Novak v. United States, No. 13-16383 (9th Cir. 2015)
Annotate this CasePlaintiffs, individuals and a corporation who reside in Hawaii, filed suit alleging that the Jones Act's cabotage provisions, 46 U.S.C. 12112(a)(2)(A) and 55102(b)(1), which prohibit foreign competition in the domestic shipping market, impair interstate trade between Hawaii and the rest of the United States to such an extent that they violate the Constitution. The district court dismissed the action with prejudice. The court concluded that plaintiffs have alleged more than generalized grievances and have demonstrated an “injury in fact,” but have not met their burden to show causation or redressability, the other two elements of Article III standing. The court further concluded that although plaintiffs, could establish standing if they amended their complaint, any amendment would be futile because plaintiffs’ challenge to the Jones Act would fail on the merits. In this case, an amended complaint would be subject to dismissal for failure to state a claim because the enactment of the Jones Act was not beyond the authority assigned to Congress under the Commerce Clause. The court rejected plaintiffs' Due Process Clause of the Fifth Amendment claim, and held that the district court did not violate plaintiffs' procedural due process right by ruling on the government's motion to dismiss without an oral hearing. Accordingly, the court affirmed the judgment.
Court Description: Jones Act. The panel affirmed the district court’s dismissal of an action challenging the constitutionality of the Jones Act’s cabotage provisions, which prohibit foreign competition in the domestic shipping market. Plaintiffs alleged that the Jones Act’s provisions impaired interstate trade between Hawaii and the rest of the United States to such an extent that they violated the Constitution. Plaintiffs are individuals and a corporation who reside in Hawaii and claim to have suffered pecuniary injury when they purchased domestic ocean cargo shipping services on west coast Hawaii routes. The panel held that plaintiffs did not meet their burden to show causation or redressability, two requisite elements for Article III standing. The panel further held that although it was possible that plaintiffs could establish standing if they amended their complaint, any amendment would be futile because plaintiffs’ Commerce Clause challenge to the Jones Act would fail on the merits. The panel held that an amended complaint would be subject to dismissal for failure to state a claim because the enactment of the Jones Act was not beyond NOVAK V. UNITED STATES 3 the authority assigned to Congress under the Commerce Clause. The panel also rejected plaintiffs’ claim alleging that the Jones Act violated protections guaranteed under the Due Process Clause of the Fifth Amendment. Finally, the panel held that the district court did not violate plaintiffs’ procedural due process by ruling on the government’s motion to dismiss without an oral hearing. Judge Friedland concurred. She wrote separately to express her view that San Diego County Gun Rights Committee v. Reno, 98F.3d 1121 (9th Cir. 19966), which drove the majority opinion’s conclusion that plaintiffs lacked Article III standing, should be reconsidered in an appropriate case.
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