Opinion ID: 3010320
Heading Depth: 3
Heading Rank: 3

Heading: The Court in EEOC v. Wyoming stated:

Text: It is in the nature of our review of congressional legislation defended on the basis of Congress' powers under S 5 of the Fourteenth Amendment that we be able to discern some legislative purpose or factual predicate that supports the exercise of that power. That does not mean, however, that Congress need anywhere recite the words `section 5' or `Fourteenth Amendment' or `equal protection' for `[t]he . . . constitutionality of action taken by Congress does not depend on recitals of the power which it undertakes to exercise.' 460 U.S. at 243-44 n.18, 103 S.Ct. at 1064 n.18 (citations omitted) (quoting Woods v. Cloyd W. Miller Co., 333 U.S. 138, 144, 68 S.Ct. 421, 424 (1948)). 10 Furthermore, as the Court recently has stated, congressional enactments are accorded a presumption of validity, because [i]t is for Congress in the first instance to `determin[e] whether and what legislation is needed to secure the guarantees of the Fourteenth Amendment,' and its conclusions are entitled to much deference. City of Boerne v. Flores, 117 S.Ct. 2157, 2172 (1997) (quoting Katzenbach v. Morgan, 384 U.S. 641, 651, 86 S.Ct. 1717, 1723-24 (1966)). However, Congress' discretion is not unlimited and courts must ensure that congressional acts do not overstep the boundaries of the Fourteenth Amendment. Id. at 2172. Therefore, while the brief statement of the constitutional foundation for the TRCA in the Senate Report is entitled to deference, it does not establish that the TRCA is constitutional. Consequently, we are obliged to examine the scope of the Fourteenth Amendment and determine whether the TRCA is valid under the amendment's enforcement section. The Due Process Clause of Fourteenth Amendment provides that no state shall deprive any person of life, liberty, or property, without due process of law. U.S. CONST. amend. 14, S 1. Sectionfive of the Fourteenth Amendment gives Congress the power to enforce, by appropriate legislation, the provisions of this article. U.S. CONST. amend. 14, S 5. The Court long has recognized that Congress' power to legislate under section five is quite broad: Whatever legislation is appropriate, that is, adapted to carry out the objects the amendments have in view, whatever tends to enforce submission to the prohibitions they contain, and to secure to all persons the enjoyment of perfect equality of civil rights and the equal protection of the laws against State denial or invasion, if not prohibited, is brought within the domain of congressional power. Ex Parte Virginia, 100 U.S. 339, 345-46 (1879). However, Congress' power under section five of the Fourteenth Amendment is not without boundaries. As the Court held in Oregon v. Mitchell, 400 U.S. 112, 91 S.Ct. 260 (1970): As broad as the congressional enforcement power is, it is not unlimited. Specifically, there are at least three 11 limitations upon Congress' power to enforce the guarantees of the Civil War Amendments. First, Congress may not by legislation repeal other provisions of the Constitution. Second, the power granted to Congress was not intended to strip the States of their power to govern themselves . . . . Third, Congress may only `enforce' the provisions of the amendments and may only do so by `appropriate legislation.' 400 U.S. at 128-29, 91 S.Ct. at 266-67. The Court also recently has cautioned that Congress does not enforce a constitutional right by changing what the right is. It has been given the power `to enforce,' not the power to determine what constitutes a constitutional violation. City of Boerne, 117 S.Ct. at 2164. Therefore, while Congress has broad remedial power under the Fourteenth Amendment, it does not have a basis for enacting substantive, nonremedial measures. Because of this limitation, for a law to be a valid mechanism to enforce the Due Process Clause, it must not create new substantive rights, but instead must provide a method of protecting against violations of those rights already extant. The Due Process Clause itself sets out the boundaries of what rights it protects: the conduct must involve action by a state; it must deprive an individual of life, liberty or property; and the deprivation must occur without due process of law. These three requirements are at the core of what the TRCA must remedy to be valid under the Fourteenth Amendment. However, for the TRCA to be a valid enforcement of the Due Process Clause under section five, it does not need to protect only against constitutional violations. Rather, the TRCA can serve the broader purposes of the Due Process Clause. The Court in City of Boerne, reiterated this notion: Legislation [enacted under section five of the Fourteenth Amendment] which deters or remedies constitutional violations can fall within the sweep of Congress' enforcement power even if in the process it prohibits conduct which is not itself unconstitutional and intrudes into `legislative spheres of autonomy previously reserved to the States.'  