No. 13-1064 ================================================================

In The

Supreme Court of the United States --------------------------------- ---------------------------------

JAMES COURTNEY AND CLIFFORD COURTNEY,

Petitioners, v.

DAVID DANNER, IN HIS OFFICIAL CAPACITY AS CHAIRMAN AND COMMISSIONER

OF THE WASHINGTON UTILITIES AND TRANSPORTATION COMMISSION, ET AL.,

Respondents.

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On Petition For Writ Of Certiorari To The United States Court Of Appeals

For The Ninth Circuit

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REPLY TO BRIEF IN OPPOSITION

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MICHAEL E. BINDAS Counsel of Record INSTITUTE FOR JUSTICE 10500 N.E. 8th Street, Suite 1760 Bellevue, WA 98004 (425) 646-9300 mbindas@ij.org

WILLIAM H. MELLOR ROBERT P. FROMMER INSTITUTE FOR JUSTICE 901 North Glebe Road, Suite 900 Arlington, VA 22203 (703) 682-9320

Counsel for Petitioners

================================================================ COCKLE LEGAL BRIEFS (800) 225-6964

WWW.COCKLELEGALBRIEFS.COM

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TABLE OF CONTENTS

Page

INTRODUCTION ................................................ 1

I. The Ninth Circuit’s Discussion Of Eco-nomic Rights Was Not “Dicta” ................... 2

II. Lake Chelan Is A Navigable Water Of The United States – Not An “Intrastate Water” ........................................................ 4

III. The Courtneys Challenge Washington’s Power To Exclude Their Ferry From Lake Chelan – Not To Regulate Ferries ............. 6

IV. The Courtneys’ Claim Is As-Applied – Not Facial .................................................. 7

V. Existing Jurisprudence Does Not Support A State’s Power To Monopolize Navigable Waters Of The United States .................... 8

VI. Amici Would Properly Tether The Privi-leges Or Immunities Clause – Not Open A Pandora’s Box ......................................... 13

CONCLUSION ..................................................... 13

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TABLE OF AUTHORITIES

Page

CASES

Anonymous, (1750) 1 Vesey 476 (Ch.) ........................ 5

City of Chicago v. Atchison, Topeka & Santa Fe Rwy. Co., 357 U.S. 77 (1958) ................................... 8

City of Sault Ste. Marie v. Int’l Transit Co., 234 U.S. 333 (1914) ..................................................... 6, 9

Conway v. Taylor’s Executor, 66 U.S. 603 (1861) ...................................................................... 12

Gloucester Ferry Co. v. Pennsylvania, 114 U.S. 196 (1885) ......................................................... 11, 12

Gravesend Case, (1612) 123 Eng. Rep. 883 (C.P.) ......................................................................... 5

Huse v. Glover, 119 U.S. 543 (1886)...................... 5, 12

Mayor of Vidalia v. McNeely, 274 U.S. 676 (1927) .................................................................... 6, 7

Mills v. County of St. Clair, 49 U.S. 569 (1850) ....... 12

N.Y. Cent. & Hudson River R.R. Co. v. Bd. of Chosen Freeholders, 227 U.S. 248 (1913) .............. 12

People ex rel. Pa. R.R. Co. v. Knight, 64 N.E. 152 (N.Y. 1902) ..................................................... 4, 7

Port Richmond & Bergen Point Ferry Co. v. Board of Chosen Freeholders, 234 U.S. 317 (1914) ...................................................................... 10

Pub. Utils. Comm’n v. United States, 355 U.S. 534 (1958) ................................................................. 8

R.R. Co. v. Maryland, 88 U.S. 456 (1874) ................... 5

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TABLE OF AUTHORITIES – Continued

Page

Saenz v. Roe, 526 U.S. 489 (1999) ............................... 3

Slaughter-House Cases, 83 U.S. 36 (1873) ........ passim

Starin v. Mayor of New York, 115 U.S. 248 (1885) ...................................................................... 11

Twining v. New Jersey, 211 U.S. 78 (1908), overruled in part on other grounds by Malloy v. Hogan, 378 U.S. 1 (1964) ..................................... 6

United States v. Chandler-Dunbar Water Power Co., 229 U.S. 53 (1913)............................................. 5

