JUST PUPPIES, INC., d/b/a Just Puppies Towson; JUST PUPPIES OF MARYLAND INC., d/b/a Just Puppies Rockville; CHARM CITY PUPPIES, LLC, d/b/a Charm City Puppies & Boutique; SOBRAD, LLC, d/b/a Pinnacle Pet; TARA BAKER, d/b/a Valley View Kennel v. ANTHONY G. BROWN
No. 21-2170
United States Court of Appeals for the Fourth Circuit
December 11, 2024
PUBLISHED
v.
Defendant - Appellee.
THE HUMANE SOCIETY OF THE UNITED STATES,
Amicus Supporting Appellee.
Appeal from the United States District Court for the District of Maryland, at Baltimore. Ellen Lipton Hollander, Senior District Judge. (1:21-cv-01281-ELH)
Argued: October 27, 2022 Decided: December 11, 2024
Before KING and RUSHING, Circuit Judges, and TRAXLER, Senior Circuit Judge.
Affirmed by published opinion. Judge Rushing wrote the opinion, in which Judge King and Senior Judge Traxler joined.
The plaintiffs in this case want to sell dogs through physical retail stores in Maryland. But a Maryland law restricts their ability to do so. The plaintiffs sued, alleging the Maryland statute is preempted by the federal Animal Welfare Act and violates the Commerce Clause of the United States Constitution. The district court dismissed plaintiffs’ complaint, concluding they failed to state plausible claims. We affirm.
I.
A.
Over the past twelve years, Maryland has passed an evolving series of laws designed to stop the sale of dogs bred in so-called “puppy mills.”1 The earliest laws required retail pet stores to source the dogs they sold from breeders and brokers who were licensed by the U.S. Department of Agriculture (USDA) and in compliance with applicable federal laws and USDA regulations. Later iterations banned retail pet stores from selling dogs altogether.
The law at issue here is Maryland‘s 2021 retail pet store statute. See
Practically speaking, the Pet Store Statute allows breeders to sell dogs in Maryland, both in person and over the internet, but prohibits retail pet stores and brokers from selling dogs. According to plaintiffs, the law “effectively shift[s] the sale of puppies from regulated retail pet stores (who source puppies from regulated out-of-state breeders and
B.
Plaintiffs are parties affected by Maryland‘s retail pet store laws. Just Puppies, Inc., Just Puppies of Maryland, Inc., and Charm City Puppies, LLC, are retail pet stores in Maryland whose business models are premised primarily on offering dogs for sale to Maryland consumers. Each of these businesses has historically derived more than ninety percent of its gross revenue from dog sales and the remainder from selling pet accessories. These businesses generated millions of dollars annually by buying high-end, pure-bred puppies, primarily from out of state, and reselling them to Maryland consumers. Sobrad, LLC, is a Missouri corporation and USDA-licensed dog broker that sources dogs for retail pet stores, including for Charm City Puppies. Tara Baker is a USDA-licensed dog breeder based in Missouri. In the past, she has sold nearly all her puppies to Just Puppies.
In May 2021, plaintiffs initiated this lawsuit challenging the Pet Store Statute.3 As relevant here, plaintiffs alleged that the Pet Store Statute is preempted by the federal
II.
“We review de novo a district court‘s dismissal of a complaint pursuant to
III.
We begin with plaintiffs’ contention that the district court erred by dismissing Count 1, in which they allege that the federal Animal Welfare Act preempts Maryland‘s Pet Store Statute.5 The Supremacy Clause of the Constitution establishes that federal law is “the supreme Law of the Land . . . , any Thing in the Constitution or Laws of any State to the Contrary notwithstanding.”
“Consideration under the Supremacy Clause starts with the basic assumption that Congress did not intend to displace state law.” Maryland v. Louisiana, 451 U.S. 725, 746 (1981). This presumption makes the most sense when, as here, “Congress legislates ‘in a field which the States have traditionally occupied.‘” S. Blasting Servs., Inc. v. Wilkes County, 288 F.3d 584, 590 (4th Cir. 2002) (quoting Medtronic, Inc. v. Lohr, 518 U.S. 470, 485 (1996)).
