James COURTNEY and Clifford Courtney, Plaintiffs-Appellants, v. Jeffrey GOLTZ, chairman and commissioner; Patrick Oshie, commissioner; Philip Jones, commissioner, in their official capacities as officers and members of the Washington Utilities and Transportation Commission; David Danner, in his official capacity as executive director of the Washington Utilities and Transportation Commission, Defendants-Appellees.
No. 12-35392
United States Court of Appeals, Ninth Circuit
Argued May 6, 2013. Submitted and Filed Dec. 2, 2013.
736 F.3d 1152
Diaz “has the burden to prove he qualifies for this relief, and we review for clear error the district court‘s findings about the completeness and truthfulness of [Diaz]‘s provision of information.” United States v. Aguilera, 625 F.3d 482, 488 (8th Cir.2010). We also review “the ultimate denial of safety valve relief for clear error.” United States v. Hinojosa, 728 F.3d 787, 790 (8th Cir.2013).
Diaz did not separately proffer his knowledge to the government and relies solely on his trial testimony to support safety valve relief. We do not address the appropriateness of such an unusual procedure.4 The district court concluded Diaz failed to provide completely and truthfully all of the evidence and information he had concerning the offense because his testimony was internally inconsistent and did not “hold together under a very simple common-sense analysis.” Based on Diaz‘s statements before and during trial, we find the district court did not commit clear error or otherwise abuse its discretion in denying safety valve relief. See Sanchez-Gonzalez, 643 F.3d at 630.
III. CONCLUSION
We affirm Diaz‘s conviction and sentence.
Fronda Colleen Woods (argued), Assistant Attorney General, Office of the Attorney General, Olympia, WA, for Defendants-Appellees.
David Wiley, Williams Kastner, Seattle, WA, for Amicus Curiae.
Appeal from the United States District Court for the Eastern District of Washington, Thomas O. Rice, District Judge, Presiding. D.C. No. 2:11-cv-00401-TOR.
Before: MICHAEL DALY HAWKINS, SIDNEY R. THOMAS, and JACQUELINE H. NGUYEN, Circuit Judges.
OPINION
NGUYEN, Circuit Judge:
James and Clifford Courtney challenge Washington statutes that require a certificate of “public convenience and necessity” (“PCN“) in order to operate a ferry on Lake Chelan in central Washington state. The Courtneys claim that these state laws abridge their right to use the navigable waters of the United States, in violation of the Privileges or Immunities Clause of the Fourteenth Amendment. The Washington Utilities and Transportation Commission and its various officers and directors (collectively, “WUTC“) successfully moved to dismiss the case and this appeal followed.
The Courtneys’ first claim for relief challenges the constitutionality of the PCN
BACKGROUND
I
James and Clifford Courtney are fourth-generation residents of Stehekin, a small unincorporated community on the northwest end of Lake Chelan in central Washington state. Lake Chelan is a narrow, fifty-five-mile long lake, which has been designated by the Army Corps of Engineers as a “navigable water of the United States.” The northwest portion of Lake Chelan, including Stehekin, is part of the Lake Chelan National Recreation Area. Although it is only accessible by boat, plane, or foot, Stehekin has long been a summer destination for tourists. See WUTC, Appropriateness of Rate and Service Regulation of Commercial Ferries Operating on Lake Chelan 3-4 (2010), available at http://www.wutc.wa.gov/webimage.nsf/0/d068a7290f85512a882576ac007e2d73/ (“Ferry Report“). The Courtneys and their siblings own and operate several businesses in Stehekin, which provide lodging and recreational activities such as white water rafting tours and horseback riding.
