The Art & Antique Dealers League of Am., Inc. v. SeggosThe Art & Antique Dealers League of Am., Inc. v. Seggos
* The Clerk of Court is respectfully directed to amend the caption to the form above, so as to reflect the correct name of the National Antique and Art Dealers Association of America, Inc., as well as the correct party status of the Humane Society of the United States, Center for Biological Diversity, Natural Resources Defense Council, Inc., and Wildlife Conservation Society as Intervenor-Defendant-Appellees, as above.
Before: LEVAL, SULLIVAN, and PÉREZ, Circuit Judges.
In their suit challenging New York State Environmental Conservation Law § 11-0535-a (the “State Ivory Law“), Plaintiffs The Art and Antique Dealers League of America, Inc. and The National Antique and Art Dealers Association of America, Inc. appeal from the judgment of the United States District Court for the Southern District of New York (Schofield, J.) in favor of Defendant Basil Seggos, the Commissioner of the New York State Department of Environmental Conservation. The district court dismissed Plaintiffs’ claim that the State Ivory Law is preempted by the federal Endangered Species Act (“ESA“),
JUDGE SULLIVAN dissents in a separate opinion.
CALEB R. TROTTER, Pacific Legal Foundation, Sacramento, CA (James M. Manley, Pacific Legal Foundation, Phoenix, AZ, Alan E. Sash, McLaughlin & Stern, LLP, New York, NY, on the brief), for Plaintiff-Appellants.
GRACE X. ZHOU, Assistant Solicitor General (Barbara D. Underwood, Solicitor General, Steven C. Wu, Deputy Solicitor General, on the brief), for Letitia James, Attorney General, State of New York, New York, NY, for Defendant-Appellee.
RALPH E. HENRY (Rebecca A. Cary, on the brief), The Humane Society of the United States, Washington, DC, for Intervenor-Defendant-Appellees.
LEVAL and PÉREZ, Circuit Judges:
BACKGROUND
I. The Pertinent Rules Governing Commerce in Ivory
In 1973, Congress enacted the ESA, restricting commerce in products made from endangered and threatened species.
The ESA prohibits the import and export of endangered species and any part or product derived from them,
These restrictions are subject to exceptions, two of which are relevant here. First,
The State Ivory Law, enacted in 2014, provides that, subject to specified exceptions, “no person shall sell, offer for sale, purchase, trade, barter or distribute an ivory article or rhinoceros horn.”
These exceptions to the State‘s prohibitions differ from the exceptions to the federal prohibitions in two important ways. First, the State law‘s exception for antiques applies only to items consisting of less than twenty percent ivory, while the ESA‘s Antiques Exception contains no such limitation. Accordingly, commerce in antique products consisting of twenty percent ivory or more runs afoul of the State Ivory Law but not necessarily of the ESA. Second, the State Ivory Law, unlike the federal regulation, does not include a de minimis exception for items containing small amounts of African elephant ivory that are not necessarily antiques.
The State Ivory Law authorizes the DEC Commissioner to issue licenses or permits for the sale of certain ivory articles.
II. This Litigation
The Dealers’ complaint alleges that the State Ivory Law is preempted by the ESA and its implementing regulations. It also asserts that the Display Restriction, a condition of DEC licenses, violates the First Amendment. The Humane Society of the United States, Center for Biological Diversity, Natural Resources Defense Council, Inc., and Wildlife Conservation Society (“Intervenors“) intervened as defendants. The district court dismissed Plaintiffs’ preemption claim. Art & Antique Dealers League of Am., Inc. v. Seggos, 394 F. Supp. 3d 447 (S.D.N.Y. 2019). Following discovery, the district court denied Plaintiffs’ motion for summary judgment and granted summary judgment to Defendant on the First Amendment claim. Art & Antique Dealers League of Am., Inc. v. Seggos, 523 F. Supp. 3d 641 (S.D.N.Y. 2021). Plaintiffs brought this appeal.
I. Preemption
We turn first to the question of preemption. The Dealers contend that the district court erred in rejecting their claim that the State Ivory Law is preempted by the ESA and its implementing regulations. Having reviewed the grant of a motion to dismiss de novo, Fink v. Time Warner Cable, 714 F.3d 739, 740-41 (2d Cir. 2013), we agree with the district court that the State Ivory Law is not preempted.2
The Supremacy Clause provides that federal law “shall be the supreme Law of the Land; and the Judges in every State shall be bound thereby, any Thing in the Constitution or Laws of any State to the Contrary notwithstanding.”
