Wyoming v. Oklahoma/Dissent Scalia

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Dissenting Opinions

Justice SCALIA, with whom THE CHIEF JUSTICE and Justice THOMAS join, dissenting.

In the almost century and a half since we first entered the business of entertaining "negative Commerce Clause" actions, see Cooley v. Board of Wardens of Port of Philadelphia, 53 U.S. (12 How.) 299, 13 L.Ed. 996 (1852), I think it safe to say that the federal courts have never been plagued by a shortage of these suits brought by private parties, and that the nontextual elements of the Commerce Clause have not gone unenforced for lack of willing litigants. Today, however, when the coal companies with sales allegedly affected by the Oklahoma law have, for whatever reason, chosen not to litigate, the Court sees fit, for the first time, to recognize a State's standing to bring a negative Commerce Clause action on the basis of its consequential loss of tax revenue. That is a major step, and I think it is wrong. Even if it were correct, however, summary judgment that Wyoming suffered consequential loss of tax revenue in the present case would be unjustified. I would deny Wyoming's motion for summary judgment and grant Oklahoma's.

* At the outset, let me address briefly the Court's suggestion that our previous rejections of Oklahoma's standing objections when we granted Wyoming leave to file its complaint and when we denied Oklahoma's motion to dismiss for want of standing-somehow impede us from considering that objection today. Ante, at 446. To begin with, the "law-of-the-case principles" which the Court suggests should be persuasive albeit not necessarily binding in original actions, ibid., have never to my knowledge been applied to jurisdictional issues raised (or re-raised) before final judgment. To the contrary, it is a court's obligation to dismiss a case whenever it becomes convinced that it has no proper jurisdiction, no matter how late that wisdom may arrive. See Fed.Rule Civ.Proc. 12(h)(3) ("Whenever it appears . . . that the court lacks jurisdiction of the subject matter, the court shall dismiss the action") (emphasis added). See also Jenkins v. McKeithen, 395 U.S. 411, 421, 89 S.Ct. 1843, 1848, 23 L.Ed.2d 404 (1969). Of course this does not mean that a court need let itself be troubled by the same jurisdictional objection raised over and over again, when it has thoroughly considered that issue once and remains convinced that it resolved the issue correctly. But that is quite different from "law of the case," which would give effect even to an erroneous decision, simply because it has already been made.

And in the present case, we have not considered the standing issue thoroughly once before. We disposed of Oklahoma's preliminary standing objections summarily, without oral argument and without opinion. I considered us to be deciding at that time, not, once for all, that standing existed, but simply that the absence of standing was not so clear that our normal practice of permitting the suit to be filed and of referring all questions (including the standing question) to a special master should be short-circuited. The parties apparently understood our action that way, since the standing issue was raised (without "law-of-the-case" objection from Wyoming) before the Special Master. And the Master certainly did not think that we had conclusively decided the point, since he received argument on it, and discussed it as the very first of the "three legal issues that require a recommendation to the Court." Report of the Special Master at 10. If the Special Master was not precluded by our prior action, it is hard to understand why we ourselves would be.

There is no unfairness to Wyoming in this. To be sure, we might have given the standing question full-dress consideration to begin with, and, if we concluded in Oklahoma's favor, could have spared the parties lengthy proceedings before the Special Master. But the same could be said of the substantive issue of whether the Act violated the Commerce Clause. Our choice not to proceed in that fashion was both in accord with ordinary practice and in my view sound. Almost all other litigants must go through at least two other courts before their case receives our attention. It has become our practice in original-jurisdiction cases to require preliminary proceedings before a special master, to evaluate the facts and sharpen the issues. Wyoming has no cause for complaint that we did that here, and we should not distort our jurisdictional holding on the basis of some misguided feeling of estoppel.

