Filed: Dec. 03, 2003
Latest Update: Mar. 02, 2020
Summary: RECOMMENDED FOR FULL-TEXT PUBLICATION Pursuant to Sixth Circuit Rule 206 2 Ammex, Inc. v. Cox Nos. 01-2392/2518 ELECTRONIC CITATION: 2003 FED App. 0424P (6th Cir.) File Name: 03a0424p.06 _ COUNSEL UNITED STATES COURT OF APPEALS ARGUED: Craig L. John, DYKEMA GOSSETT, FOR THE SIXTH CIRCUIT Bloomfield Hills, Michigan, for Appellant. Tracy A. _ Sonneborn, OFFICE OF THE ATTORNEY GENERAL, Lansing, Michigan, for Appellee. ON BRIEF: David D. AMMEX , INC., X Smyth III, STEPTOE & JOHNSON, Washington, D.C.
Summary: RECOMMENDED FOR FULL-TEXT PUBLICATION Pursuant to Sixth Circuit Rule 206 2 Ammex, Inc. v. Cox Nos. 01-2392/2518 ELECTRONIC CITATION: 2003 FED App. 0424P (6th Cir.) File Name: 03a0424p.06 _ COUNSEL UNITED STATES COURT OF APPEALS ARGUED: Craig L. John, DYKEMA GOSSETT, FOR THE SIXTH CIRCUIT Bloomfield Hills, Michigan, for Appellant. Tracy A. _ Sonneborn, OFFICE OF THE ATTORNEY GENERAL, Lansing, Michigan, for Appellee. ON BRIEF: David D. AMMEX , INC., X Smyth III, STEPTOE & JOHNSON, Washington, D.C.,..
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RECOMMENDED FOR FULL-TEXT PUBLICATION
Pursuant to Sixth Circuit Rule 206 2 Ammex, Inc. v. Cox Nos. 01-2392/2518
ELECTRONIC CITATION: 2003 FED App. 0424P (6th Cir.)
File Name: 03a0424p.06 _________________
COUNSEL
UNITED STATES COURT OF APPEALS
ARGUED: Craig L. John, DYKEMA GOSSETT,
FOR THE SIXTH CIRCUIT Bloomfield Hills, Michigan, for Appellant. Tracy A.
_________________ Sonneborn, OFFICE OF THE ATTORNEY GENERAL,
Lansing, Michigan, for Appellee. ON BRIEF: David D.
AMMEX , INC., X Smyth III, STEPTOE & JOHNSON, Washington, D.C., for
Plaintiff-Appellant/ - Appellant. Tracy A. Sonneborn, OFFICE OF THE
ATTORNEY GENERAL, Lansing, Michigan, for Appellee.
Cross-Appellee, -
- Nos. 01-2392/2518
- _________________
v. >
, OPINION
- _________________
MICHAEL A. COX , -
Defendant-Appellee/ - ROGERS, Circuit Judge. The Attorney General of
Cross-Appellant. - Michigan issued a Notice of Intended Action (“NIA”) to
- Ammex, Inc. informing it that its advertising might result in
N the Attorney General filing an enforcement action under the
Appeal from the United States District Court Michigan Consumer Protection Act (“MCPA”). In response,
for the Eastern District of Michigan at Detroit. Ammex sought a declaratory judgment against the Attorney
No. 00-73427—George C. Steeh, District Judge. General, asserting that the Attorney General could not enforce
the MCPA against it because (1) federal law preempted the
Argued: August 8, 2003 MCPA with respect to Ammex, and (2) any enforcement of
the MCPA against Ammex would abrogate the restrictions
Decided and Filed: December 3, 2003 placed upon states by the Commerce Clause. The district
court eventually dismissed the action as moot based upon the
Before: BATCHELDER and ROGERS, Circuit Judges; Attorney General’s withdrawal of the NIA. Both Ammex and
RUSSELL, District Judge.* the Attorney General appeal the district court’s decision.
Although the action was not technically mooted by events
subsequent to the initiation of the action, we affirm the
judgment of the district court because the action was not ripe.
*
The Honorable Thomas B. Russell, United States District Judge for
the Western District of Kentucky, sitting by designation.
