Court Opinion

ID: 4444768
Source: CourtListenerOpinion
Date Created: 2019-10-07 17:00:31.57573+00
Date Added: 2024-06-11T14:53:15.750768
License: Public Domain

FOR PUBLICATION

    UNITED STATES COURT OF APPEALS
         FOR THE NINTH CIRCUIT

 LARRY C. FLYNT; HAIG KELEGIAN,                     No. 17-17318
 SR.; HAIG T. KELEGIAN, JR.,
                Plaintiffs-Appellants,                 D.C. No.
                                                   2:16-cv-02831-
                      v.                              JAM-EFB

 STEPHANIE K. SHIMAZU, in her
 official capacity as the Director of                 OPINION
 the California Department of Justice,
 Bureau of Gambling Control; JIM
 EVANS, in his official capacity as
 Chairman of the California
 Gambling Control Commission;
 TRANG TO, in his official capacity as
 Commissioner of the California
 Gambling Control Commission;
 XAVIER BECERRA, in his official
 capacity as Attorney General of the
 State of California; PAULA D.
 LABRIE, in her official capacity as
 Commissioner of the California
 Gambling Control Commission,
                Defendants-Appellees.*

     *
       Appellee Shimazu is automatically substituted for her predecessor
under Federal Rule of Appellate Procedure 43(c)(2).
2                        FLYNT V. SHIMAZU

         Appeal from the United States District Court
             for the Eastern District of California
          John A. Mendez, District Judge, Presiding

           Argued and Submitted February 13, 2019
                  San Francisco, California

                       Filed October 7, 2019

    Before: Mary M. Schroeder, Diarmuid F. O’Scannlain,
          and Johnnie B. Rawlinson, Circuit Judges.

                 Opinion by Judge O’Scannlain;
                  Dissent by Judge Rawlinson

                            SUMMARY**

                             Civil Rights

    The panel reversed the district court’s dismissal, on
statute of limitations grounds, of a lawsuit brought pursuant
to 42 U.S.C. § 1983.

    Plaintiffs hold gambling licenses to own and to operate
cardrooms in California and wish to invest substantially in
out-of-state casinos. They alleged that California Business &
Professions Code §§ 19858 and 19858.5 prohibit them from
doing so because, pursuant to the statutes, a licensee of a
California cardroom may not own more than a one-percent

    **
       This summary constitutes no part of the opinion of the court. It has
been prepared by court staff for the convenience of the reader.
                     FLYNT V. SHIMAZU                         3

interest in any out-of-state entity that engages in casino-style
gambling activities, even if such activities are lawful where
the entity operates. Thus, in 2010, for example, the
California Gambling Commission determined that plaintiff
Kelegian Jr. violated the statutes through his ownership
interest in an out-of-state casino and denied his application to
renew his licenses for two California cardrooms. Kelegian
Jr. thereafter divested his out-of-state ownership interest and
on June 12, 2014, the Commission approved his renewal
applications, but ordered him to pay a fine for his previous
violations.

    On November 30, 2016, plaintiffs brought suit for
declaratory and injunctive relief alleging, in part, that
§§ 19858 and 19858.5 were facially unconstitutional under
the Dormant Commerce Clause. The district court dismissed
the suit, ruling that the claims were time-barred because
plaintiffs failed to bring suit within two years of the
Commission’s 2014 decision.

    The panel first held that although this Circuit had yet to
apply a state statute of limitations to a facial challenge under
the Dormant Commerce Clause, it saw no reason to treat such
a claim differently from facial constitutional claims under the
First, Fifth, or Fourteenth Amendments. Thus, the panel
concluded that plaintiffs’ claims were subject to the forum
state’s statute of limitations. Here, the relevant period was
two years.

    The panel rejected the State’s argument that plaintiffs’
claims accrued in 2014 when the Commission issued its
adverse decision on Kelegian Jr.’s investment. The panel
held that when the continued enforcement of a statute inflicts
a continuing or repeated harm, a new claim arises (and a new
4                    FLYNT V. SHIMAZU

limitations period commences) with each new injury. The
panel held that assuming for the sake of analysis that
§§ 19858 and 19858.5 violated the Dormant Commerce
Clause, plaintiffs demonstrated a continuing violation. The
panel reasoned that sections 19585 and 19858.5 operate on an
ongoing basis to prohibit plaintiffs from investing
significantly in numerous casinos outside of California. And
every two years, the Commission stands ready to enforce
such prohibition as part of the state’s license renewal process.
The panel concluded that plaintiffs continue to be precluded
from exploring other investment opportunities not as a
consequence of the Commission’s 2014 decision, but rather
a result of the continued existence of the statutes themselves
and the realistic threat of future enforcement.