Nevertheless, this assumption can be overcome in several ways. First, Congress may expressly preempt certain state laws. Second, “‘federal law may so thoroughly occupy a legislative field as to make reasonable the inference that Congress left no room for the States to supplement it.‘” Guthrie, 79 F.4th at 336 (quoting S. Blasting Servs., 288 F.3d at 590 (brackets omitted)). Third, compliance with both federal and state law may be “a physical impossibility,” resulting in a direct conflict. S. Blasting Servs., 288 F.3d at 589 (quoting Hillsborough Cnty. v. Automated Med. Labs., Inc., 471 U.S. 707, 713 (1985)). Or state law may “stand[] as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress,” creating another circumstance in which the Supreme Court has found preemption warranted. Hillsborough, 471 U.S. at 713 (quoting Hines v. Davidowitz, 312 U.S. 52, 67 (1941)).
In every case, Congress‘s purpose for the federal law is the “ultimate touchstone.” Medtronic, 518 U.S. at 485 (internal quotation marks omitted). And “Congress expresses its intentions through statutory text passed by both Houses and signed by the President (or passed over a Presidential veto).” Oklahoma v. Castro-Huerta, 142 S. Ct. 2486, 2496
Plaintiffs contend that the Animal Welfare Act preempts the Pet Store Statute as a matter of field and obstacle preemption. We address each in turn.
A.
Field preemption refers to the “rare case[]” in which Congress intends for federal law to exclusively govern a particular subject. Garcia, 140 S. Ct. at 804; see also English v. Gen. Elec. Co., 496 U.S. 72, 79 (1990); Cox v. Duke Energy, Inc., 876 F.3d 625, 635 (4th Cir. 2017). We can infer that intent when “Congress has legislated so comprehensively that it has left no room for supplementary state legislation.” R.J. Reynolds Tobacco Co. v. Durham Cnty., 479 U.S. 130, 140 (1986); see Garcia, 140 S. Ct. at 804; Hughes v. Talen Energy Mktg., LLC, 136 S. Ct. 1288, 1297 (2016).
In the Animal Welfare Act (AWA), Congress authorized the Secretary of Agriculture to promulgate minimum standards for “the humane handling, care, treatment, and transportation of animals by dealers, research facilities, and exhibitors.”
The AWA‘s acknowledgement of concurrent state and local animal welfare regulation demonstrates that Congress did not intend for the AWA to occupy the field of animal welfare or sales to the exclusion of state law. See DeHart, 39 F.3d at 722 (concluding the AWA “does not evince an intent to preempt state or local regulation of animal or public welfare” because it “expressly contemplates state and local regulation of animals“). We therefore reject plaintiffs’ field preemption argument.
B.
Next, we consider plaintiffs’ allegation that the Pet Store Statute poses an impermissible obstacle to achieving the purposes and objectives of the AWA. This argument faces an uphill climb. As previously noted, animal regulation is within the States’ traditional police powers, and in the AWA Congress “indicated its awareness of the operation of state law” in the field of animal welfare and sales. Bonito Boats, Inc. v. Thunder Craft Boats, Inc., 489 U.S. 141, 167 (1989). This recognition suggests Congress has “decided to stand by” the operation of both federal and state law in this area “and to
We follow a two-step process to assess whether a state law “stands as an obstacle” to federal law. S. Blasting Servs., 288 F.3d at 590 (internal quotation marks omitted). “First, we determine Congress‘s significant objectives in passing the federal law.” Guthrie, 79 F.4th at 338 (internal quotation marks omitted). Then we inquire whether the state law “stands as an obstacle to the accomplishment” of those significant federal objectives.
The AWA includes a congressional statement of policy. We reproduce it in full here:
The Congress finds that animals and activities which are regulated under this chapter are either in interstate or foreign commerce or substantially affect such commerce or the free flow thereof, and that regulation of animals and activities as provided in this chapter is necessary to prevent and eliminate burdens upon such commerce and to effectively regulate such commerce, in order—
- to insure that animals intended for use in research facilities or for exhibition purposes or for use as pets are provided humane care and treatment;
- to assure the humane treatment of animals during transportation in commerce; and
- to protect the owners of animals from the theft of their animals by preventing the sale or use of animals which have been stolen.
The Congress further finds that it is essential to regulate, as provided in this chapter, the transportation, purchase, sale, housing, care, handling, and treatment of animals by carriers or by persons or organizations engaged in using them for research or experimental purposes or for exhibition purposes or holding them for sale as pets or for any such purpose or use.
