Kevin Marilley; Salvatore Papetti; Savior Papetti, on behalf of themselves and similarly situated, Plaintiffs-Appellees,
Charlton H. Bonham, in his official capacity as Director of the California Department of Fish and Game, Defendant-Appellant.
and Submitted En Banc June 21, 2016 San Francisco, California
from the United States District Court for the Northern
District of California Donna M. Ryu, Magistrate Judge,
Presiding D.C. No. 4:11-cv-02418-DMR
Elaine Meckenstock (argued) and Gary Alexander, Deputy
Attorneys General; Annadel A. Almendras, Supervising Deputy
Attorney General; Robert W. Byrne, Senior Assistant Attorney
General; Kamala D. Harris, Attorney General; Office of the
Attorney General, Oakland, California; for
G. Gross (argued) and Jared M. Galanis, Gross Law, San
Francisco, California; Todd R. Gregorian and Tyler A. Baker,
Fenwick & West LLP, Mountain View, California; for
Before: Sidney R. Thomas, Chief Judge, and Stephen Reinhardt,
Kim McLane Wardlaw, William A. Fletcher, Marsha S. Berzon,
Milan D. Smith, Jr., Mary H. Murguia, Jacqueline H. Nguyen,
Andrew D. Hurwitz, John B. Owens, and Michelle T. Friedland,
banc court reversed the district court's summary judgment
in favor of plaintiffs and remanded for the district court to
enter summary judgment for California in an action brought by
a class of nonresident commercial fishers challenging
California's nonresident fee differential for four
commercial fishing licenses, vessel registration and permits.
banc court first held that California's fee differentials
for commercial fishing vessel registrations, fishing
licenses, Dungeness crab permits, and herring gill net
permits fell within the purview of the Privileges and
Immunities Clause. The en banc court determined that whether
the calculation was made at the general level of all
nonresident commercial fishers, or at the specific level of
nonresident commercial fishers for Dungeness crab and
herring, the fee differentials charged by California were
less than the amount by which California subsidized the
management of the nonresidents' portions of its
commercial fishery. The en banc court therefore held that the
fee differentials survived the Privileges and Immunities
Clause challenge because the differentials were justified by
a substantial reason that was closely related to the
banc court held that the fees survived an Equal Protection
Clause challenge because California's interest in
receiving compensation for its commercial fishery management
provided a "rational basis" for its fee
Judge M. Smith, joined in full by Hurwitz and Owens and by
Reinhardt and Berzon as to Part III, stated the majority
assumed away the major defect in its analysis: the fact that
nonresident fishermen pay multiple California taxes too, yet
nonetheless commence each fishing season thousands of dollars
in the hole by virtue of California's discriminatory
differentials. In Judge M. Smith's view, the fee
differentials are illegal under the Privileges and Immunities
Judge Reinhardt, joined by Judge Berzon, concurred in Part
III of Judge M. Smith's dissent and agreed that
California failed to carry its burden of demonstrating that
the differential fees it charges to nonresidents were closely
drawn to the achievement of a substantial state objective.
FLETCHER, Circuit Judge
charges nonresident commercial fishers higher fees for vessel
registrations, licenses, and permits than it charges resident
commercial fishers. A certified class of nonresident
commercial fishers challenges the fee differentials under the
Privileges and Immunities Clause and the Equal Protection
Clause. We hold that California's fee differentials do
not violate either clause.
requires both resident and nonresident commercial fishers to
register their vessels and to purchase licenses and permits
in order to engage in commercial fishing in the waters of the
state. See Cal. Fish & Game Code §§
7852, 7881 (2013). For many years, California has managed its
commercial fishery at a substantial loss. See Cal.
Fish & Game Code §§ 710.5(a), 710.7(a)(1)
(2007). In Fiscal Year (FY) 2010-11, the year for which we
have the most extensive documentation in the record,
California's Department of Fish and Game spent
approximately $20 million managing its commercial fishery. In
the same year, California received approximately $5.8 million
in fees-including registration, license, and permit fees paid
by residents and nonresidents-from participants in its
commercial fishing industry. The approximately $14 million
shortfall was covered by California's general tax
has statutorily mandated fees for commercial fishing vessel
registrations, licenses, and permits. See Cal. Fish
& Game Code §§ 713, 7852, 7881, 8280.6, 8550.5.
Fees are adjusted annually based on inflation. Beginning in
1986, California charged nonresidents more than residents for
certain commercial fishing registrations, licenses, and
permits. In 1986, California for the first time charged
nonresidents more than residents for herring gill net
permits. In 1993, California for the first time charged
nonresidents more for commercial fishing vessel registrations
and commercial fishing licenses. In 1995, California for the
first time charged nonresidents more for Dungeness crab
license year 2010, the fees for resident and nonresident
commercial fishers were as follows:
Commercial fishing vessel registration:
Commercial fishing license: Resident: $120.75
Dungeness crab vessel permits:
Herring gill net permits:
Nonresident: $1, 269.00
Cal. Dep't Fish & Game, Digest of California
Commercial Fishing Laws and Licensing Requirements
(2010). Dungeness crab and herring were (and are) limited
entry fisheries for which a limited number of permits was
(and is) available.
on the activity in question, a commercial fisher in
California could be required to pay several fees. For
example, a fishing vessel owner who personally engaged in
fishing for herring was required to pay a vessel registration
fee, a commercial fishing license fee, and a herring gill net
permit fee. For a California resident holding a single
permit, the total cost in 2010 would have been $773.75. For a
nonresident, the total cost would have been $2, 582.25, or
3.3 times as much as for a resident. A vessel owner who
personally engaged in fishing for Dungeness crab was required
to pay a vessel registration fee, a commercial fishing
license fee, and a Dungeness crab permit fee. For a
California resident, the total cost in 2010 would have been
$691.75; for a nonresident, the total cost would have been
$1, 820.75, or 2.6 times as much as for a resident. Of the
approximately $5.8 million in fees paid to California in FY
2010-11 by the commercial fishing industry, approximately
$435, 000 came from fee differentials paid by nonresidents.
a class of nonresident commercial fishers, challenge the four
nonresident fee differentials-for commercial fishing vessel
registrations, commercial fishing licenses, Dungeness crab
permits, and herring gill net permits. Plaintiffs brought a
class action in district court against California's
Director of the Department of Fish and Game (for convenience,
"California"), challenging the fee differentials as
violating the dormant Commerce Clause, the Privileges and
Immunities Clause, and the Equal Protection Clause.
