Gulf Coast Maritime Supply, Inc. v. United States

United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued May 10, 2017 Decided August 11, 2017

No. 16-5350

GULF COAST MARITIME SUPPLY, INC.,

APPELLANT

v.

UNITED STATES OF AMERICA, ET AL.,

APPELLEES

Appeal from the United States District Court

for the District of Columbia

(No. 1:16-cv-01461)

John M. Peterson argued the cause for appellant. With

him on the briefs were Michael K. Tomenga and Peter J.

Bogard.

Jennifer M. Rubin, Attorney, U.S. Department of

Justice, argued the cause for appellees. With her on the brief

was Jonathan S. Cohen, Attorney.

Before: TATEL, BROWN, and GRIFFITH, Circuit Judges.

Opinion for the Court filed PER CURIAM, in which

Circuit Judge BROWN joins as to Parts I, II, III, and V.

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Concurring opinion as to Part IV filed by Circuit Judge

BROWN.

PER CURIAM: This case involves subjects often associated

with controversy and temptation: alcohol, tobacco, and taxes.

But the case turns on some fairly straightforward issues of

statutory interpretation, not sin.

Gulf Coast Maritime Supply, Inc. (“Gulf Coast”) had a

tobacco export warehouse permit (the “tobacco permit”), and

separate permits to import and wholesale alcohol (the “alcohol

permits”). Essentially, these permits immunize Gulf Coast

from penalties—and in the case of tobacco, taxes as well—on

the unauthorized sale of tobacco or alcohol. Both permits

require the Alcohol and Tobacco Tax and Trade Bureau

(“TTB”) to be informed of “any” ownership change. See J.A.

58 (tobacco permit); J.A. 70 (alcohol permit). Though the

alcohol and tobacco permits are governed under different laws,

their punchlines are the same: Failure to report any change in

ownership, without an application for a new permit within 30

days of the ownership change, results in the permit’s automatic

termination. See 27 U.S.C. § 204(g) (alcohol permit); 27

C.F.R. § 44.107 (tobacco permit).

Gulf Coast did not inform TTB when Gulf Coast’s

President/Director died and his widow received all of his Gulf

Coast shares. TTB has no record of Gulf Coast applying for

either a new tobacco or alcohol permit after his death. Indeed,

Gulf Coast proceeded as if no ownership change occurred—

continuing to use the signature stamp of its deceased

President/Director on reports submitted to TTB. After TTB

sent a letter indicating that the unreported ownership change

could subject Gulf Coast to civil and criminal penalties, and a

separate letter indicating that Gulf Coast was liable for unpaid

excise taxes for operating under the terminated tobacco permit,

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Gulf Coast went to district court seeking injunctive and

declaratory relief. The district court held Gulf Coast’s

tobacco permit remedies were barred by the Anti-Injunction

Act (“AIA”), and that the district court lacked jurisdiction to

review the alcohol permits’ automatic termination.

We agree with the district court that the AIA prohibits Gulf

Coast’s attempt to restore its terminated tobacco permit. Gulf

Coast can bring a refund suit if it disputes liability for unpaid

excise taxes. We also affirm the district court’s holding that it

lacked jurisdiction over Gulf Coast’s alcohol permit claim.

I.

A.

The Tobacco and Alcohol Permitting Schemes

Export warehouse permits issued by the Internal Revenue

Service (“IRS”) afford tobacco exporters an exemption from

federal excise taxes. See I.R.C. § 5704(b). In order to

preserve one’s export warehouse permit, the proprietor must

comply with TTB regulations. See id. One regulation

relevant here is 27 C.F.R. § 44.107. This regulation outlines

what a permitted “export warehouse proprietor” must do in the

event “the issuance, sale, or transfer of the stock of a

corporation . . . results in a change in the identity of the

principal stockholders exercising actual or legal control of the

[corporation’s] operations.” Id. The regulation requires the

“corporate proprietor” to “make application for a new permit”

“within 30 days after the change [in principal stockholder

identity] occurs.” Id. “[O]therwise,” the regulation says,

“the present permit shall be automatically terminated at the

expiration of such 30-day period.” Id. (emphasis added). If,

however, the proprietor timely applies for a new permit, “the

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present permit shall continue in effect pending final action” on

the new permit. Id. Though the regulation does not

expressly provide for judicial review of a denied new permit

application, the Internal Revenue Code authorizes refund

actions. I.R.C. § 7422. Refund actions not only encompass

claims against tax liability, but also issues that “hinge[] on

precisely” whether one is liable for taxes—such as an entity’s

entitlement to tax-exempt status. See, e.g., Alexander v.

