907 F.3d 333
5th Cir.2018Background
- Three Expo Events, LLC produces Exxxotica, an adult-themed convention; it planned Exxxotica 2016 for the Dallas Convention Center via a wholly controlled local subsidiary, Exotica Dallas LLC.
- After controversy over the 2015 event, Dallas officials and citizens urged the City to block the 2016 event; the mayor and City Council debated and then adopted Resolution No. 160308 directing the City Manager not to enter a contract with Three Expo for the convention.
- Three Expo alleged the City’s actions (including the resolution and related public pressure) prevented the 2016 event, causing economic and reputational injury, and sued for violations of the First Amendment, Equal Protection, and the Bill of Attainder Clause.
- The district court found Three Expo lacked Article III standing (concluding Three Expo never intended to contract with the City, Exotica Dallas was a distinct third party, and the resolution did not cause the event’s nonoccurrence) and dismissed the suit.
- The Fifth Circuit majority reversed, finding the district court’s factual findings clearly erroneous and holding Three Expo was the object of the City’s actions (Exotica Dallas was controlled by Three Expo), so Three Expo established injury, causation, and redressability and may proceed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Article III standing to sue for lost profits and reputational harm | Three Expo: it was the object of the City’s exclusionary actions; it suffered economic and reputational injury traceable to the City and redressable by relief | City: resolution only barred contracts with Three Expo; Three Expo planned for its subsidiary to lease and thus lacks injury; any harm depends on third-party choices | Held: Reversed — majority finds Three Expo is the object of the action, Exotica Dallas controlled by Three Expo, and standing established (injury, causation, redressability) |
| Futility of applying to City or seeking a lease after the resolution | Three Expo: applying would have been futile given mayor/Council intent and public pressure to exclude Exxxotica | City: Three Expo/Exotica Dallas never tried to contract after resolution; futility not shown; injury speculative | Held: Majority: futility doctrine applies here; district court’s contrary factual findings were clearly erroneous; Three Expo need not have applied |
| Prudential standing and third-party rights (whether Three Expo can assert rights tied to Exotica Dallas) | Three Expo: Exotica Dallas is integrated and controlled by Three Expo; Three Expo asserts its own rights as the promoter and economic beneficiary | City: Three Expo seeks relief for a third party (Exotica Dallas); the entities are distinct and prudential limits bar assertion of third-party rights | Held: Majority: prudential concerns do not bar Article III standing because Three Expo itself was the direct object and controlled the subsidiary |
| Reputational injury / Bill of Attainder standing | Three Expo: the resolution and public denunciations harmed its reputation and function as a punitive legislative act | City: reputational-injury claim was not adequately raised below; resolution’s text limited; injury speculative | Held: Majority: reputational injury is cognizable and contributes to standing; remanded to proceed. (Dissent would find forfeiture and lack of standing.) |
Key Cases Cited
- United States v. U.S. Gypsum Co., 333 U.S. 364 (U.S. 1948) (standard for clear-error review of factual findings)
- Lujan v. Defenders of Wildlife, 504 U.S. 555 (U.S. 1992) (Article III standing: injury, causation, redressability; distinction when plaintiff is object of government action)
- Massachusetts v. EPA, 549 U.S. 497 (U.S. 2007) (case-or-controversy and prudential limits on standing discussion)
- Ellison v. Connor, 153 F.3d 247 (5th Cir. 1998) (futility doctrine for administrative applications)
- Moore v. U.S. Dep’t of Agric., 993 F.2d 1222 (5th Cir. 1993) (recognition of futility exception to exhaustion/standing in context of agency refusals)
- Little v. KPMG LLP, 575 F.3d 533 (5th Cir. 2009) (de novo review of standing dismissals)
- Duarte v. County of Lewisville, 759 F.3d 514 (5th Cir. 2014) (practical-impact test for standing when plaintiff not explicit target)
- K.P. v. LeBlanc, 627 F.3d 115 (5th Cir. 2010) (direct pecuniary injury supports injury-in-fact)
- Gully v. Nat’l Credit Union Admin. Bd., 341 F.3d 155 (2d Cir. 2003) (recognition that reputational injury can satisfy standing)