Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caDC-05-07100/USCOURTS-caDC-05-07100-0/pdf.json

Parties Involved:
Alcoholic Beverage Regulation Administration
Appellee
Decatur Liquors, Inc.
Appellant
District of Columbia
Appellee
Chekole Teshome
Appellant

Document Text:

United States Court of Appeals 

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued February 2, 2007 Decided February 27, 2007 

No. 05-7099 

DECATUR LIQUORS, INC., AND

CHEKOLE TESHOME, 

APPELLEES/CROSS-APPELLANTS

V. 

DISTRICT OF COLUMBIA AND

ALCOHOLIC BEVERAGE REGULATION ADMINISTRATION, 

APPELLANTS/CROSS-APPELLEES

Consolidated with 

05-7100 

Appeal from the United States District Court 

for the District of Columbia 

(No. 04cv01971) 

Donna M. Murasky, Senior Assistant Attorney General, 

Office of the Attorney General for the District of Columbia,

argued the cause for appellants/cross-appellees. With her on 

the briefs were Todd S. Kim, Solicitor General, and Edward E. 

Schwab, Deputy Solicitor General. 

USCA Case #05-7100 Document #1025100 Filed: 02/27/2007 Page 1 of 7
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Paul R. Q. Wolfson was on the brief for amici curiae

South Columbia Heights Neighborhood Association and 

North Columbia Heights Neighborhood Association. With 

him on the brief was David F. Olsky. 

Craig C. Reilly argued the cause for appellees/crossappellants. With him on the briefs were Paul Pascal and 

Hanoi Veras. 

Scott M. Hammack argued the cause for amicus curiae

American Civil Liberties Union of the National Capital Area 

in support of appellees/cross-appellants. With him on the 

brief were Arthur B. Spitzer, Jonathan D. Hacker, and Jason 

A. Abel. 

Before: GINSBURG, Chief Judge, and GRIFFITH, Circuit 

Judge, and WILLIAMS, Senior Circuit Judge. 

Opinion for the Court filed by Senior Circuit Judge

WILLIAMS. 

WILLIAMS, Senior Circuit Judge: When the District of 

Columbia Council was considering revisions to the District’s 

alcoholic beverage laws, then-Council Member (now Mayor) 

Adrian Fenty, who represented Ward 4, proposed a ward-wide 

four-year moratorium on the sale of single containers of 

beer—specifically, a rule barring retailers from breaking 

manufacturers’ packages of multiple containers of beer and 

selling a single container of 70 ounces or less. The underlying 

idea was that such sales were especially likely to lead to 

public drunkenness and other antisocial behavior. 

 On the first reading, April 20, 2004, the Council 

considered and rejected the proposed amendment. At the 

“second reading,” on May 18, Member Fenty proposed a more 

“targeted” version of the moratorium, banning singles sales in 

what one might call a gerrymandered zone within Ward 4—a 

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zone that in fact encompassed all existing Ward 4 Class A and 

Class B liquor licensees. Singles sales would remain 

permissible outside the moratorium zone, and licensees could 

transfer their licenses to areas outside the zone. 

At the May 18 hearing a Council member objected that 

Fenty’s revision constituted a substantial change in his earlier 

amendment, so that immediate passage would run afoul of the 

Home Rule Act’s requirement that “[e]ach proposed act . . . 

shall be read twice in substantially the same form, with at 

least 13 days intervening between each reading.” See D.C. 

Code § 1-204.12(a). The Council chair overruled the 

objection, and the Council approved the revised amendment 

by a vote of 11-2. The Council passed the entire bill on May 

19 and, after considering and approving further amendments, 

did so again on June 1. Following expiration of the 

Congressional review period, the Omnibus Alcoholic 

Beverage Amendment Act of 2004, D.C. Law 15-187, 51 

D.C. Reg. 6525-55 (July 2, 2004), including the targeted 

Ward 4 moratorium, codified as amended at D.C. Code § 25-

341 (2004), went into effect. 

Plaintiffs, who hold liquor licenses in Ward 4, sued in 

district court claiming that the ban violated the Home Rule 

Act’s “two readings” requirement, plus several provisions of 

the federal Constitution. The district court granted plaintiffs’ 

motion for a temporary restraining order on the day they filed 

suit, November 12, 2004, and issued a preliminary injunction 

on December 22. On June 16, 2005, the district court granted 

plaintiffs’ motion for summary judgment with respect to the 

alleged violation of the Home Rule Act; in light of that ruling 

it dismissed the federal claims as moot. 

A federal court has jurisdiction over substantial federal 

claims, together with local law claims that are part of a 

common nucleus of operative fact. But a federal court lacks 

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jurisdiction altogether if the federal claims are insubstantial. 

Finding that to be the case here, we vacate the district court’s 

judgment and order the district court to dismiss the local law 

claim without prejudice. 

* * * 

The defendants did not argue to the district court that 

plaintiffs’ federal claims were insubstantial. They do raise 

that argument here, however, and as the question is essential 

for our and the district court’s subject-matter jurisdiction, 

there is no waiver; indeed, we would have to address it on our 

own motion if they had failed to do so. Citizens for the 

Abatement of Aircraft Noise, Inc. v. Metropolitan Washington 

Airports Authority, 917 F.2d 48, 53 (D.C. Cir. 1990), aff’d, 

501 U.S. 252 (1991). 

When federal and local claims all derive from a common 

nucleus of operative fact, the claims constitute a single case or 

controversy within the constitutional and statutory jurisdiction 

of the federal courts. See Exxon Mobil Corp. v. Allapattah 

Services, Inc., 545 U.S. 546, 552–53 (2005); United Mine 

Workers v. Gibbs, 383 U.S. 715, 725 (1966); 28 U.S.C. 

