Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca9-13-17358/USCOURTS-ca9-13-17358-2/pdf.json

Parties Involved:
Charlton H. Bonham
Appellant
Kevin Marilley
Appellee
Salvatore Papetti
Appellee
Savior Papetti
Appellee

Document Text:

FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

KEVIN MARILLEY; SALVATORE

PAPETTI; SAVIOR PAPETTI, on

behalf of themselves and

similarly situated,

Plaintiffs-Appellees,

v.

CHARLTON H. BONHAM, in his

official capacity as Director of

the California Department of

Fish and Game,

Defendant-Appellant.

No. 13-17358

D.C. No.

4:11-cv-02418-DMR

OPINION

Appeal from the United States District Court

for the Northern District of California

Donna M. Ryu, Magistrate Judge, Presiding

Argued and Submitted En Banc June 21, 2016

San Francisco, California

Filed December 21, 2016

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2 MARILLEY V. BONHAM

Before: Sidney R. Thomas, Chief Judge, and Stephen

Reinhardt, Kim McLane Wardlaw, William A. Fletcher,

Marsha S. Berzon, Milan D. Smith, Jr., Mary H. Murguia,

Jacqueline H. Nguyen, Andrew D. Hurwitz, John B.

Owens, and Michelle T. Friedland, Circuit Judges.

Opinion by Judge W. Fletcher;

Dissent by Judge Milan D. Smith, Jr.;

Dissent by Judge Reinhardt

SUMMARY*

Civil Rights

The en banc court reversed the district court’s summary

judgment in favor of plaintiffs and remanded for the district

court to enter summary judgment for California in an action

brought by a class of nonresident commercial fishers

challenging California’s nonresident fee differential for four

commercial fishing licenses, vessel registration and permits.

The en banc court first held that California’s fee

differentials for commercial fishing vessel registrations,

fishing licenses, Dungeness crab permits, and herring gill

net permits fell within the purview of the Privileges and

Immunities Clause. The en banc court determined that

whether the calculation was made at the general level of all

nonresident commercial fishers, or at the specific level of

nonresident commercial fishers for Dungeness crab and

* This summary constitutes no part of the opinion of the court. It has

been prepared by court staff for the convenience of the reader.

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MARILLEY V. BONHAM 3

herring, the fee differentials charged by California were less

than the amount by which California subsidized the

management of the nonresidents’ portions of its commercial

fishery. The en banc court therefore held that the fee

differentials survived the Privileges and Immunities Clause

challenge because the differentials were justified by a

substantial reason that was closely related to the differential

fees. 

The en banc court held that the fees survived an Equal

Protection Clause challenge because California’s interest in

receiving compensation for its commercial fishery

management provided a “rational basis” for its fee

differentials. 

Dissenting, Judge M. Smith, joined in full byHurwitz and

Owens and by Reinhardt and Berzon as to Part III, stated the

majority assumed away the major defect in its analysis: the

fact that nonresident fishermen pay multiple California taxes

too, yet nonetheless commence each fishing season thousands

of dollars in the hole by virtue of California’s discriminatory

differentials. In Judge M. Smith’s view, the fee differentials

are illegal under the Privileges and Immunities Clause.

Dissenting, Judge Reinhardt, joined by Judge Berzon,

concurred in Part III of Judge M. Smith’s dissent and agreed

that California failed to carry its burden of demonstrating that

the differential fees it charges to nonresidents were closely

drawn to the achievement of a substantial state objective. 

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4 MARILLEY V. BONHAM

COUNSEL

M. Elaine Meckenstock (argued) and Gary Alexander,

Deputy Attorneys General; Annadel A. Almendras,

Supervising Deputy Attorney General; Robert W. Byrne,

Senior Assistant Attorney General; Kamala D. Harris,

Attorney General; Office of the Attorney General, Oakland,

California; for Defendant-Appellant.

Stuart G. Gross (argued) and Jared M. Galanis, Gross Law,

San Francisco, California; Todd R. Gregorian and Tyler A.

Baker, Fenwick &West LLP, Mountain View, California; for

Plaintiffs-Appellees.

OPINION

W. FLETCHER, Circuit Judge:

California charges nonresident commercial fishers higher

fees for vessel registrations, licenses, and permits than it

charges resident commercial fishers. A certified class of

nonresident commercial fishers challenges the fee

differentials under the Privileges and Immunities Clause and

the Equal Protection Clause. We hold that California’s fee

differentials do not violate either clause.

I. Background

California requires both resident and nonresident

commercial fishers to register their vessels and to purchase

licenses and permits in order to engage in commercial fishing

in the waters of the state. See Cal. Fish & Game Code

§§ 7852, 7881 (2013). For many years, California has

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MARILLEY V. BONHAM 5

managed its commercial fishery at a substantial loss. SeeCal.

Fish & Game Code §§ 710.5(a), 710.7(a)(1) (2007). In Fiscal

Year (FY) 2010–11, the year for which we have the most

extensive documentation in the record, California’s

Department of Fish and Game spent approximately $20

million managing its commercial fishery. In the same year,

California received approximately $5.8 million in

fees—including registration, license, and permit fees paid by

residents and nonresidents—from participants in its

commercial fishing industry. The approximately $14 million

shortfall was covered by California’s general tax revenues.

California has statutorily mandated fees for commercial

fishing vessel registrations, licenses, and permits. See Cal.

Fish & Game Code §§ 713, 7852, 7881, 8280.6, 8550.5. Fees

are adjusted annually based on inflation. Beginning in 1986,

California charged nonresidents more than residents for

certain commercial fishing registrations, licenses, and

permits. In 1986, California for the first time charged

nonresidents more than residents for herring gill net permits. 

In 1993, California for the first time charged nonresidents

more for commercial fishing vessel registrations and

commercial fishing licenses. In 1995, California for the first

time charged nonresidents more for Dungeness crab permits.

In license year 2010, the fees for resident and nonresident

commercial fishers were as follows:

Commercial fishing vessel registration:

Resident: $317.00

Nonresident: $951.50

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6 MARILLEY V. BONHAM

Commercial fishing license:

Resident: $120.75

Nonresident: $361.75

Dungeness crab vessel permits:

Resident: $254.00

Nonresident: $507.50

Herring gill net permits:

Resident: $336.00

Nonresident: $1,269.00

Cal. Dep’t Fish & Game, Digest of California Commercial

Fishing Laws and Licensing Requirements (2010). 

Dungeness crab and herring were (and are) limited entry

fisheries for which a limited number of permits was (and is)

available.

Depending on the activity in question, a commercial

fisher in California could be required to pay several fees. For

example, a fishing vessel owner who personally engaged in

fishing for herring was required to pay a vessel registration

fee, a commercial fishing license fee, and a herring gill net

permit fee. For a California resident holding a single permit,

the total cost in 2010 would have been $773.75. For a

nonresident, the total cost would have been $2,582.25, or 3.3

times as much as for a resident. A vessel owner who

personally engaged in fishing for Dungeness crab was

required to pay a vessel registration fee, a commercial fishing

license fee, and a Dungeness crab permit fee. For a

California resident, the total cost in 2010 would have been

$691.75; for a nonresident, the total cost would have been

$1,820.75, or 2.6 times as much as for a resident. Of the

approximately $5.8 million in fees paid to California in FY

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MARILLEY V. BONHAM 7

2010–11 by the commercial fishing industry, approximately

$435,000 came from fee differentials paid by nonresidents.

Plaintiffs, a class of nonresident commercial fishers,

challenge the four nonresident fee differentials—for

commercial fishing vessel registrations, commercial fishing

licenses, Dungeness crab permits, and herring gill net

permits. Plaintiffs brought a class action in district court

against California’s Director of the Department of Fish and

Game (for convenience, “California”), challenging the fee

differentials as violating the dormant Commerce Clause, the

Privileges and Immunities Clause, and the Equal Protection

Clause. Plaintiffs voluntarily dismissed their dormant

commerce clause claim. The parties filed cross-motions for

summary judgment on the remaining two claims. The district

court ruled for the plaintiff class on its privileges and

immunities claim, did not reach its equal protection claim,

and entered judgment under Federal Rule of Civil Procedure

54(b). California appealed the grant of Plaintiffs’ motion for

summary judgment and the denial of its own motion for

summary judgment. A divided three-judge panel of this court

affirmed. Marilley v. Bonham, 802 F.3d 958 (9th Cir. 2015). 

