MURPHY, Circuit Judge.
The City of Hugo, Oklahoma, and the Hugo Municipal Authority, a public water trust, (collectively "Hugo") have contracted with the City of Irving, Texas, ("Irving") for the sale of water Hugo has been or
The Board oversees Oklahoma's permitting process for appropriating water within the state. Okla. Stat. tit. 82, § 105.9. Hugo, a longstanding holder of two permits issued by the Board, contracted to sell water to Irving for use in Texas. In conjunction with that agreement, Hugo applied for a third permit to appropriate additional water and, later, sought to modify its two existing permits to include Irving as a place of use.
Before the Board acted on its application for a third permit, Hugo filed suit seeking a declaratory judgment that certain Oklahoma laws
Under the doctrine of political subdivision standing, federal courts lack jurisdiction over certain controversies between political subdivisions and their parent states. Branson Sch. Dist. RE-82 v. Romer, 161 F.3d 619, 628 (10th Cir.1998).
A. Hugo's Standing
The political subdivision standing doctrine dates back at least as far as the Supreme Court's decision in City of Trenton v. New Jersey, which concerned the city's challenge, brought under the Contract and Due Process Clauses, to its parent state's imposition of a fee for diverting water. 262 U.S. 182, 183-84, 43 S.Ct. 534, 67 L.Ed. 937 (1923). The city had previously purchased water rights from a private company and claimed the state tax effected an uncompensated taking of its property and interfered with its contractual rights to the water. Id. at 184-85, 43 S.Ct. 534. Rejecting the city's claim, the Court explained that political subdivisions are created by the state merely for convenience of administration. Id. at 185-86, 43 S.Ct. 534. The state, therefore, may delegate the function of public utilities, including the provision of water, to its political subdivisions, but the extent of that delegation "rests in the absolute discretion of the state." Id. at 186, 43 S.Ct. 534 (quotation omitted). The city lacked standing to sue its parent state in these circumstances, because, as the Court said, "[t]he power of the state, unrestrained by the contract clause or the Fourteenth Amendment, over the rights and property of cities held and used for `governmental purposes' cannot be questioned." Id. at 188, 43 S.Ct. 534.
The Court later applied the Trenton rule to hold that a political subdivision lacks standing to bring in federal court a Fourteenth Amendment equal protection challenge to its parent state's actions. Williams v. Mayor & City Council of Balt., 289 U.S. 36, 40, 53 S.Ct. 431, 77
Despite the broad language in these early cases, the Supreme Court and courts of appeals have shied away from erecting an absolute bar to political subdivisions asserting rights against their parent states in federal court. In Gomillion v. Lightfoot, the Supreme Court explained that these early cases stood for the limited proposition that "the State's authority is unrestrained [as against political subdivisions] by the particular prohibitions of the Constitution considered in those cases," rather than granting the states "plenary power to manipulate in every conceivable way ... the affairs of municipal corporations." 364 U.S. 339, 344, 81 S.Ct. 125, 5 L.Ed.2d 110 (1960). Similarly, in Branson, this court, while recognizing the long-standing bar to suits under the federal constitutional provisions at issue in Trenton and Williams, nonetheless concluded there was federal jurisdiction-over a political subdivision's claim brought under a federal statute as a Supremacy Clause claim. 161 F.3d at 628-29. Branson made the following distinction: "[A] municipality may not bring a constitutional challenge against its creating state when the constitutional provision that supplies the basis for the complaint was written to protect individual rights," as opposed to constitutional provisions designed to protect "collective or structural rights" (i.e. the Supremacy Clause). Id. at 628.
Examining the nature of the type of Supremacy Clause claim at issue in Branson reveals a fundamental difference between those claims and claims brought under a substantive provision of the Constitution. The Supreme Court has described the Supremacy Clause as "not a source of any federal rights" but rather operating to "secure federal rights by according them priority whenever they come in conflict with state law." Chapman v. Hous. Welfare Rights Org., 441 U.S. 600, 613, 99 S.Ct. 1905, 60 L.Ed.2d 508 (1979) (quotations omitted). That is, a plaintiff alleging a Supremacy Clause claim is actually alleging a right under some other federal law, which trumps a contrary state law by operation of the Supremacy Clause.
This court's cases considering political subdivision standing are illustrative. In Branson, the school district alleged the Colorado Enabling Act entitled it to management of school trust lands solely for
The dormant Commerce Clause, unlike the Supremacy Clause, itself provides substantive rights. See Dennis v. Higgins, 498 U.S. 439, 447, 111 S.Ct. 865, 112 L.Ed.2d 969 (1991) ("It is clear, however, that the Commerce Clause does more than confer power on the Federal Government; it is also a substantive restriction on permissible state regulation of interstate commerce." (quotation omitted)). The Commerce Clause reads, "The Congress shall have [p]ower ... [t]o regulate Commerce... among the several States." U.S. Const. art. I, § 8, cl. 3. In City of Philadelphia v. New Jersey, the Supreme Court explained the judicially created doctrine of the dormant Commerce Clause:
437 U.S. 617, 623, 98 S.Ct. 2531, 57 L.Ed.2d 475 (1978) (citations and quotation omitted). Accordingly, just as the rights at issue in Trenton and Williams, secured by Constitutional provisions beginning with "No state shall ...," U.S. Const. art. I, § 10, cl. 1; U.S. Const. amend. XIV, § 1, the dormant Commerce Clause limits the states' ability to act in certain ways.