    Dissenting, Judge Rawlinson agreed with the district court
that plaintiffs’ claims were barred by the applicable two-year
statute of limitations. Judge Rawlinson stated that the
majority’s view that the injury continues because the
Gambling Commission stands ready to continue to enforce
the statute is patently at odds with this Circuit’s consistently
articulated analysis of the continuing violation doctrine.

                         COUNSEL

Paul J. Cambria Jr. (argued) and Erin McCampbell Paris,
Lipsitz Green Scime Cambria LLP, Buffalo, New York, for
Plaintiffs-Appellants.
                        FLYNT V. SHIMAZU                             5

James G. Waian (argued) and Peter H. Kaufman, Deputy
Attorneys General; Sara J. Drake, Senior Assistant Attorney
General; Xavier Becerra, Attorney General; Office of the
Attorney General, San Diego, California; for Defendants-
Appellees.

                             OPINION

O’SCANNLAIN, Circuit Judge:

    We must decide whether California’s statute of
limitations for personal injury suits bars a facial challenge to
the constitutionality of certain California gambling laws.

                                   I

    Larry Flynt, Haig Kelegian Sr., and Haig Kelegian Jr.
(collectively “Licensees”) hold gambling licenses to own and
to operate cardrooms—establishments that “allow patrons to
engage in non-banked or non-percentage card games during
which the players play against each other and pay the
cardroom a fee to use its facilities.”1 In addition to owning
cardrooms in California, they wish to invest substantially in
out-of-state casinos. They complain, however, that California
law prohibits them from doing so.

    1
      We take as true the well-pleaded allegations of the First Amended
Complaint. See AlliedSignal, Inc. v. City of Phoenix, 182 F.3d 692, 695
(9th Cir. 1999).
6                    FLYNT V. SHIMAZU

                               A

    California has long permitted in-state gambling, subject
to certain restrictions. Relevant here, the state requires
cardrooms to obtain a license to operate, see Cal. Bus. &
Prof. Code § 19850, and to renew such license every two
years, Cal. Bus. & Prof. Code § 19876(a). To maintain
operations, cardroom owners must comply with state
gambling laws. See Cal. Bus. & Prof. Code § 19922.

    This case concerns the intersection of three such laws.
First, California Penal Code § 330 prohibits cardrooms from
engaging in casino-like activities, including blackjack,
roulette, and other house-banked or percentage games.
Second, California Business and Professions Code § 19858(a)
prohibits a person from “hold[ing] a state gambling license to
own a gambling establishment if,” among other things, he
“has any financial interest in any business or organization that
is engaged in any form of gambling prohibited by Section 330
of the Penal Code, whether within or without [the] state.”
(emphasis added). Finally, California Business & Professions
Code § 19858.5 permits a limited exception to § 19858’s
broad prohibition. Under § 19858.5, an applicant or licensee
who “has a financial interest in another business that conducts
lawful gambling outside the state that, if conducted within
California, would be unlawful,” may still “hold a state
gambling license” so long as he does “not own, either directly
or indirectly, more than a 1 percent interest in, or have
control of, that business.” (emphasis added).

    The upshot of §§ 19858 and 19858.5 is that a licensee of
a California cardroom may not own more than a one-percent
interest in any out-of-state entity that engages in casino-style
                     FLYNT V. SHIMAZU                       7

gambling activities, even if such activities are lawful where
the entity operates.

                              B

    With these laws on the books, Flynt and the Kelegians
allege that they have been unable to pursue numerous
investment opportunities in out-of-state casinos, despite
having a “keen interest” in doing so and being “ready,
willing, and able to compete for the opportunity.” Flynt, for
instance, alleges that prior to 2014 and as late as November
2015, he declined offers to purchase casinos in Nevada, Iowa,
Colorado, Louisiana, and Mississippi because of California’s
ownership restrictions. The Kelegians claim that they too
declined to pursue similar opportunities to invest outside the
state.

