an expert report.
Because Dr. Dunn did not produce the required expert report,
the court struck the entirety of his testimony.
The bar owners challenge these determinations, arguing
that Dr. Dunn should have been certified as an expert, and that
the district court should not have struck his testimony. To the
extent either of these decisions was in error, however, it was
harmless. See Goodman v. Ill. Dep’t of Fin. and Prof’l Regulation,
430 F.3d 432, 439 (7th Cir. 2005) (“Even an erroneous eviden-
tiary ruling can be deemed harmless if the record indicates that
the same judgment would have been rendered regardless of
the error.”). The district court found Dr. Dunn’s testimony not
credible, and this finding withstands appellate review.
Nothing in the court’s analysis requires us to disavow the
“great weight” we typically accord expert witness credibility
determinations. Huebner, 752 F.2d at 1245. The court noted the
political tone of his testimony and his expert report, in particu-
lar Dr. Dunn’s practice of referring to people who opposed
secondhand smoke as the “High Church of Holy Smoke
Haters.” His strongly held and frequently expressed political
views could reasonably be understood to have influenced the
science he presented before the court. This coupled with the
character of his expert report—a political document prepared
for submission to the Ohio State Legislature—provided ample
basis on which the district court could rest its finding that his
testimony was not credible.
Thus, even had the district court considered Dr. Dunn an
expert, it would have given his testimony little weight.
No. 13-1629 9
Particularly given that the court found the City’s expert on the
health effects of secondhand smoke credible, Dr. Dunn’s
testimony would have had minimal impact.
2. Findings of Fact
This court reviews a district court’s findings of fact under
the highly deferential clear error standard. Furry, 712 F.3d at
992. We will find clear error where, for example, the “trial
judge’s interpretation of the facts is implausible, illogical,
internally inconsistent or contradicted by documentary or
other extrinsic evidence.” Id. at 992 (quoting EEOC v. Sears
Roebuck & Co., 839 F.2d 302, 309 (7th Cir. 1988)).
a. The Surgeon General’s Report is a study
The bar owners also contend the district court erred by
calling the Surgeon General’s report on the health conse-
quences of secondhand smoke a study rather than a report.
While it is true that the Surgeon General did not conduct
independent studies while compiling the report, the report
reflects the result of a wide-ranging meta analysis. Meta
analysis could, on its own, be considered a “study.” Regard-
less, this finding is irrelevant to any of the constitutional claims
the bar owners make, and any error is thus entirely harmless.
b. The bar owners are not facing insolvency
Finally, the bar owners argue that the district court erred by
finding that the bar owners were not facing insolvency. They
base this claim on several statements made at trial about the
effect of the ordinance on the bar owners’ businesses and the
naked assertion that the bar owners must not have understood
what “insolvency” meant when asked about it at the hearing.
Like all findings of fact, however, this finding is reviewed only
for clear error, and will be reversed only if we are left with the
“definite and firm conviction that a mistake has been commit-
ted.” Furry, 712 F.3d at 992 (quoting Anderson v. City of Bessemer
10 No. 13-1629
City, 470 U.S. 564, 573 (1985)). Mere speculation that the bar
owners did not understand the question put to them cannot
give rise to such a deeply-held conviction. And the testimony
presented at trial about the financial effects of the ordinance is
insufficient to support a finding of clear error, particularly in
light of the fact that the bar owners explicitly denied they were
facing insolvency.
B. Due Process Clause
The bar owners first make a substantive due process claim,
arguing that the Indianapolis-Marion County smoking
ordinance deprives them of rights without due process of law.
Smoking does not fall alongside those rights we consider
fundamental rights. See Sung Park v. Ind. Univ. Sch. of Dentistry,
692 F.3d 828, 832 (7th Cir. 2012) (noting that the list of funda-
mental rights is a “short one” and that the Supreme Court has
cautioned against recognizing new fundamental rights, as
“guideposts for responsible decisionmaking in this uncharted
area are scarce and open-ended”) (citing Washington v.
Glucksberg, 521 U.S. 702, 720 (1997)).
