Wanda Goodpaster v. City of Indianapolis

In the

United States Court of Appeals

For the Seventh Circuit

No. 13-1629

WANDA GOODPASTER et al.,

Plaintiffs-Appellants,

v.

CITY OF INDIANAPOLIS, CITY-COUNTY

COUNCIL OF THE CONSOLIDATED CITY

OF INDIANAPOLIS, MARION COUNTY,

INDIANA, AND MAYOR OF INDIANAPO-

LIS, INDIANA,

Defendants-Appellees.

Appeal from the United States District Court for the

Southern District of Indiana, Indianapolis Division.

No. 1:12-cv-00669 — Richard L. Young, Chief Judge.

ARGUED SEPTEMBER 16, 2013 — DECIDED NOVEMBER 25, 2013

Before KANNE, ROVNER, and WILLIAMS, Circuit Judges.

KANNE, Circuit Judge. Appellants, who own bars in

Indianapolis-Marion County, Indiana, filed suit seeking

injunctive and declaratory relief against enforcement of the

2 No. 13-1629

2012 Indianapolis-Marion County smoking ordinance. The

district court denied the bar owners’ motion for a preliminary

and permanent injunction and entered judgment in favor of the

City. The bar owners now appeal.

I. BACKGROUND

In 2005, the City-County Council of Indianapolis and

Marion County passed an ordinance prohibiting smoking in

most buildings frequented by the general public. Indianapolis,

Ind. Mun. Code §§ 616-201–04 (2010) (amended 2012). The

City-County Council excepted several businesses from the ban,

including bars and taverns with liquor licenses that neither

served nor employed people under the age of eighteen, tobacco

bars, and bowling alleys. Id. at § 616-204.

Seven years later, in 2012, the City-County Council ex-

panded the 2005 ordinance by eliminating many of its excep-

tions. Indianapolis, Ind. Mun. Code § 616-204 (2013). As

amended, the ordinance included exceptions for private

residences, retail tobacco stores, tobacco specialty bars, and

private clubs that voted to permit smoking. Id. The amended

ordinance thus prohibited smoking in most Indianapolis bars

and taverns.

A group of Indianapolis-Marion County bar owners

affected by the ordinance then brought suit seeking declaratory

and injunctive relief from the ordinance. In their amended

complaint, they asserted due process, equal protection, takings

and freedom of association claims under both the federal and

Indiana constitutions. The bar owners filed a motion for a

preliminary injunction, and the City filed a motion to dismiss

for failure to state a claim. The district court consolidated the

No. 13-1629 3

hearing on the preliminary injunction with a hearing on the

merits.

At the hearing, several of the bar owners testified about the

negative economic effects of the ordinance. All who were

asked denied they were facing insolvency. The bar owners also

proffered an expert, Dr. John Dunn, to testify that secondhand

smoke exposure does not have negative health effects. Dr.

Dunn is an emergency room doctor and professor who

acquired his knowledge of epidemiology by reviewing the

relevant literature and by speaking with his colleagues who

were experts in the field. The bar owners submitted an expert

report on Dr. Dunn’s behalf titled “Dr. Dunn’s Report to the

Ohio Legislature.” When the court asked about this report, Dr.

Dunn said he didn’t realize the bar owners had represented it

as an expert report, and that he wouldn’t have submitted it as

such. During cross examination, Dr. Dunn readily acknowl-

edged an article he wrote for the Heartland Institute in which

he described those who opposed smoking as members of the

“High Church of Holy Smoke Haters” and characterized

Chicago, which had banned smoking, as “an anxious, slightly

overweight suburbanite fretting over cigarette smoke.”

The City also called an expert, Dr. Andrew Hyland, to

testify as to the health effects of secondhand smoke. Dr.

Hyland has a Ph.D. in epidemiology and has published more

than 100 peer-reviewed articles on the effects of secondhand

smoke. He testified that there had been scientific consensus

since 2000 that secondhand smoke causes disease. He based his

testimony primarily on the Surgeon General’s 2006 report, The

Health Consequences of Involuntary Exposure to Tobacco Smoke.

