Court Opinion

ID: 6960804
Source: CourtListenerOpinion
Date Created: 2022-07-24 01:45:12.818649+00
Date Added: 2024-06-11T16:08:25.546849
License: Public Domain

RYAN, Circuit Judge,
concurring in part and dissenting in part.
I concur in Parts I, II, IV, and V of my brother’s scholarly and well-reasoned opinion, but must dissent from Part III. There, the majority concludes that those plaintiffs who are manufacturers and dealers have standing to sue because they have suffered an injury-in-fact, namely, an economic injury. While I believe the majority correctly states the law with regard to a plaintiffs standing for economic injuries, I am constrained to dissent because my review of the pleadings convinces me that these plaintiffs — whom I, adopting the phraseology of the majority, will denominate the Group I plaintiffs — have never alleged or argued that they suffer from any economic harm as a result of the Violent Crime Control and Law Enforcement Act of 1994, Pub.L. No. 103-322, 108 Stat. 1796 (1994).
As the majority correctly recognizes, “before a federal court can consider the merits of a legal claim, the person seeking to invoke the jurisdiction of the court must establish the requisite standing to sue.” Whitmore v. Arkansas, 495 U.S. 149, 154, 110 S.Ct. 1717, 1722, 109 L.Ed.2d 135 (1990). Equally well-established is the requirement that a plaintiff “must clearly and specifically set forth facts sufficient to satisfy the[] Art. Ill standing requirements. A federal court is powerless to create its own jurisdiction by embellishing otherwise deficient allegations of standing.” Id. at 155-56, 110 S.Ct. at 1723. Thus, the onus here is on the plaintiffs, the parties invoking federal jurisdiction, to plead sufficient facts to demonstrate their standing in order to confirm jurisdiction in the federal court, which is “ ‘presumed to lack jurisdiction, unless the contrary appears affirmatively from the record.’” San Diego County Gun Rights Comm. v. Reno, 98 F.3d 1121, 1126 (9th Cir.1996) (citation omitted); see King Iron Bridge & Mfg. Co. v. County of Otoe, 120 U.S. 225, 226, 7 S.Ct. 552, 552-53, 30 L.Ed. 623 (1887). And an essential part of the standing inquiry is the existence of an “ ‘injury in fact,’ ” one which is “concrete in *296both a qualitative and temporal sense.” Whitmore, 495 U.S. at 155, 110 S.Ct. at 1723.
The majority believes that the plaintiffs have adequately stated an injury-in-fact, in the form of economic damage sustained as a result of the Crime Control Act’s strictures. The majority points to the manufacturer-plaintiffs’ allegations that “they will be forced to redesign and relabel some products and cease production of others,” and the dealer-plaintiffs’ assertion that “compliance with the Act affects their daily businesses by prohibiting the possession and sale of specific weapons and ammunition feeding devices.” (Maj. op. at 281.) The majority concludes from this that the manufacturers and dealers “have suffered economic harm from the impact of passage of the Act, which has restricted the operation of their businesses in various ways.” (Id. at 281.) Elsewhere, the majority asserts that compliance will “require] either a substantial monetary investment or loss-in order to comply.” (Id. at 286.)
This understanding simply does not comport with the pleadings as I read them. Having combed the record and the briefs, I have found only a minuscule number of references from which an economic injury is even remotely inferable. The plaintiffs have stated baldly that the Crime Control Act has “affected their daily business,” with virtually no explication. They have asserted that the manufacturers have been “deterred” from making certain unspecified, “intrastate transactions,” and have asserted that they have changed the design and name of their firearms. They have also asserted that “[t]he manufacturing plaintiffs were forced to ... cease the production of’ some unspecified products.
In an attempt to address my nagging sense that this pleading simply does not, as it were, cut the constitutional mustard, I have surveyed a number of cases in which courts have discussed, with some specificity, the execution of the general pleading principles sketched above — that is, cases in which a plaintiffs pleading of economic injury has been addressed and found either deficient or sufficient. This exercise has served to confirm my sense that the plaintiffs’ pleading here is inadequate to justify this court’s finding that standing has been established on the basis of an economic injury.
