Amtax Holdings 260, LLC v. Washington State Housing ( 2022 )

NOT FOR PUBLICATION FILED
UNITED STATES COURT OF APPEALS JUL 26 2022
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
AMTAX HOLDINGS 260, LLC, an Ohio No. 21-35789
limited liability company; et al.,
D.C. No. 2:20-cv-01698-BJR
Plaintiffs-Appellants,
v. MEMORANDUM*
WASHINGTON STATE HOUSING
FINANCE COMMISSION, a public body
Corporate and politic of the State of
Washington; et al.,
Defendants-Appellees.
Appeal from the United States District Court
for the Western District of Washington
Barbara Jacobs Rothstein, District Judge, Presiding
Argued and Submitted July 8, 2022
Honolulu, Hawaii
Before: WARDLAW, NGUYEN, and OWENS, Circuit Judges.
Plaintiffs-Appellants AMTAX Holdings 260, LLC, AMTAX Holdings 114,
LLC, and Alden Torch Financial, LLC (collectively “AMTAX”) appeal from the
district court’s order granting Washington State Housing Finance Commission’s
*
This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
motion to dismiss on prudential ripeness grounds. AMTAX asserts claims under
the First Amendment right to petition, the Contracts Clause, the Supremacy
Clause, the Separation of Powers, the Due Process Clause, and the Equal
Protection Clause, alleging that the Commission’s policy governing transfer
investments within the Low Income Housing Tax Credit Program improperly
punished litigation activity and interfered with AMTAX’s contracts. We review de
novo the decision to dismiss for prudential ripeness, Wolfson v. Brammer, 616 F.3d
1045, 1053 (9th Cir. 2010), and review for abuse of discretion the denial of leave
to amend, Doe v. Garland, 17 F.4th 941, 944 (9th Cir. 2021), cert denied, 142 S.
Ct. 2815 (2022). As the parties are familiar with the facts, we do not recount them
here. We affirm.
In assessing prudential ripeness, we “evaluate both the fitness of the issues
for judicial decision and the hardship to the parties of withholding court
consideration.” Ass’n of Irritated Residents v. EPA, 10 F.4th 937, 944 (9th Cir.
2021) (citation omitted). Facial constitutional challenges, see Nat’l Park Hosp.
Ass’n v. Dep’t of the Interior, 538 U.S. 803, 811-12 (2003), and First Amendment
overbreadth challenges, see Maldonado v. Morales, 556 F.3d 1037, 1044-45 (9th
Cir. 2009), must meet both prudential ripeness prongs for us to review the claim.
We assume without deciding that the district court should have analyzed
prudential ripeness on a claim-by-claim basis. See Pizzuto v. Tewalt, 997 F.3d
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893, 903-05 (9th Cir. 2021) (applying “principles of ripeness . . . to each of
plaintiffs’ specific claims”). But even if it had done so, the pleadings and record
show each claim is prudentially unripe.
AMTAX’s First Amendment claim is unfit for review. Its allegations that a
transfer application will be denied are merely “hypothetical,” Thomas v.
Anchorage Equal Rights Comm’n, 220 F.3d 1134, 1142 (9th Cir. 2000) (en banc),
both because AMTAX continually fails to assert it has applied or will apply for a
transfer, and because the text of the Policy does not include protected litigation
activity as a basis for rejecting the application, see Alaska Right to Life PAC v.
Feldman, 504 F.3d 840, 849 (9th Cir. 2007) (requiring some factual context even
for pre-enforcement constitutional challenges). Because the alleged harm “rests
upon ‘contingent future events that may not occur as anticipated, or indeed may
not occur at all,’” the claim is unfit for judicial review.1 Scott v. Pasadena Unified
Sch. Dist., 306 F.3d 646, 662 (9th Cir. 2002) (citation omitted). For the same
reason, the “firm prediction rule” does not ripen the claim. See Freedom to Travel
Campaign v. Newcomb, 82 F.3d 1431, 1436 (9th Cir. 1996).
And despite allegations of overbreadth, AMTAX does not show hardship in
1
To the extent that AMTAX alleges it already experienced injury from chilled
speech, we reject that allegation as conclusory. See Whitaker v. Tesla Motors, Inc.,
985 F.3d 1173, 1176-77 (9th Cir. 2021) (noting that in reviewing a motion to
dismiss, this court need not accept bare conclusory allegations as true).
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delaying review of the First Amendment claim. See Am.-Arab Anti-Discrimination
Comm. v. Reno, 70 F.3d 1045, 1057-58 (9th Cir. 1995) (considering overbreadth
claims under the hardship prong of prudential ripeness). Nothing in the amended
complaint establishes a “well-founded fear that the law will be enforced against
[AMTAX],” to show its speech has been or will be chilled. Wolfson, 616 F.3d at
1062 (citation omitted); see also Feldman, 504 F.3d at 851 (requiring a “credible
threat of enforcement” to establish hardship for prudential ripeness). AMTAX
similarly fails to establish hardship by showing the Policy requires an immediate
change to its conduct. See Wolfson, 616 F.3d at 1060.
The Contracts Clause claim is also prudentially unripe. Because AMTAX
does not show current or future contracts, terms, or partners would be affected by
the Policy, the claim is unfit for review, see Thomas, 220 F.3d at 1142, and not
ripened by the firm prediction rule, see Freedom to Travel, 82 F.3d at 1436. And
AMTAX does not establish hardship from delaying review because, despite
arguing its “primary conduct” is affected by the Policy, AMTAX does not point to
any affected contracts or partners. See Nat’l Park Hosp. Ass’n, 538 U.S. at 810.
Though AMTAX’s Supremacy Clause claim is likely fit for review under
Sayles Hydro Associates v. Maughan, 985 F.2d 451, 453-54 (9th Cir. 1993), it is
prudentially unripe because AMTAX does not establish hardship by showing the
issue has “a concrete impact on the parties.” Shell Oil Co. v. City of Santa Monica,
4
830 F.2d 1052, 1062 (9th Cir. 1987).
And the Separation of Powers challenge is unfit for review because it rests
on contingent and hypothetical future events. See Scott, 306 F.3d at 662.
AMTAX’s assertion that the Commission will interpret and apply the Policy
unconstitutionally is based on a long chain of contingent events that cannot be
assessed without a more robust record. And because AMTAX has not shown that
the Separation of Powers issue “requires an immediate and significant change in
[its] conduct of [its] affairs,” it has not established hardship from withholding
review. Wolfson, 616 F.3d at 1060 (citation omitted).
As the Due Process and Equal Protection claims present the same issues as
the First Amendment and Contracts Clause claims, they are prudentially unripe for
the above reasons.
Finally, the district court did not abuse its discretion by not granting leave to
amend. In its briefs and again at oral argument, AMTAX could point to no facts it
could assert to ripen its claims, and so remand for such an amendment would be
“futile.” Doe, 17 F.4th at 950.
AFFIRMED.
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