Yosh Sakamoto v. Duty Free Shoppers, Ltd.
764 F.2d 1285
9th Cir.
1985
Check Treatment

*1 SAKAMOTO, al., Yosh et

Plaintiffs-Appellants, SHOPPERS, LTD., al., FREE et

DUTY

Defendants-Appellees.

No. 84-1587. Appeals, States Court

Ninth Circuit.

Argued Nov. Submitted July

Decided Fitzgerald, Saipan, CM, M.

William for plaintiffs-appellants. Pipes, Pipes,

Riсhard A. Carbullido Agana, defendants-appellees. for Hug, Judge, concurring Circuit filed a HUG, TANG, SCHROEDER, Before opinion. Judges. Circuit

SCHROEDER, Judge. plaintiffs are in business of sell- ing gifts Guam. They tourists challenging brought legality this action agreement giv- of an exclusive concession of their competitors, Free Ltd., rights to sell Shоppers, exclusive deliver certain kinds of merchandise to de- parting passengers at the Guam The defendants this suit are Terminal. *2 1286 agreement: the concession because Guam not a state. The parties to Guam

the Guam, Free, correctly point Government of the out these Duty defendants states, implica- Authority, Authori- “negative and the limitations Guam clause, manager. flow from ty’s executive of the commerce tions” grant plenary the commerce clause’s granted summary The district authority Congress. over commerce to for the defendants аnd dismissed judgment not been deemed to have states have “[T]he plaintiffs’ principal conten- the action. The authority substantially the impede to free ‍‌‌​‌​‌​‌‌​‌‌‌​‌‌​​‌​​‌‌‌​‌​‌‌‌​​‌​‌​‌‌​‌​​​‌‌‌​​‍appeal concession tions on regulate or of commerce ... to those flow foreign agreement burdens interstate and which, national commerce phases in of the Commerce commerce violation uniformity, of the need national because of the States Constitution Clause regulation, any, if their be demand that affirm. and violates the antitrust laws. We single authority.” prescribed by a South- Duty Frеe plaintiffs business Arizona, ern Co. v. Pacific Japanese tourists in primarily aimed at 65 89 L.Ed. 1915 purchase gifts “omiyage” or to who Guam (footnote omitted). The historical conces- carry Japan. exclusive back of the clause has been con- role commerce began question here practice sion taxing limiting regulatory ac- fined entered and the current contract was by may which interfere with tion states competitive the result of into 1978 as Tribe, sovereignty. See L. Ameri- highest bidding. Duty Free submitted the (1978), Law at 336 can Constitutional bid, million, and was awarded $140 Reeves, Stаke, 447 quoted U.S. gave which it the year fifteen concession specified right exclusive to sell deliver airport. Proceeds from merchandise at the represent major source the contract unincorporated Since is an Guam funding construction and mainte- for the territоry powers may such enjoying terminal. nance of the delegated Congress by to it 1421a, Organic Act of U.S.C. § as vio- challenge In contract their of Guam is in essence an the Government clause, do plaintiffs lative of commerce government. instrumentality of the federal right of the Government of not contest the Wheeler, United States agen- Airport Authority, its and the Guam of busi- cy, limit contract number (1978). Plenary control L.Ed.2d 303 make on the permitted to sales nesses Congress the Guamanian over airport. plaintiffs Nor do premises provision that is illustrated Con directly inter- the cоntract contend Legis may any act gress annul of Guam’s ability to sell to customers their feres with Defendants lature. U.S.C. 1423i. complain § Plaintiffs about the elsewhere. negative impli goods therefore conclude right to deliver at on their limitation clause, designed of the commerce Thеy contend that the exclu- cations airport. authority, Free, pre- congressional cannot preserve which sive contract government, which is delivering previously pur- limit the Guamanian them vents Wheeler, departing passen- Congress itself. a creation of chased they аt L.Ed.2d airport, arrive at an at gers as foreign on interstate and undue burden