We granted rehearing en banc. Marilley v. Bonham, 815 F.3d

1178 (9th Cir. 2016).

For the reasons that follow, we reverse the grant of

summary judgment to Plaintiffs. We remand with directions

to grant summary judgment to California.

II. Standard of Review

We review de novo a district court’s decision granting or

denying a motion for summary judgment. Rocky Mountain

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8 MARILLEY V. BONHAM

Farmers Union v. Corey, 730 F.3d 1070, 1086 (9th Cir.

2013).

III. Discussion

A. Privileges and Immunities

Article IV, Section 2, clause 1, of the Constitution

provides that “[t]he Citizens of each State shall be entitled to

all Privileges and Immunities of Citizens in the several

States.” The Clause’s “primary purpose . . . was to help fuse

into one Nation a collection of independent, sovereign

States.” Toomer v. Witsell, 334 U.S. 385, 395 (1948). The

Clause “establishes a norm of comity” between citizens of

separate states. Austin v. New Hampshire, 420 U.S. 656, 660

(1975).

A challenge under the Privileges and Immunities Clause

entails “a two-step inquiry.” Sup. Ct. of Va. v. Friedman,

487 U.S. 59, 64 (1988); United Bldg. and Constr. Trades

Council v. Camden, 465 U.S. 208, 218 (1984); see also

Council of Ins. Agents & Brokers v. Molasky-Arman,

522 F.3d 925, 934 (9th Cir. 2008). At step one, the plaintiff

bears the burden of showing that the challenged law “fall[s]

within the purview of the Privileges and Immunities Clause.” 

Friedman, 487 U.S. at 64 (quoting Camden, 465 U.S. at

221–22); see also Schoenefeld v. Schneiderman, 821 F.3d

273, 279 (2d Cir. 2016) (quoting Friedman, 487 U.S. at 64). 

If the plaintiff makes the required step-one showing, at step

two the burden shifts to the state to show that the challenged

law is “closely related to the advancement of a substantial

state interest.” Friedman, 487 U.S. at 65 (citing Sup. Ct. of

N.H. v. Piper, 470 U.S. 274, 284 (1985)); see also

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MARILLEY V. BONHAM 9

Schoenefeld, 821 F.3d at 279 (quoting Friedman, 487 U.S. at

67).

We address these two steps in turn.

1. Purview of the Clause

The “threshold matter” in any Privileges and Immunities

Clause case is whether a challenged law “fall[s] within the

purview” of the Clause. Camden, 465 U.S. at 218 (quoting

Baldwin v. Mont. Fish & Game Comm’n, 436 U.S. 371, 388

(1978)). A plaintiff must show that the challenged law treats

nonresidents differently from residents and impinges upon a

“fundamental” privilege or immunity protected bythe Clause. 

Camden, 465 U.S. at 218. Because California charges higher

fees to nonresident commercial fishers, see Cal. Fish & Game

Code §§ 7852, 7881, 8280.6, 8550.5, we easily conclude that

Plaintiffs’ interests are “facially burdened.” McBurney v.

Young, 133 S. Ct. 1709, 1715 (2013); see also Hillside Dairy

Inc. v. Lyons, 539 U.S. 59, 66–67 (2003); Carlson v. State,

798 P.2d 1269, 1274 (Alaska 1990) (“[L]icense fees which

discriminate against nonresidents are prima facie a violation

of [the Privileges and Immunities Clause].”). Further, an

unbroken line of authority characterizes commercial fishing

as a “common calling” that is protected by the Privileges and

Immunities Clause. See Mullaney v. Anderson, 342 U.S. 415,

417–19 (1952) (striking down Alaska’s differentials for

commercial fishing licenses as violating the Privileges and

Immunities Clause); Toomer, 334U.S. at 403 (“[C]ommercial

shrimping in the marginal sea, like other common callings, is

within the purview of the privileges and immunities clause.”);

Connecticut ex rel. Blumenthal v. Crotty, 346 F.3d 84, 96 (2d

Cir. 2003) (holding that “commercial lobstering” falls within

the purview of the Privileges and Immunities Clause);

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10 MARILLEY V. BONHAM

Tangier Sound Waterman’s Ass’n v. Pruitt, 4 F.3d 264, 266

(4th Cir. 1993) (explaining that commercial fishing is a

“protected privilege” because it implicates “‘the right to earn

a living’” (quoting Toomer, 344 U.S. at 403)); Carlson,

798 P.2d at 1274 (“Commercial fishing is a sufficiently

important activity to come within the purview of the

Privileges and Immunities Clause.”).

We therefore conclude that California’s challenged fee

differentials fall within the purview of the Privileges and

Immunities Clause.

2. Closely Related to the Advancement of a Substantial

State Interest

a. Commercial Fishing Fees and State Subsidy

California’s differential fees for nonresident fishers have

not reduced the percentage of nonresidents obtaining permits. 

In license year 1986, the year differential fees were

introduced for herring gill net permits, nonresidents held

17.5% of these permits in California. In license year 2012,

the most recent year for which we have information in the

record, nonresidents held 19% of these permits. In license

year 1993, the year differential fees were introduced for

commercial fishing vessel registrations and commercial

fishing licenses, nonresident commercial fishers held 7.2% of

all commercial fishing vessel registrations and 6.6% of all

commercial fishing licenses in California. In license year

2012, nonresident commercial fishers registered 9.4% of all

commercial fishing vessel registrations and 12.9% of all

commercial fishing licenses in California. In license year

1995, the year differential fees were charged for Dungeness

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MARILLEY V. BONHAM 11

crab permits, nonresidents held 9.8% of these permits. In

license year 2012, nonresidents held 13.9% of these permits.

According to a declaration of TonyWarrington, Assistant

Chief of the Law Enforcement Division of California’s

Department of Fish and Game (“DFG”) (now the Department

of Fish and Wildlife), a “reasonable and conservative

estimate” of commercial fishing enforcement expenditures by

the Law Enforcement Division in FY 2010–11 is

$10,320,963. According to a declaration of Helen Carriker,

Deputy Director of Administration of DFG, additional FY

2010–11 expenditures by the License and Revenue Branch of

DFG and by the Marine Region of DFG were $9,499,000. 

Carriker states, however, that these numbers do “not capture

all of DFG’s commercial fishing costs,” and that “all DFG

programs benefit commercial fishermen in some way.” 

These numbers also do not include fishing-related

conservation expenditures by other California agencies, such

as the California Coastal Commission. Based on the numbers

provided byWarrington and Carriker, a conservative estimate

is that California spent approximately $20,000,000 in FY

2010–11 on enforcement, management, and conservation

activities benefitting commercial fishers.

Warrington estimated the FY 2010–11 expenditures by

the Law Enforcement Division of DFG attributable to the

Dungeness crab fishery as $921,394, and attributable to the

herring gill net fishery as $75,094. He noted, however, that

these numbers “likely underestimate the enforcement costs

for these two fisheries” because not all personnel costs (in

terms of both numbers of people and numbers of overtime

hours) were included, and because some equipment expenses

were not included. Carriker estimated the FY 2010–11

expenditures by the License and Revenue Branch of DFG

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12 MARILLEY V. BONHAM

attributable to the Dungeness crab fishery as $83,921, and

attributable to the herring gill net fishery as $97,431. 

According to a declaration by Marci Yaremko,

Environmental Program Manager for DFG, FY 2010–11

expenditures by the Marine Region of DFG attributable to the

Dungeness crab fishery were “at least” $109,797, and

attributable to the herring gill net fishery were “at least”

$285,981. Combining the expenditures by the Law

Enforcement Division, the License and Revenue Branch, and

the Marine Region, in FY 2010–11 California’s DFG spent at

least $1,115,112 attributable to the Dungeness crab fishery

and at least $458,506 attributable to the herring gill net

fishery.

DuringFY 2010–11, California residents registered 2,812

commercial fishing vessels; nonresidents registered 304

vessels. Nonresidents’ vessels thus accounted for

approximately 10% of the total registrations in that year. 

California residents purchased 5,618 commercial fishing

licenses; nonresidents purchased 775 licenses. Nonresidents

accounted for approximately 12% of the total licenses. 

California residents paid the yearly fee for 500 Dungeness

crab permits; nonresidents paid the fee for 76 permits. 

Nonresidents accounted for approximately 13% of the total

Dungeness crab permits. California residents paid the yearly

fee for 180 herring gill net permits; nonresidents paid the fee

for 39 permits. Nonresidents accounted for approximately

18% of the total herring gill net permits.