1
Nos. 01-2392/2518 Ammex, Inc. v. Cox 3 4 Ammex, Inc. v. Cox Nos. 01-2392/2518
FACTS alleging that Ammex falsely advertised that its goods could
be purchased at the Ambassador Bridge store free of state and
Ammex is a Michigan corporation that operates a United federal taxes. This claim of false advertisement was based on
States Customs Class 9 bonded warehouse and duty-free store statements that Ammex published on its website to the effect
in Detroit, adjacent to the Ambassador Bridge to Canada. that the “tax-free” nature of goods sold at the Ammex store
The Ammex store is “sterile” in that customers leaving resulted in significant savings to Ammex customers. The
Ammex’s Ambassador Bridge store may only depart by roads NIA pointed out that Ammex continued to publish these
that lead to Canada. In other words, goods sold in the statements after it had learned from the letter rulings and the
Ammex store may only reach the United States after they Michigan Court of Appeals decision that its sales of gasoline
have first been exported to Canada because the Ammex store and diesel fuel were subject to both state and federal taxes.
is located beyond the “point-of-no-return” on the United Further, the NIA noted that Ammex sold gasoline for prices
States-Canadian border. At the Ambassador Bridge store, as high as or higher than its competitors in the Detroit area,
Ammex sells a wide array of duty-free merchandise, as well implying that, contrary to Ammex’s advertising, Ammex
as gasoline and diesel fuel. At one point, Ammex’s customers were not reaping any savings on gasoline.
advertising claimed that its goods could be purchased with Through the NIA the Attorney General provided Ammex with
“no state tax, no federal tax.” Ammex’s sales of gasoline and the opportunity to cease and desist its allegedly unlawful
diesel fuel and its advertising lie at the heart of this action. practices and invited Ammex to confer with the Attorney
General. Finally, the NIA warned Ammex that unless
Since January 1, 1994, Ammex has paid, under protest, Ammex submitted a formal assurance that it would
Michigan state sales taxes and motor fuel taxes on its sales of discontinue the allegedly unlawful practice or the Attorney
motor fuel. Ammex, Inc. v. Dep’t of Treasury, 603 N.W. 2d General determined that there was no cause for action, the
308, 311 (Mich. Ct. App. 1999), cert. denied, 534 U.S. 827 Attorney General would be authorized to file a lawsuit under
(2001). Ammex filed an action seeking a refund of the state the MCPA, which lawsuit might result in an injunction and/or
taxes that it paid under protest.
Id. On September 14, 1999, a $25,000 fine.
the Michigan Court of Appeals concluded that Ammex was
not entitled to a refund and that Michigan could levy state In February of 2000, in response to the NIA, Ammex filed
taxes on Ammex’s sales of gasoline and diesel fuel. See
id. the declaratory judgment action that is the subject of the
In addition, the United States Customs Service (“Customs”) present appeal. In its complaint Ammex alleged that the
determined in two letter rulings that Ammex could not sell Attorney General was prevented from enforcing the MCPA
gasoline or diesel fuel on a duty-free basis. See J.A. at 16E, because (1) federal law relating to duty-free stores preempts
16J. the MCPA (Count I); (2) any attempt to enforce the MCPA
against Ammex would exceed the restrictions placed on the
Two months after the state-court ruling, in November 1999, states by the Commerce Clause with regard to foreign
the Michigan Attorney General issued an NIA1 to Ammex, commerce (Count II); and (3) any MCPA action against
1
At least ten days prior to the commencement of an action under the
MCPA, the Attorney General must “notify the person of [the] intended general in person, by counsel, or by other representative as to the
action and give the person an opportunity to cease and desist from the proposed action before the proposed filing date,” absent a court waiver
alleged unlawful metho d, act, o r prac tice or to confer with the attorney upon a sho wing of good cau se. M ICH . C O M P . L A W S § 445.90 5(2).
Nos. 01-2392/2518 Ammex, Inc. v. Cox 5 6 Ammex, Inc. v. Cox Nos. 01-2392/2518
Ammex based on its Internet advertising would be contrary to The present action by Ammex against the Attorney General
the restrictions placed on the states by the Commerce Clause continued with the Attorney General’s answering Ammex’s
with regard to both foreign and interstate commerce (Count complaint and filing a motion to dismiss. The motion to
III).2 dismiss alleged that Ammex’s complaint contained a number
of jurisdictional defects. The district court eventually denied
Meanwhile, Ammex was also challenging the letter rulings the Attorney General’s motion to dismiss with regard to
issued by Customs that determined that Ammex could not sell Counts I, II, and III.
gasoline and diesel fuel on a duty-free basis. In August of
2000, the Court of International Trade ruled that the letter At the close of discovery, the Attorney General filed with
rulings were contrary to law and that Customs acted the district court a withdrawal of the NIA against Ammex.
unlawfully by denying duty-free status to Ammex’s sales of The withdrawal stated that the Attorney General would not
gasoline and diesel fuel based on the reasoning employed in reinstate the NIA, nor issue a new NIA with regard to
the letter rulings. See Ammex, Inc. v. United States, 116 F. Ammex’s advertising, unless the following “changed
Supp. 2d 1269, 1272-75 (CIT 2000) (“Ammex I”). On circumstances” occurred:
September 5, 2000, Customs authorized Ammex to sell
gasoline and diesel fuel duty-free. Ammex, Inc. v. United 1. A final judgment is entered in a tax case for tax
States, 193 F. Supp. 2d 1325, 1327 (CIT 2002), aff’d, 334 periods including, or following, the issuance of the
F.3d 1052 (Fed. Cir. 2003) (Ammex II). Customs would later [Ammex I]decision in which it is determined that:
revoke the authorization letter, concluding that gasoline and (a) State sales tax applies in connection with retail
diesel fuel could not be sold duty-free based upon a rationale sales of items other than motor fuel by Ammex; OR
different from that which supported the earlier letter rulings. (b) State sales tax and/or state motor fuel taxes apply
Id. at 1054-55.3 in connection with retail sales of motor fuel by
Ammex.