CONSTITUTIONAL PROVISIONS

U.S. Const. amend. XIV .............................................. 2

STATUTES

16 U.S.C. § 90a-1 ......................................................... 5

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INTRODUCTION

This is an exceptionally important case, but one this Court can resolve on limited, narrow grounds. It is important because, in holding that the “right to use the navigable waters of the United States” does not encompass use for “economic activities,” App. 19 & n.5, the Ninth Circuit drew a false dichotomy be-tween economic and non-economic rights that ignores the history of the Privileges or Immunities Clause, contravenes this Court’s jurisprudence, and “trun-cate[s] even th[e] remaining nub of constitutional protection” that the clause offers in the wake of the Slaughter-House Cases, 83 U.S. 36 (1873). Br. Amici History and Law Professors 2. Preventing the clause from becoming a dead letter is a task of the utmost constitutional importance.

It is a task, however, that this Court can accom-plish in a narrow and measured way. The lower courts concluded the Courtneys could not even state a claim for abridgement of their right to use the navi-gable waters of the United States because that right does not encompass use of the waters for economic purposes. This Court would only need to reach that same issue. If the Court were to conclude that the Courtneys have stated a claim, then this case could – and should – be remanded for a decision on the constitutionality of the challenged regulations, as applied on Lake Chelan.

Thus, this case is at once constitutionally pro-found, yet procedurally narrow. It deserves to be

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among the few cases on which this Court expends its limited time and resources in the coming term.

In arguing otherwise, the Washington Utilities and Transportation Commission (WUTC) ignores the history of the Privileges or Immunities Clause and this Court’s jurisprudence interpreting it. The WUTC raises several arguments why this case does not warrant certiorari but is wrong on every point. The issues (or non-issues) the WUTC raises are meant to distract this Court’s attention from the real problem in this case: the Ninth Circuit’s decision rendered a vital component of the Fourteenth Amendment mean-ingless. This Court should not let the “milestone of history” that is the Privileges or Immunities Clause “be regarded as a dead end.” Id. at 25. Rather, it should grant certiorari.

I. The Ninth Circuit’s Discussion Of Eco-

nomic Rights Was Not “Dicta”

The Ninth Circuit’s discussion of economic rights was central to its holding – not “dicta,” as the WUTC contends. Br. Opp’n 8. The WUTC’s primary argu-ment on this point is that “[t]he phrase ‘economic concerns’ appears in the court’s opinion only once.” Id. The WUTC ignores the opinion’s discussion of “eco-nomic activities,” “economic rights,” the Courtneys’ desire to operate a “particular business” or “profes-sional venture” on Lake Chelan, and the “commer-cial” nature of the ferry they would run. App. 12, 17, 18, 19 & n.5. Why the WUTC focuses myopically on

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one phrase and ignores the remainder of the opinion it never explains.

Equally meritless is the WUTC’s contention that the Ninth Circuit’s decision does not “eliminate[ ] economic interests from the protection of the Privi-leges or Immunities Clause.” Br. Opp’n 8. The deci-sion plainly holds that, except for the right to travel in Saenz v. Roe, 526 U.S. 489 (1999), the clause does not protect economic rights:

Saenz v. Roe represents the Court’s only de-cision qualifying the bar on Privileges or Immunities claims against the power of the State governments over the rights of [their] own citizens. . . . [Saenz] was limited to the right to travel[,] and . . . [t]he Court has not found other economic rights protected by [the Privileges or Immunities C]lause. We have made clear that this limitation on the Privi-leges or Immunities Clause remains in effect.

App. 19 n.5 (alterations in original; internal quotation marks and citations omitted).

The Ninth Circuit’s belief that the clause does not protect “other economic rights” was critical to its holding that the Courtneys’ proposed ferry does not fall within the “right to use the navigable waters of the United States” identified in Slaughter-House. The Courtneys could not state a claim, the court conclud-ed, because “the driving force behind this litigation is the Courtneys’ desire to operate a particular business using Lake Chelan’s navigable waters – an activity driven by economic concerns.” App. 18-19; see also id.

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at 17 (“[T]he Courtneys wish to do more than simply navigate the waters of Lake Chelan. . . . [T]hey claim the right to utilize those waters for a very specific professional venture.”). The court’s discussion of economic rights, and of the economic nature of the Courtneys’ proposed use of Lake Chelan, was thus central to its decision.