For example, in United States v. SCRAP, 412 U.S. 669, 93 S.Ct. 2405, 37 L.Ed.2d 254 (1973), a case that has been characterized as “surely [going] to the very outer limit of the law” on standing, Whitmore, 495 U.S. at 159, 110 S.Ct. at 1725, a student environmental group brought suit against the Interstate Commerce Commission seeking to enjoin enforcement of certain surcharges on freight rates. In support of standing, SCRAP “alleged that each of its members was caused to pay more for finished products” as a result of the rate hikes. SCRAP, 412 U.S. at 678, 93 S.Ct. at 2411. That was found sufficient to convey standing because it amounted to an allegation that the plaintiffs “ha[d] been or w[ould] in fact be perceptibly harmed by the challenged ... action,” and because the “allegations [were] ... capable of proof at trial.” Id. at 688-89, 93 S.Ct. at 2416. Likewise, in Wedges/Ledges of California, Inc. v. City of Phoenix, 24 F.3d 56 (9th Cir.1994), the plaintiffs “alleged that they suffered ‘lost sales, lost profits, lost business opportunities and other economic harms’ as a consequence of the [defendant’s] acts.” Id. at 60. This was sufficient to challenge a government regulation that “directly affect[ed] [the plaintiffs’] customers and restricted] [their] market.” Id. at 61. Here, in contrast to these two cases, the plaintiffs have never asserted that the Crime Control Act will cause any perceptible financial harm, in any form.
In McKinney v. United States Department of Treasury, 799 F.2d 1544 (Fed.Cir.1986), the court considered a lawsuit seeking in-junctive relief to bar importation of goods produced in the Soviet Union by forced labor. The plaintiff “assert[ed] standing on the basis of its members and supporters who include ‘manufacturers or producers or workers employed by manufacturers or producers of products which are similar to and compete with goods or products being imported unlawfully from the Soviet Union.’” Id. at 1553 (footnote omitted). This allegation failed because
[t]he amended complaint does not identify any individuals, industries, producers, or *297workers in competition with the Soviet products ..., nor does the complaint provide any information regarding the nature, circumstances, or basis of the injury. Under such circumstances any alleged injury is wholly speculative and conjectural. In the absence of some reasonable delineation of the injury and that it was caused by identified Soviet goods, we hold that [the plaintiff] may not claim standing based solely upon the allegation that some of its members may be producers or workers.
Id. at 1554 (footnote and citation omitted). The court explained that “[r]elevant information might include one or more of the following: (1) reduction in product pricing; (2) decline in domestic sales; (3) decline in domestic production; (4) drop in producers’ share prices; (5) decline in the number of producers; (6) producer bankruptcies; (7) worker layoffs or cutback; or (8) reduction in workers’ wages.” Id. at 1554 n. 27. It seems patent to me that the plaintiffs’ pleading here is characterized by exactly the same type of generality as found in McKinney, and suffers from exactly the same type of omissions.
Finally, in Adams v. Watson, 10 F.3d 915 (1st Cir.1993), the court considered a lawsuit in which plaintiffs were objecting to state-imposed price regulations in the dairy industry. The first amended complaint was inadequate; it “included allegations that the pricing order caused appellants competitive injury and economic harm.” Specifically, it
merely alleged that the pricing order “has the same effect as a ‘customs duty’ or ‘protective tariff on the importation of milk produced in other states,” “subsidizes Massachusetts farmers which causes the disorderly marketing of milk,” causes out-of-state farmers, including plaintiffs, to suffer economic harm and competitive disadvantage because it subsidizes Massachusetts farmers, and may force out-of-state farmers, including plaintiffs, out of business.
