Home » Case Summaries » 2015 » Chinatown Neighborhood Ass’n v. Harris, 794 F.3d 1136 (9th Cir. 2015)


Chinatown Neighborhood Ass’n v. Harris, 794 F.3d 1136 (9th Cir. 2015)


In this case, the Chinatown Neighborhood Association and other organizations[1] (collectively, CNA) sought to challenge the California Shark Fin Law.[2] The Shark Fin Law prohibited the possession, sale, trade, and distribution of detached shark fins in California.[3] CNA argued that the Magnuson-Stevens Fishery Conservation and Management Act (MSA)[4] preempted the Shark Fin Law because the Shark Fin Law interferes with federal management of shark fishing in the exclusive economic zone (EEZ) and with the federal government’s ability to balance the statutory objectives of the MSA. CNA also contended that the Shark Fin Law violates the Commerce Clause[5] by interfering with interstate commerce and cutting off the flow of shark fins through California into the rest of the country. The Ninth Circuit rejected CNA’s arguments and affirmed the district court’s dismissal of the amended complaint with prejudice.

The MSA was enacted to create a federal-regional partnership to regulate fishery resources.[6] Under the MSA, the federal government has sovereign rights and exclusive fishery management authority over all fish and Continental Shelf fishery resources within the EEZ.[7] The EEZ spans from the seaward boundary of each coastal state to 200 miles offshore.[8] The states retain jurisdiction over fishery management within their boundaries.[9]

“Shark finning” is the removal of fins from a living shark. Shark finning has become an increasingly common practice to meet the demand for fins used primarily for shark fin soup. As a result, tens of millions of sharks die each year despite the state and federal prohibitions already regulating the waters off the California coast. In response, the California legislature passed the Shark Fin Law, making it a misdemeanor to possess, sell, trade, or distribute detached shark fins in California.[10]

In August 2012, CNA moved for a preliminary injunction against the enforcement of the Shark Fin Law. The district court denied the motion and the Ninth Circuit affirmed. In December 2013, CNA filed an amended complaint. At the hearing on the motion to dismiss, the district court asked CNA’s counsel whether “you’ve got the complaint where you want it,” and counsel responded affirmatively.[11] Based on this response, the district court denied CNA a second round of amendments and granted defendants’ motion to dismiss with prejudice. The Ninth Circuit reviewed the district court’s decision on the motion to dismiss de novo and the denial of leave to amend for abuse of discretion.

In CNA’s amended complaint, CNA attacked the Shark Fin Law under several theories, including preemption, violation of the Commerce Clause, and violation of the dormant Commerce Clause. Additionally, CNA requested the court find that the district court abused its discretion in failing to grant its leave to amend sua sponte. CNA was unsuccessful on each of its claims against the Shark Fin Law and on its request to find an abuse of discretion by the district court.

The Ninth Circuit first analyzed CNA’s preemption argument. CNA asserted that the Shark Fin Law interferes with federal authority to manage shark fishing in the EEZ and therefore “stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress.”[12] The court disagreed, holding that the police powers of states should not be superseded unless it was the “clear and manifest” purpose of Congress to do so. The court gave two reasons for why it disfavored preemption in this case. First, there is a general presumption against preemption. This presumption applies generally, but is particularly strong in instances where Congress has legislated in an area traditionally managed by the states.[13] In this case, control over fish in state waters has historically been regulated by states. Second, there is no explicit preemption provision in the MSA.[14] CNA had merely pointed to a potential obstacle to general federal purposes, which is insufficient to overcome the presumption against preemption.

CNA also argued that because the MSA attempts to balance competing objectives in fishery management, Congress intended to prevent states from promoting one objective over others. CNA claimed that California wrongly valued of conservation over other objectives of the MSA.[15] The Ninth Circuit acknowledged various competing values within the MSA, but concluded that conservation was paramount. The court held that the Shark Fin Law was consistent with the MSA’s primary goal of conservation.

CNA also argued that by failing to address on-land activities related to finning in the MSA, Congress intended to leave such activities unregulated. The Ninth Circuit rejected this argument because silence alone does not indicate preemption of state law. Rather, “a clear and manifest purpose is always required.”[16]

The Ninth Circuit next analyzed CNA’s Commerce Clause claims. CNA alleged that the Shark Fin Law is invalid because it curbs commerce in shark fins between California and out-of-state destinations and prevents shark fins from moving from one out-of-state destination to another through California. The court rejected these arguments because a state can regulate commercial relationships when at least one party is in California.[17] Even when a state law has significant extraterritorial effects it still does not violate the Commerce Clause if those effects result from the regulation of in-state conduct.[18] Unlike the cases relied upon by CNA, the Shark Fin Law does not fix prices in other states, require those states to adopt California standards, or attempt to regulate transactions conducted wholly out of state.