Finally, even if the Court were correct that some "change of circumstance," ante, at 446, ought to be presented before the jurisdictional objection that we denied so cursorily at the preliminary stage can be reraised, such a change in fact exists. The litigation has reached a new stage, having proceeded from a motion for judgment on the pleadings (which we denied) to cross-motions for summary judgment (which the Special Master recommended resolving in favor of Wyoming). When a district court denies the former, it need feel no compunction of consistency to deny the latter; and the same is true for us. The standing issue is obviously subject to different evaluation, depending upon the stage the litigation has reached. A plaintiff may survive a motion to dismiss for lack of injury-in-fact by merely alleging that a string of occurrences commencing with the challenged act has caused him injury; at that stage we presume that "general allegations embrace those specific facts that are necessary to support the claim," Lujan v. National Wildlife Federation, 497 U.S. ----, ----, 110 S.Ct. 3177, 3189, 111 L.Ed.2d 695 (1990). See also Whitmore v. Arkansas, 495 U.S. 149, 158-159, 110 S.Ct. 1717, ----, 109 L.Ed.2d 135 (1990). A plaintiff cannot, however, on the basis of the same generalizations, obtain or avoid summary judgment, where a moving party must "show that there is no genuine issue as to any material fact," Fed.Rule Civ.Proc. 56(c), and where a nonmoving party cannot rest on "mere allegations" to counter a properly supported motion, but must set forth "specific facts" through affidavits or other evidence, Fed.Rule Civ.Proc. 56(e). See Lujan, supra, at ----, 110 S.Ct., at 3188-3189. See also Gladstone, Realtors v. Village of Bellwood, 441 U.S. 91, 115 and n. 31, 99 S.Ct. 1601, 1616 and n. 31, 60 L.Ed.2d 66 (1979). It is the adequacy of these presentations that Oklahoma now asks us to evaluate-and we have not evaluated them before.

It is axiomatic that "a litigant first must clearly demonstrate that he has suffered an 'injury in fact' " in order to assert Article III standing to sue. Whitmore, supra, 495 U.S. at 155, 110 S.Ct., at ----. In assessing a claim to injury, "[w]e presume that federal courts lack jurisdiction unless the contrary appears affirmatively from the record," Renne v. Geary, 501 U.S. ----, ----, 111 S.Ct. 2331, ----, 115 L.Ed.2d 288 (1991) (quotation omitted). See also Bender v. Williamsport Area School Dist., 475 U.S. 534, 546, 106 S.Ct. 1326, 1333, 89 L.Ed.2d 501 (1986); it is accordingly "the burden of the party who seeks the exercise of jurisdiction in his favor . . . clearly to allege facts demonstrating" that he has been injured. FW/PBS, Inc. v. Dallas, 493 U.S. 215, 231, 110 S.Ct. 596, 607, 107 L.Ed.2d 603 (1990). This burden is "substantially more difficult" to bear when the asserted injury is "highly indirect and results from the independent action of some third party not before the court"-for the simple reason that there are more variables involved. Allen v. Wright, 468 U.S. 737, 757-759, 104 S.Ct. 3315, 3327-3329, 82 L.Ed.2d 556 (1984). See also Simon v. Eastern Kentucky Welfare Rights Organization, 426 U.S. 26, 42, 44-45, 96 S.Ct. 1917, 1926, 1927-1928, 48 L.Ed.2d 450 (1976); Warth v. Seldin, 422 U.S. 490, 504-505, 95 S.Ct. 2197, 2208, 45 L.Ed.2d 343 (1975). It is incumbent upon the plaintiff to eliminate those variables through "specific, concrete facts," showing that the third party actually acted as he maintains and that the injury actually occurred. Warth, supra, at 508, 95 S.Ct., at 2210.

