Park Pet Shop, Inc. v. City of Chicago , 872 F.3d 495 ( 2017 )

In the
United States Court of Appeals
For the Seventh Circuit
____________________
No. 15-3711
PARK PET SHOP, INC., et al.,
Plaintiffs-Appellants,
v.
CITY OF CHICAGO, et al.,
Defendants-Appellees.
____________________
Appeal from the United States District Court for the
Northern District of Illinois, Eastern Division.
No. 15 C 1450 — Jorge L. Alonso, Judge.
____________________
ARGUED MAY 24, 2016 — DECIDED SEPTEMBER 21, 2017
____________________
Before ROVNER, SYKES, and HAMILTON, Circuit Judges.
SYKES, Circuit Judge. This case challenges Chicago’s
“puppy mill” ordinance, which limits the sources from
which pet stores may obtain dogs, cats, and rabbits for
resale. The ordinance provides that pet retailers in the city
“may offer for sale only those dogs, cats, or rabbits” ob-
tained from an animal control or care center, pound, or
kennel operated by local, state, or federal government or “a
2 No. 15-3711
humane society or rescue organization.” CHICAGO, ILL., CODE
§ 4-384-015(b) (2016).
Two Chicago pet stores and a Missouri dog breeder sued
to invalidate the ordinance. They allege that it exceeds
Chicago’s home-rule powers under the Illinois Constitution
and violates the implied limits on state power imposed by
the Commerce Clause of the United States Constitution. The
district court dismissed the suit for failure to state a claim.
We affirm. The Illinois Constitution permits home-rule
units like Chicago to regulate animal control and welfare
concurrently with the state. And the puppy-mill ordinance
doesn’t discriminate against interstate commerce, even in
mild practical effect, so it requires no special cost-benefit
justification under the Commerce Clause. Rational-basis
review is the default standard, and the ordinance easily
passes that test.
I. Background
In 2014 the Chicago City Council acted to address con-
cerns that pet stores in the city sourced their animals from
large mill-style breeders, which are notorious for deplorable
conditions and abusive breeding practices, including over-
breeding, inbreeding, crowded and filthy living conditions,
lack of appropriate socialization, and inadequate food,
water, and veterinary care. The Council determined that
mill-bred pets develop health and behavioral problems,
creating economic and emotional burdens for pet owners
and imposing financial costs on the City as owners abandon
their physically or emotionally challenged pets or surrender
them to the shelter operated by the City’s Commission on
Animal Care and Control. Nearly a third of all animals that
No. 15-3711 3
come into the City’s care are owner surrenders—the second
largest source of dogs and cats taken in by the Commission
(strays are the largest). Chicago budgets about $300,000 each
year for its shelter service and spends more than $500,000
every year to euthanize animals.
The Council determined that extinguishing the supply of
puppy-mill pets to local pet stores would serve several
important policy goals. Among other things, it would
(1) limit financial support to mill operators; (2) reduce the
financial and emotional toll on Chicago consumers who
purchase mill-bred pets with latent physical and behavioral
problems; (3) boost placement of shelter pets; and (4) reduce
the City’s animal-care and euthanization costs. The Council
also determined that banning the retail sale of mill-bred pets
may also promote pet adoption from the City’s shelter,
which would benefit Chicago residents because the $65 pet
adoption fee both offsets the cost to taxpayers of operating
the shelter and gives Chicagoans ready access to cheaper
pets.
The Council accordingly adopted the following ordi-
nance restricting the sources from which pet stores in the
city may obtain dogs, cats, or rabbits for resale:
(b) Restrictions on the retail sale of animals. A
retailer may offer for sale only those dogs, cats,
or rabbits that the retailer has obtained from:
(1) an animal control center, animal care
facility, kennel, pound or training facility
operated by any subdivision of local, state
or federal government; or
4 No. 15-3711
(2) a humane society or rescue organiza-
tion.
CHICAGO, ILL., CODE § 4-384-015(b) (2016).