CNA also argued that according to Pike v. Bruce Church, Inc.,[19] the Shark Fin Law should be struck down under the dormant commerce clause because the burden on interstate commerce is excessive compared with “putative local benefits.”[20] The court rejected this argument because the Shark Fin Law does not interfere with inherently federal activities or activities that require national uniformity. The court held that without any significant burden on interstate commerce, it is inappropriate to determine the law’s constitutionality based on the court’s own evaluation of the benefits of the law and the State’s wisdom in adopting it.

Finally, the Ninth Circuit analyzed the district court’s denial of CNA’s motion for leave to amend. CNA asked the court to find that the district court abused its discretion in failing to grant leave sua sponte. CNA contended that if it was permitted to plead additional facts to support its preemption claim, it could have alleged a direct conflict between the California statute and the MSA. CNA argued that the Shark Fin Law affects the ability of commercial fishers to reap the optimum yields prescribed in Fishery Management Plans for shark harvests under the MSA. The court rejected this argument and held that the MSA does not preempt a state law simply because the state law could have an effect on the realization of optimal yields. The court reasoned that there were still commercially viable uses for sharks besides their fins, so it was still possible to realize the optimal yields for shark harvests by other means without the need to detach shark fins. Moreover, the MSA could not be interpreted so broadly because Congress expressly preserved state control over commerce in fish products within state borders. Such control would certainly affect the realization of optimum yields under the MSA. Therefore, the court concluded that simply because the Shark Fin Law affects the realization of optimal yields does not mean that the Shark Fin law is in direct conflict with the MSA. Thus, CNA’s amendment would not have changed the outcome in this case, and granting leave to amend would have been futile.

In sum, the Ninth Circuit held that the MSA did not preempt the Shark Fin Law because there was no clear and manifest intent by Congress to do so. The court held that the Shark Fin Law was consistent and cooperative with the purpose of the MSA, strengthening the presumption against preemption. The court also held that simply because the Shark Fin Law has an effect on the realization of optimal yields does not put it in direct conflict with the MSA. Thus, the district court did not abuse its discretion in dismissing the case because granting a second round of amendments would have been futile. Finally, the court held that the Shark Fin Law did not violate the Commerce Clause or the Dormant Commerce Clause because the effects of the law result only from regulation of in-state conduct. For these reasons, the Ninth Circuit affirmed the district court’s judgment.

Judge Reinhardt dissented in part. He contended that CNA should have been granted leave to amend the complaint for their preemption claim because the defects in CNA’s complaint could have been cured by amendment. Judge Reinhardt pointed out that the federal government has the authority to maximize productivity within the EEZ and the Shark Fin Law could pose an obstacle to legal shark fishing. He believed that if the fin is the main part of a shark that has commercial value and if the Shark Fin Law causes fishermen to cease catching sharks in EEZ fisheries, the federal objective of achieving optimum yield could be unconstitutionally impaired. Judge Reinhardt felt that leave to amend should be freely given and that CNA should at least have the opportunity to adequately plead its claim.

Footnotes    (↵ returns to text)

  1. Plaintiff-appellants included Asian Americans for Political Advancement.
  2. Cal. Fish & Game Code § 2012(b) (West 2013). Defendants included Kamala Harris in her capacity as Attorney General of the State of California, and Charlton Bonham is his capacity as Director of the California Department of Fish & Game. Intervenor-defendants included Humane Society of the United States, Monterey Bay Aquarium Foundation, Asian Pacific American Ocean Harmony Alliance.
  3. Cal. Fish & Game Code § 2012(b) (West 2013).
  4. Magnuson-Stevens Fishery Conservation and Mgmt. Act, 16 U.S.C. §§ 1801–1891(d) (2012).
  5. U.S. Const. art. I, § 8, cl. 3.
  6. Nat. Res. Def. Council, Inc. v. Daley, 3 F.3d 747, 749 (D.C. Cir. 2000).
  7. 16 U.S.C. § 1811(a) (2012).
  8. Id. § 1802(11).
  9. Id. § 1856(a)(1).
  10. Cal. Fish & Game Code § 2012(b) (West 2013).
  11. CNA v. Harris, 794 F.3d 1136, 1144 (9th Cir. 2015).
  12. Arizona v. United States, 132 S. Ct. 2492, 2501 (2012).
  13. McDaniel v. Wells Fargo Invs., LLC, 717 F.3d 668, 674 (9th Cir. 2013).
  14. MSA, 16 U.S.C. §1801 (2012).
  15. Id. § 1801(b) (recognizing various competing values under the MSA).
  16. P.R. Dep’t of Consumer Affairs v. Isla Petroleum Corp., 485 U.S. 495, 503 (1988).
  17. Gravquick A/S v. Trimble Navigation Int’l, Ltd., 323 F.3d 113, 118 (9th Cir. 2003).
  18. See Rocky Mt. Farmers Union v. Corey, 730 F.3d 1070, 1101–04 (9th Cir. 2013) (describing modern extraterritoriality doctrine).
  19. 397 U.S. 137 (1970).
  20. Id. at 142.
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