The parties have not identified, and this court has not found, a single case in which the Supreme Court or a court of appeals has allowed a political subdivision to sue its parent state under a substantive provision of the Constitution. Instead, courts have allowed such suits only when Congress has enacted statutory law specifically providing rights to municipalities. See supra n. 5. This court's decisions in Branson and Kaw Tribe are entirely consistent with this great weight of precedent. Because the claims at issue here are based on a substantive provision of the Constitution,
2. The Dissent
The dissent asserts the "modern trend [is] to limit the scope of the political subdivision standing doctrine," and this court's decision in Branson must be read within that context. Dissenting Op. at 1266. So read, the dissent contends Branson fully supports the conclusion that Hugo has standing to sue its parent state. Id. at 1265, 1271-75. For those reasons set out below, the dissent's reading of Branson is simply not tenable.
The dissent begins with the broad supposition that the modern judicial trend is to limit the scope of the Supreme Court's decisions in Trenton and Williams. Id. at 1266. In particular, the dissent relies on the decisions in Gomillion v. Lightfoot, 364 U.S. 339, 81 S.Ct. 125, 5 L.Ed.2d 110 (1960), and Board of Education of Central School District No. 1 v. Allen, 392 U.S. 236, 88 S.Ct. 1923, 20 L.Ed.2d 1060 (1968), to support the notion that "courts should read the earlier political subdivision standing cases more narrowly." Dissenting Op. at 1269. It is certainly true that most federal courts have backed away from early twentieth century absolutist statements indicating political subdivisions can never sue their parent states. That trend is why many courts, with the notable exception of the Ninth Circuit, allow suits based on federal statutes that contemplate the rights of political subdivisions. See Branson, 161 F.3d at 628-30; Dissenting Op. at 1268 n. 4. Nevertheless, we have not found, and the dissent has not cited, a single case where a court of appeals or the Supreme Court has expressly allowed to proceed a claim by a municipality against its parent state premised on a substantive provision of the Constitution.
Furthermore, the cases cited by the dissent do not support the broad assertion that the Supreme Court has strayed from its historic understanding of the Constitution as not contemplating political subdivisions as protected entities vis-a-vis their parent states. The dissent relies heavily on dicta from Gomillion to support its assertion that "state legislative control of municipalities is subject to constitutional limitations." Dissenting Op. at 1268. The problem with the dissent's reliance on Gomillion is that the case does not involve a suit by a municipality against its parent state. Instead, Gomillion involves a suit by individual citizens of Tuskegee, Alabama to enjoin, as violative of the Fourteenth and Fifteenth Amendments, a state redistricting law that changed the shape of the city. 364 U.S. at 340, 81 S.Ct. 125. The language relied upon by the dissent merely reiterates that Trenton and Williams were about particular constitutional guarantees rather than ruling that a subdivision may never sue its state. Id. at 343, 81 S.Ct. 125 ("[I]n dealing with claims under broad provisions of the Constitution, which derive content by an interpretive process of inclusion and exclusion, it is imperative that generalizations, based on and qualified by the concrete situations that gave rise to them, must not be applied out of context in disregard of variant controlling facts."). Properly read, Gomillion stands for the commonsense, limited proposition that a state's actions vis-a-vis municipalities may impact the rights of individuals living in the communities and that those impacted individuals are not denied the protections of the Constitution merely because the municipality itself is not contemplated by the constitutional provisions at issue. Id. at 345, 347-48, 81 S.Ct. 125. Contrary to the dissent's assertions, Gomillion is not remotely inconsistent with the view that federal statutes may provide rights to political subdivisions which they can enforce in court, while constitutional guarantees simply do not contemplate political subdivisions' own rights vis-a-vis their parent states. See Ysursa v. Pocatello Educ. Ass'n, 555 U.S. 353, 129 S.Ct. 1093, 1101, 172 L.Ed.2d 770 (2009) ("A private corporation enjoys constitutional protections, but a political subdivision, created by the state for the better ordering of government, has no privileges or immunities under the federal constitution which it may invoke in opposition to the will of its creator." (citation and quotation omitted)).
Nor does the Court's decision in Allen support the dissent's novel assertion that the dormant Commerce Clause confers rights on Hugo. In Allen, an Establishment Clause case, the sole discussion of the municipal entity's standing was contained in a footnote, which said, in its entirety:
392 U.S. at 241 n. 5, 88 S.Ct. 1923. This passage makes clear that the situation in Allen is very different from the situation here. In Allen, standing was based on the individual board members' personal stake in losing their jobs. Id.
Having set out its vision of a modern jurisprudential trend toward the broad availability of suits by political subdivisions to vindicate constitutional interests, the dissent then proceeds to read Branson as fully supportive of this purported trend. See Dissenting Op. at 1269-72. The dissent's expansive reading of Branson, which completely unhinges the case from its factual moorings, is ultimately unconvincing.
The dissent begins its analysis of Branson by focusing largely on the following language from that decision: "Despite the sweeping breadth of [the opinions], both Williams and Trenton stand only for the limited proposition that a municipality may not bring a constitutional challenge against its creating state when the constitutional provision that supplies the basis for the complaint was written to protect individual rights, as opposed to collective or structural rights." Branson, 161 F.3d at 629; see also Dissenting Op. at 1270-71. According to the dissent, this language from Branson cannot stand for the utterly modest and limited proposition that a municipality can sue its parent state only when Congress has conferred upon the municipality a right or privilege and the municipality's parent state denies it the benefit of that right or privilege in derogation of federal law. Instead, the dissent asserts, Branson must stand for a much more grandiose proposition: the Constitution confers on political subdivisions some "collective rights" and political subdivisions can sue their parent states to enforce those collective constitutional rights. Dissenting Op. at 1270 ("Branson did not carve out from Trenton and its progeny an exception to political subdivision standing doctrine just to allow judicial review of preemption claims. Instead, Branson read Trenton as establishing a `limited proposition' that blocks judicial review only when `the constitutional provision that supplies the basis for the complaint was written to protect individual rights, as opposed to collective or structural rights.'" (quoting Branson, 161 F.3d at 628)).