II. Lake Chelan Is A Navigable Water Of The

United States – Not An “Intrastate Water”

The WUTC is again wrong in insisting this case concerns Washington’s monopolization of “intrastate,” or “internal,” waters. Br. Opp’n 10, 13. The federal government has designated Lake Chelan a navigable water of the United States, App. 4-5, and the WUTC previously conceded that it is a “navigable water of the United States.” Ninth Cir. Supp. Excerpts R. 2. In now claiming the lake is an “intrastate” water, the WUTC ignores not only the outlets, tributaries, and distributaries that link the lake to Canada, Oregon, and the Pacific Ocean, see Compl. ¶20, but also Slaughter-House’s holding that the Privileges or Immunities Clause protects the right to use navigable waters of the United States “however they may penetrate the territory of the several States,” 83 U.S. at 79. For this reason, “[t]he navigable waters of the United States, even when they lie exclusively within the limits of a state, are open to all the world” and “require[ ] no leave or license from a state.” People ex rel. Pa. R.R. Co. v. Knight, 64 N.E. 152, 154 (N.Y. 1902).

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Using such waters is a right of national citizen-ship precisely because of their national character. They are “the public property of the nation,” United States v. Chandler-Dunbar Water Power Co., 229 U.S. 53, 63 (1913), and, as “recognized public highways of trade and intercourse[,] [n]o franchise is needed to enable the navigator to use them,” R.R. Co. v. Mary-land, 88 U.S. 456, 470 (1874). Indeed, even the Northwest Ordinance treated them as “highways equally open to all persons, without preference to any,” and “prevent[ed] any exclusive use” or “monopo-ly” of them. Huse v. Glover, 119 U.S. 543, 547, 548 (1886).

In fact, the right to use navigable waters – in-cluding to operate ferries – was established in Eng-lish common law at the time of the Founding. In the Gravesend Case, (1612) 123 Eng. Rep. 883 (C.P.), Lord Chief Justice Coke held that an exclusive grant for ferry service on the Thames was “repugnant,” as it was a “common river,” “so publick, that the King cannot restrain” competition on it. There was “equal liberty . . . to all watermen to carry what passengers that they could.” Id. at 885; see also Anonymous, (1750) 1 Vesey 476 (Ch.).

Finally, the navigable waters in this case are uniquely national in character. Stehekin, from which the Courtneys’ ferry would operate, is part of the Lake Chelan National Recreation Area, which Con-gress created for all Americans. See 16 U.S.C. § 90a-1. It attracts visitors from around the nation. Apart from air travel, boat transportation across the lake is

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the only means of accessing this federal property. App. 5; Compl. ¶15. Such access is itself protected by the Privileges or Immunities Clause, and the WUTC may not impair it. Twining v. New Jersey, 211 U.S. 78, 97 (1908) (“[A]mong the rights and privileges of national citizenship recognized by this court are . . . the right to enter the public lands. . . .”), overruled in part on other grounds by Malloy v. Hogan, 378 U.S. 1 (1964).

III. The Courtneys Challenge Washington’s

Power To Exclude Their Ferry From Lake Chelan – Not To Regulate Ferries

Beyond mischaracterizing the waters at issue, the WUTC mischaracterizes the Courtneys’ claim as asserting a right to operate a ferry “without state regulation.” Br. Opp’n 13. The Courtneys are not challenging Washington’s ability to regulate ferries in the exercise of its police power – for example, by requiring insurance or inspections. Rather, they challenge Washington’s power to monopolize a navi-gable water of the United States and thereby exclude their use of it.

As this Court has explained in twice holding exclusive ferry franchises unconstitutional, a law that “make[s] [state] consent a condition precedent” to the operation of a ferry business “goes beyond” a “mere police regulation.” City of Sault Ste. Marie v. Int’l Transit Co., 234 U.S. 333, 339, 340 (1914); see also Mayor of Vidalia v. McNeely, 274 U.S. 676, 683

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(1927). Thus, the state’s “power to regulate” ferries does not include the “power to license and therefore to exclude from the business.” Id. at 680.1

The New York Court of Appeals has likewise distinguished mere “police regulations” from laws requiring “leave or license from a state” and held that the latter are impermissible on “navigable waters of the United States, even when they lie exclusively within the limits of a state.” Knight, 64 N.E. at 154. The Courtneys simply allege that the certificate requirement on Lake Chelan is that type of imper-missible law.