     In 2010, for example, Kelegian Jr. acquired real property
in the State of Washington for the purpose of opening a
casino there. Together with his wife, Kelegian Jr. formed
Kelco Gaming, LLC, which operated the casino. He owned
a one-percent interest in the LLC, and his wife owned the
remaining ninety-nine percent. At the same time, Kelegian
Jr. applied to the California Gambling Commission to renew
his licenses for two California cardrooms. The Commission,
tasked with reviewing and issuing state gambling licenses,
denied his applications on the grounds that his ownership
interest in the Washington casino violated §§ 19858 and
19858.5. Kelegian Jr. divested his interest in the casino and
requested a hearing on the denial of his applications. In a
public decision issued on June 12, 2014, the Commission
approved Kelegian Jr.’s applications but ordered him to pay
a fine for his previous violation to the Bureau of Gambling
8                        FLYNT V. SHIMAZU

Control, a division of the California Department of Justice
that is charged with enforcing California’s gambling laws.

                                    C

    On November 30, 2016, Flynt and the Kelegians sued the
Bureau of Gambling Control, members of the California
Gambling Commission in their official capacities, and the
Attorney General of California (collectively, “the State”)
under 42 U.S.C. § 1983 in the Eastern District of California.
They alleged that §§ 19858 and 19858.5 were facially
unconstitutional under the Dormant Commerce Clause
because the statutes prohibit interstate investment and
discriminate against out-of-state economic interests.2
Licensees sought declaratory and injunctive relief. The State
moved to dismiss under Federal Rule of Civil Procedure
12(b)(6) on the ground that the suit was barred by the
applicable statute of limitations.

    The district court dismissed the suit, ruling that
Licensees’ claims were time-barred because they failed to
bring suit within two years of the Commission’s 2014
decision.

    This timely appeal followed.

    2
     Licensees also alleged that the statutes were facially unconstitutional
under the Fourteenth Amendment and unconstitutional as applied to them.
Licensees have abandoned these claims by failing to address them on
appeal. See Collins v. City of San Diego, 841 F.2d 337, 339 (9th Cir.
1988).
                     FLYNT V. SHIMAZU                         9

                               II

    Licensees contend that the district court erred in
dismissing their claims as time-barred. “Section 1983 does
not contain its own statute of limitations.” Butler v. Nat’l
Comm. Renaissance of Cal., 766 F.3d 1191, 1198 (9th Cir.
2014). Instead, claims brought under § 1983 are subject to
the forum state’s statute of limitations for personal injury
suits. See Wilson v. Garcia, 471 U.S. 261, 275–77 (1985),
superseded by statute on other grounds; Butler, 766 F.3d
at 1198. Citing Brown v. Board of Education, 347 U.S. 483
(1954), and Obergefell v. Hodges, 135 S. Ct. 2584 (2015),
Licensees note that courts have entertained facial challenges
to the constitutionality of statutes long after their enactment.
Licensees thus contend that a statute of limitations ought
never to apply to facial challenges because “such challenges
are litigated without regard to the particularities of the
plaintiff or the case.” But whether a statute of limitations
applies to such claims and whether it ultimately bars them
are different matters. Sometimes, as we explain below, a
statute of limitations, though applicable, does not bar a facial
challenge. See, e.g., Maldonado v. Harris, 370 F.3d 945, 956
(9th Cir. 2004).

    The Supreme Court has never limited the application of
a statute-of-limitations period to as-applied challenges.
Instead, it has construed 42 U.S.C. § 1988 broadly “as a
directive to select, in each State, the one most appropriate
statute of limitations for all § 1983 claims.” See Wilson,
471 U.S. at 275–79 (emphasis added). Accordingly, our
cases routinely subject both as-applied and facial challenges
brought under § 1983 to the forum state’s statute of
limitations. See, e.g., Scheer v. Kelly, 817 F.3d 1183 (9th Cir.
2016) (facial challenge under the First and Fourteenth
10                  FLYNT V. SHIMAZU

Amendments); Lukovsky v. City & County of San Francisco,
535 F.3d 1044 (9th Cir. 2008) (as-applied challenge to
racially discriminatory practices); Action Apartment Ass’n,
Inc. v. Santa Monica Rent Control Bd., 509 F.3d 1020 (9th
Cir. 2007) (facial challenge under the Fifth and Fourteenth
Amendments); Maldonado, 370 F.3d at 945 (facial challenge
under the First Amendment); Barancik v. County of Marin,
872 F.2d 834 (9th Cir. 1988) (facial due process challenge).

