Court Opinion

ID: 9489099
Source: CourtListenerOpinion
Date Created: 2023-08-05 13:05:39.436898+00
Date Added: 2024-06-11T17:53:19.130021
License: Public Domain

SILBERMAN, Circuit Judge,
concurring in part and dissenting in part:
I agree with the majority that the district court appropriately dismissed Dial A Car’s *491Sherman Act claim. But. I think the district court erred in dismissing appellant’s Lanham Act claim.
Dial A Car’s central contention is that Order No. 4 applies to appellees’ provision of Blue Car service with taxicabs. Licensing is an affirmative requirement; if not licensed to do business as Blue Cars, subject to a different set of regulations, the taxicabs must be licensed as and must function as taxicabs.1 Dial A Car alleges — and it is not squarely disputed — that the Commission has issued citations under the Order to appellees for providing Blue Car service with taxicabs, precisely the conduct at issue here. And it attempted to submit an affidavit from the D.C. Taxicab Commission’s General Counsel, who advises the Commission on the proper interpretation and application of D.C. taxicab regulations, stating that Order No. 4 applies to cars licensed as taxicabs regardless of the type of service provided. Given the Order’s clear terms and this regulatory structure, it is argued, appellees’ representations to customers that they are authorized to provide the full range of Blue Car service with their taxicabs (at lower prices, of course) were verifiably “false or misleading representation[s] of fact” under the Lanham Act.
Appellees respond that at best the Order’s application is ambiguous; it does not on its face cover this situation, and there is no ruling on the issue from the Commission, the authority that can most appropriately resolve such a question. The federal district court should therefore refuse to decide such an ambiguous local law issue. And given this ambiguity, appellees’ representations are at most “opinions” on their lawful ability to provide services. Appellant therefore cannot possibly show that any representations ap-pellees made were “verifiably false representations of fact,” and the complaint was properly dismissed.
The district court agreed with appellees. I think the district court erred, however, largely because it failed to examine closely the Order’s language and the regulatory context. Order No. 4 states that “[t]he following rules shall govern the conduct of operators of Maryland and Virginia licensed taxicabs in the District” (emphasis added). As Dial A Car contends, the Order’s language indicates that it is the type of license that is determinative, not the provision of a particular type of service. But even assuming this wording does not clearly cover taxicabs providing Blue Car service — which I think it- does— there are separate licensing provisions and regulations for Blue Cars, the existence of which the district court did not even address. If, as appellees argued and the district court accepted, taxicabs providing Blue Car service are. no longer taxicabs, the rather obvious implication of the regulatory structure is that they must be Blue Cars, licensed and regulated as such. Appellees do not concede, however, that upon providing Blue Car service, their cabs become Blue Cars subject to applicable requirements; instead, they appear to claim that their cabs float.in a regulatory limbo, not subject to any requirements. But this “position” contravenes the apparent purpose of the D.C. Code and the Commission affirmatively to require licensing for all types of transportation services in the District. Thus, the plain import of the language and regulatory structure is that Order No. 4 apples to appellees’conduct.
The district judge also accepted appellees’ argument that their representations were “opinions” rather than verifiable “facts” and therefore not within the Lanham Act. Accordingly, appellees contend, before us, that it does not matter whether the district judge misread local law — any question that calls for a legal conclusion cannot be a statement of fact for purposes of the Lanham Act. And it would be particularly inappropriate, in their view, for a federal district court to resolve a disputed issue of local law, indirectly, in the context of a Lanham Act suit. I readily agree that, if whether appellees are authorized to use taxicabs to provide Blue Car service in D.C. really is in doubt, appellees’ representations cannot serve as a basis for this suit. But I am unwilling to conclude *492that any such statement can never be a factual representation. After all, even to state that one is an American citizen draws upon certain legal conclusions; in some situations that might be doubtful, but in most others, it will be a clear statement of truth or falsity. Whether a statement of purported fact that depends on an underlying legal conclusion is a fact for Lanham Act purposes, therefore seems to me to depend for its character as fact on whether there can be a good faith doubt as to the legal conclusion (which is essentially the same question as whether a defendant “knowingly” violated local law). ■
The majority agrees, “hypothetically speaking,” with my good faith doubt approach, but expresses skepticism that a regulation could ever be sufficiently clear to support such a claim. See Maj.Op. at 489 n. 3. As such, the majority’s ostensible agreement is an illusion. And that is made abundantly clear by the majority’s assertion that merely because the district judge read local law differently than do I (the appellees, and the Commission’s General Counsel), the law must be ambiguous — even though the majority does not endorse the district judge’s “analysis” or submit an alternative plausible reading. Of course, if the fact that one judge (or agency) misread a statute was a per se indication of the statute’s ambiguity, our implementation of- Chevron — particularly when considering a district court’s review.of an agency interpretation of a statute — would be revolutionized. I do not see how, therefore, the majority’s approach to this case could possibly embody a principle for the Lanham Act or indeed any other kind of case.