To advance this policy, Congress created a federal system of licensing, registration, recordkeeping, and inspections for certain persons and entities that breed, sell, transport, or use animals, including dealers, research facilities, and exhibitors. See, e.g.,
Plaintiffs primarily contend that Congress intended “to prevent and eliminate burdens on commerce for the purchase and sale of dogs” and the Pet Store Statute imposes
We disagree. Regulating commerce was Congress‘s constitutional basis for exercising its power to enact the AWA. See
At bottom, plaintiffs’ argument is that because Congress regulated the treatment of animals bred for commercial sale, Congress must want to ensure such sales continue. But the text of Section 2131 presupposes the existence of commercial activity to be regulated. In other words, the AWA regulates the humane treatment of certain animals to the extent a market exists for their sale. It does not compel the existence of a market for such sales or guarantee a particular market structure.
Again, we disagree. States are independent sovereigns in our federal system; they do not need Congress‘s permission to exercise their historic police powers. By enacting the AWA, Congress intruded into an area traditionally regulated by the States and declined to occupy the entire field. Section 2143(a)(1) limits the extent of that intrusion by restricting the Secretary‘s regulatory authority to the handling, care, treatment, and
Finally, plaintiffs allege in their complaint that the Pet Store Statute “blurs” definitional lines that the AWA draws between breeders, brokers, and stores and “eradicate[s] USDA licensed brokers” from the Maryland market. J.A. 58. But plaintiffs have not plausibly alleged that these effects of the Pet Store Statute pose an obstacle to the
IV.
We turn next to the district court‘s dismissal of Counts 2 and 4 of plaintiffs’ complaint, in which they allege that the Pet Store Statute violates the Commerce Clause of the Constitution. The Commerce Clause empowers Congress to “regulate Commerce . . . among the several States.”
A.
In Count 2, plaintiffs allege that, although the Pet Store Statute is facially neutral, it discriminates against out-of-state breeders and brokers in purpose and effect.8 A state law that discriminates against interstate commerce can be sustained under the dormant Commerce Clause only upon “a showing that the State has no other means to advance a legitimate local purpose.” United Haulers Ass‘n, Inc. v. Oneida-Herkimer Solid Waste Mgmt. Auth., 550 U.S. 330, 338–339 (2007); see also Tenn. Wine & Spirits Retailers Ass‘n v. Thomas, 139 S. Ct. 2449, 2461 (2019).
“Discrimination” in this context means “differential treatment of in-state and out-of-state economic interests that benefits the former and burdens the latter.” Oregon Waste Sys., Inc. v. Dep‘t of Env‘t Quality, 511 U.S. 93, 99 (1994). “The principal focus of inquiry” is “the practical operation of the statute, since the validity of state laws must be judged chiefly in terms of their probable effects.” Lewis v. BT Inv. Managers, Inc., 447 U.S. 27, 37 (1980); see also Comptroller of the Treasury v. Wynne, 575 U.S. 542, 561 n.4 (2015) (“The Commerce Clause regulates effects, not motives . . . .“). However, when evaluating whether state legislation constitutes economic protectionism, we may consider
Plaintiffs acknowledge that the Pet Store Statute does not prohibit out-of-state breeders and brokers from selling dogs to Maryland consumers, but they allege that changes wrought by the statute discriminate in practical effect. As plaintiffs see it, before the Pet Store Statute, an out-of-state breeder or broker could sell dogs to Maryland consumers within the State through what plaintiffs call “face-to-face” transactions, in which a consumer can view the dog before making a purchase. Breeders and brokers conducted this desirable form of transaction through in-state retail pet stores. But after the Pet Store Statute forbade retail pet stores in Maryland from selling dogs, it became almost impossible for out-of-state breeders and brokers to sell their dogs within Maryland‘s borders through face-to-face purchases. In-state breeders, meanwhile, can continue selling dogs to consumers in Maryland directly from their establishments; they do not need a retail storefront to reach Maryland consumers in face-to-face transactions. See
Plaintiffs do not dispute, however, that just like in-state breeders, out-of-state breeders can sell their dogs in face-to-face transactions with Maryland consumers who visit their establishments. In other words, a Marylander can travel to another State to purchase a puppy directly from a breeder and then bring that out-of-state dog into Maryland. The same goes for a face-to-face purchase from an out-of-state broker (or out-of-state retail pet store). Plaintiffs also do not dispute that out-of-state breeders can sell their dogs directly