Plaintiffs voluntarily dismissed their dormant commerce
clause claim. The parties filed cross-motions for summary
judgment on the remaining two claims. The district court
ruled for the plaintiff class on its privileges and
immunities claim, did not reach its equal protection claim,
and entered judgment under Federal Rule of Civil Procedure
54(b). California appealed the grant of Plaintiffs'
motion for summary judgment and the denial of its own motion
for summary judgment. A divided three-judge panel of this
court affirmed. Marilley v. Bonham, 802 F.3d 958
(9th Cir. 2015). We granted rehearing en banc. Marilley
v. Bonham, 815 F.3d 1178 (9th Cir. 2016).
reasons that follow, we reverse the grant of summary judgment
to Plaintiffs. We remand with directions to grant summary
judgment to California.
Standard of Review
review de novo a district court's decision granting or
denying a motion for summary judgment. Rocky Mountain
Farmers Union v. Corey, 730 F.3d 1070, 1086 (9th Cir.
Privileges and Immunities
IV, Section 2, clause 1, of the Constitution provides that
"[t]he Citizens of each State shall be entitled to all
Privileges and Immunities of Citizens in the several
States." The Clause's "primary purpose . . .
was to help fuse into one Nation a collection of independent,
sovereign States." Toomer v. Witsell, 334 U.S.
385, 395 (1948). The Clause "establishes a norm of
comity" between citizens of separate states. Austin
v. New Hampshire, 420 U.S. 656, 660 (1975).
challenge under the Privileges and Immunities Clause entails
"a two-step inquiry." Sup. Ct. of Va. v.
Friedman, 487 U.S. 59, 64 (1988); United Bldg. and
Constr. Trades Council v. Camden, 465 U.S. 208, 218
(1984); see also Council of Ins. Agents & Brokers v.
Molasky-Arman, 522 F.3d 925, 934 (9th Cir. 2008). At
step one, the plaintiff bears the burden of showing that the
challenged law "fall[s] within the purview of the
Privileges and Immunities Clause." Friedman,
487 U.S. at 64 (quoting Camden, 465 U.S. at 221-22);
see also Schoenefeld v. Schneiderman, 821 F.3d 273,
279 (2d Cir. 2016) (quoting Friedman, 487 U.S. at
64). If the plaintiff makes the required step-one showing, at
step two the burden shifts to the state to show that the
challenged law is "closely related to the advancement of
a substantial state interest." Friedman, 487
U.S. at 65 (citing Sup. Ct. of N.H. v. Piper, 470
U.S. 274, 284 (1985)); see also Schoenefeld, 821
F.3d at 279 (quoting Friedman, 487 U.S. at 67).
address these two steps in turn.
Purview of the Clause
"threshold matter" in any Privileges and Immunities
Clause case is whether a challenged law "fall[s] within
the purview" of the Clause. Camden, 465 U.S. at
218 (quoting Baldwin v. Mont. Fish & Game
Comm'n, 436 U.S. 371, 388 (1978)). A plaintiff must
show that the challenged law treats nonresidents differently
from residents and impinges upon a "fundamental"
privilege or immunity protected by the Clause.
Camden, 465 U.S. at 218. Because California charges
higher fees to nonresident commercial fishers, see
Cal. Fish & Game Code §§ 7852, 7881, 8280.6,
8550.5, we easily conclude that Plaintiffs' interests are
"facially burdened." McBurney v. Young,
133 S.Ct. 1709, 1715 (2013); see also Hillside Dairy Inc.
v. Lyons, 539 U.S. 59, 66-67 (2003); Carlson v.
State, 798 P.2d 1269, 1274 (Alaska 1990)
("[L]icense fees which discriminate against nonresidents
are prima facie a violation of [the Privileges and
Immunities Clause]."). Further, an unbroken line of
authority characterizes commercial fishing as a "common
calling" that is protected by the Privileges and
Immunities Clause. See Mullaney v. Anderson, 342
U.S. 415, 417-19 (1952) (striking down Alaska's
differentials for commercial fishing licenses as violating
the Privileges and Immunities Clause); Toomer, 334
U.S. at 403 ("[C]ommercial shrimping in the marginal
sea, like other common callings, is within the purview of the
privileges and immunities clause."); Connecticut ex
rel. Blumenthal v. Crotty, 346 F.3d 84, 96 (2d Cir.
2003) (holding that "commercial lobstering" falls
within the purview of the Privileges and Immunities Clause);
Tangier Sound Waterman's Ass'n v. Pruitt, 4
F.3d 264, 266 (4th Cir. 1993) (explaining that commercial
fishing is a "protected privilege" because it
implicates "'the right to earn a living'"
(quoting Toomer, 344 U.S. at 403));
Carlson, 798 P.2d at 1274 ("Commercial fishing
is a sufficiently important activity to come within the
purview of the Privileges and Immunities Clause.").
therefore conclude that California's challenged fee
differentials fall within the purview of the ...