OR
2. It is conclusively determined, whether by final
administrative order (including appeal), judicial order
2
The complaint also included a fourth count that asked the district
(including appeal), or by federal legislation or treaty, or
court to enjoin aspects of M ichigan’s sales tax act. The d istrict court in any other conclusive manner, that Ammex may not
dismissed the fourth count and A mmex has not ap pealed that decisio n. sell motor fuel free of duty, notwithstanding the
[Ammex I] decision) [sic].
3
Ammex sought to bar the revocation by invoking res judicata
against Customs. See Amm ex II, 334 F.3d at 1055. T he Federal Circuit J.A. at 330-31. Based on the withdrawal, the Attorney
Court of Ap peals found that res judicata did no t bar Customs from General then filed a motion that asserted, inter alia, that the
concluding, based on different reasoning, that gasoline and diesel fuel action was moot. A magistrate judge recommended that the
could not be sold d uty-free. See
id. at 1055-58. The Fed eral Circuit’s
ruling, which dealt primarily with the res judicata issue, did not address
court deny the motion to dismiss, but the Attorney General
the underlying merits of Customs’s new rationale, although it did state did not file objections to the recommendation.
that there was “a reasonable basis for Customs’s action.” Id. at 1058. It
is unclear from the Federal Circuit opinion to what extent Ammex may After the magistrate judge issued his recommendation,
now challenge the new rationale for prohibiting the sale of gasoline and Ammex and the Attorney General filed cross-motions for
diesel fuel duty-free should it so cho ose.
Nos. 01-2392/2518 Ammex, Inc. v. Cox 7 8 Ammex, Inc. v. Cox Nos. 01-2392/2518
summary judgment, each addressing Counts I, II, and III of F.2d 305, 308 (6th Cir. 1990).4 Here, Ammex’s complaint
Ammex’s complaint. At the hearing regarding the motions alleged that federal law preempts the MCPA “with respect to
for summary judgment, the district court raised the mootness Foreign Trade Zones, duty-free stores and their business
issue sua sponte. The district court determined that the activities.” R. 1, Complaint, ¶ 26, J.A. at 26. Ammex also
Attorney General’s withdrawal of the NIA mooted the action, alleged that the MCPA as applied to Ammex’s advertising
and ordered the case dismissed. Both the Attorney General violated the Commerce Clause.
Id., ¶¶ 34, 38, J.A at 28.
and Ammex have appealed the district court’s decision to this Finally, Ammex asked that the Attorney General be enjoined
court. from enforcing the MCPA against Ammex based on these
violations of its federal rights. Id., ¶1, J.A. at 31. Ammex’s
I. Ammex’s Complaint Established the Existence of Subject complaint, therefore, properly invokes federal subject matter
Matter Jurisdiction. jurisdiction.
Before we reach the issue of mootness, the Attorney The Attorney General asks this court, however, to consider
General claims that this court does not have subject matter the Second Circuit’s opinion in Fleet Bank, National
jurisdiction over Ammex’s preemption claim. Although the Association v. Burke, 160 F.3d 883 (2d Cir. 1998), in
Attorney General did not raise this question below, “the analyzing whether subject matter jurisdiction exists in this
existence of federal jurisdiction may be questioned at any case. In Fleet Bank, the plaintiff, Fleet Bank, National
point in the course of litigation and . . . parties cannot waive Association (“Fleet”), filed a complaint that alleged that the
the requirement of subject matter jurisdiction.” Riggs v. Connecticut Commissioner of Banking (the “Commissioner”)
Island Creek Coal Co.,
542 F.2d 339, 343 (6th Cir. 1976). had “adopted an arbitrary, capricious, and erroneous view” of
Contrary to the Attorney General’s position, the district court Connecticut statutes dealing with the imposition of ATM
did have federal subject matter jurisdiction over Ammex’s surcharges and, alternatively, that the relevant Connecticut
claims. We review the existence of subject matter jurisdiction statutes were preempted by federal law.