    Although our court has yet to apply a state statute of
limitations to a facial challenge under the Dormant Commere
Clause, we see no reason to treat such a claim differently
from facial constitutional claims under the First, Fifth, or
Fourteenth Amendments. Thus, consistent with our court’s
case law, we conclude (as the district court did) that
Licensees’ claims are subject to the forum state’s statute of
limitations. Here, the relevant period is two years. See Cal.
Code Civ. P. § 335.1; Action Apartment Ass’n, 509 F.3d
at 1027.

                             A

    Deciding that California’s statute of limitations
applies—in the abstract—to Licensees’ claims does not end
the inquiry, however, for we still must decide whether the
limitations period ultimately bars such claims. In other
words, we must consider when the limitations period began
to run and whether, as the district court concluded, time had
run out. To answer these questions, we look to federal law.
See Wallace v. Kato, 549 U.S. 384, 388 (2007).
                     FLYNT V. SHIMAZU                        11

                               1

    A limitations period begins to run when the claim accrues.
See Levald, Inc. v. City of Palm Desert, 998 F.2d 680, 687
(9th Cir. 1993). “It is the standard rule that accrual occurs
when the plaintiff has a complete and present cause of
action,” Wallace, 549 U.S. at 388 (internal quotation marks
and alteration omitted), that is, when the plaintiff “knows or
has reason to know of the actual injury,” Scheer, 817 F.3d at
1188 (quoting Lukovsky, 535 F.3d at 1051).

    Licensees urge us to reject this rule on accrual for facial
constitutional challenges. But just as there is no justification
to treat facial challenges differently for purposes of
determining whether a statute of limitations applies, there is
no reason to do so for purposes of determining when a claim
accrues. See Bird v. Dep’t of Human Servs., 935 F.3d 738,
746 (9th Cir. 2019). Scheer states the proper test for accrual.
The question, then, is whether Licensees’ claims accrued
outside the limitations period.

                               2

    The State argues (and the district court found) that
Licensees’ claims accrued when the Commission issued its
adverse decision on Kelegian Jr.’s investment in June 2014.
The State reasons that such decision put all three Licensees
on notice of how the Commission would interpret and enforce
§ 19858.5’s one-percent limitation and that Licensees
therefore knew of the injuries underlying this suit as early as
June 2014. Because Licensees filed suit more than two years
later, the State contends that the district court properly
dismissed the suit as untimely.
12                        FLYNT V. SHIMAZU

    Licensees concede that they were aware of the
Commission’s decision and that they refrained from pursuing
some investment opportunities as a result. Nevertheless, they
urge that their claims are timely because the statutes’ ongoing
prohibition, coupled with the Commission’s willingness to
enforce it, effects a “continuing violation” and a “continuing
harm”—namely, because of the statutes, Licensees continue
to be prohibited from investing substantially in out-of-state
casinos, as they wish to do.

    When the continued enforcement of a statute inflicts a
continuing or repeated harm, a new claim arises (and a new
limitations period commences) with each new injury. See
Kuhnle Bros., Inc. v. County of Geauga, 103 F.3d 516,
521–22 (6th Cir. 1997); Palmer v. Bd. of Educ. of Comm.
Unit Sch. Dist. 201-U, 46 F.3d 682, 686 (7th Cir. 1995) (“A
series of wrongful acts . . . creates a series of claims.”); cf.
Nat’l R.R. Passenger Corp. v. Morgan, 536 U.S. 101, 113
(2002) (“Each discrete discriminatory act starts a new clock
for filing charges alleging that act.”). Assuming for the sake
of analysis that §§ 19858 and 19858.5 violate the Dormant
Commerce Clause, Licensees have demonstrated a continuing
violation.3 Sections 19585 and 19858.5 operate on an
ongoing basis to prohibit them from investing significantly in