“Americans United,” Inc., 416 U.S. 752, 762 (1974).

A separate type of permit, not connected to tax

exemptions, is required to import or purchase alcoholic

beverages for resale. See 27 U.S.C. § 203. Alcohol permits

are obtained through TTB; what the agency gives, it can

suspend, revoke, or annul. See id. § 204(e). In addition, an

alcohol permit “shall . . . automatically terminate[]” if it is

“leased, sold, or otherwise voluntarily transferred.” Id.

§ 204(g). If the alcohol permit is “transferred by operation of

law or if actual or legal control of the permittee is acquired,

directly or indirectly, whether by stock-ownership or in any

other manner, by any person, then such permit shall be

automatically terminated at the expiration of thirty days

thereafter.” Id. Section 204(g), like its tobacco regulation

analogue, provides a permittee with the ability to apply for a

new alcohol permit within thirty days of the ownership change,

see id., and such an application ensures “the outstanding basic

permit . . . continue[s] in effect until such application is finally

acted on by the Secretary of the Treasury.” Id. Should the

Secretary deny this application, the statute authorizes appeals

to this court (or any other circuit court). Id. § 204(h).

As to both alcohol and tobacco permits, the law establishes

a process to ensure: (1) TTB would be updated of any

ownership changes; (2) permits would automatically terminate

when an unreported ownership change occurs; and (3) the

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permit holder is capable of seamlessly continuing operation,

despite ownership changes, because the outstanding permit

remains in effect pending final action on a timely-submitted

application for a new permit. Judicial review is available if a

new permit is denied—a refund suit in the tobacco permit

context, and an appeal to a circuit court in the alcohol permit

context—and that review may include considering whether it

was necessary to update TTB as to a change in ownership.

Under both the tobacco and alcohol permit schemes,

automatic termination is a distinctive means by which a permit

ceases to operate. Both statutory frameworks reflect this,

treating the automatic termination process separately from the

process afforded to other forms of cessation.

In the tobacco permit context, automatic termination is

governed by its own regulatory provision. 27 C.F.R. § 44.107

speaks only to the automatic termination process, and

automatic termination is not referenced in other provisions

governing the cessation of a tobacco permit. 26 U.S.C.

§ 5713(b) requires a “show cause” hearing before TTB can

either suspend or revoke a tobacco permit, but makes no

mention of automatic termination. See id. The APA,

similarly, requires notice and an opportunity to be heard before

a license is withdrawn, suspended, revoked, or annulled—

without any reference to automatic termination. See 5 U.S.C.

§ 558(c). Gulf Coast’s own tobacco permit identified

automatic termination as one among several means by which

the permit could cease to operate. See J.A. 58 (“This permit

will remain in effect . . . until suspended, revoked,

automatically terminated, or voluntarily surrendered, as

provided by law and regulations.”).

The alcohol permit scheme also treats the automatic

termination process separately. 27 U.S.C. § 204(g) sets

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automatic termination apart from a permit’s suspension,

revocation, annulment, or voluntary surrendering. Compare

id., with § 204(e). Differences in an alcohol permit’s cessation

leads to different postures for judicial review. As explained

above, automatically terminated alcohol permits may be

succeeded by new permits; if a new permit application is

denied, judicial review is available. This process is distinct

from judicial review of revoked alcohol permits. See id.

(conditioning revocations on “due notice and opportunity for

[a] hearing” demonstrating that the proprietor “willfully

violated any of the” permit’s conditions). Similar to its

tobacco permit, Gulf Coast’s alcohol permit distinguishes

automatic termination from other cessations, and explicitly

states the statutory trigger for automatic termination. See J.A.