Most tourists and residents reach Stehekin by way of a public ferry operated by the Lake Chelan Boat Company. The state has regulated ferry service on Lake Chelan since 1911. By the 1920s, there were at least four different ferry companies offering services on Lake Chelan. Then, in 1927, the Washington legislature enacted a law that conditioned the right to operate a ferry service upon certification that such service was required by “public convenience and necessity.”1
II
A
In its current form,
B
Since the statute‘s enactment, only one PCN certificate has been issued for providing ferry services on Lake Chelan. It is now held by Lake Chelan Recreation, Inc. d/b/a Lake Chelan Boat Company.2 In 1997, James Courtney applied for a PCN certificate to operate a commercial ferry out of Stehekin. The Lake Chelan Boat Company objected, and the WUTC denied Courtney‘s application, finding that the Lake Chelan Boat Company provided “reasonable and adequate service,” the proposed service might “tak[e] business from” the company, and Courtney failed to satisfy the financial responsibility requirement. Courtney did not seek judicial review of the WUTC‘s decision. See
In 2006, James Courtney explored the possibility of starting an on-call boat service out of Stehekin, which he thought might fall within the “charter service” exemption to the PCN requirement. Because the proposed service would need to utilize federally owned docks, Courtney applied to the United States Forest Service for a special-use permit, which required confirmation that the proposed service was actually exempt from the PCN requirement. The WUTC initially opined that a PCN certificate would not be needed for the proposed on-call boat service, but changed its mind after the Lake Chelan Boat Company objected to the proposal. Several months later, the WUTC again reversed course, indicating that the proposed service would be exempt from the PCN requirement. However, no formal decision was ever rendered. WUTC‘s executive director, David Danner, did not respond to the Forest Service‘s request for an advisory opinion on this issue.
In 2008, Clifford Courtney wrote to David Danner, inquiring whether various other kinds of boat transportation services (distinct from the proposed on-call service) would require a PCN certificate. The suggested services included (a) one in which Clifford would charter a boat and offer transportation as part of a package for guests who intended to stay at his ranch and go river rafting, and (b) a scenario in which he would purchase his own vessel in order to transport patrons of his various Stehekin-based businesses. Danner responded that such services would require a certificate because they would still be “for the public use for hire,” and that it “[did] not matter whether the transportation [Clifford] would provide [was] ‘incidental to’ other businesses.” However, Danner noted that his response merely reflected the opinion of the WUTC staff and Courtney was free to pursue a formal declarato-
C
In 2009, after Clifford Courtney wrote to the governor and several state legislators regarding the PCN requirement, the legislature directed the WUTC to conduct a study on the regulation of commercial ferry services on Lake Chelan. The report by the WUTC, which issued in January 2010, concluded that Lake Chelan Boat Company was providing satisfactory service and recommended that there be no change to the existing laws and regulations. The WUTC noted that there might be flexibility under the existing law to permit some competition by exempting certain services from the PCN certificate requirement, provided that any such service would not “significantly threaten” the existing certificate holder‘s business.
D
In October 2011, the Courtneys sued the WUTC and various commissioners and directors in their official capacities, seeking declaratory and injunctive relief pursuant to
The WUTC moved to dismiss the Courtneys’ complaint pursuant to
DISCUSSION
I
To state a claim for relief under
“We review de novo a district court‘s dismissal for failure to state a claim under
II
A
The Courtneys argue that the district court erred in dismissing their first claim relating to the provision of public ferry service because the Privileges or Immunities Clause of the Fourteenth Amendment protects the right “to use the navigable waters of the United States.”3 We agree with the district court that even if the Privileges or Immunities Clause recognizes a federal right “to use the navigable waters of the United States,” the right does not extend to protect the Courtneys’ use of Lake Chelan to operate a commercial public ferry.
In its seminal decision interpreting the Privileges or Immunities Clause of the Fourteenth Amendment—the Slaughter-House Cases, 83 U.S. 36, 16 Wall. 36, 21 L.Ed. 394 (1872)—the Supreme Court upheld a Louisiana statute that granted a private company the exclusive right to operate a slaughter-house on the Mississippi River. Id. at 58-61, 83. In doing so, the Court distinguished between rights that accompany state citizenship and those that exist by virtue of United States citizenship. Id. at 72-77. The Court explained that the Fourteenth Amendment protects “the privileges or immunities of citizens of the United States,” which are distinct from those that exist by virtue of state citizenship. Id. at 73-74 (emphasis in original).
The “privileges and immunities” referred to in Article IV are conferred by state citizenship and consist of those rights “which are fundamental; which belong of right to the citizens of all free governments, and which have at all times been enjoyed by citizens of the several States which compose this Union, from the time of their becoming free, independent, and sovereign.” Id. at 76 (first emphasis added, second emphasis in original). They fall under “the following general heads: protection by the government, with the right to acquire and possess property of every kind, and to pursue and obtain happiness and safety, subject, nevertheless, to such restraints as the government may prescribe for the general good of the whole.” Id. (internal quotation marks omitted).
