Court Opinion

ID: 3034834
Source: CourtListenerOpinion
Date Created: 2015-10-13 22:51:40.43938+00
Date Added: 2024-06-11T11:48:33.036654
License: Public Domain

United States Court of Appeals
                           FOR THE EIGHTH CIRCUIT
                                   ___________

                                   No. 03-2345
                                   ___________

Charlotte Klingler; Charles Wehner;   *
Sheila Brashear,                      *
                                      *
             Appellees,               *
                                      * Appeal from the United States
       v.                             * District Court for the Western
                                      * District of Missouri.
Director, Department of Revenue,      *
State of Missouri,                    *
                                      *
             Appellant.               *
                                 ___________

                             Submitted: January 12, 2004

                                  Filed: May 3, 2004 (corrected 7/23/04)
                                   ___________

Before WOLLMAN, RICHARD S. ARNOLD, and MORRIS SHEPPARD
      ARNOLD, Circuit Judges.
                              ___________

MORRIS SHEPPARD ARNOLD, Circuit Judge.

      In Missouri, physically disabled people who pay a $2.00 annual fee to the state
revenue department may obtain permanent removable windshield placards
authorizing them to use reserved accessible parking spaces. The plaintiffs, a class of
all who have purchased, or will purchase, such placards, sought a declaration that the
charge of a fee for the placards violates Title II of the Americans With Disabilities
Act (ADA), see 42 U.S.C. §§ 12131-12165, an injunction against further collection
of the placard fee by the Director of the Missouri Department of Revenue (Director),
and monetary damages. In an earlier appeal, Klingler v. Director, Dep't of Revenue,
281 F.3d 776, 777 (8th Cir. 2002) (per curiam), we affirmed a dismissal of the
plaintiffs' claim for damages, but held that they could seek declaratory and injunctive
relief against the Director under the doctrine of Ex parte Young, 209 U.S. 123 (1908),
and remanded the case to the district court.

       The district court, following cross-motions for summary judgment, granted the
declaratory and injunctive relief sought, concluding that the fee charged to the
plaintiffs violated the surcharge prohibition of 28 C.F.R. § 35.130(f), a regulation
promulgated by the Department of Justice (DOJ) under the authority of the ADA, see
42 U.S.C. § 12134. The Director appeals, arguing that her collection of the placard
fee is not prohibited by the ADA and that, even if it were, such a prohibition would
not be a constitutionally valid exercise of congressional power. We review the
district court's grant of summary judgment for the plaintiffs de novo, see Tindle v.
Caudell, 56 F.3d 966, 969 (8th Cir. 1995), and reverse.

                                            I.
       Certain parking spaces in Missouri that are close to entrances of buildings are
reserved for the exclusive use of physically disabled people. See Mo. Rev. Stat.
§ 301.143. Missouri law authorizes a motor vehicle containing a physically disabled
occupant to park in one of these accessible parking spaces if the vehicle displays
either a specially marked license plate, see Mo. Rev. Stat. § 301.142.3, or a
removable windshield placard, see Mo. Rev. Stat. § 301.142.5. A person parking a
vehicle in a space reserved for disabled people who fails to display a disabled license
plate or placard shall be fined, and the vehicle may be towed. See Mo. Rev. Stat.
§ 301.143.4. An application for a disabled license plate or windshield placard must
be made to the Director and must be accompanied by a statement signed by a
physician that certifies that the relevant person is "physically disabled" as defined by

                                          -2-
Mo. Rev. Stat. § 301.142.1. See Mo. Rev. Stat. § 301.142.6. A disabled license plate
may be obtained at no additional fee beyond that ordinarily charged for license plates,
see Mo. Rev. Stat. § 301.142.4, but there is a fee of $2.00 per year charged for each
windshield placard, see Mo. Rev. Stat. § 301.142.5.

       The plaintiffs successfully argued below that Title II of the ADA and a
regulation promulgated by the DOJ to enforce the ADA, see 28 C.F.R. § 35.130(f),
prohibit the collection by the Director of the $2.00 annual fee for the placards.
Title II of the ADA states, in relevant part, that "no qualified individual with a
disability shall, by reason of such disability, ... be subjected to discrimination by [a
public] entity." 42 U.S.C. § 12132. Congress directed the DOJ to promulgate
regulations for the implementation of Title II of the ADA. See 42 U.S.C. § 12134(a).
The regulation relied on by the plaintiffs and the district court is a specific application
of the nondiscrimination mandate of Title II. The regulation expressly prohibits
public entities from placing a "surcharge" on a disabled person or any group of
disabled people "to cover the costs of measures ... that are required to provide [those
individuals] with the nondiscriminatory treatment required by the [ADA]." 28 C.F.R.
§ 35.130(f).