(1) express preemption, where Congress has expressly preempted local law; (2) field preemption, where Congress has legislated so comprehensively that federal law occupies an entire field of regulation and leaves no room for state law; and (3) conflict preemption, where local law conflicts with federal law such that it is impossible for a party to comply with both or the local law is an obstacle to the achievement of federal objectives.
Id. at 104 (internal quotation marks omitted). Because Plaintiffs have abandoned their field preemption argument on appeal, we consider only express and conflict preemption. Appellants’ Br. at 23 n.7.
A. Express Preemption
Express preemption occurs where “Congress . . . withdraw[s] specified powers from the States by enacting a statute containing an express preemption provision.” Arizona v. United States, 567 U.S. 387, 399 (2012); see also CSX Transp., Inc. v. Easterwood, 507 U.S. 658, 664 (1993).
The ESA includes an express preemption clause. It reads as follows:
Any State law or regulation which applies with respect to the importation or exportation of, or interstate or foreign commerce in, endangered species or threatened species is void to the extent that it may effectively (1) permit what is prohibited by this chapter or by any regulation which implements this chapter, or (2) prohibit what is authorized pursuant to an exemption or permit provided
for in this chapter or in any regulation which implements this chapter. This chapter shall not otherwise be construed to void any State law or regulation which is intended to conserve migratory, resident, or introduced fish or wildlife, or to permit or prohibit sale of such fish or wildlife. Any State law or regulation respecting the taking of an endangered species or threatened species may be more restrictive than the exemptions or permits provided for in this chapter or in any regulation which implements this chapter but not less
restrictive than the prohibitions so defined.
This appeal requires us to interpret the first sentence of the preemption provision. We begin with the text of the statutory provision and its surrounding context. The first sentence (relating to state laws and regulations that concern importation, exportation, and interstate and foreign commerce) is in two clauses. Clause 1 addresses state law that is more permissive than the ESA, in that it purports to allow conduct that is prohibited by federal law. Clause 2, the clause that concerns us here, addresses state law that is stricter than the ESA, in that it prohibits conduct that is allowed under federal law.
The Dealers argue that Clause 2 preempts the State Ivory Law, or at least those provisions of it that effectively prohibit transactions that the ESA allows (such as the interstate sale of certain antique products consisting of more than twenty percent ivory and of non-antiques containing a de minimis
amount of African elephant ivory). They argue that “Congress used exceedingly broad language” in its express preemption provision. Appellants’ Br. at 30. We disagree. The scope of the pertinent portion of the ESA‘s preemption clause is narrower than the Dealers recognize, and the preemption provision as a whole expresses a clear intention of Congress to allow state law to be more protective of endangered species than the ESA.
Clause 1, relating to more permissive state law, does indeed use very broad language. It voids any state law that “permit[s] what is prohibited by this chapter.”
chapter . . . .”
The Dealers and the dissent argue that the change of language does not matter—that the terminology Congress employed communicates the same meaning as it would have if it had expressly voided provisions of state law that “may prohibit what is authorized by this chapter.” Evaluating the Dealers’ argument requires that we examine the taxonomy established in the ESA to determine what the Act means by “authorized pursuant to an exemption or permit.”
Section 1539 sets out “exceptions” to the ESA‘s prohibitions. Included among these “exceptions” are “exemptions” and “permits,” as well as other
categories of “exceptions”
Various subsections of
prescribe . . . .”
Act which, by their terms, automatically provide exclusions from the scope of the Act‘s coverage.
The Act repeatedly uses “exemption” in this fashion. More than eighty times in
In contrast, the statute uses the word “exception” to denote (in addition to “exemptions” and “permits“) provisions that categorically narrow the scope of the Act‘s coverage by simple application of the statutory terms without need for administrative
Our conclusion that the ESA‘s use of the word “exemption” refers to such an administrative grant of authority is further reinforced by the Act‘s similar usage of the word “permit,” with which the term “exemption” is paired in the preemption clause. A “permit,” according to dictionary definition, is an individualized act of authorization: “[a] certificate evidencing permission; an official written statement that someone has the right to do something.” Permit, Black‘s Law Dictionary (12th ed. 2024). The ESA uses the term “permit” exclusively to refer to such written individual authorizations. See, e.g.,
Co., 513 U.S. 561, 575 (1995). Although our interpretation of “exemption” does not depend upon it, the canon sensibly suggests here, because of the statute‘s coupling of “exemption” with “permit,” that both words refer to administrative individualized authorizations issued in response to an application. Further, the other two instances in which the ESA uses the phrase “exemption or permit” refer to individualized administrative authorizations, and both appear directly after a subsection outlining individualized exemptions for which an application to the Secretary is required. See
It remains for us to apply the definitions derived from
entirety of the provision, rather than only the clause in contention. As a whole, the preemption provision‘s three sentences complement one another and clarify Congress‘s desired goal.
