Thomas Comiskey v. Avis Budget Group, Inc. , 391 F. App'x 643 ( 2010 )

FILED
NOT FOR PUBLICATION AUG 06 2010
MOLLY C. DWYER, CLERK
UNITED STATES COURT OF APPEALS U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
In re: TOURISM ASSESSMENT FEE No. 09-55440
LITIGATION,
D.C. No. 3:08-cv-01796-MMA-
WMC
THOMAS J. COMISKEY; et al.,
MEMORANDUM *
Plaintiffs - Appellants,
v.
AVIS BUDGET GROUP, INC.; et al.,
Defendants - Appellees.
Appeal from the United States District Court
for the Southern District of California
Michael M. Anello, District Judge, Presiding
Argued and Submitted March 4, 2010
San Diego, California
Before: HAWKINS, THOMAS and McKEOWN, Circuit Judges.
Plaintiffs appeal from the district court’s Fed. R. Civ. P. 12(b)(6) dismissal
of their class action complaint filed against defendants the California Travel and
*
This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
Tourism Commission (the “CTTC”), Secretary Dale E. Bonner, in his capacity as
Secretary of Business, Transportation, and Housing for the State of California, and
numerous passenger rental car companies operating at one or more California
airport locations (the “rental car defendants” or “RCDs”). We affirm.1
I
The district court properly dismissed plaintiffs’ Commerce Clause challenge
to the Passenger Car Rental Industry Tourism Assessment Program (the
“Program”), Cal. Gov. Code §§ 13995 et seq., which requires that rental car
companies pay an assessment for each rental car transaction that commences at an
airport or hotel location.
The central purpose behind the Commerce Clause’s prohibitions of
discriminatory measures is to proscribe “state or municipal laws whose object is
local economic protectionism.” C & A Carbone, Inc. v. Town of Clarkstown, 511
U.S. 383, 390 (1994). Such discrimination generally takes the form of regulations
which have, or threaten to have, a competitive advantage upon local business vis-a-
vis out-of-state competitors. See New Energy Co. of Indiana v. Limbach, 486 U.S.
269, 273 (1988) (“The ‘negative’ aspect of the Commerce Clause prohibits
economic protectionism – that is, regulatory measures designed to benefit in-state
1
Comiskey’s motion to take judicial notice is granted.
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economic interests by burdening out-of-state competitors”); see also National
Audubon Soc., Inc. v. Davis, 307 F.3d 835, 857 (9th Cir. 2002) (“There is
unconstitutional discrimination against interstate commerce where the asserted
benefits of the state statute are in fact illusory or relate to goals that evidence an
impermissible favoritism of in-state industry over out-of-state industry”) (internal
quotation marks, citations, and alterations omitted).
Here, plaintiffs do not allege that the Program was specifically designed to
benefit in-state economic interests by burdening out-of-state competitors.
Plaintiffs do not allege that the Program has the effect of discouraging affected
rental car companies from serving out-of-state customers. Indeed, the purpose of
the Program is to raise revenue in order to encourage tourism excursions to
California. Taking plaintiffs’ allegations to be true, plaintiffs have not shown that
the Program serves an economic protectionist end or otherwise affirmatively
discriminates against interstate commerce.
Thus, the district court correctly applied the balancing test set out in Pike v.
Bruce Church, 397 U.S. 137 (1970). See Maine v. Taylor, 477 U.S. 131, 138
(1986) (laws that regulate evenhandedly and only incidentally burden interstate
commerce are subject to less searching scrutiny under the Pike balancing test).
Under the Pike test, a statute will be upheld “unless the burden imposed upon
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[interstate] commerce is clearly excessive in relation to the putative local benefits.”
397 U.S. at 142. As the party challenging the regulation, plaintiffs must establish
that the burdens imposed on interstate commerce clearly outweigh the local
benefits arising from the Program. See Kleenwell Biohazard Waste and General
Ecology Consultants, Inc. v. Nelson, 48 F.3d 391, 399 (9th Cir. 1995). Plaintiffs
have not met their burden in this case. The district court properly found that any
burdens imposed on interstate commerce by the Program do not clearly outweigh
“California’s legitimate interest in promoting its tourism industry.”