commerce. considering reported decisions While in num questions are few this or similar response threshold The defendants’ ber, they support position. defendants’ In argument, and with which to this Ballester, (1st F.2d 805 Buscaglia v. the limitations agree, is that we Cir.), denied, cert. places upon the the First Circuit governments com power of state to burden did not re- that the commerce clause of held merce do not Government unincorporated of Puer- strict the while the limitation regulation on state pоwer to Rico because had the through the commerce clause did under clause to limit the territories territo- apply by its own force to the Territory annuling rial “even action .to the extent of Alaska, the legislative power granted to legislation.” local Id. Sea Legislаture Territorial was such Cf. Services, v. Municipality Land Inc. *3 territory should be treated as if it of were (D.P.R.1980) Juan, F.Supp. 505 533 San a state. Alaska incorpo- at the time was an (decided Rico a com- after Puerto became territory, rated way well its to on state- holding although and monwealth hood, provisions and all of the United clause commerce to Puerto States applied. August Constitution Act of proprio vigore, prohibitive Rico ex its effect (codified ch. Stat. 37 512 § through on the binding commonwealth (1952)). at 48 23 U.S.C.A. § clause). the territories The incorporated distinction between ter- (Roach), In United States v. Husband R. thought ritories which are of as future (5th Cir.1971), denied, 453 F.2d 1054 cert. states, see Granville-Smith v. Granville- ‍‌‌​‌​‌​‌‌​‌‌‌​‌‌​​‌​​‌‌‌​‌​‌‌‌​​‌​‌​‌‌​‌​​​‌‌‌​​‍935, 1785, 406 92 U.S. S.Ct. 32 L.Ed.2d 136 Smith, 1, 553, 5, 349 U.S. 75 S.Ct. (1972), Fifth Circuit held that the Gov 99 L.Ed. unincorporated 773 and ter- ernor subject of the Canal Zone was not to ritories, which only to the “essentials” of imposed legisla limitations оn a state apply, goes Constitution new. body tive the commerce clause. Id. at back to the 1901 of Supreme series Court 1059-60. The court reasoned that since decisions known as the insular cases: Congress plenary power regulate retains Bidwell, 244, Downes v. 182 U.S. 21 S.Ct. territories, IV, 3, U.S. Const. art. cl. § 770, (1901); 45 L.Ed. Armstrong 1088 2, regulate and foreign interstate and States, 243, 827, United 182 U.S. 21 S.Ct. Const, I, 3, commerce, 8, cl. U.S. art. § 45 (1901); L.Ed. 1086 Dooley v. United Congress’s Governor of the Canal Zone as States, 222, 762, 182 U.S. 45 L.Ed. “delegate,” is not subject the commerce (1901); Bidwell, 1074 DeLima v. 182 U.S. clause limitations. 453 F.2d at 1059-60. 1, 21 (1901); S.Ct. 45 L.Ed. 1041 see Scholarly commentary agrees that constitu Bidwell, also Downes v. 182 21 regulation tional restrictions on the states’ (White, J., 45 L.Ed. 1088 concur- of do interstate commerce not extend to ring). History and the of views scholars unincorporated Leibowitz, territories. judges who have focused on the issue Federalism: The States support all our сonclusion that the limita- Territories, 28 Am.U.L.Rev. 449 places tions the commerce clause (1979); Leibowitz, Applicability The of powers regulate of states to commerce do Federal Law to 16 Va.J.Int’l.L. 21 not affect of the unincor- Fuster, (1975); Origins the Doc porated of Guam. Incorpоration and trine Territorial Its Implications Regarding the Power directly This court has never addressed Regu Commonwealth Puerto Rico to the applicability of the commerce clause’s Commerce, 43 late Interstate Rev.Jur.U. negative implications unincorporated tеr- (1974). P.R. 259 have, however, ritories like Guam. We cases, precedent Ninth three assumed without discussion not to con govern- trary. Mullaney, In Anderson v. 191 F.2d commerce clause limits the (9th Cir.1951), 342 123 72 ment Guam the same manner that it aff'd we held that limits the states.1 Broadcast- Pacific legislation implicit court of Guam has incon- approval district reached its commerce annul, Shoppers, sistent results on the of commerce in its failure to Free Ambros, Commissioner, applicability. Compare F.Supp. clause Ltd. v. 464 Inc. v. Tax Maddox, (D.Guam 1962) (court (D.Guam 1979)(because language F.Supp. no exists in thе Organic Congressional refused to hold had not conferred Guam Actwhich indicates upon power impose suspend opera- Guam burdens on intent to the commerce clause’s Riddell, (9th edge governments 427 F.2d that acts state Corp. v. of both Cir.1970) receipts instrumentalities (gross tax violative of and federal are immune clause); liability. Asiatic Trans-Pa- from antitrust See Parker v. the commerce Maddox, (9th Brown, 371 F.2d 87 L.Ed. Inc. v. cific, Service, Cir.1967) receipts Alas tax not of 315 Sea-Land (gross violative Railroad, (D.C.Cir. clause); ka Trading Manila the commerce (9th 1981), denied, Maddox, F.2d cert. Suрply Co. v.