Id. at 2163 (quoting Fitzpatrick v. Bitzer, 427 U.S. at 455, 96 S.Ct. at 2671). Yet even though the 12 violations against which it protects do not have to rise to the level of constitutional violations, the TRCA must further the goals of protecting property from state action undertaken without due process of law, because the congressional enforcement power under the Fourteenth Amendment is not unlimited. See City of Boerne, 117 S.Ct. at 2163. In deciding that the TRCA is not valid as applied in this case under the Fourteenth Amendment, the district court concluded that the case did not involve a property right; therefore, the TRCA did not further the purposes of the Fourteenth Amendment. See College Sav. Bank, 948 F. Supp. at 426-28. The district court first determined that the false advertising prong of the Lanham Act invoked by CSB essentially protects the `right to be free from false advertising.'  Id. at 426. This right, according to the district court, was not property for purposes of the Fourteenth Amendment; in fact, the district court could notfind any precedent even discussing whether the right to be free of unfair competition is `property.'  Id. at 426-27 n.27. The district court indicated that we are unaware of any authority suggesting that Congress may, by simplefiat, abruptly declare that a simple statutory cause of action, which traditionally has not been understood to involve any kind of property, now encompasses a `property right' to which the Fourteenth Amendment applies. Id. at 427. Therefore, according to the district court, because a property right was not involved, Congress did not have the power under the Fourteenth Amendment to enact the TRCA as it applied to this case. In our examination of the TRCA, we, too, focus on the question of whether the TRCA protects a property right recognized under the Fourteenth Amendment. The tort of unfair competition created by the Lanham Act protects against certain harms involving improper interference with business prospects. See 15 U.S.C. S 1127; see also AT & T Co. v. Winback and Conserve Program, Inc., 42 F.2d 1421, 1428 (3d Cir. 1994) (noting that the Lanham Act contains language that  `creates a federal cause of action for unfair competition.' ) (citations omitted). CSB contends that this tort of unfair competition protects intangible property 13 rights; therefore, the TRCA should be seen to protect property as defined under the Fourteenth Amendment. The tort of unfair competition found in the Lanham Act does protect some intangible property rights, but no such intangible property is involved in the present case. See W. Page Keeton et al., Prosser and Keeton on the Law of Torts S 130, at 1015 (5th ed. 1984) (citing trade marks, copyrights, and patents as intangible property rights that the tort of unfair competition involves). Instead, CSB's Lanham Act claim concerns allegedly false statements about a competitor's own product. The only cognizable property right that could be involved would be a right to be free of false advertising, a right that is not an intangible property right protected under the Fourteenth Amendment. The Supreme Court has recognized that the Fourteenth Amendment protects some categories of intangible property rights. See, e.g., Tulsa Prof 'l Collection Serv. v. Pope, 485 U.S. 478, 485, 108 S.Ct. 1340, 1345 (1988) (in recognizing an unsecured claim against the estate, the Court wrote: Little doubt remains that such an intangible interest is protected by the Fourteenth Amendment.); Logan v. Zimmerman Brush Co., 455 U.S. 422, 430, 102 S.Ct. 1148, 1155 (1982) ([T]he types of interests protected as `property' are varied and, as often as not, intangible, relating `to the whole domain of social and economic fact.' ) (citations omitted); Paul v. Davis, 424 U.S. 693, 710, 96 S.Ct. 1155, 1165 (1976) ([T]here exists a variety of interests which are difficult of definition but are nevertheless comprehended within the meaning of either `liberty' or `property' as meant in the Due Process Clause.). However, not all intangible rights have been deemed to be property under the Fourteenth Amendment, see Paul v. Davis, 424 U.S. at 712, 96 S.Ct. at 1166 (holding that a person's reputation was not intangible property covered by Fourteenth Amendment), and the right to be free from unfair advertising is not one of the protected property interests. While infringement on such a right might give rise to a cause of action, the right does not amount to property within the meaning of the Fourteenth Amendment.4 _________________________________________________________________ 4. CSB asserts that the Supreme Court recognized that the tort of unfair competition involved protected intangible property rights in International 14 We also reject CSB's contention that the TRCA necessarily involves a protected property right under the Fourteenth Amendment on the basis that it attempts to protect businesses from harm. Clearly, a business is an established property right entitled to protection under the Fourteenth Amendment. See, e.g., Duplex Printing Press Co. v. Deering, 254 U.S. 443, 465, 41 S.Ct. 172, 