Camps Newfound/Owatonna, Inc. v. Town of Harrison, 520 U.S. 564 (1997)
is not to the contrary. In that case, the Court concluded that the challenged statute
was discriminatory because it had the purpose of discouraging Maine charities
from serving out-of-state residents, and thus operated as a protectionist measure
that attempted to hoard Maine’s natural resources and beauty for its own residents.
Id. at 576-77. Here, as already noted, plaintiffs do not allege that the Program has
the effect of discouraging affected rental car companies from serving out-of-state
customers.
The district court properly concluded that plaintiffs’ claim under the
Commerce Clause fails as a matter of law.
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II
Plaintiffs’ claims under the free speech provisions of the United States and
California constitutions are foreclosed by the government speech doctrine.
Plaintiffs contend that the government is forcing them to subsidize a private
message with which they disagree, in violation of United States v. United Foods,
Inc., 533 U.S. 405 (2001), and Keller v. State Bar of Cal., 496 U.S. 1 (1990).
Compelled subsidies are permissible when they are used to fund government
speech. Johanns v. Livestock Marketing Assoc., 544 U.S. 550, 562 (2005).
Individuals cannot object to compelled subsidies where the government exercises
“effective[] control[]” over the challenged speech. See Delano Farms Co. v. Cal.
Table Grape Comm’n, 586 F.3d 1219, 1223 (9th Cir. 2009). California appellate
courts have held that this rule is equally applicable to free speech claims brought
pursuant to the California Constitution. See Gallo Cattle Co. v. Kawamura, 159
Cal. App. 4th 948, 951-52 (2008).
Here, the government “effectively control[s]” the CTTC’s promotional
messaging. The Legislature has provided an overriding directive for the sorts of
messages that the CTTC is to promote. See Cal. Gov. Code § 13995.45. The
Governor of California appoints twelve of the CTTC’s commissioners (with the
remaining twenty-four elected by industry representatives), and the Secretary
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exercises removal powers over the elected commissioners. See Cal. Gov. Code §
13995.40(b)(2)(A), (b)(3), (e). The final adoption of the CTTC’s marketing plan
and budget is subject to the review and approval of the Secretary. Cal. Gov. Code
§ 13995.45(d). We have sustained similar statutory schemes against First
Amendment challenges. Delano Farms, 586 F.3d at 1227-30; Paramount Land
Co. v. Cal. Pistachio Comm’n, 491 F.3d 1003, 1010-12 (9th Cir. 2007).
Plaintiffs underscore that the Secretary’s approval or disapproval of the
CTTC’s marketing plan and budget can be overridden by a three-fifths vote of the
commissioners. Plaintiffs argue that, consequently, the CTTC’s decisions
regarding messaging ultimately reside in the hands of the industry. Even so, the
government retains a stronger power of review than that in Delano Farms, which
required no final review by the Secretary of Agriculture over the messages
promulgated by the California Table Grape Commission. 586 F.3d at 1229.
There are no principled distinctions to be drawn between the statutory
scheme in the present case and those determined to invoke the government speech
doctrine in Delano Farms and Paramount Land. The district court properly held
that the government speech doctrine bars plaintiffs’ free speech claims.
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III
The district court properly dismissed plaintiffs’ claim under 42 U.S.C. §
1983 as derivative of plaintiffs’ First Amendment and Commerce Clause claims.
The district court properly declined to exercise supplemental jurisdiction over
plaintiffs’ state law claims following its dismissal of plaintiffs’ federal law claims.
See 28 U.S.C. § 1367(c)(3). The district court properly declined to grant plaintiffs’
motion for leave to amend its complaint, as any amendment would be futile. See
Cook, Perkiss & Liehe, Inc. v. N. Cal. Collection Serv. Inc., 911 F.2d 242, 247 (9th
Cir. 1990) (per curiam) (affirming dismissal without leave to amend where
plaintiffs’ proposed amendments would fail to cure deficiencies and amendment
would be futile).
We need not, and do not, reach any other issue urged on appeal.
AFFIRMED.
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