Kleinsmith v. Shurtleff

FILED
United States Court of Appeals
Tenth Circuit

PUBLISH July 6, 2009
Elisabeth A. Shumaker
UNITED STATES COURT OF APPEALS Clerk of Court

TENTH CIRCUIT

PHILLIP M. KLEINSMITH,

Plaintiff - Appellant,
v. No. 07-4187
MARK L. SHURTLEFF, Attorney
General, State of Utah,

Defendant - Appellee.

APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF UTAH
(D.C. NO. 2:06-CV-387-BSJ)

Submitted on the briefs:*

Philip M. Kleinsmith, pro se.
Nancy L. Kemp, Jerrold S. Jensen, Assistant Utah Attorneys General, Mark L.
Shurtleff, Utah Attorney General, Salt Lake City, Utah, for Defendant - Appellee.

Before TACHA, EBEL, and HARTZ, Circuit Judges.

HARTZ, Circuit Judge.

_____________________

*After examining the briefs and appellate record, this panel has determined
unanimously to honor the parties’ request for a decision on the briefs without oral
argument. See Fed. R. App. P. 34(f); 10th Cir. R. 34.1(G). The case is therefore
ordered submitted without oral argument.
 Philip M. Kleinsmith resides in Colorado but is licensed to practice law in

Utah. A specialist in nonjudicial foreclosures, he challenges the constitutionality

of a Utah statute that requires all attorneys who act as trustees of real-property

trust deeds in Utah to “maintain[] a place within the state” to meet with trustors

for certain enumerated purposes related to foreclosures. Utah Code Ann.

§ 57-1-21(1)(a)(i) (2009). Mr. Kleinsmith, who has no Utah office, challenges

the law on the grounds that the maintain-a-place requirement (1) is so vague that

the statute violates the federal Constitution’s Due Process Clause; (2)

discriminates against and burdens nonresident attorneys, thereby injuring

interstate commerce in violation of the Constitution’s dormant Commerce Clause;

(3) violates the Constitution’s Article IV Privileges and Immunities Clause (and

perhaps the Fourteenth Amendment’s Privileges or Immunities Clause) by

depriving nonresident attorneys of privileges enjoyed by residents of Utah; and

(4) violates the Constitution’s Equal Protection Clause by irrationally

discriminating against nonresident attorney-trustees. He appeals from the ruling

of the United States District Court for the District of Utah granting summary

judgment to the defendant, Utah Attorney General Mark Shurtleff. We have

jurisdiction under 28 U.S.C. § 1291 and affirm.

I. BACKGROUND

Trust-deed foreclosures are a significant part of Mr. Kleinsmith’s law

practice. A trust deed conveys real property in trust to secure a debt; the debtor,

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who typically has used the loan proceeds to purchase a home, is also the trustor.

See id. § 57-1-19. In the event of default, the trustee may conduct a nonjudicial

sale of the property or institute foreclosure proceedings. See id. § 57-1-23.

According to Mr. Kleinsmith’s complaint, as a trustee he could “prepare trustee

foreclosure sale documents, supervise their recording, service, mailing and

posting and supervise a crier to conduct foreclosure sales, all without . . .

personally being present in the state of Utah.” Aplt. App. at 126. Although

Mr. Kleinsmith’s only office is in Colorado Springs, Colorado, he has gained

admission to practice law in 26 states, with the aim of building a national practice

as a foreclosure trustee. One state where he is admitted is Utah, whose bar he

joined in 1989. From 1998 to 2001 he earned more than $50,000 annually from

Utah work relating to trust-deed foreclosures, but his income from this source

“has declined to virtually nothing.” Reply Br. at 3. He attributes the decline to

amendments to the Utah statute governing the qualifications for trustees of trust

deeds.

The initial amendment that harmed his business became effective in April

2001. It required licensed Utah attorneys to reside in the state in order to qualify

as trustees. See 2001 Utah Laws ch. 236 § 2. Mr. Kleinsmith successfully

challenged the constitutionality of the residency requirement under the Privileges

and Immunities Clause of Article IV of the Constitution. See Kleinsmith v.

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Shurtleff, No. 2:01cv0310 ST, slip op. at 15 (D. Utah Aug. 13, 2001) (Aplt. App.

at 47).

The legislature then amended the statute effective May 6, 2002, to require

that attorney trustees either reside in Utah or “maintain[] a bona fide office in the

state.” 2002 Utah Laws ch. 209 § 1. The amendment defined a bona fide office

as a physical office open to the public and staffed during regular business hours,

at which a trustor could request information and deliver funds in person.

Mr. Kleinsmith again challenged the statute’s constitutionality and again

prevailed, this time on the ground that it violated the federal Constitution’s

dormant Commerce Clause by discriminating against out-of-state economic

interests. See Kleinsmith v. Shurtleff, No. 2:03-CV-63TC, slip op. at 1–2

(D. Utah July 3, 2003).

In response, the Utah legislature amended the statute a third time. See 2004

Utah Laws ch. 177 § 1. Since May 2004 the law has required Utah-licensed

attorneys who wish to act as trustees of trust deeds to

maintain[] a place within the state where the trustor or other
interested parties may meet with the trustee to:
(A) request information about what is required to reinstate or
payoff the obligation secured by the trust deed;
(B) deliver written communications to the lender as required
by both the trust deed and by law;
(C) deliver funds to reinstate or payoff the loan secured by the
trust deed; or
(D) deliver funds by a bidder at a foreclosure sale to pay for
the purchase of the property secured by the trust deed.