       To determine whether the fee involved in this case violates Title II, we would
need to decide whether the measure for which Missouri levies the fee is "required to
provide that individual or group ... nondiscriminatory treatment" as mandated by the
ADA and, if so, whether the fee for the measure is a "surcharge." See 28 C.F.R.
§ 35.130(f); Dare v. California, 191 F.3d 1167, 1171 (9th Cir. 1999), cert. denied,
531 U.S. 1190 (2001). We realize that the Supreme Court has advised that "[w]here
a case ... can be decided without reference to questions arising under the Federal
Constitution, that course is usually pursued and is not departed from without
important reasons." Siler v. Louisville & N.R. Co., 213 U.S. 175, 193 (1909). But we
believe that this is one of those rare occasions where the appropriate resolution of the
constitutional issue is reasonably straightforward and determinate and the resolution

                                           -3-
of the statutory issue is, by contrast, difficult and complex. See, e.g., D'Almeida v.
Stork Brabant B.V., 71 F.3d 50, 51 (1st Cir. 1995) (per curiam), cert. denied, 517 U.S.
1168 (1996). We thus proceed directly to the constitutional question, and conclude
that the application of Title II to the present circumstances would not be a
constitutionally valid exercise of congressional power.

                                         II.
      We have held that "the extension of Title II of the ADA to the states was not
a proper exercise of Congress's power under Section 5 of the Fourteenth
Amendment." Alsbrook v. City of Maumelle, 184 F.3d 999, 1010 (8th Cir. 1999) (en
banc). The plaintiffs concede that, but they contend that Title II, as applied to the
Director, is a constitutional exercise of Congress's Article I power to "regulate
Commerce ... among the several States," U.S. Const., art. I, § 8, cl. 3.

       The Supreme Court has held that Congress may regulate three broad categories
of activity under its commerce power: "use of the channels of interstate commerce";
persons, things, and instrumentalities in interstate commerce; and intrastate "activities
that substantially affect interstate commerce." United States v. Lopez, 514 U.S. 549,
558-59 (1995). Because the disabled placard fee clearly does not fit within either of
the first two Lopez categories, the relevant inquiry is whether Missouri's placard fee
"substantially affects" interstate commerce.

       The plaintiffs argue that Title II is a legitimate exercise of congressional power
under the commerce clause. We think that the issue is more properly understood,
though, not as whether the commerce clause gives Congress authority to enact Title II
in the first place, but as whether the statute's application to the regulated activity in
the case at hand is a valid one. See United States v. Stewart, 348 F.3d 1132, 1140-42
(9th Cir. 2003). As the Supreme Court stated in Lopez, 514 U.S. at 559, "the proper

                                          -4-
test requires an analysis of whether the regulated activity 'substantially affects'
interstate commerce."

       In United States v. Morrison, 529 U.S. 598 (2000), the Supreme Court
provided guidance for determining whether a statute regulates intrastate activity that
"substantially affects" interstate commerce. We must consider whether the regulated
activity is commercial or economic in nature; whether the statute contains an "express
jurisdictional element that might limit its reach to a discrete set" of cases; whether the
statute or its legislative history contains "express congressional findings" regarding
the effects of the regulated activity upon interstate commerce; and whether the link
between the regulated activity and a substantial effect on interstate commerce is
"attenuated." Id. at 609-13 (internal quotations omitted). We conclude that all four
of the considerations identified in Morrison favor a finding that the application of
Title II to the facts of this case would be unconstitutional under the commerce clause.

                                           A.
       The first question that we ask in determining whether the regulated activity
substantially affects interstate commerce is whether the regulated activity is
commercial or economic in nature. The Supreme Court recognized in both Lopez and
Morrison that the question whether an intrastate activity is commercial or
noncommercial may generate "legal uncertainty." Lopez, 514 U.S. at 566, quoted in
Morrison, 528 U.S. at 610. The Director's challenged activity does involve the
collection of money, and can thus perhaps be classified as "economic" in a sense. But
we agree with eight judges of an evenly-divided Fifth Circuit that "since what we are
concerned with is the power of Congress ... 'to regulate Commerce ... among the
several States' ... 'commercial' rather than simply any broadly understood concept of
'economic' seems to be the appropriate concept." United States v. McFarland,
311 F.3d 376, 396 (5th Cir. 2002) (en banc), cert. denied, 123 S. Ct. 1749 (2003).
We do not see how the Director's activity of non-profit revenue collection for state

                                           -5-
government can reasonably be deemed a "commercial" activity. The relevant
question seems to be whether the regulated activity is commercial in the sense of
being closely connected to some national commercial market, and the Director's
collection of the placard fee for state services cannot fairly be so classified.