The City called a second expert, Dr. Terrell Zollinger, to

testify as to the economic cost to the City from secondhand

smoke. Dr. Zollinger is a professor of epidemiology at Indiana

University’s School of Public Health who has produced several

4 No. 13-1629

reports on the economic impact of secondhand smoke in

Marion County. To produce these reports, Dr. Zollinger first

developed an attributable risk (i.e. the percentage of the risk of

a disease that could be attributed to secondhand smoke

exposure) for a condition based on the existing epidemiological

research on secondhand smoke. Then, he multiplied this risk

by the approximate cost of healthcare for someone with that

particular diagnosis. This weighted cost estimate was then

multiplied by the number of people diagnosed with that

particular disease. He repeated this procedure for a number of

diagnoses associated with secondhand smoke exposure. His

final estimate of the costs of secondhand smoke exposure was

$195,332,995.

Additionally, the City called Chris Gahl, the vice president

of Visit Indy, an organization that promotes Indianapolis as a

tourist destination as well as a site for conventions and other

large events. He testified that Visit Indy supported the smok-

ing ordinance because it believed the ordinance would attract

new businesses, enhance visitors’ experiences, and protect

hospitality workers. Gahl further explained that when groups

seek a host city for an upcoming convention, they often prefer

cities with comprehensive smoking ordinances.

After the hearing, both the bar owners and the City filed

their proposed findings of fact and conclusions of law. On

March 6, 2012, the district court entered judgment in favor of

the City, finding that the bar owners could not establish actual

success on the merits of their claims. It also struck Dr. Dunn’s

testimony because he failed to provide an expert report as

required by Fed. R. Civ. P. 26(a)(2). The bar owners now

appeal.

No. 13-1629 5

II. ANALYSIS

A. Evidentiary Claims

The bar owners make several claims of evidentiary error,

challenging the district court’s decision to admit and credit the

testimony of the City’s experts Dr. Hyland and Dr. Zollinger,

its decision to strike Dr. Dunn’s testimony, and its findings that

the surgeon general released a study on the effects of second-

hand smoke and that the bar owners were not insolvent.

1. Expert Testimony

a. Dr. Hyland

The bar owners first assert that the court clearly erred when

it found that secondhand smoke causes disease. The court

based this finding on Dr. Hyland’s testimony, which it found

credible. Specifically, the bar owners challenge the court’s

understanding of relative risk and the methods behind the

Surgeon General’s report which Dr. Hyland used throughout

his testimony.

In a bench trial or hearing without a jury, the district court

judge acts as both gatekeeper and factfinder. He must deter-

mine both whether expert evidence is admissible under

Federal Rule of Evidence 702 and whether it is credible. See

Smith v. Ford Motor Co., 215 F.3d 713, 718 (7th Cir. 2000)

(“soundness of the factual underpinnings of the expert’s

analysis and the correctness of the expert’s conclusions based

on that analysis are factual matters to be determined by the

trier of fact.”).

These determinations, though often closely related to each

other, require different levels of appellate scrutiny. When

reviewing a district court’s application of Rule 702, we review

the court’s choice of legal framework governing expert

testimony de novo, while we review its decision to admit or

exclude the proffered expert testimony for abuse of discretion.

6 No. 13-1629

United States v. Parra, 402 F.3d 752, 758 (7th Cir. 2005). Expert

credibility determinations, on the other hand, are findings of

fact, Smith, 215 F.3d at 718, and are thus reviewed for clear

error. Furry v. United States, 712 F.3d 988, 992 (7th Cir. 2013).

Thus, to properly analyze the bar owners’ claims, we must

determine whether they go to Dr. Hyland’s credibility or the

admissibility of his testimony under Rule 702. Rule 702

analysis focuses on the expert’s methodology and the princi-

ples upon which his research rests. Daubert v. Merrell Dow

Pharmaceuticals, 509 U.S. 579, 595 (1993) (noting that the focus

of the Rule 702 inquiry is “solely on principles and methodol-

ogy, not on the conclusions that they generate.”). It is up to the

trier of fact, however, to evaluate the “soundness of the factual

underpinnings of the expert’s analysis and the correctness of

the expert’s conclusions based on that analysis.” Smith, 215

F.3d at 718.

The challenge to the court’s understanding of relative risk

is essentially a challenge to the court’s determination that Dr.