     3
       As the Eleventh Circuit has explained, the term “continuing
violation” is “something of a misnomer,” in that it “implies that there is
but one incessant violation and that the plaintiffs should be able to recover
for the entire duration of the violation, without regard to the fact that it
began outside the statute of limitations window.” Knight v. Columbus,
19 F.3d 579, 582 (11th Cir. 1994). But that is not the scenario that it
describes. Rather than “one on-going violation,” a continuing violation
is really “a series of repeated violations.” Id. And “[b]ecause each
violation gives rise to a new cause of action, each [violation] begins a new
statute of limitations period as to that particular event.” Id.
                         FLYNT V. SHIMAZU                             13

numerous casinos outside of California. And every two
years, the Commission stands ready to enforce such
prohibition as part of the state’s license renewal process. See
Cal. Bus. & Prof. Code § 19930(a)(1) & (b). Licensees
therefore suffer a new injury each time they abstain from
investing for fear that the Commission will enforce the
statutes’ prohibition.4 See Kuhnle, 103 F.3d at 522 (“Kuhnle
suffered a new deprivation of constitutional rights every day
that Resolution 91-87 remained in effect.”). With each new
injury, a new claim arises, and the statute of limitations
period begins anew. Id. at 522–23 (holding that because “a
new injury was allegedly inflicted on Kuhnle each day that
Resolution 91-87 was in effect, a new limitations period
began to run each day as to that day’s damage” (internal
quotation marks removed)); see also Palmer, 46 F.3d at
685–86 (holding that a racial discrimination claim “arises
each day a child is assigned to school under a racially
discriminatory policy”).

    We need turn only to the First Amended Complaint to
observe that such injuries occurred during the limitations
period. See Lewis v. City of Chicago, 560 U.S. 205, 214
(2010) (Whether a violation occurred during the limitations
period “depends on the claim asserted.”). Licensees allege a
present inability to invest. Although they highlight specific
forgone investment opportunities from 2014 and 2015, they
do not seek damages for such lost opportunities. Instead, they

    4
      The dissent contends that the Commission’s readiness to enforce the
statutes has no bearing on the continuing violation analysis. But such
readiness demonstrates the legitimacy of Licensees’ claims: so long as the
Commission is willing to enforce the statutes, Licensees will continue to
suffer a constitutional deprivation so long as they abide by the statutes’
ongoing prohibition.
14                       FLYNT V. SHIMAZU

seek prospective relief, enjoining the State from enforcing the
statutes in the future. Assuming a limitations period
extending two years back from the date on which Licensees’
filed their First Amended Complaint (June 15, 2017),
Licensees’ alleged injuries fall well within the period. The
district court erred by concluding otherwise.

     The State responds that Licensees failed to plead a
continuing violation because their inability to invest outside
California is merely a continuing effect of the Commission’s
2014 decision, rather than a new injury. See Knox v. Davis,
260 F.3d 1009, 1013 (9th Cir. 2001) (A “mere continuing
impact from past violations is not actionable” if the violations
lie outside the statute of limitations period. (internal quotation
marks omitted)); see also Garcia v. Brockway, 526 F.3d 456,
462 (9th Cir. 2008) (A “continuing violation is occasioned by
continual unlawful acts, not by continual ill effects from an
original violation.”). The Commission’s decision, however,
is not what prohibits Licensees from pursuing their desired
investments. The statutes themselves do that. Ultimately, the
Commission’s decision did nothing but enforce the statutes
against a particular plaintiff—Kelegian Jr.—with respect to
a particular investment. That all three Licensees continue to
be precluded from exploring other investment opportunities
is not a consequence of the Commission’s decision, as the
dissent would have us conclude, but rather a result of the
continued existence of the statutes themselves and the
realistic threat of future enforcement.5 The State’s reliance

     5
      For the same reason, this case is distinguishable from our recent
opinion in Bird v. Dep’t of Human Servs., 935 F.3d 738 (9th Cir. 2019).
Bird held that the plaintiff’s § 1983 claim for deprivation of procedural
due process was time-barred because the deprivation occurred before the
limitations period and only effects of such deprivation occurred during the
                         FLYNT V. SHIMAZU                             15

on Knox and other similar cases is therefore misplaced.6
Licensees’ claims are timely.

                                   B

    Two final arguments raised by the State merit brief
attention.

     First, the State contends—without support—that
Licensees are estopped from asserting their facial challenges
to §§ 19858 and 19858.5 because they “urged the California
Legislature to adopt California Business and Professions
Code section 19858.5.” We are unaware of any theory of
judicial estoppel that would preclude relief on the basis of a
litigant’s legislative lobbying. Regardless, Licensees’ prior
lobbying has no bearing on their ability to challenge the
constitutionality of the statutes; that Licensees supported the
adoption of § 19858.5’s one-percent limitation at a time when
§ 19858 completely banned investment in out-of-state casinos
is not inconsistent with their position later that even the one-
percent exception violates the Constitution.