Cir.1964) receipts Plaintiffs, (gross tax violative however, clause). try to case fit this within line Supreme holding cases mu Court cases con We do not view these governments nicipalities, unlike state trolling precedent applicability of on the instrumentalities, not immune Guam. In those pursuаnt acting clearly articu unless cases, simply assumed that the this court *4 expressed pol affirmatively state lated and applied, the but issue was commerce clause icy competition. displace Town of or discussed. Such unstated never raised — Claire, City Eau Hallie v. of issuеs not assumptions ‍‌‌​‌​‌​‌‌​‌‌‌​‌‌​​‌​​‌‌‌​‌​‌‌‌​​‌​‌​‌‌​‌​​​‌‌‌​​‍non-Iitigated on 1713, -,-, 1717, holdings binding future deci precedential (1985); Community Communications v. L.A. Tucker sions. See United Boulder, 40, 51, 102 City Co. v. of Lines, 344 U.S. Truck 840-41, 835, (1982); 70 L.Ed.2d 810 69, (prior decision is 97 L.Ed. Lafayette Power City v. Louisiana & of point binding precedent on neither not Co., Light 435 U.S. by opin nor discussed raised counsel 1137, 55 L.Ed.2d 364 Lorrie’s Trav case); in that v. ion of the court Webster Tours, Inc., Airporter, el Inc. v. SFO Fall, 511, 45 S.Ct. (9th Cir.1985). Much 753 F.2d of (1925) (“Questions L.Ed. 411 prospec has the force of these cases been record, brought neither merely lurk in tively overruled with the enactment of the of the court nor ruled to the attention Antitrust of Local Government Act having as upon, are not to considered 98-544, No. Pub.L. Stat. 2750 as prece so to constitute been decided after this lawsuit was filed. effective dents.”); Baker, 693 F.2d Matter of (9th Cir.1982) (prior case found not 925-26 Co., In Community Communications controlling precedent have established City held of Suprеme Court the question issue the court since on before Boulder was not immune from antitrust at issue neither contested nor ruled was policy liability connection with its of case); Sethy upon Alameda limiting competition in cable television. District, County 545 F.2d Water city, reasoned that the a “home The Court Cir.1976) (en banc) (accord). (9th 1159-60 municipality rights of self rule” with agree with the district court’s We therefore government superseding laws of the holding in this case that state, immunity was entitled limit clause does not the Government of by grant The enjoyed state. home the governments limits Guam it a af- rule wаs not “clear articulation and agreement The does not violate the states. expression” policy re- firmative state commerce clause. regulation. garding cable television Com- Co., 455 U.S. at munity Communications plaintiffs’ next anti We turn 54-56, 102 S.Ct. at 70 L.Ed.2d 810. trust claims. district dismissed relationship to the the antitrust claims on several alternative Guam’s is re- grounds, government reach different Boulder’s but we need to seen, As immunity. lationship to Colorado. we have question Plaintiffs acknowl- tion, clause). imposed concluded Guam bound the court the limitations HUG, an government Judge, of Guam is instrumen- cоncurring: government tality of the federal over ‍‌‌​‌​‌​‌‌​‌‌‌​‌‌​​‌​​‌‌‌​‌​‌‌‌​​‌​‌​‌‌​‌​​​‌‌‌​​‍which I concur in the result reached government plenary the federal exercises majority opinion and discussion granted has it control. far fewer However, relative to the antitrust claims. powers government of self than the Statе I not fully am convinced that the commerce City granted Colorado has of Boul- Territory to the Guam under the authority der. why There is no