Two Chicago pet stores—Park Pet Shop and Pocket
Pets—joined forces with Cedar Woods Farm, a Missouri dog
breeder, seeking to invalidate the ordinance. They allege that
it exceeds Chicago’s home-rule powers under the Illinois
Constitution and amounts to an unconstitutional regulation
of interstate commerce in violation of the dormant aspect of
the Commerce Clause. Amended complaints followed—the
operative version is the second amended complaint—and
the City moved to dismiss for failure to state a claim. See
FED. R. CIV. P. 12(b)(6). The district judge granted the motion,
holding that the ordinance is a valid exercise of the City’s
home-rule authority under the Illinois Constitution and is
not an unconstitutional regulation of interstate commerce
under the Commerce Clause. The judge entered final judg-
ment for the City, and the plaintiffs appealed.
II. Discussion
We review a dismissal order without deference to the
district court’s decision, accepting as true the well-pleaded
facts in the complaint and drawing reasonable inferences in
the plaintiffs’ favor. Roberts v. City of Chicago, 817 F.3d 561,
564 (7th Cir. 2016). To survive a motion to dismiss under
Rule 12(b)(6), the complaint must allege “enough facts to
state a claim to relief that is plausible on its face.” Bell Atl.
Corp. v. Twombly, 550 U.S. 544, 570 (2007). “A claim has facial
plausibility when the plaintiff pleads factual content that
allows the court to draw the reasonable inference that the
No. 15-3711 5
defendant is liable” as alleged in the complaint. Ashcroft v.
Iqbal, 556 U.S. 662, 678 (2009).
A bit of background about Chicago’s regulatory scheme
helps to place the state and federal constitutional claims in
proper context. To operate a pet shop in Chicago requires a
license from the City. CHICAGO, ILL., CODE § 4-384-020(a)
(2016). The City’s animal-care ordinance defines “pet shop”
broadly as “any person primarily engaged in the business of
selling or offering to sell animals suitable for use as pets,”
but excludes “the isolated or occasional sale of animals by a
person who sells only such animals that he has produced
and raised” and “any person engaged in the business of
breeding who owns, has possession of, or harbors 5 or fewer
female dogs or cats capable of reproductions and sells only
those breeding dogs or cats or their offspring.” Id. § 4-384-
010. Also excluded are “any animal control center, animal
care facility, kennel or pound or training facility” operated
by a local, state, or federal government. Id.
Licensees must comply with a host of regulations gov-
erning the housing and care of animals offered for sale. For
example, the ordinance imposes requirements designed to
ensure a sanitary environment for the animals. Id. § 4-384-
050. It sets basic standards of animal care. Id. § 4-384-055. It
regulates cage size and quality. Id. § 4-384-100. And it re-
quires licensees to submit to regular inspections by city
inspectors. Id. § 4-384-130.
Though Chicago’s existing regulatory scheme was al-
ready extensive, the puppy-mill ordinance is a far more
significant restriction. It narrowly limits the sources from
which pet retailers may obtain animals for resale: “A retailer
may offer for sale only those dogs, cats or rabbits” obtained
6 No. 15-3711
from an animal care or control facility operated by a unit of
local, state, or federal government or from “a humane
society or rescue organization.” Id. § 4-384-015(b). A “retail-
er” is “any person licensed or required to be licensed under
this chapter who offers for sale any dog, cat or rabbit in the
City.” Id. § 4-384-015(a).
The ordinance thus effectively prohibits large commer-
cial breeders from supplying dogs, cats, and rabbits to pet
retailers in the city. This dramatically changes the business
model of Chicago’s pet retailers, so it’s no surprise that
litigation commenced soon after the City adopted the ordi-
nance. This suit alleges that the ordinance is constitutionally
infirm in two respects—one state, one federal. We’ll begin
with the state constitutional claim.
A. Home-Rule Authority Under the Illinois Constitution
As a home-rule municipality under the Illinois Constitu-
tion, Chicago “may exercise any power and perform any
function pertaining to its government and affairs including,
but not limited to, the power to regulate for the protection of
the public health, safety, morals and welfare; to license; to
tax; and to incur debt.” ILL. CONST. art. VII, § 6(a). This
constitutional provision “was written with the intention that
home rule units be given the broadest powers possible.”
Scadron v. City of Des Plaines, 606 N.E.2d 1154, 1158 (Ill. 1992).