70.

B.

Gulf Coast’s Ownership Change

Gulf Coast operated a tobacco export warehouse in

Houston, Texas, pursuant to a TTB permit; it also purchased

alcohol products made available for resale at the same location.

See J.A. 5–6. Sam Geller, Gulf Coast’s President/Director,

passed away on August 2, 2013. J.A. 7 ¶ 23; 10 ¶ 42. In Gulf

Coast’s district court complaint, it described Mr. Geller as “a

principal stockholder of Gulf Coast who, as an owner, director,

and officer, exercised actual and legal control over the

operations of the corporation.” J.A. 13 ¶ 53. At the time of

his death, Mr. Geller owned forty-five percent of Gulf Coast

shares. J.A. 32. Approximately one month after Mr. Geller

died, “Barbara Druss Geller was appointed Independent

Executrix” of Mr. Geller’s estate. J.A. 13 ¶ 54. Ms. Geller,

who also owned forty-five percent of Gulf Coast’s shares

before Mr. Geller’s passing, reached a partition agreement with

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Mr. Geller’s estate. Under the agreement, Ms. Geller

“obtained the ownership of 100 percent of Gulf Coast stock

which” had previously been shared between her and Mr. Geller

during his life. J.A. 13 ¶ 55. Despite Ms. Geller now

possessing ninety percent of Gulf Coast’s shares and being the

majority stakeholder, Gulf Coast continued to operate as if Mr.

Geller was in charge. When TTB investigated whether an

ownership change occurred after Mr. Geller’s death, it found

Gulf Coast’s general manager still using Mr. Geller’s signature

stamp when filing TTB reports. J.A. 113 ¶ 8.

TTB informed Gulf Coast via letter that the Company’s

failure to report the change in stock ownership automatically

terminated its alcohol and tobacco permits. J.A. 72–73. The

letter also noted Gulf Coast’s continued operation without

active permits would result in tax liability, along with civil and

criminal penalties. Id. TTB sent Gulf Coast a second letter

over a month later, stating the Company owed $7,836,787.40

in taxes, penalties, and interest for operating without a valid

tobacco permit. J.A. 75–76. The agency has yet to initiate

tax collection proceedings against Gulf Coast, but Gulf Coast

has yet to cease its alcohol and tobacco operations, pay the

assessed taxes or penalties, or apply for new alcohol or tobacco

permits.

C.

Proceedings Below

Gulf Coast filed an APA action in response to TTB’s

correspondence, along with a request to enjoin the termination

of its permits. TTB filed a motion to dismiss which the district

court granted while also denying Gulf Coast’s injunction

request. The district court said the AIA precluded Gulf Coast

from attempting to restore its prior tobacco permit;

8

“challeng[ing] the termination of its permits rather than

explicitly challenging the imposition of the excise taxes and

fines” did not exempt Gulf Coast from the AIA’s bar. See J.A.

104. Moreover, the district court recognized Gulf Coast’s

ability to bring a refund suit and, afterward, submit a new

tobacco permit application. J.A. 105. As to Gulf Coast’s

alcohol permit, the district court held the APA provided it with

no jurisdiction to review the permit’s automatic termination.

J.A. 107–08. If Gulf Coast desired judicial review, the

Company would first have to apply for a new alcohol permit

under the applicable statute. See id. Gulf Coast appealed

here, objecting as to the AIA’s application and contesting the

district court’s lack of jurisdiction over the terminated alcohol

permit. The Company did not, however, appeal the district

court’s denial of its motion for injunctive relief.

II.

As the district court dismissed Gulf Coast’s claims based

on a lack of subject-matter jurisdiction, see FED. R. CIV. P.

12(b)(1), we review the district court’s legal conclusions de

novo. A motion to dismiss the complaint requires us to take

as true all well-pled factual allegations within Gulf Coast’s

complaint—while it also obligates us to disregard any legal

conclusions, legal contentions couched as factual allegations,

and unsupported factual allegations within the complaint.