The first sentence addresses state laws relating to importation, exportation, or interstate or foreign commerce in endangered or threatened species. See
allowed to do what the Secretary has expressly authorized by an exemption or permit.
Congress‘s limitation on the scope of Clause 2 was purposeful, a conclusion that the preemption provision‘s second sentence bolsters. The next sentence expressly states, in part, “This chapter shall not otherwise be construed to void any State law or regulation which is intended to conserve migratory, resident, or introduced fish or wildlife . . . .”
The final sentence of the preemption provision further clarifies this policy goal. The final sentence concerns “the taking of an endangered species.”
Thus, all three sentences of the ESA‘s express preemption provision take pains to provide that state laws establishing protections for endangered and threatened species beyond those established by the ESA are not voided. The fact that Congress intended to so empower states to enact protections of endangered species going beyond those adopted in the ESA is underlined in the House Report. We look to this legislative history to confirm our interpretation of the text. The House Report clearly expresses Congress‘s intention that “states would and should be free to adopt legislation orregulations that might be more restrictive than that of the Federal Government and to enforce the legislation.” H.R. Rep. No. 93-412, at 7 (1973). The preemption provision of
Finally, Congress‘s distinction between “exceptions” on the one hand, and “exemptions and permits” on the other, makes logical sense, especially when considering Congress‘s declared intention, noted above, to leave states free to protect species more broadly than the ESA does. Through the express preemption provision, Congress gave effect to individualized decisions made by federal officials, via an exemption or permit, notwithstanding a contrary
For all these reasons, we conclude that the phrase “authorized pursuant to an exemption or permit provided for in this chapter,”
Plaintiffs finally point to the ESA‘s savings clause in the second sentence of the express preemption provision. They argue that the clause‘s preservation of state power to “permit or prohibit sale” of “migratory, resident, or introduced fish or wildlife,”
We therefore find that the ESA‘s express preemption clause does not expressly preempt the State Ivory Law.
B. Response to the Arguments of the Dissenting Opinion
The dissenting opinion relies on several arguments regarding express preemption, each of which we find unpersuasive. First, it relies on a dictionary definition of “exemption” — “[f]reedom from a duty, liability, or other requirement; an exception,” Exemption, Black‘s Law Dictionary (11th ed. 2019)—to show that the word means nothing different in this context from an “exception.” Because those two words can be used to mean the same thing, the dissent argues that the statute uses the two words interchangeably, without differentiation, so that, for any usage in the statute of either word, the other could be substituted without affecting the meaning. Because, accordingto dictionary definition, to be “exempted” from obligations is to be “excepted” from them, the dissent argues that the two words necessarily have the same meaning and are used interchangeably in the ESA.
We do not dispute that an “exemption” is an “exception.” Indeed, the ESA treats an “exemption” as an “exception.” But Congress is free to use words in statutes with an assigned meaning, and it has done so in the ESA. It has chosen to establish “exemptions” (as well as “permits“) as subcategories of “exceptions.” “Exceptions” include both statutory provisions
In making this argument, the dissenting opinion does not confront evidence of Congress‘s intent, which undermines its reading. For starters, itwould be needlessly confusing for Congress to use different words interchangeably to mean the same thing, without any reason to do so. The dissent suggests no reason why Congress would have wished to sow needless confusion in this manner. As we have explained above, examination of the actual usage of the two words reveals that Congress used them to mean slightly different things. See supra pp. 13-18.
The dissent does not ask, much less answer, why, in
Second, based on the single instance in which the ESA uses “exemption” to refer to a categorical, self-executing exception from the Act‘s prohibitions, the dissent argues that this single nonconforming use amongmore than eighty shows Congress‘s intention to use the two words interchangeably. Dissenting Opinion at 5-6 (citing
The argument is not convincing. Where Congress has 1) clearly documented, as in
Third, the dissent notes that the implementing regulations of the ESA do not adhere to the taxonomy, which is so scrupulously followed in the Act itself, but appear to use “exception” and “exemption” interchangeably to mean the same thing. The dissent then argues that we should interpret the Act as using those terms interchangeably as they are used in the regulations.