The state constitution further provides that a municipality
with home-rule status may “exercise and perform concur-
rently with the State any power or function of a home rule
unit to the extent that the General Assembly by law does not
specifically limit the concurrent exercise or specifically
declare the State’s exercise to be exclusive.” ILL. CONST.
art. VII, § 6(i).
No. 15-3711 7
To determine whether the puppy-mill ordinance is a
permissible exercise of Chicago’s home-rule powers, we
follow the Illinois Supreme Court’s instructions and evaluate
the “nature and extent of the problem” at hand and whether
the state has a “vital interest and a traditionally exclusive
role” in regulating it. City of Chicago v. StubHub, Inc.,
979 N.E.2d 844, 852–53 (Ill. 2011). These are commonly
referred to as the Kalodimos factors. Kalodimos v. Village of
Morton Grove, 470 N.E.2d 266 (Ill. 1984) (developing the
doctrine).
The puppy-mill ordinance is aimed at reducing the social
problems and economic costs associated with mill-bred pets:
the emotional and financial costs incurred by individual
Chicagoans who find themselves with sick or troubled pets
and the financial strain on the public fisc caused by mill-bred
animals. State and local governments alike are vitally con-
cerned with issues of animal control and welfare, and both
governments have long regulated animal welfare concur-
rently. See, e.g., County of Cook v. Village of Bridgeview,
8 N.E.3d 1275, 1279 (Ill. 2014), appeal denied, 23 N.E.3d 1200
(Ill. 2015) (“In Illinois, the problem of animal control, over-
population, and the spread of rabies is both a local and
statewide concern.”). State government has never had an
exclusive role in addressing animal-control issues; concur-
rent regulation is the norm.
In areas of concurrent authority, the Illinois Constitution
expressly requires a clear statement from the state legislature
to oust a municipality’s home-rule power. See 5 ILL. COMP.
STAT. 70/7 (2015) (“No law enacted after January 12, 1977,
denies or limits any power or function of a home rule unit,
pursuant to paragraphs (g), (h), (i), (j), or (k) of Section 6 of
8 No. 15-3711
Article VII of the Illinois Constitution, unless there is specific
language limiting or denying the power or function and the
language specifically sets forth in what manner and to what
extent it is a limitation on or denial of the power or function
of a home rule unit.”). No state animal-control statute explic-
itly ousts or limits Chicago’s power to regulate in this area.
To the contrary, state law preserves municipal power to
regulate animal care and welfare:
Nothing in this Act shall be held to limit in
any manner the power of any municipality or
other political subdivision to prohibit animals
from running at large, nor shall anything in
this Act be construed to, in any manner, limit
the power of any municipality or other politi-
cal subdivision to further control and regulate
dogs, cats or other animals in such municipali-
ty or other political subdivision provided that
no regulation or ordinance is specific to breed.
510 ILL. COMP. STAT. 5/24 (2015).
The plaintiffs point to Village of Bridgeview as support for
their home-rule challenge, but that case is inapposite. At
issue there was a dispute between Cook County and the
Village of Bridgeview, a municipality within the county’s
borders. 8 N.E.3d at 1277–78. The two governmental units
had promulgated conflicting regulations aimed at eradicat-
ing the problem of rabid feral cats. Id. To resolve the regula-
tory conflict, the state appellate court had to decide which
governmental unit had a more traditional role and vital
interest in controlling and preventing the spread of rabies.
No. 15-3711 9
The court held that rabies control is a matter of statewide
concern and “do[es] not strictly pertain to the government
and affairs of Bridgeview as a home rule unit.” Id. at 1280.
The court noted as well that the state and county govern-
ments had a “more traditional role” in addressing problems
of rabies control. Id. Moreover, county government has a
“greater geographical reach” and “can more comprehensive-
ly and effectively address feral cat control than local munici-
palities.” Id. at 1279. In short, the Kalodimos factors all point-
ed in the same direction: the county ordinance prevailed
over the village ordinance. Id. at 1280.
No similar regulatory conflict exists here. Illinois is not
trying to regulate in this space, much less regulate exclusive-
ly. The puppy-mill ordinance does not exceed the City’s
home-rule authority under the Illinois Constitution.