See, e.g., Food & Water Watch, Inc. v. Vilsack, 808 F.3d 905,

913 (D.C. Cir. 2015). Moreover, the court “may consider

materials outside the pleadings in deciding whether to grant a

motion to dismiss for lack of jurisdiction.” Jerome Stevens

Pharms., Inc. v. FDA, 402 F.3d 1249, 1253 (D.C. Cir. 2005);

see also Bell Atl. Corp. v. Twombly, 550 U.S. 544, 568 n.13

(2007) (stating courts may “take notice of the full contents” of

published documents “referenced in the complaint” (citing

FED. R. EVID. 201)).

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III.

Pursuant to the AIA, “[n]o suit for the purpose of

restraining the assessment or collection of any tax [can be

brought] in any court by any person.” 26 U.S.C. § 7421(a).

By prohibiting challenges to tax-related laws before those laws

are enforced, the AIA “protects the Government’s ability to

collect a consistent stream of revenue.” Nat’l Fed’n of Indep.

Bus. v. Sebelius, 567 U.S. 519, 543 (2012). A tax-related law

can be challenged, only after the law is enforced, via a refund

lawsuit. See id. Determining whether the AIA bars a tax-

related lawsuit “requires a careful inquiry into the remedy

sought, the statutory basis for that remedy, and any implication

the remedy may have on [tax] assessment and collection.” Z

St. v. Koskinen, 791 F.3d 24, 29 (D.C. Cir. 2015).

Here, Gulf Coast contends the AIA is inapplicable because

the remedy it seeks does not impede tax collection. Gulf

Coast wants its terminated tobacco permit restored—an action

that would obviate TTB’s assertion of unpaid tobacco excise

taxes. The Company’s argument presupposes its tobacco

permit was revoked, not automatically terminated, and Gulf

Coast did not receive a certain due process. But the

Company’s presuppositions do not describe what actually

happened; “the statutory basis for [the] remedy” Gulf Coast

seeks is inapplicable. See id.

Gulf Coast’s theory of relief discards the difference

between revocations and automatic terminations. Indeed, the

Company’s briefs use those terms interchangeably. See, e.g.,

Gulf Coast Opening Br. 5 (stating, at the start of the page’s first

full paragraph, TTB “declar[ed] the permits revoked,” only to

say at the start of the next full paragraph that “TTB referenced

its allegation that Gulf Coast’s export warehouse proprietor’s

10

permit terminated . . . .” (emphasis added)). Yet the

applicable statutes and regulations, as well as Gulf Coast’s own

tobacco permit, treat “automatic termination” and “revocation”

distinctly. This is not surprising—the two concepts are not the

same. Compare GARNER’S DICTIONARY OF LEGAL USAGE

344 (3d ed. 2011) (“If [a contract] ends because it’s cut short

. . . by a party’s act, it’s definitely called a termination.”), with

id. at 786 (“Revoke = to annul by taking back”). The

conceptual difference fits the procedural distinction.

Requiring notice and an opportunity for a hearing before TTB

determines one’s permit may be withheld (i.e., before it is

revoked) makes sense. Logically, however, to insist on that

same process when a party’s action already extinguished its

right to the permit (i.e., the permit automatically terminated) is

a non sequitur.

Even if there were some basis to treat the automatic

termination of Gulf Coast’s tobacco permit like a revocation,

restoring Gulf Coast’s terminated permit has a direct effect on

the assessment and collection of taxes. As the Government

rightly put it, by “seek[ing] to retroactively restore its tobacco

permit[],” “Gulf Coast seeks to . . . avoid[] past, present, and

future tax liability.” Gov’t Br. 28. If Gulf Coast’s tobacco

permit should never have been revoked in the first instance,

either because there was no change in ownership or because

Gulf Coast’s permit was improperly “revoked,” Gulf Coast

was, properly, always tax-exempt. Restoring Gulf Coast’s old

permit, as opposed to the Company applying for a new permit,

voids ab initio any unpaid excise taxes on tobacco sales made

during the period where Gulf Coast operated under its

terminated permit.

