United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued November 7, 2005 Decided April 14, 2006
No. 04-7184
WORLDWIDE MOVING & STORAGE, INC.,
A MARYLAND CORPORATION,
APPELLANT
v.
DISTRICT OF COLUMBIA,
APPELLEE
Appeal from the United States District Court
for the District of Columbia
(No. 04cv00175)
Charles E. Wagner argued the cause for the appellant.
Timothy Falls was on brief.
James C. McKay, Jr., Assistant Attorney General, District of
Columbia, argued the cause for the appellee. Robert J.
Spagnoletti, Attorney General, and Edward E. Schwab, Deputy
Attorney General, District of Columbia, were on brief.
Before: HENDERSON and BROWN, Circuit Judges, and
WILLIAMS, Senior Circuit Judge.
Opinion for the court filed by Circuit Judge HENDERSON.
2
KAREN LECRAFT HENDERSON, Circuit Judge: Worldwide
Moving and Storage, Inc. (Worldwide) filed this action seeking
an injunction to prohibit the District of Columbia (District or
D.C.) from imposing a surety bond requirement on a federally
licensed motor carrier or its employees, contending such a
requirement is preempted by federal law. The district court
dismissed the action for lack of constitutional standing.
Although Worldwide may well have constitutional standing
under our decision in Pesikoff v. Secretary of Labor, 501 F.2d
757 (D.C. Cir. 1973), we decline to decide the standing issue
and instead affirm the dismissal on the alternative
ground—raised in but not reached by the district court—that we
should abstain from resolving Worldwide’s preemption claim
under Younger v. Harris, 401 U.S. 37 (1971), because the
dispute is currently being litigated in the local courts of the
District of Columbia. See Nat’l Ass’n of Home Builders v. U.S.
Army Corps of Eng’rs, 417 F.3d 1272, 1281 (D.C. Cir. 2005)
(court “may affirm the district court on an alternative ground”
(citing Tymshare, Inc. v. Covell, 727 F.2d 1145, 1150 (D.C. Cir.
1984))).1
I.
On October 29, 2001 Melvin S. Yates, II, Worldwide’s
founder and one-time president, pleaded guilty in the D.C.
Superior Court (Superior Court) to five misdemeanor counts of
failing to comply with the contract provisions of five moving
jobs performed by the moving company he then operated, M.Y.
1
Although Steel Co. v. Citizens for Better Environment, 523 U.S.
83 (1998), requires that an appellate court “address questions
pertaining to its or a lower court's jurisdiction before proceeding to the
merits,” Younger abstention “represents the sort of ‘threshold
question’ we have recognized may be resolved before addressing
jurisdiction.” Tenet v. Doe, 125 S. Ct. 1230, 1235 n.4 (2005) (citing
Ruhrgas AG v. Marathon Oil Co., 526 U.S. 574, 585 (1999)).
3
Enterprises (MYE), in violation of D.C. Mun. Reg. § 16-
702.1(g).2
On February 11, 2002 the D.C. Office of the Corporation
Counsel (now the Office of the Attorney General) filed a civil
enforcement action against Yates and MYE in Superior Court
for misleading customers in violation of the D.C. Consumer
Protection Procedures Act, D.C. Code. § 28-3904. On February
26, 2002 the Superior Court entered a preliminary injunction
requiring that no later than April 1, 2002 Yates and MYE obtain
a $100,000 surety bond issued in the name of the District of
Columbia “for the benefit of any consumer injured as a result of
any false or misleading representation made, omission of
material facts that have a tendency to mislead, or failure to
honor valid insurance claims while defendants are engaged in
the business of transporting, moving, warehousing, or storing
goods.”3 District of Columbia v. MYE, C.A. No. 02-926, order
at 6-7 (D.C. Super. Ct. Feb. 26, 2002).
Unable to secure a surety bond, in early 2002 MYE filed for
liquidation under Chapter 7 of the Bankruptcy Code, 11 U.S.C.
§§ 701 et seq., and is no longer in business. Subsequently, the
District sought an order in Superior Court holding Yates in
contempt for operating Worldwide, which he incorporated on
March 22, 2001, without a surety bond. On November 12, 2002
the Superior Court issued an order to show cause why Yates
2
D.C. Mun. Reg. § 16-702.1(g) requires that a contract for moving
household goods contain: “The name, address and telephone number
of the place of storage, if any, and the hours during which the stored
goods can be inspected by the owner.”