During FY 2010–11, California received, from residents

and nonresidents, a total of approximately $2,415,000 for

commercial vessel registrations, commercial fishing licenses,

Dungeness crab permits, and herring gill net permits. Of that

amount, approximately $435,000 was due to fee differentials

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MARILLEY V. BONHAM 13

paid by nonresident fishers. Broken down by category, the

fee differentials were approximately $193,000 for

commercial fishing boat registrations; approximately

$187,000 for commercial fishing licenses; approximately

$19,000 for Dungeness crab permits; and approximately

$36,000 for herring gill net permits.

Overall, during FY 2010–11 California received

approximately $5,800,000 in commercial fishing revenues,

including revenues from resident and nonresident fishing

vessel registrations, fishing licenses, Dungeness crab permits,

and herring gill net permits. Using $20,000,000 as the

conservative estimate of California’s overall commercial

fishery expenditures, the FY 2010–11 shortfall was slightly

over $14,000,000. If we exclude from the calculation fee

differentials paid by nonresidents, the shortfall in FY

2010–11 was approximately $14,435,000. The shortfall was

covered by California’s general tax revenues. This shortfall

was a subsidy, or benefit, provided byCalifornia taxpayers to

the commercial fishing industry in California. The question

before us is whether, or to what degree, nonresident

commercial fishers may be required to pay differential fees to

account for their proportionate share of that subsidy, or

benefit.

b. Advancement of a Substantive State Interest

i. State Expenditures and Compensation by Nonresidents

(a) State Expenditures

The Supreme Court has decided two cases in which

differential fees were charged to nonresident commercial

fishers. First, in Toomer v. Witsell, 334 U.S. 385 (1948),

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14 MARILLEY V. BONHAM

South Carolina charged a license fee of $25 for commercial

shrimp boats owned by state residents. It charged a license

fee of $2,500—one hundred times greater—to commercial

shrimp boats owned by nonresidents. Id. at 389. The Court

wrote that “South Carolina plainly and frankly discriminates

against non-residents, and the record leaves little doubt but

what the discrimination is so great that its practical effect is

virtually exclusionary.” Id. at 396–97; see also id. at 398

(noting “a near equivalent of total exclusion”). The Court

struck down the fee differential as a violation of the

Privileges and Immunities Clause. Id. at 403. The Court was

careful, however, to endorse differential fees that were

compensation or reimbursementfor state-provided benefits as

to which nonresidents would otherwise be free riders. The

Court wrote that the Clause allows a state “to charge nonresidents a differential which would merely compensate the

State for any added enforcement burden they may impose or

for any conservation expenditures from taxes which only

residents pay.” Id. at 399.

Second, in Mullaney v. Anderson, 342 U.S. 415 (1952),

the Tax Commissioner of Alaska charged a commercial

fishing license fee of $5 to residents and a $50 fee—a ten

times greater fee—to nonresidents. Alaska sought to justify

the fee differential based on enforcement costs attributable to

nonresident commercial fishers, but the record did not

support its attempted justification. Indeed, wrote the Court,

the Tax Commissioner and his Deputy “specifically

disclaimed any knowledge of the dollar cost of enforcement.” 

Id. at 418. Applying the Privileges and Immunities Clause to

a Territory (as Alaska then was), the Court struck down the

fee differential. The Court quoted the language from Toomer

endorsing differential fees that prevent nonresidents from free

riding on state-provided enforcement and conservation

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MARILLEY V. BONHAM 15

efforts, id. at 417, and the Court was careful to say that

precise cost and reimbursement figures were not required in

order to justify differential fees, id. at 418 (“Constitutional

issues affecting taxation do not turn on even approximate

mathematical determinations.”).

To justify the fee differentials challenged in this case,

California points to the approximately $14 million yearly

shortfall in its expenditures in managing its commercial

fishery. As noted above, without the revenue produced by the

fee differentials, the yearly shortfall would be an additional

$435,000. California contends that the fee differentials

charged to nonresident commercial fishers appropriately

compensate it for costs incurred in enforcement and

conservation efforts attributable to nonresidents as their

proportionate share, and that the fee differentials reduce

(though do not entirely eliminate) the free-rider problem that

would otherwise exist.

On several occasions, the Supreme Court has stated that

a state’s expenditures may justify discrimination against

nonresidents that would otherwise be impermissible under the

Privileges and Immunities Clause. As just noted, the Court

stated in Toomer and Mullaney that a state may charge

differential fees to nonresident commercial fishers in order to

recover the state’s expenditures in enforcement and

conservation measures that are attributable to the

nonresidents. In Camden, a municipal ordinance required

that at least forty percent of workers employed on city

construction projects be residents of Camden, New Jersey. 

The Court wrote, “The fact that Camden is expending its own

funds or funds it administers in . . . terms of a grant is

certainly a factor—perhaps the crucial factor—to be

considered in evaluating whether the statute’s discrimination

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16 MARILLEY V. BONHAM

violates the Privileges and Immunities Clause.” Camden,

465 U.S. at 221.

The Court’s decisions under the Commerce Clause make

much the same point about state expenditures. Commerce

Clause decisions are relevant to the Privileges and

Immunities Clause because the two clauses share the same

underlying concerns. See, e.g., Hicklin v. Orbeck, 437 U.S.

518, 531–32 (1978) (“[T]he mutually reinforcing relationship

between the Privileges and Immunities Clause . . . and the

Commerce Clause—a relationship that stems from their

common origin in the Fourth Article of the Articles of

Confederation and their shared vision of federalism . . .

—renders several Commerce Clause decisions appropriate

support for our conclusion [under the Privileges and

Immunities Clause].” (internal citation omitted)). In Reeves,

Inc. v. Stake, 447 U.S. 429 (1980), South Dakota built and

owned its own cement plant. When demand for cement

exceeded supply, South Dakota instituted a policy of

satisfying all orders from South Dakota customers first,

relegating out-of-state customers to the end of the line. The

Court sustained the policy against a dormant Commerce

Clause challenge, writing:

The State’s refusal to sell to buyers other than

South Dakotans is “protectionist” only in the

sense that it limits benefits generated by a

state program to those who fund the state

treasury and whom the State was created to

serve . . . . Such policies, while perhaps

“protectionist” in a loose sense, reflect the

essential and patentlyunobjectionable purpose

of state government—to serve the citizens of

the State.

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MARILLEY V. BONHAM 17

Id. at 442. Similarly, in McBurney v. Young, 133 S.Ct. 1709

(2013), the Supreme Court rejected a dormant Commerce

Clause challenge to a Virginia Freedom of Information Act

provision under which only Virginia residents were allowed

to compel production of state government documents. Citing

Reeves, the Court wrote, “Insofar as there is a ‘market’ for

public documents in Virginia, it is a market for a product that

the Commonwealth has created and of which the

Commonwealth is the sole manufacturer.” Id. at 1720. The

Court therefore held that Virginia could reserve for its

citizens the benefits of the product it had created through the

expenditure of state funds.

(b) Compensation by Nonresidents for State-provided

Benefits

The core principle of the foregoing cases is that when a

state makes an expenditure from a fund to which nonresidents

do not contribute, and when the state provides a benefit

through that expenditure to both residents and nonresidents,

the state may exclude nonresidents from the benefit either in

whole or in part, or it may seek compensation from

nonresidents for the benefit conferred. When the benefit at

issue is access to a natural resource, the state may not exclude

nonresidents, but it may seek reimbursement for money spent

to manage and preserve the resource. In such cases, as the

Court wrote in Toomer, the Privileges and Immunities Clause

allows a state “to charge non-residents a differential which

would merely compensate the State for any added

enforcement burden theymay impose or for any conservation

expenditures from taxes which only residents pay.” Toomer,

334 U.S. at 399.

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18 MARILLEY V. BONHAM

Several related principles come from these same cases. 

First, the benefit provided to a nonresident, and the

appropriate amount of compensation from the nonresident,

need not be determined with mathematical precision. The

constitutional question “do[es] not turn on even approximate

mathematical determinations.” Mullaney, 342 U.S. at 418. 

Second, we accord states deference in determining the benefit

provided and the appropriate amount of compensation. A

privileges and immunities inquiry “must . . . be conducted

with due regard for the princip[le] that the States should have

considerable leeway in analyzing local evils and in

prescribing appropriate cures.” Toomer, 334 U.S. at 396. 