limitations period. By contrast, the § 1983 claim in this case is timely
because the Licensees plead a harm that constantly renews, including
during the limitations period.
    6
        The State’s (and the dissent’s) reliance on Scheer is similarly
unpersuasive. Unlike the gambling statutes here, the challenged practice
in Scheer was not a continuing violation, but instead involved a one-time
application of California’s attorney discipline procedures, triggering the
statute of limitations only upon final decision of the California Supreme
Court, see 817 F.3d at 1188. Scheer therefore does not demand a contrary
result.
16                   FLYNT V. SHIMAZU

    Second, the State argues cursorily that Licensees failed to
plead facts supporting a facial, as opposed to an as-applied,
challenge. The State did not raise this argument in its motion
to dismiss, so the district court did not rule on it. We decline
to do so in the first instance.

                              III

    Assuming that the enforcement of §§ 19858 and 19858.5
inflicts an injury, California’s two-year statute of limitations
does not bar facial challenges under the Dormant Commerce
Clause.

     REVERSED and REMANDED.

RAWLINSON, Circuit Judge, dissenting:

    I respectfully dissent. I agree with the district court that
the Plaintiffs’ claims were barred by the applicable two-year
statute of limitations.

     The majority opinion relies on out-of-circuit authority
addressing the continuing violation doctrine to reverse the
ruling of the district court. See Majority Opinion, pp.12–13
(citing Kuhnle Bros., Inc. v. Cty. of Geauga, 103 F.3d 516,
521–22 (6th Cir. 1997); Palmer v. Bd. of Educ. of Comm.
Unit Sch. Dist. 201-U, 46 F.3d 682, 686 (7th Cir. 1995)).
However, our precedent supports the ruling by the district
court.

   As the majority acknowledges, a statute of limitation
commences running when the claim accrues. See Levald, Inc.
                     FLYNT V. SHIMAZU                       17

v. City of Palm Desert, 998 F.2d 680, 687 (9th Cir. 1993). In
turn, the claim accrues when “a plaintiff knows or has reason
to know of the actual injury.” Scheer v. Kelly, 817 F.3d 1183,
1188 (9th Cir. 2016) (quoting Lukovsky v. City & Cty. of San
Francisco, 535 F.3d 1044, 1051 (9th Cir. 2008)) (internal
quotation marks omitted).

    It is undisputed that Plaintiffs Larry C. Flynt, Haig
Kelegian, and Haig Kelegian, Jr. became aware on June 12,
2014, that the challenged statute prohibited any interest in a
gambling establishment outside California if that interest
exceeded one percent. Because Plaintiffs desired to acquire
prohibited interests in gambling establishments outside
California, the injury imposed by the statute accrued as to
them at the latest on June 12, 2014, when the California
Gambling Commission required Kelegian, Jr. to divest
himself of a community property interest in a gambling
establishment that exceeded one percent. At that point,
Plaintiffs knew or had reason to know that the statute
imposed an actual injury upon them. See Scheer, 817 F.3d
at 1188 (observing that the statute of limitations on a claim
against the State Bar would begin to run when discipline was
imposed or was foreseeable).

    Plaintiffs’ complaint was filed more than two years after
the Gambling Commission’s action, and was thus untimely.
The majority avoids this conclusion by employing the
continuing violation doctrine as interpreted by other circuits.
But the continuing violation doctrine, as interpreted in this
circuit, supports the decision of the district court.

    In RK Ventures, Inc. v. City of Seattle, 307 F.3d 1045,
1058 (9th Cir. 2002), we determined the limitations period by
identifying “when the operative decision occurred.” (internal
18                    FLYNT V. SHIMAZU

quotation marks omitted). Once the operative decision is
identified, the inevitable consequences of the operative
decision do not affect the running of the statute of limitations.
See id.

    Relying upon out-of-circuit authority, the majority posits
that Plaintiffs established the existence of a continuing
violation because “the Commission stands ready to enforce”
the statutory prohibition “as part of the state’s license renewal
process.” Majority Opinion, p. 13 (citing Kuhnle, 103 F.3d
at 522 – Sixth Circuit; Palmer, 46 F.3d at 685–86 – Seventh
Circuit). However, our precedent does not support this
interpretation of the continuing violation doctrine. Rather,
inaction on the part of a government entity has no effect on
the statute of limitations calculus. See Scheer, 817 F.3d at
1188 (observing that the statute of limitations was not
triggered until the State Bar had imposed discipline). The
fact that the Gambling Commission “stands ready” to enforce
the statute does not translate into the “discrete act” required
to support a continuing violation argument. RK Ventures,
307 F.3d at 1061 (rejecting a continuing violation argument
and explaining that “the statute of limitations runs separately
from each discrete act”) (citing National Railroad Passenger
Corp. v. Morgan, 122 S. Ct. 2061, 2072 (2002)) (emphasis
added). Simply put, under our precedent the continuing
violation theory cannot rest on a non-act, such as “standing
ready” to enforce a statute. See id.