This state of affairs cannot be said to discriminate against interstate commerce. The Pet Store Statute “does not prohibit the flow of interstate goods, place added costs upon them, or distinguish between in-state and out-of-state companies” in the market. Exxon Corp. v. Governor of Maryland, 437 U.S. 117, 126 (1978). Nor does the law in practice “treat persons from out-of-state any differently than persons in-state.” Brown v. Hovatter, 561 F.3d 357, 364 (4th Cir. 2009). Breeders, whether in-state or out-of-state, can sell their dogs directly to Maryland consumers at their establishment or over the internet. Brokers, whether in-state or out-of-state, cannot sell dogs in Maryland.9 And the statute does not in any way regulate dog sales occurring wholly in other States, whether through retail stores, brokers, or breeders.10
Relatedly, plaintiffs allege that travel and shipping expenses associated with the direct-sale business model required by the Pet Store Statute will substantially increase the cost of doing business in Maryland for out-of-state breeders. But their examples of increased cost are premised on purchasing dogs from far-away States like Missouri, where Baker lives, rather than nearby States like Virginia or Pennsylvania. “The cost of doing business in many markets is higher for faraway sellers than for nearby ones,” but that fact alone does not condemn a state law under the Commerce Clause. N.Y. Pet Welfare Ass‘n, 850 F.3d at 91; see also Minerva Dairy, Inc. v. Harsdorf, 905 F.3d 1047, 1060 (7th Cir. 2018) (reasoning that a discriminatory effect on “long-distance commerce” due to the “geographical fact[s] of life” did not constitute impermissible discrimination against out-of-state commerce). Moreover, harm to “particular interstate firms” does not establish a discriminatory effect on “the interstate market” itself, which is the dormant Commerce Clause‘s concern. Exxon Corp., 437 U.S. at 127–128; see also Colon Health Centers of Am. v. Hazel, 733 F.3d 535, 543 (4th Cir. 2013) (“[A] court should focus on discrimination
Plaintiffs hypothesize that the Pet Store Statute will discriminate in effect by shifting business to Maryland sellers to the detriment of out-of-state breeders.11 But even under
What‘s more, plaintiffs’ allegations suggest that consumers lack suitable in-state options for purchasing dogs. They aver that “[t]he demand for puppies by Maryland consumers generally exceed[ed] the supply that retail pet stores [were] able to obtain from out-of-state breeders,” J.A. 43, rescues and shelters have “limited inventory” of the kinds of dogs Maryland consumers want, J.A. 48, and “only one” USDA-licensed breeder (i.e., breeder with more than four breeding females) sells dogs to the public in Maryland, Opening Br. 17. In short, plaintiffs’ complaint does not support an inference that the “probable effect[]” of the Pet Store Statute will be to drive business to Maryland sellers and away from out-of-state breeders. Hazel, 813 F.3d at 152 (internal quotation marks omitted).
As for discriminatory purpose, we agree with the district court that plaintiffs have not plausibly alleged that the Maryland General Assembly enacted the Pet Store Statute with intent to discriminate against out-of-state economic interests. To support their claim, plaintiffs quote statements in the legislative history from the bill‘s sponsor, Maryland State Senator Ben Kramer. In a committee hearing, Kramer said: “[Y]ou‘ll notice that no small breeder, no responsible breeder has sent you written opposition or is providing oral opposition. We are talking [in this bill about] these big out of state breeders who sell by the thousands that are here in opposition.” J.A. 62. Kramer added: “This [bill] deals with the out-of-state massive corporations that are just literally by the thousands turning over puppies every year and sourcing through puppy mills.” J.A. 62–63. In the same committee
Our review of the legislative history attached to the complaint, however, confirms the district court‘s conclusion that plaintiffs took Senator Kramer‘s comments out of context. During the same hearing on which plaintiffs rely, Kramer also stated, for example: “There is nothing that would restrict your ability, if you found a responsible breeder in Pennsylvania, Massachusetts, or California from selling you a [] puppy and you‘ll still be able to do that.” J.A. 423. He went on to say that nothing prevented consumers “from buying [a puppy] from [an out-of-state breeder and] having it shipped here.” J.A. 424. And just before he discussed the bill‘s putative benefits for mom-and-pop businesses, Kramer commented that “if there‘s a big Missouri puppy mill and you decided they‘ve got a puppy you want, you‘ll still be able to buy directly from them. They can ship to you.” J.A. 431.