Third, in seeking compensation from nonresidents, a state

must treat nonresidents and residents with “substantial

equality.” Id. at 396 (“[I]t was long ago decided that one of

the privileges which the [Privileges and Immunities Clause]

guarantees to citizens of State A is that of doing business in

State B on terms of substantial equality with the citizens of

that State.”).

Consistent with these principles, we may calculate at a

general level the benefit provided by California and the

appropriate compensation from nonresident fishers. 

California spent approximately $20,000,000 managing its

commercial fishing industry in FY 2010–11. Not including

the fee differentials paid by nonresident fishers, California

received a total amount of approximately $5,365,000 in fees

from the commercial fishing industry. This amount includes

all fees, not limited to commercial fishing license fees,

commercial fishing vessel registration fees, Dungeness crab

permits, and herring gill net permits. Of that total amount

(again excluding the amount paid in fee differentials),

approximately $1,980,000 came from registration, license,

and permit fees paid by commercial fishers. The remaining

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MARILLEY V. BONHAM 19

approximately $3,385,000 came from fish landing taxes and

from licensing fees paid by fish buyers, sellers, and

importers. The shortfall in revenues (excluding nonresident

differentials) in FY 2010–11was approximately$14,635,000,

or approximately 73% of the entire amount spent by

California in managing its commercial fishery. The shortfall

was a subsidy, or benefit, provided by California to its

commercial fishing industry, paid by California taxpayers. 

All commercial fishers in California—residents and

nonresidents alike—benefited from this subsidy.

We will assume, as a rough estimate, that commercial

fishers as a whole benefited from the states’ subsidy in

proportion to the amount they paid in fees. Excluding fee

differentials, the amount paid to California by commercial

fishers ($1,980,000) was 37% of the total amount paid to

California by the entire commercial fishing industry

($5,365,000). Thirty-seven percent of the state’s $14,635,000

subsidy is approximately $5,341,000. That amount went to

commercial fishers as their proportionate share of the subsidy

in FY 2010–11. Nonresident commercial fishers in

California were 12% of all commercial fishers in FY

2010–11. Twelve percent of the $5,341,000 subsidy that

went to all commercial fishers is approximately $641,000. 

California could have charged up to that amount to

nonresident fishers in FY 2010–11, as their proportionate

share of the subsidy, or benefit, provided to them by

California out of its general fund. In actual fact, nonresident

fishers paid a total of $435,000 in fee differentials in FY

2010–11, substantially less than the amount of their

proportionate share of the subsidy, or benefit, provided to

them by California.

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20 MARILLEY V. BONHAM

We may also calculate the subsidies provided to the two

specific fisheries for which California charges fee

differentials—Dungeness crab and herring. As described

above, in FY 2010–11 California’s DFG spent approximately

$1,115,000 attributable to the Dungeness crab fishery and

approximately $460,000 attributable to the herring fishery. 

As noted above, the overall subsidy provided byCalifornia to

its commercial fishery is 73% of California’s total

expenditures for managing its commercial fishery. We will

assume, as a rough estimate, that 73% of the amount spent on

the Dungeness crab and herring fisheries is the amount by

which those specific fisheries were subsidized in FY

2010–11.

Seventy-three percent of the subsidy provided to the

Dungeness crab fishery is approximately $814,000. 

Nonresidents were 13% of the Dungeness crab permit holders

in FY 2010–11. Thirteen percent of $814,000 is

approximately $106,000, which is the proportionate share of

the subsidy provided to nonresident Dungeness crab fishers

in FY 2010–11. The differential fee charged to nonresident

Dungeness crab fishers in FY 2010–11 was approximately

$19,000, substantially less than the $106,000 subsidy, or

benefit, provided to them.

Seventy-three percent of the subsidy provided to the

herring fishery is approximately $335,000. Nonresidents

were 18% of the herring gill net permit holders in FY

2010–11. Eighteen percent of $335,000 is approximately

$60,000. The differential fee charged to nonresident herring

gill net fishers in FY 2010–11 was $36,000, substantially less

than the $60,000 subsidy, or benefit, provided to them.

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MARILLEY V. BONHAM 21

Thus, whether the calculation is made at the general level

of all nonresident commercial fishers, or at the specific level

of nonresident commercial fishers for Dungeness crab and

herring, the fee differentials charged by California are less

than the amount by which California subsidizes the

management of the nonresidents’ portions of its commercial

fishery.

In contrast to the fee differential charged in Toomer,

California commercial fishing differentials are not “virtually

exclusionary.” Toomer, 334 U.S. at 397. Indeed, quite the

contrary. As the numbers given above demonstrate, the

percentages of nonresident fishing vessel registrations,

nonresident commercial fishing licenses, nonresident

Dungeness crab permits, and nonresident herring gill net

permits have all increased since the institution of differential

fees for nonresidents. Further, in contrast to the fee

differentials in Toomer and Mullaney, the multiples of the

fees charged to residents are relatively modest. In Toomer,

South Carolina charged nonresident shrimpers one hundred

times what it charged residents. In Mullaney, Alaska charged

nonresident fishers ten times what it charged residents. In

California, the multiples ranged from about two to slightly

less than four.

We therefore conclude that the fee differentials charged

by California are permitted under the Privileges and

Immunities Clause.

ii. California Taxes Paid by Nonresident Fishers

The above analysis is premised on the nonresident fishers

in this case not having paid “taxes which only [California]

residents pay.” Toomer, 334 U.S. at 399. Plaintiffs did not

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22 MARILLEY V. BONHAM

argue in the district court or in their briefs to us that they have

paid California income tax on their earnings from commercial

fishing in California, and that they are therefore protected by

the Privileges and Immunities Clause from having to pay fee

differentials. Plaintiffs made this argument for the first time

during oral argument before our en banc panel. Our

dissenting colleagues use Plaintiffs’ late-raised argument as

the central rationale of their dissent. We could hold

Plaintiffs’ argument waived for failure to raise it in the

district court and for failure to raise it in their briefs to us. 

However, we address it on the merits, for there is enough

uncontested information in the record to allow us to consider

and reject it. Because we reject the argument, there is no

unfairness to California resulting from Plaintiffs’ failure to

raise it until oral argument before our en banc panel.

If Plaintiffs paid more than de minimus income tax to

California, such that they should be assimilated, either

entirely or in part, to California resident taxpayers for

purposes of the Privileges and Immunities Clause, we would

have to modify our analysis. However, we do not need to do

so because the three named plaintiffs have paid either no or

minimal California income tax. One of the named plaintiffs

has fished commercially in California for many years and has

never paid California income tax. The other two named

plaintiffs have fished commercially in California for many

years; each has paid income taxes in California for only three

of those years.

Named plaintiff Savior Papetti lives in McKinney, Texas. 

He owns two commercial fishing boats. He uses one of them

to fish in Alaska. He has kept the other boat in San Francisco

since 2000. He does not own any herring gill net permits, but

has fished regularly for herring in California, missing only a

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MARILLEY V. BONHAM 23

few years, by leasing permits from others. He has fished for

Dungeness crab regularly since 2006 except for a “couple [of]

years.” He stated in his deposition that he has filed California

tax returns “every year.” He specifically stated that he has

not paid California income tax since 1992. There is nothing

in the record to indicate that he paid California income taxes

before 1992.

Named plaintiff Salvatore Papetti, Savior’s father, lives

in Bellingham, Washington. He states in his deposition that

he has worked as a commercial fisherman since 1963. He

owns two commercial fishing boats. He keeps one of them in

Alaska. He now uses it to fish for salmon, but in the past has

used it to fish for Dungeness crab and herring in California. 

At the time of his deposition, his other boat was in

Washington for repairs. He uses that boat to fish for herring

in Alaska and in California, and for salmon in Washington. 

He fished for Dungeness crab in California as late as 2007. 

About five or six years ago, he sold his crab permit to his son

Savior. He has never missed a herring season in California

except the year the season was closed due to an oil spill in

San Francisco Bay. He has filed California income tax

returns “every year,” but has paid income taxes to California

in only three of those years. He paid $331 in 2004, $652 in

2009, and $2,273 in 2010.