                                            B.
        We ask next whether the statute included an express jurisdictional element in
order to limit its reach to a distinct set of activities that can be appropriately regulated
under the commerce clause. "Such a jurisdictional element may establish that the
enactment is in pursuance of Congress' regulation of interstate commerce." Morrison,
529 U.S. at 612. The absence of such a jurisdictional element, though, might indicate
that a statute is overinclusive, unconstitutionally sweeping within its ambit activities
that have no explicit connection with or effect on interstate commerce. Title II of the
ADA includes no requirement of a case-by-case showing of a nexus between the
regulated activity and interstate commerce.

                                            C.
       The next question is whether Congress made express findings about the effects
of the proscribed activity on interstate commerce. In enacting the ADA, Congress
expressly invoked the commerce clause power, stating: "It is the purpose of this
chapter ... to invoke the sweep of congressional authority, including the power ... to
regulate commerce, in order to address the major areas of discrimination faced day-to-
day by people with disabilities." 42 U.S.C. § 12101(b)(4). Congress also stated in
the ADA its "finding" that "the continuing existence of unfair and unnecessary
discrimination and prejudice [against people with disabilities] ... costs the United
States billions of dollars in unnecessary expenses resulting from dependency and
nonproductivity." 42 U.S.C. § 12101(a)(9). The legislative history contains
additional legislative findings regarding the effects of disability discrimination on the

                                            -6-
economy. For instance, the report of the House Committee on Education and Labor
concludes that disability discrimination creates unnecessary shortages in the labor
pool while costing the government billions of dollars in unnecessary welfare
programs. See H.R. Rep. No. 101-485 (II), at 43-47 (1990), reprinted in 1990
U.S.C.C.A.N. 303, 325-29.

       Even assuming that these findings identifying the effects of disability
discrimination on interstate commerce are factually accurate, there were no findings
that the type of parking placard fees being regulated here substantially affect
interstate commerce. While express congressional findings are not required, such
findings are helpful where a substantial effect on interstate commerce is not evident
"to the naked eye." Lopez, 514 U.S. at 563. A substantial relation between Missouri's
placard fee and interstate commerce is not obvious to us, and the findings describing
the general economic effects of discrimination against disabled people do not lend
much support to the conclusion that the exercise of congressional power to prohibit
the Director's collection of the $2.00 annual placard fee is proper.

                                          D.
        The final question is whether the link between Missouri's $2.00 annual disabled
placard fee and any substantial effect on interstate commerce is attenuated. In their
brief, the plaintiffs attempt to justify the regulation of Missouri's placard fee under
the commerce clause by arguing that Title II is "designed to eradicate barriers limiting
the ability of persons with disabilities to engage in commerce," that "[e]nabling
people to get into stores is at the core of Congress' power to regulate commerce," and
that "[i]n regulating commerce, Congress may prohibit States from enacting fees and
taxes which encumber commerce."

                                          -7-
       We agree that a person in Missouri whose mobility is impaired by a physical
disability can engage in many economic transactions more flexibly and conveniently
with a placard than without a placard. Unlike license plates that indicate disability
(which disabled Missourians can obtain at no extra charge), windshield placards are
portable and thus allow disabled people to use accessible parking spaces when riding
with others, or when driving another person's car or a rental car. In a sense, then, the
lack of a placard can be considered a "barrier" hampering the ability of disabled
people to participate in interstate commerce. The question at issue, however, is not
whether a complete absence of disabled placards would substantially affect interstate
commerce, but whether the imposition of a $2.00 annual charge on each placard
would substantially affect interstate commerce.

       The plaintiffs analogize the prohibition of the $2.00 annual placard fee to the
"similar efforts to integrate groups previously excluded from commerce" that were
upheld by the Supreme Court under the commerce clause in Heart of Atlanta Motel,
Inc., v. United States, 379 U.S. 241 (1964), and Katzenbach v. McClung, 379 U.S.
294 (1964). In Heart of Atlanta, the Supreme Court held that Title II of the Civil
Rights Act of 1964, which, as relevant, bars racial discrimination by places of "public
accommodation," see 42 U.S.C. § 2000a, was a constitutional exercise of
congressional power under the commerce clause "as applied ... to a motel which
concededly serves interstate travelers." Heart of Atlanta, 379 U.S. at 242, 247, 261.
In Katzenbach, the Court held that the same statutory provision was a valid exercise
of congressional power "as applied to a restaurant annually receiving about $70,000
worth of food which has moved in commerce." Katzenbach, 379 U.S. at 298, 304-05.