A broader look at the history of the Pet Store Statute and its predecessor law reveals the Maryland General Assembly‘s concern over puppy mills, its desire to hamper puppy mills’ ability to sell dogs in Maryland, and its desire to protect Maryland consumers from purchasing unhealthy dogs. Plaintiffs acknowledge this in their complaint, recognizing
The district court was correct to dismiss Count 2 because plaintiffs failed to plausibly allege that the Pet Store Statute impermissibly discriminates against interstate commerce in purpose or effect.
B.
In Count 4, plaintiffs allege that even if the Pet Store Statute does not discriminate against out-of-state economic interests in purpose or effect, it nonetheless violates the Commerce Clause because it flunks the balancing test the Supreme Court articulated in Pike v. Bruce Church, Inc., 397 U.S. 137 (1970).12
Under Pike, “[w]here the statute regulates even-handedly to effectuate a legitimate local public interest, and its effects on interstate commerce are only incidental, it will be upheld unless the burden imposed on such commerce is clearly excessive in relation to the putative local benefits.” Id. at 142; see Dep‘t of Revenue of Ky. v. Davis, 553 U.S. 328, 337–338 (2008). The Supreme Court has recently cautioned against “overstat[ing] the
To survive Pike balancing, a statute “must be reasonably tailored” but “need not be perfectly tailored.” Yamaha Motor Corp. v. Jim‘s Motorcycle, Inc., 401 F.3d 560, 569 (4th Cir. 2005). The “extent of the burden” on interstate commerce that will be tolerated “depend[s] on the nature of the local interest involved, and on whether it could be promoted as well with a lesser impact on interstate activities.” Pike, 397 U.S. at 142. We “proceed with deference to the state legislature” when assessing the law‘s putative benefits and consider only “whether the legislature had a rational basis for believing there was a legitimate purpose that would be advanced by the statute.” Yamaha Motor Corp., 401 F.3d at 569. Analyzing the law‘s burdens “requires closer examination,” especially “when the burdens fall predominantly on out-of-state interests.” Id. Although state laws “frequently survive” Pike scrutiny, Davis, 553 U.S. at 339, “[t]he fact-intensive character of this inquiry . . . counsels against a premature dismissal,” Hazel, 733 F.3d at 546.
Plaintiffs contend the district court prematurely dismissed Count 4, but we disagree. Because plaintiffs failed to “plead facts ‘plausibly’ suggesting a substantial harm to interstate commerce” or that the legislature lacked a rational basis to believe the Pet Store
To start, the Maryland General Assembly articulated legitimate purposes for the Pet Store Statute. Plaintiffs acknowledge that the legislature hoped to “eradicate so-called ‘puppy mills,‘” “reduce the number of animals in shelters,” and “protect[] consumers from purchasing unhealthy animals.” J.A. 71–72. But plaintiffs allege that these purported benefits are illusory because the General Assembly lacked sufficient evidence from which to conclude that retail pet stores contributed to these problems or that the Pet Store Statute‘s prohibition would achieve the legislature‘s goals. Yet the General Assembly, or one of its committees, heard testimony about the dangers of puppy mills and their negative effects on Maryland consumers, that retail pet stores and brokers sold pets sourced from puppy mills, and that problems plague USDA licensing and enforcement. It also heard contrary testimony. The legislature thus had a rational basis for the Pet Store Statute and acted within the legislative purview by hearing conflicting information about a problem and choosing among possible solutions. The judicial branch is ill-suited “to ‘second-guess the[se] empirical judgments of lawmakers concerning the utility of legislation‘” and must “giv[e] due deference to the body whose primary responsibility it is to judge the benefits and burdens of” legislative action. Hazel, 813 F.3d at 156 (quoting CTS Corp., 481 U.S. at 92).
Further, plaintiffs failed to plausibly allege that the Pet Store Statute substantially burdens interstate commerce, much less that its burdens are “clearly excessive” in
V.
The district court correctly held that Maryland‘s Pet Store Statute is not preempted by the federal Animal Welfare Act and does not violate the Constitution‘s Commerce Clause. Accordingly, the judgment of the district court is
AFFIRMED.