Finally, named plaintiff Kevin Marilley lives in Lynden,

Washington. He has worked as a commercial fisherman since

1974. He owns three commercial fishing boats. He keeps

two in Alaska and uses them to fish there. He keeps the third

boat in Bellingham, Washington, and uses it to fish for

salmon in Alaska and herring in California. He fished for

squid and herring in California between 1989 and 2005, and

fished for squid in California in 2009. He regularly fished for

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24 MARILLEY V. BONHAM

herring in California through 2007. He stated in his

deposition that he intended to fish for herring in California in

2013. He stated in his deposition that he “believe[d]” he filed

a California tax return for every year he fished in California

up through 2003. The last time he filed a tax return in

California was 2003. He paid income tax in California in

only three years. He paid $153 in 1994, $3,161 in 1995, and

$845 in 1996. He last paid California income tax twenty

years ago.

Our dissenting colleagues do not ask to alter our analysis

based on the non-existent or minimal California income taxes

paid by the three named plaintiffs. Rather, they ask us to do

so based on an unsupported assumption that unnamed class

members paid substantially more in California income taxes

than did the named plaintiffs.

The record contains no evidence of California income

taxes paid by any of the unnamed class members. Attorneys

for the plaintiff class had an opportunity in the district court

to present evidence of California income taxes paid by

unnamed class members, but they failed to present any such

evidence. Nor did they make any argument in the district

court based on payment of California income taxes by any

class member, named or unnamed. An assumption that

unnamed class members paid substantially more than the

named plaintiffs is inconsistent with the basic premises of

class certification. Federal Rule of Civil Procedure 23(a)(3)

requires that the “claims . . . of the representative parties [be]

typical of the claims . . . of the class.” That is, a claim by an

unnamed member of the class must match a “typical” claim

by a named plaintiff. In this case, there is no such “typical”

claim in the complaint because the named plaintiffs made no

claim whatsoever based on their payment of California

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MARILLEY V. BONHAM 25

income taxes. Rule 23(a)(2) also requires that there be

“questions of law or fact common to the class.” If a claim

based on the payment of California income taxes had been

made in the district court (which it was not), that claim was

required to have been based on law or fact “common to the

class.” To the extent there were facts common to such a

claim, if it had been made, the only facts in evidence were

those recounted above.

In short, our dissenting colleagues ask us to make an

assumption, based on sheer speculation, that unnamed class

members paid substantially more in California income taxes

than did the named plaintiffs. We respectfully decline to

make that assumption.

B. Equal Protection

Plaintiffs also challenged California’s commercial fishing

fee differentials under the Equal Protection Clause. The

district court struck down the fee differentials as a violation

of the Privileges and Immunities Clause and did not reach the

equal protection question. We could remand to the district

court to address that question in the first instance, but in the

interest of judicial efficiency we decide the question

ourselves.

Because California’s commercial fishing fee differentials

do not “classify persons based on protected characteristics,

such as race, alienage, national origin, or sex” or “affect the

exercise of fundamental rights,” rational basis review applies. 

Fields v. Legacy Health Sys., 413 F.3d 943, 955 (9th Cir.

2005); see also Country Classic Dairies, Inc. v. State of

Mont., Dep’t of Commerce Milk Control Bureau, 847 F.2d

593, 596 (9th Cir. 1988) (“[T]he right to pursue a calling is

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26 MARILLEY V. BONHAM

not a fundamental right for purposes of the Equal Protection

Clause.” (citingNew Orleans v. Dukes, 427 U.S. 297, 303–05

(1976) (per curiam))); see also Medeiros v. Vincent, 431 F.3d

25, 32 (1st Cir. 2005) (“The right to ‘make a living’ is not a

‘fundamental right,’ for either equal protection or substantive

due process purposes.”). Therefore, in order to succeed

Plaintiffs must “negat[e] everyconceivable basis which might

support the legislative classification” between residents and

nonresidents. Fields, 413 F.3d at 955. As explained above,

California has a “substantial reason” for charging nonresident

differentials. It has an obvious interest in recovering from

nonresident commercial fishers their share of the benefit

provided to them by its management of its commercial

fishery. Congress has recognized this interest as legitimate. 

See Pub. L. No. 109-13, § 6036(b)(1), 119 Stat. 231. But

even absent such congressional endorsement, California’s

interest in receiving compensation for the benefit its

management confers provides a “rational basis” for its fee

differentials.

Conclusion

We reverse the district court’s grant of summary

judgment to Plaintiffs. California’s fee differentials for

commercial fishing vessel registrations, fishing licenses,

Dungeness crab permits, and herring gill net permits survive

the Privileges and Immunities Clause challenge because the

differentials are justified by a substantial reason that is

closely related to the differential fees. The fees survive the

Equal Protection Clause challenge because California has a

rational basis for charging the differential fees. California is

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MARILLEY V. BONHAM 27

therefore entitled to summary judgment on both of Plaintiffs’

claims. We remand with directions to the district court to

enter summary judgment for California.

REVERSED and REMANDED.

M. SMITH, Circuit Judge, with whom HURWITZ and

OWENS, Circuit Judges, join in full, and REINHARDT and

BERZON, Circuit Judges, join as to Part III, dissenting:

The majority assumes away the major defect in its

analysis: the fact that nonresident fishermen pay multiple

California taxes too, yet nonetheless commence each fishing

season thousands of dollars in the hole by virtue of

California’s discriminatory differentials. To avoid dealing

with this problem, the majority employs the analytical head

fake of fixating on the named plaintiffs and ignoring the rest

of the class. It then opines that the named plaintiffs’ tax

liability is de minimus, assumes that finding is representative,

and concludes that its analysis need go no further.

That approach is deeply flawed. Our analysis cannot

properly ignore the bevy of taxes nonresident fishermen pay

collectively to the State. Moreover, the majority improperly

transposes the evidentiary burden: it is California that must

demonstrate that the differentials recoup a subsidy funded

only by its residents. Hence, any purported lack of evidence

on the tax liability of nonresident fishermen counts against

the State, not the other way around. The majority shrugs this

off, and thereby fails to require California to bear the burden

the Privileges and Immunities Clause demands.

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28 MARILLEY V. BONHAM

California, like the majority, overlooks how nonresident

taxes defray the costs of any subsidy for conservation, and

thereby fails to meet its burden to show its discrimination is

“closely drawn” to the achievement of a substantial state

objective. Sup. Ct. of Va. v. Friedman, 487 U.S. 59, 68

(1988). For that reason, I would affirm the district court’s

judgment in favor of the plaintiffs, and I respectfully dissent.

I.

Salvatore Papetti and his wife Nancy fish for herring

together in a two person team. They make the trip to San

Francisco from Bellingham, Washington, to fish on their

boat, the “Pacman.” It is tough work—“being on the ocean

day and night, your body wears out” because “when there’s

fish, you just got to go go go go . . . they’re here today and

they’re gone tomorrow. . . . You got to catch as much as you

can when you can.” They fish “five days a week, 24 hours a

day, Sunday sundown till Friday noon.” They land their

catch every day while the fish are still fresh to ensure the

bounty does not spoil.

They hold two commercial fishing licenses, three herring

gill net permits, and one commercial fishing vessel

registration. This would cost them $1566.50 in license fees

if they were California residents, using the majority’s

numbers from 2010. California, however, extracts $5482.00

from the Papettis, based simply on their status as

nonresidents. So, Salvatore and Nancy start the season with

a $3915.50 deficit, relative to their in-state competitors. 

Adding insult to injury, every year it gets worse because

commercial fishing fees are automatically indexed for

inflation. Cal. Fish & Game Code § 713 (2013). The effect

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MARILLEY V. BONHAM 29

of the indexing is to widen the gap between resident and

nonresident fishing license fees each season.

SaviorPapetti—Nancyand Salvatore’s son—must endure

the same built-in headwinds. He registers a boat in

California, obtains a fishing license, and secures permits to

fish for herring and crab. But since he hails from McKinney,

Texas, he starts each season $2062.00 behind his California

resident competitors. Kevin Marilley is no different. He sets

sail on the “Sundance Kid” near San Francisco to fish for

herring. He registers his boat, obtains a fishing license, and

has three herring gill net permits, so he starts $3674.50 in the

red, unlike his California resident competitors. Frustrated by

the disadvantage, Marilley and the Papettis challenge four of

California’s differential fees under the Privileges and

Immunities Clause of the U.S. Constitution.

A.

The Privileges and Immunities Clause is one of the

cornerstones upon which our nation was built. Its origins add

an important perspective on the State’s burden in this dispute.