When the remedy sought directly affects tax collection, the

suit is barred by the AIA. See, e.g., Fla. Bankers Ass’n v. U.S.

Dep’t of Treasury, 799 F.3d 1065, 1070–71 (D.C. Cir. 2015)

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(stating, when “the obvious purpose of [the] suit[] was to

reduce the payment of taxes,” the suit would violate the AIA).

The “obvious purpose” of imposing the statutory revocation

process on automatic terminations is to restore Gulf Coast’s

prior permit, absolving it of tax liability. This “obvious

purpose” directly impairs the collection of assessed taxes,

barring the suit under the AIA. 1

Accordingly, the AIA bars Gulf Coast’s attempt to restore

its prior tobacco permit.

1

Gulf Coast seeks to exempt itself from the AIA by relying on the

Supreme Court’s decision in South Carolina v. Regan, 465 U.S. 367

(1984). Regan provides an exception to the AIA’s application when

a lawsuit challenges a federal tax and the statute “has not provided

an alternative remedy” to bringing an action in federal court. Id. at

378. Gulf Coast misapprehends Regan’s import. First, and most

simply, a refund suit challenging TTB’s change-in-ownership

finding is an “alternative remedy.” As Gulf Coast’s liability for

these assessed taxes “hinges on precisely the same legal issue as does

its eligibility for [tax-exempt]” status under its tobacco permit, a

refund suit would necessarily resolve the same issues presented here.

See Alexander, 416 U.S. at 762. Second, restoration of a prior

permit is unavailable altogether in the automatic termination

process; Gulf Coast’s tax status, unlike South Carolina’s in Regan,

is not why such relief is unavailable. Cf. Regan, 465 U.S. at 380.

Finally, if an automatic termination can result in a restored permit

after judicial review, then an “automatic termination” is neither

automatic nor a termination. Gulf Coast effectively asks us to

excise automatic termination from the regulatory scheme, in the

name of excusing Gulf Coast from tax liability. Nothing in Regan

allows us to rewrite a regulation.

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IV.

As with its tobacco-permit claim, Gulf Coast contends the

APA affords it a right to notice and an opportunity to be heard

before its alcohol permits may be revoked and insists that it

may bring a claim challenging that revocation in district court.

See Appellant’s Reply Br. 2 (“TTB revoked these permits

without furnishing notice of claimed violations, and without

providing an opportunity to demonstrate or achieve compliance

with lawful requirements, as required by the APA, 5 U.S.C.

§ 558(c).”). However, the alcohol-permitting scheme set out

in 27 U.S.C. § 204 takes the place of the APA’s license-

revocation procedures and provides its own process for judicial

review. Under Section 204, challenges to orders revoking

alcohol permits must be brought in circuit court, not district

court. Because Gulf Coast sought a determination that its

permits were improperly “revoked,” the district court lacked

jurisdiction to hear the company’s claim.

i.

Gulf Coast bases its claim on the APA, which provides

that, in general, an agency may suspend or revoke a license

only if it provides notice “in writing of the facts or conduct

which may warrant the action” and offers an “opportunity to

demonstrate or achieve compliance with all lawful

requirements.” 5 U.S.C. § 558(c)(1)–(2). The company

points out that it received no such process before its permits

were, in its words, “revoked.” Appellant’s Br. 1. Gulf Coast

further observes that agency decisions to revoke licenses (or

permits) are typically subject to APA review. See, e.g., Atl.

Richfield Co. v. United States, 774 F.2d 1193, 1199 (D.C. Cir.

1985); Colley v. James, --- F. Supp. 3d ---, 2017 WL 2080246,

at *13 (D.D.C. May 15, 2017). As a result, Gulf Coast argues,

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it properly brought suit in district court under the APA, seeking

to compel the agency to follow certain procedures before

“revoking” the company’s permits.

The APA provides for “a broad spectrum of judicial

review of agency action,” Bowen v. Massachusetts, 487 U.S.