3
Yates filed an appeal of the preliminary injunction, which the
D.C. Court of Appeals dismissed as moot on February 17, 2005, Yates
v. District of Columbia, 868 A.2d 866 (D.C. 2005), after the Superior
Court issued a permanent injunction on December 21, 2004, as
detailed infra.
4
should not be held in contempt. On March 19, 2003, Yates filed
for personal bankruptcy protection.
On February 5, 2004, Worldwide filed this action in the
district court to enjoin the District “from imposing or attempting
to impose a surety bond requirement on a motor carrier holding
authority to operate in interstate commerce if that carrier meets
the minimum federal insurance requirements” and “from
imposing a surety bond requirement on employees of federally
licensed motor carriers which meet the federal insurance
requirements.” Compl. at 19. The complaint alleged, inter alia,
that federal law preempts the District from regulating
Worldwide’s interstate moving operations through a surety bond
requirement. The District filed a motion to dismiss on the
grounds that Worldwide lacked standing, Younger abstention,
absence of an indispensable party (Yates) and failure to state a
claim under Fed. R. Civ. P. 12(b)(6). In an order filed
September 30, 2004 the district court dismissed the complaint
for lack of standing, concluding that “[b]ecause the surety bond
imposed on Mr. Yates inflicts no substantial injury to any
legally protected interest of Worldwide, plaintiff lacks standing
to enjoin the enforcement of that requirement.” Worldwide
Moving & Storage v. District of Columbia, C.A. No. 04-0175,
mem. op. at 7 (D.D.C. Sept. 30, 2004). Worldwide then timely
appealed.
Following a jury trial, the Superior Court entered final
judgment in favor of the District. District of Columbia v. MYE,
C.A. No. 02-926, ord. at 7-11 (D.C. Super. Ct. Dec. 21, 2004).
The court assessed a $7,000 civil penalty against Yates and
issued permanent injunctive relief which imposed a number of
obligations and prohibitions on any “Yates company,” which the
court defined as “a) Yates, or b) any company engaged in the
business of moving and/or storing consumer goods that is under
the management or control of Yates,” id. at 7. The order also
directed that Yates either (1) “obtain and maintain in force a
5
surety bond . . . in the amount of $75,000” (“in his individual
capacity or through the company whose activities trigger this
bond requirement”) or (2) “refrain from managing or
controlling, whether directly or indirectly, a company that
provides Local Moves involving household goods.” Id. at 9.
The injunction defined a “Local Move” as “a move or contract
of storage within the District of Columbia Commercial Zone, as
defined by 49 C.F.R. § 372.219, in which the customer’s
destination point, the customer’s origination point, or the Yates
company storage facility is located within the District of
Columbia” or, if a Yates company used a District of Columbia
address to conduct business, “any move within the District of
Columbia Commercial Zone that occurs entirely within one
state.” Id. at 7. Worldwide filed an appeal in the D.C. Court of
Appeals.4
On March 16, 2005 the District moved in Superior Court for
an order to show cause why Yates should not be held in
contempt for, inter alia, not complying with the surety bond
requirement in the December 21, 2004 judgment order. In
addition, the motion recommended that the contempt order
“enjoin a Yates company (as defined in the order of December
21, 2004), including WorldWide Moving and Storage Inc., from
engaging in any moving or storage business activity within the
District of Columbia until Yates satisfies the Court that he is in
compliance with all outstanding provisions of the Court’s order
of December 21, 2004.” District of Columbia v. MYE, C.A. No.
02-926, Pl.’s Mot. for Order to Show Cause Why Def. Should
Not Be Held in Civil Contempt, at 2 (D.C. Super. Ct. filed Mar.
16, 2002). At a hearing on January 5, 2006 the court found
Yates in civil contempt, granted the requested injunctive relief
4
The D.C. Court of Appeals denied Yates’s motion to stay the
injunction on appeal. Yates v. District of Columbia, Nos. 05-CV-29
& 06-CV-96 (D.C. filed March 8, 2006).
6
and directed that he pay a fine of $100 per day, beginning
January 9, 2006, for each day he violated the prohibition.