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Utah Code Ann. § 57-1-21(1)(a)(i). 1 The statute does not further define maintain

or place. Although the term is no longer relevant to attorney trustees, the statute

1
Section 57-1-21(1) states in full:

(1)(a) The trustee of a trust deed shall be:

(i) any active member of the Utah State Bar who maintains a place
within the state where the trustor or other interested parties may meet
with the trustee to:
(A) request information about what is required to reinstate or
payoff the obligation secured by the trust deed;
(B) deliver written communications to the lender as required
by both the trust deed and by law;
(C) deliver funds to reinstate or payoff the loan secured by the
trust deed; or
(D) deliver funds by a bidder at a foreclosure sale to pay for
the purchase of the property secured by the trust deed;
(ii) any depository institution as defined in Section 7-1-103, or
insurance company authorized to do business and actually doing
business in Utah under the laws of Utah or the United States;
(iii) any corporation authorized to conduct a trust business and
actually conducting a trust business in Utah under the laws of Utah
or the United States;
(iv) any title insurance company or agency that:
(A) holds a certificate of authority or license under Title 31A,
Insurance Code, to conduct insurance business in the state;
(B) is actually doing business in the state; and
(C) maintains a bona fide office in the state;
(v) any agency of the United States government; or
(vi) any association or corporation that is licensed, chartered, or
regulated by the Farm Credit Administration or its successor.
(b) For purposes of this Subsection (1), a person maintains a bona fide
office within the state if that person maintains a physical office in the state:
(i) that is open to the public;
(ii) that is staffed during regular business hours on regular business
days; and
(iii) at which a trustor of a trust deed may in person:
(A) request information regarding a trust deed; or
(B) deliver funds, including reinstatement or payoff funds.

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retains its definition of bona fide office, see id. at § 57-1-21(1)(b), because a title-

insurance company is required to have one to qualify as a trustee of trust deeds,

see id. at § 57-1-21(1)(a)(iv)(C).

Mr. Kleinsmith filed this suit in May 2006. Two weeks later he moved for

summary judgment. He asserted that certain facts were undisputed but did not

submit affidavits or other evidence in support of his motion. The Attorney

General filed his own motion for summary judgment. After a hearing the district

court denied Mr. Kleinsmith’s motion and granted the Attorney General’s.

Mr. Kleinsmith filed a motion to reconsider in which he raised for the first time

an argument that the statute is unconstitutionally vague. The court denied the

motion.

II. DISCUSSION

We review de novo a district court’s decision to grant summary judgment,

viewing all facts in the light most favorable to the party opposing summary

judgment. See Jacklovich v. Simmons, 392 F.3d 420, 425 (10th Cir. 2004). We

will affirm a grant of summary judgment if there is no genuine issue of material

fact and the prevailing party is entitled to judgment under the law. See id. at 426;

Fed. R. Civ. P. 56(c).

A. Due Process (Vagueness)

Section 57-1-21(1)(a)(i) requires an attorney trustee to “maintain[] a place

within the state where the trustor or other interested parties may meet

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with the trustee to” request information or deliver funds or written

communications. The term maintain a place is not defined in the statute. About

all that we can readily infer is that maintaining a place is less onerous than

maintaining a bona fide office, as required by the previous version of the statute,

which was amended in response to Mr. Kleinsmith’s successful challenge to its

bona-fide-office requirement. The statute, both before and after the most recent

amendment, defines a bona fide office as

a physical office in the state . . . that is open to the public; . . .
staffed during regular business hours on regular business days; and . .
. at which a trustor of a trust deed may in person: . . . request
information regarding a trust deed; or . . . deliver funds, including
reinstatement or payoff funds.

Utah Stat. Ann. § 57-1-21(1)(b). The district court’s opinion granting summary

judgment did not attempt to provide a complete definition of maintain a place,

but it offered the following observations when addressing Mr. Kleinsmith’s

Commerce Clause argument:

[The statute] does not prohibit attorney-trustees from sharing office
space or other resources, such as support staff, with other parties.
Moreover, [the provision regulating attorney trustees] and the Statute
as a whole do not require that the place maintained by
attorney-trustees be open to the public during all regular business
hours on all regular business days, as required of
title-company-trustees, and do not unreasonably restrict out-of-state
attorney-trustees from also maintaining a practice or working in other
states.

Aplt. App. at 269. (The court also noted that resident attorney-trustees could use

their homes as their “places” under the statute; but it is not clear to us that many

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attorneys would wish to disclose their home addresses to people threatened with

foreclosure, much less meet them for business at their homes.)

A statute violates the due-process guarantee of the Fourteenth Amendment

if it “forbid[s] or requir[es] conduct in terms so vague that [persons] of common

intelligence must necessarily guess at its meaning and differ as to its application.”

Baggett v. Bullitt, 377 U.S. 360, 367 (1964). On appeal Mr. Kleinsmith contends

that § 57-1-21(1)(a)(i) is void because the word place in the statutory text “and as

interpreted by [the district court]” is unconstitutionally vague. Aplt. Br. 18. But

he did not raise a vagueness challenge in his motion for summary judgment or in

his response to Mr. Shurtleff’s cross-motion. He first mentioned vagueness in his

motion to reconsider the summary judgment against him, and even then it was

only a passing reference in his challenge to the district court’s rejection of his

earlier arguments. The court did not address the issue in its one-page ruling on

that motion.