      We think that the effect of Missouri's placard fee on interstate commerce is
much more speculative and tenuous than that of the racial discrimination at issue in
Katzenbach and Heart of Atlanta. The Supreme Court, in Katzenbach and Heart of
Atlanta, validated under the commerce clause the prohibition of restaurants and

                                          -8-
motels turning away willing customers because of their race. The discriminatory
activities targeted in these two cases were blocking a great number of potential
economic transactions that would have occurred but for the discrimination and
undoubtedly had a substantial aggregate affect on interstate commerce. Even if the
transactions prevented by the racial discrimination would have been largely shifted
to other commercial outlets, interstate commerce would, in the aggregate, be
substantially affected by all of these disrupted and shifted transactions.

       Racially exclusive policies at restaurants and hotels presented an insuperable
barrier blocking the ability of many people to complete economic transactions at
those establishments. The nominal placard fee, in contrast, is unlikely to deter any
significant number of people, who would obtain placards if they were free, from
purchasing them and thus acquiring the enhanced ability to engage in economic
transactions that the placards might afford. Even if the Director provided the placards
free of charge, disabled people would have to expend time and effort in applying for
them at the Missouri Department of Revenue and getting a doctor's note, which
requirements the plaintiffs do not challenge here. Considering the significant benefits
conferred by the placards, we are unable to conclude that the additional minimal
burden of the $2.00 annual fee would reduce the number of placard-possessing
disabled people to such an extent that interstate commerce would be substantially
affected.

      There is one way in which the Director's collection of the placard fee could be
deemed to affect interstate commerce substantially. The Director collects a total of
about $400,000 per year in revenue from the placard fees. Our "society is an elastic
medium which transmits all tremors throughout its territory," United States v. A.L.A.
Schechter Poultry Corp., 76 F.2d 617, 624 (2d Cir. 1935) (Hand, J., concurring), and
the money annually collected by the Director ($2.00 out of the pocket of each of
thousands of disabled people) would have gone somewhere else in the economy had

                                         -9-
the Director not collected it. One could reasonably presume that a sizeable portion
of the money that the Director collected would, in the absence of the placard fee, have
ended up flowing through the various channels of interstate commerce. This effect
on interstate commerce, however, seems to be "so indirect and remote that to embrace
[it], in view of our complex society, would effectually obliterate the distinction
between what is national and what is local." NLRB v. Jones & Laughlin Steel Corp.,
301 U.S. 1, 37 (1937). The mere fact that $2.00 paid to a state government for a
placard might otherwise have been spent in a manner that affected interstate
commerce is too attenuated to justify the inference that the $2.00 fee itself
"substantially affects" interstate commerce in a manner justifying federal regulation.

                                          III.
      For the reasons stated, we reverse the district court's grant of the plaintiffs'
motion for summary judgment, and its award of declaratory and injunctive relief, and
we remand the case to the district court for entry of a judgment consistent with this
opinion.

RICHARD S. ARNOLD, Circuit Judge, dissenting.

      With respect, I disagree with the Court's conclusion that Congress lacks power
under the Commerce Clause to prohibit Missouri's imposition of a $2.00 fee for
disabled-parking placards. I also believe that the $2.00 fee imposed on disabled
individuals seeking a disabled-parking placard is a surcharge that violates Title II and
28 C.F.R. § 35.130(f). Therefore, I would affirm the judgment of the District Court.

       I believe the Court takes too narrow a view of what activity is being regulated
by Title II. The Court states that "[t]he nominal placard fee . . . is unlikely to deter
any significant number of people, who would obtain placards if they were free, from

                                         -10-
purchasing them and thus acquiring the enhanced ability to engage in economic
transactions that the placards might afford." Ante, at 8. By taking this narrow view,
the Court concludes that the fee has no substantial impact on interstate commerce
because only some small, unknown number of disabled individuals who cannot pay
the fee, or will not pay the fee, are denied the opportunity to participate in economic
transactions. Although the Court concedes that certain disabled individuals would
be denied the opportunity to participate in certain aspects of interstate commerce
because they would not otherwise have access to places where such activity occurs,
the Court holds that the number of disabled individuals who would be denied access
is so insignificant that it does not have the requisite "substantial impact" on interstate
commerce.

