[PUBLIS H] IN THE UN ITED STATES COURT OF APPEALS FOR THE ELE VENTH CIRCUIT

__ __ __ __ __ __ __ __ __ __ __ __ Nos . 11 -1 04 75 ; 1 1- 11 11 6

__ __ __ __ __ __ __ __ __ __ __ __ D.C. Dock etNo. 1 :0 5- cv -2 26 37 -AJ
FLORIDA TRANSPORTATION SERVICES, INC ., a Fl or id a co rp or at io n, Pl ai nt iff -Ap pe ll eeCro ss -Ap pe ll an t, ve rs us MIAM I-DADE COUNTY, a p ol it ic al subd iv is io n o f th e St at e o f Fl or id a, D efen da nt -Ap pe ll an t, Cro ss -Ap pe ll ee.

__ __ __ __ __ __ __ __ __ __ __ __ App eal s fr om

th e Uni te d S ta te s Di st ric t Co urt forth e So ut he rnDis tri ctof F lo rid a

__ __ __ __ __ __ __ __ __ __ __ __ (Dece m be r 28 , 20 12 ) Case: 11-11116 Date Filed: 12/28/2012 Page: 1 of 83Befo re HULL andCOX, Circ ui t J ud ge s, an d WALTE R, Dis tri ctJu dg e. * HULL, Ci rcu itJu dg e: Thi s ap pe al in vo lv es a co un ty ord in an ce fo r pe rm it ti ng st ev ed or es at t he Po rt o f Mi am i i n M ia m i-Da de Co un ty, Fl or id a. Ste ve do res lo adan d u nl oa d
m il li on s o f do ll ars incarg o i n i nt ers ta te an d fo rei gn co m m erce at t he Po rt e ach y ear. St ev ed or e p erm it s ex pi redan nu al ly anda co un ty ord in an ce re qu ire d e ach st ev ed or e co m

pa ny eachy ear t o re ap pl y an d b e rea ss es se d, al on g wi th an y ne w ap pl ic an ts , as t o c om

pe te nc y , saf

ety reco rd , fin an ci al st ren gt h, an d n eed . Pl ai nt iff Flo rid a Tran sp orta ti on Serv ic es , Inc . (“ FTS”) fi le d s ui t ag ai ns t Defen da ntMi am i-Da de Co un ty (“ th e Co un ty”), whi ch own s an d o pe rat es th e Po rt. The cru x o f FTS’s co m

pl ai ntis th atth e Co un ty’ s Po rt Di rect ordi d n otfol lo w th e or di na nc e’s requi rem en ts at a ll bu t i ns te adpro te ct edin cu m be ntst ev ed or es an d ke ptou t n ew en tra nt s an d c om pe ti ti on , li ke FTS, by rub be r-s ta m pi ng an d au to m at ic al ly renewi ng pe rm it s fo r al l ex is ti ng st ev ed or e p erm itho ld ers at t he Po rt a ndauto m at ic al ly deny in g p erm it s t o a ll ne w app li can ts invi ol at io n o f th e do rm an t Co m

m erce Claus e. The di stric t co urt g ran te d p art ia l s umm ary jud gm en t fo r Pl ai nt iff FTS as to

The Honor able Dona ld E. Walter, United States District Judg e for the Western District * of L ouisiana, sitting by

designation. 2 Case: 11-11116 Date Filed: 12/28/2012 Page: 2 of 83li ab il it y , con cl ud in g the Co un ty’ s d en ia l o f pe rm it s t o F TS in 20 03 , 20 04 , and

20 05 vi ol at edth e d orm an t Co m m erce Claus e. The d is tri ctco urt the n h el d ajury tri al as t o d am ag es . The jury award ed$3 .55 m il li oninda m ag es to FTS fo r lo st pr of it s i n 2 00 3, 2 00 4, an d 2 00 5. The Co un ty app eal s t he di st ric t co urt’s (1 ) gr an t o f pa rti al su m m ary jud gm en t fo r FTS as to th e Co un ty’ s l iabi li ty for d en y in g s te ve do re p erm it s t o F TS in 20 03 , 20 04 , and20 05 , and(2) de ni al of t he Co un ty’ s m ot io ns forjud gm en t as a m at te r of law as to da m ag es , m ad e b ot h a t the clo se of the ev id en ce an d l at er af te r th e jury’ s d am ag es award . After r ev ie w andora l ar gu m en t, we af firm . I. BACKG ROUND 1 W e fi rs t re co un t h ow t he Co un ty’ s Po rt Di rect orus edth e p erm itpro ces s t o pr ot ectth e in cu m

be ntst ev ed or e p erm itho ld ers at the Po rt o f Mi am i fr om an y ne w en tra nt s an d c om

pe ti ti oninth atlo cal m ark et . A. Port o f Mia m i a nd the Stev edo re Permit Or di na nce The Po rt o f Mi am i i s o ne of t he bu si es t p orts inth e n at io n, fu ll y en ga ge d i n in te rs ta te co m

m erce , pre do m in an tl y

for ei gn co m

m erce . Fo r in st an ce, fro m 20 03

The fa cts in this case a

re la rg ely undisputed. Some are ba sed on the e videntiary rec ord, 1 but most of the fac ts in thi s section ar e fr om the parties’ J oint St ipulation on Material F actua l I ssues, dated O ctober

26, 2007. The diff

iculty in this case derives not from the fa cts but from whether the fa cts establish a violation of the dor mant Commerce Clause . 3 Case: 11-11116 Date Filed: 12/28/2012 Page: 3 of 83th ro ug h 2 00 5, the Po rt h an dl edov er n in e m il li onto ns of c arg o e ach y ear, 3 9%

ex po rte d a nd61 % im

po rte d, an d a ro un d 3 .5 m il li oncru is e p as se ng ers carr ie d o n be twee n 7 19 an d 8 50 cru is e sh ip s. Fro m 20 02 th ro ug h 2 00 6, 2 7% o f th e tr ad e in th e Po rt wa s wi th th e FarEast , 25 % with S ou thAm eri ca, 1 7% wi th Euro pe , and le ss th ana th irdof 1 % with No rth Am eri ca. St ev ed or in g i s an ess en ti al co m po ne ntof the Po rt. St ev ed or es lo adan d un lo adcarg o a t p ort fa ci li ti es . Each year, st ev ed or es m ov e m il li on s o f do ll ars of go od s i n i nt ers ta te an d fo rei gn co m m erce th ro ug h t he Po rt o f Mi am i. The rat es st ev ed or es ch arg e are est ab li sh edth ro ug h a n i nd iv idua l ag reem en t b etween(1) th e st ev ed or e an d (2 ) th e co nt ract in g s hi pp ers or c ru is e li ne s. The Co un ty doe s n ot reg ul at e th e rat es th atst ev ed or es ch arg e. Bu t t o o pe rat e atall inth e Po rt o f Mi am i, the st ev ed or e m

us t o bt ai n ape rm itfro m

th e Co un ty, whi ch is th e h ardpa rt. The fir stst ep —the li cen se —i s ea sy. The Co un ty’ s o rd in an ce re qu ire s a pe rs on to ha ve a Co un ty-is su edli cen se inord er t o a ctas ast ev ed or e an ywhe re i n Mi am i-Da de Co un ty, Fl or id a. Mi am i-Da de Co un ty, Fl a., Co de of Ord in an ces (“ Mi am i-Da de Co un ty Cod e”) § 28 A-6 .1. 2 The sec on d s te p i s the pro bl em he re. If the li cen se d s te ve do re wan ts to
Miami-Dade County

Code § 28A-6.1 state s, “No pe rson, shall ac t as a steve dore w ithin 2 Miami-Dade County , Florida , unless such per son is a natura l person and ha s first obtained a stevedore license f

rom the B oard [of County Commi ssioners] after e x amination.” 4 Case: 11-11116 Date Filed: 12/28/2012 Page: 4 of 83op erat e atth e Po rt o f Mi am i, the same Cou nt y ord in an ce re qu ire s t ha t p ers on als o to ha ve a st ev ed or e p erm itis su edby the Dire ct orof t he Po rt o f Mi am i. Id . § 2 8A6.2 . The Co un ty Mana ge r an d P ort Di rect or “ sh al l, af te r ex am in at io n, i ss ue 3 st ev ed or e li cen se s an d p erm it s, re sp ect iv el y , to co m pe te ntan d t ru st worth y

pe rs on s in su ch nu m

be rs as t he y

de em ne ces sa ry

for th e eff ic ie ntop erat io n o f th e co un ty wate rfro ntan d P ort o f Mi am i fa ci li ti es .” Id . § 2 8A- 6.4 (c) (e m ph as is ad de d) . To de m on st rat e th atanap pl y in g s te ve do re i s co m pe te nt , th e Po rt Di rect or

requi res th e ap pl ic an t t o p ro vi de sat is fact ory pro of th atitha s t rai ne d andexpe rie nc ed pe rs on ne l t o o pe rat e th e Po rt’s c ran es an d o th er equi pm en t. Sp eci fic al ly, th e Po rt Dire ct or ’s Requi rem en t fo r Co m pe te nc e st at es : Fo r any st ev ed or e firm to be is su ed a pe rm it to work at th e Po rt, it is of ut m os t im

po rta nc e fro m a sa fety an d fin an ci al ris k st an dp oi nt th at th ey de m on st rat e th at t h e y are co m pe te nt to pe rfo rm th e se rv ic es of a st ev ed or e.

. . . . To de m on st rat e th at a st ev ed or e firm is co m pe te nt , th ey sh ou ld pr ov id e pr oo f th at th ey em

pl oy hi gh ly tra in ed pe rs on ne l with sp eci fic expe rie nc e to sa fel y op erat e t h e Po rt of Mi am i’s carg o ga nt ry cran es an d ot he r equi pm en t to be ut il iz ed at th e Po rt. A de m on strat ed sa fety reco rd co ul d as si stinde te rm in in g t he lev el of c om pe te nc y of ast ev ed or e fi rm .

. . . . A st ev ed o r e pe rm it can an d sh ou ld be de ni ed pe nd in g th e sa ti sf act ory
Miami-Dade County

Code § 28A-6.2 state s, “No pe rson shall ac t as a steve dore w ithin 3 the Port of Miami without first having obta ined a steve dore pe rmit from the Dire ctor [of the Port] . . . . The Dire ctor shall not consider an application for a steve dore pe rmit unless the applicant ha s a stevedor e license or employ s a natura l person so license d.” 5 Case: 11-11116 Date Filed: 12/28/2012 Page: 5 of 83de m on st rat io n th at th e ap pl y in g st ev ed or e firm ha s co m pe te nt pe rs on ne l an d e qu ip m en t. The Co un ty’ s o rd in an ce fu rth er p res cri be s n in e b ro adcat eg or ie s o f cri te ria th atgo ve rnth e Po rt Di rect or ’s is su an ce o f a Po rt o f Mi am i s te ve do re p erm it , in cl ud in g “ [t]he in ab il ity

or r efu sa l o f li cen se or p res en t p erm itho ld ers , res pe ct iv el y , to ad equa te ly serv e n ew orex is ti ng bu si ne ss ,” Mi am i-Da de Co un ty Co de § 2 8A- 6.4 (c)( 5) ; “ [t]he fin an ci al st ren gt h o f th e ap pl ic an t, i nc lu di ng th e ab il it y to sec ur e in su ran ce, i nd em ni ty andpe rfo rm an ce b on ds ,” id . § 2 8A- 6.4 (6 ); an d “ [t]he ex pe rie nc e o f th e ap pl ic an t, i ts affi li at es , pri nc ip al s o r op erat in g of fic ers ,” id . § 2 8A- 6.4 (c)( 8) . Furth er, “ [t]he Po rt Di rect or , inm ak in g h is 4 de te rm in at io n a s t o t he is su an ce o r de ni al of t he pe rm it , sh al l, i n a dd it io n t o t he [n in e b ro adcat eg or ie s o f] crit eri a . . . [,] m ak e fi nd in gs as t o the ne edor l ackof ne edfor su ch pe rm it .” Id. § 28 A-6 .4(b ). In s umm ary, th e Po rt Di rect orm us t 5
m ak e co m

pe te nc y , saf

ety reco rd , fin an ci al , andne ed s as se ss m en ts inco ns id eri ng Additional criteria

for the issuanc e of ne w stevedor e per mits i nclude “ [t ]he total and 4 peak qua ntities of passeng ers or

fre ight,”Miami-Dade County Code § 28A-6.4( c)( 2), “[t] he fre quency of docking s,” id. § 28A-6.4( c)( 3), “[t] he pende ncy or entry of any proce eding , judgme nt or order

of any court or r egulatory

body respe ctingthe ability

of the a pplicant . . . to conduct a stevedoringbusiness,” id. § 28A-6.4( c)( 7), and “ [e] fficie nt operation of the port,” id. § 28A-6.4(c )(9) . The ordina

nce doe s not clarify

how the re quirement that the Port Dire ctor a ssess the 5 inability of pre sent permit holders to ser ve new or existi ngbusiness differ s from the re quirement that the Port Direc tor make f indings a s to the “the ne ed or la ck of ne ed” f or a pe rmit. The ordinanc e also doe s not describe what ty pe of f indings the Port Dire ctor must make to asse ss the need f or issuing the stevedore permit. 6 Case: 11-11116 Date Filed: 12/28/2012 Page: 6 of 83th e is su an ce o r de ni al of ape rm it .

Po rt o f Mi am i s te ve do re p erm it s ex pi re an nu al ly andau to m at ic al ly on Ja nu ary 15 of e ach y ear. Id . § 2 8A- 6.6 . There fo re, eac h andev ery st ev ed or e, in cl ud in g e xi st in g p erm itho ld ers , m us t ap pl y or r eap pl y

each y ear. Im

po rta nt ly he re, the Co un ty’ s o rd in an ce p ro vi de s t ha t the Po rt Di rect or m ay ren ew an ex pi rin g p erm it , bu t o nl y if t he ren ewal ap pl ic at io n m eet s the cri te riaforth e is su an ce o f a n ew pe rm it . Id. Thu s, the Co un ty’ s o rd in an ce fa ci al ly sub jecte d ne w andren ewal ap pl ic at io ns to th e sa m e co m pe te nc y , saf

ety reco rd , fin an ci al , an d n eed s cr it eri a. Howev er, as ex pl ai ne d b el ow, the Po rt Di rect or di d n otab id e by the ord in an ce an d d idno t m ak e th es e as se ss m en ts an nu al ly. Rathe r, th e Po rt Dire ct orinpra ct ic e au to m at ic al ly renewe d p erm it s o f ex is ti ng pe rm itho ld ers an d rep eat ed ly den ie d p erm it s t o n ew ap pl ic an ts li ke FTS. Befo re d et ai li ng th e Co un ty Po rt Di rect or ’s perm it ti ng pra ct ic es , we rev ie w who he ldst ev ed or e p erm it s an d th e st ev ed or e m ark etat t he Po rt o f Mi am i. B. Permitted S tev edo res , 20 02 –2 00 7 As o f 20 02 , ni ne co m

pa ni es he ldst ev ed or e p erm it s fo r th e Po rt o f Mi am i. Abo utha lf o f th es e co m

pani es were b as edor i nc or po rat edou t-o f-s ta te , andab ou t ha lf we re i n- st at e. Thes e p erm it -h ol de r co m pa ni es were: (1) Seab oa rdMari ne , a who ll y own edsubs id ia ry

of S eab oa rdCo rp ., whi ch was b as edinKans as ; (2 )

7 Case: 11-11116 Date Filed: 12/28/2012 Page: 7 of 83Uni ve rs al Mari ti m e Servi ce, a New Yo rkco m pa ny; (3 ) Ell er-I TO, a join t v en tu re be twee n (a ) Co nt in en ta l St ev ed or in g a ndTerm in al s, wh os e lo cat io n i s n ot in di cat edinth e rec or d, an d (b ) Po rts Am eri ca, a New J ers ey co rp or at io n; (4)

6 Po rts Am eri ca Fl or id a, whi ch was o wne d b y Po rts Am eri ca; (5) R.O. Whi te & 7 Co m pa ny (“ R.O. W

hi te ”), a Fl or id a co m

pany; (6 ) Hal lm arkSte ve do rin g, a F lo rid a co m pa ny; (7 ) Fl or id a St ev ed or in g, a F lo rid a co m pa ny; (8 ) Ocean ic Ste ve do rin g Co m pa ny, who se lo cat io n i s n otin di cat edinth e rec or d; an d (9 ) Bi sc ayne St ev ed or e Age nc y , Inc ., who se lo cat io n i s n otin di cat edinth e rec or d. 8 As o f 20 07 , sev enof t he se ni ne co m pa ni es —Se ab oa rdMari ne , Uni ve rs al Mar it im e Servi ce, Ell er-I TO, Port s Am eri ca Fl or id a, R.O. Whi te , Hall m ark 9 St ev ed or in g, an d F lo rid a St ev ed or in g— st il l h el d s te ve do re p erm it s.
The a ffidavit of Ray

Mauri, Chief of

Financ e of the Miami-Dade County Seaport 6 Depa rtment, indicates that Eller & Co., rather than Continental Stevedoring a nd Terminals, jointly owned Eller -I TO with Ports America . Howeve r, the pa rties’ fa ctual stipulation indicates that Continental is the jointowner , and states: The curr ent owner s of POMTOC are p artne rs that are licensed and permitted stevedoring conce rns : Florida Stevedoring , Inc., Continental Stevedoring and Terminals, Inc., and Ports Americ a (or an aff iliate) (Continental and Ports Americ a (or an aff iliate) are joint venture partne rs in the port permitted stevedoring company Eller-I TO); in addition, Ports Americ a (or an aff iliate) al so has a port stevedoring permit. Ports America

Florida operated pre viously

as P&O Ports Florida. 7 Eller-I TO and F lorida Stevedoringdid not operate outside of Florida. 8 New Jersey-base d Ceres Te rminals, Inc. purc hased R.O. White sometime in 2005. 9 8 Case: 11-11116 Date Filed: 12/28/2012 Page: 8 of 83The two st ev ed or e p erm itho ld ers in20 02 th atdo no t ap pe ar o n t he 20 07 li st

are B is cayne St ev ed or e Age nc y an d Oce an ic Ste ve do rin g. Bi sc ayne las t h el d a st ev ed or e p erm itin20 05 an d d idno t s ub m ita ren ewal ap pl ic at io n i n 2 00 5 o r be y on d. Ocean ic ap pe ars eit he r to ha ve be enacqui redby ano th er co m pa ny or was de fu nc t b y

20 07 . The p art ie s d o n otdi sp ut e th e fac t tha t ex is ti ng pe rm itho ld ers who want edpe rm itren ewal s g otth em an nu al ly between20 02 an d 2 00 7. 1 0 Im po rta nt ly, to o, atlea stth ree o f th e co m pani es on th e 2 00 2 a nd20 07 li st s— Seab oa rdMari ne , Ports Am eri ca Fl or id a, an d R .O. Whi te —h adth ei r pe rm it s re ne wedev enth ou gh th ey were n otpro vi di ng st ev ed or e se rv ic e. Thi s 1 1
m ean t tha t atm os t s ix of n in e p erm it te d s te ve do res co rn eredth e Po rt o f Mi am i
m ark etin20 02 an d a t m os t fo urst il l d idin20 07 . Tho se fou r were: Flo rid a St ev ed or in g, El le r-ITO, Uni ve rs al Mari ti m e Servi ce, an d Hal lm arkSte ve do rin g. As d is cu ss edlat er, the Po rt Di rect or , y ear a fte r y ear, re fu se d t o g ran t a p erm itto FTS to en te r th e lo cal m ark etan d c om pe te with t he se in cu m

be ntst ev ed or e p erm it ho ld ers . C. Stev edo re Ma rk et a t Por t of Mia m i The re cord doe s not include a c omplete list of stevedore s permitted in eac h year during 1 0 the re levant 2003 to 2005 period, but it does show who was per mitted in 2002 and in 2007. Notably , though, Sea

board Ma rine a nd Ports America

Florida wer e other

wise integrally 1 1 involved in the stevedoringindustry at the Port of Miami, as discussed be low. And R.O. Whit e had held a

stevedore permit at the Port since 1994. 9 Case: 11-11116 Date Filed: 12/28/2012 Page: 9 of 83It i s h el pf ul to expl ai n o th er u nd is pu te d a sp ect s o f th e st ev ed or e m ark etat th e Po rt o f Mi am i. Seab oa rdMari ne op erat eda m ai n c arg o t erm in al at t he Po rt. Se ab oard Mar in e was als o ash ip pe r an d ast ev ed or e p erm itho ld er. The Po rt Di rect or an nu al ly renewe d S eab oa rdMari ne ’s st ev ed or e p erm itfro m 20 02 to 20 07 . Not ab ly, th ou gh , Seab oa rdMari ne di d n otpro vi de st ev ed or e se rv ic es forit se lf o r th irdparti es , eve n t ho ug h i t h el d o ne of t he few st ev ed or e p erm it s atth e Po rt. Rat he r, Seab oa rdMari ne em pl oyed an othe r pe rm it te d s te ve do re, Ell er-I TO, for Seab oa rdMari ne ’s ownsh ip pi ng fro m at l eas t 2 00 3 t o 2 00 5. Th us , a so le st ev ed or e se rv edon e car go term in al . Mae rs k, In c. op erat edan ot he r m ai n c arg o t erm in al at t he Po rt o f Mi am i, an d who ll y own edUni ve rs al Mari ti m e Servi ce, a p erm it te d s te ve do re. Uni ve rs al Mar it im e Servi ce, as a st ev ed or e, se rv edon ly Maers k. The re was li tt le co m

pe ti ti on els ewh ere a t the Po rt. Th e th irdm ai n c arg o te rm in al at t he Po rt wa s o pe rat edby the Po rt o f Mi am i Term in al Oper at in g Co m pa ny (“ POMTOC”) , a Flo rid a li m it edli ab il it y co m pa ny. POMTOC it se lf 1 2

POMTOC was forme d in 1994 by four smaller

carg o terminal oper ators to fa cilitate 1 2 investment in Port facilities and to improve the Port’s ca pacity . Upon its formation, POMTOC contra cted with the Miami-Da de B oard of County Commi ssioners to consolidate the Port’s sever al smaller c arg o terminals and ope rate an improved third main c arg o terminal. 10 Case: 11-11116 Date Filed: 12/28/2012 Page: 10 of 83was no t a s te ve do re an d n ev er h el d ast ev ed or e p erm it . Rath er, as de ta il edbe lo w,