We decline to reach the merits of Mr. Kleinsmith’s vagueness claim. His

failure to raise a vagueness challenge to the statute before the district court

entered summary judgment bars such a challenge on appeal. See FDIC v. Noel,

177 F.3d 911, 915 (10th Cir. 1999). Of course, if the district court had exercised

its discretion to address that challenge in Mr. Kleinsmith’s motion for

reconsideration, the matter would be preserved for appeal. See Holland v. Big

River Minerals Corp., 181 F.3d 597, 605 (4th Cir. 1999); Quest Med., Inc. v.

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Apprill, 90 F.3d 1080, 1087 (5th Cir. 1996). But the district court did not do so,

which was a proper exercise of its discretion. See Elephant Butte Irrigation Dist.

v. U.S. Dep’t of Interior, 538 F.3d 1299, 1303–04 (10th Cir. 2008). It follows

that the claim was not preserved for appeal. See also Burnette v. Dresser Indus.,

Inc., 849 F.2d 1277, 1285 (10th Cir. 1988) (declining to consider issue that was

first raised in district court in motion to reconsider, and which district court did

not address); Iverson v. City of Boston, 452 F.3d 94, 104 (1st Cir. 2006) (“The

presentation of a previously unpled and undeveloped argument in a motion for

reconsideration neither cures the original omission nor preserves the argument as

a matter of right for appellate review.”). Mr. Kleinsmith suggests that only after

the district court ruled on the summary-judgment motion could he have raised a

claim that the statute as interpreted by the district court was unconstitutionally

vague. Perhaps he is right, but he did not raise this particular vagueness

argument even in his motion to reconsider the summary judgment. Accordingly,

we do not address this argument either.

Although we do not consider whether § 57-1-21(1)(a)(i) is

unconstitutionally vague, we note that the uncertainty in the provision’s meaning

lurks over several of Mr. Kleinsmith’s remaining arguments. As we shall see, the

validity of several of his challenges to the statute depends on the burden that the

statute places upon nonresident attorneys—a burden that he must prove to prevail.

He has failed to present that proof, perhaps in large part because he has been

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unable to show what the statute would require of him. One might say that his

constitutional challenges are premature; until there is clarity concerning the

statutory command, a proper analysis of the constitutionality of the burden

imposed on him is impossible.

B. Dormant Commerce Clause

The Constitution’s Commerce Clause gives Congress the power “[t]o

regulate commerce . . . among the several States.” U.S. Const. art. I, § 8, cl. 3.

“Although the Commerce Clause is by its text an affirmative grant of power to

Congress to regulate interstate . . . commerce, the Clause has long been

recognized as a self-executing limitation on the power of the States to enact laws

imposing substantial burdens on such commerce.” S.-Cent. Timber Dev., Inc. v.

Wunnicke, 467 U.S. 82, 87 (1984). Courts speak of the source of this limitation

on state law as the dormant Commerce Clause. See Dep’t of Revenue of Ky. v.

Davis, 128 S. Ct. 1801, 1808 (2008). The Supreme Court’s jurisprudence under

the dormant Commerce Clause “is driven by concern about economic

protectionism—that is, regulatory measures designed to benefit in-state economic

interests by burdening out-of-state competitors. The point is to effectuate the

Framers’ purpose to prevent a State from retreating into economic . . . isolation.”

Id. (citations, brackets, and internal quotation marks omitted). The Supreme

Court

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 has adopted what amounts to a two-tiered approach to analyzing state
economic regulation under the Commerce Clause. When a state
statute directly regulates or discriminates against interstate
commerce, or when its effect is to favor in-state economic interests
over out-of-state interests, [the Court has] generally struck down the
statute without further inquiry. When, however, a statute has only
indirect effects on interstate commerce and regulates evenhandedly,
[the Court has] examined whether the State’s interest is legitimate
and whether the burden on interstate commerce clearly exceeds the
local benefits.

Brown-Forman Distillers Corp. v. N.Y. State Liquor Auth., 476 U.S. 573, 578–79

(1986) (citations omitted).

The first-tier inquiry turns on whether the challenged law “affirmatively or

clearly discriminates against interstate commerce on its face or in practical

effect.” C & A Carbone, Inc. v. Town of Clarkstown, N.Y., 511 U.S. 383, 402

(1994) (internal quotation marks omitted). Discriminatory laws are those that

“mandate differential treatment of in-state and out-of-state economic interests that

benefits the former and burdens the latter.” Granholm v. Heald, 544 U.S. 460,

472 (2005) (internal quotation marks omitted). A statute may be neutral in its

terms and still discriminate against interstate commerce. See Hunt v. Wash. State

Apple Adver. Comm’n, 432 U.S. 333, 350–52 (1977) (facially neutral North

Carolina statute discriminated against interstate commerce by raising Washington

growers’ costs of doing business in the state and stripping away the competitive

advantage of the Washington grading system).

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 “The burden to show discrimination rests on the party challenging the

validity of the statute.” Hughes v. Oklahoma, 441 U.S. 322, 336 (1979). If the

challenger succeeds, then “the burden falls on the State to justify [its law] both in

terms of the local benefits flowing from the statute and the unavailability of

nondiscriminatory alternatives adequate to preserve the local interests at stake.”