       Congress could not possibly make express findings about every situation to
which the ADA might be extended, nor is it required to do so under the Commerce
Clause. Congress did, however, express its intent that disabled individuals not be
subjected to discriminatory treatment, and the Department of Justice, in exercising its
delegated authority, promulgated § 35.130(f) to ensure that disabled individuals were
not required to pay for their right to reasonably equivalent access. I believe that the
Court overlooks the fact that those disabled individuals who pay the fee are being
required to pay for their access to interstate commerce while non-disabled individuals
are not.

       It is an axiom cherished by many economists that, all other things being equal,
an increase in the cost of a certain kind of activity will decrease the amount of that
activity. As I read the Court's opinion, it does not deny the validity of that axiom in
general. Rather, it concludes that the decrease in shopping, say, by disabled
individuals is simply not substantial enough to justify Congress's exercise of power
under the Commerce Clause. This approach seems to me wrong in two ways. First,
the amount of the decrease in economic activity is treated as an ordinary fact to be

                                          -11-
proved by a preponderance of the evidence by the party bearing the burden of proof,
here the plaintiffs. I agree that the record is devoid of evidence quantifying the
amount of commercial activity — say, sales — that will be delayed or eliminated by
placing a charge on the disabled-parking placards. This analysis, however, in my
view, mischaracterizes the kind of "fact" we deal with here. What is at stake is a
question of "legislative fact," the kind of fact that is expressly or implicitly "found"
by a legislative body when it enacts a law, rather than "judicial fact," the kind of fact
that has to do with who did what and the effect that activity had on the parties to the
case.

       When dealing with legislative facts, I think, even in the absence of express
findings, we owe it to Congress to assume the existence of any state of facts
reasonably conceivable by the legislature at the time the statute was enacted. The
view that a substantial amount of commercial activity would be affected by this
charge is certainly not arbitrary or unreasonable. We should give Congress the
benefit of the doubt. When the constitutionality of a statute is challenged and "the
legislative judgment is drawn in question," judicial review "must be restricted to the
issue whether any state of facts either known or which could reasonably be assumed"
supports such statute. United States v. Carolene Prods. Co., 304 U.S. 144, 154
(1938). Furthermore, although express findings may at times aid courts in reviewing
the connection between a statute or regulation and interstate commerce, "Congress
normally is not required to make formal findings as to the substantial burdens that an
activity has on interstate commerce." United States v. Lopez, 514 U.S. 549, 562
(1995).

      There are cases upholding statutes and regulations that were adopted without
express findings about their impact upon interstate commerce. For example, in Gibbs
v. Babbitt, 214 F.3d 483 (4th Cir. 2000), the Fourth Circuit upheld a regulation
prohibiting the taking of red wolves on private property promulgated under the

                                          -12-
Endangered Species Act. Although the Court recognized that there were no formal
findings with regard to the impact of the regulation on interstate commerce, the Court
recognized that it must "take account of congressional judgment and the judgment of
the agency designated to implement the statute." Gibbs, 214 F.3d at 493 n.3. As a
second example, the Seventh Circuit recently held that 18 U.S.C. § 2252(a)(4)(B)
(possession of child pornography) was a constitutionally permissible exercise of
Congress's power under the Commerce Clause despite the lack of express
congressional findings because "Congress could have rationally reasoned" that
intrastate possession of child pornography affects the interstate market for child
pornography. United States v. Angle, 234 F.3d 326, 337 (7th Cir. 2000). In this case,
Congress rationally could have found that the number of individuals deterred by the
$2.00 fee from engaging in interstate commerce was substantial. It is certainly not
obvious to me that the amount of economic activity affected here is insignificant or
de minimis.

       Moreover, I find the Court's attempt to distinguish the racial-discrimination
cases, Heart of Atlanta Motel, Inc. v. United States, 379 U.S. 241 (1964), and
Katzenbach v. McClung, 379 U.S. 294 (1964), unconvincing. It is true that the effect
on commerce considered in those two cases was more pronounced. That is, Congress
was attempting to override an absolute prohibition against participation in a certain
economic activity based on a prospective patron's race. Here, disabled individuals
are not kept out of the store altogether; rather the state has made it more difficult for
them to enter the store. The difference in the two situations, I think, is one of degree
rather than kind. I do not believe that this difference justifies making a distinction for
Commerce Clause purposes.

       The State of Missouri has made it more costly for certain disabled individuals
to gain convenient access to places of business where commercial activity affecting
interstate commerce is taking place. Congress has prohibited such state action by

                                          -13-
statute, and the prohibition has been made explicit by regulation. Automobiles and
department stores are the very stuff of interstate commerce. For these reasons, I
respectfully dissent. I would affirm the judgment of the District Court.
                      ______________________________

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