Court Opinion

ID: 152509
Source: CourtListenerOpinion
Date Created: 2010-08-07 00:01:39+00
Date Added: 2024-06-11T17:24:28.909347
License: Public Domain

FILED
                            NOT FOR PUBLICATION                                 AUG 06 2010

                                                                            MOLLY C. DWYER, CLERK
                     UNITED STATES COURT OF APPEALS                          U.S. COURT OF APPEALS

                            FOR THE NINTH CIRCUIT

In re: TOURISM ASSESSMENT FEE                     No. 09-55440
LITIGATION,
                                                  D.C. No. 3:08-cv-01796-MMA-
                                                  WMC

THOMAS J. COMISKEY; et al.,
                                                  MEMORANDUM *
              Plaintiffs - Appellants,

  v.

AVIS BUDGET GROUP, INC.; et al.,

              Defendants - Appellees.

                    Appeal from the United States District Court
                       for the Southern District of California
                    Michael M. Anello, District Judge, Presiding

                        Argued and Submitted March 4, 2010
                               San Diego, California

Before: HAWKINS, THOMAS and McKEOWN, Circuit Judges.

       Plaintiffs appeal from the district court’s Fed. R. Civ. P. 12(b)(6) dismissal

of their class action complaint filed against defendants the California Travel and

        *
             This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
Tourism Commission (the “CTTC”), Secretary Dale E. Bonner, in his capacity as

Secretary of Business, Transportation, and Housing for the State of California, and

numerous passenger rental car companies operating at one or more California

airport locations (the “rental car defendants” or “RCDs”). We affirm.1

                                           I

      The district court properly dismissed plaintiffs’ Commerce Clause challenge

to the Passenger Car Rental Industry Tourism Assessment Program (the

“Program”), Cal. Gov. Code §§ 13995 et seq., which requires that rental car

companies pay an assessment for each rental car transaction that commences at an

airport or hotel location.

      The central purpose behind the Commerce Clause’s prohibitions of

discriminatory measures is to proscribe “state or municipal laws whose object is

local economic protectionism.” C & A Carbone, Inc. v. Town of Clarkstown, 511

U.S. 383, 390 (1994). Such discrimination generally takes the form of regulations

which have, or threaten to have, a competitive advantage upon local business vis-a-

vis out-of-state competitors. See New Energy Co. of Indiana v. Limbach, 486 U.S.

269, 273 (1988) (“The ‘negative’ aspect of the Commerce Clause prohibits

economic protectionism – that is, regulatory measures designed to benefit in-state

      1
          Comiskey’s motion to take judicial notice is granted.

                                           2
economic interests by burdening out-of-state competitors”); see also National

Audubon Soc., Inc. v. Davis, 307 F.3d 835, 857 (9th Cir. 2002) (“There is

unconstitutional discrimination against interstate commerce where the asserted

benefits of the state statute are in fact illusory or relate to goals that evidence an

impermissible favoritism of in-state industry over out-of-state industry”) (internal

quotation marks, citations, and alterations omitted).

      Here, plaintiffs do not allege that the Program was specifically designed to

benefit in-state economic interests by burdening out-of-state competitors.

Plaintiffs do not allege that the Program has the effect of discouraging affected

rental car companies from serving out-of-state customers. Indeed, the purpose of

the Program is to raise revenue in order to encourage tourism excursions to

California. Taking plaintiffs’ allegations to be true, plaintiffs have not shown that

the Program serves an economic protectionist end or otherwise affirmatively

discriminates against interstate commerce.

      Thus, the district court correctly applied the balancing test set out in Pike v.

Bruce Church, 397 U.S. 137 (1970). See Maine v. Taylor, 477 U.S. 131, 138

(1986) (laws that regulate evenhandedly and only incidentally burden interstate

commerce are subject to less searching scrutiny under the Pike balancing test).

Under the Pike test, a statute will be upheld “unless the burden imposed upon

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[interstate] commerce is clearly excessive in relation to the putative local benefits.”

397 U.S. at 142. As the party challenging the regulation, plaintiffs must establish

that the burdens imposed on interstate commerce clearly outweigh the local

benefits arising from the Program. See Kleenwell Biohazard Waste and General

Ecology Consultants, Inc. v. Nelson, 48 F.3d 391, 399 (9th Cir. 1995). Plaintiffs

have not met their burden in this case. The district court properly found that any

burdens imposed on interstate commerce by the Program do not clearly outweigh

“California’s legitimate interest in promoting its tourism industry.”