    The majority attempts to distinguish our recent decision
in Bird v. Dep’t of Human Servs., No. 17-16076, ___ F.3d
___, 2019 WL 3977554 (9th Cir. August 23, 2019) (per
curiam), reiterating our steady approach to the continuing
violation doctrine. See Majority Opinion, p. 14 n.5.
                     FLYNT V. SHIMAZU                       19

However, there is no principled basis upon which Bird can be
distinguished from the facts of this case.

    In Bird, the plaintiff brought a claim under 42 U.S.C.
§ 1983 against the Hawai‘i Department of Human Services
for including and retaining her name on a child abuse
registry. See 2019 WL 3977554 at *1, 4. Bird became aware
that her name was on the registry in 2012 “when the report
turned up on a background check.” Id. at *2. After Bird
rejected the offer of a limited administrative hearing, her
attorney sent the Department a letter dated May 14, 2013,
stating that Bird would proceed to litigation unless her name
was removed from the registry. See id. at *4.

    The district court concluded that Bird’s cause of action
accrued at the latest on May 14, 2013, and the complaint filed
more than two years after that date was untimely. See id.
at *5.

    We affirmed the judgment of the district court that Bird’s
complaint was time-barred. See id. We rejected Bird’s
continuing violation argument and her argument that the
statute can be challenged as long as it is in effect. See id.
at *5–6. We confirmed that an alleged due process violation
under § 1983 is “a discrete event” that is governed by the
“discovery rule of accrual.” Id. at *7. Applying the rule to
Bird’s claim, we concluded that because Bird was aware of
her claim no later than May, 2013, her claim was discovered
on that date and the statute of limitations began to accrue.
See id. at *10. We noted that the “little [that] remains of the
continuing violations doctrine” did not apply to Bird’s
individualized claim. Id. at *8–9. We echoed our past
rulings in reasoning that “the deprivation of liberty that Bird
continues to suffer is best understood as the continuing
20                   FLYNT V. SHIMAZU

impact from a past violation,” rather than a separate discrete
injury. Id. at *9 (citations and alteration omitted). We
elaborated that although the injuries resulting from Bird’s
placement on the registry continued “to the present day,” that
“continuing effect is insufficient to constitute a continuing
violation.” Id. (citation omitted).

    Application of this same analysis to the plaintiffs in this
case is inescapable. The plaintiffs in this case indisputably
became aware on June 12, 2014, that they were prohibited by
the challenged statute from acquiring an interest in a gaming
establishment outside California in excess of one percent.
Their complaint, asserting individualized claims as in Bird,
was filed more than two years later, and was untimely. The
fact that the Gambling Commission continued to enforce the
statute “is insufficient to constitute a continuing violation.”
Id. (citation omitted).

    In Bird, we specifically addressed and rejected the
argument that the continued existence of a challenged statute
supports the extension of a limitations period. We explained
that acceptance of that argument “would essentially nullify all
statutes of limitations with respect to statutory challenges.”
Id. at *6.

    In the process of debunking Bird’s argument, we
expressly negated any reliance on the Sixth Circuit’s decision
in Kuhnle, a case also heavily relied upon by the majority. In
Bird, we explained that Kuhnle “did nothing more than bring
the . . . Sixth Circuit[] into alignment with our view that a
facial challenge to a statute generally accrues when the statute
is enforced.” Id. (citation and internal quotation marks
omitted). The majority’s view that the injury continues
because the Gambling Commission “stands ready” to
                    FLYNT V. SHIMAZU                      21

continue to enforce the statute is patently at odds with our
consistently articulated analysis of the continuing violation
doctrine. See id.

    Because the continuing violation theory is    not viable
under our precedent, I agree with the district    court that
Plaintiffs’ action is barred by the applicable    statute of
limitations. I respectfully dissent from the      majority’s
contrary conclusion.