This argument is certainly not frivolous. We would be on firmer ground if the regulations adhered to
Since the Supreme Court‘s decision in Loper Bright Enterprises v. Raimondo, 144 S. Ct. 2244 (2024), terminating the era of Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc., 467 U. S. 837 (1984), the importance of agency interpretations of statutes is much diminished. “The [Administrative Procedure Act] . . . codifies,” the Loper Court wrote, “for agency cases the unremarkable, yet elemental proposition reflected by judicial practice dating back to Marbury: that courts decide legal questions by applying their own judgment.” 144 S. Ct. at 2261. An administrative agency does not have authority to pass regulations that are inconsistent with the meaning of astatute. The fact that the implementing regulations at times fail to observe the distinction drawn by the Act between “exception” and “exemption” does not mean that the statute uses these words interchangeably. In the post-Chevron era, regardless of whether a statute is deemed to be ambiguous or unambiguous, interpretation of the statute is a question of law, and accordingly, it is the court, and not the administrative agency, that determines its meaning. See id. While the court may of course be persuaded by the correctness of the agency‘s interpretation, see Skidmore v. Swift & Co., 323 U.S. 134, 139-40 (1944), the court is not required to defer to the agency‘s interpretation. Id. The court makes its own determination of the meaning of ambiguous provisions. Loper Bright, 144 S. Ct. at 2273.
For this instance, we have no doubt, given the care with which Congress structured the relationship between “exceptions” and “exemptions,” and the consequence it intentionally gave to the difference between them with respect to preemption, that Congress did not give the two words the same meaning in the ESA.
We recognize that the one, perhaps only, circumstance in which consequences attach to distinctions between “exception” and “exemption” isthe operation of the preemption provisions of
Finally, the dissent argues that its interpretation is supported by the fact that the Marine Mammal Protection Act, which is cross-referenced in the ESA, does not distinguish between “exceptions” and “exemptions.” Dissent at 7. We are not persuaded. The Marine Mammal Protection Act is a distinct act. Its usages do not override the system of usages carefully established in the ESA.
C. Conflict Preemption
The Dealers further contend that the State Ivory Law is nullified by virtue of the doctrine of conflict preemption. Even if the State Ivory Law is not expressly preempted by the ESA, under the doctrine of conflict preemption, state law is preempted “where it is impossible for a private party to comply with both state and federal law and where . . . [the state law] stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress.” Crosby v. Nat‘l Foreign Trade Council, 530 U.S. 363,372-73 (2000) (internal quotation marks and citations omitted). The Dealers argue that the State Ivory Law is an obstacle to the purposes and objectives of the ESA.
The Dealers nonetheless argue that the State law stands as an obstacle to the ESA‘s objective of allowing interstate sales of objects within the scope of the ESA‘s exceptions, because the State‘s prohibition of intrastate sales of these objects renders it difficult to conduct profitably a business in interstate sales. We agree with the district court that the Dealers’ arguments fail to make a case of conflict preemption. “[F]ederal law does not preempt state law under [conflict] preemption analysis unless the repugnance or conflict is so direct and positive that the two acts cannot be reconciled or consistently standtogether.” Marentette v. Abbott Lab‘ys, Inc., 886 F.3d 112, 117 (2d Cir. 2018) (first alteration in original) (internal quotation marks omitted). It is possible, even likely, that a restriction on intrastate sales could make it much less profitable to be an interstate ivory dealer in New York. However, there is not an irreconcilable conflict between allowing the out-of-State sale of some items and prohibiting the sale of those same items within the State. As discussed above, the DEC will not deny permits for interstate or foreign sales of ivory. Because Plaintiffs are free to sell these items across state lines in accordance with the ESA, there is no basis to conclude that the State Ivory Law undermines the regulatory scheme established in federal law.
We therefore affirm the district court‘s dismissal of Plaintiffs’ preemption claim.
II. First Amendment
Under the State Ivory Law, those seeking to engage in the “sale, offering for sale, purchase, trading, bartering or distribution of ivory articles” must obtain a license from the DEC.
This claim raises two essential questions. The first question is whether a dealer‘s display of an ivory product to a potential customer to aid in making a sale, although such display involves neither oral nor written communication, nonetheless constitutes speech protected as such by the First Amendment. Plaintiffs bear the burden on this question. Plaintiffs, however, are relieved of that burden in this case by the fact that Defendant (and Intervenors) conceded the issue by acknowledging that the Display Restriction restrains commercial speech. Defendant and Intervenors do not argue otherwise.
The second question is whether the State-imposed restriction on Plaintiffs’ speech passes the test prescribed by the Supreme Court in Central Hudson Gas & Electric Corporation v. Public Service Commission, 447 U.S. 557 (1980), for such restrictions on commercial speech. The Central Hudson test, as discussed below, raises several issues, and for different issues the burden falls on different parties. The district court rejected Plaintiffs’ claim of a FirstAmendment violation. It granted the State‘s motion for summary judgment.