POMTOC o pe rat edth e th irdm ai n c arg o t erm in al , andPOMTOC’s o wne rs , in effe ct , pro vi de d t he st ev ed or e se rv ic es at tha t t erm in al . Dur in g t he rel ev an t t im e in th is cas e, th ere wer e th ree o wne rs of P OMTOC: (1 ) Fl or id a St ev ed or in g, a s te ve do re p erm itho ld er, (2 ) Po rts Am eri ca Fl or id a, an ot he r st ev ed or e p erm itho ld er, an d (3 ) Co nt in en ta l St ev ed or in g a ndTerm in al s, whi chjoi nt ly owne d p erm itho ld er Ell er-I TO with Po rts Am eri ca. POMTOC’s o wne rs us edth ei r st atus as o pe rat or s o f th e th irdm ai n c arg o te rm in al to sque lc h c om

pe ti ti on inth e Po rt o f Mi am i s te ve do re m ark et . A POMTOC o ffi ci al tes ti fie d t ha t POM TOC wou ldno t al lo w no n- POMTOCaffi li at edst ev ed or es to serve sh ip pe rs at P OMTOC’s car go term in al . In de ed , POMTOC’s web si te li st edFlo rid a St ev ed or in g a ndEll er-I TO as the on ly

“ st ev ed or es servi ci ng POMTOC.” As n ot edab ov e, th is same E ll er-I TO pro vi de d t he st ev ed or e se rv ic es to Seab oa rdMari ne at i ts term in al . And , R.O. W hi te , a st ev ed or e p erm itho ld er un affi li at edwith P OMTOC, was un ab le to serve sh ip pi ng co m pa ni es who want ed to hi re R.O. Whit e fo r st ev ed or in g b ecau se POMTOC res tri ct edterm in al acce ss to Ell er-I TO andFlo rid a St ev ed or in g. At the same tim e, Po rts Am eri ca Fl or id a, th e th irdPOMTOC o wne r, ha d i ts pe rm itren ewedby the Po rt Di rect orev enth ou gh it 11 Case: 11-11116 Date Filed: 12/28/2012 Page: 11 of 83do es no t ap pe ar t o h av e p ro vi de d a ny ste ve do re s erv ic es . Sim pl y pu t, 1 3 POMTOC’s o wne rs co nt ro ll edth e m ark etforth ird -p arty st ev ed or e se rv ic es at i ts carg o t erm in al an d l im it edth e st ev ed or e co m pe ti ti on to two pe rm itho ld ers : El le rITO andFlo rid a St ev ed or in g. 1 4 D. Port Di rect or ’s Permitti ng Prac tic es W it h t hi s b ack gr ou nd , we tu rnto th e Po rt Di rect or ’s perm it ti ng pra ct ic es . In19 99 an d 2 00 2, the Po rt Di rect orco nduc te d s o- cal le d “ ne ed s as se ss m en ts ” as to st ev ed or es , os te ns ib ly to s at is fy on e o f th e st ev ed or e p erm itord in an ce’s requi rem en ts , i.e., to de te rm in e “ th e n eedor l ackof n eed ” fo r a p erm it . See Mi am i-Da de Co un ty Cod e § 28 A-6 .4(b ). The Po rt Di rect orco nt act edeach of t he Po rt’s fi ve lar ge stcarg o c arri ers by tele ph on e an d a sk edfiv e que st io ns rel at edto th e car go carr ie rs ’ us e o f an d s at is fact io n wi th st ev ed or es at t he Po rt o f Mi am i. 1 5
The district cour

t noted that the Port rene wed Ports America F lorida’s steve dore 1 3 permits despite Ports America Florida ’s not providingstevedore service s at the Port. Fla. Transp. Ser

v. v. Miami-Dade Cnty ., 757 F. Supp. 2d 1260, 1272 (S.D. F la. 2010). It appea rs that Ports America

Florida (for merly P&O Ports Florida) wa s owned by Ports America , which coowned Eller -I TO. See supr a note 7. Eller -I TO held a stevedore permit and provide d stevedore service s at the Port. As discussed in the dama g es sec tion, infra, F TS contends that it could have c ompeted 1 4 ag ainst these POMTOC-re lated steve dores f or Seaboa rd Marine’s steve dore w ork at Sea board Marine’ s carg o terminal. The Port Dire ctor a sked the same five que stions in bot h 1999 and 2002. Those 1 5 questions were : (1) In the last year , how many stevedore companies ha

ve you used at the Port of Miami? 12 Case: 11-11116 Date Filed: 12/28/2012 Page: 12 of 83Bas edon th es e te le ph on e su rv ey s, the Po rt Di rect orco nc lu de d i n b ot h 1 99 9 a nd

20 02 th at“ th ere a re s uf

fic ie ntlev el s o f cu rren t s te ve do re s erv ic es interm s o f qu an ti ty, effi ci en cy

an d c om pe ti ti ve ne ss to m eetth e Po rt’s n eed s.” The reco rdsh ows th es e “ ne ed s as se ss m en ts ” were c on du ct edon ly to p ro te ct th e eco no m ic in te res ts of t he ex is ti ng st ev ed or e p erm itho ld ers . In l it ig at io n be twee n F TS an d t he Co un ty in 1 99 9, the Po rt Di rect orev enadm it te d i n ave rif ie d pl ead in g t ha t: is su in g ad di ti on al pe rm it s whe n i n s u f f i c i e n t ne ed ex is ts can di lu te th e m ark et t o t h e e xt en t of cau si ng eco no m ic ha rd sh ip to th e en ti re lo cal st ev ed or in g in du st ry . It is fo r th is reas on th at Co de Sect io n 26 A-6 requi res th e Po rt Dire ct or to m ak e a de te rm in at io n of n e e d p r i or to is su in g a ny new St ev ed or e Perm it s. 1 6 Po rt d oc um en ts fro m

20 00 ackno wled ge th atth e Po rt wo ul d e ns ur e th atth e

“ gr an ti ng or r en ewal of ape rm itdo es no t l eadto dupl ic at io n o f se rv ic es th atco ul d le adto de st ru ct iv e co m

pe ti ti on ” atth e Po rt. In de po si ti on tes ti m on y , th e Po rt (2) Ty pically how many

stevedorecompanies w ould you solicit rates fr om per ve ssel? I f not, how often? (3) I f you only

use one or

two stevedore firms, why ? (4) Ha ve you ever

not been a

ble to load or unload a

vessel due to a

stevedore problem at the Port of Miami? (5) In comparison with other ports how would you rate the ef ficienc y of stevedor es at the Port of Miami, say , on a 1 (lowe st) – 10 (best) sc ale? The five carg o car

riers sur veyed included Ma ersk a

nd Seaboar d Marine. Port Director

Charles A. Tow sley

was the Port Dire ctor at all times relevant to the 1 6 instant case. 13

Case: 11-11116 Date Filed: 12/28/2012 Page: 13 of 83Dire ct orco ns id eredth is st at em en t ab ou t p rev en ti ng “ de st ru ct iv e co m pe ti ti on ” to be co ns is te ntwith t he ne ed s as se ss m en t re qu ire m en t i n t he Co un ty’ s p erm it or di na nc e. Add it io na ll y , th e n eed s as se ss m en ts di d n otad dr es s an y of the othe r or di na nc e requi rem en ts , su ch as t he ap pl ic an t’s co m pe te nc y , fin an ci al ab il ity , or sa fety reco rd . So m et im e in or b efo re 2 00 2, the Po rt Di rect ordi d app ro ve th e n ew ap pl ic at io n o f Seabo ardMari ne fora st ev ed or e p erm it . The Co un ty stre ss es th at 1 7 Seab oa rdMari ne was t he on ly app li can t fr om ou t-o f-s ta te du rin g 1 99 9 t o 2 00 7, whi le Pla in ti ff FTS i s a F lo rid a co rp or at io n. Inres po ns e, FTS em ph as iz es th atth e Po rt Di rect orgra nt edan d re pe at ed ly renewe d ast ev ed or e p erm itforSeab oa rd Mar in e, ev enth ou gh Seab oa rdMari ne di d n otpro vi de st ev ed or e se rv ic es , bu t yet de ni edpe rm it s t o P la in ti ff FTS, wh ic h wan te d t o p ro vi de st ev ed or e se rv ic es . Mo reo ve r, de sp it e it s o ut -o f-s ta te ori gi n, Se ab oa rdMari ne was a lre ady en tre nc he d in th e lo cal m ark etlo ng be fo re o bt ai ni ng a st ev ed or e p erm itin20 02 , inth at Seab oa rdMari ne op erat edon e o f th e Po rt’s thr ee m ai n c arg o t erm in al s an d

The re cord doe s not show exactly when the Port Dire ctor a war ded Seaboa

rd Marine’s 1 7 first stevedor e per

mit. Tom P aelinck, vic e-pr esident of Sea board Ma rine, indicated that Seaboar d Marine a

pplied for a

stevedore permit in 2001. Seaboar d Marine a ppear s on a list of stevedore s permitted in 2002. In addition, the rec ord shows that Seaboa rd Marine re mained a permitted stevedor e in 2007. 14

Case: 11-11116 Date Filed: 12/28/2012 Page: 14 of 83ex cl us iv el y

us edin cum

be ntst ev ed or e Ell er-I TO for s te ve do re s erv ic es at t he Po rt. In de ed , Seab oa rdMari ne ha s o pe rat edit s ca rg o t erm in al at t he Po rt f orov er twen ty y ears . Unl ik e in 20 02 , th e Po rt Di rect orco nduc te d n o n eed s o r an y ot he r cri te rio n as se ss m en ts in20 03 , 20 04 , or 2 00 5. Ra th er, fro m 20 03 to 20 05 , th e Po rt Di rect or co ns is te nt ly andau to m at ic al ly (1) ap pr ov edap pl ic at io ns forex is ti ng pe rm it ho ld ers an d (2 ) de ni edpe rm it s t o n ew ap pl ic an ts . Alth ou gh th e o rd in an ce requi redth atpe rm it s b e ren ewedon ly if all ap pl ic ab le requi rem en ts (in cl ud in g co m pe te nc y , fin an ci al , saf

ety reco rd , andne ed s as se ss m en ts ) were m et , th e Po rt Dire ct orren ewedex is ti ng pe rm it s wi th ou t co nduc ti ng any of the requi red as se ss m en ts . 1 8 The Po rt Di rect orco nc ed es th atat t im es in cu m be ntst ev ed or e p erm it ho ld ers —s uc h a s Se ab oa rdMari ne , R.O. Whi te , or Po rts Am eri ca Fl or id a—h ad th ei r pe rm it s re ne wedev enth ou gh th ey were n otdo in g a ny ste ve do re wo rkat t he Po rt. Fro m

20 03 to 20 05 , th e Po rt Di rect orals o k ep t o utany ne w ent ran ts an d

The district cour

t found that abunda

nt, undisputed evidence showed that the Port 1 8 Direc tor applied the pe rmit ordinance in this fashion. Fla. Tr ansp. Serv., 757 F . Supp. 2d at 1277, 1278 n.7. The County did not disput e this fac t either in the district cour t or on appe al. Fur ther, duringthe jury

trial on damag es, the Port Dire ctor a dmitted that he automatically denied applications for

new steve dore pe rmits and automatically grante d applications for

permit rene wals. 15

Case: 11-11116 Date Filed: 12/28/2012 Page: 15 of 83th us an y

co m pe ti ti on ag ai ns t the li m it ednu m be r of in cu m be nt s i n t he lo cal m ark et th atactua ll y

pro vi de d s te ve do re s erv ic es . Yet F TS rep eat ed ly app li edfor a ne w st ev ed or e p erm itfro m

19 99 to 20 05 an d was au to m at ic al ly den ie d ape rm itby the Po rt Di rect or . The Po rt Di rect or ’s pra ct ic e o f au to m at ic al ly app ro vi ng ren ewal ap pl ic at io ns an d d en y in g n ew ap pl ic at io ns (1) pro te ct edin cum be ntst ev ed or e pe rm itho ld ers , and(2) ba rredth e en try of n ew co m pe ti to rs to th e Po rt o f Mi am i st ev ed or e m ark et . E. FTS’s Appli ca tio ns fo r a Permit Pl ai nt iff FTS al read y

pro vi de d s te ve do re s erv ic es inBro wardCo un ty, Fl or id a, it s p rin ci pa l p la ce o f bu si ne ss . Desp it e rep eat edatt em pt s, FTS was un ab le to ex pa ndit s b us in es s t o t he Po rt o f Mi am i i n M ia m i-Da de Co un ty. FTS is no t a s hi pp er, a crui se li ne or aPo rt o f Mi am i carg o t erm in al op erat or . FTS si m

pl y want eda pe rm itinord er t o p ro vi de st ev ed or e se rv ic es to th irdparti es at t he Po rt. In o th er wo rd s, FTS s ou gh t en try int o wh atis term edth e 1 9

“ th ird -p arty ” st ev ed or e m ark etat t he Po rt o f Mi am i. Obt ai ni ng a Mi am i-Da de Co un ty stev ed or e “ li cen se ” was no t a p ro bl em . Duringthe re levant time, FT S did not l ease land at the Port of Miami or other wise 1 9 contra ct for a cce ss to the Port’s carg o terminals. FT S also did not have any leg ally enfor cea ble commitments from shippers or c ruise lines for FTS to provide steve dore se rvice s at the Port. As explained later, F TS claimed if it g ot a per mit, itwould have c harg ed rates lower tha n the others and would assur edly

have g otten business. 16 Case: 11-11116 Date Filed: 12/28/2012 Page: 16 of 83Si nc e 1 97 9, FTS P res id en t J oh n Go rm anha s h el d t he requi si te st ev ed or e li cen se

fo r Mi am i-Da de Co un ty. Obt ai ni ng a st ev ed or e “pe rm it ” fo r th e Po rt o f Mi am i 2 0
was im po ss ib le . In ea ch y ear f

ro m 19 99 to 20 05 , FTS ap pl ie d t o t he Po rt o f Mi am i fo r a s te ve do re p erm it . In ea ch of t he se y ears , th e Po rt Di rect orde ni ed FTS’s pe rm itap pl ic at io n o n t he ba si s t ha t n o n ew st ev ed or es were n eed edat t he Po rt. In20 03 , 20 04 , and20 05 , th e Po rt Di rect or m erel y sen t FTS aform

let te r 2 1 de nyin g F TS’s perm itap pl ic at io n a ndst at in g n o a dd it io na l s te ve do res were ne ed edat t he Po rt. 2 2 Not ab ly, on e d ay

aft er FTS fi rs t ap pl ie d fo r a s te ve do re p erm itin19 99 , a Po rt e m pl oyee, m is ta ke nl y

be li ev in g F TS was a n e xi st in g p erm itho ld er s eek in g ren ewal , award edth e p erm it . The n ex t d ay , th e Po rt Di rect or he ldth e p erm itin ab ey an ce an d e xp la in edina le tt er t o F TS th atth e p erm itwas g ran te d wi th ou t the
Pursuant to Miami-Dade County ordinanc e, only

a natur al per son may

hold a stevedor e 2 0 license. Miami-D ade County Code § 28A-6.1. How ever , corpor ations and par tnerships may hold stevedore permits at the Port of Miami (but not elsewhe re) . I d. § 28A-6.2. In 1999, the Port Direc tor denied F TS’s permit application on the a dditional basis that 2 1 FTS per sonnel wer e not qualified to ope rate equipment at the Port and that FTS had a poor saf ety rec ord. In 2003, 2004, and 2005, the f orm letters rote ly

stated that the Port Dire ctor ha d 2 2 “conside red the criteria and pr ocedur es outlined in Chapter 28A of the Code of Miami-Da de County ,” but it is undisput ed the Port Dire ctor did not do this. Instead, the Port Dire ctor just automatically

approve d applications of e x isting per mit holders and denied those of any new entra nts. 17

Case: 11-11116 Date Filed: 12/28/2012 Page: 17 of 83requi si te ne ed s as se ss m en t. The Po rt Di rect orul ti m at el y ne ve r gr an te d F TS a pe rm itin19 99 or i n 2 00 0 t o 2 00 5. F. Alleg at io ns in Co m pl ai nt InOcto be r 20 05 , FTS fil eda on e-co un t co m pl ai ntag ai ns t M ia m i-Da de Co un ty und er 4 2 U.S.C. § 19 83 . FTS’s complai ntall eg edth atMi am i-Da de 2 3 Co un ty “ vi ol at edth e Co m m erce Claus e th ro ug h i ts est ab li sh m en t an d u se of a pe rm it ti ng pro ces s t ha t ef fect iv el y all ows on ly the own ers of M ia m i-b as edPo rt o f Mi am i Term in al Oper at in g C om pa ny, L .C. (‘POMTOC’ ) to pro vi de th irdpa rty carg o s te ve do rin g s erv ic es ” atth e Po rt. FTS al le ge d t ha t “ [a]t al l re le vantti m es , no act iv e th irdpa rty carg o s te ve do rin g c om pe ti to r of POMTOC’s o wne rs , su ch as FTS, ha s b een gra nt eda pe rm itby the Co un ty.” FTS’s cl ai m foc us es on th e Co un ty’ s s te ve do re p erm it ti ng pra ct ic es , th ro ug h i ts Po rt Di rect or , as app li edto th ird -p arty

st ev ed or es , i.e., st ev ed or es who are n otaffi li at edwith t he ir s hi pp ercu st om ers . Acco rd in g t o F TS’s complai nt , th e Co un ty PortDire ct or ’s pro te ct io n o f POMTOC’s m on op ol y

ov er the th ird -p arty

st ev ed or e m ark etvi ol at edth e

FTS’s c omplaint also named the Port Dire ctor a s a def endant, but F TS voluntarily 2 3 dismiss ed its claims ag ainst the Port Direc tor. Only FTS and the County

are parties to this appea l. 18

Case: 11-11116 Date Filed: 12/28/2012 Page: 18 of 83Co m

m erce Claus e: “ By

all owi ng on ly the own ers of P OMTOC, a Mi am i-Da de Co un ty bus in es s, t o p ro vi de su ch [st ev ed or e] serv ic es , th e Co un ty has un co ns ti tu ti on al ly dep riv edou t-o f-co un ty bus in es se s s uc h a s FTS a cces s t o t he lo cal m ark et , invi ol at io n o f th e Co m m erce Claus e.” FTS al le ge d t ha t the Co un ty’ s p ol ic y

“ba rredst ev ed or in g c om pe ti to rs su ch as F TS fro m en ga gi ng in in te rs ta te an d i nt ern at io na l co m m erce ” an d “ fo recl os edus e o f th e Po rt t o n at io na l an d i nt ern at io na l ca rri ers who do no t wi shto pay POMTOC’s o wne rs ’ ex orbi ta nt [s te ve do rin g] rat es .” FTS ch arac te riz edth e Po rt Di rect or ’s nee ds -b as edde ni al s o f it s s te ve do re p erm itap pl ic at io ns as a“ sh am ” an d a“pr et en se ” d es ig ne d t o p ro te ct POMTOC’s m on op ol y

ov er s te ve do rin g. 2 4 FTS’s co m

pl ai ntreque st edde cl arat ory rel ie f an d d am ag es du e to th e Co un ty’ s d en ia l o f it s p erm itap pl ic at io ns ineachy ear f ro m 19 99 to 20 05 . FTS al so reque st edanin

jun ct io n e njo in in g t he Co un ty from “ co nt in ui ng it s un co ns ti tu ti on al co nduc t an d re qu iri ng itto tak e st ep s t o d is si pa te th e h arm fu l effe ct s o f it s p rio r co nduc t b y pro vi di ng FTS wit h ape rm itan d s uf fic ie ntlan d a t th e Po rt t o o pe rat e st ev ed or in g a ndterm in al servi ces .” G. Dis tri ct Co urt’ s O rder The pa rties agree that no pretria l order modifie d the alleg ations or claims in the 2 4 complaint. We thus rely

on the complaint as the a uthoritative statement of F TS’s claims. 19 Case: 11-11116 Date Filed: 12/28/2012 Page: 19 of 83Afte r subs ta nt ia l d is co ve ry , th e p art ie s fi le d c ro ss m ot io ns forsu m m ary jud gm en t. Init s m ot io n, FTS a rg ue d t ha t “ th e o bv io us pu rp os e an d e ffec t o f th e Co un ty’ s ‘nee d’ ord in an ce as ap pl ie d t o F TS” was to pro te ctPOMTOC’s
m on op ol y

inth e Po rt’s t hi rd -p arty

st ev ed or e m ark et , invi ol at io n o f th e Co m m erce Cl au se . Ina publ is he d, am en de d o rd er, the di st ric t co urt co nc lu de d t ha t FTS’s cl ai m s as to th e Co un ty’ s d en ia ls of i ts pe rm itap pl ic at io ns in19 99 , 20 00 , and 20 01 were b arre d b y

§ 1 98 3’s fo ur -y ear s ta tu te of l im it at io ns . Fla. Tran sp . Serv ., In c. v. M ia m i-Da de Cn ty., 75 7 F . Sup p. 2 d 1 26 0, 1 26 9– 70 (S.D. Fla . 20 10 ). The di st ric t co urt al so de te rm in edth atFTS’s cla im as t o 2 00 2 was ba rredby the do ctrin e o f res jud ic at a b ecau se FTS ap pe al edth e Co un ty’ s d en ia l o f it s 2 00 2 ap pl ic at io n t o a n a dm in is tra ti ve ex am in er, wh ic h a ffi rm edth e d en ia l o f FTS’s ap pl ic at io n. Id . at 1 27 0– 73 . 2 5 The di stric t co urt, h owe ve r, gr an te d s umm ary jud gm en t t o F TS with re sp ect to th e Co un ty’ s l iabi li ty for i ts de ni al of F TS’s st ev ed or e p erm itap pl ic at io ns in 20 03 , 20 04 , and20 05 . The d is tri ctco urt fi rs t ex pl ai ne d t ha t the Po rt’s p erm it or di na nc e, as ap pl ie d i n tho se y ears , vi ol at edth e Co m m erce Claus e b y

un du ly
The district cour

t expl ained that the a dministrative pr ocee ding me t all of Florida ’s 2 5 require ments for the a

pplication of re s judicata a nd that “F lorida Tra

nsportation could have asser ted its constituti onal claims in the administrative proc eeding s . . . .” F la. Tra nsp. Serv., 757 F. Supp. 2d at 1271. 20