Branson simply will not bear the weight the dissent seeks to place upon it. Branson did not involve in any way the question whether political subdivisions can sue their parent states to enforce substantive provisions of the Constitution. Instead, the case involved the far more limited question whether a political subdivision could enforce against its parent state, through the Supremacy Clause, rights accorded it by the Colorado Enabling Act, a federal statute. Branson, 161 F.3d at 625. In answering that question in the affirmative, Branson relied primarily on this court's previous decision in Kaw Tribe and the Fifth Circuit's decision in Rogers. Id. at 630 (adopting as the "better rule" the "one supported by Rogers and Kaw Tribe"). As is the case with Branson, neither Kaw Tribe nor Rogers involved a municipality trying to enforce a substantive provision of the Constitution. Instead, each involved the question whether a political subdivision could enforce against its parent state, via the Supremacy Clause, rights accorded it by a federal statute or statutory scheme. Kaw Tribe, 952 F.2d at 1193 (claim under Fair Housing Act enforced through the Supremacy Clause); Rogers, 588 F.2d at 1067-71 (claim under "statutes establishing the federal school breakfast program" enforced via the Supremacy Clause).
Having broadly interpreted Branson as validating suits by political subdivisions against their parent states to enforce substantive constitutional provisions granting collective rights, the dissent proceeds to
Not only does the dormant Commerce Clause, unlike the Supremacy Clause, provide substantive restraints on state action, it also concerns rights that are properly characterized as guaranteed to individuals. As the Court has said, the doctrine "invalidate[s] local laws that impose commercial barriers or discriminate against an article of commerce by reason of its origin or destination out of State." C & A Carbone, Inc. v. Town of Clarkstown, 511 U.S. 383, 390, 114 S.Ct. 1677, 128 L.Ed.2d 399 (1994). That is, a seller or buyer has a right not to be impeded in commercial transactions because of an impermissibly discriminatory state law. Dennis, 498 U.S. at 447, 111 S.Ct. 865 ("Th[e] combined restriction on state power and entitlement to relief under the Commerce Clause amounts to a right, privilege, or immunity under the ordinary meaning of those terms." (quotation omitted)). Hugo and Irving cite this court's decision in Quik Payday, Inc. v. Stork, for the proposition that the dormant Commerce Clause protects the market, not individual firms. 549 F.3d 1302, 1309 (10th Cir.2008). Read in context, however, the language in Quik Payday clearly refers to the question how to measure the burden on interstate commerce, not who holds enforceable rights under the doctrine. See id. In any event, structural rights described in Branson concern the relationship between the federal government and the states, not the relationship between the states and the private market, which the dormant Commerce Clause protects. Certainly, nothing in Quik Payday suggests the dormant Commerce Clause specifically contemplates the rights of political subdivisions, as did the federal laws at issue in Branson and Kaw Tribe.
The existence of what is referred to as the "market participant" exception to the dormant Commerce Clause doctrine reinforces the view that the rights protected are individual in nature.
Dissenting Op. at 1271. The thrust of the dissent's argument is less than clear. "[A]ll federal actions to enjoin a state enactment rest ultimately on the Supremacy Clause." Swift & Co. v. Wickham, 382 U.S. 111, 126, 86 S.Ct. 258, 15 L.Ed.2d 194 (1965). This is not only true of federal statutes and the dormant Commerce Clause, but also of the protections set out in the Contract Clause and the Fourteenth Amendment. Nevertheless, the Supreme Court has conclusively determined that municipalities cannot sue their parent states for violations of the Contract Clause or the Fourteenth Amendment's Due Process and Equal Protection Clauses. See supra at 1255-56. Thus, that the dormant Commerce Clause is enforced through the Supremacy Clause says nothing at all as to whether a municipality can sue its parent state to enforce its provisions. It is for this very reason that the dissent's envisioned dichotomy between "preemption claims" and "individual rights claims" is a false dichotomy. See Cooper v. Aaron, 358 U.S. 1, 17-18, 78 S.Ct. 1401, 3 L.Ed.2d 5 (1958) (holding the Supreme Court's interpretation of the Fourteenth Amendment is the supreme law of the land and is binding on the states through the Supremacy Clause).
The Supreme Court made clear in Trenton and Williams that the Constitution does not confer upon the political subdivisions rights as against their parent states. Ysursa, 129 S.Ct. at 1101. The rule set out in Trenton and Williams is not implicated, however, when Congress enacts positive federal law affording rights to political subdivisions. Rogers, 588 F.2d at 1070. Relying heavily on Rogers, this is the exact rule adopted by this court. Branson, 161 F.3d at 628-30. Because the claims advanced by Hugo are not based on a federal statutory enactment affording it federal rights, but are instead based on a constitutional provision affording individual economic rights, Hugo lacks standing to bring the claims in federal court. Id.
B. Irving's Standing
Irving, unlike Hugo, is suing not its parent state, but another state. The political subdivision standing doctrine has no applicability in such a circumstance. Nonetheless, Irving must still meet the traditional standing requirements. Under Article III, a plaintiff must demonstrate standing to sue by showing an injury-in-fact, that the injury is fairly traceable to the defendant's conduct, and that the injury is likely to be redressed by the relief sought. Bennett v. Spear, 520 U.S. 154, 162, 117 S.Ct. 1154, 137 L.Ed.2d 281 (1997); Stewart v. Kempthorne, 554 F.3d 1245, 1253 (10th Cir.2009) (naming as constitutional standing requirements injury-in-fact, causation, and redressablity).