IV. The Courtneys’ Claim Is As-Applied – Not

Facial

The WUTC is again wrong in attempting to recast the Courtneys’ claim as a facial challenge to the certificate requirement. See Br. Opp’n 17-19. The Courtneys’ complaint – in the very paragraphs the WUTC cites – makes clear that theirs is an as-applied challenge. E.g., Compl. ¶119 (“As applied to the provision of boat transportation service on Lake Chelan that is open to the general public, . . . .”). The Ninth Circuit recognized it as such, App. 4 (“The Courtneys’ first claim for relief challenges the consti-tutionality of the PCN requirement as applied to the

1 Although these cases were resolved on Commerce Clause grounds, as they involved interstate and international ferries, their holdings regarding the police power are not so limited.

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provision of public ferry service on Lake Chelan.”), as did the district court, App. 37 (“The Courtneys’ Complaint alleges that the applicable statutes and administrative regulations, as applied to their at- tempts to establish a competing ferry service on Lake Chelan, . . . .”). In fact, until it filed its brief in this Court, the WUTC consistently acknowledged the claim was as-applied. E.g., Appellees’ Br. 10 (“In Claim I of their complaint, the Courtneys allege that Washing-ton state laws governing certificates of public conven-ience and necessity for commercial ferries, as applied to Lake Chelan, . . . .”).

The WUTC’s eleventh-hour recasting of the claim is baseless. The Court should not countenance the tactic, nor should it be dissuaded from granting the writ.2

V. Existing Jurisprudence Does Not Support

A State’s Power To Monopolize Navigable Waters Of The United States

The WUTC’s next suggestion – that this Court’s jurisprudence, and that of other courts, recognizes a state’s authority to monopolize ferry service on the

2 The WUTC suggests the Courtneys could not have brought an as-applied challenge because they “did not apply for a certificate during the decade preceding this lawsuit.” Br. Opp’n 17. The WUTC never made this argument below, and for good reason: this Court has rejected it. E.g., City of Chicago v. Atchison, Topeka & Santa Fe Rwy. Co., 357 U.S. 77, 89 (1958); Pub. Utils. Comm’n v. United States, 355 U.S. 534, 540 (1958).

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navigable waters of the United States, see Br. Opp’n 9-12 – is equally unsupported. None of the cases the WUTC cites addresses whether the right to use navigable waters of the United States encompasses use to operate a ferry, and the WUTC has previously conceded there are no such cases. Ninth Cir. Supp. Excerpts R. 2-3 (“Have you found any cases that define the term ‘use?’ [a]s used in the phrase, ‘the right to use the navigable waters of the United States?’ . . . I have not, Your Honor.”). As the Ninth Circuit explained, the right “has yet to be interpreted by a single federal appellate court in the privileges or immunities context,” and, therefore, its “boundaries . . . have not been established.” App. 14.

Instead, the WUTC tries to cherry-pick language from a few opinions to support its position. It begins with Slaughter-House, noting that one line in the opinion discusses the police power and mentions ferries among the things a state may regulate. Br. Opp’n 9. As discussed above, however, the Courtneys do not dispute that a state may exercise its police power to regulate ferries. Rather, they allege that a law “mak[ing] [state] consent a condition precedent” to the operation of a ferry on Lake Chelan “goes beyond” a “mere police regulation.” City of Sault Ste. Marie, 234 U.S. at 339, 340.

The WUTC next turns to the Slaughter-House dissents, which do not even mention the right to use navigable waters of the United States. They do, however, mention ferries, and the WUTC tellingly omits a large portion of the discussion. Justices

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Bradley and Field noted that monopolies – including ferry monopolies – were statutorily outlawed in England at the time of our Founding. Slaughter-House, 83 U.S. at 120 (Bradley, J., dissenting) (noting England had “abolished all monopolies except grants for a term of years to the inventors of new manufac-tures”); id. at 104 (Field, J., dissenting). Justice Bradley called this statutory proscription “one of th[e] constitutional landmarks of English liberty” and “part of that inheritance which our fathers brought with them.” Id. at 120 (Bradley, J., dissenting). Alt-hough “the British Parliament, as well as our own legislatures,” had at times “disregarded” the statuto-ry proscription “by granting exclusive privileges for erecting ferries, railroads, [and] markets,” Justice Bradley regarded such franchises as “odious,” “wrong in principle,” and “inimical to the just rights and greatest good of the people.” Id. at 120, 121. That is hardly the endorsement the WUTC claims it is.