Case: 11-11116 Date Filed: 12/28/2012 Page: 20 of 83bu rd en in g i nt ers ta te co m m erce ab se nta su ffi ci en t co un te rv ai li ng Co un ty int eres t. Id . at 1 27 6– 81 . The d is tri ctco urt co nc lu de d t ha t “ th e Co un ty has fai le d t o p res en t an y publ ic in te res t warran ti ng th e se em in gl y pe rm an en t re m ov al of t he Po rt o f Mi am i’s s te ve do re m ark etfro m th e lo cal , st at e, an d n at io na l m ark et s.” Id . at 1 28 0. The di st ric t co urt fo un d t ha t “ th ere i s n o e vi de nc e in th e rec or d d em on strat in g t ha t co m pe ti ti on inth e st ev ed or e m ark etwil l h av e a d es tru ct iv e eff ecton th e Po rt o r it s op erat io ns if n ew ap pl ic an ts are al lo wedto co m pe te with e xi st in g p erm it -h ol de rs fo r th e av ai labl e sl ot s.” Id . The di stric t co urt re

jecte d t he Co un ty’ s ar gu m en t tha t i t d idno t v io la te th e Co m m erce Claus e b ecau se itact edina pr op rie ta ry , rathe r th ana reg ul at ory , cap aci ty in p erm it ti ng st ev ed or es at t he Po rt. Id . at 1 28 1– 82 . The di stric t co urt the n h el d ajury tri al as t o F TS’s damages res ul ti ng fro m pe rm itde ni al s i n 2 00 3, 2 00 4, an d 2 00 5. Th e jury awarde d F TS $2 .55 m il li on for FTS’s pr of

it s l os t fr om

Seab oardMari ne st ev ed or in g c on tra ct s an d $ 1 m il li on for pr of it s l os t fr om

cru is e li ne st ev ed or in g c on tra ct s fr om 20 03 to 20 05 . The jury award edno da m ag es forFTS’s lo stcarg o t erm in al bu si ne ss . Afte r tr ia l, the di st ric t co urt d en ie d F TS’s m ot io n fo r in jun ct iv e rel ie f on th e gr ou nd s t ha t (1 ) th e Co un ty now h adab an do ne d i ts un lawfu l s te ve do re p erm it ti ng

21 Case: 11-11116 Date Filed: 12/28/2012 Page: 21 of 83pr act ic es , and(2) “ a p erm an en t i nju nc ti on co ul d n oteffe ct iv el y gi ve FTS st ev ed or e p erm it s fo r 20 03 , 20 04 , and/o r 20 05 ” b ecau se pe rm it s ar e v al idforon ly on e y ear a nd“ FTS si m

pl y can no t re ly on t he ass um pt io n t ha t, h aditbe engra nt ed pe rm it s i n 2 00 3, 2 00 4, an d 2 00 5, i t wo ul d h av e al so be engrant edren ewal s . . . .” The Co un ty app eal s (1 ) th e d is tri ctco urt’s g ran t o f su m m ary jud gm en t fo r FTS as to th e Co un ty’ s l iabi li ty for d en y in g s te ve do re p erm it s t o F TS in 20 03 , 20 04 , and20 05 an d (2 ) th e jury’ s d am ag es awardag ai ns t the Co un ty. 2 6 II . STANDARD OF REVIEW As t o l iabi li ty iss ue s, we re vi ew de no vo a di stric t co urt’s g ran t o f su m m ary jud gm en t. Ho ll om anv. Ma il -Well C or p., 4 43 F.3d83 2, 8 36 (11 th Cir . 20 06 ). Su m m ary jud gm en t i s ap pr op ria te when th e ev id en ce, v ie wedinth e li gh t m os t fav or ab le to th e n on m ov in g p arty , pre se nt s n o g enui ne is su e o f m at eri al factan d co m pe ls jud gm en t as a m at te r of law. Fed . R. Civ . P. 56 (a); Hol lo m an , 44 3 F .3dat 83 6. As t o d am ag es is su es , we rev ie w de n ov o t he di st ric t co urt’s d en ia l o f a
m ot io n a ndren ewedm ot io n fo r jud gm en t as a m at te r of law. Bro ug h v . Im

pe ria l

FTS cr oss-appe als the district court’ s order grantingthe County ’s pre -trial motion in 2 6 limine and excluding fr om the jury ’s consider ation evidenc e of F TS’s alleg ed lost profits in 2006 and 2007. F TS acknowle dg es that it did not apply for a permit in 2006 or 2007. We aff irm the district court’s orde r bec ause F TS’s cross-a ppeal lac ks merit. 22 Case: 11-11116 Date Filed: 12/28/2012 Page: 22 of 83St erl in g Lt d., 2 97 F.3d11 72 , 11 76 (11 th Cir . 20 02 ). Evi de nt ia ry rul in gs are rev ie wedforab us e o f di sc ret io n. Id . at 1 17 9. II I. DORMANT COMME RCE CLAUSE BACKG ROUND A. Gener al Princ ip le s The Co m m erce Claus e g ran ts to Co ng res s t he po wer t o re gu la te in te rs ta te an d fo rei gn co m

m erce . U.S. Con st . art . I, § 8 , cl. 3 . “ [T]his affi rm at iv e g ran t o f au th or it y to Co ng res s al so en co m

pa ss es anim

pl ic itor ‘do rm an t’ li m it at io n o n t he au th or it y of t he Sta te s t o e na ctleg is la ti on affe ct in g i nt ers ta te co m m erce .” Heal y v. Be er In st ., Inc ., 49 1 U.S. 3 24 , 32 6 n .1, 1 09 S. Ct. 2 49 1, 2 49 4 n .1 (1 98 9) . “ Thi s ne ga ti ve co m

m an d p rev en ts a St at e fro m jeop ard iz in g t he welf

are o f th e Nat io n a s a who le by pla ci ng burd en s o n t he flo w of c omm erce acro ss it s b or de rs th at co m m erce who ll y

withi n tho se bo rd ers wou ldno t b ear.” Am . Truck in g As s’ns v. Mi ch . Pub . Serv s. Co m

m ’n, 54 5 U.S. 4 29 , 43 3, 1 25 S. Ct. 2 41 9, 2 42 3 (2 00 5) (al te rat io n a ndin te rn al qu ot at io n m ark s o m it te d) . Inad di ti on to st at e laws, the do rm an t Co m m erce Claus e ap pl ie s equa ll y to lo cal an d m

un ic ip al laws . “ [A] Stat e (o r on e o f it s p ol it ic al subd iv is io ns ) m ay no t av oi d t he st ric tu res of the Co m m erce Claus e b y

cu rta il in g t he m ov em en t o f art ic le s of co m m erce th ro ug h s ub di vi si on s o f th e St at e rathe r th anth ro ug h the Sta te

23 Case: 11-11116 Date Filed: 12/28/2012 Page: 23 of 83it se lf.” Fort Gra ti otSan it ary Lan df il l, In c. v. M ic h. Dep ’t of Natur al Res ., 50 4 U.S. 35 3, 3 61 , 11 2 S . Ct. 2 01 9, 2 02 4 (1 99 2) . The d orm an t Co m m erce Claus e

“ in va li da te [s ] lo cal laws th atim po se co m m erci al ba rri ers or d is cri m in at e ag ai ns t anart ic le of c omm erce by reaso n o f it s o rig in or d es ti na ti on ou t o f St at e.” C & A Carb on e, In c. v. To wn o f Cl ark st own , 51 1 U.S. 3 83 , 39 0, 1 14 S. Ct. 1 67 7, 1 68 2 (1 99 4) (em

ph as is ad de d) ; ac co rdDeanMi lkCo . v. Ci ty of Mad is on , 34 0 U.S. 3 49 , 35 4, 7 1 S . Ct. 2 95 , 29 8 (1 95 1) (“ Inth us erec ti ng aneco no m ic barri er p ro te ct in g a m ajorlo cal in du st ry

ag ai ns t co m

pe ti ti on fro m

witho utth e St at e, [the Cit y of] Mad is on pl ai nl y

di sc riminat es ag ai ns t i nt ers ta te co m m erce .”); S. W as te Sy s., LLC. v. Ci ty of Del ray Bea ch , 42 0 F .3d12 88 , 12 90 (11 th Cir . 20 05 ). B. Tw o- Ti ered Anal ys is Laws ch al le ng edun de r th e d orm an t Co m m erce Claus e are ex am in edus in g a two -ti eredan al y si s. Fi rs t, we co ns id er wh ethe r th e la w or re gu la ti on “ di rect ly reg ul at es or d is cri m in at es ag ai ns t i nt ers ta te co m m erce , or h as th e eff

ectof fav or in g i n- st at e eco no m ic in te res ts .” Is la ndSil ve r & Sp ic e, In c. v. Is la m or ad a, 54 2 F .3d84 4, 8 46 (11 th Cir . 20 08 ) (i nt ern al qu ot at io n m ark s an d a lt erat io n om it te d) . “ Dis cri m in at io n a ga in stin te rs ta te co m m erce infav orof l oc al bu si ne ss orin ve st m en t i s p er s e in va li d, s av e in a na rro w cla ss of c as es inwhi chth e

24 Case: 11-11116 Date Filed: 12/28/2012 Page: 24 of 83m

un ic ip al it y

cande m on st rat e, un de r ri go ro us scrut in y , th atitha s n o o th er m ean s to adva nc e a l eg it im at e lo cal in te res t.” Ca rb on e, 51 1 U.S. at39 2, 1 14 S. Ct. at 16 83 . “ The cen tra l ra ti on al e fo r th e ru le ag ai ns t d is cri m in at io n i s t o p ro hi bi t s ta te orm un ic ip al laws who se ob

ject i s l oc al eco no m ic pro te ct io ni sm . . . .” Id . at 3 90 , 11 4 S . Ct. at16 82 . Seco nd , if the law o r reg ul at io n a dv an ces a le gi ti m at e lo cal in te res t an d h as on ly “ in di recteffe ct s o n i nt ers ta te co m m erce ,” we ap pl y

th e b al an ci ng tes t fr om Pi ke v. Bruc e Ch ur ch , Inc ., 39 7 U.S. 1 37 , 90 S. Ct. 8 44 (19 70 ), an d i nv al id at e th e la w on ly if “ th e b ur de n o n i nt ers ta te co m m erce cle arl y

ex ceed s t he lo cal be ne fit s.” Is la ndSil ve r & Sp ic e, 54 2 F .3dat 8 46 (in te rn al qu ot at io n m ark s o m it te d) . Thu s, the two way s a l aw canvi ol at e th e d orm an t Co m m erce Claus e are (1 ) by dis cri m in at in g a ga in stin te rs ta te co m m erce or ( 2) by undul y

bu rd en in g in te rs ta te co m

m erce . W e n ex t ex pl ai n i n m or e d et ai l the way s i n wh ic h ast at e o r lo cal law d is cri m in at es ag ai ns t i nt ers ta te co m m erce . C. Disc ri m in at io n

“ [T]here i s n o c le ar l in e” s ep arat in g d is cri m in at ory fro m no n- di sc riminat ory st at e reg ul at io ns . Bro wn- Fo rm anDis ti ll ers Co rp . v. N.Y. Stat e Liquo r Aut h., 4 76 U.S. 57 3, 5 79 , 10 6 S . Ct. 2 08 0, 2 08 4 (1 98 6) . Rath er, the Supr em e Co urt’s

25 Case: 11-11116 Date Filed: 12/28/2012 Page: 25 of 83de ci si on s s ho w th atst at e an d l oc al laws di sc riminat e in vi ol at io n o f th e d orm an t

Co m m erce Claus e insev eral way s. Fi rs t, a s ta te or l oc al law d is cri m in at es by restric ti ng m ark etparti ci pa ti on or cu rta il in g t he m ov em en t o f art ic le s o f in te rs ta te co m m erce ba se d o n wh ethe r a m ark etpa rti ci pa ntor a rti cl e o f co m m erce is in -s ta te ve rs us ou t-o f-s ta te , or l oc al ve rs us no n- lo cal . See, e.g ., Ful to n C or p. v . Fau lkne r, 51 6 U.S. 3 25 , 33 3, 1 16 S. Ct . 84 8, 8 55 (19 96 ); F ort Gra ti ot , 50 4 U.S. at36 1, 1 12 S. Ct. at20 24 ; H.P. Ho od & So ns , Inc . v. DuMo nd , 33 6 U.S. 5 25 , 52 6, 6 9 S . Ct. 6 57 , 65 9 (1 94 9) . Seco nd , a st at e o r lo cal law d is cri m in at es by con di ti on in g p art ic ip at io n i n a n in te rs ta te m ark eton th e in -s ta te or l oc al pro ces si ng of g oo ds . In o th er wo rd s, a st at e o r lo cal go ve rn m en t m ay no t re qu ire di ve rs io n o f res ou rces of a n i nt ers ta te m ark etin to th e lo cal m ark etto serve lo cal in te res ts . See, e.g ., Carb on e, 51 1 U.S. at39 0, 1 14 S. Ct. at16 82 ; Dea n M il k, 3 40 U.S. at 3 54 , 71 S. Ct. at29 8. Im po rta nt ly, a d is cri m in at ory law i s n o l es s d is cri m in at ory be cau se it ap pl ie s “ al ik e to th e p eo pl e o f al l the Sta te s, i nc lu di ng th e p eo pl e o f th e St at e en act in g s uc h s ta tu te .” Fo rt Gra ti ot , 50 4 U.S. at36 1, 1 12 S. Ct. at20 25 (in te rn al qu ot at io n m arkom it te d) ; ac co rdDeanMi lk , 34 0 U.S. at35 4 n .4, 7 1 S . Ct. at29 8 n.4 (expl ai ni ng th atlo cal ord in an ce’s s ub jecti ng no n- lo cal , in -s ta te res id en ts to

26 Case: 11-11116 Date Filed: 12/28/2012 Page: 26 of 83sa m e p ro sc rip ti on as o ut -o f-s ta te res id en ts is “ imm at eri al ” to do rm an t Co m m erce Cl au se an al y si s) ; s ee Ca rb on e, 51 1 U.S. at39 3– 94 , 11 4 S . Ct. 1 68 3– 84 (in va li da ti ng lo cal wast e d is po sa l o rd in an ce tha t re qu ire d b oth i n- st at e an d o ut -o fst at e was te di sp os al co m

pa ni es to us e lo cal pro ces si ng faci li ty). Ast at e o r lo cal la w m ay im pe rm is si bl y

di sc riminat e ag ai ns t i nt ers ta te co m m erce ev enif t ha t l aw ap pl ie s t o a ll . The Supr em e Co urt’s d orm an t Co m m erce Claus e d eci si on s al so sh ow wh at types of s ta te or l oc al laws are n otdi sc riminat ory . A sta te or l oc al law i s n ot di sc riminat ory

wher e it(1) ha s i nc id en ta l n eg at iv e eff ect s o n s om e (b utno t al l) ou t-o f-s ta te m ark etparti ci pa nt s an d (2 ) do es no t re du ce o r cu rta il acce ss to in te rs ta te m ark et s. See , e.g., Ex xo n C or p. v . Gov ern orof M arylan d, 4 37 U.S. 11 7, 98 S. Ct. 2 20 7 (1 97 8) . As we ex pl ai ne d i n Is la ndSil ve r & Sp ic e, th e fac t tha t “ a reg ul at io n fa ll s o nt o asubs etof o ut -o f-s ta te [co m pa ni es ] do es no t, b y

it se lf, es tabl is h acla im

of d is cri m in at io n a ga in stin te rs ta te co m m erce .” 54 2 F .3dat 8 46 (in te rn al qu ot at io n m ark s o m it te d) ; s ee al so S. W as te Sy s., 4 20 F.3dat 1 29 1 (“ [T]o th e ex te ntth atin -s ta te an d o ut -o f-s ta te bi dd ers are al lo wedto co m pe te free ly on a le ve l p la y in g [f

ie ld ], th ere i s n o c au se forco ns ti tu ti on al co nc ern .”). D. Undue Bur den

27

Case: 11-11116 Date Filed: 12/28/2012 Page: 27 of 83Eve n i f a l aw is no t d is cri m in at ory , itno ne th el es s v io la te s t he do rm an t

Co m m erce Claus e if

itun du ly bur de ns in te rs ta te co m m erce . A law un du ly bu rd en s i nt ers ta te co m

m erce un de r Pi ke if “ th e b ur de n o n i nt ers ta te co m m erce cl earl y ex ceed s t he lo cal be ne fit s.” Is la ndSil ve r & Sp ic e, 54 2 F .3dat 8 46 (in te rn al qu ot at io n m ark s o m it te d) . In thi s i nqui ry , we eva lu at e th e “pr act ic al effe ctof t he st atut e” i n l ig htof “ wha t ef fectwou ldari se if n oton e, bu t m an y or ev ery, Sta te ad op te d s im il ar l eg is la ti on .” Heal y , 49 1 U.S. at33 6, 1 09 S. Ct. at 24 99 . Not ab ly, “ in te rs ta te co m m erce is no t s ub

jecte d t o a n i m

pe rm is si bl e b ur de n si m pl y be cau se anot he rwis e v al idreg ul at io n c au se s s om e b us in es s t o s hi ft f ro m on e in te rs ta te supp li er t o ano th er.” Ex xo n, 4 37 U.S. at 1 27 , 98 S. Ct. at22 14 . Altho ug h t he se ge ne ral pri nc ip le s ar e eas y to su m m ari ze, the y

are m or e di ffi cu ltto ap pl y . Thu s we e xam in e h ow t he Supr em e Co urt an d t hi s C ou rt h av e ap pl ie d t he m

to sp eci fic factua l s cen ari os indo rm an t Co m m erce Claus e cas es . IV. SUPREME COURT AND ELE VENTH CI RCUIT DECI SI ONS A. Disc ri m in at io n: Res tri cti ng Mar ket Pa rti ci pa tio n o r Mo ve m ent o f Arti cl es Ba se d o n Lo ca tio n 1. H.P. Hoo d & So ns , Inc . (19 49 ) H.P. Hoo d & So ns , a Mas sa ch us etts co rp or at io n s el li ng m il k i n B os to n,

28 Case: 11-11116 Date Filed: 12/28/2012 Page: 28 of 83pu rch as edraw m il k fr om New Yorkm il k p ro du cers an d m ai nt ai ne d t hr ee rece iv in g d ep ot s i n New Yo rk , whi ch itop erat edpurs ua ntto a New Yorkst at e li cen se . H.P. Hoo d & So ns , Inc . v. DuMo nd , 33 6 U.S. 5 25 , 52 6, 6 9 S . Ct. 6 57 ,

2 7 65 9 (1 94 9) . Hoo d s ou gh t a l ic en se fro m th e New York C omm is si on er o f Agr ic ul tu re an d M ark et s (the “ Co m m is si on er”) to op erat e a fo urth rece iv in g d ep ot . Und er the New Yorklaw, n o s uc h l ic en se co ul d b e g ran te d fo r anex is ti ng bu si ne ss to op erat e anad di ti on al faci li ty “un le ss th e co m m is si on er i s s at is fie d t ha t . . . the is su an ce o f th e li cen se wil l n otten d t o ade stru ct iv e co m pe ti ti on ina m ark etalr eady

serve d, an d t ha t the is su an ce o f th e li cen se is inth e p ub li c in te res t.” Id . at 5 27 n.3 , 69 S. Ct. at65 9 n .3 (quo ti ng N.Y. A gr ic . Mkts . Law § 2 58 -c) (e m

ph as is ad de d) . The Co m m is si on er d en ie d Ho od ’s li cen se ap pl ic at io n, fin di ng a ne w pl an t wo ul d “ te ndto a de st ru ct iv e co m pe ti ti on ina m ark etalr eady ad equa te ly serv ed .” Id. at52 9, 6 9 S . Ct. at66 0. 2 8 The Supreme Court’s decision in H.P. Hood does not indicate whether H.P. Hood held 2 7 a license for e ach of

its rece iving de pots or whether it held a sing le license for a ll three. Specifica lly , the New

York Commissioner expl ained: 2 8 I f [Hood] is permitted to equip and operate another milk plant in this territory , and to take on produce rs now delivering to plants other than tho se which [Hood] operates, it will tend to r educe the volume of milk rec eived at the plants which lose those produce rs, and will tend to inc rea se the cost of handling milk in t hose plants. I f [Hood] takes produce rs not delivering milk to local marke ts such as Troy , it will have a tendenc y to deprive such marke ts of a supply neede d duringthe short season.
29 Case: 11-11116 Date Filed: 12/28/2012 Page: 29 of 83Hoo d s ue d, an d t he Supr em e Co urt h el d t ha t the New Yorkst atut e, as

ap pl ie d, v io la te d t he do rm an t Co m m erce Claus e b y

di sc riminat in g a ga in st in te rs ta te co m

m erce . The Supr em e Co urt ex pl ai ne d t ha t the Co m m is si on er’s reas onforde nyin g Ho oda pe rm itwas t ha t i ts ne w faci li ty w ou ldall ow Ho odto ta ke bu si ne ss fro m , andcau se sh orta ge s i n, l oc al New Yorkm ark et s. Id . at 5 40 , 69 S. Ct. at66 6. Th is ob

jecti ve was i m

pe rm is si bl e b ecau se th e Co m m is si on er de ni edHoo d’s l ic en se reque st“up on th e so le an d s pe ci fic gro un ds th atitwil l subjec t o th ers to co m

pe ti ti on an d t ak e supp li es ne ed edlo cal ly, anen d, as we ha ve sh own , always h el d t o b e p recl ud edby the Co m m erce Claus e.” Id. at54 2, 6 9 S . 2 9 Ct . at 6 67 . The Supr em e Co urt re

jecte d t he Co m

m is si on er’s cl ai m

th atth e st atut e d id no t d is cri m in at e ag ai ns t i nt ers ta te co m m erce be cau se Hoo d a lre ady he lda li cen se to op erat e th ree o th er New Yo rkfaci li ti es fro m whi chHoo d c ou ldsh ip an un li m it edam ou ntof m il k t o M as sa ch us et ts . Id. at53 9, 6 9 S . Ct. at66 5– 66 . The

There is no evidenc e that any produce r i s wi t h o u t a marke t for his milk. There is no evidenc e that an y produce rs not now delivering milk to [Hood] would rec eive any highe r price , wer e they to deliver their milk to [Hood’s] proposed plant. I d. at 528–29, 69 S. Ct. at 660. The Supreme Court also rejec ted the Commissi oner’ s claim that the licensingstatute 2 9 was a uthorized by

and par t of the fe dera l regulatory scheme for the milk marke t. H.P. Hood, 336 U.S. at 540–45, 69 S. Ct . at 666–68.