Hyland was credible. Dr. Hyland’s principles and method-

ology—epidemiology—provided a relative risk1 value for

secondhand smoke between 1.2 and 1.3. Dr. Hyland then

offered the conclusion that this was sufficient to support a

finding that secondhand smoke causes disease. The court

1

Relative risk is the ratio of the rate of disease in people exposed to a risk

factor to the rate of disease in people not exposed to the risk factor. Michael

D. Green et al., Reference Guide on Epidemiology, in Reference Manual on

Scientific Evidence 566 (3d ed. 2011). In this case, the relative risk compares

the rate of disease in those exposed to secondhand smoke to the rate of

disease in those without such exposure. A relative risk of one indicates no

relationship between the risk factor and the disease. Id. at 567. A relative

risk of less than one indicates a negative association between the risk factor

and the disease. Id. A relative risk greater than one indicates a positive

association. Id.

No. 13-1629 7

found this conclusion credible when it credited Dr. Hyland’s

testimony.

We give a district court’s credibility determinations of

expert witnesses “great weight.” United States v. Huebner, 752

F.2d 1235, 1245 (7th Cir. 1985). In this case, there is no reason

to disturb the district court’s finding that Dr. Hyland was

credible. He provided ample explanation for his conclusions;

given the record, it cannot be stated with any certainty that the

court’s conclusion was in error.

The bar owners’ challenge to the substance of the Surgeon

General’s report goes to the admissibility of Dr. Hyland’s

testimony, as it concerns his methodology and application of

epidemiological principles. Thus, it would be evaluated under

the abuse of discretion standard, were it properly preserved.

But the bar owners did not object to Dr. Hyland’s testimony on

these grounds at trial, and the claim is forfeited. See Jiminez v.

City of Chicago, – F.3d –, 2013 WL 5524787 (7th Cir. Oct. 7, 2013).

b. Dr. Zollinger

The bar owners next argue that because Dr. Zollinger’s

expert testimony about the economic consequences of second-

hand smoke was based on the epidemiological research

establishing causation, the findings by the district court that

credited Dr. Zollinger’s testimony were clearly erroneous. As

noted above, the district court did not clearly err in crediting

Dr. Hyland’s testimony that secondhand smoke causes disease;

thus, it could not have clearly erred in finding that the health

consequences of secondhand smoke had an adverse economic

impact.

c. Dr. Dunn

In its findings of fact and conclusions of law, the district

court found that Dr. Dunn was not an expert in epidemiology

and that his testimony was not credible. The court then

8 No. 13-1629

determined that the expert report he submitted, titled “Dr.

Dunn’s Report to the Ohio Legislature,” was not an expert

report for the purposes of Fed. R. Civ. P. 26(a)(2). It based this

determination largely on Dunn’s admissions at trial that the

report was produced for political purposes and that Dunn

himself would not have submitted it as an expert report.

Because Dr. Dunn did not produce the required expert report,

the court struck the entirety of his testimony.

The bar owners challenge these determinations, arguing

that Dr. Dunn should have been certified as an expert, and that

the district court should not have struck his testimony. To the

extent either of these decisions was in error, however, it was

harmless. See Goodman v. Ill. Dep’t of Fin. and Prof’l Regulation,

430 F.3d 432, 439 (7th Cir. 2005) (“Even an erroneous eviden-

tiary ruling can be deemed harmless if the record indicates that

the same judgment would have been rendered regardless of

the error.”). The district court found Dr. Dunn’s testimony not

credible, and this finding withstands appellate review.

Nothing in the court’s analysis requires us to disavow the

“great weight” we typically accord expert witness credibility

determinations. Huebner, 752 F.2d at 1245. The court noted the

political tone of his testimony and his expert report, in particu-

lar Dr. Dunn’s practice of referring to people who opposed

secondhand smoke as the “High Church of Holy Smoke

Haters.” His strongly held and frequently expressed political

views could reasonably be understood to have influenced the

science he presented before the court. This coupled with the

character of his expert report—a political document prepared

for submission to the Ohio State Legislature—provided ample

basis on which the district court could rest its finding that his

testimony was not credible.

Thus, even had the district court considered Dr. Dunn an

expert, it would have given his testimony little weight.