The majority’s resistance to recognition of a Lanham Act claim appears to stem from its unwillingness to apply federal law to a local dispute. It emphasizes that this dispute is within the Taxicab Commission’s jurisdiction — which the majority assumes has not yet resolved the issue. I share the majority’s concern that the Lanham Act should not be used as “a handy device to reach and decide all sorts of local law questions,” Maj. Op. at 490, but that concern dissipates when state or local law is clear. The majority has given no justification for what in effect is an absolute bar to Lanham Act claims based on local law.2 While the majority notes that the Lanham Act apparently has not been applied previously to a misrepresentation based on state or local law, the Act does not on its face draw this distinction. It is strange, to say the least, to consider a statement of federal authorization, e.g., copyright ownership, to be a misrepresentation of fact actionable under the Lanham Act, but a similar statement of local authorization to be á non-actionable opinion. And although it is possible for the District’s legal/regulatory structure to give the Commission exclusive authority vis-a-vis any court, féderal or local, to enforce the D.C. Code and its orders, this is not clearly stated in the statute or regulations nor addressed by the majority. Cf. National Labor Relations Act, 29 U.S.C. § 153(d) (1994) (vesting “final authority” for issuing and prosecuting complaints with the General Counsel of the National Labor Relations Board). Nevertheless, the majority relies on Sandoz Pharmaceuticals Corp. v. Richardson-Vicks, Inc., 902 F.2d 222 (3d Cir.1990), a “primary jurisdiction” case, to explain its refusal to apply the Act. The rationale of primary jurisdiction is that a court should not preemptively decide an issue for which another agency or court has primary responsibility and that implicates agency expertise, policy issues, or exclusive agency jurisdiction. Thus, in Sandoz, the court refused to decide a complex, scientific issue — whether a cough syrup demulcent that hastens the. effect of the other (active) ingredients is itself an active rather than an inactive ingredient — that the Food & Drug Administration had not yet addressed. The court noted that the petitioner was free to pursue its false labeling claim with the. FDA, and refused to “preemptively” decide an issue that the FDA should decide “as an original matter.” Id. at 231-32 & n. 10.
*493In Sandoz, however, in contrast to the present case, the court thought the law unclear, and there had been no indication from the agency of the appropriate interpretation. And the FDA presumably could investigate, at petitioner’s request, the alleged labeling violations. Here, a eareful examination of the Order’s language and the regulatory scheme shows the law is clear. And Dial A Car alleged squarely that the Commission has issued citations on precisely the conduct at issue. Further, there is no suggestion that the Commission, like the FDA, is authorized to entertain false advertising claims. The actual violation of the taxicab regulations, for which the Commission may issue (random) citations, is distinct from the false advertising that Dial A Car seeks to remedy in its Lanham Act claim, over which the federal court appropriately has jurisdiction. To tell Dial A Car to raise its claim with the Commission, as the majority suggests, is thus not only unnecessary; it is an . empty solution. Appellants brought the Lanham Act claim because, as they have explained, the Commission does not have the institutional powers or resources effectively to prevent Barwood and Red Top from flouting the D.C. statute.
The majority insists (footnote three’s concession on the good faith doubt rule notwithstanding) that only a formal statement from the Commission on Order No. 4 is an acceptable indication of its meaning. But there is no Commission interpretive rule requiring such a formal statement, and perhaps none has issued because the Commission considers the Order’s meaning obvious. If a statement of the Commission were thought necessary or desirable, I do not understand why the General Counsel’s affidavit is inadequate. There is simply no excuse for the district judge’s refusal to even examine that document. The court stated only that it was “of the view that [the motion to dismiss] can and should be resolved on the basis of the complaint, without reference to the Declaration sought to be filed by Plaintiff as supplemental material.” See Dial A Car, Inc. v. Transportation, Inc., Civ. Action No. 93-2170, 1994 WL 902774, Mem.Op. at 2 (D.D.C. Sept. 8, 1994). The majority suggests that the district judge had “discretion” in deciding whether to accept the affidavit. But the judge’s discretion on a Fed.R.Civ.P. 12(b)(6) motion to dismiss extends only to whether to accept evidentiary or factual submissions that would convert the motion into one for summary judgment under Rule 56. Submissions on legal issues, as is the affidavit here, are not within that discretion.
The affidavit stated that the General Counsel “advise[s] the Commission as to the legality and proper interpretation of its rules, regulations, orders and rulings.” Crawford Aff. 1. The district court did not state that it was rejecting the affidavit because the General Counsel did not purport to speak for the Commission, as the majority suggests, see Maj.Op. at 489 n. 4, and given his role vis-a-vis the Commission, the General Counsel apparently is authorized to give an authoritative interpretation. He averred that
[t]here is not now, and never has been, any question that all operations of taxicabs licensed in jurisdictions other than the District of Columbia must conform to Administrative Order No. 4 ... regardless of the method of payment or means of dispatch, and' there is no exception for trips made pursuant to established “Corporate Account” billing.
Id. Moreover, if appellant proved that the Commission citations issued to Red Top and Barwood were specifically directed to the alleged providing of illegal Blue . Car service, that also would support that Order No. 4 applies to the disputed services and that appellees were in fact aware that their conduct was illegal. That information is clearly significant and relevant to the Order’s meaning, and therefore to whether Dial A Car has a viable Lanham Act claim.
Since I think Order No. 4 clear, on its text and regulatory context alone (and certainly in light of Dial A Car’s supporting material), I would determine that the district court’s refusal to consider the material submitted by Dial A Car and its subsequent dismissal of the case with prejudice were erroneous.

. "No person ... shall operate a taxicab ... or taxicab service within the District without first procuring all applicable licenses required by the Commission.” "Operate” includes "taxicab service of any type which physically originates in the District.” D.C.Code Ann. § 40-1719(a) (1990).

. The majority misstates the case when it re- . peatedly refers to the relevant issue as the application of federal law to a local dispute, see Maj. Op. at 488, 490; this is not enforcing local law but rather applying federal law, according to its terms, to factual misrepresentations that happen in this instance to stem from local law.