By contrast, the “privileges or immunities” discussed in the Fourteenth Amendment consist of rights “which ow[e] their existence to the Federal government, its National character, its Constitution, or its laws.” Id. at 79 (emphasis added). In analyzing the legislative history of the Thirteenth and Fourteenth Amendments, the Court noted that “the one pervading purpose” of the amendments was to ensure “the freedom of the slave race, the security and firm establishment of that freedom, and the protection of the newly-made freeman and citizen from the oppressions of those who had formerly exercised unlimited dominion over him.” Id. at 71.
B
The Supreme Court in the Slaughter-House Cases ultimately concluded that the rights asserted by the butchers were rights “which belong to citizens of the
The Courtneys’ case is predicated entirely on the Supreme Court‘s passing reference to a “right to use the navigable waters of the United States“—a phrase that has yet to be interpreted by a single federal appellate court in the privileges or immunities context. As such, the boundaries of the term “use” have not been established. Still, we are not faced with an entirely blank slate. The historical backdrop upon which the Supreme Court enunciated the navigable waterway right strongly suggests that the Court did not intend a panoptic definition of the term. Moreover, our Privileges or Immunities Clause jurisprudence does not support an interpretation that would foreclose states from regulating public transportation upon their intrastate navigable waterways. Thus, even if we assume that the examples of rights deriving from national citizenship set forth by the Supreme Court in the Slaughter-House Cases are not mere dicta, we nevertheless find that the right “to use the navigable waters of the United States” does not include a right to operate a public ferry on Lake Chelan.
Turning to the historical context, Article 4 of the Northwest Ordinance of 1787 established navigable waters within newly federal territory as “common highways” that would be “forever free,” even in the event portions of the Northwest Territory were incorporated into newly formed States. Ordinance of 1787 art. IV; Econ. Light & Power Co. v. United States, 256 U.S. 113, 118-19, 41 S.Ct. 409, 65 L.Ed. 847 (1921) (“The public interest in navigable streams . . . does not arise from custom or implication, but has a very definite origin[;] [b]y article 4 of the compact in the Ordinance of July 13, 1787 . . . it was declared: ‘The navigable waters . . . shall be common highways, and forever free . . . as to the citizens of the United States . . . .‘“).
Cases interpreting the language in the Northwest Ordinance emphasize the states’ responsibility to avoid destroying navigable waters or rendering them unnavigable.4 The Supreme Court has explicitly held that the Ordinance did not
In light of the foregoing, a reasonable interpretation of the right to “use the navigable waters of the United States,” and the one we adopt, is that it is a right to navigate the navigable waters of the United States. Here, it is clear that the Courtneys wish to do more than simply navigate the waters of Lake Chelan. Indeed, they are not restrained from doing so in a general sense. Rather, they claim the right to utilize those waters for a very specific professional venture. While navigation of Lake Chelan is a necessary component of the Courtneys’ proposed activity, it is neither sufficient to achieve their purpose nor the cause of their dissatisfaction. The Supreme Court in the Slaughter-House Cases declined to define the plaintiffs’ asserted rights broadly, finding that the statute did not prohibit the butchering of animals in general because it was specifically “the slaughter-house privilege, which [was] mainly relied on to justify the charges of gross injustice to the public, and invasion of private right.” Slaughter-House Cases, 83 U.S. at 61. Similarly here, the district court correctly identified the actual privilege at stake as a ferry operation privilege, not a broad navigation privilege. Were navigation all the Courtneys wished to do, they would not need the WUTC‘s permission and this dispute would never have arisen. We find it exceedingly unlikely that the Supreme Court in the Slaughter-House Cases contemplated operation of a public ferry as part of the right “to use the navigable waters of the United States,” so as to divest the states of their historic authority to regulate public transportation on intrastate navigable waterways.
Indeed, the Slaughter-House decision, itself, contains suggestions that contradict such an understanding. In discussing the nature of the states’ police power, the majority noted that, with respect to “laws for regulating the internal commerce of a State, and those which respect . . . ferries . . . [, n]o direct general power . . . is granted to Congress; and consequently they remain subject to State legislation.” Id. at 63 (quoting Gibbons v. Ogden, 22 U.S. (9 Wheaton) 1, 203 (1824)) (internal quotation marks omitted). Moreover, while the dissenting minority disagreed with the majority‘s acceptance of a slaughter-house monopoly, it seemed to approve of ferry franchises, stating that
[i]t is the duty of the government to provide suitable roads, bridges, and ferries for the convenience of the public, and if it chooses to devolve this duty to any extent . . . upon particular individuals or corporations, it may of course stipulate for such exclusive privileges . . . as it may deem proper, without encroaching upon the freedom or the just rights of others.