No. 13-1629 9

Particularly given that the court found the City’s expert on the

health effects of secondhand smoke credible, Dr. Dunn’s

testimony would have had minimal impact.

2. Findings of Fact

This court reviews a district court’s findings of fact under

the highly deferential clear error standard. Furry, 712 F.3d at

992. We will find clear error where, for example, the “trial

judge’s interpretation of the facts is implausible, illogical,

internally inconsistent or contradicted by documentary or

other extrinsic evidence.” Id. at 992 (quoting EEOC v. Sears

Roebuck & Co., 839 F.2d 302, 309 (7th Cir. 1988)).

a. The Surgeon General’s Report is a study

The bar owners also contend the district court erred by

calling the Surgeon General’s report on the health conse-

quences of secondhand smoke a study rather than a report.

While it is true that the Surgeon General did not conduct

independent studies while compiling the report, the report

reflects the result of a wide-ranging meta analysis. Meta

analysis could, on its own, be considered a “study.” Regard-

less, this finding is irrelevant to any of the constitutional claims

the bar owners make, and any error is thus entirely harmless.

b. The bar owners are not facing insolvency

Finally, the bar owners argue that the district court erred by

finding that the bar owners were not facing insolvency. They

base this claim on several statements made at trial about the

effect of the ordinance on the bar owners’ businesses and the

naked assertion that the bar owners must not have understood

what “insolvency” meant when asked about it at the hearing.

Like all findings of fact, however, this finding is reviewed only

for clear error, and will be reversed only if we are left with the

“definite and firm conviction that a mistake has been commit-

ted.” Furry, 712 F.3d at 992 (quoting Anderson v. City of Bessemer

10 No. 13-1629

City, 470 U.S. 564, 573 (1985)). Mere speculation that the bar

owners did not understand the question put to them cannot

give rise to such a deeply-held conviction. And the testimony

presented at trial about the financial effects of the ordinance is

insufficient to support a finding of clear error, particularly in

light of the fact that the bar owners explicitly denied they were

facing insolvency.

B. Due Process Clause

The bar owners first make a substantive due process claim,

arguing that the Indianapolis-Marion County smoking

ordinance deprives them of rights without due process of law.

Smoking does not fall alongside those rights we consider

fundamental rights. See Sung Park v. Ind. Univ. Sch. of Dentistry,

692 F.3d 828, 832 (7th Cir. 2012) (noting that the list of funda-

mental rights is a “short one” and that the Supreme Court has

cautioned against recognizing new fundamental rights, as

“guideposts for responsible decisionmaking in this uncharted

area are scarce and open-ended”) (citing Washington v.

Glucksberg, 521 U.S. 702, 720 (1997)).

Because it does not infringe a fundamental right, the

smoking ordinance will stand if it passes rational basis

scrutiny. Eby-Brown Co., LLC v. Wisconsin Dep’t of Agriculture,

295 F.3d 749, 754 (7th Cir. 2002). Under rational basis review,

a state law is constitutional even if it is “unwise, improvident,

or out of harmony with a particular school of thought.” Id.

(citing Williamson v. Lee Optical of Oklahoma, Inc., 348 U.S. 483,

488 (1955)). The law must merely “bear[] a rational relationship

to some legitimate end.” Id. (citing Romer v. Evans, 517 U.S. 620,

631 (1996)). It is irrelevant whether the reasons given actually

motivated the legislature; rather, the question is whether some

rational basis exists upon which the legislature could have

based the challenged law. See FCC v. Beach Communications,

Inc., 508 U.S. 307, 315 (1993). Those attacking a statute on

No. 13-1629 11

rational basis grounds have the burden to negate “every

conceivable basis which might support it.” Id.

The bar owners have failed to meet this heavy burden.

There are numerous reasons the City may have chosen to limit

smoking in enclosed public spaces, and the bar owners have

failed to disprove all of them. In addition to the negative health

effects Dr. Hyland testified to in the district court, the City

could have determined that they wanted to limit smoking in

public places because it is annoying to nonsmokers, who are

not used to inhaling smoke. It could also have reasoned that by

banning smoking in public places, it would encourage more

smokers to quit, improving health outcomes for more than just

those exposed to secondhand smoke. Whatever the City’s

reasoning, the bar owners have failed to demonstrate that there

is no rational basis on which a law restricting smoking in

public places could be based.

