Erik Autor v. Penny Pritzker

United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued October 25, 2013 Decided January 17, 2014

No. 12-5379

ERIK O. AUTOR, ET AL.,

APPELLANTS

v.

PENNY SUE PRITZKER, IN HER OFFICIAL CAPACITY AS

SECRETARY OF COMMERCE, ET AL.,

APPELLEES

Appeal from the United States District Court

for the District of Columbia

(No. 1:11-cv-01593)

Charles A. Rothfeld argued the cause and filed the briefs

for appellants. With him on the briefs was Joseph P. Minta.

Michael S. Raab, Attorney, U.S. Department of Justice,

argued the cause for appellees. With him on the brief were

Stuart F. Delery, Acting Assistant Attorney General, Ronald

C. Machen Jr., U.S. Attorney, Mark B. Stern and Daniel

Tenny, Attorneys.

Before: TATEL and BROWN, Circuit Judges, and

EDWARDS, Senior Circuit Judge.

Opinion for the Court filed by Circuit Judge TATEL.

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TATEL, Circuit Judge: President Obama, seeking to reduce

the “culture of special interest access,” directed executive

agency heads to bar federally registered lobbyists from serving

on advisory committees. Appellants, federally registered

lobbyists wishing appointment to one type of advisory

committee—Industry Trade Advisory Committees

(ITACs)—challenge the constitutionality of the presidential

ban. Because the ban requires Appellants to limit their exercise

of a constitutional right—in this case, the First Amendment

right to petition government—in order to qualify for a

governmental benefit—in this case, ITAC membership—we

reverse the district court’s premature dismissal of the

complaint and remand for that court to determine in the first

instance whether the government’s interest in excluding

federally registered lobbyists from ITACs outweighs any

impingement on Appellants’ constitutional rights.

I.

Created by the Trade Act of 1974, which requires the

President to “seek information and advice from representative

elements of the private sector . . . with respect to” trade policy,

19 U.S.C. § 2155(a)(1), ITACs play a significant role in

shaping international trade agreements. See id. § 2155(c)(2).

The sixteen industry-specific ITACs run the gamut of

industrial interests from Aerospace Equipment to Consumer

Goods to Service and Financial Industries. See International

Trade Administration, List of Industry Trade Advisory

Committees, available at

www.ita.doc.gov/itac/committees/index.asp (last visited Jan.

10, 2014). In addition to meeting “at the call of the United

States Trade Representative,” 19 U.S.C. § 2155(d), ITACs

prepare reports for the President, Congress, and the Trade

Representative on whether proposed trade agreements provide

for “equity and reciprocity within” the committees’ sector, id.

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§ 2155(e)(1), (3). Although ITAC advice is non-binding, the

Act requires the Trade Representative to “inform the advisory

committees of significant departures from such advice or

recommendations made.” Id. § 2155(i)(2).

Unlike many advisory committees, ITACs exist for the

very purpose of reflecting the viewpoints of private industry.

According to the Trade Act, the “committees shall, insofar as is

practicable, be representative of all industry, labor,

agricultural, or service interests.” Id. § 2155(c)(2). Applicants

for ITAC membership must be sponsored by a firm or

organization engaged in trade or trade policy. See Request for

Nominations for the Industry Trade Advisory Committees

(ITACs), 75 Fed. Reg. 24,584, 24,585 (May 5, 2010). ITAC

members serve in a “representative capacity presenting the

views and interests of a U.S. entity or U.S. organization.” Id. It

should thus come as no surprise that the Aerospace Equipment

ITAC includes representatives of Boeing, Pratt & Whitney,

Gulfstream, General Electric, Lockheed Martin, and Bell

Aerospace. Likewise, the Energy and Energy Services ITAC

includes representatives of Halliburton, Chevron, General

Electric, the National Mining Association, and the Nuclear

Energy Institute. See International Trade Administration, List

of Industry Trade Advisory Committees, available at

www.ita.doc.gov/itac/committees/index.asp (last visited Jan.

10, 2014).

Although Congress created ITACs to represent the views

of the private sector, President Obama directed “the heads of

executive departments and agencies not to make any new

appointments or reappointments of federally registered

lobbyists to advisory committees.” Presidential Memorandum,

Lobbyists on Agency Boards and Commissions, 75 Fed. Reg.

35,955 (June 18, 2010). In so directing, the President sought to

further his commitment to change “the culture of

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special-interest access” that is furthered by lobbyists’ “service

in privileged positions within the executive branch.” Id. “My

administration,” the President explained, “is committed to

reducing the undue influence of special interests that for too

long has shaped the national agenda and drowned out the

voices of ordinary Americans.” Id. Pursuant to the President’s

directive, and setting the stage for this litigation, the

Commerce Secretary and the Trade Representative prohibit

federally registered lobbyists from serving on ITACs. See

Request for Nominations for the Industry Trade Advisory

Committees (ITACs), 75 Fed. Reg. at 24,585.