As I have mentioned, the plaintiff's success in meeting this burden is to be assessed under the rules governing the stage the litigation has reached. See Lujan, 497 U.S., at ----, 110 S.Ct. at 3188-3189. See also Gladstone, supra, 441 U.S., at 115 and n. 31, 99 S.Ct., at 1616 and n. 31; Simon, supra, 426 U.S., at 45 n. 25, 96 S.Ct., at 1926 n. 26; Warth, supra, 422 U.S., at 527 and n. 6, 95 S.Ct., at 2219 and n. 6 (Brennan, J., dissenting). Wyoming's motion for summary judgment thus cannot be granted unless Wyoming has demonstrated "that there is no genuine issue" as to its injury, Fed.Rule Civ.Proc. 56(c), see Adickes v. S.H. Kress & Co., 398 U.S. 144, 157, 90 S.Ct. 1598, 1608, 26 L.Ed.2d 142 (1970)-which means that "[i]f reasonable minds could differ as to the import of the evidence," the motion must be denied, Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250-251, 106 S.Ct. 2505, 2511, 91 L.Ed.2d 202 (1986). To be entitled to prevail at this stage, therefore, Wyoming must have submitted "specific, concrete facts," Warth, supra, 422 U.S., at 508, 95 S.Ct., at 2210, which when "viewed in the light most favorable" to Oklahoma "foreclose" all reasonable inferences that Wyoming was not injured by the Act, Adickes, supra, 398 U.S., at 157, 90 S.Ct., at 1608. Wyoming has not in my view remotely carried that burden, and the Special Master's recommendation to grant its motion for summary judgment must be rejected.

The Special Master apparently thought Wyoming's injury unquestionable because it is undisputed that, since the Act's effective date, Oklahoma utilities have bought less Wyoming coal as a percentage of their coal purchases. Report of the Special Master at 11. I am willing to assume for the sake of argument that that undisputed fact compels the inference that less Wyoming coal was sold in Oklahoma as a result of the Act. To establish injury, however, Wyoming had to show not merely that the statute caused Oklahoma sales to be lost, but that it prevented Wyoming "severances" of coal from occurring. Wyoming does not tax sales of coal to Oklahoma utilities; it taxes severances. The loss of a particular Oklahoma sale would not hurt Wyoming's treasury at all unless (1) the coal that was the subject of that sale was not severed to be sold elsewhere, or (2) if it was severed to be sold elsewhere, that latter sale (and severance) would have occurred even if the Oklahoma sale had been made.

The Court o'erleaps this inconvenient obstacle by asserting that "a loss of specific tax revenues [is] an undisputed fact here." Ante, at 448. I cannot imagine where this helpful concession comes from. The Special Master listed the undisputed facts, and it is not among them. See Report of Special Master at 2-10, 11.

The Court also appears to believe that the second of the above described means of connecting sales loss with tax loss is established by the fact that "Wyoming has a significant excess mining capacity"; this fact, according to the Court, necessarily means that "the loss of any market cannot be made up by sales elsewhere." Ante, at 445, 446. That is not so. Excess capacity can mean the existence of facilities capable of producing additional quantities of goods that can be sold for a profit at current market prices-in which case the loss of one sale cannot really be "replaced" by the gain of another. But excess capacity need not mean that. It can also mean the existence of facilities that lie fallow because, although they can produce additional quantities of goods, they cannot do so at a cost that will yield a profit at current market prices. Innumerable capped or unexploited oil wells in this country exemplify that phenomenon. If that is the sort of excess capacity the Wyoming coal industry has, it nonetheless has a limited capability of sales at current market prices-in which case so long as that capability has been fully achieved no tax revenue has been lost.

The excess capacity attested to by Wyoming's experts may well have been of this latter sort, since it was said to have been created in response to 1970s "forecasts of high demand growth." Affidavit of Seth Schwartz 2. Higher demand generally means higher prices, and the coal companies might well have brought new, higher-cost production facilities on line (for example, deep-pit mines) that are at current prices not competitive. Even if the entire "excess capacity" is competitive, since much of it came (according to Wyoming's expert) from the opening of "new mines," ibid, another possibility is that the Wyoming industry responded to less-than-anticipated demand in an efficient manner-buy closing down some of the mines entirely rather than leaving them all in operation at a fraction of capacity. Under these conditions, it might well not pay a particular company to make a particular additional sale, if that additional sale would require the reopening of an additional mine, with the incremental cost that entails. [1]