C. Equal Protection Clause

The bar owners also argue the ordinance denies them equal

protection of the laws because while it bans smoking in

traditional bars, smoking remains lawful in tobacco specialty

bars.2 The bar owners acknowledge this distinction does not

rest on a suspect or quasi-suspect classification and is thus

subject to rational basis review.

As noted above, rational basis review requires us to

presume an ordinance is valid and to uphold it so long as it

“bears a rational relation to some legitimate end.” Romer, 517

U.S. at 631. Once we identify a plausible basis for the legisla-

tion, our inquiry is at its end. United States R.R. Retirement Bd.

2

The ordinance defines “tobacco specialty bars” as businesses that do not

sell cigarettes or permit cigarette smoking on their premises, that sell food

only as an incident to cigars or hookah, and that earn at least 20% of their

revenue from the sale of cigars or hookah.

12 No. 13-1629

v. Fritz, 449 U.S. 166, 179 (1980). When dealing with local

economic regulation, “it is only the invidious discrimination,

the wholly arbitrary act, which cannot stand consistently with

the Fourteenth Amendment.” Listle v. Milwaukee Cty., 138 F.3d

1155, 1158 (7th Cir. 1998) (internal citations omitted). The

analysis is slightly different than for the due process claim

discussed above. Rather than identify a rational reason for

infringing on citizens’ ability to smoke in public, we must

identify a rational reason for the distinction the ordinance

draws between traditional bars and tobacco specialty bars.

The bar owners suggest that because the council members

could not articulate a reason for the cigar bar exception, the

legislation lacked a rational basis. But they mischaracterize the

nature of rational basis review: To uphold a legislative choice,

we need only find a “reasonably conceivable state of facts that

could provide a rational basis” for the classification. Heller v.

Doe, 509 U.S. 312, 320 (1993) (internal citations omitted). The

actual motivation (or lack thereof) behind the legislation is

immaterial.

The bar owners also argue that because cigars are at least as

harmful as cigarettes, permitting cigar smoking while banning

cigarette smoking is arbitrary and capricious. Illogical reasons

for a distinction, however, will not doom a classification

supported by other rational reasons. In this case, the City could

have been trying to protect public health by decreasing

secondhand smoke exposure but simultaneously trying not to

close all businesses where tobacco was sold or used. This was

rational: while the City wants to decrease involuntary exposure

to secondhand smoke, it does not want to ban smoking and

tobacco use in its entirety. An effort to decrease involuntary

exposure to secondhand smoke will naturally not be as

concerned with bars whose business model is predicated on

tobacco. Presumably, the patrons of cigar bars and hookah bars

No. 13-1629 13

are not being involuntarily subjected to secondhand smoke

because they chose to patronize bars where smoking is a

necessary and essential part of the experience.

The City thus drew a line between traditional bars, for

whom tobacco sales and usage are incidental to their primary

business of alcohol and food sales, and tobacco specialty bars,

whose business models depend on tobacco sales. The bar

owners essentially argue that this line was drawn incorrectly

because it does not include their businesses, which also depend

significantly upon on-site tobacco usage. But legislation “does

not violate the Equal Protection Clause merely because the

classifications [it makes] are imperfect.” Dandridge v. Williams,

397 U.S. 471, 485 (1970). A law can be underinclusive or

overinclusive without running afoul of the Equal Protection

Clause. New York Transit Authority v. Beazer, 440 U.S. 568, 592

n.38 (1979).

Because the bar owners cannot establish that the ordinance

lacked a rational basis, their equal protection claim must fail.

D. Freedom of Association

The bar owners further argue that the smoking ordinance

inhibits their freedom of association. The Supreme Court has

recognized two kinds of constitutionally-protected association:

intimate association and expressive association. Roberts v. U.S.

Jaycees, 468 U.S. 609, 617–18 (1984). Socializing with friends and

acquaintances at a neighborhood bar qualifies as neither.

Intimate association “protects the right ‘to enter into and

maintain certain intimate human relationships.’” Montgomery

v. Stefaniak, 410 F.3d 933, 937 (7th Cir. 2005) (quoting Jaycees,

468 U.S. at 617–18). While this right does not exclusively

protect family relationships, the Supreme Court has identified

relationships that “attend the creation and sustenance of a

family” as appropriate benchmarks for evaluating whether a

14 No. 13-1629

relationship qualifies for protection as an intimate association.