Because it does not infringe a fundamental right, the
smoking ordinance will stand if it passes rational basis
scrutiny. Eby-Brown Co., LLC v. Wisconsin Dep’t of Agriculture,
295 F.3d 749, 754 (7th Cir. 2002). Under rational basis review,
a state law is constitutional even if it is “unwise, improvident,
or out of harmony with a particular school of thought.” Id.(citing Williamson v. Lee Optical of Oklahoma, Inc., 348 U.S. 483,
488 (1955)). The law must merely “bear[] a rational relationship
to some legitimate end.” Id. (citing Romer v. Evans, 517 U.S. 620,
631 (1996)). It is irrelevant whether the reasons given actually
motivated the legislature; rather, the question is whether some
rational basis exists upon which the legislature could have
based the challenged law. See FCC v. Beach Communications,
Inc., 508 U.S. 307, 315 (1993). Those attacking a statute on
No. 13-1629 11
rational basis grounds have the burden to negate “every
conceivable basis which might support it.” Id.The bar owners have failed to meet this heavy burden.
There are numerous reasons the City may have chosen to limit
smoking in enclosed public spaces, and the bar owners have
failed to disprove all of them. In addition to the negative health
effects Dr. Hyland testified to in the district court, the City
could have determined that they wanted to limit smoking in
public places because it is annoying to nonsmokers, who are
not used to inhaling smoke. It could also have reasoned that by
banning smoking in public places, it would encourage more
smokers to quit, improving health outcomes for more than just
those exposed to secondhand smoke. Whatever the City’s
reasoning, the bar owners have failed to demonstrate that there
is no rational basis on which a law restricting smoking in
public places could be based.
C. Equal Protection Clause
The bar owners also argue the ordinance denies them equal
protection of the laws because while it bans smoking in
traditional bars, smoking remains lawful in tobacco specialty
bars.2 The bar owners acknowledge this distinction does not
rest on a suspect or quasi-suspect classification and is thus
subject to rational basis review.
As noted above, rational basis review requires us to
presume an ordinance is valid and to uphold it so long as it
“bears a rational relation to some legitimate end.” Romer, 517
U.S. at 631. Once we identify a plausible basis for the legisla-
tion, our inquiry is at its end. United States R.R. Retirement Bd.
2
The ordinance defines “tobacco specialty bars” as businesses that do not
sell cigarettes or permit cigarette smoking on their premises, that sell food
only as an incident to cigars or hookah, and that earn at least 20% of their
revenue from the sale of cigars or hookah.
12 No. 13-1629
v. Fritz, 449 U.S. 166, 179 (1980). When dealing with local
economic regulation, “it is only the invidious discrimination,
the wholly arbitrary act, which cannot stand consistently with
the Fourteenth Amendment.” Listle v. Milwaukee Cty., 138 F.3d
1155, 1158 (7th Cir. 1998) (internal citations omitted). The
analysis is slightly different than for the due process claim
discussed above. Rather than identify a rational reason for
infringing on citizens’ ability to smoke in public, we must
identify a rational reason for the distinction the ordinance
draws between traditional bars and tobacco specialty bars.
The bar owners suggest that because the council members
could not articulate a reason for the cigar bar exception, the
legislation lacked a rational basis. But they mischaracterize the
nature of rational basis review: To uphold a legislative choice,
we need only find a “reasonably conceivable state of facts that
could provide a rational basis” for the classification. Heller v.
Doe, 509 U.S. 312, 320 (1993) (internal citations omitted). The
actual motivation (or lack thereof) behind the legislation is
immaterial.
The bar owners also argue that because cigars are at least as
harmful as cigarettes, permitting cigar smoking while banning
cigarette smoking is arbitrary and capricious. Illogical reasons
for a distinction, however, will not doom a classification
supported by other rational reasons. In this case, the City could
have been trying to protect public health by decreasing
secondhand smoke exposure but simultaneously trying not to
close all businesses where tobacco was sold or used. This was
rational: while the City wants to decrease involuntary exposure
to secondhand smoke, it does not want to ban smoking and
tobacco use in its entirety. An effort to decrease involuntary
exposure to secondhand smoke will naturally not be as
concerned with bars whose business model is predicated on
tobacco. Presumably, the patrons of cigar bars and hookah bars
No. 13-1629 13
are not being involuntarily subjected to secondhand smoke
because they chose to patronize bars where smoking is a
necessary and essential part of the experience.
The City thus drew a line between traditional bars, for
whom tobacco sales and usage are incidental to their primary
business of alcohol and food sales, and tobacco specialty bars,
whose business models depend on tobacco sales. The bar
owners essentially argue that this line was drawn incorrectly
because it does not include their businesses, which also depend
significantly upon on-site tobacco usage. But legislation “does
not violate the Equal Protection Clause merely because the
classifications [it makes] are imperfect.” Dandridge v. Williams,
397 U.S. 471, 485 (1970). A law can be underinclusive or
overinclusive without running afoul of the Equal Protection
Clause. New York Transit Authority v. Beazer, 440 U.S. 568, 592
n.38 (1979).