Id. (internal quotation marks omitted). This is no easy task: “A discriminatory

law is virtually per se invalid.” Davis, 128 S. Ct. at 1808 (internal quotation

marks omitted).

If the challenged law does not discriminate, the challenger must rely on a

second-tier inquiry, which employs the balancing test of Pike v. Bruce Church,

Inc., 397 U.S. 137 (1970). That test states that “[the law] will be upheld unless

the burden imposed on [interstate] commerce is clearly excessive in relation to

the putative local benefits.” Id. at 142. We should note that the Supreme Court

has “recognized that there is no clear line separating the category of state

regulation that is virtually per se invalid under the Commerce Clause, and the

category subject to the [Pike] balancing approach.” Brown-Forman, 476 U.S. at

579.

1. Tier One: Does the Utah Statute Discriminate Against
Interstate Commerce?

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 Utah Code Ann. § 57-1-21(1)(a)(i) plainly does not discriminate on its face.

It requires each Utah attorney acting as a trust-deed trustee, whether the attorney

is a resident or a nonresident, to maintain a place.

Mr. Kleinsmith can still prevail, however, if he can show that the statute

discriminates in practical effect. “The Supreme Court has not directly spoken to

the question of what showing is required to prove discriminatory effect where, as

here, a statute is evenhanded on its face.” Cherry Hill Vineyard, LLC v. Baldacci,

505 F.3d 28, 36 (1st Cir. 2007). But we agree with the First Circuit that the party

claiming discrimination has the burden to put on evidence of a discriminatory

effect on commerce that is “significantly probative, not merely colorable.”

Alliance of Auto. Mfrs. v. Gwadosky, 430 F.3d 30, 40 (1st Cir. 2005) (internal

quotation marks omitted). That party must show “both how local economic actors

are favored by the legislation, and how out-of-state-actors are burdened.” Cherry

Hill Vineyards, LLC v. Lilly, 553 F.3d 423, 432 (6th Cir. 2008) (internal quotation

marks omitted). Not every benefit or burden will suffice—only one that “alters

the competitive balance between in-state and out-of-state firms.” Baldacci, 505

F.3d at 36; see West Lynn Creamery, Inc. v. Healy, 512 U.S. 186, 196 (1994) (a

state law that “cause[s] local goods to constitute a larger share, and goods with an

out-of-state source to constitute a smaller share, of the total sales in the market”

is unconstitutional “because it, like a tariff, neutralizes advantages belonging to

the place of origin.” (brackets and internal quotation marks omitted)); R & M Oil

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& Supply, Inc. v. Saunders, 307 F.3d 731, 734–35 (8th Cir. 2002) (Illinois-based

propane seller failed to present sufficient evidence that Missouri statute requiring

sellers to have in-state propane-storage facility put it at competitive

disadvantage); see also Cloverland-Green Spring Dairies, Inc. v. Pa. Milk Mktg.

Bd., 462 F.3d 249, 260–70 (3d Cir. 2006) (out-of-state challenger failed to show

that Pennsylvania milk-pricing scheme negated its competitive advantage); cf.

Granholm, 544 U.S. at 473–74 (holding discriminatory a law that required

out-of-state wine, but not in-state wine, to pass through an in-state wholesaler and

retailer before reaching consumers, adding “two extra layers of overhead” and

thus a “cost differential . . . [that] can effectively bar small [out-of-state] wineries

from the Michigan market.”).

We think it instructive to see how the presentation of evidence led to

opposite results in Baldacci and Lilly, which involved challenges to state laws

regulating direct sales by wineries to consumers. The Maine law challenged in

Baldacci allowed a small winery (a “farm winery”) to sell its products directly to

consumers (bypassing the otherwise mandatory distribution chain through a

licensed wholesaler and a licensed retailer) in face-to-face transactions on its

premises and at up to two off-site locations established by the winery within

Maine. See 505 F.3d at 30–31. A farm-winery license was available on equal

terms to Maine and out-of-state wineries. See id. The out-of-state wineries

claimed that the Maine statute discriminated against interstate commerce by

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preventing them from selling their wines directly to Maine consumers. See id. at

31–32. The First Circuit rejected the challengers’ claim under the dormant

Commerce Clause because they had “proffered no evidence that permitting farm

wineries to sell only face to face, either on premises or at approved in-state

locations, discriminates against interstate commerce.” Id. at 36. They had not

produced evidence that “Maine law acts to protect Maine vineyards or that Maine

consumers substitute wines purchased directly from Maine vineyards for wines

that they otherwise would have purchased from out-of-state producers”; that “any

wines at all are purchased by consumers directly from Maine vineyards”; or that

the law “somehow alters the competitive balance between in-state and out-of-state

firms.” Id. The court continued:

[P]laintiffs have adduced no evidence that would in any way
undermine the plausible impression that Maine consumers (like
imbibers everywhere) view trips to a winery as a distinct experience
incommensurate with—and, therefore, unlikely to be replaced by—a
trip to either a mailbox or a retail liquor store. Nor have they offered
evidence to impeach the suggestion, made in one of the cases on
which they rely, that bottles of wine are unique and, thus, unlikely to
be perceived by consumers as interchangeable.