Id. at 885. On these
de novo. Ullmo ex rel. Ullmo v. Gilmour Acad., 273 F.3d grounds, Fleet sought a declaratory judgment that it could
671, 680 (6th Cir. 2001). impose the contested surcharge and an injunction to enjoin
the Commissioner from interfering with the imposition of the
The Supreme Court’s decision in Shaw v. Delta Air Lines, surcharges. Id. On appeal, the Commissioner questioned
Inc. makes clear that a federal court has subject matter whether the Second Circuit had subject matter jurisdiction
jurisdiction when a person seeks to enjoin state officials from over the case, arguing that Fleet was trying to skirt the well-
enforcing a state regulation against the person on the ground pleaded complaint rule and invoke federal jurisdiction by
that the regulation violates federal rights. See Shaw v. Delta
Air Lines, Inc.,
463 U.S. 85, 96 n. 14 (1983); see also Verizon
Md. Inc. v. Pub. Serv. Comm’n of Md.,
535 U.S. 635, 642 4
(2002) (stating, with respect to an action for declaratory and W hether federal subject ma tter jurisdiction ex ists when the plaintiff
seeks merely declaratory relief from state regulation on enforcement
injunctive relief against a state commission order on grounds, however, is not as clear. See Fleet Bank, Nat’l Ass’n v. Burke,
preemption grounds, “[w]e have no doubt that federal courts 160 F.3d 883, 888 -889 (2d Cir. 1998 ) (discussing Lawrence County v.
have jurisdiction under [28 U.S.C.] § 1331 to entertain such Lead Dead wood School D istrict No. 40-1,
469 U.S. 256, 259 n.6 (1985)
a suit”); Alltel Tenn., Inc. v. Tenn. Pub. Serv. Comm’n, 913 and the doubtful continued significance of language in Public Service
Co mm ission v. Wycoff Co., 344 U.S. 237 (1952)). This suit, however,
doe s not see k merely declaratory relief.
Nos. 01-2392/2518 Ammex, Inc. v. Cox 9 10 Ammex, Inc. v. Cox Nos. 01-2392/2518
anticipating a federal defense through a declaratory judgment comparable grounds. See Verizon Md., Inc., 535 U.S. at 642
action. See
id. at 885-86. (“We have no doubt that federal courts have jurisdiction
under [28 U.S.C.] § 1331 to entertain such suit.”); Shaw, 463
In concluding that the district court did not have subject U.S. at 96 n. 14. Subject matter jurisdiction exists in those
matter jurisdiction over the action, the Second Circuit noted cases despite the fact that if one were to examine closely the
that, unlike the case before it, none of the Shaw plaintiffs, or nature of the complaint in such a case, the asserted
the plaintiffs in the cases upon which Shaw relied, raised preemption claim would often be remarkably similar to an
issues that required the interpretation of state law. Id. at 889. anticipation of a federal defense through a declaratory action,
The court found that this distinction mattered, reasoning that which generally does not create subject matter jurisdiction
the interpretation of state law would implicate complicated under the well-pleaded complaint rule. See Public Serv.
abstention doctrines and Eleventh Amendment concerns, Comm'n v. Wycoff Co.,
344 U.S. 237, 248 (1952); see also
while also risking “a major and unwarranted incursion on the Playboy Enters., Inc. v. Pub. Serv. Comm’n,
906 F.2d 25, 30
authority of state courts to construe state statutes.”
Id. at 891- (1st Cir.1990) (noting that in Shaw the Supreme Court limited
92. Consequently, the Fleet Bank court refused to extend the Wycoff rule “[w]ithout explaining exactly why”).
Shaw “beyond instances where the plaintiff, seeking an Assuming that Fleet Bank was correctly decided, we decline
injunction on the ground of preemption, does not dispute the to read it so broadly as to preclude subject matter jurisdiction
meaning and application of state law.”
Id. at 893. The over Ammex’s claims.
Attorney General asserts that this case falls within the holding
of the Fleet Bank decision. II. The Attorney General’s Withdrawal of the NIA Did Not
Moot Ammex’s Claim.
Fleet Bank, however, is distinguishable from this case.
Here Ammex did not seek a declaratory judgment that its The district court dismissed this action on the ground that
advertising does not violate the MCPA, nor did it ask the it was mooted by the Attorney General’s withdrawal of the
district court to interpret Michigan law. Rather Ammex’s NIA. While the district court properly dismissed on
complaint only asked the court to determine if the MCPA justiciability grounds, as we explain in part III, it was not
violated its federal rights and, if so, to enjoin the Attorney proper for the district court to rely on the mootness doctrine,
General from enforcing the MCPA against Ammex. In short, inasmuch as the Attorney General’s withdrawal did not make
in Ammex’s federal pleading, it did not dispute the meaning it absolutely clear that the allegedly wrongful conduct could
or application of state law. The Attorney General, however, not be reasonably expected to recur. We review de novo a
urges us to consider what Ammex would have pleaded had it district court’s decision that an action has been mooted.
waited for the commencement of a state enforcement action. NAACP v. City of Parma, 263 F.3d 513, 530 (6th Cir. 2001),
The Attorney General contends that it is unimaginable in such cert. denied,
535 U.S. 971 (2002).
circumstances that Ammex would have pleaded only a
preemption defense. “Under Article III of the Constitution, [a federal court’s]
jurisdiction extends only to actual cases and controversies.