Finding no support in Slaughter-House, the WUTC invokes a few other decisions from this Court that say nothing regarding the right to use navigable waters of the United States. First is Port Richmond & Bergen Point Ferry Co. v. Board of Chosen Freehold-ers, 234 U.S. 317 (1914), which concerned regulation of ferry fares. This Court upheld the regulation but expressly distinguished regulations aimed at “rea-sonable charges” from “prohibitory or discriminatory requirements . . . imposed by the state, which may be said to interfere with the guaranteed freedom of

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interstate intercourse, or with constitutional rights of property.” Id. at 331 (emphasis added).

The WUTC’s reliance on Starin v. Mayor of New York, 115 U.S. 248 (1885), is equally misplaced. The WUTC claims Starin held that “whether [a] city had [the] exclusive right to establish ferries over public waters entirely within one state was a matter of state, not federal, law.” Br. Opp’n 10. Yet no constitu-tional question was even raised in Starin, and the city’s argument for an exclusive ferry right rested on a charter that preceded the Constitution. Id. at 257. “The question,” the Court explained, “[wa]s as to the extent of the ancient grant made to the city, not as to the rights of the defendants in the navigation of the waters of the United States irrespective of this grant.” Id. at 258. Moreover, the right conferred in the grant was not over the establishment of ferries generally, but over a single route, between specific points on Manhattan and Staten Island. Citizens were perfectly free to run ferries elsewhere. Id.

The same was true in Gloucester Ferry Co. v. Pennsylvania, 114 U.S. 196 (1885), which held uncon-stitutional a state tax on a ferry operating between New Jersey and Pennsylvania. In its opinion, this Court noted that Pennsylvania had not attempted to “establish[ ] and regulat[e] ferries across the Dela-ware river.” Id. at 217-18. “Any one . . . is free,” the Court noted, “to establish such ferries as he may choose.” Id. at 218.

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Finding no support in this Court’s post-Slaughter-House jurisprudence, the WUTC looks earlier – to Conway v. Taylor’s Executor, 66 U.S. 603 (1861), and Mills v. County of St. Clair, 49 U.S. 569 (1850). The former was overruled in Gloucester Ferry, which the WUTC neglects to mention. N.Y. Cent. & Hudson River R.R. Co. v. Bd. of Chosen Freeholders, 227 U.S. 248, 261 (1913) (noting that the “theories” advanced in Conway “are directly contrary to the ruling in . . . Gloucester Ferry,” which “is now conclu-sive”).3 And both predate not only the Privileges or Immunities Clause and Slaughter-House, but also Huse, which held that navigable waters were to remain “highways equally open to all persons, with-out preference to any,” and that there could be no “exclusive use” of them. 119 U.S. at 547, 548.

Getting no traction with this Court’s decisions, the WUTC turns to a 1934 Ninth Circuit decision and a few earlier state-court decisions to argue that there is no “privilege to avoid state regulation of commer-cial ferries.” Br. Opp’n 11. Again, the Courtneys do not claim such a privilege – only that Washington’s exclusion of their ferry from Lake Chelan abridges their right to use the navigable waters of the United States. The WUTC’s cases have nothing to say on that point.

3 So, too, was Mills, insofar as it countenanced exclusive ferry franchises between states.

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VI. Amici Would Properly Tether The Privi-leges Or Immunities Clause – Not Open A Pandora’s Box

Finally, the WUTC baselessly accuses the Courtneys and amici of having the “avowed intent” of opening a Pandora’s Box. Br. Opp’n 16, 17. The arti-cles the WUTC cites in support of its accusation advocate an interpretation of the Privileges or Im-munities Clause that is tethered to its history and original public meaning. Effectuating the aims of those who framed and ratified the clause – which “emerged from a generation of struggle” and “through the bloodshed of war,” Br. Amici History and Law Professors 20 – is not opening a “Pandora’s Box.” Nor, for that matter, is clarifying the contours of a right that this Court has already recognized, which is all the Courtneys ask this Court to do.

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CONCLUSION

The petition should be granted.

Respectfully submitted,

MICHAEL E. BINDAS Counsel of Record INSTITUTE FOR JUSTICE 10500 N.E. 8th Street, Suite 1760 Bellevue, WA 98004 (425) 646-9300 mbindas@ij.org

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WILLIAM H. MELLOR ROBERT P. FROMMER INSTITUTE FOR JUSTICE 901 North Glebe Road, Suite 900 Arlington, VA 22203 (703) 682-9320

Counsel for Petitioners