Jaycees, 468 U.S. at 619–20. To determine whether a particular

relationship qualifies as “intimate,” courts consider factors

including the size of the group, its exclusivity, its purpose, and

whether outsiders are permitted to participate in critical

aspects of the relationship. Bd. of Dirs. of Rotary Int’l v. Rotary

Club of Duarte, 481 U.S. 537, 546 (1987). The relationship

between regular patrons of a particular bar is not an intimate

association. A bar’s clientele is not exclusive; any person on the

street can drop in for a beer. This collection of patrons is also

likely quite large, and lacks any distinct purpose other than

diffuse socializing. And however you define the “critical

aspects” of the relationship between people who drink at the

same bar, it is hard to imagine the bar owners preventing

willing customers from taking part.

Expressive association, on the other hand, “ensures the

right to associate for the purpose of engaging in activities

protected by the First Amendment.” Montgomery, 410 F.3d at

937. To qualify, a group must “engage in some form of

expression, whether it be public or private.” Boy Scouts of

America v. Dale, 530 U.S. 640, 648 (2000). Thus, to determine

whether the bar owners enjoy the protection of the expressive

associational right, we must first determine whether they

engage in expressive association. On this point, City of Dallis v.

Stanglin, 490 U.S. 19 (1989), is instructive. In that case, the

appellants alleged that a Dallas ordinance that restricted

attendance at certain dance halls to minors and certain adults

infringed their First Amendment rights. Id. at 22–23. The Court

noted that while “it is possible to find some kernel of expres-

sion in almost every activity a person undertakes … such a

kernel is not sufficient to bring the activity within the protec-

tion of the First Amendment.” Id. at 25. Accordingly, the Court

found that the First Amendment did not protect “coming

together to engage in recreational dancing.” Id.

No. 13-1629 15

Similarly, the First Amendment does not protect coming

together at a local bar to smoke. Bar regulars are not a group

“organized to engage in speech,” see id. at 25, or an association

that “seeks to transmit … a system of values,” see Dale, 530 U.S.

at 650. Because the bar patrons do not engage in expressive

association, the ordinance does not violate their First Amend-

ment rights.

E. Takings

The bar owners next raise a takings claim, contending that

the smoking ban goes “too far” and thus constitutes a taking.3

Takings jurisprudence encompasses four basic claims: perma-

nent physical invasion, deprivation of all beneficial economic

use, exactions, and partial regulatory takings. Lingle v. Chevron,

U.S.A., Inc., 544 U.S. 528, 538–39 (2005). The bar owners’

3

We note that the bar owners seek an injunction to bar the alleged taking.

Typically, injunctive relief is not available under the Takings Clause. See

Ruckelshaus v. Monsanto Co., 467 U.S. 986, 1016 (1984) (“Equitable relief is not

available to enjoin an alleged taking of private property for a public use,

duly authorized by law, when a suit for compensation can be brought

against the sovereign subsequent to the taking.”); see also

Warner/Elektra/Atlantic Corp. v. Cty. of DuPage, 991 F.2d 1280, 1285 (7th Cir.

1993) (explaining that a state can “oppose injunctions against takings on the

ground that the owner’s only right is to monetary compensation …”).

However, the City did not object to the appropriateness of an injunction on

appeal, and thus has forfeited this argument. See United States v. Parker, 609

F.3d 891, 896 (7th Cir. 2010).

Relatedly, the bar owners also assert that there are different takings tests

under the Fifth and Fourteenth Amendments, citing Williamson County. v.