We
The First Amendment, of course, protects speech. Ordinarily, it does not protect conduct. However, in some circumstances, conduct is sufficiently communicative that it can qualify as protected speech. See Lorillard Tobacco Co. v. Reilly, 533 U.S. 525, 567 (2001). Plaintiffs’ claim that the Display Restriction violates the First Amendment inevitably raises the question of whether a dealer‘s display of ivory products to a potential customer is speech in the first place. Compare Cent. Hudson Gas & Elec. Corp., 447 U.S. at 564 (“The First Amendment‘s concern for commercial speech is based on the informational function of advertising.“), with United States v. O‘Brien, 391 U.S. 367, 376 (1968) (“We cannot accept the view that an apparently limitless variety of conduct can be labeled ‘speech’ whenever the person engaging in the conduct intends thereby to express an idea.“).
Because the opposing parties have conceded that speech protected by the First Amendment is restrained by the Display Restriction, the question whether Plaintiffs prevail on this issue is, in one sense, simplified, but is, in another sense, complicated.
Defendant‘s and the Intervenors’ concession that the Display Restriction implicates speech simplifies the determination as to whether Plaintiffs prevail with respect to this essential element of their case. Because the adverse parties do not claim otherwise, there is no dispute as to whether a display of ivory products for sale constitutes speech on which this court must rule. The court is entitled to treat the concession as dispositive of the issue so that, if the ultimate judgment turns on this question, Plaintiffs win.
The court‘s reliance on this concession does complicate the effect such a ruling has on the law with respect to this issue. A party‘s concession of an issue of law on which the adversary bears the burden may eliminate the issue from the case by relieving the adversary of its burden. Such a concession is not, however, the equivalent of the court‘s reaching a decision on a controverted issue. Otherwise put, a party‘s concession on a disputed issue of law may control the outcome of the particular dispute between the parties, but it does not necessarily establish a legal precedent, which, under the rule of stare decisis, will control the decision of other unrelated cases.
We explore below the significance of the concession. For the moment, it is sufficient to note that the concession can suffice to ensure that Plaintiffs willprevail on their First Amendment argument if they succeed on all other elements of their claim.
It is the function of federal courts under the Cases and Controversies Clause of Article III of the Constitution,
Furthermore, unless the answer to the question is obvious, a court is disadvantaged in attempting to reach a reliable conclusion on a question on which no conflicting arguments have been presented. At times, of course, the answer to a question is sufficiently obvious that a court rules on it notwithstanding the absence of dispute, and at other times courts undertake, notwithstanding
In this case, we do not believe that the answer to whether a dealer‘s display is protected speech is obvious. Because the parties have put forth nodisagreement on the question and have not furnished us with arguments on either side disputing the question, our court need not, and does not, reach a conclusion on the undisputed issue.
There are many circumstances in which a court may, and should, grant (or deny) relief as between parties based on concessions by the adverse party or deficiencies in the adversary‘s advocacy, without reaching a conclusion on the merits of the legal question. The most obvious of these occurs where the defendant defaults, in failing either to answer the complaint, or to comply with the court‘s directions, or to respond to the plaintiff‘s motion for summary judgment. In such cases, it can be appropriate for the court to grant the relief demanded in the complaint to the plaintiff based on the defendant‘s failure, without needing to decide whether the law is necessarily as the plaintiff contends.
In such circumstances, the court may lack an adequate basis for reaching a conclusion of law, much less for making a precedential ruling on the question. While a plaintiff might be entitled to relief, such as an injunction or an award of damages, if points of law essential to the plaintiff‘s case have been conceded or forfeited by the defendant and the plaintiff has prevailed inproving the remaining essential elements, a court might be well advised to grant the plaintiff relief while refraining from establishing a precedent of law to the effect that the facts of the case constituted a violation of law.
We here find that to be the prudent path. We do not think the answer is obvious whether the Display Restriction affects speech or only non-speech conduct. The failure to argue that speech is not affected has effectively waived that argument and conceded the issue. However, it does not necessarily follow that speech is affected by the restriction. Had contrary arguments been presented to us, we cannot say with confidence that we would not have been persuaded by them. At times, it is difficult to be confident of a conclusion made in the absence of argument to the contrary. We have clear justification (relying on the concession) for deeming Plaintiffs to have prevailed on this essential element of their claim without our reaching a substantive conclusion on the question.