Id. at 88 (Field, J., dissenting).
Further, the driving force behind this litigation is the Courtneys’ desire to oper-
C
Finally, although the Slaughter-House Court acknowledged that “the right to engage in one‘s profession of choice” was a “fundamental” privilege belonging to “citizens of all free governments,” it “made it very clear” that such a right “[was] not protected by the Privileges or Immunities Clause if [it was] not of a ‘federal’ character.” Id. at 983 (emphasis added) (citations omitted). Operation of a ferry service is not inherently “federal” in character. To the contrary, the regulation of ferry operation has traditionally been the prerogative of state and local authorities. See, e.g., Gloucester Ferry Co. v. Pennsylvania, 114 U.S. 196, 215-17, 5 S.Ct. 826, 29 L.Ed. 158 (1885) (recognizing that “[t]he power of the states to regulate matters of internal police includes the establishment of ferries” so long as regulations do not burden interstate commerce); Can. Pac. Ry. Co. v. United States, 73 F.2d 831, 833 (9th Cir. 1934) (explaining that “[a]t common law a franchise was necessary to the creation of a ferry and . . . an integral part of the definition“); Kitsap Cnty. Transp. Co. v. Manitou Beach-Agate Pass Ferry Ass‘n, 176 Wash. 486, 30 P.2d 233, 234-35, 237 (1934) (finding a state PCN requirement to be within the state‘s police power in order to serve “the best interests of the traveling public at large“).
In this case, the state of Washington has a vital interest in regulating traffic on its navigable waterways. As the WUTC noted in its Ferry Report, “[t]he combination of statutory protection from competition, on the one hand, and stringent regulation of rates and terms of service, on the other, has historically been adopted for industries believed to have characteristics of a ‘natural monopoly.‘” Ferry Report 11 (citing Charles F. Phillips, Jr., The Regulation of Public Utilities 49-73 (3d ed.1993)). The PCN requirement creates precisely the kind of ferry franchise that has existed with approval since before the Slaughter-House Cases were decided. See, e.g., Conway, 66 U.S. at 633-35.
The Courtneys contend that ferry operation on Lake Chelan is “nationalized” because of the “national character of the forum in which such a ferry operates,” and that Lake Chelan is “uniquely federal” due to its incorporation into “the federal Lake Chelan National Recreation Area.” However, the Courtneys provide no actual authority for the proposition that the Lake Chelan National Recreation Area renders unconstitutional state regulation of ferry service on wholly intrastate waterways. The Lake Chelan National Recreation Area does not appear to contemplate pre-
D
At the end of the day, the state legislation the Courtneys challenge is narrow in scope, merely restricting the operation of commercial public ferries to those who obtain a PCN certificate. The PCN requirement does not constrain the Courtneys from traversing Lake Chelan in a private boat for private purposes. See
III
The district court declined to express an opinion as to whether the right to use the navigable waters of the United States covers the use of such waters for private boat services for patrons of specific businesses or groups of businesses. Instead, it found that the Courtneys lacked standing, the claim was unripe, and the issue was appropriate for abstention under the doctrine enunciated in Railroad Commission of Texas v. Pullman Co., 312 U.S. 496, 61 S.Ct. 643, 85 L.Ed. 971 (1941). We disagree as to standing6 and need not reach the ripeness issue because we find that the district court did not abuse its discretion in abstaining from considering the claim under the Pullman doctrine. However, we conclude that the district court should have retained jurisdiction over the Courtneys’ case and vacate and remand with instructions that it do so.
The Pullman doctrine is “based on the avoidance of needless friction between federal pronouncements and state policies.” Reetz v. Bozanich, 397 U.S. 82, 87, 90 S.Ct. 788, 25 L.Ed.2d 68 (1970) (internal quotation marks omitted). It vests federal courts with discretion7 to abstain from
Abstention under Pullman is an appropriate course where (1) the case touches on a sensitive area of social policy upon which the federal courts ought not enter unless no alternative to its adjudication is open, (2) constitutional adjudication plainly can be avoided if a definite ruling on the state issue would terminate the controversy, and (3) the possible determinative issue of state law is uncertain. Confederated Salish v. Simonich, 29 F.3d 1398, 1407 (9th Cir.1994). The court “has no discretion to abstain in cases that do not meet the requirements.” Fireman‘s Fund Ins. Co. v. City of Lodi, 302 F.3d 928, 939 (9th Cir.2002).