Accepting such an argument would expand Fleet Bank to [A federal court has] no power to adjudicate disputes which
such an extent that it would render meaningless the Supreme are moot.” McPherson v. Mich. High Sch. Athletic Ass'n,
Court’s repeated holdings that federal jurisdiction extends to Inc., 119 F.3d 453, 458 (6th Cir.1997) (en banc) (quotation
suits to enjoin state enforcement on federal preemption and omitted). “It is well settled that ‘a defendant’s voluntary
Nos. 01-2392/2518 Ammex, Inc. v. Cox 11 12 Ammex, Inc. v. Cox Nos. 01-2392/2518
cessation of a challenged practice does not deprive a federal The court also concluded that the confinement of the
court of its power to determine the legality of the practice.’ immigrant was not reasonably likely to recur based on the
. . . ‘[I]f it did, the courts would be compelled to leave [t]he sworn statement of an INS official that “[a]bsent Picrin’s
defendant . . . free to return to his old ways.’” Friends of the reinvolvement with the criminal justice system, a change in
Earth, Inc. v. Laidlaw Envtl. Servs. (TOC), Inc., 528 U.S. the Cuban government enabling him to return to Cuba, or the
167, 189 (2000) (alteration in original) (quoting City of willingness of a third country to accept him, he will be
Mesquite v. Aladdin’s Castle, Inc.,
455 U.S. 283, 289 & n.10 paroled for another year.”
Id. at 776 (alteration in original)
(1982)). Here the district court concluded that the Attorney (quoting government dismissal motion). Thus, having found
General’s withdrawal of the NIA mooted Ammex’s the voluntary cessation test satisfied, the Ninth Circuit
declaratory judgment action. A case may be mooted by a dismissed the case as moot.
defendant’s voluntary conduct only “if subsequent events
made it absolutely clear that the allegedly wrongful behavior We are reluctant to rely upon Picrin-Peron here because it
could not reasonably be expected to recur,” Friends of the is different in some important respects. The instant case is of
Earth, 528 U.S. at 189 (quoting United States v. Concentrated course not a habeas corpus case, and Ammex arguably does
Phosphate Export Ass’n, Inc.,
393 U.S. 199, 203 (1968), and not enjoy all of the relief that the court could enter.
“interim relief or events have completely and irrevocably Moreover, the Attorney General’s withdrawal of the NIA here
eradicated the effects of the alleged violation.” County of Los is different from the sworn statement in Picrin-Peron in a
Angeles v. Davis,
440 U.S. 625, 631 (1979). The heavy significant way. In Picrin-Peron there was no indication that
burden of demonstrating mootness rests on the party claiming the INS knew at the time of its statement that any of the
mootness. Friends of the
Earth, 528 U.S. at 189. On the “changed circumstances” were reasonably likely to occur.
other hand, we have noted that “‘cessation of the allegedly Here, the Attorney General’s withdrawal acknowledges that
illegal conduct by government officials has been treated with related litigation is ongoing and might reasonably be expected
more solicitude by the courts than similar action by private to lead to the “changed circumstances” articulated in the
parties.’” Mosley v. Hairston,
920 F.2d 409, 415 (6th withdrawal. See J.A. at 330 (stating that the Attorney General
Cir.1990) (quoting Ragsdale v. Turncock,
841 F.2d 1358, would “forbear from issuing similar notices of intended action
1365 (7th Cir. 1988)). or filing suit on the basis of the matters raised in the [NIA]
under the [MCPA] until the effect of [Ammex I’s] ruling on
Against this legal backdrop, the district court, principally tax matters has been conclusively resolved” (emphasis
relying on Picrin-Peron v. Rison, 930 F.2d 773, 775-76 (9th supplied)). The Attorney General’s withdrawal thus does not
Cir. 1991), held that the Attorney General’s withdrawal of the make it absolutely clear that the enforcement action is not
NIA was sufficient to moot this action. In Picrin-Peron, the reasonably likely to recur. Consequently, the mootness
Ninth Circuit considered the habeas corpus petition of an doctrine, without more, does not provide a sufficient basis for
excludable Cuban alien who, during the pendency of his dismissing this case.
habeas appeal, had been placed on immigration parole. See
id. at 774-75. The Ninth Circuit found that, due to the limited III. Ammex’s Claims Are Not Ripe.
relief courts may grant under the writ of habeas corpus, it was
without power to grant relief beyond the freedom from Although Ammex’s claims were not technically mooted by
confinement that had already been effected.
Id. at 775-76. the Attorney General’s withdrawal of the NIA, Ammex’s
This led the court to conclude that the case was mooted.