Contrary to popular belief, only certain lobbyists are

required to be federally registered. The Lobbying Disclosure

Act of 1995 (LDA) requires that lobbyists register if they (1)

are employed by a client for compensation, (2) have made

more than one lobbying contact on behalf of such client, and

(3) have spent at least twenty percent of their time for that

client working on lobbying activities during a three-month

period. 2 U.S.C. § 1602(10). In other words, lobbyists have no

obligation to register if they limit their lobbying activities to at

most twenty percent of their time working for any particular

client.

Appellants, six federally registered lobbyists wishing to

serve on ITACs, sued to enjoin the ban. Relying on Perry v.

Sindermann, 408 U.S. 593 (1972), which limits the

government’s power to condition governmental benefits on

recipients’ relinquishment of constitutionally protected rights,

Appellants alleged that the ban violates the First Amendment

and the equal protection guarantee of the Fifth Amendment by

“denying the benefit of committee service to individuals whose

exercise of the right to petition triggers the LDA’s registration

requirement.” Complaint ¶ 44.

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The district court dismissed the complaint pursuant to

Federal Rule of Civil Procedure 12(b)(6). The court first found

Appellants’ claims foreclosed by Minnesota State Board for

Community Colleges v. Knight, 465 U.S. 271 (1984), in which

the Supreme Court held that “the Constitution does not grant

members of the public any particular right to be heard by

public bodies making policy decisions.” Autor v. Blank, 892 F.

Supp. 2d 264, 273–74 (D.D.C. 2012) (citing Knight, 465 U.S.

at 283). The court went on to conclude that even if Knight left

open Appellants’ unconstitutional conditions claim, the

complaint nonetheless failed to establish both “that service on

an ITAC is a valuable government benefit,” id. at 275, and that

Appellants were denied this benefit “on a basis that infringes

upon their constitutionally protected rights,” id. at 268. Finding

that the lobbyist ban implicated no fundamental rights, the

court also rejected Appellants’ Fifth Amendment equal

protection claim. See id. at 282–84.

On appeal, Appellants challenge the dismissal of both

their First Amendment and Fifth Amendment claims. We

review Rule 12(b)(6) dismissals de novo, see St. Marks Place

Housing Co., Inc. v. U.S. Department of Housing & Urban

Development, 610 F.3d 75, 79 (D.C. Cir. 2010), “accept[ing] as

true all of the factual allegations contained in the complaint and

draw[ing] all inferences in favor of the nonmoving party,” City

of Harper Woods Employees’ Retirement System v. Olver, 589

F.3d 1292, 1298 (D.C. Cir. 2009).

II.

At the outset, we think it important to put the issue

before us in its proper context. Reading the government’s brief

and listening to oral argument, during which counsel asserted

that the Constitution imposes “very, very few restrictions” on

the “President’s [power to] choos[e] [his] advisors,” Oral Arg.

Tr. 16, one might get the impression that this case is about the

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President’s ability to select his Chief of Staff or White House

Counsel. Nothing could be further from the truth. The question

before us concerns only the President’s choice of individuals to

serve on congressionally created advisory committees—more

specifically, Industry Trade Advisory Committees.

According to Appellants, we may resolve this case

through a straightforward application of Perry’s

“unconstitutional conditions” doctrine. See Perry, 408 U.S. at

597. If, as they allege, ITAC service qualifies as a

governmental benefit and the registered-lobbyist ban requires

them to curtail their right to petition government to receive this

benefit, then, they contend, the government has

unconstitutionally burdened their exercise of this right. Before

addressing this question, however, we must consider the

government’s antecedent argument, embraced by the district

court, that the Supreme Court’s recognition in Knight of the

government’s freedom to choose its advisors forecloses

application of the unconstitutional conditions doctrine here.

Knight concerned a Minnesota law requiring public

employers to “meet and confer” with their professional

employees on employment-related policy issues. Knight, 465

U.S. at 274. But if an employee bargaining unit had an

exclusive bargaining representative, i.e., a union, the law

prohibited the employer from “meeting and conferring” with

anyone other than the union’s representatives. Id. at 274–75. In

Knight, community college teachers who had declined to join

their union and were therefore prohibited from “meeting and

conferring” with their employer on their own challenged this

provision. Although the union allowed both union and

nonunion members “to nominate candidates, to run for

election, and to vote for” each “meet and confer”

representative, id. at 280 n.5, the teachers alleged that

Minnesota unconstitutionally burdened their First Amendment

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rights by limiting participation in the “meet and confer”

process to representatives chosen by the union, id. at 279.