The speculations Wyoming invites us to engage in are certainly plausible (though one must be given pause by the fact that the Wyoming coal companies themselves-who if Wyoming is right have lost not just the tax on the severances but the entire profits-have not chosen to litigate). Were this a trial on the record I might well conclude that it is more likely than not that Wyoming was injured. But "at the summary judgment stage [our] function is not to weigh the evidence." Anderson, 477 U.S., at 249, 106 S.Ct., at 2510. It has at least not been conclusively established that Wyoming coal producers would have sold coal in addition to that diverted from the (presumably) lost Oklahoma sales. A genuine issue of material fact thus exists, and the Special Master's recommendation that we grant Wyoming's motion for summary judgment must be rejected.

Even if Wyoming had fully established, in the manner Rule 56 provides, the "injury in fact" required by Article III, I would still conclude that it does not have standing to bring this suit, and would grant Oklahoma's cross-motion for summary judgment. "Beyond the constitutional requirements, the federal judiciary has also adhered to a set of prudential principles that bear on the question of standing." Valley Forge Christian College v. Americans United for Separation of Church and State, Inc., 454 U.S. 464, 474, 102 S.Ct. 752, 759, 70 L.Ed.2d 700 (1982). One of these is the requirement that the plaintiff "establish that the injury he complains of (his aggrievement, or the adverse effect upon him) falls within the 'zone of interests' sought to be protected by the statut[e] [or constitutional guarantee] whose violation forms the legal basis for his complaint." Air Courier Conference of America v. American Postal Workers Union, 498 U.S. ----, ----, 111 S.Ct. 913, 918, 112 L.Ed.2d 1125 (1991) (quotation omitted). The "zone-of-interests" formulation first appeared in cases brought under § 10 of the Administrative Procedure Act, 5 U.S.C. § 702, see Association of Data Processing Service Organizations, Inc. v. Camp, 397 U.S. 150, 153, 90 S.Ct. 827, 829, 25 L.Ed.2d 184 (1970), but we have subsequently made clear that the same test similarly governs claims under the Constitution in general, see, e.g., Valley Forge, supra, 454 U.S., at 475, 102 S.Ct., at 760, and under the negative Commerce Clause in particular, see Boston Stock Exchange v. State Tax Comm'n, 429 U.S. 318, 320-321, n. 3, 97 S.Ct. 599, 602, n. 3, 50 L.Ed.2d 514 (1977). Indeed, we have indicated that it is more strictly applied when a plaintiff is proceeding under a "constitutional . . . provision" instead of the "generous review provisions of the APA." Clarke v. Securities Industry Assn., 479 U.S. 388, 400, n. 16, 107 S.Ct. 750, 757, n. 16, 93 L.Ed.2d 757 (1987).

The zone-of-interests test "denies a right of review if the plaintiff's interests are . . . marginally related to or inconsistent with the purposes implicit in the [constitutional provision]." Id., at 394, 399, 107 S.Ct., at 754, 757. The usual starting point for zone-of-interests analysis is the text of the provision at issue, see Air Courier Conference, supra, at ----, 111 S.Ct., at 918-919; since, however, the negative Commerce Clause is an inference rather than a text, the starting point here must be the history and purposes of the inference, see id., at ----, 111 S.Ct., at 919-920.