After the revolution, “[t]he strong sympathies . . . which

bound the States together during a common war, dissolved on

the return of peace.” Gibbons v. Ogden, 22 U.S. 1, 223

(1824) (Johnson, J. concurring). For the first time, the states

found themselves “in the unlimited possession of those

powers over their own commerce, which they had so long

been deprived of, and so earnestly coveted.” Id. at 224. State

parochialism “began to show itself in iniquitous laws and

impolitic measures, from which grew up a conflict of

commercial regulations, destructive to the harmony of the

States.” Id.

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30 MARILLEY V. BONHAM

New York, for instance, obtained firewood from

Connecticut and goods from the farms of New Jersey, but

because such trade harmed domestic industry, the State

required “every Yankee sloop” and “Jersey market boat” to

pay an entrance fee and a duty. JOHN FISKE, THE CRITICAL

PERIOD OF AMERICAN HISTORY, 1783–1789 150S52 (1897). 

New Jersey retaliated by laying a tax on property New York

had acquired in Sandy Hook. Id. at 152. Connecticut’s

merchants refused “to send any goods whatever into the hated

state for a period of twelve months.” Id. Yet, as three other

New England states “closed their ports to British shipping,”

Connecticut saw fit to “thr[ow] hers wide open, an act which

she followed up by laying duties upon imports from

Massachusetts.” Id. at 148S49. Connecticut’s practice of

“denying to outlanders the treatment that its citizens

demanded for themselves was widespread.” Austin v. New

Hampshire, 420 U.S. 656, 660 (1975). “This came to

threaten at once the peace and safety of the union.” H. P.

Hood & Sons, Inc. v. Du Mond, 336 U.S. 525, 533 (1949)

(internal quotation marks omitted).

The new country initially tried to solve the problem with

the toothless Articles of Confederation, which provided:

The better to secure and perpetuate mutual

friendship and intercourse among the people

of the different States in this Union, the free

inhabitants of each of these States . . . shall be

entitled to all privileges and immunities of

free citizens in the several States; and the

people of each State shall have free ingress

and regress to and from any other State, and

shall enjoy therein all the privileges of trade

and commerce, subject to the same duties,

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MARILLEY V. BONHAM 31

impositions, and restrictions as the inhabitants

thereof . . . .

Art. IV. Since no state could unilaterally enforce this

provision, the economic interaction of the several states

became more and more fraught. Ultimately, this internecine,

economic fratricide became “the immediate cause[] that led

to the forming of a [constitutional] convention.” Gibbons,

22 U.S. at 224; see also KATHLEENM. SULLIVAN& GERALD

GUNTHER, CONSTITUTIONAL LAW 82 (17th ed. 2010) (“The

poor condition of American commerce and the proliferating

trade rivalries among the states were the immediate

provocations for the calling of the Constitutional

Convention.”)

The Privileges and Immunities Clause was primarily

aimed at “creat[ing] a national economic union,” Sup. Ct. of

N.H. v. Piper, 470 U.S. 274, 279S80 (1985), and was taken

from the Articles of Confederation “with no change of

substance or intent, unless it was to strengthen the force of the

clause in fashioning a single nation,” Austin, 420 U.S. at 661. 

It affirms “[t]he Citizens of each State shall be entitled to all

Privileges and Immunities of Citizens in the several States.” 

U.S. Const. art. IV, § 2, cl. 1. Alexander Hamilton referred

to the Clause quite simply as “the basis of the Union.” The

Federalist No. 80, at 502 (B. Wright ed., 1961). It “place[d]

the citizens of each State upon the same footing with citizens

of other States, so far as the advantages resulting from

citizenship in those States are concerned.” Paul v. Virginia,

75 U.S. 168, 180 (1868). The Court found it gave outsiders

“an exemption from higher taxes or impositions than are paid

by the other citizens of the state.” Corfield v. Coryell,

6 F.Cas. 546, 552 (No. 3,230) (Cir. Ct. E.D. Pa. 1823). “It

has been justly said that no [other] provision in the

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32 MARILLEY V. BONHAM

Constitution has tended so strongly to constitute the citizens

of the United States one people . . . .” Paul, 75 U.S. at 180.

B.

In light of this background, when states erect barriers that

impair our national economic unity, they bear a significant

burden of justification: laws implicating the Clause must

serve a “substantial state interest” and be “closely related” to

the advancement of that interest to be valid. Friedman,

487 U.S. at 65. A substantial interest does not exist “unless

there is something to indicate that non-citizens constitute a

peculiar source of the evil at which the [discriminatory]

statute is aimed.” Hicklin v. Orbeck, 437 U.S. 518, 525S26

(1978) (quotation marks omitted, brackets in original). States

of course do have some flexibility in prescribing appropriate

cures for local ills and, when levying fees, need not

demonstrate mathematical precision. See Toomer v. Witsell,

334 U.S. 385, 396 (1948). But citizens of State A must be

allowed to do business in State B “on terms of substantial

equality with the citizens of that State.” Id. (emphasis

added).

C.

The “evil” the fee differentials target in this case is the

potential for nonresidents to “free ride” on California’s

investment in its fisheries.1 The State’s valid interest thus lies

1 The California legislature never articulated this aim, but the State

insists the fee differentials were passed to close a budget gap. It is

undisputed that nonresident fishermen were never actually identified as a

unique source of any problem that would justify charging them a

differential. Additionally, as “the Clause forbids a State fromintentionally

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MARILLEY V. BONHAM 33

in seeking reimbursement for a benefit funded exclusively by

California residents. In this situation, California may exact

only “a differential which would merely compensate the State

for [1] any added enforcement burden [nonresidents] may

impose or [2] for any conservation expenditures from taxes

which only residents pay.” Toomer, 334 U.S. at 399

(emphasis added).2

giving its own citizens a competitive advantage in business or

employment,” it is appropriate to examine whether the differentials were

enacted for a protectionist purpose. McBurney v. Young, 133 S. Ct. 1709,

1716 (2013). Here, California’s enactment of the Dungeness crab fee

differential bears the hallmarks of economic protectionism. As the district

court observed, the California Assembly Committee on Water, Parks, and

Wildlife opposed an early version of the bill, noting it “provided[d] an

unfair advantage to the sponsors of the bill – the Pacific Coast Federation

of Fisherman [sic] [a resident fishermen advocacy group] – by making it

very difficult for any new crab fishers to obtain permits and enter the

market.” The Department of Fish and Game (“DFG”) later commented

“[t]his bill is an attempt to . . . control competition to California fishermen

and processors from out of state.” DFG’s enrolled bill report described

the legislation as “an industry sponsored bill to prevent out-of-state

commercial fishermen from moving into California and getting an undue

share of the California Dungeness crab resource.” When the fee was

renewed in 2006, Senate Republican analysis of the bill observed “where

resource management crosses the line into economic protectionism it

should be opposed . . . DFG should explore other management options that

focus on maintaining the crab population instead of the industry

population.”

2 The majority suggests that “a state’s expenditures may justify

discrimination against nonresidents.” Maj. Op. at 15. But the cases it

cites involve the Commerce Clause, not the Privileges and Immunities

Clause, and assume that nonresidents do not “fund the state treasury.” 

Reeves, Inc. v. Stake, 447 U.S. 429, 224 (1980); McBurney v. Young,

133 S. Ct. 1709, 1712S13 (2013) (quoting Reeves, 447 U.S. at 224).

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34 MARILLEY V. BONHAM

California elected to put all of its eggs in the second

basket, as it never asserted, much less provided any evidence,

that nonresident commercial fishermen impose any added

enforcement or management burden on the State.3In

conducting our analysis, we thus look to the aggregate

benefits nonresident fishermen receive at the expense of

California’s taxpayers. To calculate that benefit, I will

leverage, but do not endorse, the majority’s handiwork.

The majority assumes the $20 million spent on licensing

and enforcement is akin to conservation. Maj. Op. at 18–19. 

It then finds a $14,635,000 shortfall, after accounting for

$5,365,000 received in fees, not including differentials. Id.

Next, the majority assumes commercial fishermen benefitted

from the subsidy in proportion to the amount they paid in fees

($1,980,000 / $5,365,000).4Id. That equals thirty-seven (37)

percent of the $14,635,000 shortfall, meaning fishermen were

subsidized to the tune of $5,341,000. Id. at 19. Since

nonresidents account for twelve percent of commercial

fishermen, the majority tags them with twelve percent of that

amount. Id. at 19. In other words, according to the majority,

nonresident fishermen received a $641,000 “subsidy.” Id.