B. Dormant Commerce Clause
The Commerce Clause grants Congress the power to
“regulate Commerce … among the several States,” U.S.
CONST. art. I, § 8, cl. 3, but the Supreme Court has long held
that a “dormant” or “negative” component of the Clause
implicitly limits the states from “erecting barriers to the free
flow of interstate commerce” even where Congress hasn’t
acted, see, e.g., Raymond Motor Transp., Inc. v. Rice, 434 U.S.
429, 440 (1978). The doctrine is not generally applicable. It
does not apply to every state and local law that affects inter-
state commerce. “Because even ‘local’ activities displace the
movement of goods, services, funds, and people, almost
every state and local law—indeed almost every private
transaction—affects interstate commerce.” Nat’l Paint &
Coatings Ass’n v. City of Chicago, 45 F.3d 1124, 1130 (7th Cir.
1995). Dormant Commerce Clause doctrine applies only to
10 No. 15-3711
laws that discriminate against interstate commerce, either
expressly or in practical effect. Id. at 1130–31.
We have explained that state and local laws fall into one
of three categories for purposes of dormant Commerce
Clause analysis. “The first category comprises laws that
explicitly discriminate against interstate commerce”; laws of
this type are treated as presumptively unconstitutional. Id. at
1131. “The second category comprises laws that appear to be
neutral among states but that bear more heavily on interstate
commerce than on local commerce.” Id. Facially nondiscrim-
inatory laws sometimes have a discriminatory effect on
interstate commerce, and “[w]hen the effect is powerful,
acting as an embargo on interstate commerce without hin-
dering intrastate sales,” the law is treated as the equivalent
of a facially discriminatory statute. Id.
On the other hand, laws that are facially nondiscrimina-
tory but have “mild disparate effects and potential neutral
justifications” are analyzed under Pike v. Bruce Church, Inc.,
397 U.S. 137 (1970), which established a balancing test that
requires the reviewing court to weigh the burden on inter-
state commerce against the nature and strength of the state
or local interest at stake. Nat’l Paint, 45 F.3d at 1131. More
specifically, Pike holds that when a state or local statute
regulates even-handedly to effectuate a legiti-
mate local public interest, and its effects on in-
terstate commerce are only incidental, it will be
upheld unless the burden imposed on such
commerce is clearly excessive in relation to the
putative local benefits. If a legitimate local
purpose is found, then the question becomes
one of degree. And the extent of the burden
No. 15-3711 11
that will be tolerated will of course depend on
the nature of the local interest involved, and on
whether it could be promoted as well with a
lesser impact on interstate activities.
397 U.S. at 142 (citation omitted). Importantly for our pur-
poses, however, Pike balancing is triggered only when the
challenged law discriminates against interstate commerce in
practical application. Pike is not the default standard of
review for any state or local law that affects interstate com-
merce. Nat’l Paint, 45 F.3d at 1131.
“If the first category may be called disparate treatment,
and the second disparate impact, the third category com-
prises laws that affect commerce without any reallocation
among jurisdictions”—in other words, laws “that do not
give local firms any competitive advantage over those
located elsewhere.” Id. In this third category, “the normal
rational-basis standard is the governing rule.” Id. “Unless
the law discriminates against interstate commerce expressly
or in practical effect, there is no reason to require special
justification.” Id. at 1132. To put the point in plainer terms:
“No disparate treatment, no disparate impact, no problem
under the dormant commerce clause.” 1 Id.
1 As Judge Hamilton reads the legal terrain, National Paint is no longer
valid in light of intervening developments in dormant Commerce Clause
doctrine—specifically, the Supreme Court’s decisions in Department of
Revenue of Kentucky v. Davis, 553 U.S. 328 (2008), and United Haulers
Association v. Oneida–Herkimer Solid Waste Management Authority, 550 U.S.