Our negative-Commerce-Clause jurisprudence grew out of the notion that the Constitution implicitly established a national free market, under which, in Justice Jackson's words, "every farmer and every craftsman shall be encouraged to produce by the certainty that he will have free access to every market in the Nation . . . [and] every consumer may look to the free competition from every producing area of the Nation to protect him from exploitation." H.P. Hood & Sons, Inc. v. DuMond, 336 U.S. 525, 539, 69 S.Ct. 657, 665, 93 L.Ed. 865 (1949). Virtually every one of our cases in this area thus begins its analysis with some form of the incantation that "the very purpose of the Commerce Clause was to create an area of free trade among the several States . . . [and the Clause] by its own force created an area of trade free from interference by the States." Westinghouse Electric Corp. v. Tully, 466 U.S. 388, 402-403, 104 S.Ct. 1856, 1865, 80 L.Ed.2d 388 (1984); see also Boston Stock Exchange, 429 U.S., at 328, 97 S.Ct., at 606; American Trucking Assns., Inc. v. Scheiner, 483 U.S. 266, 280, 107 S.Ct. 2829, 2838, 97 L.Ed.2d 226 (1987). Just last Term we said that the negative commerce clause "confer[s] a 'right' to engage in interstate trade free from restrictive state regulation," for it "was intended to benefit those who . . . are engaged in interstate commerce." Dennis v. Higgins, 498 U.S. ----, ----, 111 S.Ct. 865, 877, 878, 112 L.Ed.2d 969 (1991).

The coal companies, of course, would pass the zone-of-interests test. So would Wyoming if it bought or sold coal, or otherwise directly participated in the coal market. It would then be "asserting [its] right to engage in interstate commerce free of discriminat[ion]," Boston Stock Exchange, supra, 429 U.S., at 320-21, n. 3, 97 S.Ct., at 602, n. 3 (emphasis added). But Wyoming's right to collect taxes presents an entirely different category of interest, only marginally related to the national market/free trade foundation of our jurisprudence in this area; indeed, it is in a sense positively antagonistic to that objective, since all state taxes, even perfectly constitutional ones, burden interstate commerce by reducing profit. Thus, when state taxes have been at issue in our prior negative-Commerce-Clause cases they have been the object of the plaintiff's challenge rather than the basis for his standing; and we have looked upon the State's interest in tax collection as a value to be weighed against the purposes of our Commerce Clause jurisprudence. Thus, Wyoming's interest in this case falls far shorter of meeting the zone-of-interests test than did that of the plaintiff postal union in Air Courier Conference, supra, at ----, 111 S.Ct., at ----: Whereas the latter's interest in securing employment for postal workers, although distinct from the statute's goal of providing postal services to the citizenry, at least coincided with that goal a good amount of the time, here the asserted interest (tax collection) and the constitutional goal invoked to vindicate it (free trade) are antithetical.

In seeming response to a zone-of-interests argument, the Court quotes, ante, at 449, our statement in Hunt v. Washington Apple Advertising Comm'n, 432 U.S. 333, 345, 97 S.Ct. 2434, 2442, 53 L.Ed.2d 383 (1977), that "the interests of the [Washington State Apple Advertising] Commission itself may be" at issue in the litigation, because "[i]n the event the North Carolina statute results in a contraction of the market for Washington apples or prevents any market expansion that might otherwise occur, it could reduce the amount of the assessments due the Commission." The Court fails to note that this statement was preceded by the square holding that the State Apple Advertising Commission had standing to sue as an association on behalf of its members, the apple growers and dealers (who were in the same position as the coal companies here):

"If the Commission were a voluntary membership organization-a typical trade association-its standing to bring this action as a representative of its constituents would be clear. . . .

"The only question presented, therefore, is whether, on this record, the Commission's status as a state agency, rather than a traditional voluntary membership organization, precludes it from asserting the claims of the Washington apple growers and dealers who form its constituency. We think not." Id., at 342-344, 97 S.Ct., at 2440-2442.