§ 1367. Laws passed by Congress that are applicable 

exclusively to the District of Columbia are not federal law for 

jurisdictional purposes, see 28 U.S.C. §§ 1331, 1366, so any 

claims based on such laws are necessarily local. Although the 

Home Rule Act contained elements of federal law, see 

Thomas v. Barry, 729 F.2d 1469 (D.C. Cir. 1984), neither 

party suggests that the two readings requirement is anything 

other than local law. Thus the district court could not have 

entertained plaintiffs’ claim under the Home Rule Act unless 

the court had supplemental jurisdiction over the claim. 

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A necessary condition for the exercise of supplemental 

jurisdiction is the substantiality of the federal claims. Gibbs, 

383 U.S. at 725. If the federal claims are “obviously 

frivolous” or “so attenuated and unsubstantial as to be 

absolutely devoid of merit,” Hagans v. Lavine, 415 U.S. 528, 

536–37 (1974) (internal quotation marks and citations 

omitted), a federal court lacks subject-matter jurisdiction over 

those claims and, consequently, any local law claims. So it is 

here. 

At oral argument we asked plaintiffs’ counsel what they 

viewed as their most substantial claim, and he pointed to the 

argument that the District violated the Fifth Amendment’s 

Due Process Clause by denying the affected licensees 

individualized notice and an opportunity to be heard. The 

Supreme Court’s decision in Bi-Metallic Investment Co. v. 

State Board of Equalization, 239 U.S. 441 (1915), clearly 

forecloses the argument. “Where a rule of conduct applies to 

more than a few people it is impracticable that every one 

should have a direct voice in its adoption. The Constitution 

does not require all public acts to be done in town meeting or 

an assembly of the whole.” Id. at 445. Here, the moratorium 

zone covered all 73 liquor stores in Ward 4. This is the 

classic Bi-Metallic scenario—the statute prohibits the same 

conduct by all 73 licensees. Not only would individualized 

hearings be impractical, they would be unnecessary, as the 

only disputable issue would be the link between the forbidden 

sales and the District’s legislative goal. Although there might 

be situations where the Due Process Clause entitled a party to 

a hearing on whether the relevant legislative purposes called 

for inclusion of the party’s property within a special 

geographic zone, see, e.g., Chicago, Milwaukee, St. Paul & 

Pacific Railraod Co. v. Risty, 276 U.S. 567, 574–75 (1928), 

this is not such a case; the purpose of the moratorium zone 

was clear, and there is no dispute that encompassing all Ward 

4 licensees matched the legislative goal. 

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Plaintiffs also allege a violation of the substantive 

component of the Fifth Amendment’s Due Process Clause. 

We have recently held that “substantive due process 

constrains only egregious government misconduct.” George 

Washington University v. District of Columbia, 318 F.3d 203, 

209 (D.C. Cir. 2003). An effort to stem public drunkenness 

by regulating the sale of alcohol doesn’t remotely qualify. 

Next is plaintiffs’ theory that the moratorium violates the 

equal protection component of the Fifth Amendment’s Due 

Process Clause because the moratorium covers only Ward 4 

liquor stores—and none elsewhere in the District. See Bolling 

v. Sharpe, 347 U.S. 497, 499 (1954). But it is inherent in the 

nature of regulation that some people and businesses will be 

treated differently from others. As plaintiffs acknowledge, 

geographic classifications need be supported only by a 

rational basis, as such classifications are not inherently 

suspect and don’t implicate a fundamental right. See City of 

Cleburne v. Cleburne Living Center, Inc., 473 U.S. 432, 439–

40 (1974). Council Member Fenty identified reasons why 

public drunkenness and other concerns were particularly acute 

in Ward 4, and, again, there can be no doubt that a link exists 

between the sale of alcohol and public drunkenness. Thus, 

plaintiffs’ equal protection claim is insubstantial. 

Fourth, plaintiffs allege that the moratorium effects an 

unconstitutional taking under the Fifth Amendment. But in 

Mugler v. Kansas, 123 U.S. 623 (1887), the Supreme Court 

rejected a taking claim by a brewery owner whose brewery 

lost 75% of its value as a result of a state ban on the making of 

intoxicating liquors other than “for medical, scientific, and 

mechanical purposes.” Id. at 633, 655, 657. The evolution of 

takings law since 1887 has offered nothing to help plaintiffs. 

Compare Keystone Bituminous Coal Ass’n v. DeBenedictis, 

480 U.S. 470, 495 (1987) (limiting takings claims on 

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preenforcement review to ones where the statute deprives 

plaintiffs of all “economically viable use” of their property). 

Finally, plaintiffs assert that the statute is void for 

vagueness. Outside of the First Amendment context, a 

plaintiff must show that the law in question “is impermissibly 

vague in all of its applications.” Village of Hoffman Estates v. 

Flipside, Hoffman Estates, Inc., 455 U.S. 489, 494–95 (1982). 

Even assuming that the moratorium language may be vague in 

some applications, plaintiffs’ claim plainly fails this stringent 

test. 

In light of the insubstantiality of plaintiffs’ federal claims, 

we conclude that the district court lacked federal-question 

jurisdiction over those claims and thus supplemental 

jurisdiction over the Home Rule Act claim. Therefore, we 

reverse the judgment of the court and remand with 

instructions to dismiss plaintiffs’ local law claim without 

prejudice.

So ordered. 

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