Because the bar owners cannot establish that the ordinance
lacked a rational basis, their equal protection claim must fail.
D. Freedom of Association
The bar owners further argue that the smoking ordinance
inhibits their freedom of association. The Supreme Court has
recognized two kinds of constitutionally-protected association:
intimate association and expressive association. Roberts v. U.S.
Jaycees, 468 U.S. 609, 617–18 (1984). Socializing with friends and
acquaintances at a neighborhood bar qualifies as neither.
Intimate association “protects the right ‘to enter into and
maintain certain intimate human relationships.’” Montgomery
v. Stefaniak, 410 F.3d 933, 937 (7th Cir. 2005) (quoting Jaycees,
468 U.S. at 617–18). While this right does not exclusively
protect family relationships, the Supreme Court has identified
relationships that “attend the creation and sustenance of a
family” as appropriate benchmarks for evaluating whether a
14 No. 13-1629
relationship qualifies for protection as an intimate association.
Jaycees, 468 U.S. at 619–20. To determine whether a particular
relationship qualifies as “intimate,” courts consider factors
including the size of the group, its exclusivity, its purpose, and
whether outsiders are permitted to participate in critical
aspects of the relationship. Bd. of Dirs. of Rotary Int’l v. Rotary
Club of Duarte, 481 U.S. 537, 546 (1987). The relationship
between regular patrons of a particular bar is not an intimate
association. A bar’s clientele is not exclusive; any person on the
street can drop in for a beer. This collection of patrons is also
likely quite large, and lacks any distinct purpose other than
diffuse socializing. And however you define the “critical
aspects” of the relationship between people who drink at the
same bar, it is hard to imagine the bar owners preventing
willing customers from taking part.
Expressive association, on the other hand, “ensures the
right to associate for the purpose of engaging in activities
protected by the First Amendment.” Montgomery, 410 F.3d at
937. To qualify, a group must “engage in some form of
expression, whether it be public or private.” Boy Scouts of
America v. Dale, 530 U.S. 640, 648 (2000). Thus, to determine
whether the bar owners enjoy the protection of the expressive
associational right, we must first determine whether they
engage in expressive association. On this point, City of Dallis v.
Stanglin, 490 U.S. 19 (1989), is instructive. In that case, the
appellants alleged that a Dallas ordinance that restricted
attendance at certain dance halls to minors and certain adults
infringed their First Amendment rights. Id. at 22–23. The Court
noted that while “it is possible to find some kernel of expres-
sion in almost every activity a person undertakes … such a
kernel is not sufficient to bring the activity within the protec-
tion of the First Amendment.” Id. at 25. Accordingly, the Court
found that the First Amendment did not protect “coming
together to engage in recreational dancing.” Id.No. 13-1629 15
Similarly, the First Amendment does not protect coming
together at a local bar to smoke. Bar regulars are not a group
“organized to engage in speech,” see id. at 25, or an association
that “seeks to transmit … a system of values,” see Dale, 530 U.S.
at 650. Because the bar patrons do not engage in expressive
association, the ordinance does not violate their First Amend-
ment rights.
E. Takings
The bar owners next raise a takings claim, contending that
the smoking ban goes “too far” and thus constitutes a taking.3
Takings jurisprudence encompasses four basic claims: perma-
nent physical invasion, deprivation of all beneficial economic
use, exactions, and partial regulatory takings. Lingle v. Chevron,
U.S.A., Inc., 544 U.S. 528, 538–39 (2005). The bar owners’
3
We note that the bar owners seek an injunction to bar the alleged taking.
Typically, injunctive relief is not available under the Takings Clause. See
Ruckelshaus v. Monsanto Co., 467 U.S. 986, 1016 (1984) (“Equitable relief is not
available to enjoin an alleged taking of private property for a public use,
duly authorized by law, when a suit for compensation can be brought
against the sovereign subsequent to the taking.”); see also
Warner/Elektra/Atlantic Corp. v. Cty. of DuPage, 991 F.2d 1280, 1285 (7th Cir.
1993) (explaining that a state can “oppose injunctions against takings on the
ground that the owner’s only right is to monetary compensation …”).
However, the City did not object to the appropriateness of an injunction on
appeal, and thus has forfeited this argument. See United States v. Parker, 609
F.3d 891, 896 (7th Cir. 2010).
Relatedly, the bar owners also assert that there are different takings tests
under the Fifth and Fourteenth Amendments, citing Williamson County. v.