Here, Irving, a plaintiff-intervenor in the district court, based its claims of injury solely on the contract between it and Hugo for the sale of water. Its complaint explained the broad terms of the agreement,
Even assuming Irving could demonstrate an injury-in-fact and causation, Irving's standing arguments fail on the third constitutional prong, redressability. To demonstrate redressability, a party must show that a favorable court judgment is likely to relieve the party's injury. Coll v. First Am. Title Ins. Co., 642 F.3d 876, 892 (10th Cir.2011). This court previously considered the standing of a commercial timber company to challenge an agency preservation plan which prevented the sale of timber rights in a particular area. Wyo. Sawmills, Inc. v. U.S. Forest Serv., 383 F.3d 1241, 1246-47 (10th Cir.2004). The timber company's standing ultimately failed because "the federal agency has complete discretion as to whether to offer the opportunity sought by the plaintiff, and accordingly, the courts do not have the power to grant the only relief that would rectify the alleged injury." Id. at 1249.
The circumstances here are analogous. If a federal court were to declare, as Irving urges, the challenged Oklahoma laws unconstitutional under the dormant Commerce Clause, the dormant Commerce Clause still would not constrain the Board's actions with respect to Hugo's permit applications. As explained above, Hugo's "power to hold and manage" water rights "rests in the absolute discretion of the state." City of Trenton, 262 U.S. at 186, 43 S.Ct. 534 (quotation omitted).
The cases cited by Hugo and Irving for the proposition that political subdivisions of one state may sue another state under the dormant Commerce Clause over allegedly discriminatory water permitting laws are inapposite because they do not involve a political subdivision of one state whose claim is premised on a contract with a political subdivision of the defendant state. Rather, those cases concern political subdivisions attempting to access the private market or obtain a permit directly from the defendant state. See, e.g., City of El Paso v. Reynolds, 563 F.Supp. 379, 381 (D.N.M.1983) (city in Texas sought water permit directly from permitting authority of New Mexico and also contracted for the purchase of water from a private New Mexico company); City of Altus v. Carr, 255 F.Supp. 828, 831 (W.D.Tex.1966) (city in Oklahoma contracted for purchase of water from private landowners in Texas). Because of that posture, were a court to declare the challenged state laws in those cases unconstitutional, plaintiffs' injuries would be redressed because the defendants
For the foregoing reasons, the district court's order is
MATHESON, J., dissenting.
I would reach the merits because Hugo and Irving have standing. I therefore respectfully dissent.
Hugo has standing based on Branson School District RE-82 v. Romer, 161 F.3d 619 (10th Cir.1998). Branson was decided sixty-five years after the Supreme Court last denied political subdivision standing to a plaintiff. During that interval, the trend in the Supreme Court and lower courts was to limit the doctrine to claims based on the specific constitutional provisions invoked in the early Supreme Court cases. As part of that trend, Branson granted political subdivision standing in a preemption case and formulated a test that allows standing when the plaintiff makes a structural constitutional claim and the plaintiff is sufficiently independent of the parent state. Hugo alleged such a structural claim when it challenged Oklahoma water statutes as unconstitutional under the dormant Commerce Clause. Hugo therefore should receive a decision on the merits.
Irving has standing even if Hugo does not. The political subdivision standing doctrine does not apply to Irving. Apart from Hugo, Irving has asserted a justiciable claim because the Oklahoma water statutes block implementation of its contract to import water from Hugo and because a favorable ruling on its dormant Commerce Clause challenge will remove that barrier.
I part ways with my colleagues on how to read Branson. The majority reads Branson as allowing a political subdivision to sue its parent state when it claims that a federal statute preempts state law. I read Branson as allowing a political subdivision to sue its state for a dormant Commerce Clause violation.
My basic disagreement with the majority is its failure to recognize that Branson set the terms for future consideration of political subdivision standing in this circuit. Branson canvassed the early Supreme Court cases that prohibited standing and found them to establish only the "limited proposition" that political subdivisions lack standing when a claim is based on a "constitutional provision ... written to protect individual rights." 161 F.3d at 628. Branson allows standing when the claim is based on a "constitutional provision ... written to protect ... structural rights." Id.
The majority is correct that Branson did not resolve the "exceedingly important issue" of whether a dormant Commerce Clause claim can support political subdivision standing. See Maj. Op. at 1261. And although the majority correctly reminds us that Branson allowed standing for a preemption claim, it incorrectly denies that Branson set the stage to decide the question presented here: whether the dormant Commerce Clause was written to protect an individual right or a structural right. Branson anticipated this question and foreshadowed the answer.
The answer is that the dormant Commerce Clause protects a structural right and thereby supports political subdivision standing. The rationale for my position will be presented by (1) describing how broad language in early Supreme Court cases that prevented political subdivision suits has been interpreted more narrowly over time; (2) explaining the Branson court's analysis of the scope of political subdivision standing; (3) addressing whether the constitutional claim in this case is a structural or an individual right claim; and (4) having concluded that Hugo is alleging a structural claim, showing that Hugo is sufficiently independent of its parent state to litigate that claim.