330 (2007). Dissent at p. 17. We disagree. We do not read the quoted
passages of Davis and United Haulers as extending Pike balancing to all
state laws—even those that have no discriminatory effect on interstate
commerce. Read in context, the Court’s references to “nondiscriminato-
12 No. 15-3711
The puppy-mill ordinance does not expressly discrimi-
nate against interstate commerce. By limiting Chicago pet
stores to dogs, cats, and rabbits sourced from public or
private nonprofit shelters, the ordinance evenhandedly
prohibits all large commercial breeders—whether located in
Illinois or out of state—from selling dogs, cats, and rabbits to
Chicago pet stores. Because there is no disparate treatment,
the ordinance does not fall within the first category.
It does not fall within the second category either. The
puppy-mill ordinance does not have a disparate impact on
out-of-state breeders; breeders in Illinois enjoy no competi-
tive advantage over their counterparts outside the state. All
breeders are similarly disadvantaged. And unless the chal-
lenged law discriminates against interstate commerce in
practical effect, the dormant Commerce Clause does not
come into play and Pike balancing does not apply.
The plaintiffs ask us to infer that Chicagoans will re-
spond to the puppy-mill ordinance in part by turning direct-
ly to breeders for their purebred pets. Indulging that infer-
ence doesn’t support a conclusion that the ordinance has a
discriminatory effect on interstate commerce. While it’s
plausible to infer that Chicago consumers may prefer to
patronize breeders located closer to the city over those that
are farther away, that inference would show only that the
ordinance may confer a competitive advantage on breeders
that are not too distant from Chicago. But those breeders are
as likely to be located in nearby Wisconsin or Indiana as they
ry” laws in these passages must be understood to mean facially nondis-
criminatory laws that have discriminatory practical effects on interstate
commerce—or in the National Paint taxonomy, state laws that have a
disparate impact on interstate commerce.
No. 15-3711 13
are in suburban Chicago or downstate Illinois. So the suppo-
sition that Chicagoans will turn directly to breeders for their
pure-bred pets does not establish that the ordinance has a
discriminatory effect on breeders located out of state.
Perhaps Chicago consumers might respond to the ordi-
nance by turning to small breeders rather than traveling to a
large breeder outside Chicago (whether in state or out of
state). But that would have the effect of simply shifting sales
among different sources of pets without regard to location.
“Favoritism for [small breeders over pet stores and large
breeders] does not pose a constitutional problem … .” Baude
v. Heath, 538 F.3d 608, 615 (7th Cir. 2008). Again, dormant
Commerce Clause doctrine is concerned only with regula-
tion that discriminates against out-of-state firms. Nat’l Paint,
45 F.3d at 1131–32; Amanda Acquisition Corp. v. Universal
Foods Corp., 877 F.3d 496, 505 (7th Cir. 1989).
Perhaps Chicagoans might turn not to breeders (whether
large or small, in state or out of state) but to pet stores in the
surrounding suburbs or directly to the City’s shelter or a
shelter operated by a local private nonprofit. This just shifts
business within the state; it has no effect on interstate com-
merce. See Missouri Pet Breeders Ass’n v. County of Cook, 106 F.
Supp. 3d 908, 923 (N.D. Ill. 2015) (“[N]either of these out-
comes imposes a burden on interstate commerce [because]
business would simply shift between entities within
Illinois.” (citing Exxon Corp. v. Governor of Maryland, 437 U.S.
117, 126 n.16 (1978))).
The plaintiffs argue that the puppy-mill ordinance is a de
facto ban on pets bred out of state. It is not. Chicago has not
attempted to regulate beyond its borders. The ordinance
doesn’t ban animals from out-of-state breeders, either ex-
14 No. 15-3711
pressly or in practical effect. It affects large breeders—
wherever they’re located—in exactly the same way. Both can
sell directly to Chicago consumers, but they may not sell to
city-licensed pet retailers.
Finally, the plaintiffs maintain that dismissal on the
pleadings is improper because Pike balancing requires a
factual record. It’s true as a general matter that “[a]ny bal-
ancing approach, of which Pike is an example, requires
evidence.” Baude, 538 F.3d at 612. As we’ve explained,
however, Pike balancing is required only if the challenged
law has a discriminatory effect on interstate commerce. And
conclusory allegations of disparate impact are not sufficient;
to survive the City’s motion to dismiss, the plaintiffs needed
to plead specific facts to support a plausible claim that the
ordinance has a discriminatory effect on interstate com-
merce. Adams v. City of Indianapolis, 742 F.3d 720, 733 (7th
Cir. 2014). Because they haven’t done so, Pike balancing is
not required. See New York Pet Welfare Ass’n v. City of New
York, 850 F.3d 79, 90–91 (2d Cir. 2017) (affirming a
Rule 12(b)(6) dismissal of an analogous challenge to a
puppy-mill ordinance).