30

Case: 11-11116 Date Filed: 12/28/2012 Page: 30 of 83Supr em e Co urt o bs erv edth atm il k re cei vi ng de po ts m us t b e lo cat edclo se to m il k pr oduc ers , andth eref

or e Hoo d c ou ldno t i nc reas e it s m il k d is tri bu ti on by ex pa nd in g i ts ex is ti ng New Yorkfaci li ti es . Id. at54 0, 6 9 S . Ct. at66 6. Th e Supr em e Co urt s tre ss edth at , eve n t ho ug h Ho odit se lf wa s al read y pa rti ci pa ti ng in th e New York m il k d is tri bu ti on m ark et , th e Co m m is si on er’s rat io na le for res tri ct in g Ho od ’s op erat io n o f a n ew faci li ty, if p erm it te d, wo ul d a ls o a ll ow t he st at e to ex cl ud e n ew en tra nt s i n t he m il k d is tri bu ti on m ark et . Id. 2. Fo rt Gra ti ot(19 92 ) Whi le H.P. Hoo d i nv ol ve d re st ric ti ng m ark etpa rti ci pa ti on , Fort Gra ti ot San it ary Lan df

il l, In c. v. M ic hi ga n Dep art m en t o f Natur al Res ou rces , 50 4 U.S. 35 3, 1 12 S. Ct. 2 01 9 (1 99 2) , sh ows th atres tri ct in g t he m ov em en t o f art ic le s o f in te rs ta te co m

m erce to pro te ctlo cal bu si ne ss es fro m co m pe ti ti on als o im pe rm is si bl y

di sc riminat es ag ai ns t i nt ers ta te co m m erce . The Fo rt Gra ti otCo urt i nv al id at eda Mi ch ig anst atut e th atall owe d aco un ty to acce pton ly w as te ge ne rat edinth atco un ty andto res tri ctth e im po rt o f so li d was te in to th atco un ty from bo th in -s ta te an d o ut -o f-s ta te (th e “ W as te Im po rt

31 Case: 11-11116 Date Filed: 12/28/2012 Page: 31 of 83Res tri ct io ns ”). Id. at36 1, 1 12 S. Ct. at20 24 . Plai nt iff Fo rt Gra ti otop erat eda 3 0 la nd fil l i n S t. Cl ai r Co un ty, Mi ch ig an . Id. at35 7, 1 12 S. Ct. at20 22 . St. Cl ai r Co un ty den ie d F ort Gra ti ot ’s app li cat io n fo r au th or it y to acce ptou t-o f-s ta te wast e atit s l an df

il l. Id . FortGrat io t s ue d, cl ai m in g t he W as te Im po rt R es tri ct io ns vi ol at edth e d orm an t Co m m erce Claus e. The Supr em e Co urt s tru ckdo wn t he W as te Im po rt R es tri ct io ns , whi ch ap pl ie d t o b ot h i n- st at e an d o ut -o f-s ta te bu si ne ss es . The Supr em e Co urt co nc lu de d fi rs t tha t “ [s ]oli d was te , eve n i f itha s n o v al ue , is anart ic le of co m m erce .” Id . at 3 59 , 11 2 S . Ct. at20 23 . The Co urt n ex t fo un d t ha t the W as te Im po rt R es tri ct io ns were d is cri m in at ory be cau se th ey

affo rd ed“ lo cal wast e pr oduc ers co m

pl et e p ro te ct io n fr om

co m pe ti ti on fro m

ou t-o f-s ta te wast e p ro du cers who see k t o u se lo cal wast e d is po sa l ar eas .” Id . at 3 61 , 11 2 S . Ct. at20 24 . Mi ch ig anarg ue d t ha t the W as te Im po rt R es tri ct io ns “ do no t d is cri m in at e

In 1988, Michig an ame nded its Soli d Waste Manag ement Ac t to provide that: 3 0 “A pe rson shall not acc ept for disposal solid waste . . . that is not g ener ated in the county in which the disposal are a is located unless th e ac ce p t ance of solid waste . . . that is not g ener ated in the co u n t y is expli citly authorized in the approve d county solid waste manag ement plan.” Mich. Comp. L aws § 299.413a (1991). In addition, the amende d statute provided: “In order for a disposal are a to serve the disposal needs of another county , state, or country , the service . . . must be expli citly authorized in the approve d solid waste manag ement plan of the r ece iving c ounty .” I d. § 299.430(2) ( 1991).

32 Case: 11-11116 Date Filed: 12/28/2012 Page: 32 of 83ag ai ns t i nt ers ta te co m m erce on th ei r face or i n e ffec t b ecau se th ey tre atwast e fro m ot he r Mi ch ig anco un ti es no di ffer en tl y th anwast e fro m

ot he r St at es .” Id . Reject in g t hi s ar gu m en t, the Supr em e Co urt i ns tru ct edth at“ a St at e (o r on e o f it s po li ti cal subd iv is io ns ) m ay no t av oi d t he st ric tu res of the Co m m erce Claus e b y cu rta il in g t he m ov em en t o f art ic le s o f co m m erce th ro ug h s ub di vi si on s o f th e St at e, rathe r th anth ro ug h t he Sta te it se lf.” Id. In ot he r wor ds , “ ‘a burd enim po se d b y a St at e upo n i nt ers ta te co m m erce is no t t o b e su st ai ne d s im pl y be cau se th e st atut e im po si ng itap pl ie s al ik e to th e p eo pl e o f al l the Sta te s, i nc lu di ng th e p eo pl e o f th e St at e en act in g s uc h s ta tu te .’ ” Id . at 3 61 , 11 2 S . Ct. at20 25 (qu ot in g B rimm er v . Reb m an , 13 8 U.S. 7 8, 8 3, 1 1 S . Ct. 2 13 , 21 4 (1 89 1) ). The Supr em e Co urt d et erm in edMi ch ig anha d fa il edto sh ow t ha t i ts W as te Im po rt R es tri ct io ns “ fu rth er h eal th an d s afet y co nc ern s t ha t cann otbe ad equa te ly se rv edby non di sc riminat ory alt ern at iv es .” Id . at 3 66 , 11 2 S . Ct. at20 27 . The Co urt re jecte d M ic hi gan’s ar gu m en t tha t the W as te Im po rt R es tri ct io ns were ne ces sa ry to en ab le co un ti es to pl anforth e d is po sa l o f fu tu re was te . Id. The Supr em e Co urt ex pl ai ne d tha t “ Mi ch ig anco ul d a tt ai n t ha t o bjec ti ve witho ut di sc riminat in g b etweenin - an d o ut -o f-s ta te wast e,” b y , for ex am pl e, li m it in g “ th e am ou ntof wa st e th atlan df il l o pe rat or s m ay

acce pteach y ear.” Id. at36 7, 1 12 S. Ct . at 2 02 7.

33

Case: 11-11116 Date Filed: 12/28/2012 Page: 33 of 833. Fu lt on Co rp . (19 96 )

Fu lt onCo rp . v. Fau lkne r, 51 6 U.S. 3 25 , 11 6 S . Ct. 8 48 (19 96 ), sh ows th at (1 ) anin -s ta te pl ai nt iff

m ay pro pe rly chal le ng e a s ta te law o n d orm an t Co m m erce Cl au se gro un ds , and(2) a st at e’s ta x t ha t i s b as edonwhet he r a b us in es s i s i n- st at e orou t-o f-s ta te di sc riminat es ag ai ns t i nt ers ta te co m m erce . Pl ai nt iff Fu lt on Co rp or at io n was a North Caro li naco m pany tha t o wne d st oc k i n o th er co rp or at io ns th atdi d b us in es s ex cl us iv el y ou t-o f-s ta te . Id. at32 8, 11 6 S . Ct. at85 2. No rth Caro li nalaw i m po se d ast at e “ in tang ib le s t ax ” o n co rp or at e st oc k o wne d b y Nort h C aro li nares id en ts , su ch as F ul to n. Id . at 3 27 , 11 6 S . Ct. at85 2. The tax was a ss es se d a cco rd in g t o t he st oc k- is su in g c or po rat io n’s ex po su re to Nort h C aro li na ’s st at e in co m e ta x. Th e m or e North Caro li nain co m e ta x t he co rp or at io n p ai d, the les s a No rth Caro li nares id en t s ha reh ol de r owe d due to hi s own ers hi p o f th atco rp or at io n’s s to ck . Id. at32 8, 1 16 S. Ct. at85 2. Sev eral of the ou t-o f-s ta te co rp or at io ns who se st oc k F ul to n o wne d p ai d n o NorthCaro li nain co m e ta x, wh ic h m ean t Fu lt on , an i n- st at e res id en t, p ai d ahi gh er in ta ng ib le s t ax th anot he r in -s ta te res id en ts who own edst oc k i n c or po rat io ns th at pa idNort h C aro li nain co m e ta x. Id . at 3 29 , 11 6 S . Ct. at85 2. Fu lt on ch al le ng ed

34 Case: 11-11116 Date Filed: 12/28/2012 Page: 34 of 83th e ta x u nd er the do rm an t Co m m erce Claus e. The Supr em e Co urt s tru ckdo wn t he tax . Firs t, the Supr em e Co urt co nc lu de d, “ [t]he re i s n o d oubtth atth e in ta ng ib le s t ax faci al ly dis cri m in at es ag ai ns t i nt ers ta te co m

m erce ” b ecau se “ [a] regi m e th attax es st oc k o nl y to th e de gr ee tha t i ts is su in g c or po rat io n p art ic ip at es inin te rs ta te co m m erce fav or s do m es ti c co rp or at io ns .” Id . at 3 33 , 11 6 S . Ct. at85 5. Im po rta nt ly, th e Fu lt on Co urt co ns id eredth e eff

ectof the Nort h C aro li nalaw o n n on -p arty , ou t-o f-s ta te firm s— an d n otjus t o n t he in -s ta te pl ai nt iff —i n a ss es si ng th e la w’ s i nt ers ta te reac h. The Supr em e Co urt ru le d t ha t No rth Caro li naco ul d n otjus ti fy th e in ta ng ib le s t ax on gro un ds th atitsubjec te d i nt ers ta te co m m erce to a bu rd en al read y bo rn e b y in tra st at e co m

m erce . The Supr em e Co urt ex pl ai ne d t ha t No rth Caro li naco ul d n otsh ow t ha t the in ta ng ib le s t ax ap pr ox im at edth e am ou ntof t ax on in tra st at e co m

m erce , th e in ta ng ib le s t ax was n otsubs ta nt ia ll y equi va le ntto th e st at e in co m e ta x, an d No rth Caro li naha d n o s ov erei gn in te res t i n t ax in g i nc om e earn edou t-o f-s ta te . Id. at33 4– 35 , 11 6 S . Ct. at85 5– 56 . B. Dis cri m in at io n: Co ndi tio ni ng Mar ket Pa rti ci pa tio n o n Lo ca l o r In -Sta te Pro ces si ng of G oo ds 1. DeanMi lkCo . (19 51 )

35 Case: 11-11116 Date Filed: 12/28/2012 Page: 35 of 83DeanMi lkCo m pa ny v. Cit y

of M ad is on , 34 0 U.S. 3 49 , 71 S. Ct. 2 95 (19 51 ) il lu st rat es th e se co ndway a st at e o r lo cal law ca n d is cri m in at e ag ai ns t i nt ers ta te co m m erce : b y requi rin g t he lo cal or i n- st at e p ro ces si ng of g oo ds . InDeanMi lk , th e Ci ty of Mad is on , W is co ns in , pas se d a n o rd in an ce requi rin g tha t al l m il k s ol d i n M ad is on be pa st eu riz ed , pro ces se d a ndbo tt le d a t a Ci ty-app ro ve d p la ntwithi n fi ve m il es of M ad is on . 34 0 U.S. at35 0, 7 1 S . Ct. at 29 6. On ly thre e m il k p ro ces so rs th atactua ll y so ldm il k wh ol es al e an d re ta il in Mad is on were l oc at edwithi n t ha t fi ve -m il e rad iu s. Id . at 3 52 , 71 S. Ct. at29 7. Pl ai nt iff DeanMi lk , an I ll in oi s co rp or at io n, b ou gh t m il k fr om hu nd red s o f farm s i n Il li no is an d Wis co ns in , pas te ur iz edth e m il k i n Il li no is , m or e th anfiv e m il es fro m

Mad is on , anddi st rib ut edth e m il k i n b ot h s ta te s. Id . Purs ua ntto th e or di na nc e, Mad is on de ni eda m il k- se ll in g l ic en se to DeanMi lkso le ly becau se DeanMi lkpa st eu riz edm il k a t p la nt s m or e th anfiv e m il es fro m Mad is on . Id. DeanMi lksu ed , cla im in g t he Cit y ’s ord in an ce v io la te d t he do rm an t Co m m erce Cl au se . Id. at35 0, 7 1 S . Ct. at29 6. Th e Supr em e Co urt ag reedan d s tru ckdo wn th e o rd in an ce. Id . at 3 53 , 71 S. Ct. at29 7. The Supr em e Co urt co nc lu de d t ha t the Cit y ord in an ce d is cri m in at edag ai ns t in te rs ta te co m

m erce be cau se th e o rd in an ce “ in pra ct ic al effe ctex cl ud es fro m di st rib ut io n i n M ad is on who le so m e m il k p ro du cedan d p as te ur iz edinIll in oi s.” Id .
36 Case: 11-11116 Date Filed: 12/28/2012 Page: 36 of 83at35 4, 7 1 S . Ct. at29 7– 98 . The Supr em e Co urt co nc lu de d t ha t the Cit y ha d

“ erec t[e d] aneco no m ic barri er p ro te ct in g am ajorlo cal in du st ry ag ai ns t co m pe ti ti on fro m

witho utth e St at e,” an d the refo re the Cit y ord in an ce “pl ai nl y di sc riminat es ag ai ns t i nt ers ta te co m m erce .” Id . at 3 54 , 71 S. Ct. at29 8. Th e fac t th atth e Ci ty ord in an ce ap pl ie d e qu al ly to i n- st at e m il k d is tri bu to rs di d n otch an ge th e Supr em e Co urt’s an al y si s, fo r “ [i]t i s i m m at eri al th atW is co ns in mil k fr om ou ts id e th e Ma di so n[ , W is co ns in ] areais subjec te d t o the same pro sc rip ti on as t ha t m ov in g i n i nt ers ta te co m m erce .” Id . at 3 54 n.4 , 71 S. Ct. at29 8 n .4. The DeanMi lkCo urt re co gn iz edth e Ci ty’ s i nt eres t i n t he saf ety an d h eal th of it s ci ti zen s an d t he ir m il k s up pl y . Id. at35 3, 7 1 S . Ct. at29 7. Ho wev er, the Supr em e Co urt d et erm in edth at“ reas on ab le an d a de qu at e al te rn at iv es ” to th e Ci ty or di na nc e were a va il ab le . Id. at35 4, 7 1 S . Ct. at29 8. Fo r ex am pl e, th e Ci ty cou ld (1 ) ch arg e o ut -o f-t own m il k p ro ces so rs for th e co stof i ns pe ct in g m il k b ro ug htto Mad is on fro m

ot he r are as , or (2 ) ad op t a qua li ty stan da rdba se d o n m il k ra ti ng s es tabl is he d b y

th e juri sd ic ti oninwhi ch th e m il k i s p ro ces se d. Be cau se th e di sc riminat ory

m eas ur e was no t “ es se nt ia l fo r th e p ro te ct io n o f lo cal he al th in te res ts ,” th e Supr em e Co urt i nv al id at edth e o rd in an ce. Id . at 3 56 , 71 S. Ct. at 29 9. DeanMi lksh ows th atlo cal ord in an ces th atis ol at e lo cal m ark et s fr om

37 Case: 11-11116 Date Filed: 12/28/2012 Page: 37 of 83ou ts id ers are d is cri m in at ory ev enwhen th os e o rd in an ces ap pl y equa ll y to in
st at ers an d o ut -o f-s ta te rs . This earl y cas e il lu st rat es th ata la w canbe di sc riminat ory

ev enwitho utex pl ic it ly dis ti ng ui sh in g b etweenin -s ta te rs an d o ut of -s ta te rs . 2. C & A Carb on e, In c. (1 99 4) C & A Carbo ne , Inc . v. Town of C lark st own , 51 1 U.S. 3 83 , 11 4 S . Ct. 1 67 7 (1 99 4) , is on e o f se ve ral cas es inwhi chth e Supr em e Co urt s tru ckdo wn a l oc al or di na nc e requi rin g a n i te m inco m m erce to be pro ces se d b y lo cal co m

pa ni es be fo re b ei ng sh ip pe d o ut -o f-s ta te . Andli ke DeanMi lk , Carb on e sh ows th atev en a fac ia ll y ne ut ral law ca n b e d is cri m in at ory , so lo ng as t he pu rp os e o r effe ctof t he la w is to res tri ctou ts id ers ’ acce ss to lo cal m ark et s. Ca rb on e al so de m on strat es th ata lo cal law ap pl y in g o nl y to a lo cal res ou rce m ay

no ne th el es s v io la te th e do rm an t Co m

m erce Claus e an d t ha t i n c on si de rin g s uc h a n i ss ue , th e la w’ s ef fect on ou t-o f-s ta te no n- pa rti es m ay pro pe rly be co ns id ered . InCarb on e, th e Town of C la rk st own , New York , rep la ceda la nd fil l wi th a ne w tra ns fer s ta ti onth at(1) rece iv edbu lkso li d was te , (2) sep arat edrecyclab le fro m no nr ecyclab le it em s, an d (3 ) sh ip pe d re cy cl ab le wast e to a recycli ng faci li ty an d n on recyclab le wast e to a la nd fil l o r in ci ne rat or . 51 1 U.S. at38 7, 1 14 S. Ct. at 16 80 . To fi na nc e th e n ew tr an sf er s ta ti on , th e Town en ga ge d a“ lo cal pri va te

38 Case: 11-11116 Date Filed: 12/28/2012 Page: 38 of 83co nt ract or ” to bu il d a ndop erat e th e tr an sf er s ta ti on an d t o c ha rg e a fee forwast e 3 1 th e co nt ract orpro ces se d a t the st at io n. Id . After f iv e y ears , th e co nt ract orwou ld se ll th e tr an sf

er s ta ti on to th e Town for$1 . Id. To g ua ran te e th e lo cal co nt ract orst eady bu si ne ss , th e Town pa ss eda “ flo w co nt ro l” ord in an ce re qu iri ng all no n- ha zard ou s s ol idwast e in th e Townto be de po si te d fi rs t atth is ne w, lo cal tra ns fer s ta ti on be fo re l eav in g t he m un ic ip al it y . 3 2 Id . Pl ai nt iff

C & A Carb on e, In c., alr eady op erat eda recycli ng cen te r in th e Townwher e it“rece iv e[d ] bu lkso li d was te , so rt[ ed ] an d b ai l[e d] it , andth en sh ip [p ed ] itto ot he r pr oc es si ng faci li ti es —m uc h a s o ccu r[re d] at t he [T] own ’s new tra ns fer s ta ti on .” Id. at38 7, 1 14 S. Ct. at16 81 . Alth ou gh Carb on e co ul d s ti ll 3 3
rece iv e so li d was te , th e o rd in an ce re qu ire d C arb on e to bri ng th e n on recyclab le res idue fro m

th atwast e to th e Town ’s new tran sf er s ta ti on . It thu s “ fo rb [ad e] The Supreme Court’s decision in Carbone does not state explicitly whether the 3 1 company that built and operated the wa ste transfe r station was loca ted in the Town. How ever , the majority

opinion describes the company as a “ local private contra ctor.” Carbone, 511 U .S. at 387, 114 S. Ct . at 1680. Noncompliance was punishable by fine a nd imprisonment. “The avowed pur pose of 3 2 the ordinanc e [was] to retain the proc essingfee s charg ed at the tr ansfe r station to amortize the cost of the f

acility .” I d. at 386, 114 S. Ct. at 1680. The Supreme Court’s decision in Carbone does not state explicitly whether C & A 3 3 Carbone w as located in the Town. How ever , the company nonetheless ope rate d a re cycling cente r in the Town.

39

Case: 11-11116 Date Filed: 12/28/2012 Page: 39 of 83Carb on e to sh ip th e n on recyclab le wast e it se lf, a nditrequi re[d ] Carb on e to pa y a ti pp in g fe e o n t ras h t ha t Ca rb on e h a[d ] al read y so rte d.” Id. at38 8, 1 14 S. Ct. at 16 81 . Carb on e su edth e Town , cla im in g t he ord in an ce v io la te d t he do rm an t Co m m erce Claus e. Carb on e arg ue d t he ord in an ce ex cl ud edco m pe ti to rs (bo th in
st at e an d o ut -o f-s ta te firm s) fro m acce ss in g alo cal m ark etan d p rev en te d C arb on e fro m sh ip pi ng th e Town ’s wast e o utof t own an d a cro ss st at e li ne s. Id . at 3 87 –8 8, 11 4 S . Ct. at16 80 –8 1. Th e Supr em e Co urt ag reedan d s tru ckdo wn t he ord in an ce. The Supr em e Co urt re as on edth at“ [w]hil e th e imm ed ia te effe ctof t he or di na nc e is to di rectlo cal tra ns po rt o f so li d was te to a de si gn at edsi te withi n t he lo cal juri sd ic ti on , it s ec on om ic effe ct s ar e in te rs ta te inreac h.” Id. at38 9, 1 14 S. Ct . at 1 68 1. In ot he r wor ds , eve n t ho ug h t he ord in an ce was di rect in g l oc al wast e fro m Carb on e’s ownfaci li ty loc at edinth e Town to th e tr an sf er s ta ti on lo cat edin th e sa m e Town , th e eff

ectof t he lo cal ord in an ce was in te rs ta te inreac h. In fact , Carb on e’s faci li ty in the Townrece iv edan d p ro ces se d was te fro m pl aces ot he r th anth e Town , in cl ud in g fr om ou t o f st at e. By

requi rin g C arb on e to sen d t he no nr ecyclab le res idue of tha t was te to th e n ew lo cal tra ns fer s ta ti on at a n ad di ti on al co st , th e o rd in an ce “ [dro ve ] up th e co stforou t-o f-s ta te in te res ts to

40 Case: 11-11116 Date Filed: 12/28/2012 Page: 40 of 83di sp os e o f th ei r so li d was te .” Id . Thu s, the Supr em e Co urt l oo ke d a t the effe cton

no n- party, out -o f-s ta te firm s wh o c on tra ct edwith C arb on e to sh ow the in te rs ta te reac h o f th e Town ’s ord in an ce. Eve n a s t o was te ori gi na ti ng inth e Town , th e or di na nc e “pr ev en t[e d] ev eryone ex cep t the fav or edlo cal op erat orfro m pe rfo rm in g t he in it ia l p ro ces si ng st ep ” an d “ th us de pr iv e[d ] ou t-o f-s ta te bu si ne ss es of a cces s t o alo cal m ark et .” Id . Bas edon th is an al y si s, the Carb on e Co urt co nc lu de d t ha t the ord in an ce di sc riminat edag ai ns t i nt ers ta te co m m erce be cau se “ itall ow[ ed ] on ly the fav or ed op erat orto pro ces s was te th at[was ] withi n the li m it s o f th e to wn.” Id . at 3 91 , 11 4 S. Ct . at 1 68 2. Th e Supr em e Co urt fo un d t ha t “ [t]he ord in an ce i s n o l es s di sc riminat ory

be cau se in -s ta te or i n- to wn p ro ces so rs are al so co ve redby the pr oh ib it io n.” Id. Lik en in g t he ord in an ce t o i nv al idlaws requi rin g t he in -s ta te pr oc es si ng of m eat , m il k a ndsea fo od , th e Car bo ne Co urt ex pl ai ne d t ha t “ [t]he es se nt ia l v ic e in laws of t hi s s ort i s t ha t the y ba r th e im

po rt o f th e p ro ces si ng se rv ic e.” Id . at 3 92 , 11 4 S . Ct. at16 83 . “ Pu t an ot he r way , th e o ffen di ng lo cal la ws h oa rda lo cal res ou rce . . . fo r th e b en efi t o f lo cal bu si ne ss es th attre atit .” Id . The Supr em e Co urt s ta te d t ha t the Town ’s ord in an ce “ ho ard s s ol idwast e, an d t he de m an d t o g etridof i t, fo r th e b en efi t o f th e p refe rredpro ces si ng faci li ty.” Id.