Id. at 37 (citation and footnote omitted).

In Lilly, by contrast, the challengers (one of whom had also been a plaintiff

in Baldacci) made an evidentiary showing of the discriminatory effect of

Kentucky’s law permitting licensed small wineries, whether in-state or

out-of-state, to ship wine directly to consumers (thus bypassing wholesalers and

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retailers) but only if the consumer purchased the wine in person at the winery.

553 F.3d at 427–28. The evidence showed that in Oregon, the home of Cherry

Hill Vineyards, only 13 of the 300 wineries marketed their wine in Kentucky, and

most of the 300 were small. See id. at 432. Because it is not economical for a

wholesaler to carry the products of a small winery, many were “foreclosed from

the Kentucky market altogether unless they [could] take orders directly from

Kentucky residents and ship wine.” Id. at 433. In particular, “Cherry Hills

aver[red] that in order to distribute their wine through a wholesaler, they and

other wineries pay up to 50% of their profits to the wholesaler, which can result

in a profit differential of $10-15 per bottle of wine.” Id. And some Kentucky

residents stated that they “would buy wines directly from out-of-state wineries but

for the in-purchase requirement.” Id. The court also relied on “a Federal Trade

Commission . . . report which concluded that state laws like Kentucky’s, which

prevent direct sales and force producers to use wholesalers, create an

anticompetitive barrier to e-commerce for small wineries.” Id. The Sixth Circuit

concluded that “Plaintiffs have presented specific evidence that meets the[ir]

burden . . . . Plaintiffs have demonstrated that the challenged statutes

discriminate against interstate commerce in practical effect.” Id.

Unlike the challengers in Lilly, and like the challengers in Baldacci,

Mr. Kleinsmith has not presented evidence that could satisfy his burden to

establish a discriminatory effect of § 57-1-21(1)(a)(i). His statement of

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undisputed facts in support of his motion for summary judgment fails to show

how the statute has affected his ability (or the ability of nonresident attorneys

generally) to compete in the Utah market. With regard to economic loss

attributable to the law, he says: “From 1998-2001, [my] volume [of Utah

foreclosure work] was good[,] generating $50,000 plus per year in gross income.

Since 2001, volume has declined. . . . Since 2002, volume and dollar revenue has

decreased further because of the changes in Utah’s statutes in question herein.”

Aplt. App. at 138. But the period of time he describes includes the effective dates

of the two amendments to § 57-1-21(1)(a)(i) that have been stricken in prior

litigation. Mr. Kleinsmith provides no insight into the effect of the May 2004

amendment whose constitutionality we must decide. In particular, he fails to say

that he has so much as investigated the costs of complying with the present

statute—for example, by making arrangements (perhaps with Utah clients) to

“maintain a place” in compliance with the Utah statute.

Perhaps more importantly, Mr. Kleinsmith has not shown how the 2004 law

alters the competitive balance between resident and nonresident attorneys. Even

if he had made a competent showing of his own economic loss attributable to the

law, he would still need to show a discriminatory effect upon interstate commerce

in attorney-trustee services as a whole. Exxon Corp. v. Governor of Maryland,

437 U.S. 117 (1978), is instructive. The Court in that case considered a dormant

Commerce Clause challenge to a Maryland statute that prohibited producers and

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refiners of petroleum products from operating retail service stations within the

state. See id. at 119. Among the challengers were out-of-state refiners who sold

their gasoline in Maryland only through stations that they owned. See id. at 122.

They pointed to evidence that the statute would cause them to discontinue selling

in Maryland. See id. at 127. The Supreme Court was not impressed, because the

fate of a single interstate business, or even a class of such businesses, was not

dispositive. Maryland did not produce or refine any petroleum products. See id.

at 123. The Court said:

Some refiners may choose to withdraw entirely from the Maryland
market, but there is no reason to assume that their share of the entire
supply will not be promptly replaced by other interstate refiners.
The source of the consumers’ supply may switch from
company-operated stations to independent dealers, but interstate
commerce is not subjected to an impermissible burden simply
because an otherwise valid regulation causes some business to shift
from one interstate supplier to another.

Id. at 127 (emphasis added). In language that we find applicable here, the Court

explained: “We cannot . . . accept appellants’ underlying notion that the

Commerce Clause protects the particular structure or methods of operation in a

retail market. . . . [T]he Clause protects the interstate market, not particular

interstate firms, from prohibitive or burdensome regulations.” Id. at 127–28. See

Brown & Williamson Tobacco Co. v. Pataki, 320 F.3d 200, 212–13 (2d Cir.

2003). In light of Exxon, Mr. Kleinsmith should at least have produced evidence

that the work he had performed was now being done by attorneys who are

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residents of Utah. Yet, he appears to claim precisely the opposite. His opening

brief in our court asserts that he has lost his Utah work to a “national group[]” of

lawyers. Aplt. Br. at 5. Accordingly, we conclude that Mr. Kleinsmith has failed

to carry his burden of proving that the Utah statute is discriminatory in practical

effect.

2. Tier Two: Pike Balancing

We turn next to Mr. Kleinsmith’s argument that the Utah statute

excessively burdens interstate commerce under the Pike balancing test. A statute

violates the dormant Commerce Clause if “the burden imposed on [interstate]

commerce is clearly excessive in relation to the putative local benefits.” Pike,

397 U.S. at 142. “[T]he extent of the burden that will be tolerated will of course

depend on the nature of the local interest involved, and on whether it could be

promoted as well with a lesser impact on interstate activities.” Id. The person

challenging the statute bears the burden of establishing a Pike violation. See

Dorrance v. McCarthy, 957 F.2d 761, 763 (10th Cir. 1992).