Accordingly, the ordinance falls into the third category,
which comprises state and local laws that “affect commerce
without any reallocation among jurisdictions”; that is, laws
that “do not give local firms any competitive advantage over
those located elsewhere.” Nat’l Paint, 45 F.3d at 1131. For
laws in this category, the default rational-basis standard of
review applies. Id. No surprise, the ordinance easily survives
review for rationality. Chicago’s justifications for the ordi-
nance are plentiful and plausible. The City’s policy goals are
to reduce financial support for mill breeders, curb the emo-
No. 15-3711 15
tional and financial burdens on consumers who unwittingly
buy mill-bred pets, and reduce the cost of sheltering and
euthanizing unwanted problem pets. These are unquestion-
ably legitimate governmental interests, and it’s rational to
think that the puppy-mill ordinance will serve them.
Because the plaintiffs did not plead a plausible claim that
the puppy-mill ordinance violates either the Illinois Consti-
tution or the dormant Commerce Clause, the case was
properly dismissed for failure to state a claim.
AFFIRMED.
16 No. 15-3711
HAMILTON, Circuit Judge, dissenting in part. I agree that the
Illinois Constitution does not bar Chicago’s ordinance. On
two points critical to the federal Commerce Clause claim,
however, I view the law differently than my colleagues do, so
I respectfully dissent regarding the federal claim.
First, the Supreme Court itself has not yet confined the
balancing test under Pike v. Bruce Church, Inc., 397 U.S. 137
(1970), as narrowly as my colleagues suggest. The majority
writes that Pike balancing comes into play “only when the law
discriminates against interstate commerce in practical applica-
tion.” Ante at 11 (emphasis in original), citing National Paint
& Coatings Ass’n v. City of Chicago, 45 F.3d 1124, 1131 (7th Cir.
1995). In Pike itself, however, the Court wrote that this balanc-
ing test applies where “the statute regulates even-handedly to
effectuate a legitimate local public interest, and its effects on
interstate commerce are only incidentalY.” 397 U.S. at 142 (em-
phasis added). In such cases, and this is one, the law will be
upheld “unless the burden imposed on such commerce is
clearly excessive in relation to the putative local benefits.” Id.
The majority tries to confine Pike balancing to cases of
“discrimination,” but it can do so only by using a notion of
“discrimination” so broad that it applies to “even-handed”
legislation with “only incidental” effects on interstate com-
merce. The majority would apply Pike only when the chal-
lenged law gives “local firms any competitive advantage over
those located elsewhere.” Ante at 11, quoting National Paint,
45 F.3d at 1131.
The Supreme Court’s more recent discussions of Pike, since
we decided National Paint in 1995, are difficult to reconcile
with this approach. For example, the Court has explained that
federal courts “generally leave the courtroom door open to
No. 15-3711 17
plaintiffs invoking the rule in Pike, that even nondiscriminatory
burdens on commerce may be struck down on a showing that
those burdens clearly outweigh the benefits of a state or local
practice.” Department of Revenue of Kentucky v. Davis, 553 U.S.
328, 353 (2008) (emphasis added); see also United Haulers
Ass’n v. Oneida-Herkimer Solid Waste Mgmt. Auth., 550 U.S. 330,
346 (2007) (plurality opinion of Roberts, C.J.) (“Under the Pike
test, we will uphold a nondiscriminatory statute like this one
‘unless the burden imposed on [interstate] commerce is
clearly excessive in relation to the putative local benefits.’”)
(emphasis added). Given these developments, we should no
longer use National Paint to avoid Pike balancing in Commerce
Clause cases like this one.
I confess that I write this with some diffidence and a sense
of irony. Pike balancing has been criticized harshly in courts
and the academy, and I am among those who have suggested
it should ultimately be abandoned. See CTS Corp. v. Dynamics
Corp. of America, 481 U.S. 69, 95 (1987) (opinion of Scalia, J.)