reason Guam should Anderson v. (9th Mullaney, Cir.1951), 191 F.2d 123 immunity enjoy less than the federal aff'd itself. See Jet Courier Ser- (1952). I find the distinction between the vices, Inc. v. Federal Reserve Bank of then Territory Alaska and the (6th Atlanta, Cir.1983); However, of Guam somewhat tenuous. I Services, Inc., F.2d 246- Sea-Land would reach that issue because I would agreement hold places only remaining contention which no on burden interstate commerce. plaintiffs pursue appeаl because clear that Authority permits delivery by only the contract grant could concessionaire the exclu- company, the the equal contract violates right sive sell protection plaintiffs al- clause. Because competitive after bidding. party No dis- lege discrimination, only economic we need putes plaintiffs this. The maintain that the *5 only determine whether the contract has a agreement that; does more than claim they legitimate rational relation to state inter- agreement deprives that them of a ests. Employment Ohio Bureau Ser- transportation facility ship- essential to Hodory, vices v. of their goods ment interstate commerce. 52 L.Ed.2d 513 Benson my opinion, In this is not the Plain- case. ship v. can goods by freight Arizona State Board Dental tiffs just Exam- air person can; iners, any nothing other (9th Cir.1982). agree- 277-78 deprives them ment of the use of air is disputed that franchise facility. plain- carrier What is denied to agreement tiffs is the airport, airport complete raises revenue for the use delivering their sales transaction by production legitimate and revenue a passenger at the air- stаte interest. San Indepen Antonio thus, port. is, whether the dent Rodriguez, School District v. requires plain- commerce clause 93 airport tiffs be allowed to use com- reg L.Ed.2d Guam’s interest in plete their sales transaction with the cus- ulating security traffic and the airport Airport or Authority tomеr whether the implicated. also Plaintiffs claim that their require delivery can be made else- deliveries will fact create serious I where. hold would security problems traffic airport, or at the prevent Author- claims, true, but these if do not serve ity establishing requirement. this denigrate legitimаcy governmen of the passenger Goods delivered elsewhere regard.2 tal interest this The concession plain- can taken aboard him and the deny equal contract this case does not ship freight. tiffs are free to air There protection. commerce, is no burden on interstate there Affirmed. airport a limitation on the of the use Texas, basis, rely Fly ing 2. Plaintiffs on Park’N had less lots no “much a reasonable Houston, (S.D.Tex.1971). however, There, City F.Supp. one.” Id. at distinc- There the found a Houston ordinance tion between the and concessionaire others with permitted only city actually conges- "shuttle bus” con- vehicles similar created traffic positions ability to use cessionaire favorable for load- tion hindered the unloading passengers park- primary obligations passengers. its from distant serve complete deliv- facility to sale as a

ery.

Benjamin Anne F. MAPLESDEN and ‍‌‌​‌​‌​‌‌​‌‌‌​‌‌​​‌​​‌‌‌​‌​‌‌‌​​‌​‌​‌‌​‌​​​‌‌‌​​‍Maplesden, Plaintiffs/Appellants,

W. America, Jon

UNITED STATES Riewerts, Defendants/Appellees.

E. 84-1830.

No. Appeals, Court

Ninth Circuit. 9, 1985.

Argued April and Submitted July

Decided *6 Cal., Carter, plain- Redding, Ross for

J. tiffs/appellants. Lazarus, Dept, of B. Jus-

William D.C., tice, Washington, defendants/ap- for pellees.