Declining to “recognize a constitutional right to

participate directly in government policymaking [that] would

work a revolution in existing government practices,” id. at 284,

the Supreme Court rejected the teachers’ “principal claim . . .

that they ha[d] a right to force officers of the State” to listen to

them, id. at 282. “Absent statutory restrictions,” the Court

elaborated, “the State must be free to consult or not to consult

whomever it pleases.” Id. at 285. The Court then rejected the

teachers’ claim that the union’s ability to exclude nonmembers

from participation in the “meet and confer” sessions burdened

nonmember teachers’ speech and associational rights. The

Court reasoned that the union’s ability to choose

“representatives who share[d] its views on the issues to be

discussed with the State . . . no more unconstitutionally

inhibit[ed] [the teachers’] speech than voters’ power to reject a

candidate for office inhibits the candidate’s speech,” id. at 289,

and that any pressure the teachers might have felt to join the

union was constitutionally insignificant because it was the

same pressure any individual feels to join a privileged group,

id. at 289–90.

The government argues that Knight controls this case.

Like the state in Knight, the government insists it has “simply

restricted the class of persons to whom it will listen in its

making of policy.” Appellee’s Br. 14 (quoting Knight, 465

U.S. at 282) (internal quotation marks omitted). Moreover, the

government argues, it makes no difference if its decision

pressures Appellants to limit their lobbying activities, as

Knight found this very type of pressure constitutionally

insignificant. According to the government, therefore, it

violated no constitutional right when it “determin[ed] that it

would make best use of the advisory committee mechanism by

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receiving information and advice from persons who are not

already paid to regularly share their views with federal

officials.” Appellee’s Br. 14–15.

Knight does not control this case. Acknowledging they

have no constitutional right to make the government listen to

them, Appellants argue that the government—required by the

Trade Act to establish ITACs for the very purpose of hearing

the views of industry—may not deny them the benefit of ITAC

service based on their exercise of the constitutional right to

petition government. Unlike in Knight, in which the alleged

burden on the teachers’ First Amendment rights resulted from

the union’s exclusion of them from the “meet and confer”

committees, here any burden on Appellants’ constitutional

rights results directly from the government’s decision to bar

them from ITAC membership. True, the state in Knight was

indirectly responsible for the alleged burden on the teachers’

constitutional rights, but as the Court explained, any indirect

burden was inherent in the state’s decision to listen to some but

not all. See Knight, 465 U.S. at 289–90. Put another way,

although the Supreme Court recognized that the government

may choose to hear from some groups at the expense of others,

it never addressed the question we face here—whether, in so

doing, the government may also limit the constitutional rights

of those to whom it chooses to listen.

The situation before us is more analogous to cases in

which the government sought to curtail the First Amendment

rights of government employees than it is to Knight. Although

the government generally has authority to choose whom it

hires, the Supreme Court has repeatedly subjected employment

conditions restricting fundamental rights to constitutional

scrutiny, at least when the government fills non-partisan,

non-policymaking positions. See, e.g., Elrod v. Burns, 427

U.S. 347, 372–73 (1976) (holding patronage dismissals of

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non-policymaking public employees unconstitutional);

Pickering v. Board of Education, 391 U.S. 563, 574–75 (1968)

(holding unconstitutional city’s restriction on employee speech

on matter of public concern); see also Williams v. Rhodes, 393

U.S. 23, 29 (1968) (recognizing that although “the Constitution

is filled with provisions that grant Congress or the States

specific power[s] . . . these granted powers are always subject

to the limitation that they may not be exercised in a way that

violates other specific provisions of the Constitution”). Indeed,

were the government correct about Knight, it would be free, as

its counsel virtually conceded at oral argument, to exclude

committee members based on race, gender, or political

expression. Oral Arg. Tr. 14–16.

Having rejected the government’s Knight argument, we

turn to Appellants’ claim that the lobbyist ban imposes an

unconstitutional condition on their right to petition

government. As formulated in Perry v. Sindermann, the

unconstitutional conditions doctrine provides that “even

though a person has no ‘right’ to a valuable governmental

benefit and even though the government may deny him the

benefit for any number of reasons, . . . [it] may not deny a

benefit to a person on a basis that infringes his constitutionally

protected interests.” 408 U.S. at 597. The district court

dismissed this claim, finding that the ban neither deprived

Appellants of a valuable benefit nor burdened their right to

petition. We disagree on both counts.