A
The array of cases dealing with waterways and waterbased transportation in Washington state suggests that regulation of water traffic is indeed a sensitive issue of social policy in Washington. See Rancho Palos Verdes Corp. v. City of Laguna Beach, 547 F.2d 1092, 1094 (9th Cir. 1976) (pointing to the “array of state constitutional provisions and statutes” involving land use planning as evidence that it is “a sensitive area of social policy” in California). Given the ubiquity of waterways in Washington, and the unique importance of water navigation in the Lake Chelan area specifically, it follows that regulation of water routes and resources in the area would be of great concern to the state. See Reetz, 397 U.S. at 87, 90 S.Ct. 788 (noting that “fish resources” was “an asset unique in its abundance in Alaska,” and that “the management [of fish resources was] a matter of great state concern“).
B
In addition, “[a] state court decision . . . could conceivably avoid any decision under the Fourteenth Amendment and would avoid any possible irritant in the federal-state relationship.” Id. at 86-87, 90 S.Ct. 788. If, for example, the WUTC issues a declaratory order that the “charter” boat service proposed by the Courtneys is not “for the public use for hire,” within the meaning of
Moreover, even if the WUTC concludes that the PCN requirement applies to the Courtneys’ proposed services, a contrary ruling by the Washington Supreme Court could also potentially render their constitutional challenge unnecessary. See England v. La. State Bd. of Med. Examiners, 375 U.S. 411, 424, 84 S.Ct. 461, 11 L.Ed.2d 440 (1964) (Douglas, J., concurring) (“Where state administrative action is challenged, a federal court will normally not intervene where there is an adequate state court review which is protective of any federal constitutional claim.“).
C
Finally, as discussed above, it is not clear whether the PCN requirement applies to the private boat transportation services the Courtneys wish to provide. An issue of state law is “uncertain” if “a federal court cannot predict with any confidence how the state‘s highest court would decide an issue of state law.” Pearl Inv. Co. v. City and Cnty. of S.F., 774 F.2d 1460, 1465 (9th Cir.1985).
The PCN requirement in
D
In light of the foregoing, the district court did not abuse its discretion in abstaining from adjudication of the Courtneys’ second claim for relief. Nevertheless, the district court should have retained jurisdiction over the case pending resolution of the state law issues, rather than dismissing the case without prejudice. We have generally considered dismissal inappropriate following Pullman abstention. See Fireman‘s Fund Ins. Co., 302 F.3d at 940 (“If a court invokes Pullman abstention, it should stay the federal constitutional question until the matter has been sent to state court for a determination of the uncertain state law issue.” (internal quotation marks and citation omitted)); Columbia Basin Apt. Ass‘n v. City of Pasco, 268 F.3d 791, 802 (9th Cir.2001) (same); Int‘l Bhd. of Elec. Workers, Loc. Union No. 1245 v. Pub. Serv. Comm‘n of Nev., 614 F.2d 206, 213 (9th Cir.1980) (finding dismissal following Pullman abstention improper pending Nevada courts’ resolution of state issues); Santa Fe Land Improvement Co. v. City of Chula Vista, 596 F.2d 838, 841 (9th Cir.1979) (“If the court abstains under Pullman, retention of jurisdiction, and not dismissal of the action, is the proper course.“).
The Supreme Court has found dismissal without prejudice following Pullman abstention to be appropriate where Texas law precluded a grant of state declaratory relief if a federal court retained jurisdiction. See Harris Cnty. Comm‘rs Ct. v. Moore, 420 U.S. 77, 88 n. 14, 95 S.Ct. 870, 43 L.Ed.2d 32 (1975). The same does not appear to be true, however, in Washington. See Rancho Palos Verdes Corp., 547 F.2d at 1096 (distinguishing California law from
Despite its proper invocation of the Pullman doctrine, the district court erred in dismissing the Courtneys’ second claim. Therefore, we vacate and remand the Courtneys’ second claim with directions that the district court enter an order retaining jurisdiction over the constitutional claim. See Isthmus Landowners Ass‘n, Inc. v. California, 601 F.2d 1087, 1090-91 (9th Cir.1979) (finding failure to retain jurisdiction after Pullman abstention to be reversible error).
CONCLUSION
The district court‘s dismissal of the Courtneys’ first claim for relief is AFFIRMED. The dismissal of their second claim for relief is AFFIRMED in part, VACATED in part, and REMANDED with instructions that the district court retain jurisdiction over the constitutional question.
The parties shall bear their own costs of appeal.