41 Case: 11-11116 Date Filed: 12/28/2012 Page: 41 of 83As a re su lt , th ou gh th e lo cal ord in an ce d idno t re gu la te in te rs ta te co m m erce “ in ex pl ic itterm s,” i t d idso in“pr act ic al effec t an d d es ig n.” Id. at39 4, 1 14 S. Ct. at 16 84 . Not ab ly, th e Car

bo ne Co urt fo un d t ha t the ord in an ce’s fav or in g asi ng le co m pa ny—ve rs us m erel y

im po si ng anin -to wn p ro ces si ng requi rem en t— on ly
m ad e “ th e p ro te ct io ni steffe ctof the ord in an ce m or e acu te .” Id . at 3 92 , 11 4 S . Ct. 16 83 . An in -to wn p ro ces si ng requi rem en t wo ul d a ll ow a c om pe ti to r to bu il d a pr oc es si ng faci li ty in Cl ark st own , justas M ad is on ’s m il k- pa st eu riz at io n o rd in an ce wou ldall ow Dea n M il k t o b ui lda pa st eu riz at io n p la ntwithi n fi ve m il es of Mad is on . Id. Bu t b y

li m it in g p ro ces si ng to a si ng le co m pa ny, “ th e fl ow co nt ro l or di na nc e atis su e h ere s qu el ch es co m pe ti ti on inth e was te -p ro ces si ng servi ce al to ge th er, l eav in g n o ro om forin ve st m en t fr om

ou ts id e.” Id . Fi na ll y , th e Car

bo ne Co urt re

jecte d t he Town ’s pro ffer edrat io na le s fo r th e di sc riminat ory

ord in an ce, i nc lu di ng th e Town ’s nee d t o e ns ur e th e sa fe h an dl in g an d t reat m en t o f so li d was te , esp eci al ly giv enth e d im in is he d l an df il l s pa ce an d es cal at in g e nv iro nm en ta l-c le anup co st s. Id . at 3 93 , 11 4 S . Ct. at16 83 . The Supr em e Co urt p oi nt edou t tha t the Townha d “ an y nu m be r of no nd is cri m in at ory al te rn at iv es forad dr es si ng th e h eal th an d e nv iro nm en ta l p ro bl em s al le ge d t o

42 Case: 11-11116 Date Filed: 12/28/2012 Page: 42 of 83jus ti fy

th e o rd in an ce i n que st io n,” in cl ud in g “ un ifo rm saf ety reg ul at io ns .” Id.

3 4 The Supr em e Co urt co nc lu de d, “ [s ]tate an d l oc al go ve rn m en ts m ay no t u se th ei r reg ul at ory

po wer t o fa vo r lo cal en te rp ris e b y pro hi bi ti ng pa tro na ge of o ut -o f-s ta te co m pe ti to rs or t he ir f

aci li ti es .” Id . at 3 94 , 11 4 S . Ct. at16 84 . C. Non-Di sc ri m in at io n: La w s Aff ecti ng Onl y S ome Out- of -Sta te Co m pa ni es or Effe cti ng a Le ve l Pl ay in g Fi el d Altho ug h t he laws im

pe rm is si bl y

di sc riminat edinH.P. Hoo d, Fo rt Gra ti ot , Fu lt on , DeanMi lk , andCarb on e, th e Supr em e Co urt h el d t ha t the law i n Ex xo n di d n ot . 1. Ex xo n C or

p. (1 97 8) InExx on Co rp . v. Go ve rn orof M arylan d, 4 37 U.S. 11 7, 9 8 S . Ct. 2 20 7 (1 97 8) , th e Supr em e Co urt fo un d t ha t a s ta te st atut e th atap pl ie d t o o nl y so m e o ut of -s ta te co m

pa ni es , bu t n otall of the m , was n otdi sc riminat ory an d d idno t v io la te th e d orm an t Co m

m erce Claus e. At the ti m e, al l g as so ldinMarylan d was pro du cedor r efi ne d o ut -o f-s ta te . Id . at 1 23 , 98 S. Ct. at22 12 . Out -o f-s ta te pro du cers an d re fin ers own edfiv e
The Court also re

jected the Town’s fina

ncingrationale and explained that “r evenue 3 4 g ener ation is not a local intere st that can justify discrimination ag ainst interstate c ommerce .” Carbone, 511 U .S. at 393, 114 S. C t. at 1684.

43

Case: 11-11116 Date Filed: 12/28/2012 Page: 43 of 83pe rcen t o f Mary la nd ’s gas st at io ns . Id. The rem ai ni ng ga s s ta ti on s i n M arylan d

were o wne d b y

ou t-o f-s ta te ga so li ne de al ers or i nd ep en de ntMarylan d g as ol in e de al ers , no ne of wh ic h p ro du cedor r efi ne d g as ol in e. Afte r th e 1 97 3 g as ol in e sh orta ge , th e St at e o f Mary la ndin ve st ig at edan d fo un d tha t g as st at io ns inMarylan d t ha t wer e o wne d b y refi ne rs ha d u nf

ai r acc es s to ga so li ne supp li es du rin g the sh orta ge . In re sp on se , Marylan d e na ct eda st atut e pr oh ib it in g g as ol in e ref

in ers fro m

op erat in g re ta il ga s s ta ti on s i n t he st at e. Exx on , 43 7 U.S. at11 9– 21 , 98 S. Ct. at22 11 . The s ta tu te di d n otaffe ctan y own ers of g as st at io ns th atwere n otals o g as ol in e ref in ers . Id. at12 6, 9 8 S . Ct. at22 14 . As a res ul t, the bu rd enof d iv es ti tu re fe ll en ti rel y on ou t-o f-s ta te co m

pa ni es th atbo th own edMarylan d g as st at io ns an d p ro du cedor r efi ne d g as . Sev enga so li ne pro du cers an d re fin ers th atown edMarylan d g as st at io ns (th e “ refi ne rs ”) ch al le ng edMarylan d’s d iv es ti ture s ta tu te un de r th e d orm an t Co m m erce Claus e. The re fin ers arg ue d tha t the st atut e was di sc riminat ory be cau se itpro te ct edin de pe nd en t M arylan d g as ol in e d eal ers fro m ou t-o f-s ta te co m pe ti ti on . Id. at12 5, 9 8 S . Ct. at22 13 –1 4. 3 5 The re finers r elied on the f act that the dive stiture require ment aff ecte d only

out-of-state 3 5 companies. Exx on, 437 U.S. at 125, 98 S. Ct . at 2214. The r efine rs offe red no e vidence that the statute would cha

ng e the total amount of pe troleum products shipped into Mary land. I d. at 123, 98 S. Ct . at 2212.

44

Case: 11-11116 Date Filed: 12/28/2012 Page: 44 of 83The Exx on Co urt uph el d M arylan d’s s ta tu te be cau se itap pl ie d o nl y to ou tof -s ta te ga so li ne de al ers th atpro du cedor r efi ne d g as ol in e an d l eftot he r ou t-o fst at e g as ol in e d eal ers un affe ct ed . Id. at12 5– 26 , 98 S. Ct. at22 14 . The Ex xo n Co urt re jecte d t he refi ne rs ’ arg um en t tha t, s in ce the bu rd enof d iv es ti tu re fe ll en ti rel y on ou t-o f-s ta te co m

pa ni es , th e st atut e cre at ed“ a p ro te ct eden cl av e fo r Mary la ndin de pe nd en t d eal ers ” an d d is cri m in at edag ai ns t i nt ers ta te co m m erce in th e ret ai l g as ol in e m ark et . Id. at12 5, 9 8 S . Ct. at22 13 –1 4. Th e Supr em e Co urt ob se rv edth atth e st atut e “ crea te [d ] no ba rri ers what so ev er ag ai ns t i nt ers ta te in de pe nd en t d eal ers ” an d t he refo re ap pl ie d t o o nl y so m e o ut -o f-s ta te co m

pani es . Id . at 1 26 , 98 S. Ct. at22 14 . The s ta tu te th us ga ve “ in -s ta te in de pe nd en t d eal ers . . . no c om

pe ti ti ve advant ag e o ve r ou t-o f-s ta te de al ers .” Id . The Supr em e Co urt no te d t ha t the Marylan d s ta tu te di d n ot“pr oh ib itth e fl ow o f in te rs ta te go od s, p la ce ad de d c os ts up on th em , or d is ti ng ui sh be twee n i n- st at e an d o ut -o f-s ta te co m pa ni es in th e ret ai l m ark et .” Id . To the Exx onCo urt, the factth atth e Ma ry landst atut e wou ldhave no effe ct on th e p ro po rti on of i n- st at e v ers us ou t-o f-s ta te ga so li ne so ldinMarylan d di st in gu is he d Ex xo n fr om DeanMi lk . As no te d abo ve , all of t he ga s s ol d i n

45 Case: 11-11116 Date Filed: 12/28/2012 Page: 45 of 83Mary la ndcam e fro m ou t-o f-s ta te . Id. The Supr em e Co urt re as on edth at“ [i]f th e effe ctof ast at e reg ul at io n i s t o c au se lo cal go od s t o c on st itut e a l arg er s ha re, an d go od s wi th anou t-o f-s ta te so ur ce t o c on st itut e a s m al le r sh are, o f th e to ta l s al es in th e m ark et

—as in. . . DeanMi lk

—the reg ul at io n m ay

ha ve a di sc riminat ory

effe ct on in te rs ta te co m

m erce .” Id . at 1 26 n.1 6, 9 8 S . Ct. at22 14 n.1 6 (c it at io ns om it te d) . The Ma ry la ndst atut e wou ldha ve no su ch effe ct . Id. The Exx on Co urt h el d, “ [t]he factth atth e b ur de n o f a s ta te reg ul at io n fa ll s on so m e in te rs ta te co m

pa ni es do es no t, b y

it se lf, e st ab li sh a cl ai m

of di sc riminat io n a ga in stin te rs ta te co m m erce .” Id . at 1 26 , 98 S. Ct. at22 14 (em ph as is ad de d) . Nex t, the Exx on Co urt co nc lu de d t ha t the withd rawal of o ut -o f-s ta te ga so li ne pro du cers an d re fin ers fro m th e Ma ry la ndret ai l g as ol in e m ark etwas n ot anim pe rm is si bl e b ur de n o n i nt ers ta te co m m erce be cau se ot he r ou t-o f-s ta te pr oduc ers an d re fin ers wou ldrep la ce the m is si ng sh are o f th e g as ol in e supp ly. Id. The Co m m erce Claus e d oe s n otpro te ct“ th e p art ic ul ar s tru ctur e o r m etho ds of op erat io n i n aret ai l m ark et .” Id . at 1 27 , 98 S. Ct. at22 15 . “ [I]nt ers ta te co m m erce is no t s ub jecte d t o a n i m

pe rm is si bl e b ur de n s im

pl y be cau se anot he rwis e v al id reg ul at io n c au se s s om e b us in es s t o s hi ft f ro m on e in te rs ta te supp li er t o ano th er.”

46 Case: 11-11116 Date Filed: 12/28/2012 Page: 46 of 83Id . at 1 27 , 98 S. Ct. at22 14 .

It i s al so he lp fu l t o re vi ew two of o urown de ci si on s co nc lu di ng th ata ch al le ng edlo cal law, wh ic h e it he r ap pl ie d e ve n- ha nd ed ly or crea te d alev el pl ay in g fi el d, was no t d is cri m in at ory an d d idno t v io la te th e d orm an t Co m m erce Cl au se . 2. So ut he rnW as te Sy st em s (2 00 5) InSo ut he rnW as te Sy st em s v . Cit y of De lra y

Beac h, 4 20 F.3d12 88 (11 th Ci r. 20 05 ), th e Ci ty of Del ray Bea ch , Flo rid a, is su eda reque stforpro po sa ls fora fiv e-year co nt ractto pro vi de ex cl us iv e was te co ll ect io n s erv ic es inth e Ci ty. Id. a t 12 89 . Fiv e co m

pa ni es subm it te d b id s, an d a fte r a p ub li c h eari ng , th e Ci ty gran te d th e co nt ractto BFI Wast e Sy st em s, the lo wes t b id de r. BFI was anou t-o f-s ta te co rp or at io n. Id . Pu rs uantto th e co nt ract , BFI wo ul d b e th e ex cl us iv e was te haul er i n Del ray Bea ch . The Ci ty w ou ldsetwast e co ll ect io n ra te s, b utBFI wo ul d b il l an d c ol le ct di rect ly from

Cit y res id en ts . BFI wo ul d p ay th e Ci ty a fiv e p erce ntfran ch is e fee . Id . “ The Cit y

co di fie d t he co nt ractby m un ic ip al ord in an ce.” Id .

47 Case: 11-11116 Date Filed: 12/28/2012 Page: 47 of 83So ut he rnW as te Sy st em s (“ SWS”), whi ch di d n otsubm ita bi d fo r th e 3 6
co nt ract , so ug ht(1) a de cl arat ory jud gm en t tha t the co nt ractawardan d the or di na nc e v io la te d the do rm an t Co m m erce Claus e an d (2 ) anin jun ct io n a ga in st Delr ay Beac h. SW S cl ai m edth atth e co nt ractan d o rd in an ce v io la te d t he

3 7 do rm an t Co m

m erce Claus e b y

“ award [in g] th e ex cl us iv e ri gh t t o c ol le ctwast e in th e Ci ty to o ne co m

pa ny, the reb y

ex cl ud in g a ll ot he r co m

pa ni es —b ot h i nt ers ta te an d i nt ras ta te —fr om

wast e co ll ect io n.” Id. at12 90 . Thi s C ou rt uph el d t he ord in an ce an d c on tra ct . W e ex pl ai ne d tha t due to th e

“ fai r an d o pe n b id di ng pro ces s” us edby D el ray Bea ch , “ th ere i s n othi ng in he ren tl y di sc riminat ory

inth e awardof a n e xc lu si ve wast e h au li ng co ntract ” an d “ [t]he re i s no th in g i n t he reco rdto supp ort the cla im th atth e Ci ty’ s ac ti on s co ns ti tu te d the so rt o f ‘loc al eco no m ic pro te ct io ni sm ’ th atth e Co m m erce Claus e fo rb id s.” Id . at 12 91 (qu ot in g C arb on e, 51 1 U.S. at39 0, 1 14 S. Ct. at16 82 ). W e st res se d t ha t

“ th ere i s n o c au se forco ns ti tu ti on al co nc ern ” whe n “ in -s ta te an d o ut -o f-s ta te
The opinion does not spec ify whether SW S was an out-of

-state or in-state compa

ny . 3 6 The opinion states only

that SW S conducted business in F lorida. S. Waste Sy s., 420 F.3d a t 1289. SW S appear s to have ha d standingto challeng e the a war d of the c ontrac t beca use a 3 7 Delra y Be ach c ompany

that had contr acte d with SW S to remove construc tion and demolition debris wa s later c ited for violatingthe ordinanc e.
48 Case: 11-11116 Date Filed: 12/28/2012 Page: 48 of 83bi dd ers are al lo wedto co m pe te free ly on alev el pl ay in g [f ie ld ]. ” Id . (in te rn al qu ot at io n m ark s o m it te d) . Rath er, we ex pl ai ne d t ha t i n d orm an t Co m m erce Cl au se cas es , “ th e p ro ces s b y whi ch th e co nt ract oris ch os enass um es gre at im po rta nc e in de te rm in in g t he pl an ’s con st itut io na li ty vel no n.” Id. at12 92 . W e ad de d tha t “ in -s ta te in te res ts are n otun du ly pam pe red , no r ou t-o f-s ta te co m pe ti to rs un du ly bur de ne d, wh ena m un ic ip al it y

award s anex cl us iv e co nt ractto a lo w bi dd er (fr om

what ev er s ta te or r eg io n) aft er a fa ir a ndop enbi dd in g pr oc es s.” Id . 3. Lei b (2 00 9) The im po rtanc e o f anop enan d e ve n- ha nd edpe rm itpro ces s t ha t i s n otov ert pr ot ect io ni sm

is als o e vi de ntinou r de ci si on inLeib v. Hi ll sb or ou gh Co un ty Publ ic Tran sp orta ti on Co m m is si on , 55 8 F .3d13 01 (11 th Cir . 20 09 ). Mo sh e Lei b, the own er o f a Tam paBay, Flo rid a, tr an sp orta ti on servi ce, so ug hta pe rm itfro m

th e Hil ls bo ro ug h C ou nt y , Flo rid a, Publ ic Tran sp orta ti on Co m m is si on (“ HCPTC”) to op erat e a To y ot a Pri us as a n “ en vi ro nm en ta ll y fri en dl y ” li m ou si ne . Id. at13 04 . Con cl ud in g t ha t a To y ot a Pri us was n ota

“ lu xu ry ” v eh ic le , andth us di d n otm eetHCPTC Tax i Ru le 1.1 5’s d efi ni ti on of

49 Case: 11-11116 Date Filed: 12/28/2012 Page: 49 of 83“ li m ou si ne ,” HCPTC d en ie d Lei b’s p erm itreque st . Id. Lei b app li edfor a 3 8 waiv er o f th e “ lu xu ry ” requi rem en t, an d HCP TC de ni edth e wai ve r reque st . Leib su ed , all eg in g, i nt er al ia , th atHCPTC’s d en ia l o f hi s p erm itreque st vi ol at edth e d orm an t Co m m erce Claus e. The d is tri ctco urt d is m is se d Lei b’s co m pl ai ntun de r Ru le 12 (b )(6 ) fo r fai lu re t o s ta te a cl ai m . Id. at13 05 . Leib ap pe al ed . Thi s C ou rt c on cl ud edth atLeib ’s cla im fai le d o n t he m eri ts be cau se , in te r al ia , th e HCPTC R

ul e reg ul at edev en -h an de dl y an d was ap pl ie d i n an e ve n- ha nd ed way . Id. at13 11 . This Co urt ex pl ai ne d t ha t the do rm an t Co m m erce Claus e

“ fo rb id s a s ta te or m

un ic ip al it y

fro m im pe di ng th e fl ow o f go od s an d s erv ic es acro ss st at e b or de rs , or fr om fav or in g i n- st at e eco no m ic in te res ts at t he expe ns e o f ou t-o f-s ta te eco no m ic in te res ts .” Id . (qu ot in g S . W as te Sy s., 4 20 F.3dat 1 29 0) . W e in st ru ct edth at“ [t]he fir stst ep inass es si ng vi ol at io ns of t he Co m m erce Claus e
HCPTC Tax i Rule 1.15 stated: 3 8 “L imousine” means any motor vehicle for hire not equip p ed with a taxi meter, with the capa city for 15 p asseng ers or less . . . . This definition consists of vehicles which are rec ognized by the industry as “luxury” vehicles, that are co n s i dere d as high- end lux ury vehicles by the manufa cture r and vehicles that have been uniquely modified so as to provide “luxury” limousi ne service . The “luxury” quality of vehicles will be deter mined by assessing ae s thetics of the interior and exterior of the vehicle, amenities provided to the passen ger , s p a c io u s n e s s a

n d c o mp a rison to curr ent industry standards for vehicles perf orming limousi n e service in Hillsborough County . L eib, 558 F.3d at 1304.

50

Case: 11-11116 Date Filed: 12/28/2012 Page: 50 of 83is to co ns id er wh ethe r th e la w or re gu la ti on inqu es ti on rep res en ts anov ertform of pr ot ect io ni sm , inwhi ch cas e th e m eas ur e is ge ne ral ly inv al idpe r se .” Id . App lying th es e p rin ci pl es to Leib ’s perm itreque st , th is Co urt co nc lu de d th atHCPTC’s Tax i Ru le 1.1 5 was no t d is cri m in at ory be cau se it“pu rp orts m erel y to reg ul at e tr av el inth e Tam paBay area ” an d l ik el y

di d n ot“pl ace a ny spe ci al bu rd enon in te rs ta te co m

m erce at a ll .” Id . Leib st res se d t ha t the HCPTC ru le pr oh ib it edall pa ss en ge rs fro m ut il iz in g h is Toyota P riu s l im ou si ne servi ce, b utwe ex pl ai ne d t ha t Lei b’s al l-p as se ng er ar gu m en t “ su gg es ts th atRu le 1.1 5 b ur de ns in
st at e an d o ut -o f-s ta te co m m erce equa ll y .” Id. Im po rtant ly, th is Co urt n ot edth at 3 9 th e Ru le di d n otlea ve pa ss en ge rs who de si re “ en vi ro nm en ta ll y -fri en dl y ” tra ns po rta ti on servi ce wi th “ no alt ern at iv e o pt io ns ” b ecau se “ anen vi ro nm en ta ll y fri en dl y ve hi cl e m ay

qu al ify as a l im ou si ne so lo ng as i t m eet s R ul e 1 .15 ’s lu xu ry an d o th er re qu ire m en ts .” Id . at 1 31 2. In ot he r wor ds , th e Ru le di d n otfor ecl os e

In L eib, this Court did poi nt out that “the Rule has not bee n challeng ed by an out-of- 3 9 state business” a

nd that “L eib purports to cha lleng e the Rule fr om within the state that is the supposed bene ficiar

y of the putative bur den on interstate commerc e.” L eib, 558 F.3d a t 1311. But importantly , this Court di d not sugg est that these f acts unde rmined L eib’s standingto sue or rende red him an imprope r par ty to the case . Instead, the L eib Court mere ly noted that the lac k of out-of-state plaintiffs and L eib’s in-state status undercut L eib’s argument that the HCPTC’s Taxi Rule 1.15 unduly

burdene d interstate c ommerce . In any event, F TS is not a Miami-Dade County stevedore , and thus does not cha lleng e the Port Dire ctor’s a pplication of the County

stevedore permit ordinanc e fr om within the municipality that “is the supposed be nefic iary of the putative burden on inter state commer ce.” I d.