As to the first issue, the government does not defend the

district court’s conclusion that ITAC service fails to qualify as

a governmental benefit. Indeed, ITAC membership comes with

many important benefits. For example, ITAC members are

able to play a significant role in shaping national trade policy:

they consult with top-government officials before, during, and

after the conclusion of trade negotiations; they submit reports

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assessing the impact of trade agreements on industry; and the

Trade Representative is required to respond to these reports.

See 19 U.S.C. § 2155(d), (e)(1),(3), (i). Also, as Appellants

explained to the district court, ITAC members receive

“valuable expertise,” “experience,” and “a resume-enhancing

characteristic.” Autor, 892 F. Supp. 2d at 276. True, as the

district court pointed out, such benefits may not be quantifiable

in the same way as tax exemptions, welfare payments, and

other benefits the Supreme Court has found to implicate the

unconstitutional conditions doctrine. See id. at 277. But as the

district court also acknowledged, “neither the Supreme Court

nor this Circuit has required the benefit in an unconstitutional

conditions claim to have measurable economic worth.” Id. at

275. This is hardly surprising given that the doctrine’s

foundational principle—that the government “may not deny a

benefit to a person on a basis that infringes his constitutionally

protected interests . . . to produce a result which (it) could not

command directly,” Perry, 408 U.S. at 597 (internal quotations

omitted)—does not turn on whether the benefit has economic

worth. Even if it has none, so long as it has value to those who

seek it, as ITAC membership does to Appellants, then the

government can use its power to withhold the benefit to

pressure Appellants to forgo constitutionally protected

activity. Our sister circuits have thus extended the doctrine to a

broad range of non-monetary benefits and none, to our

knowledge, has found a benefit too insignificant. See, e.g.,

Cuffley v. Mickes, 208 F.3d 702, 707 (8th Cir. 2000)

(participation in adopt-a-highway program); Hyland v.

Wonder, 972 F.2d 1129, 1135–36 (9th Cir. 1992) (volunteer

position).

As to the second basis for the district court’s decision, the

government acknowledges, as it must, that registered lobbyists

are protected by the First Amendment right to petition. See

Liberty Lobby, Inc. v. Pearson, 390 F.2d 489, 491 (D.C. Cir.

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1968) (holding lobbying is protected by the right to petition

government); see also Riley v. National Federation of the Blind

of North Carolina, Inc., 487 U.S. 781, 801 (1988) (holding that

First Amendment rights are “not lost merely because

compensation is received”). Its disagreement with Appellants

centers on whether the ban infringes this right. For its part, the

district court concluded that the ban “does not curtail protected

activity,” reasoning that “the statutory duty to register is not

directly correlated with the amount, nature, or content of any

lobbyist’s protected activity.” Autor, 892 F. Supp. 2d at 281–

82. Again, the government does not defend the district court’s

reasoning. Instead, it argues that the ban imposes no

unconstitutional burden, citing in support Lyng v. International

Union, 485 U.S. 360 (1988), one of a series of decisions

holding that “when the government appropriates public funds

to establish a program,” Rust v. Sullivan, 500 U.S. 173, 194

(1991), its “decision not to [use program funds to] subsidize

the exercise of a fundamental right does not infringe the right.”

Lyng v. International Union, United Automobile, Aerospace &

Agricultural Implement Workers of America, 485 U.S. 360,

368 (1988) (quoting Regan v. Taxation with Representation of

Washington, 461 U.S. 540, 549 (1983)) (internal quotation

marks omitted). In Lyng, the Supreme Court held that the

government could deny food stamp increases to striking

workers without running afoul of the First Amendment. Id. at

369–73; see also Regan, 461 U.S. at 551 (upholding denial of

tax exemption). But unlike in Lyng and the other subsidy cases,

in which the government withheld a financial benefit from the

plaintiffs, here the government pays ITAC members nothing.

They serve as volunteers, absorbing even their out of pocket

expenses. See Request for Nominations for the Industry Trade

Advisory Committees (ITACs), 75 Fed. Reg. at 24,585. The

Supreme Court has never extended the subsidy doctrine to

situations not involving financial benefits, and the government

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offers no reason, nor can we think of one, why we should do so

here.

The government also cites Lyng for the proposition that

the lobbyist ban cannot “be thought to constitute significant

pressure to give up one’s status as a paid registered lobbyist.”

Appellee’s Br. 17. As Appellants point out, however, this

argument is premature. In their complaint, Appellants

plausibly alleged that the ban pressures them to limit their

constitutional right to petition, and given that the district court

dismissed the complaint pursuant to Rule 12(b)(6)—by

contrast, the Supreme Court resolved Lyng at summary

judgment—we must accept this allegation as true. See City of

Harper Woods, 589 F.3d at 1298.