This analysis fails because it assumes that the State’s

subsidy derives from “taxes which only residents pay,”

Toomer, 334 U.S. at 399, notwithstanding the fact that the

3 The State concedes it did not analyze the impact of nonresident

commercial fishermen on its fisheries generally, nor identify any savings

it would realize if nonresidents were excluded from participating in its

fisheries. As such, there is no evidence in the record that the differentials

compensate for any added burden or expense nonresidents impose on

commercial fisheries.

4

 The State never advanced, let alone justified, this assumption.

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MARILLEY V. BONHAM 35

record shows that nonresident commercial fisherman pay

California taxes as well. Nonresident fishermen, in other

words, must “be assimilated, either entirely or in part, to

California resident taxpayers for purposes of the Privileges

and Immunities Clause,” Maj. Op. at 22, because—like

Golden State residents—they too pay taxes to fund the State’s

conservation expenditures.

II.

A.

The State’s expert, Dr. Carriker, says commercial

fishermen in California earned $150 million in 2009, $179

million in 2010, and $204 million in 2011. The State also

consistently represented it could charge fees to nonresident

fishermen in relation to their percentage of overall fishermen. 

Thus, taking the majority’s number, we can attribute twelve

percent of those earnings to the efforts of out-of-state

fishermen. By that account, nonresident fishermen paid

personal income taxes to the State on earnings approximating

$18–$24 million.5

We can also consider it in another way. Using the

landings data submitted both for residents and nonresidents,

Dr. Carriker submits that the “average per-fisherman income”

5 To be clear, California taxes the income of nonresidents “derived

from sources within this state,” Cal. Rev. & Tax. Code § 17041(i)(1)(B), 

“including income from a business, trade, or profession carried on within

this State.” Cal. Code Regs. tit. 18, § 17951-2. California also imposes a

property tax on boats, including those registered in California but located

outside of it. See California State Board of Equalization, Frequently

Asked Questions – Personal Property, https://www.boe.ca.gov/

proptaxes/faqs/personal.htm.

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36 MARILLEY V. BONHAM

in California was $91,293.03 in 2009, $105,858.00 in 2010,

and $105,070.28 in 2011. If we assume nonresident

fishermen are comparable to their in-state counterparts,

nonresidents would be liable for at least 9.3 percent in

personal income taxes on roughly those amounts. See

Franchise Tax Board, 2014 ANNUAL REPORT tbl.A1-B

(2014), available at https://www.ftb.ca.gov/Archive/

AboutFTB/Tax_Statistics/Reports/2014/Annual_Report.sht

ml#Tax_Rates (showing personal income tax rates for each

income level from 1935 to 2014) [hereinafter 2014 FTB

Report].

Alternatively, if we divide the aggregate earnings

(approximately $24 million) by the number of nonresident

fishermen (775), nonresidents would be paying California

taxes on $31,000 per year on average. This estimate,

however, assumes income is distributed evenly,

notwithstanding the fish will bite for some fishermen more

than others. Accordingly, $31,000 might be construed as the

median income, meaning half of nonresidentfishermenwould

make more each year, and the other half less. In that

scenario, it would not be surprising for the named plaintiffs

to have made modest in-state tax payments, even where

nonresident fisherman collectively contribute substantially.

California never contemplated, much less accounted for,

the contributions nonresident fishermen make in personal

income taxes.6 Based on the evidence in the record, however,

we can reasonably infer nonresident fishermen’s incomes

6 Regardless of when the issue was raised, the above evidence has

always been in the record, and we review a district court’s decision

granting a motion for summary judgment de novo. Rocky Mountain

Farmers Union v. Corey, 730 F.3d 1070, 1086 (9th Cir. 2013).

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MARILLEY V. BONHAM 37

contribute meaningfully in the aggregate to the State’s

conservation expenditures. See, e.g., SER 20 (“[A]

substantial portion of General Fund revenue comes from

nonresident sources, including personal income tax paid by

nonresidents,including nonresident commercial fishermen.”).

Consider also the fact that California derives close to

thirty percent of the General Fund from sales and use tax

revenue. Nonresident fishermen like the Papettis pay those

taxes just as California residents do—to purchase food, fuel,

and other necessary materials in California. I assume that

nonresident fishermen are also a salty bunch, and likely pay

excise taxes too, on cigarettes, beer, wine, and alcohol,

thereby adding further to the State’s general revenue. Yet

California makes no effort to account for any of these

nonresident funds in justifying its fee differentials, or to

explain how nonresidents remain on the “same footing” as

residents in spite of them. That simply is unjustifiable; under

the Privileges and Immunities Clause California is required

to do more. See Mullaney v. Anderson, 342 U.S. 415, 418

(1952) (“[S]omething more is required than bald assertion to

establish a reasonable relation between the higher fees and

the higher cost[s] to the [State].”); Tangier Sound

Waterman’s Ass’n v. Pruitt, 4 F.3d 264, 267 (4th Cir. 1993)

(finding differential not “closely related” to asserted interest

because, among other things, State gave “no recognition” to

sales and use taxes paid by nonresident fishermen); Carlson

v. State, 798 P.2d 1269, 1278 (Alaska 1990) (reading Toomer

“to mean that if nonresident fishermen paid the same taxes as

Alaskans and these taxes were substantially the sole revenue

source for the state out of which conservation expenditures

were made, then differential fees would not be permissible”).

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38 MARILLEY V. BONHAM

The majority concedes its analysis would have to be

“modif[ied]” if nonresident fisherman “paid more than de

minimus” taxes to California, Maj. Op. at 22, but it shrugs off

the few thousands of dollars the named plaintiffs paid to

California as being insufficient to meet its novel standard. By

itself, this is error—the State must demonstrate “a reasonable

relationship between the danger represented by non-citizens,

as a class, and the severe discrimination practiced upon

them.” Toomer, 334 U.S. at 399 (emphasis added). In this

case, California has failed to make any such showing.

Apparently unable to respond more adequately to our

argument, the majority steps purposefully to the plate, swings

as hard as it can, and whiffs, by fixating on Rule 23’s class

certification standards. Emphatically, those standards do not

require that class members be carbon copies of each other. 

They therefore cannot excuse the majority’s failure to grapple

with the hole in its argument. For instance, the majority

invokes “commonality,” but “[t]he existence of shared legal

issues with divergent factual predicatesis sufficient” to meet

that “permissive” standard. Hanlon v. Chrysler Corp.,

150 F.3d 1011, 1019 (9th Cir. 1988) (emphasis added). 

Likewise, “typicality” requires “only that [the named

plaintiffs’] claims be ‘typical’ of the class, not that [the

named plaintiffs] be identically positioned to each other or to

every class member.” Parsons v. Ryan, 754 F.3d 657, 686

(9th Cir. 2014); see also Ellis v. Costco Wholesale Corp.,

657 F.3d 970, 985 n.9 (9th Cir. 2011) (“Differing factual

scenarios resulting in a claim of the same nature as other class

members does not defeat typicality.”).

Here, the district court found both elements satisfied

because the plaintiffs “articulated a common constitutional

issue at the heart of each proposed class member’s claim for

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MARILLEY V. BONHAM 39

relief,” and resolution of that issue “would inform similar

claims by other proposed class members regardless of factual

differences among class members.” This finding by no

means warrants the majority’s factual assumption that every

class member paid the same amount as the named plaintiffs

in state taxes to California. Maj. Op. at 25. Indeed, Rule 23

requires only that each class member here pay fees higher

than those charged to in-state residents. And, though the

extent of nonresident tax liability might be a common

question, Rule 23 permits certification even where the answer

varies based on the unique factual circumstances of each

nonresident fisherman. In short, neither “commonality” nor

“typicality” mean the majority must assume every

nonresident fisherman, across all species, location, and

circumstance, earned the same income as the named plaintiffs

and owed the same taxes to the state of California. Maj. Op.

at 24–25. In fact, the opposite conclusion is more reasonable

given some nonresidents fish for herring, others for crab, and

still others for both, to say nothing of the fishermen who add

outings for crayfish or lobster, amongst many other

commodities. Were it not evident enough that the majority is

seeking to avoid the elephant in the room, it bemoans the

absence of any information about the income taxes

nonresident fishermen pay to California, id. at 24, without

even considering the aggregate statistics cited above, and the

reasonable inferences drawn from those data.7

7 The majority asserts our inferences are unsupported, but that is

incorrect. Our assessment derives from the aggregate earnings statistics

California placed into the record, which were taken from landings data

submitted both for resident and nonresident commercial fishermen. See

supra II.A. We do not claim, as the majority states, that every unnamed

class member makes “substantially more” than the named plaintiffs. Maj.