51

Case: 11-11116 Date Filed: 12/28/2012 Page: 51 of 83en vi ro nm en ta ll y -fri en dl y op ti on s t o p as se ng ers . D. Undue Bur den un der Pi ke Eve n i f th e la w do es no t d is cri m in at e ag ai ns t i nt ers ta te co m m erce , itm ay st il l v io la te th e d orm an t Co m m erce Claus e if

itpl aces anun du e b ur de n o n in te rs ta te co m

m erce th atex ceed s l oc al be ne fit s. Pi ke v. Bruc e Ch ur ch , Inc ., 39 7 U.S. 13 7, 9 0 S . Ct. 8 44 (19 70 ). InPik e, Pl ai nt iff

Bru ce Ch ur ch , Inc ., an i n- st at e can ta lo up e g ro wer, ch al le ng eda st at e o ffi ci al ’s app li cat io n o f anAriz on a la w whi ch requi redth atall can ta lo up es gro wn i n Ari zo naan d o ffer edfor sal e m us t b e p ack edinreg ul ar co m pa ctarra ng em en t i n c lo se d s ta nd ardco nt ai ne rs . Id. at13 8, 9 0 S . Ct. at84 5 (ci ti ng Ariz . Rev . Sta t. An n. § 3-5 03 (19 69 )). In vo ki ng hi s au th or it y un de r th at la w to ap pr ov e th e m etho d o f pa ck in g c an ta lo up es , th e st at e o ffi ci al is su edan or de r th atpro hi bi te d B ru ce Ch ur ch fro m tra ns po rti ng can ta lo up es fro m it s Pa rk er, Ariz on a, ran ch to ne arb y

Blyth e, Cal ifo rn ia , for

pa ck in g andpro ces si ng . Id. To co m pl y with t ha t o rd er, Bru ce Ch ur ch wou ldbe requi redto ex pe nd$2 00 ,00 0 t o co ns tru cta pa ck in g p la ntinAriz on a. Id . at 1 40 , 90 S. Ct. at84 6. Bru ce Ch ur ch su edth e st at e o ffi ci al , ask in g ath ree- jud ge di st ric t co urt t o en joi n t he ord er as un co ns ti tu ti on al un de r th e d orm an t Co m m erce Claus e. See i d.

52 Case: 11-11116 Date Filed: 12/28/2012 Page: 52 of 83at13 8, 9 0 S . Ct. at84 5. Aft er fi rs t g ran ti ng pre li m in ary in jun ct iv e rel ie f an d pe rm it ti ng di sc ov ery, th e d is tri ctco urt i ss ue d ape rm an en t i nju nc ti on up on th e ba si s t ha t the ch al le ng edord er co ns ti tu te d a n u nl awfu l b ur de n upo n i nt ers ta te co m m erce . Id. at14 0, 9 0 S . Ct. at84 6. Th e Supr em e Co urt af firm ed . 4 0 On ap pe al fro m

th e d is tri ctco urt, the Supr em e Co urt fi rs t re jecte d t he st at e of fic ia l’s ar gu m en t tha t the ch al le ng edord er d idno t af fectin te rs ta te co m

m erce be cau se itim

pa ct edon ly int ras ta te pa ck in g o f go od s b efo re tho se go od s en te red in te rs ta te co m

m erce . The Co urt o bs erv edth atlaws whi ch requi redcert ai n k in ds of pro ces si ng be do ne in -s ta te were co ns is te nt ly stru ckdo wn und er the Co m m erce Cl au se . Id. at14 1- 42 , 90 S. Ct. at84 7. Th us , th e ch al le ng edord er h ere i m po se d a bu rd enon in te rs ta te co m

m erce ; the qu es ti on was o nl y whet he r itdi d s o un co ns ti tu ti on al ly. Id. a t 1 42 , 90 S. Ct. at84 7. The Supr em e Co urt s ta te d a s “ th e g en eral rul e” tha t “ [w]here t he st atut e reg ul at es ev en -h an de dl y

to effe ctua te a le gi ti m at e lo cal publ ic in te res t, an d i ts effe ct s o n i nt ers ta te co m

m erce are o nl y

in ci de nt al , itwil l b e uph el d unl es s t he Pursuant to 28 U.S.C. § 2281 (repea led 1976), a specia l three-

judgecourt wa s 4 0 convene d to consider B ruce Church’s a pplication for pe rmane nt injunctive relief r estrainingthe execution of a state statute on grounds of unc onstitut ionality . See Pike v. B ruce Church, Inc., 397 U.S. 137, 138, 90 S. C t. 844, 845 (1970). The state of

ficial dire ctly

appea led to the Supreme Court pursua nt to 28 U.S.C . § 1253. See Pike, 397 U.S. at 138, 90 S. Ct. at 845.

53

Case: 11-11116 Date Filed: 12/28/2012 Page: 53 of 83bu rd enim

po se d o n s uc h c omm erce is cle arl y ex ces si ve inrel at io n t o t he pu ta ti ve lo cal be ne fit s.” Id . Once aleg it im at e p ub li c in te res t i s i de nt ifi ed , “ th e que st io n be co m es on e o f de gr ee.” Id . The ex te ntof t he bu rd enonin te rs ta te co m m erce

“ th atwil l b e to le rat edwil l d ep en d o n t he na tu re o f th e lo cal in te res t i nv ol ve d, an d on whet he r itco ul d b e p ro m ot edas we ll with ales se r im pa cton in te rs ta te act iv it ie s.” Id . The st at e o ffi ci al att em

pt edto jus ti fy

th e b ur de n o n i nt ers ta te co m m erce he re s ol el y

by ass ert in g t he st at e’s in te res t t o “ pr om ot e an d p res erv e th e rep ut at io n of Ariz on a g ro wers by pro hi bi ti ng de cep ti ve pa ck ag in g.” Id. at14 3, 9 0 S . Ct. at 84 8. Mo re s pe ci fic al ly, Ariz on a wan te d B ru ce Ch ur ch to pa ck ag e th e can ta lo up es in -s ta te so th atth e h ig h- qu al it y fru itco ul d b e ad ve rti se d a s g ro wn i n Ari zo na rathe r th anCal ifo rn ia . Alth ou ghreco gn iz in g t he leg it im acy of th e st at e’s in te res t, th e Co urt re fu se d t o a cco rdth e co nc ernm uc h wei gh t: “ The Sta te ’s ten uo us in te res t i n h av in g t he co m pa ny’ s ca nt al oupe s i de nt ifi edas o rig in at in g i n Ari zo na can no t co ns ti tu ti on al ly j us ti fy th e requi rem en t tha t the co m pany bu il d a ndop erat e anun ne ed ed$2 00 ,00 0 p ack in g p la nt ” in Ariz on a. Id . at 1 45 , 90 S. Ct. at84 9. Here, the na tu re o f th atbu rd enwas “ co ns ti tu ti on al ly . . . m or e si gn ifi can t tha n i ts ex te nt ,” be cau se itrequi redbu si ne ss op erat io ns to be pe rfo rm edin -s ta te when

54 Case: 11-11116 Date Filed: 12/28/2012 Page: 54 of 83th ey

co ul d m or e eff

ic ie nt ly be p erfo rm edels ewh ere— a b ur de n t y pi cal ly fou nd

“pe r se il le ga l.” Id . The Co urt n ot edth at“ [s ]uchanin ci de nt al co ns eque nc e o f a reg ul at ory

sch em e co ul d p erh ap s b e to le rat edif am or e co m pe ll in g s ta te in te res t were i nv ol ve d,” bu t h ere t he st at e’s in te res t was “ m in im al at b es t.” Id . at 1 46 , 90 S. Ct . at 8 49 . Accor di ng ly, th e Co urt h el d tha t the st at e o ffi ci al ’s app li cat io n o f th e la w con st itut edanun la wfu l b ur de n upo n i nt ers ta te co m m erce an d t hu s vi ol at edth e d orm an t Co m m erce Claus e. W it h t hi s b ack gr ou nd , we exa m in e th e p art ie s’ cla im s o n app eal .

V. PRU DENTI AL STANDI NG The Co un ty firs t ar gu es th atFTS la ck s p ru de nt ia l s ta nd in g t o c ha ll en ge th e Po rt Di rect or ’s st ev ed or e p erm it ti ng pro ces s u nd er the do rm an t Co m m erce Claus e be cau se bo th FTS an d t he Co un ty are lo cat edinFlo rid a. A party has pru de nt ia l s tand in g wh en , in te r al ia , th e in te res t the pa rty seek s to pro te ct“ is arg uabl y

withi n t he zo ne of i nt eres ts . . . pr ot ect edor r eg ul at edby th e st atut e o r co ns ti tu ti on al gu aran te e in qu es ti on .” Ass ’n of Dat a Pro ces si ng Serv . Orgs . v. Camp, 39 7 U.S. 1 50 , 15 3, 9 0 S . Ct. 8 27 , 83 0 (1 97 0) (em ph as is ad de d) . “ The zo ne of i nt eres t re qu ire m en t i s a p ru de nt ia l s ta nd in g d oc tri ne , no t m an da te d d ire ct ly by

Arti cl e III.” Chu rch of S ci en to lo gy Flag Serv . Org., In c. v.

55 Case: 11-11116 Date Filed: 12/28/2012 Page: 55 of 83Ci ty of Cl earwa te r, 2 F.3 d 1 51 4, 1 52 6 (1 1t h C ir. 1 99 3) . This tes t “ requi res on ly

th atth e rel at io ns hi p b etweenth e p la in ti ff’s al le ge d i nt eres t an d t he pu rp os es im pl ic itinth e subs ta nt iv e p ro vi si on be m or e th anm arg in al .” Id . (al te rat io n a nd in te rn al qu ot at io n m ark s o m it te d) . FTS eas il y

m eet s thi s b ar. FTS as se rts it s ri gh t t o p ro vi de servi ces to an in te rs ta te sh ip pi ng m ark etat t he Po rt o f Mi am i. FTS cl ai m s t ha t the Co un ty un la wfu ll y

res tri ct edth is in te rs ta te m ark etto a lo cal m on op ol y . In ad di ti on , FTS is it se lf apa rti ci pa ntinth e in te rs ta te th ird -p arty st ev ed or e m ark etinBro ward Co un ty andsee ks to ex pa ndit s b us in es s i nt o t he Mi am i m ark et . FTS’ s i nt eres t i s th us “ arg uabl y ” p ro te ct edby the do rm an t Co m m erce Claus e, whi ch ba rs m un ic ip al it ie s fr om

di sc riminat in g a ga in stth e fre e fl ow o f in te rs ta te co m m erce or ag ai ns t en try int o t he lo cal seg m en t o f anin te rs ta te m ark et . FTS’s Fl or id a res id en cy

do es no t ch an ge th is an al y si s. Th e Co un ty cite s n o cas e in whi ch th is Co urt o r th e Supr em e Co urt h as di sm is se d a n i n- st at e p la in ti ff’s do rm an t Co m

m erce Claus e cl ai m

on gro un ds th atth e in -s ta te pl ai nt iff lac ke d prud en ti al st an di ng . To th e co nt rary, the c ou rts ha ve reac he d t he m eri ts of nu m ero us do rm an t Co m

m erce Claus e cas es in vo lv in g i n- st at e p art ie s, an d a n en ti re b od y

of d orm an t Co m

m erce Claus e juri sp ru de nc e ref le ct s t he di sp os it io n o f

56 Case: 11-11116 Date Filed: 12/28/2012 Page: 56 of 83su ch cas es on th e m eri ts . See, e.g ., Uni te d Hau le rs Ass ’n v. On ei da -Herk im er

So li d Wast e Mg m

t. Au th ., 55 0 U.S. 3 30 , 34 7, 1 27 S. Ct. 1 78 6, 1 79 8 (2 00 7) (uph ol di ng m

un ic ip al it ie s’ wast e p ro ces si ng ord in an ce ag ai ns t ch al le ng e b ro ug ht by com pani es op erat in g i n m

un ic ip al it ie s) ; Ca rb on e, 51 1 U.S. at39 1– 92 , 11 4 S . Ct . at 1 68 2– 83 (in va li da ti ng to wn was te pro ces si ng ord in an ce i n s ui t b y lo cal was te pro ces so r ag ai ns t t own ); F ul to n C or p., 5 16 U.S. at 3 46 , 11 6 S . Ct. at86 1 (s tri ki ng do wn No rth Caro li natax insu itby N orth Caro li naco m pa ny); W. Ly

nn Crea m ery, Inc . v. Heal y , 51 2 U.S. 1 86 , 18 8, 1 14 S. Ct. 2 20 5, 2 20 9 (1 99 4) (st rik in g do wn M as sa ch us et ts m il k p ric in g o rd er i n s ui t b y Mas sa ch us et ts -li cen se d m il k de al ers ); F ort Gra ti ot , 50 4 U.S. at36 7– 68 , 11 2 S . Ct. at20 27 –2 8 (s tri ki ng do wn Mi ch ig anwast e im

po rt r es tri ct io ns insu itby Mich ig anlan df il l o pe rat or ); S . W as te Sy s., 4 20 F.3dat 1 29 1– 92 (up ho ld in g was te pro ces si ng ord in an ce o n m eri ts in su it by in- st at e co m

pa ny); Lei b, 5 58 F.3dat 1 31 1 (h ol di ng th atdo rm an t Co m m erce Cl au se co m

pl ai ntby in-s ta te res id en t ag ai ns t m un ic ip al it y

fai le d o n m eri ts be cau se ch al le ng edrul e reg ul at edev en -h an de dl y an d d idno t b ur de n i nt ers ta te co m m erce ). Inad di ti on , as n ot edab ov e, th e d orm an t Co m m erce Claus e m ay

ba r m un ic ip al laws th atpro te ctlo cal eco no m ic in te res ts an d s qu el ch ou ts id e co m pe ti ti on , eve n wh ere i n- st at e an d o ut -o f-s ta te co m pa ni es are af

fect ed . See,

57 Case: 11-11116 Date Filed: 12/28/2012 Page: 57 of 83e.g ., Carb on e, 51 1 U.S. at39 1– 92 , 11 4 S . Ct. at16 82 (“ The ord in an ce i s n o l es s

di sc riminat ory

be cau se in -s ta te or i n- to wn p ro ces so rs are al so co ve redby the pr oh ib it io n.” ); De anMi lk , 34 0 U.S. at35 4, 7 1 S . Ct. at29 8 (i nv al id at in g c it y or di na nc e requi rin g a ll m il k s ol d i n t he cit y to be pa st eu riz edwithi n fi ve m il es of th e ci ty andfin di ng irr el ev an t the factth atth e law als o app li edto in -s ta te m il k pr oc es so rs ). ThatFTS is anin -s ta te co m pa ny do es no t p er s e m ean th atFTS la ck s prud en ti al st an di ng to rai se a do rm an t Co m m erce Claus e ch al le ng e. As the se cas es sh ow, FTS’s i nt eres t h ere i s “ m or e th anm arg in al ,” Ch ur ch of Sci en to lo gy, 2 F.3dat 1 52 6, an d i t thu s m eet s the cri te riaforpru de nt ia l s ta nd in g.

VI. ANALYSI S OF FTS’S CLAIMS W e n ow turn t o wh ethe r th e Co un ty’ s s te ve do re p erm itord in an ce, as ap pl ie d b y

th e Po rt Di rect or , vi ol at edth e d orm an t Co m m erce Claus e. 4 1 The fir stqu es ti on is whet he r th e Po rt Di rect or ’s st ev ed or e p erm it ti ng pr act ic es “ di rect ly regu la te [d ] or di sc riminat e[d ] ag ai ns t i nt ers ta te co m m erce .” Is la ndSil ve r & Sp ic e, 54 2 F .3dat 8 46 (in te rn al qu ot at io n m ark s o m it te d) . Sp eci fic al ly, we m

us t d et erm in e whe th er the Po rt Di rect or ’s app li cat io n o f th e Co un ty’ s s te ve do re p erm itord in an ce i n 2 00 3, 2 00 4, an d 2 00 5 d ire ct ly

FTS does not fa cially

challeng e the County ’s stevedor e per mit ordinance. 4 1 58 Case: 11-11116 Date Filed: 12/28/2012 Page: 58 of 83di sc riminat edag ai ns t i nt ers ta te co m m erce by regu la ti ng pa rti ci pa ti on inth e in te rs ta te st ev ed or e m ark eton th e b as is of a n app li can t’s l oc al ve rs us ou t-o f-s ta te or ig in . Evenif t he Po rt Di rect or ’s perm it ti ng pra ct ic es di d n otdi rect ly di sc riminat e, th e se co ndqu es ti on is whet he r th e Po rt Di rect or ’s perm it ti ng reg im e im po se d a(1) “bu rd enon in te rs ta te co m m erce ” th at(2) “ cl earl y

ex ceed s t he lo cal be ne fit s” un de r th e Pi ke un du e b ur de n t es t. Id . (ci ti ng Pik e, 39 7 U.S. at14 2, 9 0 S . Ct . at 8 47 ) (i nt ern al qu ot at io n m arkom it te d) . W e n eedno t ad dr es s t he fir stqu es ti on be cau se we co nc lu de th e d is tri ct co urt d idno t co m

m itrev ers ib le erro r in fin di ng th atth e Po rt Di rect or ’s perm it ti ng pr act ic es un du ly bur de ne d i nt ers ta te co m m erce un de r th e Pi ke un du e b ur de n t es t. To ex pl ai n o urco nc lu si on , we st artby revi ewin g t he bu rd enim po se d o n i nt ers ta te co m m erce by the Po rt Di rect or ’s perm it ti ng pra ct ic es . W e th enex am in e th e lo cal be ne fit s an d s ho w why

th e b ur de n “ cl earl y

ex ceed [ed ]” tho se be ne fit s i n v io la ti on of th e d orm an t Co m

m erce Claus e. A. Burd en o n In ters ta te Co m m erce At the ou ts et , we agr ee wi th th e d is tri ctco urt tha t the Po rt Di rect or ’s pe rm it ti ng pra ct ic es were n otev en -h an de d a ndwere d es ig ne d t o p rev en t co m pe ti ti on .

59

Case: 11-11116 Date Filed: 12/28/2012 Page: 59 of 83Po rt o f Mi am i s te ve do re p erm it s ex pi redannu al ly. Mi am i-Da de Co un ty

Co de § 2 8A- 6.6 . All s te ve do re p erm itsee ke rs , bo thne w andol d, wer e requi redto ap pl y fora pe rm iteach y ear. Acco rd in gl y , th e Co un ty ord in an ce re qu ire d the Po rt Dire ct orto co ns id er p erm itap pl ic an ts , bo th in cu m be ntan d n ew, witho utreg ardto whe th er the ap pl ic an t h el d ast ev ed or e p erm itinth e p rev io us y ear. Se e id . In de ed , th e p erm itord in an ce au th or iz edth e Po rt Di rect orto ren ew anin cu m be nt st ev ed or e’s pe rm iton ly if th e ren ewal ap pl ic at io n m etth e cri te riaforth e is su an ce of a ne w perm it . Id. Bu t the Po rt Di rect ordi d n otap pl y th e p erm itord in an ce i n t hi s fa sh io n. As di sc us se d abo ve , th e Po rt Di rect orin20 03 , 20 04 , and20 05 au to m at ic al ly gran te d ne w perm it s t o a ll co m

pa ni es th athe ldpe rm it s i n t he pre vi ou s year an d au to m at ic al ly den ie d p erm it s t o a ll co m pa ni es , li ke FTS, th atdi d n otho ldpe rm it s in th e p rev io us y ear. As th is rub be r-s ta m p p ract ic e sh ows , th e so le fact orth at de te rm in edwhet he r th e Po rt Di rect orwou ldgra nta st ev ed or e ap pl ic at io n was no t ne ed , saf ety , or any oth er cr it eri on id en ti fie d i n t he Co un ty ord in an ce; itwas whe th er the ap pl ic an t al ready ha d ape rm itat t he Po rt. W e al so no te th e p ro te ct io ni st m ot iv at io n u nd erl y in g the se pra ct ic es . As 4 2

We rec ognize that the terms “prote ctionist” and “pr otectionism” arenarr owly define d 4 2 in dormant Commerce Clause jurisprudenc e. We use the te rm more br oadly here as the 60 Case: 11-11116 Date Filed: 12/28/2012 Page: 60 of 83th e Po rt Di rect or ’s ownst at em en ts sh ow, the se pe rm it ti ng pra ct ic es were ai m edto

pr ev en t co m

pe ti ti on ag ai ns t i nc um

be ntst ev ed or es . The Po rt Di rect orst at edin pr io r li ti ga ti on ag ai ns t FTS tha t the pe rm itord in an ce was in te nd edto pre ve nt

“ eco no m ic ha rd sh ip to th e en ti re l oc al st ev ed or in g i ndus try” th atwou ldres ul t fro m “ di lu t[i ng ] th e m ark et ” with e xc es si ve st ev ed or e p erm it s. Po rt d oc um en ts fro m 20 00 st at e th atth e Po rt wo ul d e ns ur e th atth e “ gr an ti ng or r en ewal of a [s te ve do re] perm itdo es no t l eadto dupl ic at io n o f se rv ic es th atco ul d l eadto de st ru ct iv e co m

pe ti ti on ” atth e Po rt. In 2 00 3, 2 00 4, an d 2 00 5, the Po rt Di rect or 4 3 di sp en se d wi th co m

pe te nc y , saf

ety reco rd , fin an ci al , andne ed s as se ss m en ts al to ge th er i n fa vo r of

a rubb er-s ta m

p p ro cedur e cl earl y

de si gn edan d i nt en de d t o pr ot ectin cu m

be ntst ev ed or es an d fo recl os e n ew en tra nt s i nt o M ia m i’s l oc al st ev ed or e m ark et . As th e d is tri ctco urt o bs erv ed , th e Po rt Di rect or ’s perm it ti ng pr act ic es “pr ot ect edan d i ns ul at ed ” th e ex is ti ng st ev ed or es “ fro m an y ne w co m pe ti ti on .” Fla . Trans p. Se rv ., 75 7 F . Sup p. 2 d a t 1 27 8; cf. al so H.P. Hoo d, 3 36 U.S. at 5 28 , 69 S. Ct. at66 0 (i nv al id at in g l ic en si ng st atut e th atco nd it io ne d l ic en se permitting pr actice s did not burden only out-of-state competitors. See, e .g ., New E nergy Co. of Ind. v. L imbach, 486 U.S. 269, 273, 108 S. Ct. 1803, 1807 (1988) (“This ‘ne g ative’ a spect of the Commerce Clause prohibits economic prote ctionism—that is, regulatory measure s designed to benef it in-state economic inter ests by burdeningout-of-statecompetitors.”) . In deposition testimony , the Port Direc tor consider ed this statement to be consistent 4 3 with the ordinanc e’s ne eds asse ssment require ment. 61 Case: 11-11116 Date Filed: 12/28/2012 Page: 61 of 83on ass ur an ces th at“ th e is su an ce o f th e li cen se wil l n otten d t o ade st ru ct iv e

co m pe ti ti on ina m ark etalr eady ad equa te ly serv ed ”). The Po rt Di rect or ’s reg ul at in g a cces s t o i nt ers ta te m ark et s i n t hi s m an ne r pl ai nl y burd en edin te rs ta te co m

m erce . New ent ran ts were ef fect iv el y sh utou t, ev enif the y

co ul d h av e p ro vi de d b et te r se rv ic e, be tt er equi pm en t, o r lo wer p ric es th anth e in cu m

be ntst ev ed or es . Fla. Tran sp . Serv ., 75 7 F . Sup p. 2 d a t 1 27 8. Sp eci fic al ly, FTS el ic it edtes ti m on y su gg es ti ng th atno n- un io n s te ve do res —wh ic h FTS co ul d p ro vi de —wo ul d h av e o ffer eda ch eap er al te rn at iv e to carg o- te rm in al
op erat orSeab oa rdMari ne , whi ch us edth e u ni on st ev ed or e se rv ic es of El le r-ITO. Add it io na ll y , th ere wer e co nc ern s t ha t the co ns ol id at io n t ren d o f ex is ti ng st ev ed or e p erm it -h ol de r co m pa ni es wou ldres ul t i n e ve n l es s s te ve do re co m pe ti ti on at t he Po rt. In fact , Seab oa rdMari ne ap pl ie d fo r it s o wn s te ve do re pe rm itin20 01 be cau se of t he pro sp ectof d win dl in g s te ve do re o pt io ns an d h ig he r pr ic es as t he res ul t o f co ns ol id at io n. The re was als o e vi de nc e th atno curren t sh ip pe r orcru is e li ne at the Po rt wo ul d h av e ev enco ns id eredth e b us in es s o f FTS oran y ot he r no n- in cum

be ntst ev ed or e co m

pa ny in t he ab se nc e o f a s te ve do re pe rm it . Of co ur se , in crea se d c os ts are i ns uf fic ie ntalo ne to co ns ti tu te an

62 Case: 11-11116 Date Filed: 12/28/2012 Page: 62 of 83un reas on ab le bu rd enon in te rs ta te co m m erce invi ol at io n o f th e d orm an t Co m m erce Claus e. See, e.g ., Exx on Co rp ., 43 7 U.S. at12 8; 98 S. Ct. at22 15 (“ It m ay be tru e th atth e co ns um in g p ub li c wil l b e in jure d b y th e lo ss of t he hi gh
vo lu m e, lo w-p ric edst at io ns op erat edby the in de pe nd en t re fin ers , bu t ag ai n t ha t arg um en t re la te s t o the wis do m of t he st atut e, no t t o i ts burd enon co m m erce .”). Bu t we m us t al so ev al ua te “ th e p ract ic al effe ctof t he st atut e” b y co ns id eri ng

“ wha t ef fectwou ldari se if n oton e, bu t m any or e ve ry , Sta te ad op te d s im il ar le gi sl at io n.” See Hea ly, 49 1 U.S. at33 6, 1 09 S. Ct. at24 99 . The pe rm it ti ng pra ct ic es he re d idno t s im pl y im po se a bu rd enon en try int o th e Po rt’s s te ve do re m ark et . It m ad e en try im po ss ib le . Paral le l s te ve do re pe rm it ti ng requi rem en ts ba rri ng ne w ent ran ts wou ldsubjec t p orts ’ st ev ed or e m ark et s t o t he whi m s o f th e p erm it ti ng au th or it ie s an d d riv e up t he pri ce o f vi rtu al ly all g oo ds im

po rte d t hr ou gh th e n at io n’s p orts . Butno t o nl y pri ces wou ld be im pa ct ed . Oth er p orts ’ ad op ti on of t he Po rt Di rect or ’s rub be r-s tam p p ract ic e, a pr oc es s t ha t d is reg ard s t he qu al it y of t he ap pl ic an t i n fa vo r of th e so le cri te rio n o f whe th er the ap pl ic an t (n o m at te r wha t the saf ety reco rd , equ ip m en t, o r em pl oyee tra in in g) alr eady

ha s a p erm it , cou ldres ul t i n p orts m an ne d b y in co m pe te ntan d un sa fe s te ve do res .