Lawyers’ concessions on points of law (and forfeitures by failing to argue them) are tricky and at times inscrutable. They are sometimes tactical in the sense that a lawyer may refrain from making one argument lest it detract from the court‘s focus on (or even tend to contradict) another argument thatthe lawyer considers more important. They can also result from a lawyer‘s error in judgment—in failing to recognize the strength of an available argument. Accordingly, for courts to proclaim a governing legal precedent based on an adverse party‘s concession on a point of law creates a significant risk of establishing a bad law, and all the more so when the concession is inferred solely based on the adverse party‘s failure to argue the point. See Horne v. Coughlin, 191 F.3d 244, 246-47 (2d Cir. 1999). A court has a responsibility in establishing a legal precedent to get the law right, especially when the validity of a statute or regulation is at stake. A party‘s concession on an issue of law may well furnish an adequate basis for granting relief to the adverse party, but is often not an adequate basis for a court to
We accordingly conclude that, by virtue of their adversaries’ concessions that the Display Restriction affects speech that is protected by the First Amendment, Plaintiffs are relieved of the responsibility of demonstrating that point. We can therefore assume for the resolution of this case that the restriction affects speech and implicates the First Amendment without establishing a precedent to that effect.
The next questions are what degree of protection is afforded to this commercial speech—intermediate or strict scrutiny, and ultimately whether the Display Restriction is offensive to the First Amendment. Plaintiffs contend that the Display Restriction‘s interference with their conduct, which was infused with speech, calls for strict scrutiny. Nonetheless, they argue that, even if this speech is less vigorously protected, so that the interfering restriction is judged only under intermediate scrutiny, the restriction nonetheless violates the First Amendment. We examine that contention first.
As a general matter, restrictions on commercial speech are subject to intermediate scrutiny, as set forth in Central Hudson. Under the Central Hudson test, courts assess “whether (1) the expression is protected by the First Amendment; (2) the asserted government interest is substantial; (3) the regulation directly advances the government interest asserted; and (4) the regulation is no more extensive than necessary to serve that interest.” Vugo, Inc. v. City of New York, 931 F.3d 42, 44 (2d Cir. 2019) (citing Cent. Hudson, 447 U.S. at 566). On this issue, it is Plaintiffs who have made a concession that the State has a substantial interest in stopping illegal sales of ivory goods in New York, and that the restriction advances this interest. Therefore, only the final
prong of the Central Hudson
test—whether the regulation is no more extensive than necessary—is in dispute.In determining whether this fourth prong of the Central Hudson
test is met, we must consider the “fit between the legislature‘s ends and the means chosen to accomplish those ends.” Rubin v. Coors Brewing Co., 514 U.S. 476, 486 (1995) (internal quotation marks omitted). We require “a fit that is not necessarily perfect, but reasonable; that represents not necessarily the single best disposition but one whose scope is in proportion to the interest served; that employs not necessarily the least restrictive means but . . . a means narrowly tailored to achieve the desired objective.” Bd. of Trs. of State Univ. of N.Y. v. Fox, 492 U.S. 469, 480 (1989) (internal quotation marks and citation omitted). The State “bears the burden of justifying its restrictions.” Id.The State contends that there is a reasonable fit between the Display Restriction and the State‘s interest in preventing illegal sales of ivory. It explains that, if the object for sale, the buyer, and the seller were all physically present in the same location, the risk that the seller would purchase the item on the spot, thereby engaging in an illegal intrastate sale, would be high. By preventing the seller from displaying the ivory object for the buyer‘s inspection, the Display Restriction “impedes the immediate consummation of such sales.” Appellee‘s Br. at 49.
Nevertheless, we find, on this record, assuming as the State concedes that the Display Restriction impinges on speech, that the restriction is more extensive than necessary to serve the State‘s interest. The State argues that the Display Restriction leaves “open ample channels of communication,” comparing it to the restrictions
But the Display Restriction is undeniably broader than the restrictions upheld in Lorillard. Rather than merely regulating the way in which the items are displayed, as the Lorillard restrictions did, the Display Restriction prevents any display of the product for sale, including ivory goods for lawful interstate or international sale. If a New Jersey customer is interested in a product offered by a New York dealer, for example, that customer cannot travel to New York to see that item before purchasing. Instead, if the customer wants to inspect the item before purchase, that customer and the dealer must arrange for a viewing of the item outside of New York State. The State argues that this is not excessively burdensome because the Dealers can communicate in any other manner—for example, by displaying the item in print or posting information online. The State also notes that “nothing prevents [the Dealers] from physically displaying those products outside New York.” Appellee‘s Br. at 43.