District of Columbia v. MYE, C.A. No. 02-926, 1/5/06 Hearing
Tr. at 60-61. In a written order dated January 18, 2006
(expressly superseding the oral order), the court found Yates in
contempt and directed that neither Worldwide nor any “Yates
company” “engage in any moving or storage business activity in
the District of Columbia, or use a District of Columbia address
to conduct its business, unless and until this Court has issued a
further Order finding that the company has satisfied, or need not
satisfy, the surety bond requirement set forth in the Court’s
Order of December 23, 2004.” District of Columbia v. MYE,
C.A. No. 02-926, order at 8-9 (docketed Jan. 19, 2006). On
January 27, 2006 Yates appealed the order to the D.C. Court of
Appeals, which consolidated the appeal with Yates’s pending
appeal of the December 21, 2004 permanent injunction and
denied Yates’s motion to stay the injunction on appeal. Yates v.
District of Columbia, Nos. 05-CV-29 & 06-CV-96 (D.C. filed
March 8, 2006).
II.
“In Younger v. Harris and its progeny, the Supreme Court
held that, except in extraordinary circumstances, a federal court
should not enjoin a pending state proceeding (including an
administrative proceeding) that is judicial in nature and involves
important state interests.” JMM Corp. v. District of Columbia,
378 F.3d 1117, 1120 (D.C. Cir. 2004) (citations omitted).5 The
Younger abstention doctrine rests “both on ‘equitable principles’
and on ‘concerns for comity and federalism.’ ” Id. at 1121
(citations omitted). In determining whether to abstain under
Younger, we apply a “rigid three-prong test”:
5
In JMM Corp., we decided that the Younger doctrine applies to
the District.
7
[F]irst, a federal court may dismiss a federal claim only
when there are ongoing state proceedings that are
judicial in nature; second, the state proceedings must
implicate important state interests; third, the proceedings
must afford an adequate opportunity in which to raise
the federal claims.
Bridges v. Kelly, 84 F.3d 470, 476 (D.C. Cir. 1996) (quoting
Hoai v. Sun Ref. & Mktg. Co., 866 F.2d 1515, 1518 (D.C. Cir.
1989) (citing Middlesex County Ethics Comm. v. Garden State
Bar Ass’n, 457 U.S. 423, 432 (1982))). All three criteria are met
in this case.
First, both the Superior Court proceeding and the appeals
from its December 21, 2004 and January 18, 2006 orders are
ongoing. Second, the District has an important interest in
enforcing its laws that regulate the local movement and storage
of household goods. Cf. JMM Corp., 378 F.3d at 1126 (noting
Supreme Court “has found that the enforcement of zoning
regulations . . . constitutes an important state interest”) (citing
City of Los Angeles v. Alameda Books, Inc., 535 U.S. 425, 435-
37 (2002); City of Renton v. Playtime Theatres, Inc., 475 U.S.
41, 50 (1986)). Third, there is no reason the preemption defense
may not be raised and fully litigated in the D.C. court
proceedings, whether by Yates or by Worldwide (as the latter
has sought to do in federal court).6 Cf. JMM Corp., 378 F.3d at
6
In fact, Yates has already asserted the defense in Superior Court.
See District of Columbia v. MYE, C.A. No. 02-926, Resp. to Mot. to
Show Cause Order at 6-7 & n.4 (D.C. Super. Ct. filed Mar. 25, 2004).
Worldwide contends abstention is inappropriate in part because it is
not a party to the Superior Court action and “this Court has opined that
whether the Federal plaintiff is a party to the local action is a key
factor in any abstention evaluation.” Reply Br. at 18 (citing Family
Div. Trial Lawyers of Super. Ct.–D.C., Inc. v. Moultrie, 725 F.2d 695,
702 (D.C. Cir. 1984)). Yet at the same time Worldwide characterizes
8
1121 (“Where the proceedings begin in Superior Court, the
defendant can raise any constitutional claims in that court,
appeal an adverse decision to the District of Columbia Court of
Appeals, and if still dissatisfied seek review in the United States
Supreme Court.” (citing D.C. Code Ann. §§ 2-510(a); 11-921,
11-923; 11-721; 28 U.S.C. § 1257(a), (b))).