Id. claims are not ripe. Accordingly, we affirm the district
Nos. 01-2392/2518 Ammex, Inc. v. Cox 13 14 Ammex, Inc. v. Cox Nos. 01-2392/2518
court’s judgment on ripeness grounds. We review issues of be weighed. The first two deal with the “fitness of the issues
justiciablity, such as ripeness, de novo. NRA of Am. v. for judicial determination.” One aspect of the “judicial fitness
Magaw,
132 F.3d 272, 278 (6th Cir. 1997). of the issues” is the extent to which the legal analysis would
benefit from having a concrete factual context. The second
The ripeness inquiry arises most clearly when litigants seek aspect of the “judicial fitness of the issues” is the extent to
to enjoin the enforcement of statutes, regulations, or policies which the enforcement authority’s legal position is subject to
that have not yet been enforced against them. Recent change before enforcement. The third consideration deals
holdings of the Supreme Court make clear the continuing with the “hardship to the parties of withholding court
validity in that context of the three-part test for ripeness in the consideration.” See Abbott Labs., 387 U.S. at 148-49; see
companion cases of Abbott Laboratories v. Gardner, 387 U.S. also Ohio Forestry
Ass’n, 523 U.S. at 733. Together these
136 (1967) and Toilet Goods v. Gardner,
387 U.S. 158 considerations weigh against ripeness in this case.
(1967). See Nat’l Park Hospitality Ass’n v. Dept. of the
Interior,
123 S. Ct. 2026, 2030-2032 (2003); Ohio Forestry A. Judicial fitness: the benefit to the court of a concrete
Ass’n v. Sierra Club,
523 U.S. 726, 732-33 (1998). Where, factual context.
as in this case, the statute at issue has not been enforced
against Ammex, and indeed where a notice of intent to Ammex’s legal contention is that the MCPA does not apply
enforce has been explicitly withdrawn, the ripeness doctrine to its activities because it is preempted by federal statutes and
provides the appropriate analysis for determining whether this by the negative implications of the Commerce Clause.
case should be heard at this time. Analysis of both issues would be significantly benefitted by
the concrete context that would be afforded by an
The ripeness doctrine “is drawn both from Article III enforcement action against a specific action by Ammex.
limitations on judicial power and from prudential reasons for
refusing to exercise jurisdiction.” Reno v. Catholic Soc. The issue in Abbott Laboratories was whether a particular
Servs., Inc., 509 U.S. 43, 57 n. 18 (1993). The prudential regulation (requiring the generic name of a drug to
discretion to decline jurisdiction over unripe cases derives accompany the brand name every time on drug labelling) was
from the discretionary nature of injunctive and declaratory consistent with the Federal Drug and Cosmetic Act. 387 U.S.
remedies. Abbott
Labs., 387 U.S. at 148. The “basic at 137-39. Supporting its conclusion that the pre-enforcement
rationale” of the ripeness doctrine is challenge was ripe, the Court found that the issue was purely
legal, and moreover that “both sides have approached this
to prevent the courts, through avoidance of premature case as one purely of congressional intent, and . . . the
adjudication, from entangling themselves in abstract Government made no effort to justify the regulation in factual
disagreements over administrative policies, and also to terms.” Id. at 149. In contrast, in the Toilet Goods
protect the agencies from judicial interference until an companion case, the issue was whether it was statutorily
administrative decision has been formalized and its permitted for the Food and Drug Administration to provide by
effects felt in a concrete way by the challenging parties. regulation that the FDA could have access to manufacturing
facilities on pain of suspending certification of the
Abbott Labs., 387 U.S. at 148-49; see also Nat’l Park
manufacturer. 387 U.S. at 161-62. Although the issue was a
Hospitality
Ass’n, 123 S. Ct. at 2030. In determining whether purely legal one, the Court found that the case was not ripe in
a pre-enforcement challenge is ripe, three considerations must part because the validity of the regulation depended not only
Nos. 01-2392/2518 Ammex, Inc. v. Cox 15 16 Ammex, Inc. v. Cox Nos. 01-2392/2518
upon specific legislative intent, but also on “an understanding With regard to the need for more factual development, this
of what types of enforcement problems are encountered by case is more like Toilet Goods and Ohio Forestry Ass’n than
the FDA, the need for various sorts of supervision in order to like Abbott Laboratories. The court’s need for more factual
effectuate the goals of the Act, and the safeguards devised to development consideration thus weighs against ripeness in
protect legitimate trade secrets.”
