Kevin Marilley v. Charlton Bonham
2016 U.S. App. LEXIS 22896
| 9th Cir. | 2016Background
- California charges higher vessel-registration, license, and permit fees to nonresident commercial fishers than to residents for several categories (commercial vessel registration, commercial fishing license, Dungeness crab permit, herring gill-net permit). 2010 differentials made some nonresident permit packages 2.6–3.3x resident costs.
- The Department of Fish and Game (DFG) spent ~ $20 million in FY2010–11 on enforcement, management, and conservation for the commercial fishery; revenue from commercial fishing fees (excluding nonresident differentials) was ~ $5.365 million, leaving a subsidy/shortfall of ~ $14.635 million covered by California general revenues.
- Nonresidents accounted for roughly 10–19% of registrations/licenses/permits depending on category; nonresident differentials produced about $435,000 in FY2010–11—less than the court’s estimate of nonresidents’ proportionate share of the subsidy.
- Plaintiffs (a certified class of nonresident commercial fishers) challenged four fee differentials under the Privileges and Immunities Clause and Equal Protection Clause; they voluntarily dismissed a dormant Commerce Clause claim. The district court granted summary judgment for plaintiffs on the P&I claim; the Ninth Circuit majority (en banc) reverses and directs entry of summary judgment for California.
- The panel framed the P&I inquiry as two steps: (1) threshold showing that the law burdens a privilege protected by the Clause (commercial fishing is a protected “common calling”); (2) whether the discrimination is closely related to a substantial state interest (here, reimbursing general-fund–funded management/conservation benefits). The court also addressed the Equal Protection claim under rational-basis review.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether fee differentials fall within the purview of the Privileges and Immunities Clause | Marilley: differential fees burden a protected interest (right to earn a living via commercial fishing) and thus trigger Clause scrutiny | California: admits differential treatment but contends commercial fishing is within Clause purview and justification is required | Held: Yes — commercial fishing is a protected "common calling," so the Clause applies |
| Whether the differentials are "closely related" to a substantial state interest under the P&I Clause | Marilley: California failed to show differentials merely compensate for benefits funded only by residents (nonresidents also pay state taxes), so discrimination not "closely related" | California: differentials reasonably reimburse nonresidents for their share of enforcement/management/conservation benefits funded by the general fund; nonresidents paid less in differentials than their calculated proportionate share of the subsidy | Held: The court accepts California’s reimbursement justification; differentials are permitted because they are substantially related to the state interest and are less than nonresidents’ proportionate share of the subsidy |
| Whether payment of California income and other state taxes by nonresidents defeats California’s reimbursement theory | Marilley: plaintiffs argued (late) some nonresidents pay California income taxes so they already fund the subsidy; evidence in the record for named plaintiffs shows minimal in-state income taxes paid | California: (implicitly) treats nonresident tax contributions as de minimis for the named plaintiffs and relies on aggregate subsidy calculation | Held: Court finds record shows named plaintiffs paid little-to-no California income tax; rejects class-wide tax-assimilation argument as waived/unsupported and declines to assume unnamed class members paid substantially more |
| Equal Protection challenge (resident vs. nonresident classification) | Marilley: differential fees violate Equal Protection because they discriminate based on residency without sufficient justification | California: resident-based classification is rationally related to legitimate state interest (recouping cost of fishery management from beneficiaries) | Held: Rational-basis review applies; court finds a rational basis and upholds the differentials under Equal Protection |
Key Cases Cited
- Toomer v. Witsell, 334 U.S. 385 (1948) (state may not impose exclusionary fee differentials on nonresident fishers, but may charge differentials that merely compensate for enforcement or conservation expenditures funded by resident-only taxes)
- Mullaney v. Anderson, 342 U.S. 415 (1952) (struck down unjustified nonresident fee differential where record did not support claimed enforcement cost basis; precise math not required but evidentiary basis is needed)
- United Bldg. & Constr. Trades Council v. Camden, 465 U.S. 208 (1984) (state or municipality expending its own funds is a relevant factor when evaluating P&I discrimination)
- Sup. Ct. of Va. v. Friedman, 487 U.S. 59 (1988) (articulates two-step P&I test: threshold purview showings, then state must show that the law is closely related to advancement of a substantial state interest)
- Reeves, Inc. v. Stake, 447 U.S. 429 (1980) (in Commerce Clause context, state may favor its own residents when distributing benefits from programs funded by the state treasury)
- McBurney v. Young, 133 S. Ct. 1709 (2013) (States may reserve certain benefits to their own residents; Court references distinction between state-funded products and open markets)