Mr. Kleinsmith has failed to make the necessary showing. The Attorney

General asserts that the statute makes trust-deed trustees more accessible to

Utahns going through nonjudicial foreclosure. Not only has Mr. Kleinsmith

failed to present any evidence to challenge this benefit, but, as noted in the prior

section of this opinion, he also has not produced evidence of any burden that the

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challenged law imposes on interstate commerce. As a fellow circuit recently

observed:

Any balancing approach, of which Pike is an example, requires
evidence. It is impossible to tell whether a burden on interstate
commerce is clearly excessive in relation to the putative local
benefits without understanding the magnitude of both burdens and
benefits. Exact figures are not essential (no more than estimates may
be possible) and the evidence need not be in the record if it is subject
to judicial notice, but it takes more than lawyers’ talk to condemn a
statute under Pike.

Baude v. Heath, 538 F.3d 608, 612 (7th Cir. 2008) (citations and internal

quotation marks omitted). Absent an evidentiary basis for concluding that the

Utah statute fails the Pike balancing test, we must reject Mr. Kleinsmith’s

challenge under the dormant Commerce Clause.

C. Privileges and Immunities Clause

Article IV’s Privileges and Immunities Clause provides that “[t]he Citizens

of each State shall be entitled to all Privileges and Immunities of Citizens in the

several States.” U.S. Const. art. IV, § 2. In applying the Clause, the Supreme

Court has equated citizenship with residence. See Sup. Ct. of Va. v. Friedman,

487 U.S. 59, 64 (1988). “[T]he purpose of that clause . . . is to outlaw

classifications based on the fact of non-citizenship unless there is something to

indicate that non-citizens constitute a peculiar source of the evil at which the

statute is aimed.” Toomer v. Witsell, 334 U.S. 385, 398 (1948). That is, denial of

a privilege or immunity to nonresidents “is invalid unless (i) there is a substantial

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reason for the difference in treatment; and (ii) the discrimination practiced against

nonresidents bears a substantial relationship to the State’s objective.” Barnard v.

Thorstenn, 489 U.S. 546, 552 (1989) (internal quotation marks omitted).

Mr. Kleinsmith contends that the maintain-a-place requirement of

§ 57-1-21(1)(a)(i) violates the Clause by discriminating against nonresident

attorneys. Invoking the district court’s suggestion in its summary-judgment

ruling that an attorney-trustee could comply with the statute by using his home as

a “place,” he emphasizes that this alternative is not available to nonresident

attorneys who, by definition, lack a Utah residence. He further argues that there

is no substantial reason for this discrimination; that it does not relate closely to a

legitimate state objective because an attorney-trustee whose office lies in a

neighboring state may be geographically closer to a Utahn going through

foreclosure than a trustee whose office is in a distant part of Utah; and that

nondiscriminatory alternative means—for example, requiring attorney-trustees to

have toll-free telephone and fax lines—could have been chosen by the legislature.

We assume, without deciding, that the opportunity to serve as a trust-deed

trustee in Utah is a privilege protected by the Privileges and Immunities Clause.

See Sup. Ct. of N.H. v. Piper, 470 U.S. 274, 280–81 (1985) (practice of law is

privilege protected by the Clause). Nevertheless, we hold that there has been no

violation of that Clause here. The problem for Mr. Kleinsmith is that Utah has

not deprived him of any privilege granted its citizens. Section 57-1-21(1)(a)(i)

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does not create a residency classification. Resident and nonresident attorney

trustees alike are subject to the same requirement: they must maintain a place in

Utah where the trustor can meet with the trustee to request information and

deliver money and documents. The Supreme Court has never employed the

Privileges and Immunities Clause to invalidate a generally applicable law (one

that does not treat different classes of persons differently), or even suggested that

it might do so. Of course, it may be more difficult, more burdensome, for a

nonresident than a resident to comply with a generally applicable law. Indeed,

one would think that typically it is harder for a nonresident to conduct a business

or profession in a state than it is for a resident simply because of the distance

involved; and that was certainly true when the Constitution was adopted. The

Privileges and Immunities Clause does not promise nonresidents that it will be as

easy for them as for residents to comply with a state’s law; it merely protects

nonresidents from legal classifications that treat them more harshly (without

justification).

Thus, the cases in which the Supreme Court has stricken a state law under

the Privileges and Immunities Clause have generally involved laws that classify

residents and nonresidents differently. For example, in Toomer, 334 U.S. 385, the

Court invalidated a South Carolina statue that exacted from nonresident shrimp

fishermen a license fee 100 times that charged to South Carolinians. In Doe v.

Bolton, 410 U.S. 179 (1973), the unconstitutional statute forbade nonresident

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women from having an otherwise lawful abortion in Georgia. In Austin v. New

Hampshire, 420 U.S. 656 (1975), only nonresidents were subject to a tax on

income earned within New Hampshire. In Hicklin v. Orbeck, 437 U.S. 518

(1978), an invalid state law gave preference to state residents in employment in

the oil-and-gas industry. And in Piper, 470 U.S. 274, the Supreme Court

invalidated New Hampshire’s rule that made nonresidents ineligible to join the

state’s bar. See also Nelson v. Geringer, 295 F.3d 1082 (10th Cir. 2002) (striking

a Wyoming statute that barred nonresidents from serving as assistant adjutant

generals in the state’s national guard).