Limiting Broad Dicta of Early Cases
Branson should be read in the context of the modern trend to limit the scope of the political subdivision standing doctrine. Branson interpreted two early Supreme Court decisions, Trenton v. New Jersey, 262 U.S. 182, 43 S.Ct. 534, 67 L.Ed. 937 (1923), and Williams v. Mayor of Baltimore, 289 U.S. 36, 53 S.Ct. 431, 77 L.Ed. 1015 (1933). These cases contain broad dicta suggesting that a municipality can never sue its parent state.
In Trenton, the city claimed that a New Jersey statute imposing a fee on the city for withdrawing water from the Delaware River violated the Contract Clause and the Fourteenth Amendment's Due Process Clause. See 262 U.S. at 183, 43 S.Ct. 534. The Court ruled for New Jersey, holding that "[a] municipality is merely a department of the State, and the State may withhold, grant or withdraw powers and privileges as it sees fit." Id. at 187, 43 S.Ct. 534.
Trenton relied on an earlier precedent, Hunter v. City of Pittsburgh, 207 U.S. 161, 28 S.Ct. 40, 52 L.Ed. 151 (1907). In Hunter the Court approved Pennsylvania's right to annex the City of Allegheny into the City of Pittsburgh over Allegheny's objections based on the Contract Clause and the Due Process Clause. Id. at 179, 28 S.Ct. 40.
In Williams, the Court rejected an equal protection challenge to a Maryland statute exempting a railroad from local taxes. 289 U.S. at 40, 53 S.Ct. 431. Justice Cardozo explained that "[a] municipal corporation ... has no privileges or immunities under the Federal Constitution which it may invoke in opposition to the will of its creator." Id.
It would be difficult to square Branson's allowing a political subdivision to sue its parent state with the sweeping dicta of these cases. But the legal landscape changed between 1933 and 1998, and Branson was decided after the Supreme Court had taken a narrower view of these earlier decisions.
The Supreme Court did not address political subdivision standing after Williams until Gomillion v. Lightfoot, 364 U.S. 339, 81 S.Ct. 125, 5 L.Ed.2d 110 (1960). In Gomillion, African-American citizens of Alabama sought to enjoin the mayor of Tuskegee and other local officials from enforcing a redistricting plan that, they argued, violated the Due Process and Equal Protection Clauses of the Fourteenth Amendment and the Fifteenth Amendment. Id. at 340, 81 S.Ct. 125. The defendants, relying on Hunter, "invoke[d] generalities expressing the State's unrestricted power — unlimited, that is, by the United States Constitution — to establish, destroy, or reorganize by contraction or expansion its political subdivisions, to wit, cities, counties, and other local units." Id. at 342, 81 S.Ct. 125. The Court, commenting on Hunter and Trenton, explained that
Id. at 343, 81 S.Ct. 125.
The Court determined that the earlier cases' precedent should be limited to the specific constitutional provisions that those cases addressed. See id. at 344, 81 S.Ct. 125. Justice Frankfurter stated for the Court that
The Court summarized its position:
Id. at 344-45, 81 S.Ct. 125.
Gomillion was not a suit between a municipality and its parent state. But its interpretation of the cases that created the political subdivision standing doctrine is telling. The Court said that state legislative control of municipalities is subject to constitutional limitations. Under the Gomillion analysis, Hunter, Trenton, and Williams prevent political subdivision standing only when a municipality attempts to sue its parent state under the Fourteenth Amendment or the Contract Clause. Some of the circuits also have limited the broad dicta of the earlier cases.
The majority argues that the Supreme Court's language in Gomillion expressing skepticism about the political subdivision standing doctrine is dicta. But so is much of the language from Hunter, Trenton and Williams that created the political subdivision standing doctrine. With their dicta stripped, those cases hold that a municipality cannot bring suits against its parent state on Contract Clause, Due Process Clause, or Equal Protection Clause grounds. In determining whether a municipality may bring a dormant Commerce
Consistent with the trend reflected in Gomillion, in Board of Education of Central School District v. Allen, 392 U.S. 236, 88 S.Ct. 1923, 20 L.Ed.2d 1060 (1968), the Court reached the merits of an Establishment Clause challenge to a New York education statute brought by two local school boards against the state education commissioner of their parent state. The majority points to Allen's reference to individual board members' "personal stake" in the case, Maj. Op. at 1260 (quoting Allen, 392 U.S. at 241 n. 5, 88 S.Ct. 1923), but the school boards, not their individual members, were the plaintiffs. What the Court did not do in Allen — and in any other case since 1933 — is follow Trenton and Williams and deny political subdivision standing to a political subdivision. As Justices Marshall and White later said, Allen cannot be squared with a bar against political subdivisions' raising constitutional claims against their parent states. See City of S. Lake Tahoe v. Cal. Tahoe Reg'l Planning Agency, 449 U.S. 1039, 1042, 101 S.Ct. 619, 66 L.Ed.2d 502 (1980) (White, J., joined by Marshall, J., dissenting from denial of certiorari).
The foregoing cases inform the different readings of Branson in this case. The majority reads Branson as a narrow exception to a broad prohibition of political subdivision standing. The dicta in early Supreme Court cases support this reading. But, as the majority acknowledges, courts have retreated from the "absolutist" gloss of the early cases.
2. Branson and Constitutional Claims
When Branson granted political subdivision standing on a federal preemption claim, it never declared that a political subdivision could sue its parent state only for a preemption claim.
In Branson, school districts brought a preemption challenge against a voter-approved amendment to the Colorado Constitution, alleging that the amendment violated a federal land trust established by Congress in the Colorado Enabling Act. See 161 F.3d at 625. The defendant state officials argued that the school districts, as political subdivisions, could not sue their parent state. Id. at 628. We recognized the political subdivision standing doctrine stemming from Trenton and Williams: "It is well-settled that a political subdivision may not bring a federal suit against its parent state based on rights secured through the Fourteenth Amendment." Id. (citations omitted). We upheld the school districts' right to sue. Id. at 629-30.