Id. at 917 & n. 6. Needless to say, this inadequate pleading offers far more in the way of economic-injury allegations than does the complaint here. The Adams court reversed the district court, however, insofar as it held that the plaintiffs should have been permitted to “recast their first amended complaint by adding two paragraphs for the stated purpose of alleging ‘with greater specificity “injury in fact.”’” Id. at 917. The amendment would have set forth the specific “chain of economic events” that the plaintiffs believed would “result in [their] loss of future income, profits, and business opportunities.” Id. at 919. Again, it is needless to say that the plaintiffs here have never suggested a specific “chain of economic events” that caused them harm.
To emphasize, the plaintiffs here have never even uttered the words “economic injury” or anything along those lines. They have never claimed that any revenue loss or expenditure — either currently existing or potentially forthcoming — is attributable to the Crime Control Act. Thus, contrary to the intimations of the majority, there is no allegation — and certainly no evidence — that the plaintiffs have suffered or will suffer “substantial economic harm” as a result of the Crime Control Act. And in addition to not having been pleaded, the theory of economic harm was never addressed by the district court, and has not been argued by the parties in their briefs.
Presumably, the majority feels that economic harm is palpable here: that if weapons are banned, or if redesigning or relabelling is required, the manufacturers and dealers of those weapons are necessarily injured, particularly vis-a-vis certain competitors whose products were not affected by the Crime Control Act. And indeed, there is a line of “direct competitor” cases in which “future injury-in-fact is viewed as ‘obvious’ since government action that removes or eases only the competitive burdens on the plaintiffs rivals plainly disadvantages the plaintiffs competitive position in the relevant marketplace.” Adams, 10 F.3d at 922 (emphasis omitted). But as the Adams court cautioned, “ ‘[w]here “injury” and “cause” are not obvious, the plaintiff must plead their existence in his complaint with a fair degree of specificity.’ ” Id. (citation omitted).
To me, this case does not present the court with an obvious situation of economic harm. To again quote the Adams court,
*298All predictions are conjectural to a degree .... Economics is a cross between an art and a science, which is to say, both an imperfect art and an imperfect science. While the law of supply and demand may sometimes be suspended by unpredictable marketplace decisions, and even lesser for-tuities like bovine obstinacy, basic economic theory quite consistently transcends utter randomness by positing elemental laws of cause and effect predicated on actual market experience and probable market behavior.
Id. at 923. I do not decline to join my colleagues’ opinion out of any reticence stemming from a flawed understanding of basic economic principles. Instead, I see a wide variety of possible explanations for why, here, the Group I plaintiffs would not have suffered any economic harm from the Crime Control Act, and why the absence of actual harm is the most obvious explanation for why they failed to allude to such harm in their complaint.
It is, for example, quite possible that the manufacturers here have not actually stopped manufacturing prohibited weapons, despite the dictates of the Crime Control Act; nowhere do they straightforwardly assert that they have desisted from manufacturing — they state only that they have been “deterred.” While they state that they have relabelled and redesigned some products, there is no corresponding statement of what that cost them, or any statement that they have not been able to raise their prices sufficiently to cover whatever costs did result. The latter possibility is definitely suggested by San Diego County, 98 F.3d 1121, in which the plaintiffs explicitly complained that manufacturers had raised the price of certain weapons by 40 to 100%. See id. at 1130. Relatedly, given that the relevant marketplace is extremely broad — indeed, nationwide — it is less likely that the Group I plaintiffs will experience future economic loss from the disadvantages apparently wrought by the Crime Control Act, cf. Adams, 10 F.3d at 922, and correspondingly less likely that even if there were a loss, it could be causally attributable to the Crime Control Act, see San Diego County, 98 F.3d at 1130.
In any event, we are not faced with the usual case, where the question is whether allegations of future competitive injury are too speculative to confer standing. We are instead faced with a case in which the plaintiffs have failed to even mention economic damage as a basis for standing, but where the majority has drawn what I believe are unwarranted conclusions from circumstances alluded to in the pleadings. Because I find the majority’s reasoning entirely too speculative, I respectfully dissent.