      Camps Newfound/Owatonna, Inc. v. Town of Harrison, 520 U.S. 564 (1997)

is not to the contrary. In that case, the Court concluded that the challenged statute

was discriminatory because it had the purpose of discouraging Maine charities

from serving out-of-state residents, and thus operated as a protectionist measure

that attempted to hoard Maine’s natural resources and beauty for its own residents.

Id. at 576-77. Here, as already noted, plaintiffs do not allege that the Program has

the effect of discouraging affected rental car companies from serving out-of-state

customers.

      The district court properly concluded that plaintiffs’ claim under the

Commerce Clause fails as a matter of law.

                                           4
                                         II

      Plaintiffs’ claims under the free speech provisions of the United States and

California constitutions are foreclosed by the government speech doctrine.

Plaintiffs contend that the government is forcing them to subsidize a private

message with which they disagree, in violation of United States v. United Foods,

Inc., 533 U.S. 405 (2001), and Keller v. State Bar of Cal., 496 U.S. 1 (1990).

      Compelled subsidies are permissible when they are used to fund government

speech. Johanns v. Livestock Marketing Assoc., 544 U.S. 550, 562 (2005).

Individuals cannot object to compelled subsidies where the government exercises

“effective[] control[]” over the challenged speech. See Delano Farms Co. v. Cal.

Table Grape Comm’n, 586 F.3d 1219, 1223 (9th Cir. 2009). California appellate

courts have held that this rule is equally applicable to free speech claims brought

pursuant to the California Constitution. See Gallo Cattle Co. v. Kawamura, 159

Cal. App. 4th 948, 951-52 (2008).

      Here, the government “effectively control[s]” the CTTC’s promotional

messaging. The Legislature has provided an overriding directive for the sorts of

messages that the CTTC is to promote. See Cal. Gov. Code § 13995.45. The

Governor of California appoints twelve of the CTTC’s commissioners (with the

remaining twenty-four elected by industry representatives), and the Secretary

                                          5
exercises removal powers over the elected commissioners. See Cal. Gov. Code §

13995.40(b)(2)(A), (b)(3), (e). The final adoption of the CTTC’s marketing plan

and budget is subject to the review and approval of the Secretary. Cal. Gov. Code

§ 13995.45(d). We have sustained similar statutory schemes against First

Amendment challenges. Delano Farms, 586 F.3d at 1227-30; Paramount Land

Co. v. Cal. Pistachio Comm’n, 491 F.3d 1003, 1010-12 (9th Cir. 2007).

      Plaintiffs underscore that the Secretary’s approval or disapproval of the

CTTC’s marketing plan and budget can be overridden by a three-fifths vote of the

commissioners. Plaintiffs argue that, consequently, the CTTC’s decisions

regarding messaging ultimately reside in the hands of the industry. Even so, the

government retains a stronger power of review than that in Delano Farms, which

required no final review by the Secretary of Agriculture over the messages

promulgated by the California Table Grape Commission. 586 F.3d at 1229.

      There are no principled distinctions to be drawn between the statutory

scheme in the present case and those determined to invoke the government speech

doctrine in Delano Farms and Paramount Land. The district court properly held

that the government speech doctrine bars plaintiffs’ free speech claims.

                                         6
                                          III

      The district court properly dismissed plaintiffs’ claim under 42 U.S.C. §

1983 as derivative of plaintiffs’ First Amendment and Commerce Clause claims.

The district court properly declined to exercise supplemental jurisdiction over

plaintiffs’ state law claims following its dismissal of plaintiffs’ federal law claims.

See 28 U.S.C. § 1367(c)(3). The district court properly declined to grant plaintiffs’

motion for leave to amend its complaint, as any amendment would be futile. See

Cook, Perkiss & Liehe, Inc. v. N. Cal. Collection Serv. Inc., 911 F.2d 242, 247 (9th

Cir. 1990) (per curiam) (affirming dismissal without leave to amend where

plaintiffs’ proposed amendments would fail to cure deficiencies and amendment

would be futile).

      We need not, and do not, reach any other issue urged on appeal.

      AFFIRMED.

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