Only after finding associational standing did we speculate, in the passage the Court quotes, that the Commission itself "may be" adversely affected because its revenue collections "could [be] reduce[d]." Id., at 345, 97 S.Ct., at 2442. I hardly think that musings of this sort are grounds for disregarding the obvious application of the zone-of-interests test to the present case particularly as the Court in Hunt did not purport to be applying that test. The dicta in Hunt, moreover, were applying a since-repudiated understanding of the purpose of the standing requirement. Compare the last sentence of the passage quoted by the Court (taking the purpose to be "to 'assure that concrete adverseness which sharpens the presentation of issues . . .,' " ibid., quoting Baker v. Carr, 369 U.S. 186, 204, 82 S.Ct. 691, 703, 7 L.Ed.2d 663 (1962)), with Allen, 468 U.S., at 750-752, 104 S.Ct., at 3324-3325 (asserting that standing performs a separation-of-powers function, restricting the courts to their traditional role).

Of course, if the state interest in collecting severance taxes does fall within the zone of interests of the Commerce Clause, so must every other state taxing interest. The zone-of-interest test, as opposed to the injury-in-fact requirement, turns on the type of interest asserted and not on its speculativeness or its degree of attenuation from its alleged source. The injury-in-fact requirement, of course, will still remain-but if and when de facto causality can be established, every diminution of state revenue attributable to the allegedly unconstitutional commercial regulation of a sister-State will now be the basis for a lawsuit. Suits based on loss of sales tax revenue ought to become a regular phenomenon, since it is no more difficult to show that an automatic sales tax was lost on a particular sale than it is to show that the severance tax was lost here. Further expansions of standing (or irrational distinctions) lurk just around the corner: if a State has a litigable interest in the taxes that would have been paid upon an unconstitutionally obstructed sale, there is no reasonable basis for saying that a company salesman does not have a litigable interest in the commissions that would have been paid, or a union in the wages that would have been earned.

In abandoning the zone-of-interests test, the Court abandons our chosen means of giving expression, in the field of constitutional litigation, to the principle that "the judicial remedy cannot encompass every conceivable harm that can be traced to alleged wrongdoing." Associated General Contractors of California, Inc. v. Carpenters, 459 U.S. 519, 536, 103 S.Ct. 897, 908, 74 L.Ed.2d 723 (1983). The "zone of interests" test performs the same role as many other judge-made rules circumscribing the availability of damages in tort and contract litigation-doctrines such as foreseeability and proximate cause, see, e.g., Palsgraf v. Long Island R. Co., 248 N.Y. 339, 162 N.E. 99 (1928); directness of injury, see, e.g., Associated General Contractors, supra, 459 U.S., at 540-541, 103 S.Ct., at 909-910; the limitation on suits by third-party beneficiaries of contracts, see, e.g., Restatement (Second) of Contracts § 302(1) (1981); and the contemporaneous ownership rule governing shareholders' derivative actions, see, e.g., Fed.Rule Civ.Proc. 23.1. When courts abolish such limitations and require, as our opinion does today, nothing more than a showing of de facto causality, exposure to liability becomes immeasurable and the scope of litigation endless. If today's decision is adhered to, we can expect a sharp increase in state-against-state Commerce Clause suits; and if its rejection of the zone-of-interests test is applied logically, we can expect a sharp increase in all constitutional litigation.

* * * * * *

Of the three points I have discussed in the three portions of this opinion, I must believe that the first is the crucial one: the Court's reluctance, in an original action, to reconsider our initial denial of a motion to dismiss for lack of standing. I shall consider that to be an essential part of the holding of the case. I respectfully dissent.


^1  Wyoming's expert, a coal market analyst from Virginia, averred by affidavit that "[i]n [his] opinion" the lost sales could not be made up. Affidavit of Seth Schwartz 3. That is not enough to establish the point. Schwartz did not, as Rule 56(e) requires, set forth the "facts" upon which he based his opinion. Just as the requirements for summary judgment are not met when a court makes unsubstantiated inferences about a third party's behavior, see, e.g., Lujan v. National Wildlife Federation, 497 U.S. ----, ----, 110 S.Ct. 3177, 3188-3189, 111 L.Ed.2d 695 (1990), they are not met when the plaintiff hires an outside expert to do the same.

This work is in the public domain in the United States because it is a work of the United States federal government (see 17 U.S.C. 105).