The government next argues that the availability of a

“wide variety of alternative settings”—such as public

meetings, hearings, and trade “road shows”—in which

“registered lobbyists remain free” to participate in shaping

trade policy, Appellee’s Br. 18, “underscore the absence of any

First Amendment concerns,” Appellee’s Br. 20. But as

Appellants point out, their ability to participate in trade policy

in a variety of other ways is no answer to their argument that

banning them from ITAC membership deprives them of “an

especially effective way to affect government policy.”

Appellants’ Reply Br. 19. In support, Appellants

cite—properly in our view—Healy v. James, 408 U.S. 169

(1972), in which the Supreme Court held that a public

university’s decision to deny a student organization official

recognition burdened the student group notwithstanding the

group’s ability to associate in other ways. See id. at 183. The

government has no answer to Healy.

To sum up, then, Appellants have pled a viable First

Amendment unconstitutional conditions claim. That is, they

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allege that the government has conditioned their eligibility for

the valuable benefit of ITAC membership on their willingness

to limit their First Amendment right to petition government.

But this does not end our inquiry. The Supreme Court has

long sanctioned government burdens on public employees’

exercise of constitutional rights “that would be plainly

unconstitutional if applied to the public at large.” United States

v. National Treasury Employees Union, 513 U.S. 454, 465

(1995) (citing Pickering, 391 U.S. 563). Although ITAC

service differs from public employment, the government’s

interest in selecting its advisors, see Knight, 465 U.S. at 285,

implicates similar considerations that we believe may justify

similar restrictions on individual rights. As the Supreme Court

explained in Pickering v. Board of Education, the “problem in

[these cases] is to arrive at a balance between the interests of

the [individual] . . . and the interest of the State.” 391 U.S. at

568. And where, as here, the government imposes a “blanket”

ban on protected activity, its “burden is greater” than in an

ordinary Pickering case. National Treasury Employees Union,

513 U.S. at 468.

The government justifies the ban on the grounds that it

“directly relates to the purposes and efficacy of the ITACs as

advisers” by “enabl[ing] the government to listen to

individuals who have experience in the industry but who are

not registered lobbyists, and are thus not otherwise as actively

engaged in the political and administrative process.”

Appellee’s Br. 16–17. This rationale, Appellants respond, is

“barely intelligible” because ITAC members “serve in a

representative capacity.” Appellants’ Reply Br. 13 (emphasis

added). Appellants also urge us to undertake the Pickering

balancing ourselves. But given that the issue is virtually

unbriefed, that the district court dismissed the complaint

pursuant to Rule 12(b)(6), and that the challenged ban

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represents a major presidential initiative, we believe the wisest

course of action is to remand for the district court to develop a

factual record and undertake the Pickering analysis in the first

instance. In so doing, the district court should ask the parties to

focus on the justification for distinguishing, as the lobbyist ban

does, between corporate employees (who may represent their

employers on ITACs) and the registered lobbyists those same

corporations retain (who may not). The court may also want to

ask the government to explain how banning lobbyists from

committees composed of representatives of the likes of Boeing

and General Electric protects the “voices of ordinary

Americans.” Presidential Memorandum, 75 Fed. Reg. at

35,955.

We have one loose end to tie up. As noted at the outset, in

addition to their First Amendment claim, Appellants pled a

Fifth Amendment equal protection claim. Because they have

plausibly alleged that the ban denies them a benefit available to

others on account of their exercise of a fundamental right, we

must reverse the district court’s dismissal of their equal

protection claim as well. See Tele-Communications of Key

West, Inc. v. United States, 757 F.2d 1330, 1340 (D.C. Cir.

1985) (allegation of differential treatment without satisfactory

justification states equal protection claim); see also Police

Department of City of Chicago v. Mosley, 408 U.S. 92, 94–95

(1972) (analyzing city’s differential treatment of plaintiff’s

picketing under Equal Protection Clause). Although we can

think of good reasons why the Pickering balancing test should

apply to both claims, see Rogers v. Corbett, 468 F.3d 188,

193–94 (3d Cir. 2006) (abandoning traditional tiers of equal

protection scrutiny and applying Anderson v. Celebrezze, 460

U.S. 780 (1983), balancing test to equal protection claim

challenging ballot access restriction), this issue is also

unbriefed, and we think it best to leave it too for the district

court to wrestle with should the parties choose to pursue it.

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III.

We reverse and remand for further proceedings consistent

with this opinion.

So ordered.