176 (1920) (finding that a business . . . is a property right, entitled to protection against unlawful injury or interference .. .); United States v. Tropiano, 418 F.2d 1069, 1076 (2d Cir. 1969) (The right to pursue a lawful business including the solicitation of customers necessary to the conduct of such business has long been recognized as a property right within the protection of the Fifth and Fourteenth Amendments to the Constitution.) (citations omitted); Small v. United States, 333 F.2d 702, 704 (3d Cir. 1964) (The right to pursue a lawful business or occupation is a right of property which the law protects against intentional and unjustifiable interference. A cause of action based upon such an interference is analogous to one based upon unlawful interference with existing contracts, and is governed by the same principles.) (citations omitted). Nevertheless, while a business is a property right, the fact that CSB operates a business does not lead necessarily to the conclusion that the TRCA as applied in this case protects property rights. For instance, in Gentry v. Howard, 365 F. Supp. 567 (W.D. La. 1973), an operator of an ambulance service sued _________________________________________________________________ News Serv. v. Associated Press, 248 U.S. 215, 236, 39 S.Ct. 68, 71 (1918) ([T]he right to acquire property by honest labor or the conduct of a lawful business is as much entitled to protection as the right to guard property already acquired. . . . It is this right that furnishes the basis of the jurisdiction in the ordinary case of unfair competition.) (citations omitted). However, the quoted language concerned the question of whether the courts should exercise equity jurisdiction over the dispute; the Court needed to determine if a right sufficient to sustain such jurisdiction had been violated and if a harm had occurred. Thus, while the opinion does discuss property rights and the tort of unfair competition, the Court did not determine whether the tortious actions injured a property right worthy of protection under the Fourteenth Amendment. The Court merely determined that an injury to a specific right had occurred. 15 the mayor of the City of Monroe in part on due process grounds, because the city began operating a competing ambulance service. The district court held that this action by the city did not amount to a due process violation, because no deprivation of property had occurred, within the meaning of the Fourteenth Amendment. Even though the city clearly was competing with the private business which suffered from this competition, this harm did not rise to the level of a deprivation of property under the Fourteenth Amendment. See also Hegeman Farms Corp. v. Baldwin, 293 U.S. 163, 170, 55 S.Ct. 7, 9 (1934) (The Fourteenth Amendment does not protect a business against the hazards of competition.); cf. Reich v. Beharry, 883 F.2d 239, 242 (3d Cir. 1989) (Every breach of contract by someone acting under color of state law [does not] constitute[ ] a deprivation of property for procedural due process purposes.). As Gentry illustrates, just because the state's actions impact on a private business does not mean that this action somehow infringes on the Fourteenth Amendment rights of the private individual. If a state's conduct impacting on a business always implicated the Fourteenth Amendment, Congress would have almost unrestricted power to subject states to suit through the exercise of its abrogation power. Congress could pass any law that tangentially affected the ability of businesses to operate and then create causes of action against the states in federal court if they infringed on those federally created rights. This result would be unacceptable and would conflict directly with the strict limits on Congress' powers to abrogate a state's Eleventh Amendment immunity. Thus, because this case does not involve a property interest protected by the Fourteenth Amendment, the TRCA, as applied in this case, is an unconstitutional exercise of Congress' powers. We carefully have confined our discussion by holding that the TRCA is unconstitutional as applied in this case. We have done so for two reasons. First, as the district court correctly noted, the false advertising prong of the Lanham Act implicated in this litigation is separate and distinct from the trademark infringement prong. College Sav. Bank, 948 F. Supp. at 426 n.25. Second, the false advertising 16 prong of the Lanham Act not only proscribes misrepresentations regarding a person's own goods or services, but it also forbids misrepresentations about a competitor's goods or services. 11 U.S.C. S 1125 (a)(1)(B). Since the present case only involves allegations that Florida Prepaid misrepresented its own product, the second part of the false advertising prong is not implicated. Therefore, because the scope of the allegations in this case is so narrow, we express no opinion as to whether the TCRA may be applied constitutionally in a case involving a trademark infringement or involving a misrepresentation about a competitor's goods or services.