63

Case: 11-11116 Date Filed: 12/28/2012 Page: 63 of 83The Co un ty doe s n otco nt es t the ab ov e ch arac te riz at io n o f th e Po rt

Dire ct or ’s perm it ti ng pra ct ic es or tha t i t ex cl ud edne w ent ran ts in20 03 , 20 04 , and 20 05 to li m itpe rm it s t o i nc um be ntpe rm itho ld ers witho utex am in at io n o f th e ap pl ic an t’s re qu ire d c om

pe te nc y , saf

ety reco rd , andfin an ci al st ren gt h, o r th e n eed s atth e Po rt. In st ead , th e Co un ty argu es th atev enun de r th e Pi ke tes t, FTS m us t de m on st rat e th atth e Po rt Di rect or ’s perm it ti ng pra ct ic es ha d adi sp arat e im pa cton ou t-o f-s ta te in te res ts , andth atFTS fai le d t o d o s o. Th e Co un ty say s tha t i t h as no t de ni eda st ev ed or e p erm itto a si ng le ou t-o f-s ta te ap pl ic an t i n t eny ears . 4 4 Eve n a ss um in g a rg ue nd o tha t a s ho win g o f di sp arat e im pa ctm us t b e m ad e un de r th e Pi ke un du e b ur de n a na lysis , we con cl ud e th atth e Po rt Di rect or ’s pe rm it ti ng pra ct ic es cau se d s uc h a n i m pa ct . To be su re, s om e o f th e in cu m be nt pe rm itho ld ers th atrece iv edau to m at ic pe rm itren ewal s wer e in co rp or at edou t-o fst at e, orwere o wne d b y

co m pani es in co rp or at edou t-o f-s ta te . Buta co m pa ny’ s pl ace o f in co rp or at io n a lo ne do es no t d eci de whet he r th e Po rt Di rect or ’s pe rm it ti ng pra ct ic es , as app li edto FTS, im po se d adi sp arat e im

pa ctonou t-o f-s ta te orno n- lo cal co m

pa ni es for

th e b en efi t o f lo cal co m

pa ni es . If th atwere the cas e,
But pursua

nt to the Port Director’ s permitting pr actice s in 2003, 2004, and 2005, a ne w 4 4 out-of-state applicant would ha ve bee n denied a

permit bec ause it could not have met the sole criterion the Port Director used to issue a pe rmit: whether the a pplicant alre ady

held a pe rmit. 64 Case: 11-11116 Date Filed: 12/28/2012 Page: 64 of 83th ena st at e o r m un ic ip al it y ’s do rm an t Co m m erce Claus e li ab il it y

wou ldtu rnon th e em pt y form al it y of wh ere aco m

pa ny’ s arti cl es of i nc or

po rat io n wer e fi le d, rathe r th anwher e th e co m pa ny’ s b us in es s t ak es pl ace o r whe re i ts po li ti cal in flu en ce l ie s. Cf. Un it edHaul ers Ass ’n, Inc . v. On ei da -Herk im er So li d Wast e Mg m t. Au th ., 55 0 U.S. 3 30 , 34 5, 1 27 S. Ct. 1 78 6, 1 79 7 (2 00 7) (“ Ourdo rm an t Co m m erce Claus e cas es oft enfin d d is cri m in at io n wh ena St at e sh ift s t he co st s o f reg ul at io n t o o th er St at es , bec au se when th e b ur de n o f st at e reg ul at io n fa ll s o n in te res ts ou ts id e th e st at e, itis un li ke ly to b e al le vi at edby the op erat io n o f th os e po li ti cal res tra in ts no rm al ly exert edwhen in te res ts withi n t he st at e are affe ct ed .” (in te rn al qu ot at io n m ark s o m it te d) ). The co rp or at e st ru ctur e o f in cu m be ntpe rm it ho ld er Ell er-I TO ill us tra te s t hi s p ro bl em . Elle r-ITO was own edinpa rt b y Po rts Am eri ca, a New J ers ey

co rp or at io n. Bu t El le r-ITO d idno t o pe rat e o ut si de of Fl or id a an d h adbe enop erat in g i n F lo rid a fo r de cad es . W e ta ke a fu nc ti on al ap pr oa ch to th e que st io n o f whe th er the ch al le ng ed pe rm it ti ng pra ct ic es fav or“ lo cal ” co m pani es an d i n turn b ur de n “ no n- lo cal ” bu si ne ss in te res ts forth e p ur po se of d orm an t Co m

m erce Claus e an al y si s. Th ou gh so m e o f th e p erm itho ld ers were i nc or po rat edou t-o f-s ta te , all of t he pe rm itho ld ers were o pe rat in g l oc al ly at th e Po rt o r were o th erwi se en tre nc he d a t the Po rt a s a

65 Case: 11-11116 Date Filed: 12/28/2012 Page: 65 of 83carg o t erm in al op erat oror a s co -o wne r of anop erat in g s te ve do re. The Po rt 4 5 Dire ct ordi d n otde ny a perm itto a si ng le in cu m be ntpe rm itho ld er tha t was al read y en tre nc he d a t the Po rt i n o ne of t ho se cap aci ti es an d d idno t g ran t a p erm it to a si ng le st ev ed or e th atwas n ot . Ind eed , fou r of th e in cu m

be ntpe rm itho ld ers th atwere ei th er i nc or

po rat edou t-o f-s ta te or o wne d b y co m pa ni es in co rp or at ed ou t-o f-s ta te ha d e nt ren ch edrel at io ns hi ps with t he Po rt o f Mi am i tha t p red at edth e gr an t o f th ei r st ev ed or e p erm it s i n 2 00 3, 2 00 4, an d 2 00 5. Se ab oa rdMari ne , own edby a Kans as co m

pa ny, w as a carg o t erm in al op erat or an d ash ip pe r. Uni ve rs al Mari ti m e Servi ce, a New Yo rkco m pa ny, w as own edby Maers k, wh ic h was a carg o t erm in al op erat oran d ash ip pe r. Ports Am eri ca, a New J ers ey co m pa ny, co-o wne d p erm itho ld er Ell er-I TO andown edpe rm itho ld er Po rts Am eri ca Fl or id a, whi ch intu rnco -o wne d c arg o- te rm in al -o pe rat orPOMTOC. The se co m

pani es m ay

ha ve be enin co rp or at edels ewh ere, b utth ey eit he r op erat ed lo cal ly or ha d l oc al in te res ts inth e Po rt o f Mi am i ap artfro m th ei r st ev ed or e se rv ic es . Acco rd in gl y , we con cl ud e th atth e Po rt Di rect or ’s perm it ti ng pra ct ic es
The outliers he re—e .g ., R.O. Whi te and Ha llmark—wer e other wise entre nched a s they 4 5 had bee n permitted to operate at the Port longbefor e 2003, 2004, and 2005. F urthermor e, these incumbent per

mit holders were Florida

companies. R.O. White was a Florida company until it s purcha se by

an out-of- state compa

ny in 2005. 66 Case: 11-11116 Date Filed: 12/28/2012 Page: 66 of 83pl ai nl y

burd en edin te rs ta te co m

m erce . W e n ex t b al an ce tha t b ur de n a ga in stth e lo cal be ne fit s t he Co un ty attr ib ut es to th e Po rt Di rect or ’s perm it ti ng pra ct ic es . B. Lo ca l Be nefi ts Co ns is te ntwith t he Co un ty stev ed or e p erm itord in an ce, the Co un ty clai m s th atth e lo cal be ne fit s fr om it s p erm it ti ng pra ct ic es were (1 ) “ m ax im iz [in g] Port sp ace a ndop erat io na l ef

fic ie nc ie s” inli gh t o f th e Po rt’s “ li m it edsp ace a nd res ou rces ” an d (2 ) en su rin g t ha t s te ve do re cu st om ers ha d “ a sk il le d, ex pe rie nc ed , rel iabl e, pr op erl y

equi pp ed , andsaf

e p oo l o f Po rt- pe rm it te d s te ve do res .” Thes e lo cal be ne fit s ar e in de edleg it im at e. Andth es e in te res ts wou ldha ve be enserve d by the ord in an ce i f itha d b een ap pl ie d a s wri tt en . Bu t fo ll owi ng th e o rd in an ce as writ te n was no t the Po rt Di rect or ’s pra ct ic e in 20 03 , 20 04 , and20 05 . The p ur po se s an d b en efi ts id en ti fie d b y th e Co un ty are no t s erv edor e ve n fu rth eredby the Po rt Di rect or ’s (1) auto m at ic ren ewal of pe rm it s fo r in cu m

be ntst ev ed or es , (2) au to m at ic de ni al of p erm it s t o n ew ap pl ic an ts , and(3) who le sa le fai lu re t o p erfo rm th e requi redco m

pe te nc y , saf

ety reco rd , fin an ci al an d n eed s as se ss m en ts in20 03 , 20 04 , and20 05 . Whe n p erfo rm ed , th e co m pe te nc y , saf

ety reco rd , fin an ci al , andne ed s

67 Case: 11-11116 Date Filed: 12/28/2012 Page: 67 of 83as se ss m en ts co ul d b ot h d is cernth e le ve l o f ne edforst ev ed or e se rv ic es at the Po rt

an d e ns ur e th e in cu m

be ntst ev ed or es rem ai ne d “ sk il le d, ex pe rie nc ed , rel iabl e, pr op erl y equi pp ed , andsaf

e.” An aut om at ic ren ewal , ho wev er, i n n o way de te rm in es whet he r anin cum be ntpe rm itho ld er cu rren tl y sat is fie s an y

of t he cri te riainMi am i-Da de Co un ty Cod e § 28 A-6 .1. Rubb er-s ta m pi ng in he ren tl y

do es no t al lo w foranev al ua ti on of, fo r ex am pl e, (1 ) th e ap pl ic an t’s co m pe te nc e an d tru st worth in es s; (2) th e ab il it y of p res en t p erm itho ld ers to “ ad equa te ly serv e n ew orex is ti ng bu si ne ss ”; (3) “ [t]he fin an ci al st ren gth o f th e ap pl ic an t” ; o r (4 ) “ th e ex pe rie nc e o f th e ap pl ic an t.” Id . § 2 8A- 6.1 (c), (c )(5 ), (c)( 6) , (c)(8 ). Ind eed , th e Po rt Di rect orren ewedth e st ev ed or e p erm it s o f th ree i nc um be ntst ev ed or es —R.O. Whi te , Seab oa rdMari ne , andPo rts Am eri ca Fl or id a—t ha t wer e n otdo in g a ny st ev ed or e work a t the Po rt, wh ic h wh ol ly und erm in es th e Co un ty’ s ra ti on al e o f

“ m ax im iz [in g] Port s pa ce an d o pe rat io na l ef fic ie nc ie s” gi ve n t he Po rt’s “ li m it ed sp ace a ndres ou rces .” Insu m , whi le th e lo cal be ne fit s i de nt ifi edby the Co un ty are leg it im at e, th e Po rt Di rect or ’s perm it ti ng pra ct ic es do no t ra ti on al ly con tri bu te to th es e p ur po rte d lo cal be ne fit s. See Raym on d M ot orTran sp ., Inc v. Ri ce, 4 34 U.S. 42 9, 4 47 –4 8, 98 S. Ct. 7 87 , 79 7 (1 97 8) (strik in g d own W is co ns in hi gh way tra il er-l en gth

68 Case: 11-11116 Date Filed: 12/28/2012 Page: 68 of 83reg ul at io n u nd er u ndue bu rd entes t wh ere Wis co ns in “ fai le d t o m ak e ev ena

co lo rab le sh owi ng th atit s re gu la ti on s co nt rib ut e to hi gh way saf ety ”); Pik e, 39 7 U.S. at 1 46 , 90 S. Ct. at84 9 (s tri ki ng do wn Ari zo nacan ta lo up e p ack in g requi rem en t wh ere “ th e St at e’s in te res t i s m in im al at b es t” ). The Co un ty argu es th atth e d is tri ctco urt s ho ul d h av e si m pl y de ferr edto th e Co un ty’ s p ut at iv e p ur

po se s an d b en efi ts . Bu t an y de fere nc e is no t ab so lu te .

“ [T]he in can ta ti onof a[le gi ti m at e] purp os e . . . do es no t i ns ul at e a s ta te law fr om Co m m erce Claus e atta ck . Reg ul at io ns de si gn edforth atsal ut ary pu rp os e ne ve rth el es s m ay

furth er the pu rp os e so m arg in al ly, an d i nt erfe re wi thco m m erce so subs ta nt ia ll y , as t o b e in va li d u nd er the Co m m erce Claus e.” Kas se l v . Con so l. Frei gh tways Co rp . of Del ., 45 0 U.S. 6 62 , 67 0, 1 01 S. Ct. 1 30 9, 1 31 6 (1 98 1) (p lu ral it y op in io n) . Thatis th e cas e h ere. Th e p erm it ti ng pra ct ic es di d n otfurth er, bu t i f an yth in g ra th er d is se rv ed , th e Co un ty’ s p ur po rte d p ur

po se s an d b en efi ts . In ad di ti on , th e Co un ty has no t i de nt ifi edan y publ ic in te res t warran ti ng th e rem ov al of th e lo cal st ev ed or e m ark etat t he Po rt f ro m co m pe ti ti on fro m

ne w entran ts (wh ethe r th es e n ew en tra nt s b e o ut -o f-s ta te or i n- st at e). See Fo rt Gra ti ot , 50 4 U.S. at36 1, 1 12 S. Ct. at20 25 (“ [A] bur de n i m po se d b y a St at e upo n i nt ers ta te co m m erce is no t t o b e su st ai ne d s im pl y be cau se th e st atut e im

po si ng itap pl ie s

69 Case: 11-11116 Date Filed: 12/28/2012 Page: 69 of 83al ik e to th e p eo pl e o f al l the Sta te s, i nc lu di ng th e p eo pl e o f th e St at e en act in g s uc h

st atut e.” (quo ti ng Bri m

m er, 1 38 U.S. at 8 2- 83 , 11 S. Ct. at21 4) (in te rn al qu ot at io n m ark s o m it te d) ). W e al so ag ree wi th th e d is tri ctco urt tha t ev enif t he Co un ty had a le gi ti m at e in te res t i n p rev en ti ng de st ru ct iv e co m pe ti ti on , su chanin te res t was no t se rv edor e ve n fu rth eredby the Po rt Di rect or ’s actua l p erm it ti ng pra ct ic es . The Po rt Di rect orren ewedth e p erm it s o f atlea sttwo st ev ed or es th atwere n otdo in g an y st ev ed or e work a t the Po rt wh at so ev er, ap paren tl y witho utan y

de le te rio us effe ct s. Inan y ev en t, the Po rt Di rect orco ul d h av e p ro m ot edth e Co un ty’ s s afety an d effi ci en cy ob jecti ve s wi th ou t b arri ng ne w ent ran ts inth e st ev ed or e m ark etby si m pl y adhe rin g t o t he Co un ty’ s p erm itord in an ce. See Pik e, 39 7 U.S. at14 2, 9 0 S. Ct . at 8 47 (st at in g t ha t “ th e ex te ntof t he bu rd en[onin te rs ta te co m m erce ] th at wil l b e to le rat edwil l o f co ur se de pe ndon . . . whe th er [t he lo cal in te res t] cou ldbe pr om ot edas we ll with ales se r im pa cton in te rs ta te act iv it ie s” ). Forex am pl e, th e Po rt Di rect orco ul d h av e (1 ) subjec te d a ll st ev ed or e p erm itap pl ic an ts , andno t m erel y ne w app li can ts , to th e co m pe te nc y , saf

ety reco rd , fin an ci al an d n eed s as se ss m en ts , as re qu ire d b y th e Co un ty ord in an ce, an d (2 ) gr an te d p erm it s o nl y to ap pl ic an ts th atwere “ sk il le d, ex pe rie nc ed , rel iabl e, pr op erl y equi pp ed , andsaf

e,”

70 Case: 11-11116 Date Filed: 12/28/2012 Page: 70 of 83witho utreg ardto whet he r th ey were p erm it te d t o o pe rat e atth e Po rt a lre ady . See Loc ke v. Sh or e, 63 4 F .3d11 85 , 11 93 –9 5 (1 1t h C ir. 2 01 1) (up ho ld in g F lo rid a in te rio r de si gn er l ic en si ng requi rem en t b ecau se st atut e d id“no t b lo cken try al to ge th er” a ndon ly requ ire d d es ig ne rs “ to ach ie ve pro fic ie nc y ”), cert. d en ie d, 13 2 S . Ct. 1 00 4 (2 01 2) . Thes e rea so nabl e an d l es s b ur de ns om e al te rn at iv es wou ld ha ve serve d t he Co un ty’ s p ur po se s, b utth e actua l p erm it ti ng pro cedur es ap pl ie d by the Po rt Di rect ordi d n ot . Ult im at el y , th e rec or d h ere s ho ws n o l oc al be ne fitrat io na ll y furth eredby ho w th e Po rt Di rect oractua ll y ap pl ie d t he st ev ed or e p erm itord in an ce. Rubb erst am pi ng all ren ewal pe rm itap pl ic at io ns an d aut om at ic al ly den y in g a ll ne w perm it ap pl ic at io ns si m

pl y can no t “ m ax im iz e Po rt s pa ce an d o pe rat io na l ef fic ie nc ie s” or en su re tha t s te ve do re cu st om ers ha ve “ a sk il le d, ex pe rie nc ed , rel iabl e, pr op erl y equi pp ed , andsaf

e p oo l o f Po rt- pe rm it te d s te ve do res .” The burd enon in te rs ta te co m m erce —ef

fect iv el y rem ov in g t he Po rt o f Mi am i s te ve do re m ark etfro m th e lo cal , st at e, an d n at io na l m ark et s an d p res erv in g i t fo r a s el ectfew p riv il eg ed pe rm itho ld ers —i s s ig ni fic an t, wh erea s t he actua l p erm it ti ng pra ct ic es di d n ot fu rth er an y

lo cal be ne fit s. Thus , th e b ur de n n eces sa ril y ex ceed edth em . Acco rd in gl y , th e st ev ed or e p erm itord in an ce as ap pl ie d v io la te s t he do rm an t

71 Case: 11-11116 Date Filed: 12/28/2012 Page: 71 of 83Co m

m erce Claus e. C. Mark et-Pa rti ci pa nt Ex cept io n The Co un ty nex t cl ai m s t ha t i t i s i m m un e fro m do rm an t Co m

m erce Claus e st ric tu res un de r th e m ark et -p art ic ip an t ex cep ti on . “ [W] he n ast at e o r lo cal go ve rn m en t en te rs th e m ark etas aparti ci pa ntitis no t s ub ject t o t he res tra in ts of th e [d orm an t] Comm erce Claus e.” Whit e v . Mas s. Co un ci l o f Co ns tr. Em p’rs , In c., 46 0 U.S. 2 04 , 20 8, 1 03 S. Ct. 1 04 2, 1 04 4 (1 98 3) . “ The li m itof t he m ark et pa rti ci pa ntdo ctrin e m

us t b e th atitall ows a St at e to im po se bu rd en s o n c omm erce withi n t he m ark etinwhi ch itis a pa rti ci pa nt , bu t al lo ws i t t o g o n o fu rth er.” So ut h- Cen tra l Ti m

be r Dev ., Inc . v. Wunn ic ke , 46 7 U.S. 8 2, 9 7, 1 04 S. Ct. 2 23 7, 22 45 (19 84 ) (p lu ral it y

op in io n) . W e ag ree wi th th e d is tri ctco urt tha t the m ark et -p art ic ip an t ex cep ti on do es no t ap pl y be cau se th e Co un ty doe s n otpro vi de st ev ed or e se rv ic es . See Fl a. Tran sp . Serv ., 75 7 F . Sup p. 2 d a t 1 28 1. A st at e o r lo cal go ve rn m en t m ay tak e adva nt ag e o f th e m ark et -p art ic ip an t ex cep ti on on ly if th e g ov ern m en t i s a pr op rie to r of

go od s o r se rv ic es in th e rel ev an t m ark et . For e xa m pl e, in Sm it h v . Dep artm en t o f Agr ic ul tu re o f th e St at e o f Geo rg ia , 63 0 F .2d10 81 (5t h C ir.