Notwithstanding this case satisfies all three of the Younger
abstention prerequisites, Worldwide contends abstention is
improper because the D.C. enforcement proceeding is
preempted by federal law governing interstate shippers. In New
Orleans Public Service, Inc. v. Council of New Orleans, 491
U.S. 350 (1989) (NOPSI), the Supreme Court observed that even
a “substantial” preemption claim (like a substantial
constitutional claim) is insufficient to require a federal court to
intervene in a matter being litigated in state court. 491 U.S. at
364-65. The Court held open the possibility that, as the
petitioner argued, “a facially conclusive claim” might be
“sufficient to render abstention inappropriate” but found no need
to decide the question because “the proceeding and order at
issue do not meet that description.” Id. at 367 (emphasis in
itself as a “de facto party” to the Superior Court action, Appellants’
Opening Br. at 25, and relies on the orders issued therein to support its
Article III standing here. Given that the January 18, 2006 Superior
Court order expressly found that Yates controls Worldwide and
expressly subjected Worldwide as well as Yates to the injunction it
issued, we see no reason why the preemption claim should not be
decided there. See Doran v. Salem Inn, Inc., 422 U.S. 922, 928-929
(1975) (noting “there plainly may be some circumstances in which
legally distinct parties are so closely related that they should all be
subject to the Younger considerations which govern any one of
them”); Moultrie, 725 F.2d at 702 (“[T]he Younger abstention policy
is best suited to cases where federal plaintiffs are trying to attack state
enforcement procedures which have been directly applied to them.”).
9
original). Worldwide has likewise failed to assert a “facially
conclusive” preemption claim.
Worldwide contends the Superior Court’s enforcement
proceeding is preempted under two federal statutes. The first
provision is the “Carmack Amendment” to the Interstate
Commerce Act, which codifies the common law liability of a
carrier transporting property for hire “for the actual loss or
injury to the property” shipped. 49 U.S.C. § 14706(a)(1). The
Carmack Amendment, however, governs only the private
liability of a carrier to the owner of the property. It says nothing
explicitly about a prophylactic surety bond, the remedy imposed
by the Superior Court and to which Worldwide objects. The
second statute is 49 U.S.C. § 14501(c)(1), which prohibits a
state from enacting or enforcing laws or regulations governing
certain aspects of interstate transportation. Section
14501(c)(2)(A), however, expressly states that the prohibition
“shall not restrict . . . the authority of a State to regulate carriers
with regard to minimum amounts of financial responsibility
relating to insurance requirements and self-insurance
authorization,” which appears to exempt from the prohibition
the surety bond requirement imposed on Worldwide. Given that
the two statutes on which Worldwide relies appear inapplicable
to the surety bond requirement, we conclude that Worldwide’s
preemption claim does not satisfy the “facially conclusive”
standard described in NOPSI. Cf. Hughes v. Att’y Gen. of Fla.,
377 F.3d 1258, 1265 (11th Cir. 2004) (under NOPSI facially
conclusive standard, “only the clearest of federal preemption
claims would require a federal court to hear a preemption claim
when there are underlying state court proceedings and when that
claim can be raised in the state forum”). Thus, like the Supreme
Court in NOPSI, we need not decide whether a preemption claim
10
that did meet this standard would override the Younger
abstention doctrine.7
Because principles of equity, comity and federalism favor
abstaining from addressing Worldwide’s federal claims while
the D.C. court proceedings continue, we affirm the district
court’s dismissal of Worldwide’s complaint under Younger.
So ordered.
7
In two post-argument letters submitted to the court pursuant to
District of Columbia Circuit Rule 28(j), Worldwide suggests, for the
first time before this court, that abstention is foreclosed by Yates’s
bankruptcy proceeding. See Rule 28(j) letters of Appellant filed Jan.
27, 2006, Feb. 06, 2006. This argument comes too late. Cf. Goldring
v. District of Columbia, 416 F.3d 70, 77 n.4 (D.C. Cir. 2005)
(argument raised for first time in reply brief is untimely (citation
omitted)); Ark Las Vegas Rest. Corp. v. NLRB, 334 F.3d 99, 108 n.4
(D.C. Cir. 2003) (argument raised at oral argument but not in briefs is
waived (citations omitted)). In any event, Worldwide’s claim of
bankruptcy preclusion, resting as it does on a review of the factual
record of this case and the bankruptcy proceeding (which Worldwide
informs us was “closed” on December 28, 2005, Mar. 20, 2006 28(j)
Letter at 1), is not facially conclusive under NOPSI.