Addressing the scope of political subdivision standing, we held that, "[d]espite the sweeping breadth of [their] language," the earlier cases rejecting standing for municipalities raising constitutional challenges against their parent states "stand only for the limited proposition that a municipality may not bring a constitutional challenge against its creating state when the constitutional provision that supplies the basis for the complaint was written to protect individual rights, as opposed to collective or structural rights." Id. We concluded that "a political subdivision has standing to bring a constitutional claim against its creating state when the substance of its claim relies on the Supremacy Clause and a putatively controlling federal law." Id.
Branson did not carve out from Trenton and its progeny an exception to political subdivision standing doctrine just to allow judicial review of preemption claims. Instead, Branson read Trenton as establishing a "limited proposition" that blocks judicial review only when "the constitutional provision that supplies the basis for the complaint was written to protect individual rights, as opposed to collective or structural rights." Id.
In this case, the City of Hugo, an Oklahoma political subdivision, sued members of the OWRB, an Oklahoma state agency, in their official capacities.
Branson explains that "a political subdivision has standing to bring a constitutional claim against its creating state when the substance of its claim relies on the Supremacy Clause and a putatively controlling federal law." Id. (emphasis added). Federal law includes, of course, not only statutes but also constitutional provisions. And Branson did not say that a political subdivision may only sue a parent state when its claim relies on the Supremacy Clause and a federal statute.
Applying Branson to Hugo, the relevant comparison is not between a Supremacy Clause claim and a dormant Commerce Clause claim. It is between a preemption claim based on a federal statute and a dormant Commerce Clause claim. When either is the basis for a challenge to a state law, the Supremacy Clause is essential to the challenge. The majority is correct that "a plaintiff alleging a Supremacy Clause claim is actually alleging a right under some other federal law, which trumps a contrary state law by operation of the Supremacy Clause." Maj. Op. at 1256 (emphasis in original). But that is exactly what Hugo is doing — alleging a claim under the dormant Commerce Clause, which is the "other federal law [that] trumps a contrary state law by operation of the Supremacy Clause."
The Supremacy Clause plays the same role in either case because it requires that the federal law, whether a federal statute or the dormant Commerce Clause, will prevail if it conflicts with state law. All claims alleging a conflict between state law and federal law rely upon the Supremacy Clause priority rule that the "Constitution, and Laws of the United States ... and all Treaties ... shall be ... supreme." U.S. CONST. ART. VI, cl. 2.
If Branson meant to restrict political subdivision standing to certain preemption claims, its distinction between individual and structural rights would be superfluous. Under the majority's reading, only preemption claims count as a structural right. But Branson did not distinguish between claims based on a constitutional provision and a federal statute. It distinguished between claims based on individual and structural rights. We should therefore decide whether a dormant Commerce Clause claim is based on an individual or structural right.
Hugo's Dormant Commerce Clause Claim Is Structural
Branson divides political subdivision constitutional claims into two categories: structural rights claims, which support standing, and individual rights claims, which do not.
Branson does not elaborate on its distinction between structural and individual rights. But Branson's allowing a political subdivision to bring a preemption claim provides a clue to understanding the distinction. A preemption claim alleges that a federal statute is supreme relative to conflicting state law. Such a claim is structural because it concerns the relative authority of federal and state government. An individual right claim, by contrast, concerns the limits of government authority over the individual. Dormant Commerce Clause claims are more like preemption than individual rights claims because they concern the relative power of federal and state government. They ask whether state law improperly interferes with an area of federal concern — interstate commerce.
An additional clue to understanding Branson's distinction between individual and structural rights are the words "written to protect" in Branson's key passage that political subdivision standing is forbidden only when "the constitutional provision that supplies the basis for the complaint was written to protect individual rights, as opposed to collective or structural rights." 161 F.3d at 628.
The Bill of Rights, the Contract Clause (at issue in Hunter and Trenton), the Due Process Clause (at issue in Hunter and Trenton), and the Equal Protection Clause (at issue in Williams) were "written to protect" individual rights. By contrast, the enumerated powers of Article I, Section 8 both authorize and limit what Congress can do, and, from the standpoint of limiting power, were "written to protect" states' rights. The Commerce Clause, therefore, was "written to protect" the allocation of power between the federal
Hugo's dormant Commerce Clause claim, like the preemption claim in Branson, addresses structural issues. "[T]here is widespread acceptance of our authority to enforce the dormant Commerce Clause, which we have but inferred from the constitutional structure as a limitation on the power of the States." United States v. Lopez, 514 U.S. 549, 579, 115 S.Ct. 1624, 131 L.Ed.2d 626 (1995) (Kennedy, J., concurring). The dormant Commerce Clause doctrine provides that, unless authorized by Congress, states lack power to regulate in certain matters reserved for national legislation.
Both dormant Commerce Clause claims and preemption claims based on federal laws enacted pursuant to the Commerce Clause concern the relationship between federal and state governments and the relative scope of federal and state power. These claims represent the two situations where Article I of the Constitution restrains state regulation of commerce. See Kathleen M. Sullivan & Gerald Gunther, Constitutional Law 175 (17th ed.2010). Congressional intent on the relation between state and federal law is a critical issue when a preemption claim is based on Congress's exercise of its Commerce Clause power and also when a dormant Commerce Clause claim may be resolved based on whether Congress authorized state regulation. These are "techniques Congress may employ in the ordering [of] relations between the nation and the states." Id. at 243.