72 Case: 11-11116 Date Filed: 12/28/2012 Page: 72 of 8319 80 ), th is Co urt co ns id ereda ch al le ng e to a Geo rg iareg ul at io n p ro vi di ng 4 6 Geo rg iares id en ts pri or it y sp ace a ss ig nm en ts at ast at e-o wne d fa rm ers m ark et . W e reject edGeor gi a’s arg um en t tha t the m ark et -p art ic ip an t ex cep ti on sav edth is reg ul at io n b ecau se Geor gi a “ ne it he r pr oduc e[d ] th e g oo ds to be so ldat t he m ark et , no r en ga ge [d ] in th e actua l b uyin g o r se ll in g o f th os e g oo ds .” Sm it h, 6 30 F.3dat 10 83 . Sim il arl y , inSo ut h- Cen tra l Ti m be r, a p lu ral it y

of the Supr em e Co urt reject edAlas ka ’s cla im

th atitact edas am ark etpa rti ci pa ntby requ iri ng th e in
st at e p ro ces si ng of t im

be r cu t o n Al as kalan ds . 46 7 U.S. at98 , 10 4 S . Ct. at22 46 . Inth atcas e, th e Supr em e Co urt p lu ral it y co nc lu de d t ha t Al as kawas areg ul at or be cau se , in te r al ia , Alas kadi d n otactua ll y parti ci pa te inth e ti m

be r-p ro ces si ng m ark et . Id. Lik ewis e, th e Co un ty’ s o rd in an ce g iv es th e Po rt Di rect orth e au th or it y to gr an t o r de ny ste ve do re p erm it s t o p riv at e p art ie s. Th es e p riv at e p art ie s m ay no t pr ov id e st ev ed or e se rv ic es at t he Po rt o f Mi am i wi th ou t a P ort-i ss ue d p erm it . But ne it he r th e Co un ty north e Po rt i ts el f pr ov id es or p ur ch as es st ev ed or e se rv ic es . Rat he r, th e Co un ty’ s o nl y rel at io ns hi p t o t he st ev ed or e m ark etis th ro ug h

In Bonne r v. City

of Prichar d, 661 F.2d 1206, 1209 ( 11th Cir. 1981) (en ba nc), this 4 6 Court adopted as bindingprec edent a ll decisions of the for mer F ifth Circuit prior to October 1, 1981. 73

Case: 11-11116 Date Filed: 12/28/2012 Page: 73 of 83pe rm it ti ng , whi ch , as i ll us tra te d b y th e Co un ty’ s p erm itord in an ce, i s i nt en de d t o se rv e th e Co un ty’ s i nt eres ts of s afe a ndeffi ci en t p ort o pe rat io ns rathe r th anan y pr op rie ta ry

or c omm erci al in te res t. See Mi am i-Da de Co un ty Cod e § 28 A-6 .4(c ).

VII . DAMAGES W e n ex t co ns id er wh ethe r th e d is tri ctco urt erredby den y in g t he Co un ty’ s m ot io n a ndren ewedm ot io n fo r jud gm en t as a m at te r of law as to FTS’s dam ag es . Und er Fe de ral Ru le of C iv il Pro cedur e 5 0, “ [a] party ’s m ot io n fo r jud gm en t as a m atte r of

law ca n b e g ran te d a t the clo se of e vi de nc e o r, if t im el y ren ewed , aft er the jury ha s re tu rn edit s v erd ic t, as lo ng as t he re i s n o l eg al ly suf fic ie nt ev id en ti ary ba si s fo r a rea so nabl e jury to fi ndforth e n on -m ov in g p arty .” Ch an ey v. Ci ty of Orla nd o, 4 83 F.3d12 21 , 12 27 (11 th Cir . 20 07 ) (i nt ern al qu ot at io n m ark s o m it te d) ; s ee al so Fed . R. Civ . P. 50 . “ Thi s co urt, l ik e th e d is tri ctco urt, m us t co ns id er al l the ev id en ce, an d t he in fere nc es dra wn the refr om , inth e li gh t m os t fa vo rab le to th e n on m ov in g p arty .” Bro ug h v . Im pe ria l St erl in g Lt d., 2 97 F.3 d 1 17 2, 1 17 6 (1 1t h C ir. 2 00 2) . W e rev ie w th e ev id en ce i nt ro du cedat t ria l, i n t he li gh t m os t fa vo rab le to FTS, be fo re d is cu ss in g t he su ffi ci en cy of t hi s ev id en ce. A. Safe ty an d Rel ia bi li ty

74

Case: 11-11116 Date Filed: 12/28/2012 Page: 74 of 83FTS in tro du cedev id en ce tha t i t was a rel iabl e, sa fe, an d c om pe te nt st ev ed or e to sh ow t ha t i t wo ul d h av e rec ei ve d ast ev ed or e p erm itin20 03 , 20 04 an d 2 00 5 h adth e Po rt Di rect orpro pe rly app li edth e Co un ty’ s p erm itord in an ce as writ te n. FTS Pr es id en t J oh n Go rm antes ti fie d t ha t FTS h adno si gn ifi can t s afet y pr ob le m s fr om

19 93 to 20 05 an d t ha t FTS p ro vi de d s te ve do re s erv ic e fo r Dis ne y Cru is e Lin es at P ort Cana ve ral , Flo rid a. EdwardGon zal ez, Seabo ardMari ne ’s pr es id en t an d C EO, tes ti fie d t ha t FTS h adpro vi de d s te ve do rin g fo r Seabo ard Mar in e co nt ai ne r ve ss el s i n F ort Lau de rd al e, Fl or id a. Gon zal ez co ul d n otsay an yth in g n eg at iv e ab ou t FTS’s s te ve do re wo rkan d h adno co m pl ai nt s ab ou t FTS’s pe rfo rm an ce. Ro la ndMal in s- Sm it h, the pre si de ntof s hi pp er Se afre ig htAgen ci es , U.S.A., tes ti fie d t ha t h is co m pa ny hadus edFTS as it s s te ve do re atPo rt Eve rg la de s, Fl or id a, fo r 12 y ears . Mal in s- Sm it h s ta te d tha t h is co m pa ny nev er h ad sa fety co nc ern s wi th FTS. Eve n t he Po rt Di rect oradm it te d t ha t h is let te rs de nyin g F TS’s st ev ed or e pe rm itap pl ic at io ns aft er 1 99 9 d idno t s ay an yth in g n eg at iv e ab ou t FTS’s co m pe te nc e o r sa fety . The jury al so he ardev id en ce tha t the Po rt Di rect or au to m at ic al ly gran te d p erm itap pl ic at io ns of i nc um be ntst ev ed or es an d au to m at ic al ly rejectedne w app li can ts . At tri al , th e Po rt Di rect oradm it te d tha t h is

75 Case: 11-11116 Date Filed: 12/28/2012 Page: 75 of 83rubb er-s ta m p app ro va l p ro ces s s hi el de d i nc um be ntst ev ed or es fro m

ne w co m pe ti ti on an d g ran te d p erm it s t o c om pa ni es th atwere n otdo in g s te ve do re wo rk atth e Po rt. The Po rt Di rect orco nc ed edth athe ha d n otran ke d s te ve do re p erm it ap pl ic an ts acco rd in g t o n eedin20 03 , 20 04 , or 2 00 5 a nddi d n otkn ow h ow h e wou ldha ve ran ke d F TS in th os e y ears . B. Sea bo ar d Ma ri ne Ste ve do ri ng FTS al so in tro du cedev id en ce s ho win g t ha t FTS c ou ldhave op erat edm or e effi ci en tl y

th anEll er-I TO andot he r st ev ed or es . FTS Pres id en t Go rm antes ti fie d th atby usi ng a m ob il e h arb orcran e h e p ur ch as edin20 00 , FTS’s “ effi ci en cy wou ldbe clo se to tri pl e wha t [S eab oa rdMari ne ’s] cu rren t . . . st ev ed or e [Ell erITO’ s] was” be cau se Ell er-I TO us edsl owe r, “ st ic k” cran es . Gorm anex pl ai ne d th atFTS’s fas te r se rv ic e wou ldha ve all owe d S eab oa rdMari ne ’s sh ip s t o “ go sl owe r an d s av e al l tha t m on ey in fue l an d/ or

ov ert im e inth e o th er p orts .” FTS’s no n- un io n l ab orals o o ffer edgre at er fl ex ib il ity to sh ip pe rs be cau se Int ern at io na l Lon gs ho rem an ’s Ass oc ia ti on (“ ILA”) u ni onlab or , whi ch Ell er-I TO andot he r st ev ed or es us ed , cou ldbe acqui redon ly w it h 2 4 h ou rs ’ no ti ce. FTS co ul d p ro vi de st ev ed or e labo r inas l it tl e as fou r ho ur s. Inad di ti on , tri al ev id en ce s ho wedth atbe cau se FTS us edno n- un io n l ab or , it

76 Case: 11-11116 Date Filed: 12/28/2012 Page: 76 of 83wou ldha ve be enab le to off er s te ve do re s erv ic e to Seab oa rdMari ne at adi sc ou nt rel at iv e to Ell er-I TO, Seab oa rdMari ne ’s st ev ed or e in 20 03 , 20 04 , and20 05 . Fo ren si c acc ou nt an t Th om as Bas ti antes ti fie d t ha t h e ex am in edFTS’s co st reco rd s, i nv oi ces , andfin an ci al st at em en ts an d i nv oi ces fro m Ell er-I TO and Fl or id a St ev ed or in g. Bas ti anals o re vi ewedin vo ic es fro m sev eral cru is e li ne s cal li ng at t he Po rt o f Mi am i an d l ab orag reem en ts be twee n t he ILA un io n a nd FTS’s co m

pe ti to rs . Bas ti antes ti fie d t ha t FTS’s s te ve do rin g ra te s wer e

“ subs ta nt ia ll y

les s t ha n t he rat es be in g c ha rg edby E ll er-I TO andFlo rid a St ev ed or in g.” Bas edon th e d iff

eren ces in st ev ed or in g ra te s al on e, Bas ti anco nc lu de d t ha t Seab oa rdMari ne wou ldhave sav ed$7 .5 m il li on by em pl oyin g F TS fro m

20 03 to 20 05 rathe r th anEll er-I TO. Alto ge th er, Bas ti anco nc lu de d tha t h adFTS se rv edas Seab oa rdMari ne ’s st ev ed or e fro m 20 03 to 20 05 , FTS wou ldha ve real iz eda to ta l ne t p ro fitof $ 2.6 m il li on . Tom Pael in ckwork edfor

Seab oa rdMari ne fro m

19 88 to 20 07 an d was Seab oa rdMari ne ’s Port o f Mi am i o pe rat io ns m an ag er fro m 19 95 to 19 98 . Pael in ckex pl ai ne d tha t p ric e was anim po rta ntfact orinde ci di ng whi ch st ev ed or e to hi re.

77

Case: 11-11116 Date Filed: 12/28/2012 Page: 77 of 83Pael in ckfurth er t es ti fie d t ha t s om et im es he was s at is fie d wi th Ell er-I TO’ s

st ev ed or e se rv ic es at t he Po rt o f Mi am i an d s om et im es he was d is sa ti sf ie d. Th e Po rt Di rect or ’s 19 99 ne ed s as se ss m en t s ho wedth atSeab oa rdMari ne ’s th en pr es id en t J oh n Lynchga ve Po rt o f Mi am i s te ve do res a ran ki ng of 4 ou t o f 10 whe n a sk edto ev al ua te th e st ev ed or es ’ effi ci en cy . C. Cruis e Li ne Ste ve do ri ng Leo n S ut cl iff

e was a cru is e o pe rat io ns m an ag er fo r Carni va l Crui se Lin es . Su tc li ffe t es ti fie d t ha t Ca rn iv al us edHall m arkSte ve do rin g, wh ic h u se d ILA l ab or , fo r eac h o f it s fi ve sh ip s i n M ia m i. Su tc li ffe s ta te d tha t Ca rn iv al wou ldhave co ns id ereda st ev ed or e p ro po sa l fr om FTS be twee n 2 00 3 and20 05 . Ano th er wi tn es s was Ste ve Mi la n, the sen io r vi ce p res id en t fo r la nd op erat io ns of R oyal Car ib be anCru is e Lin es . Mil antes ti fie d t ha t Ro y al Cari bb ean us edEll er-I TO for i ts st ev ed or in g a t the Po rt o f Mi am i. Acco rd in g t o M il an , Ro y al Cari bb ean wou ldhave co ns id ereda st ev ed or e p ro po sa l fr om FTS be twee n 20 03 an d 2 00 5. Acco un ta ntBas ti anan al y zedEll er-I TO st ev ed or in g i nv oi ces for Ro y al Cari bb ean an d c on cl ud edth atRo y al Carr ib ean wou ldha ve sav ed$4 .2 t o 4.3 mil li on fro m

20 03 to 20 05 by usi ng FTS rathe r th anEll er-I TO. Bas ti an 4 7
Ba stian never

revie wed Ha llmark Stevedoring ’s re cords a nd there fore could not 4 7 estimate how much mone y Carnival would have saved ha d it used FTS.

78 Case: 11-11116 Date Filed: 12/28/2012 Page: 78 of 83co nc lu de d t ha t h adFTS pr ov id edst ev ed or e se rv ic es to cru is e li ne s fr om 20 03 to 20 05 , FTS wou ldha ve real iz eda to ta l n etpro fitof $ 1.1 m il li on . 4 8 D. Stev edo re Co ntra cts FTS p res en te d n o e vi de nc e o f co nt ractua l co m m it m en ts to pro vi de st ev ed or e se rv ic es to an y sh ip pe r orcru is e li ne at t he Po rt o f Mi am i. Bu t ab un da nt ev id en ce es tabl is he d t ha t s hi pp ers an d c ru is e li ne s wo ul d n oten te rta in st ev ed or in g co nt ractpro po sa ls if ast ev ed or e la ck edth e requi si te st ev ed or e p erm it . Mal in sSm ith, p res id en t o f Sea frei gh t Ag en ci es , U.S.A., ex pl ai ne d t ha t “ [i]t wo ul dn ’t be prud en t b us in es s p ract ic e” t o e nt er i nt o aco nt ractwith ast ev ed or e co m pa ny if th at co m pa ny didno t h av e a p erm it . Ro y al Cari bb ean als o wo ul d n othave co ns id ered a p ro po sa l fr om

a st ev ed or e th atdi d n otho lda Po rt o f Mi am i s te ve do re p erm it . Carn iv al op erat io ns m an ag er Su tc li ffe s ai d t ha t “ on e o f th e fi rs t que st io ns th atwe wou ldask ” o f a p ot en ti al st ev ed or e was “ [a]re y ouli cen se d o r pe rm it te d t o op erat e? ” Tom Pael in ckof S eab oa rdMari ne expr es se d s im il ar re se rv at io ns . Pael in ck sp ok e with F TS’s Gorm anin19 98 or 1 99 9 abo utth e p os si bi li ty of FTS p ro vi di ng Ba stian derived the se lost-profit figures f rom per- passeng er r evenueand cost data and 4 8 rate s based on F TS’s stevedore work for Disney Cruise L ines at Port Canave ral. B astian’s lostprofit figures f

or cr uise lines assumed that F TS would have provide d stevedore service for one ship in 2003, two ships in 2004 and three ships in 2005, and did not reflec t stevedoringfor a ny particula r cr uise line. 79 Case: 11-11116 Date Filed: 12/28/2012 Page: 79 of 83st ev ed or e se rv ic es forSeab oa rdMari ne at t he Po rt o f Mi am i. Pael in cksai d,

“ [T]he que st io n was alwa y s, d o youha ve a pe rm itto op erat e? If y oudo n’t h av e a pe rm it , th enwe can. . . have a co nv ers at io n, b uty oucan ’t real ly neg ot ia te an yth in g u nt il y ouha ve th e to ol s t o o pe rat e.” Pael in ckco nt in ue d, “ If s om eb od y co m es up to m e an d s ay s, ‘I’ d l ik e to do y ou r st ev ed or in g,’ bef or e we ev enst art ta lk in g abo utth e p ric es , we go t t o t al k abo ut. . . can y oudo th is ? Do y ouha ve th e pe rm it ? Do y ouhave th e li cen se ? ” E. Anal ys is Viewe d i n t he li gh t m os t fa vo rab le to FTS, we co nc lu de th is tri al ev id en ce was su ffi ci en t t o s up po rt t he jury’ s d am ag es award . Con si de rin g t he ev id en ce o f FTS’s sa fety

an d c om pe te nc e, a rea so nabl e jury cou ldha ve co nc lu de d t ha t FTS wou ldha ve rece iv eda st ev ed or e p erm itat the Po rt o f Mi am i h adth e Po rt Di rect or la wfu ll y ev al ua te d s te ve do re p erm itap pl ic at io ns in20 03 , 20 04 , and20 05 . Ind eed , th e Po rt Di rect or ’s form

let te rs au to m at ic al ly den y in g F TS’s perm itap pl ic at io ns in th os e y ears m en ti on edon ly the lac k o f ne edforne w st ev ed or es , rathe r th an co nc ern s ab ou t FTS’s co m pe te nc e o r sa fety

reco rd . Furt he r, th e jury was en ti tl ed to co nc lu de th atFTS wou ldha ve rece iv eda pe rm itwere i ts ap pl ic at io n c on si de red on th e b as is of n eedbe cau se th e Po rt Di rect or ren ewedth e p erm it s o f co m pa ni es

80 Case: 11-11116 Date Filed: 12/28/2012 Page: 80 of 83th atwere n otev enpe rfo rm in g s te ve do re wo rkat t he Po rt.

As t o wh ethe r FTS wo ul d h av e rec ei ve d s te ve do re wo rk , am pl e ev id en ce sh owe d t ha t FTS wo ul d h av e o ffer edsubs ta nt ia ll y lo wer s te ve do rin g ra te s t o Ell er-I TO’ s cu st om ers , in cl ud in g S eab oa rdMari ne an d R oyal Car ib be an , du e to it s us in g n on -u ni onlab or . Exp erttes ti m on y sh owe d tha t the sav in gs to Seab oa rd 4 9 Mar in e an d t he cru is e li ne s wo ul d h av e b een subs ta nt ia l. Inad di ti on , cru is e li ne s an d s hi pp ers were o pe n t o s te ve do rin g p ro po sa ls an d s ta te d t ha t p ric e was an im po rta ntco ns id erat io n i n s el ect in g ast ev ed or e. Seab oa rdMari ne inpa rti cu la r ex pr es se d s om e d is sa ti sf

act io n wi th it s s te ve do re, Ell er-I TO. E vi de nc e al so supp orte d c us to m ers ’ no n- pr ic e rea so ns forch oo si ng FTS, in cl ud in g F TS’s m or e effi ci en t m ob il e h arb orcran e an d F TS’s sh orte r no ti ce p eri oddu e to it s u si ng no nun io n l ab or . The am ou ntof t he jury’ s d am ag es awardwas a ls o s up po rte d b y th e ev id en ce. The jury award edFTS $2 .55 mil li on forFTS’s pr of it s l os t fr om Seab oa rdMari ne st ev ed or in g c on tra ct s an d $ 1 m il li on for pro fit s l os t fr om

cru is e li ne st ev ed or in g c on tra ct s, al l fr om 20 03 to 20 05 . The jury ’s dam ag es award

Due to lac k of financ ial data f or Ha llmark Stevedoring , Ba stian could not evaluate the 4 9 saving s Carnival would have rea liz ed fr om using F TS rather than Hallmar

k. Howeve r, B astian’s lost-profit calc ulations were based on F TS cost figures f or stevedoring c ruise vesse ls, and, as noted above , did not reflec t lost profits from any single cruise line. 81 Case: 11-11116 Date Filed: 12/28/2012 Page: 81 of 83cl os el y

tra ck edBas ti an ’s exp ertan al y si s o f FTS’s lo stpro fit s due to lo stSeab oa rd Mar in e ($ 2.6 m il li on ) an d c ru is e li ne ($1 .1 m il li on ) st ev ed or e work. The Co un ty argu es th atth e jury’ s d am ag es awardwas s pe cu la ti ve be cau se FTS h adno co nt ractua l co m m it m en ts fro m

sh ip pe rs or c ru is e li ne s t o p ro vi de st ev ed or e se rv ic e. Bu t the ev id en ce s ho wedth atFTS’s lac k o f a s te ve do re p erm it atth e Po rt o f Mi am i p recl ud editfro m sec ur in g b in di ng st ev ed or e ag reem en ts . As ou r di sc us si on ab ov e ex pl ai ns , th e jury was en ti tl edto co nc lu de th atFTS wou ld ha ve rece iv eda pe rm itbu t fo r th e Po rt Di rect or ’s un la wfu l p erm it ti ng pra ct ic es . Und er the pa rti cu la r fac tu al cir cu m st an ces inth is reco rd , th e Co un ty’ s at ta ckon th e jury verd ic t— ongro un ds th atFTS ha d n o b in di ng co nt ract s— fai ls be cau se th e Po rt Di rect or ’s un la wfu l p erm it ti ng pra ct ic es pre cl ud edFTS fro m rece iv in g co nt ract s i n t he fir stpl ace. Insu m , th e ev id en ce p ro vi de d asu ffi ci en t l eg al ba si s fo r th e jury’ s d am ag es award . Accor di ng ly, th e d is tri ctco urt p ro pe rly den ie d t he Co un ty’ s m ot io n a nd ren ewedm ot io n fo r jud gm en t as a m at te r of law. VII I. CONCLUSI ON Fo r th e fo reg oi ng reas on s, we (1 ) affi rm th e d is tri ctco urt’s g ran t o f su m m ary jud gm en t t o F TS as to th e Co un ty’ s l iabi li ty for 2 00 3, 2 00 4, an d 2 00 5;

82 Case: 11-11116 Date Filed: 12/28/2012 Page: 82 of 83(2 ) affi rm

th e jury’ s d am ag es awardto FTS; a nd(3) affi rm th e d is tri ctco urt’s or de r gr an ti ng th e Co un ty’ s p re-t ria l m ot io n i n l im in e ex cl ud in g fr om th e jury’ s co ns id erat io n e vi de nc e o f FTS’s al le ge d l os t p ro fit s i n 2 00 6 a nd20 07 . AFFIRMED.

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