Hamilton Bank, 473 U.S. 172, 197 (1985). According to the bar owners,

government action that has the same effect as an eminent domain taking is

simply invalid as a violation of the Fourteenth Amendment’s due process

clause. Id. The Supreme Court, however, has never endorsed this purported

difference; the cited portion of Williamson County refers to one party’s

argument, the merits of which the Court did not address. Williamson County,

473 U.S. at 199–200.

16 No. 13-1629

argument calls to mind the partial regulatory takings line of

cases,4 and thus will be evaluated in accordance with Pennsyl-

vania Central Transportation Co. v. City of New York, 438 U.S. 104

(1978), and its progeny. A court applying Penn Central consid-

ers several factors to determine whether a diminution in value

amounts to a taking: (1) the nature of the government action,

(2) the economic impact of the regulation, and (3) the degree of

interference with the owner’s reasonable investment-based

expectations. Bettendorf v. St. Croix Cty., 631 F.3d 421, 430 (7th

Cir. 2011). These factors do not provide a “set formula” for

determining whether a taking has occurred, but rather are

“designed to bar Government from forcing some people alone

to bear public burdens which, in fairness and justice, should be

borne by the public as a whole …” Penn Central, 438 U.S. at

123–24 (internal quotations omitted).

The bar owners have clearly established a negative eco-

nomic impact on their respective businesses. Regardless of

whether they are facing insolvency, they have demonstrated a

decrease in sales since the smoking ordinance went into effect.

But mere loss of future profits is a “slender reed” upon which

to rest a takings claim. Andrus v. Allard, 444 U.S. 51, 66 (1979)

(“Prediction of profitability is essentially a matter of reasoned

speculation that courts are not especially competent to per-

form.”). This is particularly true when an otherwise weak

economy supplies an obvious potential confounding factor.

Further, it is inappropriate to consider only the loss due to

4

The bar owners cite an Indiana state case as providing the appropriate test

to evaluate a federal takings claim. While we cannot evaluate a federal

claim based on the law as determined by a state court, the citation clarifies

that the bar owners intend to evoke the partial regulatory takings case law.

The case cited, Town of Georgetown v. Sewell, 786 N.E.2d 1132 (Ind. App.

2003), describes a regulation that “places limitations on land that fall short

of eliminating all economically beneficial use.” Id. at 1139. This describes a

partial regulatory taking.

No. 13-1629 17

prohibited uses, without also considering “the many profitable

uses to which the property could still be put.” First English

Evangelical Lutheran Church of Glendale v. Los Angeles Cty., 482

U.S. 304, 331 (1987).

The remaining factors do not favor the bar owners’ case.

While the smoking ban may interfere with some reasonable

investment-based expectations, it does not do so to a degree

significant enough to find a taking. Assuredly, the bar owners

have continued to invest in upkeep and improvements to their

bars, and the smoking ban, which appears to have decreased

their profits, would have diminished the return on these

investments. That said, smoking in public places has been

regulated in Indianapolis-Marion County since 2005, when the

first ordinance was enacted. It should not have come as a

surprise that the ordinance was later expanded to include

appellants’ businesses. See Connolly v. Pension Guar. Corp., 475

U.S. 211, 226 (1986) (“Prudent employers then had more than

sufficient notice not only that pension plans were currently

regulated, but also that withdrawal itself might trigger

additional financial obligations.”). Finally, the smoking ban is

a prototypical example of a “public program adjusting the

benefits and burdens of economic life to promote the common

good.” Penn Central, 438 U.S. at 124. Such character weighs

heavily against finding a taking. See Keystone Bituminous Coal

Ass’n v. DeBenedictis, 480 U.S. 470, 485 (1987) (refusing to find

a taking where the government “acted to arrest what it

perceive[d] to be a significant threat to the common welfare.”).

The smoking ordinance does not constitute a taking, and the

bar owners are not entitled to relief on this claim.

F. Ninth Amendment

The bar owners also assert that the Ninth Amendment

shields them from the smoking ordinance. This argument is a

non-starter, as the Ninth Amendment “is a rule of interpreta-

18 No. 13-1629

tion rather than a source of rights.” Froehlich v. Wisconsin Dep’t

of Corr., 196 F.3d 800, 801 (7th Cir. 1999); see also Quilici v.

Village of Morton Grove, 695 F.2d 261, 271 (7th Cir. 1982) (noting

that “the Supreme Court has never embraced this theory.”).

G. Indiana State Claims

Additionally, the bar owners raise four claims under the

Indiana Constitution: (1) a privileges and immunities claim

based on article 1, section 23, (2) a due process claim under

article 1, section 21, (3) a freedom of association claim under

article 1, section 9, and (4) a takings claim under article 1,

section 23.