One leading commentator understood the dormant Commerce Clause to be exactly the sort of structural right that Branson meant to allow political subdivision standing: "The Fifth and Tenth Circuits, for example, have limited cities' standing to cases that involve claims under the Supremacy Clause and other structural restrictions on state power, such as the Dormant Commerce Clause." David J. Barron, Why (and When) Cities Have a Stake in Enforcing the Constitution, 115 Yale L.J. 2218, 2250 (2006) (emphasis in original).
The conceptual affinity of the preemption doctrine and the dormant Commerce Clause is reflected in cases where both types of challenges are raised against the same statute. For example, in City of Philadelphia v. New Jersey, 437 U.S. 617, 98 S.Ct. 2531, 57 L.Ed.2d 475 (1978), a New Jersey law banning importation of solid and liquid waste from out of state to New Jersey landfills was challenged under both the preemption doctrine and the dormant Commerce Clause. The Court held that federal legislation did not preempt the state law, id. at 620, 98 S.Ct. 2531, but also held that the state law violated the dormant Commerce Clause, id. at 629, 98 S.Ct. 2531.
The resemblance between preemption and dormant Commerce Clause arguments is especially clear in cases addressing whether a federal statute gives congressional consent to state regulation and therefore insulates a state law from dormant Commerce Clause challenge. In Sporhase v. Nebraska, ex rel. Douglas, 458 U.S. 941, 102 S.Ct. 3456, 73 L.Ed.2d 1254 (1982), the Court considered whether federal laws consented to a Nebraska law limiting out-of-state transfer of groundwater and thereby insulated it from dormant Commerce Clause challenge. The Court said no. Id. at 960, 102 S.Ct. 3456. The question in consent cases such as Sporhase and in preemption cases is what state legislation Congress intended to allow or disallow when it enacted a federal statute.
In this case, as in Branson, Congress has spoken. A central question is whether the Red River Compact authorizes the Oklahoma statutes that limit interstate commerce in water. Whether the issue is congressional preemption in Branson or congressional consent in this case, both are hinged to structural analysis and determining congressional intent.
The majority correctly indicates that Hugo and Irving have their own economic interests in the outcome of the litigation. But it does not follow that their claim is correctly characterized as based on "constitutional provisions ... written to protect individual rights." Branson, 161 F.3d at 628. Party interests are at stake in both preemption and dormant Commerce Clause claims, but the nature of the claim — adjudicating the power of the state relative to that of the federal government — is structural, a question of relative state and federal power. Indeed, the Commerce Clause, upon which the dormant Commerce Clause is based, authorizes Congress to regulate interstate commerce and, as an enumerated right, was in part "written to protect" the states from federal overreaching. Litigants basing claims on this Article I provision ask courts to adjudicate questions of relative federal and state power, the answers to which affect the parties' interests. In short, such cases call for constitutional interpretation of federal rights and state power — structural rights — not individual rights.
Given our Article III standing requirements calling for a plaintiff to show a redressable individual injury in all federal cases, individual interests are virtually always at stake irrespective of the legal basis for the claim. It does not follow that all such claims except for preemption cases fit Branson's category of individual rights claims. Dormant Commerce Clause claims fit Branson's structural category.
The scope of analysis presented here is narrow and does not envision, as the majority
According to Branson, in addition to making a claim based on a structural right, a political subdivision must be "substantially independent" from its parent state to have standing. See Branson, 161 F.3d at 639 (quoting Lassen v. Arizona ex rel. Arizona Highway Dep't, 385 U.S. 458, 459 n. 1, 87 S.Ct. 584, 17 L.Ed.2d 515 (1967)). The school districts in Colorado were substantially independent because they "may hold property in their own name, enter into contracts, and they have the right to sue and be sued in their own name." Id. at 629. We also noted that the districts "are led by boards that are elected independently." Id.
The City of Hugo is substantially independent of Oklahoma. Hugo can hold property in its own name, enter into contracts, and sue and be sued in its own name. See OKLA. STAT. tit. 11, 22-101, 22-104, 37-117. Because Hugo is raising a claim based on a constitutional provision that protects structural rights and is substantially independent from the State of Oklahoma, I would hold that Hugo has standing.
Even if the City of Hugo lacks political subdivision standing, this case should proceed to the merits because the City of Irving has standing to raise the dormant Commerce Cause claim. As the majority notes, Irving, a Texas municipality, faces no political subdivision standing bar. The majority holds that Irving does not meet the redressability requirement of Article III standing.
"Standing under Article III of the Constitution requires that an injury be concrete, particularized, and actual or imminent; fairly traceable to the challenged action; and redressable by a favorable ruling." Monsanto Co. v. Geertson Seed Farms, ___ U.S. ___, 130 S.Ct. 2743, 2752, 177 L.Ed.2d 461 (2010). "It must be the effect of the court's judgment on the defendant that redresses the plaintiffs' injury, whether directly or indirectly." Coll v. First Am. Title Ins. Co., 642 F.3d 876, 892 (10th Cir.2011) (quoting Nova Health Sys. v. Gandy, 416 F.3d 1149, 1159 (10th Cir.2005)).
Irving's alleged injury is its inability to import water from Oklahoma pursuant to its contract with Hugo. Irving claims that certain Oklahoma water statutes cause this injury because they restrict interstate water transfers compared to intrastate water transfers. The injury is redressable because a successful dormant Commerce Clause challenge to these statutes will remove a major barrier to Irving's plan to use Hugo's water.