Hamilton Bank, 473 U.S. 172, 197 (1985). According to the bar owners,
government action that has the same effect as an eminent domain taking is
simply invalid as a violation of the Fourteenth Amendment’s due process
clause. Id. The Supreme Court, however, has never endorsed this purported
difference; the cited portion of Williamson County refers to one party’s
argument, the merits of which the Court did not address. Williamson County,
473 U.S. at 199–200.
16 No. 13-1629
argument calls to mind the partial regulatory takings line of
cases,4 and thus will be evaluated in accordance with Pennsyl-
vania Central Transportation Co. v. City of New York, 438 U.S. 104(1978), and its progeny. A court applying Penn Central consid-
ers several factors to determine whether a diminution in value
amounts to a taking: (1) the nature of the government action,
(2) the economic impact of the regulation, and (3) the degree of
interference with the owner’s reasonable investment-based
expectations. Bettendorf v. St. Croix Cty., 631 F.3d 421, 430 (7th
Cir. 2011). These factors do not provide a “set formula” for
determining whether a taking has occurred, but rather are
“designed to bar Government from forcing some people alone
to bear public burdens which, in fairness and justice, should be
borne by the public as a whole …” Penn Central, 438 U.S. at123–24 (internal quotations omitted).
The bar owners have clearly established a negative eco-
nomic impact on their respective businesses. Regardless of
whether they are facing insolvency, they have demonstrated a
decrease in sales since the smoking ordinance went into effect.
But mere loss of future profits is a “slender reed” upon which
to rest a takings claim. Andrus v. Allard, 444 U.S. 51, 66 (1979)
(“Prediction of profitability is essentially a matter of reasoned
speculation that courts are not especially competent to per-
form.”). This is particularly true when an otherwise weak
economy supplies an obvious potential confounding factor.
Further, it is inappropriate to consider only the loss due to
4
The bar owners cite an Indiana state case as providing the appropriate test
to evaluate a federal takings claim. While we cannot evaluate a federal
claim based on the law as determined by a state court, the citation clarifies
that the bar owners intend to evoke the partial regulatory takings case law.
The case cited, Town of Georgetown v. Sewell, 786 N.E.2d 1132 (Ind. App.
2003), describes a regulation that “places limitations on land that fall short
of eliminating all economically beneficial use.” Id. at 1139. This describes a
partial regulatory taking.
No. 13-1629 17
prohibited uses, without also considering “the many profitable
uses to which the property could still be put.” First English
Evangelical Lutheran Church of Glendale v. Los Angeles Cty., 482
U.S. 304, 331 (1987).
The remaining factors do not favor the bar owners’ case.
While the smoking ban may interfere with some reasonable
investment-based expectations, it does not do so to a degree
significant enough to find a taking. Assuredly, the bar owners
have continued to invest in upkeep and improvements to their
bars, and the smoking ban, which appears to have decreased
their profits, would have diminished the return on these
investments. That said, smoking in public places has been
regulated in Indianapolis-Marion County since 2005, when the
first ordinance was enacted. It should not have come as a
surprise that the ordinance was later expanded to include
appellants’ businesses. See Connolly v. Pension Guar. Corp., 475
U.S. 211, 226 (1986) (“Prudent employers then had more than
sufficient notice not only that pension plans were currently
regulated, but also that withdrawal itself might trigger
additional financial obligations.”). Finally, the smoking ban is
a prototypical example of a “public program adjusting the
benefits and burdens of economic life to promote the common
good.” Penn Central, 438 U.S. at 124. Such character weighs
heavily against finding a taking. See Keystone Bituminous Coal
Ass’n v. DeBenedictis, 480 U.S. 470, 485 (1987) (refusing to find
a taking where the government “acted to arrest what it
perceive[d] to be a significant threat to the common welfare.”).
The smoking ordinance does not constitute a taking, and the
bar owners are not entitled to relief on this claim.
F. Ninth Amendment
The bar owners also assert that the Ninth Amendment
shields them from the smoking ordinance. This argument is a
non-starter, as the Ninth Amendment “is a rule of interpreta-
18 No. 13-1629
tion rather than a source of rights.” Froehlich v. Wisconsin Dep’t
of Corr., 196 F.3d 800, 801 (7th Cir. 1999); see also Quilici v.
Village of Morton Grove, 695 F.2d 261, 271 (7th Cir. 1982) (noting
that “the Supreme Court has never embraced this theory.”).
