Opinion ID: 613899
Heading Depth: 2
Heading Rank: 2

Heading: Plaintiffs' Cross Appeals

Text: Plaintiffs allege that the PACT Act violates the Fifth Amendment's equal protection guarantees because it intentionally targets Native Americans, and because it exempts only residents of Alaska and Hawaii from the statute's exclusion on the use of the mails. The district court concluded that plaintiffs' equal protection claims were unlikely to succeed on the merits. Red Earth and Pierce argue that the district court erred as to the intentional discrimination claim, and the SFTA asserts that the district court erred as to the non-mailability claim. Red Earth and Pierce allege that the PACT Act, although a facially neutral statute, was motivated by discriminatory animus towards Native Americans and that its application results in a discriminatory effect. See Village of Arlington Heights v. Metro. Hous. Dev. Corp., 429 U.S. 252, 264-65, 97 S.Ct. 555, 50 L.Ed.2d 450 (1977) (requiring proof of racially discriminatory intent in addition to racially disproportionate impact to find that official action violates equal protection). Discriminatory intent implies that the decisionmaker. . . selected or reaffirmed a particular course of action at least in part `because of,' not merely `in spite of,' its adverse effects upon an identifiable group. Personnel Adm'r v. Feeney, 442 U.S. 256, 279, 99 S.Ct. 2282, 60 L.Ed.2d 870 (1979). The district court recognized that the PACT Act would have a disproportionate effect on Native Americans, who comprise at least 80 percent of delivery sellers. The district court also acknowledged plaintiffs' identification of evidence in the legislative history that they characterized as evincing animus towards Native Americans, such as laughter by some present when a letter from the Seneca Nation was introduced into the congressional record. However, the district court found that Congress's intent in passing the PACT Act was to curtail what it believed to be improper assertions of Native American sovereignty, not to purposefully discriminate against Native Americans as a group. As plaintiffs have failed to show that this finding was clearly erroneous, the district court did not abuse its discretion in deeming plaintiffs' intentional discrimination claim unlikely to succeed on the merits. The SFTA's equal protection challenge is based on an exception to the PACT Act's classification of all cigarettes and smokeless tobacco as nonmailable. 18 U.S.C. § 1716E(a)(1). Although the statute prohibits the U.S. Postal Service from accepting cigarettes and smokeless tobacco for delivery, mailings within the State of Alaska or within the State of Hawaii are excepted from that restriction. Id. § 1716E(b)(2). Plaintiffs argued that this provision irrationally favors residents of Alaska or Hawaii over similarly situated residents of other states. The district court rejected this challenge, finding the exception was rationally designed to ensure that residents of remote areas of Alaska and Hawaii could obtain cigarettes. On appeal, the SFTA reiterates that the exception for Alaska and Hawaii is over-inclusive, in that it applies to residents of cities like Anchorage and Honolulu, and under-inclusive, as it excludes similarly situated residents of remote regions in other states. However, rational basis review allows legislatures to act incrementally and to pass laws that are over (and under) inclusive without violating equal protection. Hayden v. Paterson, 594 F.3d 150, 171 (2d Cir.2010). A classification neither involving fundamental rights nor proceeding along suspect lines is accorded a strong presumption of validity. Heller v. Doe, 509 U.S. 312, 319, 113 S.Ct. 2637, 125 L.Ed.2d 257 (1993). It will be upheld as long as there is any reasonably conceivable state of facts that could provide a rational basis for the classification. Id. at 320, 113 S.Ct. 2637 (quoting FCC v. Beach Commc'ns, Inc., 508 U.S. 307, 313, 113 S.Ct. 2096, 124 L.Ed.2d 211 (1993)). The district court properly concluded that this exception falls well within the bounds of rationality.
The Tenth Amendment provides that [t]he powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people. U.S. Const. amend. X. Plaintiffs claim that, by attempting to levy state and local taxes, Congress is acting outside its enumerated powers in violation of the Tenth Amendment. The district court, relying on Brooklyn Legal Services Corporation B v. Legal Services Corporation, 462 F.3d 219, 234-36 (2d Cir.2006), concluded that plaintiffs lack standing to assert a Tenth Amendment claim. In Brooklyn Legal Services, after deciding that the question of standing under the Tenth Amendment was controlled by Tennessee Electric Power Co. v. Tennessee Valley Authority, 306 U.S. 118, 144, 59 S.Ct. 366, 83 L.Ed. 543 (1939), we found that plaintiffs lacked standing because no plaintiff . . . represent[ed] a state or its instrumentality. See Brooklyn Legal Services, 462 F.3d at 234-35. In United States v. Bond, the Third Circuit, while recognizing a circuit split as to the issue of standing under the Tenth Amendment, similarly relied on Tennessee Electric in concluding that the individual plaintiff lacked standing to assert a Tenth Amendment claim. 581 F.3d 128, 136-38 (3d Cir.2009), cert. granted, ___ U.S. ___, 131 S.Ct. 455, 178 L.Ed.2d 285 (2010). But see Gillespie v. City of Indianapolis, 185 F.3d 693, 703-04 (7th Cir.1999) (allowing private parties to bring Tenth Amendment challenges), cert. denied, 528 U.S. 1116, 120 S.Ct. 934, 145 L.Ed.2d 813 (2000). During the pendency of this appeal, the Supreme Court reversed the Third Circuit, resolving this circuit split. In Bond v. United States, ___ U.S. ___, 131 S.Ct. 2355, 180 L.Ed.2d 269 (2011), the Court held that an individual can have standing to pursue a Tenth Amendment claim. [W]here the litigant is a party to an otherwise justiciable case or controversy, she is not forbidden to object that her injury results from disregard of the federal structure of our Government. Id. at 2366-67. Red Earth and the SFTA, in letters filed with the court pursuant to Federal Rule of Appellate Procedure 28(j), both state that Bond provides an additional basis for upholding the preliminary injunction issued by the district court. The government has not responded to plaintiffs' letters. Bond effectively overrules Brooklyn Legal Services, and thus abrogates the basis for the district court's resolution of the Tenth Amendment question. Because the district court concluded that plaintiffs were unlikely to succeed on their Tenth Amendment claim based on their apparent lack of standing, it did not otherwise address the claim's viability on the merits. As we affirm the preliminary injunction on other grounds, and plaintiffs do not contend that Bond warrants any expansion of that injunction, the outcome of this appeal is unaffected by the Supreme Court's resolution of Bond. While it now appears that plaintiffs have standing to raise the Tenth Amendment claim, we have no need to address the likelihood that plaintiffs will succeed as to their Tenth Amendment claim and decline to do so.