The majority argues that Irving's contract with Hugo makes Irving's Article III standing dependent on Hugo's standing and that dismissal of Hugo under the political subdivision standing doctrine eliminates redressability for Irving. But in my view, the contract cuts the other way. By entering the contract, Hugo as seller and Irving as buyer of water have an equal and mutual stake in performance of the contract and the transfer of the water. Hugo, not Irving, is the applicant to the OWRB for approval of the water transfer. But even if Hugo is dismissed from this case
Irving has as much stake in the application as Hugo does by virtue of their contract, and Irving's dormant Commerce Clause claim, if successful, would declare the Oklahoma water statutes unconstitutional and thereby help pave the way for approval of the application. The contract ties Irving to the OWRB's decision on the application and enables Irving to meet the elements of Article III standing. It is reasonable to expect that the OWRB would respect and follow a decision of this court that the Oklahoma water laws restricting interstate transfer of water from Hugo to Irving are unconstitutional under the dormant Commerce Clause.
For its redressability analysis, the majority relies on Wyoming Sawmills Inc. v. U.S. Forest Service, 383 F.3d 1241 (10th Cir.2004). In Wyoming Sawmills, a timber company alleged that the Forest Service violated the Establishment Clause by expanding a protected area to protect a Native American religious site. Id. at 1243-45. The company's alleged injury was its inability to access the expanded site to cut timber. Id. at 1246. We held that the timber company's injury was not redressable:
Id. at 1249.
Wyoming Sawmills' injury was not redressable because the relief it sought — securing a timber lease in the protected area — was too speculative and remote even if the timber company prevailed on its Establishment Clause claim against the Forest Service. Even if it lost the case on the merits, the Forest Service would still have had complete discretion on whether to offer timber leases in the area at issue. Even if leasing opportunities were offered, Wyoming Sawmills would need to qualify for and apply to receive one, and then the company might be competing with others for the lease. Finally, the Forest Service would need to select the company from among the lease applicants.
Wyoming Sawmills is sufficiently different from this case that it supports standing redressability here by comparison. Hugo holds Oklahoma water permits. Hugo and Irving have entered a contract for Irving to use Hugo's water in Texas. Hugo has applied to the OWRB for approval to implement the contract. Irving alleges that the Oklahoma water laws on out-of-state water use block performance of the contract. With or without Hugo, a successful dormant Commerce Clause challenge would redress this problem by removing a major state statutory obstacle to securing Irving's contractual water rights through Hugo's application.
Irving's situation resembles the plaintiff's in City of Altus v. Carr, 255 F.Supp. 828 (W.D.Tex.1966). In that case, the district court reached the merits of an Oklahoma municipality's claim that a Texas law banning the export of Texas water to Oklahoma violated the dormant Commerce Clause. Id. at 837-40. Altus had contracted to purchase the water from a private landowner in Texas. Id. at 831. Irving contracted with an Oklahoma municipality rather than a private landowner, but that difference does not diminish Altus as supporting Irving's Article III standing. Irving, like Altus, has contracted to use water out-of-state and is burdened
Because invalidation of the Oklahoma statutes under the dormant Commerce Clause would redress Irving's alleged injury, I would hold that Irving, like Hugo, has standing to raise its dormant Commerce Clause claim.
Id. (emphasis added).
Dissenting Op. at 1271. What would truly be odd is for Branson to announce a rule that political subdivisions can sue their parent states to enforce some undefined class of substantive constitutional provisions when the issue was not before the court, none of the cases cited by Branson involved such a question, and no other appellate court had ever so held.
This principle appears to be based on implied federalism limits. If the political subdivision standing doctrine blocks federal court interference with the "internal political organization of states," neither the preemption claim in Branson nor Hugo's claim here undermines that principle. We must, of course, analyze Hugo's suit under our circuit's precedent, which is the analytical framework developed in Branson. That framework allows political subdivision standing "when the constitutional provision that supplies the basis for the complaint was written to protect ... structural rights." 161 F.3d at 628.
The Fifth and Eleventh Circuits join the Tenth Circuit in rejecting a per se rule. See Rogers v. Brockette, 588 F.2d 1057, 1071 (5th Cir.1979) (holding that "the Hunter and Trenton line of cases do not, properly speaking, deal with a municipality's standing to sue the state that created it" and reaching the merits of a preemption challenge by a local school district against state education authorities); United States v. Alabama, 791 F.2d 1450, 1455 (11th Cir.1986) (holding that "no per se rule applies in this Circuit. In assessing the standing to sue of a state entity, we are bound by the Supreme Court's or our own Court's determination of whether any given constitutional provision or law protects the interests of the body in question").
Other circuits have expressed skepticism about a per se rule without definitively resolving the issue. See City of Charleston v. Pub. Serv. Comm'n of W. Va., 57 F.3d 385, 390 (4th Cir.1995) (reaching the merits of a suit between a city and a state agency after noting that the political subdivision standing doctrine is "unclear"); Amato v. Wilentz, 952 F.2d 742, 755 (3d Cir.1991) (finding that "[j]udicial support for this rule may be waning with time"); S. Macomb Disposal Auth. v. Twp. of Washington, 790 F.2d 500, 504 (6th Cir.1986) (noting that "[t]here may be occasions in which a political subdivision is not prevented, by virtue of its status as a subdivision of the state, from challenging the constitutionality of state legislation").
Even the Ninth Circuit's rule has been called into question. See Palomar, 180 F.3d at 1110 (Hawkins, J., concurring) ("The existence of a contrary view in other circuits does not automatically suggest a need to reexamine our own position. However, where the other circuits' view is well and thoroughly reasoned, we should at least satisfy ourselves that our position is grounded in an equally solid rationale").