The State‘s arguments are unpersuasive in light of undisputed facts in the record. While it is true that ivory dealers remain free to advertise their products in print and online, these modes of communication fail to convey adequately information needed by purchasers about the items’ quality and authenticity, two factors that are likely of great importance to interested buyers. Indeed, the declaration of the State‘s own witness, DEC Captain Antone Paluch, corroborates the importance of physical inspection for a purchaser of ivory: “In my experience, it is impossible to assess the genuineness or the condition and value of ivory without inspecting it in person, and therefore buyers of ivory of significant value are unwilling to make a purchase of ivory that they have not inspected in person.” App‘x at 144. If it is, as Captain Paluch suggests, impossible to assess quality and authenticity without physical inspection,4 then the State‘s Display Restriction amounts to a near-total ban within the State of New York on the conveyance of certain vitally important information about goods for lawful interstate or international sale.
Accordingly, prevention of the display and handling of ivory products, many of which include artistic carvings, is far more detrimental to the sale of ivory than requiring that a salesperson act as intermediary to a customer‘s handling of a pack of cigarettes is to the sale of cigarettes. The restriction on a customer‘s handling of a pack of cigarettes does not deny the customer information necessary to the customer‘s decision to purchase.
The burden of the Display Restriction is only slightly alleviated by the
Given the State‘s concession that exhibiting ivory objects offered for sale falls within the scope of commercial speech, the Display Restriction thus amounts to “suppression of [the] commercial speech” of the Dealers. Bad Frog Brewery, Inc. v. N.Y. State Liquor Auth., 134 F.3d 87, 101 (2d Cir. 1998). While we generally afford a state “considerable leeway . . . in determining the appropriate means to further a legitimate governmental interest, even when enactments incidentally limit commercial speech,” Clear Channel Outdoor, Inc. v. City of New York, 594 F.3d 94, 105 (2d Cir. 2010) (internal quotation marks omitted) (omission in original), that latitude has its limits.
We find, on this record, that the Display Restriction is more extensive than reasonably appropriate to promote the State‘s interest in preventing illegal transactions. The Dealers have proposed an alternative solution, which they refer to as “Segregation and Labeling,” which would require stores to segregate ivory permitted for sale in interstate or international commerce with a notice informing the viewer that the item cannot be sold in New York.5 While it is not necessary that the State show that such an alternative would be wholly ineffective,6 the State must make a “showing . . . that a more limited restriction . . . would not serve adequately the State‘s interests.” Cent. Hudson, 447 U.S. at 570. The State has not done so here.
The State relies on a single anecdote in which Captain Paluch described how he, acting in an undercover capacity, purchased an ivory item in an illegal intrastate transaction, despite a sign stating that the item was not for sale.7 The State contends that this incident illustrates the ineffectiveness of the Dealers’ proposed alternative. As Plaintiffs note, however, the merchant in that instance was unlicensed
Display Restriction also does not prevent a dealer from violating the restriction in the course of conducting an illegal sale.
The district court found that Plaintiffs’ proposed alternative would not advance the State‘s interest “as effectively” as the Display Restriction. Seggos, 523 F. Supp. 3d at 648. But this misstates what constitutes a “reasonable fit” under the Central Hudson test. The question is not whether the operative restriction is the most effective disposition or is more effective than proposed alternatives. Instead, the relevant question is whether the “scope [of the operative restriction] is in proportion to the interest served.” Long Island Bd. of Realtors, Inc. v. Village of Massapequa Park, 277 F.3d 622, 627 (2d Cir. 2002) (quoting Fox, 492 U.S. at 480); see also N.Y. State Ass‘n of Realtors, Inc. v. Shaffer, 27 F.3d 834, 844 (2d Cir. 1994) (”Central Hudson requires us to evaluate not merely the existence of a particular type of harm but the scope of the restriction in light of the degree of the harm.“). Therefore, were the State to impose an extraordinarily severe restriction on speech where a much less intrusive alternative would have been nearly as effective in achieving the State‘s asserted interest, this court could very well find that the fit between the restriction and the interest was not reasonable.