Op. at 24. Our argument is that the record reasonably reflects that

nonresident fishermen—taken collectively, across the full range of their

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40 MARILLEY V. BONHAM

Even if we accept the majority’s framing, the named

plaintiffs can still “be assimilated . . . to California resident

taxpayers.” Maj. Op. at 22. We have no reason to believe

that fishermen are any different from resident and nonresident

tax-filers in the State more generally. And whereas fiftyeight (58) percent of resident filers owe personal income

taxes to California, sixty (60) percent of nonresident filers

owe them.8 Compare 2014 FTB Report tbl.B-4A (showing

58.4 percent of residents returns were taxable in 2013), with

id. tbl.B-4G (showing 60.2 percent nonresident returns were

taxable in 2013). So, like ordinary Californians, some

nonresident fishermen pay the State more in personal income

income distribution—pay taxes that contribute materially to the State’s

conservation expenditures (a fact California completely ignores). Unlike

the majority’s hypothesis, under which unnamed class members are clones

ofthe named plaintiffs, our assessment comports with common sense. We

appreciate that 775 fisherman—some of whom fish the whole year in

California, others of whom fish part-time—will earn incomes that fall

along a distribution, such that some will owe California income taxes, and

others will not. Given that point, the majority has no basis, under Rule 23

or otherwise, to assume the California tax liability of the three named

plaintiffs is broadly representative. More importantly, it is California’s

burden to demonstrate our understanding is untrue in order to justify its

discriminatory differentials. It has made no such showing in this case.

Next, while it is true that “[i]f a claim based on the payment of

California income taxes had been made in the district court, that claimwas

required to have been based on law or fact ‘common to the class,’” Maj.

Op. at 25, that observation affords the majority no help. The law common

to the class is the constitutional issue under the Privileges and Immunities

Clause, andRule 23(a)(2), stated in the disjunctive, requires nothingmore. 

In other words, the only common “claim” that is required by Rule 23 to

appear in the complaint is the one the plaintiffs advanced—that each class

member pays fees higher than those charged to California residents.

8

 The Franchise Tax Board’s 2014 Annual Report is the most recent

available data.

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MARILLEY V. BONHAM 41

taxes than others, but like Californians generally, nonresident

fishermen contribute meaningfully to the State’s coffers

collectively. All told, the majority improperly focuses on a

few fishermen whose contributions it deems insignificant on

the overall tax liability spectrum, but the record reflects, and

common sense dictates, nonresident fishermen’s taxes

contribute materially to conservation expenditures.

B.

By chalking up to a rounding error the taxes nonresidents

pay, the majority effectively shifts the applicable burden. 

Yet, any purported lack of evidence on the tax liability of

nonresident fishermen is a strike against California, not

against the plaintiffs. It is California that shoulders the

burden to demonstrate that its discrimination “bears a close

relation to the achievement of substantial state objectives.” 

Friedman, 487 U.S. at 70. Moreover, it is California that

must demonstrate its differentials “merely compensate” for

expenditures that derive from taxes “which only residents

pay.” Toomer, 334 U.S. at 399. Finally, it is California that

must demonstrate it permits nonresident fishermen to do

business “on terms of substantial equality” with citizens of

the State. Id. at 396. Unfortunately, the majority lets

California off the hook, for while the State is owed some

deference, it made no effort to account for nonresident taxes

whatsoever. California simply fails to meet its burden. The

upshot is that nonresident fishermen stand on different

footing than residents, whether fisherman or not. They alone

pay differentials but must also pay the same taxes on income

earned within the State.

To illustrate, the 775 nonresident fishermen can be

charged for a $641,000 “subsidy,” even though they pay state

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42 MARILLEY V. BONHAM

taxes to cover this conservation expenditure. In-state

fishermen, by contrast, receive a $4,700,080 subsidy, but

California’s 15,000,000 taxpayers collectively foot the bill. 

Accordingly, using the majority’s numbers, California

residents, whether fisherman or not, pay about thirty cents on

average towards the subsidy to in-state fishermen, whereas

nonresident fishermen are charged over $800 each on average

for the “subsidy” they receive.9

It bears repeating: California shoulders the burden of

showing the additional fees charged to nonresidents are

closely related to the “taxes which only residents pay,”

Toomer, 334 U.S. at 399, and California must permit

nonresident fishermen to do business on terms of substantial

equality with citizens of the State. By overlooking how the

taxes nonresident fishermen pay the State defray the costs of

any subsidy for conservation, California fails to meet its

burden. The fee differentials must accordingly be struck

down.

9 Notably, Carlson rejected the “proposition that the state may

subsidize its own residents in the pursuit of their business activities and

not similarly situated nonresidents, even though this results in substantial

inequality of treatment.” 798 P.2d at 1278. The court found such a

system“economically indistinguishable fromimposing a facially equal tax

on residents and nonresidents while making it effectively unequal by a

system of credits and exemptions.” Id. It declined to strike down the

differential imposed by Alaska on this basis because state taxes were not

“substantially the sole revenue source” for conservation expenditures. Id.

(noting 86 percent of state revenues derived from petroleum production). 

The opposite is true here—personal income tax and sales tax made up 86

percent of General Fund revenues for the year ending June 30, 2015. See

California State Controller’s Office, COMPREHENSIVEANNUALFINANCIAL

REPORT FOR THE FISCALYEAR ENDED JUNE 30, 2015 42 (2016), available

at http://www.sco.ca.gov/Files-ARD-Local/LocRep/cafr15web.pdf.

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MARILLEY V. BONHAM 43

C.

If left to stand on this showing, we have no reason to

think interstate fee differentials will not proliferate. Indeed,

California could, for example, charge nonresident truckers

and commercial airline pilots fees for earning a living off

state-subsidized highways and airports. And why wouldn’t

states seek to recoup from those professions conservation

expenditures aimed at maintaining air quality? As in this

case, they need only intend to close a budget gap and need

not identify any relationship between the shortfall and

nonresident truckers or pilots. Further, they need not

determine what burdens nonresidents impose, if any, on the

state’s air, roads, and other infrastructure. Nor would they

need to identify any savings the state would realize if

nonresident truckers and pilots were excluded. Finally, they

could, like California, ignore nonresident taxes in setting the

fee, so long as a few of the truckers or pilots earned incomes

that led to modest in-state tax payments. The Privileges and

Immunities Clause should preclude such barriers because

they disrupt interstate economic harmony unjustifiably. The

majority unfortunately holds otherwise, and thereby subverts

one of the most important economic compacts that initially

bound us together.

III.

This country is more than a league of confederated

states—it is a nation. Yet the enactment of discriminatory fee

differentials promotes our economic balkanization. We must

be mindful of competing interests when evaluating such

measures, but they require ample justification. California’s

showing in this case does not come close to meeting its

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44 MARILLEY V. BONHAM

burden, so the fee differentials are illegal under the Privileges

and Immunities Clause. I respectfully dissent.

REINHARDT, Circuit Judge, dissenting, in which BERZON,

Circuit Judge, joins.

I concur in Part III of Judge M. Smith’s dissent and agree

that California failed to carry its burden of demonstrating that

the differential fees it charges to nonresidents are “closely

drawn” to the achievement of a “substantial state objective.”

Supreme Court of Virginia v. Friedman, 487 U.S. 59, 68

(1988). Permissible state objectives include “compensat[ing]

the State for any added enforcement burden they may impose

or for any conservation expenditures from taxes which only

residents pay.” Toomer v. Witsell, 334 U.S. 385, 399 (1948).

Here, California does not contend that nonresident fishermen

impose any sort of added enforcement burden. Nor does the

state provide persuasive evidence that its fee differentials

bear a “reasonable relationship” to its legitimate interest in

receiving compensation from nonresidents for its

“conservation expenditures from taxes which only residents

pay.” Toomer, 334 U.S. at 399 (1948). Therefore, I agree with

Judge M. Smith that the state has failed to make the requisite

showing to justify any differential. That conclusion does not

embrace either of the views expressed by the original panel

as to how a differential should be calculated when it is in fact

justified. See Marilley v. Bonham, 802 F.3d 958, 966–68 (9th

Cir. 2015), reh’g en banc granted, 815 F.3d 1178 (9th Cir.

2016) (Graber., J., dissenting) (comparing the “per capita”

and “fair share” approaches to calculating a justified fee

differential).

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