(Pike balancing inquiry is “ill suited to the judicial function
and should be undertaken rarely if at all”); Lebamoff Enter-
prises, Inc. v. Huskey, 666 F.3d 455, 468–69 (7th Cir. 2012) (Ham-
ilton, J., concurring in the judgment) (endorsing criticism);
Wiesmueller v. Kosobucki, 571 F.3d 699, 704 (7th Cir. 2009) (“The
judiciary lacks the time and the knowledge to be able to strike
a fine balance between the burden that a particular state reg-
ulation lays on interstate commerce and the benefit of that
regulation to the state’s legitimate interests.”); Regan, The Su-
preme Court and State Protectionism: Making Sense of the
Dormant Commerce Clause, 84 Mich. L. Rev. 1091, 1207–08
(1986) (introducing review of Supreme Court cases); see also
Department of Revenue v. Davis, 553 U.S. at 353–56 (describing
18 No. 15-3711
difficulty in applying Pike to state law exempting in-state gov-
ernment bonds from state income tax, and deferring to Con-
gress to make policy choice). For now, though, the Supreme
Court has left Pike open as a potential path to challenge eco-
nomic regulations that do not discriminate against interstate
commerce but that have incidental and perhaps unintended
effects on interstate commerce.
Second, the majority errs by applying a stringent version
of Iqbal and Twombly to find that plaintiffs have not plausibly
alleged sufficiently burdensome effects on interstate com-
merce. Ante at 13–14, citing Adams v. City of Indianapolis, 742
F.3d 720, 733 (7th Cir. 2014) (applying stringent pleading
standard to affirm dismissal of Title VII claim of disparate ra-
cial impact). Plaintiffs’ complaint offers a plausible forecast of
those effects, though. The operative complaint alleges that the
ordinance prohibits out-of-state breeders from selling pets in
Chicago except by direct sales to customers, who would have
to visit the breeder to pick up the purchased pet or otherwise
arrange for delivery. ¶ 72. Perhaps the effects would be like
those for distant in-state breeders, but that would be an em-
pirical question. The complaint also alleges that the ordinance
will be counter-productive, depriving consumers of pure-
bred puppies, depriving consumers of a regulated and ac-
countable sources for such puppies, and leaving consumers
with the only practical alternative of going to less regulated
and less accountable brokers and breeders on the internet and
elsewhere. ¶ 74.
Those allegations might or might not be true, but they
seem to me at least plausible. It’s easy to imagine that the Chi-
cago ordinance will not actually reduce the demand for high-
cost, pure-bred pets. Meeting that demand might well be
No. 15-3711 19
much more difficult and expensive, with greater effects on
out-of-state breeders and without obvious gain in terms of
health and safety or humane treatment of animals. In addi-
tion, plaintiffs offer at least some allegations of a discrimina-
tory purpose, alleging that when the ordinance was enacted,
the city clerk portrayed the ordinance as aligning Chicagoans
against the interests of an out-of-state industry with its “pow-
erbase in Iowa, Missouri and Indiana.” ¶ 66 & Ex. B.
To affirm dismissal on the pleadings, the majority relies
further on National Paint, but there we addressed factual find-
ings made after a trial. We wrote: “Pike may be impossible to
apply without some factual inquiries (albeit limited as Clover
Leaf Creamery requires).” National Paint, 45 F.3d at 1132. Plain-
tiffs lost in National Paint because they had offered no evi-
dence of impacts on interstate commerce. Id.; see also id. at
1134 (Rovner, J., concurring) (noting that district court may
need to conduct evidentiary hearing or trial to test the actual
benefits and burdens of legislation if there is an allegation of
a disparate impact on interstate commerce); Baude v. Heath,
538 F.3d 608, 612 (7th Cir. 2008)(Pike “requires evidence”). I
don’t know whether the plaintiffs in this case could ultimately
meet the demands of the Pike balancing test. They should be
permitted to try, though, particularly now that the ordinance
has taken effect and evidence of actual effects should be avail-
able. I would reverse the dismissal for failure to state a claim
and remand for further proceedings.