Here, the State has enacted a restriction that prohibits the communication of information that is crucially important to a potential lawful buyer (namely, the quality and authenticity of the item offered for lawful sale) within the State. That restriction places an excessive burden on what we assume, based on the State‘s concession, is speech. The State has failed to show that its interests would not be adequately served by other measures that would be less burdensome. See Bad Frog Brewery, 134 F.3d at 101 (finding that defendant “gave inadequate consideration to alternatives to [a] blanket suppression of commercial speech“). We conclude that the restriction “lacks a reasonable fit” with the State‘s asserted interest in preventing illegal transactions, id. (internal quotation marks omitted), and thus fails the Central Hudson test.8
We rule that the Dealers are entitled to relief in the form of an injunction barring enforcement against their members of the Display Restriction. For the reasons explained above, however, in so ruling, we rely on the State‘s concession that the Dealers’ display of ivory products to potential customers is speech. We reach no conclusion and state no precedent on whether, if this issue were contested, we would find
CONCLUSION
For the foregoing reasons, we AFFIRM the district court‘s dismissal of Plaintiffs’ preemption claim and REVERSE the district court‘s grant of summary judgment to Defendant on Plaintiffs’ constitutional claim. We direct the district court to grant injunctive relief barring the enforcement of the Display Restriction against Plaintiffs and their members. We leave it to the district court whether to issue, in addition, a declaratory judgment that the State may not enforce the Display Restriction against Plaintiffs and their members and whether to grant other relief not inconsistent with this opinion.
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RICHARD J. SULLIVAN, Circuit Judge, dissenting:
Although I happen to agree with the majority‘s conclusion that the Display Restriction impermissibly restricts commercial speech under the test enunciated by the Supreme Court in Central Hudson Gas & Electric Corp. v. Public Service Commission of New York, 447 U.S. 557 (1980), I see no reason to even reach that issue since, in my view, the
As the majority notes, the
When construing a statute, we begin with the statutory text. See Engine Mfrs. Ass‘n v. S. Coast Air Quality Mgmt. Dist., 541 U.S. 246, 252 (2004). The
The NYSIL similarly prohibits individuals from “sell[ing], offer[ing] for sale, purchas[ing],
These differences make plain that the NYSIL prohibits certain sales of ivory that would otherwise be authorized under the
The majority contends that the Antiques and De Minimis Exceptions cannot give rise to express preemption under the
The text of the
claims the term “exemption” does not cover. See
The majority brushes aside this language as a regrettable oversight on the part of Congress. See id. at 27. But we are not to infer such errors in the drafting of laws. See E.P.A. v. EME Homer City Generation, L.P., 572 U.S. 489, 508-09 (2014) (“[A] reviewing court‘s task is to apply the text of the statute, not to improve upon it.” (internal alterations and quotation marks omitted)). The statute makes no distinction between “exceptions” and “exemptions,” and neither do the
The majority also makes much of the fact that some variant of the word “exemption” is used “[m]ore than eighty times in [sections] 1536 and 1539 [to] refer[] to an administrative individual grant of authorization by the Secretary,” as opposed to “a categorical, self-executing application
In the face of these textual obstacles, the majority resorts to legislative history and “logical sense” to argue that a narrow interpretation of “exemption” best aligns with the “entirety” of
For all these reasons, I remain convinced that the undefined term “exemption” in
It is indisputably true that the Dealers’ operative complaint only explicitly challenges the NYSIL‘s application to “intrastate“—as distinct from interstate—commerce in ivory. J. App‘x at 86-87 ¶¶ 74-76, 96-97. But the use of the term “intrastate sale[s]” clearly tracks the meaning of “intrastate sale[s]” as defined by the Commissioner for purposes of enforcing the NYSIL. The district court appears to have uncritically concluded that what the Commissioner considers to be “intrastate commerce” in ivory necessarily falls outside of what the
The Commissioner‘s briefing was, to say the least, inconsistent on this point.2 Nevertheless, at oral argument, the Commissioner clarified his position that intrastate sales are those that are conducted within New York state—i.e., where the seller tenders the article and the buyer tenders
i.e., in-person sales of ivory articles in New York state—and interstate commerce as defined in the
For starters, the
Moreover, I agree with the Dealers that “because elephants and rhinos are not native to New York,” any “trade in antiques and art containing ivory” is “inherently . . . interstate commerce.” Dealers Br. at 31. Accordingly, I would find that the NYSIL is expressly preempted as to any sale of ivory articles covered by the Antiques and De Minimis Exceptions—including sales between New York sellers and New York buyers that are executed wholly within New York state lines.
While I am not aware of any case in which a federal court has construed the phrase “sell or offer for sale in interstate or foreign commerce” as used in the
In light of the foregoing, it seems to me that any sale of artworks or antiques containing ivory would constitute a sale “in interstate . . . commerce” under the
* * *
For the reasons stated above, I believe that the Antiques and De Minimis Exceptions are exemptions covered by the
district court‘s decision as to the Dealers’ preemption claim, without even reaching their First Amendment claim.
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