62 F.4th 567
D.C. Cir.2023Background:
- D.C.’s First Source Employment Agreement Act (amended 2011) requires contractors on D.C. government-assisted projects valued at $300,000+ to give hiring preferences to D.C. residents (e.g., 51% of new hires for $300K–$5M projects), with reporting, penalties, waivers, and possible debarment for violations.
- Metro Washington Chapter, Associated Builders & Contractors, Inc. (an association of construction contractors) sued in 2012 under 42 U.S.C. § 1983 seeking to enjoin enforcement, alleging violations of the dormant Commerce Clause, the Privileges and Immunities Clause, and the Fifth Amendment.
- The district court (2014) dismissed most claims on Rule 12(b)(6) grounds except the Privileges and Immunities claim; after briefing and appointment of amicus, Metro Washington amended alleging “reverse incorporation” of P&I into the Fifth Amendment.
- The district court later granted summary judgment to D.C. (2021), finding individual nonresident workers lacked Article III standing, Metro Washington had associational Article III standing, and holding the Privileges and Immunities Clause did not apply to D.C. and could not be incorporated into the Fifth Amendment.
- On appeal Metro Washington argued the statute violated the dormant Commerce Clause, the Privileges and Immunities Clause, and substantive due process via reverse incorporation; D.C. argued market-participant exception, and that Metro Washington (and its corporate members) lacked P&I rights and third-party standing.
- The D.C. Circuit affirmed dismissal of the dormant Commerce Clause and P&I claims, upheld summary judgment on P&I inapplicability to corporations, and held Metro Washington lacks third-party prudential standing to assert nonresident workers’ P&I or reverse-incorporation Fifth Amendment rights.
Issues:
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Dormant Commerce Clause (facial) | Statute discriminates against nonresidents and burdens interstate commerce | Many covered projects involve D.C. as a market participant, so Commerce Clause does not apply | Dismissed: plaintiff failed to show statute invalid in all applications; market-participant exception controls for many projects |
| Privileges and Immunities Clause (standing/substance) | Statute infringes nonresidents’ P&I rights by favoring D.C. residents | Corporations and D.C.-based contractors lack P&I rights; challengers must be individual nonresident workers | Dismissed: Metro Washington and its corporate members have no P&I rights; claim fails for lack of proper party/standing |
| Substantive Due Process / "Reverse Incorporation" | Fifth Amendment incorporates P&I protections against D.C.; Metro Washington can assert this right | Reverse incorporation not recognized; Metro Washington lacks prudential third-party standing to assert workers’ rights | Dismissed: court declined to adopt reverse-incorporation theory and found no third-party standing |
| Associational / Article III Standing | Metro Washington can sue on members’ behalf (e.g., Miller & Long) for organizational injury | D.C. concedes Article III associational standing but contests prudential standing for P&I/due-process claims | Metro Washington has Article III associational standing, but lacks prudential third-party standing for P&I and reverse-incorporation claims |
Key Cases Cited
- White v. Mass. Council of Constr. Emps., Inc., 460 U.S. 204 (1983) (market-participant exception to the dormant Commerce Clause)
- Washington State Grange v. Washington State Republican Party, 552 U.S. 442 (2008) (standard for facial challenges)
- United States v. Salerno, 481 U.S. 739 (1987) (facial-challenge burden is most difficult)
- Lujan v. Defenders of Wildlife, 504 U.S. 555 (1992) (injury-in-fact requirement for standing)
- Hunt v. Washington State Apple Advertising Comm’n, 432 U.S. 333 (1977) (associational standing test)
- Kowalski v. Tesmer, 543 U.S. 125 (2004) (limits and exceptions to third-party standing)
- Powers v. Ohio, 499 U.S. 400 (1991) (close-relationship/hindrance framework for third-party standing exception)
- Toomer v. Witsell, 334 U.S. 385 (1948) (P&I challenge brought by individual nonresidents)
- Hicklin v. Orbeck, 437 U.S. 518 (1978) (upholding claim by individual nonresident workers under P&I)
- New Hampshire v. Piper, 470 U.S. 274 (1985) (P&I rights of nonresidents in professional licensing)
- United Building & Construction Trades Council v. Camden, 465 U.S. 208 (1984) (P&I binds municipalities; associational posture in P&I context)