G. Indiana State Claims
Additionally, the bar owners raise four claims under the
Indiana Constitution: (1) a privileges and immunities claim
based on article 1, section 23, (2) a due process claim under
article 1, section 21, (3) a freedom of association claim under
article 1, section 9, and (4) a takings claim under article 1,
section 23.
1. Due Process, Freedom of Association, and Takings Clause
The district court dismissed these three claims, finding that
the bar owners had failed to present evidence or argument in
favor of them at the evidentiary hearing or in their Proposed
Findings of Fact and Conclusions of Law, and that the claims
were thus waived. The bar owners raised these claims briefly
in their amended complaint, but did not provide any addi-
tional argument in support of them in their brief in support of
the preliminary injunction, their reply to the City’s motion to
dismiss, or in their Proposed Findings of Fact and Conclusions
of Law.5 They never cited a case describing Indiana law in
these areas, and did not connect the facts they presented to any
relevant Indiana constitutional provisions. They also failed to
respond to the City’s arguments against these claims in their
reply to the City’s motion to dismiss. Because they did not
provide the district court with any basis to decide their claims,
5
The bar owners did respond to a very specific allegation concerning their
takings claim—that they had failed to exhaust state remedies—in a response
to the City’s second motion to dismiss. They did not, however, ever provide
any legal basis for the state takings claim, instead focusing their energy on
the federal case law.
No. 13-1629 19
and did not respond to the City’s arguments, these claims are
waived. See Bratton v. Roadway Package Sys., Inc., 77 F.3d 168,
173 n.1 (7th Cir. 1993) (argument waived where appellants
“failed to develop the argument in any meaningful manner”)
(citing Sanchez v. Miller, 792 F.3d 694, 703 (7th Cir. 1986)); see
also Bonte v. U.S. Bank, N.A., 624 F.3d 461, 466 (7th Cir. 2010)
(“Failure to respond to an argument … results in waiver”).
2. Privileges and Immunities Clause
The bar owners also claim that the Indiana Privileges and
Immunities Clause bars enforcement of the smoking ordinance.
While this section of the Indiana Constitution bears similarities
to the federal Equal Protection Clause, the Indiana Supreme
Court has explained that it “should be given independent
interpretation and application.” Collins v. Day, 644 N.E.2d 72,
75 (Ind. 1994). Accordingly, that court has developed a two-
step analysis for privileges and immunities claims. For a law
that provides preferential treatment to one class over another
to pass constitutional muster, the disparate treatment must be
(1) reasonably related to inherent characteristics which
distinguish the relevant classes and (2) uniformly available to
all persons similarly situated. Id. at 78–80.
The first factor requires only that the disparate treatment be
reasonably related to the characteristics which distinguish the
unequally treated classes. Dvorak v. City of Bloomington, 796
N.E.2d 236, 239 (Ind. 2003). In this case, the unequally treated
classes are the owners of traditional neighborhood bars as
compared to the proprietors of cigar and hookah bars. The
distinction here, as noted above, is the role tobacco ostensibly
plays in each business model. For traditional neighborhood
bars, smoking is incidental to the sale of food and alcohol. But
for cigar bars and hookah bars, smoking and tobacco sales are
their raison d’être. The distinction is thus reasonably related to
20 No. 13-1629
the City’s decision to ban smoking in traditional bars but not
cigar or hookah bars.
The disparate treatment is also sufficiently available to all
persons similarly situated, despite the fact that some tradi-
tional bars are clearly more affected by the ordinance. The
distinction drawn still means that bars for whom tobacco is an
integral part of their business model—and not just an inciden-
tal yet important part—can permit smoking within their walls
while other bars cannot. Further, even if we do think that the
traditional neighborhood bars are more like cigar and hookah
bars, the Indiana Supreme Court has refused to invalidate
legislation simply because it is marginally over- or under-
inclusive. See Collins, 644 N.E.2d at 80 (quoting Cincinnati,
Hamilton, and Dayton Ry. Co. v. McCullom, 109 N.E. 206, 208
(1915)) (“Exact exclusion and inclusion is impractical in
legislation. It is almost impossible to provide for every excep-
tional and imaginary case, and a legislature ought not to be
required to do so at the risk of having its legislation declared
void …”). The bar owners thus have not stated a valid claim
under the Indiana Privileges and Immunities Clause.
III. CONCLUSION
The bar owners cannot succeed on the merits of any of their
myriad claims detailed above. The injunction the bar owners
sought was thus unwarranted. We AFFIRM the district court’s
judgment in favor of the City.