Id. at 163-64. this case. Ammex is not challenging a specific rule or finding
of the Michigan Attorney General, but rather the general
Similarly, in Ohio Forestry Ass’n, the Supreme Court, applicability of a statutory scheme to its conduct. Analysis of
unanimously reversing this court, held that a challenge to a any preemption or Commerce Clause issue would benefit
U.S. Forest Service management plan was not ripe. 523 U.S. from knowledge of just what was forbidden by the MCPA,
at 732, 739. The plan set logging goals, selected the areas and what the effects of the state’s regulation would be on the
suited to timber production, and determined which probable policies underlying the Interstate and Foreign Commerce
methods of timber harvest were appropriate, but did not itself Clauses and the federal statutes relied upon by Ammex.
authorized the cutting of any trees. Id. at 729. With respect Unlike the claims that this court found to be ripe in NRA of
to the “judicial fitness” question of whether the a court’s legal America v. Magaw, this is not a situation where “[n]o factual
analysis would benefit from having a concrete factual context, development can change what the statute bans and what it
the Court stated:
protects.” 132 F.3d at 291. Like the Supreme Court in Toilet
Goods, “[w]e believe that judicial appraisal of these factors is
[R]eview of the Sierra Club’s claims regarding logging likely to stand on a much surer footing in the context of a
and clearcutting now would require time-consuming specific application of this [statute] than could be the case in
judicial consideration of the details of an elaborate, the framework of the generalized challenge made here.” 387
technically based plan, which predicts consequences that U.S. at 164.
may affect many different parcels of land in a variety of
ways, and which effects themselves may change over B. Judicial Fitness: Permitting an Agency to Refine Its
time. That review would have to take place without Policies
benefit of the focus that a particular logging proposal
could provide. Thus, for example, the court below in The second aspect of the judicial fitness inquiry is perhaps
evaluating the Sierra Club’s claims had to focus upon the strongest against ripeness in this case. Courts should
whether the Plan as a whole was “improperly skewed,” avoid pre-enforcement challenges that do not permit
rather than focus upon whether the decision to allow enforcement agencies to refine their policies. In Abbott
clearcutting on a particular site was improper, say, Laboratories the case was ripe where the challenge was to a
because the site was better suited to another use or final regulation that the FDA was unlikely to change. There
logging there would cumulatively result in too many was “no hint” that the regulation was tentative. 387 U.S. at
trees’ being cut. 151. In contrast, although the regulation in Toilet Goods was
technically a “final agency action” for purposes of the
523 U.S. at 736-37; see also Nat’l Park Hospitality Ass’n, Administrative Procedure Act, the challenge there was
not
123 S. Ct. at 2032 (concluding that judicial resolution of issue ripe in part because
at hand should be deferred until Court was presented with
concrete dispute). [t]he regulation serves notice only that the Commissioner
may under certain circumstances order inspection of
Nos. 01-2392/2518 Ammex, Inc. v. Cox 17 18 Ammex, Inc. v. Cox Nos. 01-2392/2518
certain facilities and data, and that further certification of basis. See Ammex I, 116 F. Supp. 2d at 1271. Ammex would
additives may be refused to those who decline to permit later prevail in this suit,
id. at 1275-76, and would be issued
a duly authorized inspection until they have complied in a letter granting its request to expand its duty-free operations
that regard. At this juncture we have no idea whether or to the sale of gasoline and diesel fuel, Ammex II, 334 F.3d at
when such an inspection will be ordered and what 1054. As long as Ammex can sell gas tax-free, there is no
reasons the Commissioner will give to justify his order. basis for assuming that the Attorney General will enforce the
MCPA against Ammex. And if Ammex is ultimately
387 U.S. at 163. forbidden from selling gasoline tax-free, it is still far from
clear what the Attorney General’s policy would be with
Similarly, in finding that the challenge to the forestry respect to enforcement of the MCPA against Ammex.
management plan in Ohio Forestry Ass’n was not ripe, the Enforcement of the MCPA against Ammex is thus more
Court relied upon several post-plan administrative actions to obviously tentative and subject to agency reconsideration than
conclude that “the possibility that further consideration will the challenged regulation in Toilet Goods or the challenged
actually occur before the Plan is implemented is not forestry management plan in Ohio Forestry Ass’n. This
theoretical, but real.” 523 U.S. at 735. consideration strongly weighs against ripeness.
The possibility that the agency will modify its position is C. The Hardship to Ammex in Waiting for Enforcement.
far stronger here than it was in Toilet Goods or Ohio Forestry
Ass’n. There is not even the “final agency action” that there Finally, whatever hardship Ammex incurs by waiting for
was in Toilet Goods. The NIA was at most an initiation of enforcement is not enough to outweigh the above-considered
proceedings, and a permissively worded one at that, allowing factors weighing against ripeness here. In Abbott
that “unless an Assurance of Discontinuance is accepted, or Laboratories, the claim was ripe in part because the
it is determined that there is no cause for action, the Attorney challenged regulation had a direct and immediate impact on
General will be authorized to file a lawsuit against AMMEX, the day-to-day operations of the plaintiff drug company. The
INC.” J.A. at 15 (emphasis supplied). Cf. FTC v. Standard drug companies either had to incur the enormous cost of
Oil of Cal., 449 U.S. 232, 241-42 (1980) (holding that changing all their labels and promotional materials, or “risk
initiation of an administrative complaint was not “final serious criminal and civil penalties for the unlawful
agency action”). Moreover, the record shows that the NIA distribution of ‘misbranded’ drugs.” Abbott Labs., 387 U.S.
was subsequently withdrawn, albeit with a reservation of the at 153. The government counsel, moreover, had represented
possibility of reissuance on certain conditions. The Attorney in court that immediate compliance with the regulation was
General’s enforcement decision was, at least in part, based on expected.