1. Due Process, Freedom of Association, and Takings Clause

The district court dismissed these three claims, finding that

the bar owners had failed to present evidence or argument in

favor of them at the evidentiary hearing or in their Proposed

Findings of Fact and Conclusions of Law, and that the claims

were thus waived. The bar owners raised these claims briefly

in their amended complaint, but did not provide any addi-

tional argument in support of them in their brief in support of

the preliminary injunction, their reply to the City’s motion to

dismiss, or in their Proposed Findings of Fact and Conclusions

of Law.5 They never cited a case describing Indiana law in

these areas, and did not connect the facts they presented to any

relevant Indiana constitutional provisions. They also failed to

respond to the City’s arguments against these claims in their

reply to the City’s motion to dismiss. Because they did not

provide the district court with any basis to decide their claims,

5

The bar owners did respond to a very specific allegation concerning their

takings claim—that they had failed to exhaust state remedies—in a response

to the City’s second motion to dismiss. They did not, however, ever provide

any legal basis for the state takings claim, instead focusing their energy on

the federal case law.

No. 13-1629 19

and did not respond to the City’s arguments, these claims are

waived. See Bratton v. Roadway Package Sys., Inc., 77 F.3d 168,

173 n.1 (7th Cir. 1993) (argument waived where appellants

“failed to develop the argument in any meaningful manner”)

(citing Sanchez v. Miller, 792 F.3d 694, 703 (7th Cir. 1986)); see

also Bonte v. U.S. Bank, N.A., 624 F.3d 461, 466 (7th Cir. 2010)

(“Failure to respond to an argument … results in waiver”).

2. Privileges and Immunities Clause

The bar owners also claim that the Indiana Privileges and

Immunities Clause bars enforcement of the smoking ordinance.

While this section of the Indiana Constitution bears similarities

to the federal Equal Protection Clause, the Indiana Supreme

Court has explained that it “should be given independent

interpretation and application.” Collins v. Day, 644 N.E.2d 72,

75 (Ind. 1994). Accordingly, that court has developed a two-

step analysis for privileges and immunities claims. For a law

that provides preferential treatment to one class over another

to pass constitutional muster, the disparate treatment must be

(1) reasonably related to inherent characteristics which

distinguish the relevant classes and (2) uniformly available to

all persons similarly situated. Id. at 78–80.

The first factor requires only that the disparate treatment be

reasonably related to the characteristics which distinguish the

unequally treated classes. Dvorak v. City of Bloomington, 796

N.E.2d 236, 239 (Ind. 2003). In this case, the unequally treated

classes are the owners of traditional neighborhood bars as

compared to the proprietors of cigar and hookah bars. The

distinction here, as noted above, is the role tobacco ostensibly

plays in each business model. For traditional neighborhood

bars, smoking is incidental to the sale of food and alcohol. But

for cigar bars and hookah bars, smoking and tobacco sales are

their raison d’être. The distinction is thus reasonably related to

20 No. 13-1629

the City’s decision to ban smoking in traditional bars but not

cigar or hookah bars.

The disparate treatment is also sufficiently available to all

persons similarly situated, despite the fact that some tradi-

tional bars are clearly more affected by the ordinance. The

distinction drawn still means that bars for whom tobacco is an

integral part of their business model—and not just an inciden-

tal yet important part—can permit smoking within their walls

while other bars cannot. Further, even if we do think that the

traditional neighborhood bars are more like cigar and hookah

bars, the Indiana Supreme Court has refused to invalidate

legislation simply because it is marginally over- or under-

inclusive. See Collins, 644 N.E.2d at 80 (quoting Cincinnati,

Hamilton, and Dayton Ry. Co. v. McCullom, 109 N.E. 206, 208

(1915)) (“Exact exclusion and inclusion is impractical in

legislation. It is almost impossible to provide for every excep-

tional and imaginary case, and a legislature ought not to be

required to do so at the risk of having its legislation declared

void …”). The bar owners thus have not stated a valid claim

under the Indiana Privileges and Immunities Clause.

III. CONCLUSION

The bar owners cannot succeed on the merits of any of their

myriad claims detailed above. The injunction the bar owners

sought was thus unwarranted. We AFFIRM the district court’s

judgment in favor of the City.