This is not to say that a statute’s classification must be expressed in terms

of citizenship or residency to violate the Privileges and Immunities Clause. In

Chalker v. Birmingham & Nw. Ry. Co., 249 U.S. 522 (1919), the Supreme Court

considered a Tennessee law that taxed persons involved in railroad construction at

a higher rate if their principal offices lay outside the state. The Court held that

the differential tax violated the Clause because “the chief office of an individual

is commonly in the state of which he is a citizen” and thus the challenged tax

“[p]ractically . . . would produce discrimination against citizens of other states by

imposing higher charges against them than citizens of Tennessee are required to

pay.” Id. at 527. “[A] citizen of one state is guaranteed the right to enjoy in all

other states equality of commercial privileges with their citizens,” it continued,

“but he cannot have his chief office in every one of them.” Id.

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 A similar issue arose in the more recent case of Hillside Dairy Inc. v.

Lyons, 539 U.S. 59 (2003). Owners of dairies located outside California

contended that a California milk pooling plan violated the Privileges and

Immunities Clause. They argued to the Ninth Circuit that the plan

“discriminate[d] against those who produce milk out-of-state which, for all intents

and purposes, means those who are residents of other states.” Ponderosa Dairy v.

Lyons, 259 F.3d 1148, 1156 (9th Cir. 2001); see id. at 1151–52 (describing the

plan). The circuit court rejected the challenge. “There is . . . no violation,” it

said, “because the classifications . . . are based on the location where milk is

produced.” Id. The plan “d[id] not, on [its] face, create classifications based on

any individual’s residency or citizenship.” Id. Relying on Chalker, the Supreme

Court reversed. Without reaching the merits, the Court said that a law may

violate the Privileges and Immunities Clause even if the challenged classification

in the law does not refer to residency or citizenship. See Lyons, 539 U.S. at 67.

The Court noted that the classification struck down in Chalker was based, not on

citizenship or residence, but on the location of the person’s principal place of

business. It continued:

Whether Chalker should be interpreted as merely applying the Clause
to classifications that are but proxies for differential treatment
against out-of-state residents, or as prohibiting any classification
with the practical effect of discriminating against such residents, is a
matter we need not decide at this stage of these cases.

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Id. As we understand Lyons, the lower court’s error was in holding that a

classification is subject to the Privileges and Immunities Clause only if it is

explicitly based on citizenship or residency. The Supreme Court’s point was that

another ground for classification may create a Privileges and Immunities Clause

violation if that ground is just a proxy for residence or is so connected to

residence that the classification necessarily imposes discriminatory burdens on

nonresidents.

We must not read too much into Chalker and Lyons. Yes, a state cannot

avoid Privileges and Immunities Clause review of its law by eschewing the words

residence or citizenship and their derivatives. But there still needs to be a

classification—a classification that creates a difference in status for residents and

nonresidents. There is no such classification in § 57-1-21(1)(a)(i). All attorney-

trustees—resident and nonresident—must “maintain a place.” One could say that

attorney-trustees are treated differently from other attorneys or are treated

differently from other trustees; but these differences are totally unconnected to

residence.

Our view of the Privileges and Immunities Clause finds strong support in

the Supreme Court’s analysis in Friedman, 487 U.S. 59. Friedman considered a

challenge under the Clause to Virginia’s requirement that only residents could be

admitted to its bar “on motion” (that is, without passing its bar exam). Id. at 61

(internal quotation marks omitted). After concluding that the residency

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requirement deprived qualified nonresidents of the privilege of practicing law in

Virginia “on terms of substantial equality with [Virginia] residents,” id. at 66, the

Court turned to the state’s contentions that substantial reasons justified the

disparity in treatment and that the discrimination bore a close relation to those

reasons. The Court stated that this inquiry focuses on “whether, within the full

panoply of legislative choices otherwise available to the State, there exist

alternative means of furthering the State’s purpose without implicating

constitutional concerns,” id. at 67. It rejected Virginia’s argument that the

residency requirement was the least problematic means of ensuring an attorney’s

“commitment to service and familiarity with Virginia law.” Id. at 68. The state

could protect these interests, concluded the Court, by, for example, mandating

that attorneys attend continuing-legal-education courses and take on pro bono

work. See id. at 69. The Court likewise rejected the argument that the residency

requirement facilitated enforcement of Virginia’s full-time-practice requirement,

noting:

Virginia already requires . . . that attorneys admitted on motion
maintain an office for the practice of law in Virginia. . . . [T]he
requirement . . . facilitates compliance with the full-time practice
requirement in nearly the identical manner that the residency
restriction does, rendering the latter restriction largely redundant.
The office requirement furnishes an alternative to the residency
requirement that is not only less restrictive, but also is fully adequate
to protect whatever interest the State might have in the full-time
practice restriction.