Id. at 152. This immediate impact was
whether Ammex could sell its gasoline on a duty-free basis, distinguished in Toilet Goods, which held that a challenge to
because if Ammex’s sales of gasoline and diesel fuel were regulations permitting FDA access to manufacturing facilities
made duty-free, then the tendency of its advertising to be did not have any immediate direct effect until the FDA sought
misleading would seem to be significantly less. At the time to enforce it, at which time it could be promptly challenged.
this action was filed, on February 15, 2000, Ammex
had 387 U.S. at 164-65; see also Ohio Forestry Ass’n, 523 U.S. at
already filed suit in the Court of International Trade to 733-35 (holding challenge to forestry management plan not
challenge the Customs letter rulings that determined that ripe in part because plaintiff had not shown how plan would
Ammex could not sell gasoline or diesel fuel on a duty-free “force [plaintiff] to modify its behavior in order to avoid
Nos. 01-2392/2518 Ammex, Inc. v. Cox 19 20 Ammex, Inc. v. Cox Nos. 01-2392/2518
future adverse consequences, as, for example, agency advertising conduct will be affected in a way that confronts
regulations can sometimes force immediate compliance Ammex with a dilemma like that in Abbott Laboratories.
through fear of future sanctions”).
On the other hand, if Ammex is ultimately not permitted to
The Supreme Court recently focused on the hardship factor sell gas on a tax-free basis, it may then be on the horns of a
in finding that a challenge to a National Park Service dilemma as to the extent to which it may advertise that it is a
regulation was not ripe. Nat’l Park Hospitality Ass’n, 123 “tax-free” facility without subjecting itself to significant fines.
S.Ct. at 2030-32. The regulation stated that National Park In that event, Ammex may undergo some uncertainty as to
concession contracts were not covered by the federal just how far it can go in publicizing its tax-free status without
Contracts Disputes Act (CDA). Id. at 2029. The Supreme risking penalties under a Michigan statute that Ammex claims
Court found that because the Park Service does not administer is not applicable to it. And while the Attorney General has
the CDA, the regulation merely informed the public of its not asserted that he will seek the imposition of fines for
view of CDA coverage, and did not “create ‘adverse effects activity preceding the issuance of an NIA, neither has the
of a strictly legal kind.’”
Id. at 2031 (quoting Ohio Forestry Attorney General’s counsel assured us that the Attorney
Ass’n, 523 U.S. at 733). There was thus even less hardship General will not.
than in Toilet Goods, where “the FDA regulation was more
onerous than [the Park Service regulation] because failure to While this factor presents a closer question than the other
comply with it resulted in the suspension of the producer’s two relevant factors, a weighing of the three factors together
certification and, consequently, could affect production.” leads to the conclusion that this case is not ripe. At this stage
Nat’l Park Hospitality
Ass’n, 123 S. Ct. at 2031. the Attorney General has indicated in a very tentative way, in
a notice that has been withdrawn, that a general consumer
The hardship to Ammex in this case appears to fall between protection statute applies to Ammex, but indicated that under
the situations in Abbott Laboratories and Toilet Goods. certain conditions the Attorney General will not seek to
Unlike in Abbott Laboratories, there are no allegations of enforce the statute. The uncertainty that Ammex may
huge immediate expense in temporarily complying with the (perhaps) face is not significantly different from that faced by
requirements of the MCPA. There is also no asserted threat any regulated party claiming that it is immune from an entire
of criminal liability. And while the possibility of $25,000 in scheme of regulation.
fines is referred to in the (now-withdrawn) NIA, it is not clear
that such fines would be imposed for actions prior to a valid CONCLUSION
NIA. In Abbott Laboratories, in contrast, the agency
affirmatively took the position that immediate compliance Because Ammex’s pre-enforcement challenge to the
was required. 387 U.S. at 152. Moreover, unlike in Abbott applicability of the MCPA is not ripe, we AFFIRM the
Laboratories, an external uncertainty affects Ammex’s judgment of the district court.
current advertising conduct as much as the possibility of
MCPA enforcement. The underlying taxability of gasoline
products here is an issue that does not appear finally resolved,
and would not be affected, much less resolved, by permitting
this case to go forward. If Ammex ultimately can sell gas on
a tax-free basis, it is very unlikely that Ammex’s primary