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Id. at 69–70 (citation omitted). The requirements that all attorneys maintain an

office and engage in pro bono work are more burdensome to nonresidents than to

residents (and the disparity in burdens is certainly greater than the disparity in

burdens in “maintaining a place” under Utah’s law). Yet the Court assumed

without discussion that these uniformly imposed requirements would not pose a

problem under the Privileges and Immunities Clause. They must have been

“alternative means of furthering the State’s purpose without implicating

constitutional concerns.” Id. at 67.

Accordingly, we reject Mr. Kleinsmith’s argument under the Privileges and

Immunities Clause. It is irrelevant to the Clause whether the practical effect of

the maintain-a-place requirement of § 57-1-21(1)(a)(i) burdens nonresidents

disproportionately.

Mr. Kleinsmith also invokes the Fourteenth Amendment’s Privileges or

Immunities Clause. Put aside that the authorities he cites all concern Article IV’s

Clause. It is well established that the only privileges or immunities protected by

the Fourteenth Amendment are those that “owe their existence to the Federal

government, its National character, its Constitution, or its laws.” Slaughterhouse

Cases, 83 U.S. (16 Wall.) 36, 79 (1872). Mr. Kleinsmith’s challenge implicates

no such right. See Powers v. Harris, 379 F.3d 1208, 1214 (10th Cir. 2004) (right

to pursue an occupation not protected by the Fourteenth Amendment’s Privileges

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or Immunities Clause); Merrifield v. Lockyer, 547 F.3d 978, 982–84 (9th Cir

2008) (same).

D. Equal Protection Clause

The Fourteenth Amendment to the United States Constitution declares that

“[n]o State shall . . . deny to any person within its jurisdiction the equal

protection of the laws.” U.S. Const. amend XIV, § 1. Mr. Kleinsmith contends

that § 57-1-21(1)(a)(i) violates the Equal Protection Clause by requiring different

qualifications of different classes of trust-deed trustees. The distinction among

trustees is not based on an inherently suspect characteristic, such as race or

national origin, see Price-Cornelison v. Brooks, 524 F.3d 1103, 1109 (10th Cir.

2008); nor does it burden the exercise of a fundamental right, see Okla. Educ.

Ass’n v. Alcoholic Beverage Laws Enforcement Comm’n, 889 F.2d 929, 932 (10th

Cir. 1989) (“In the equal protection clause context, the Supreme Court has never

recognized a fundamental right to pursue a particular line of employment.”);

Montalvo-Huertas v. Rivera-Cruz, 885 F.2d 971, 977 n.8 (1st Cir. 1989). Thus,

Mr. Kleinsmith’s equal-protection challenge must fail “if the classification drawn

by the statute is rationally related to a legitimate state interest.” ACLU of N.M. v.

Santillanes, 546 F.3d 1313, 1319 (10th Cir. 2008) (internal quotation marks

omitted). Our review under this rational-basis standard is deferential:

Governmental bodies have wide latitude in enacting social and
economic legislation; the federal courts do not sit as arbiters of the
wisdom or utility of these laws. . . . [W]e need not satisfy ourselves

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 that the challenged rules will in fact further their articulated
purposes; it is sufficient if the legislature could rationally have
concluded that the purposes would be achieved.

Allright Colo., Inc. v. City & County of Denver, 937 F.2d 1502, 1512 (10th Cir.

1991) (citations and internal quotation marks omitted).

The statute readily survives this test. Making it easier for Utahns to meet

with trustees, who play a pivotal role in nonjudicial foreclosures, is a legitimate

state interest. And Utah’s legislature could rationally have concluded that this

interest would be served by requiring attorney-trustees to maintain a place within

Utah for meeting with trustors and other interested persons.

Mr. Kleinsmith’s arguments to the contrary are unpersuasive. He first

argues that we should not apply rational-basis scrutiny to his equal-protection

challenge because the statute violates the constitutional provisions that are the

subjects of his other challenges—Article IV’s Privileges and Immunities Clause,

the Fourteenth Amendment’s Privileges or Immunities Clause, the dormant

Commerce Clause, and the Due Process Clause. But, as explained above, these

other constitutional challenges fail.

Mr. Kleinsmith’s other argument is that the Utah statute’s true aim is to

harm an “unpopular group, out-of-state Attorneys,” and that such an aim is barred

by Romer v. Evans, 517 U.S. 620 (1996). Aplt. Br. at 35. Romer struck down on

equal-protection grounds a Colorado constitutional amendment that forbade every

branch of state government from enacting any law or pursuing any policy to

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protect gays and lesbians from discrimination. 517 U.S. at 635. The Court said

that (1) Colorado’s imposition of a “broad and undifferentiated disability on a

single named group” was an “invalid form of legislation”; and (2) the

amendment’s “sheer breadth [was] so discontinuous with the reasons offered for it

that the amendment seems inexplicable by anything but animus toward the class it

affects; it lacks a rational relationship to legitimate state interests.” Id. at 632. In

accordance with circuit precedent, however, we reject Mr. Kleinsmith’s Romer

argument. In Powers, 379 F.3d at 1223–25 & n.20, we considered an

equal-protection claim by persons who sought to sell caskets within Oklahoma

over the Internet. We held that Romer (and its apparent heightened rational-basis

review) does not apply to state economic regulation. See id. at 1224–25. We

therefore need not pursue any further analysis under Romer on this appeal.

In sum, the Utah statute withstands Mr. Kleinsmith’s equal-protection

challenge.

III. CONCLUSION

We AFFIRM the judgment of the district court.

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