879, 903 (1988), but Congress did not intend this “general grant

of review . . . to duplicate existing procedures for review of

agency action” or “provide additional judicial remedies in

situations where . . . Congress has provided special and

adequate review procedures,” id.; see Ctr. for Biological

Diversity v. EPA, --- F.3d ---, 2017 WL 2818634, at *8 (D.C.

Cir. June 30, 2017) (“[W]here a special statutory review

procedure exists, it is ordinarily supposed that Congress

intended that procedure to be the exclusive means of obtaining

judicial review in those cases to which it applies.” (alterations

and internal quotation marks omitted)). An “alternative

remedy is ‘adequate’ and therefore preclusive of APA review”

if there is “‘clear and convincing evidence’ of ‘legislative

intent’ to create a special, alternative remedy,” Citizens for

Responsibility & Ethics in Wash. (CREW) v. U.S. Dep’t of

Justice, 846 F.3d 1235, 1244 (D.C. Cir. 2017) (quoting Garcia

v. Vilsack, 563 F.3d 519, 523 (D.C. Cir. 2009)), such as when

Congress “provide[s] . . . an alternative review procedure,” id.

at 1245 (quoting El Rio Santa Cruz Neighborhood Health Ctr.

v. U.S. Dep’t of Health & Human Servs., 396 F.3d 1265, 1270

(D.C. Cir. 2005)).

Here the Federal Alcohol Administration Act (FAAA)

provides an adequate alternative remedy, “bar[ring] APA

review.” CREW, 846 F.3d at 1245. Under the FAAA, the

Treasury Department may suspend or revoke a permit “by

order . . . after due notice and opportunity for hearing” and must

“state the findings which are the basis for the order.” 27

U.S.C. § 204(e). Following a suspension or revocation, the

14

permittee can file an appeal in this court or in the federal court

of appeals where its principal place of business is located. Id.

§ 204(h). Section 204 thus provides an “alternative review

procedure” for alcohol-permit revocations, which

demonstrates Congress’s intent to preclude APA review in that

context. CREW, 846 F.3d at 1245. Because Congress has

chosen to channel all alcohol-permit-revocation challenges

through the courts of appeals under section 204, Gulf Coast

cannot bring a revocation challenge in district court under the

APA.

ii.

Importantly, Gulf Coast has repeatedly and forcefully

made clear that it seeks only to challenge a revocation of its

alcohol permits by the agency, based on the agency’s failure to

provide the Company with certain process it was allegedly due.

See, e.g., Appellant’s Reply Br. 1, 2, 4; Statement of Issues,

ECF No. 1652649 (framing its challenge as one “to the

revocation, by the [agency], of [the company’s] basic alcohol

permits”). As we have explained, however, no revocation

challenge may be brought in district court.

To be clear, the TTB’s letter to Gulf Coast is not a

revocation of the Company’s alcohol permits. Far from it.

As we see it, the letter is a formal notification to Gulf Coast

that, in the agency’s view, the Company’s permits have

automatically terminated and a warning that the company

would be subject to penalties for continuing to operate. Thus,

contrary to what the concurrence suggests, we in no way

believe that this Court has jurisdiction under Section 204 over

Gulf Coast’s claim that its permits were somehow “revoked.”

However, Gulf Coast’s argument to us for why the district

court had jurisdiction is that its permits were revoked and that

15

procedurally defective permit revocations can be challenged in

district court. Because procedurally defective permit

revocations cannot be challenged in district court, and because

Gulf Coast has given us no other reason to reverse the district

court, we deny the Company’s appeal. 2

We would be confronted with a different question,

however, had Gulf Coast instead argued that it was challenging

a determination by the agency that its permits had

automatically terminated. See 27 C.F.R. § 44.107. In the

past, we have found final agency action and allowed parties to

bring pre-enforcement challenges under somewhat similar

circumstances, but based on reasoning very different from the

kind Gulf Coast advances here. For example, in CSI Aviation

Services, Inc. v. U.S. Department of Transportation, 637 F.3d

408 (D.C. Cir. 2011), we concluded that we could review a

letter warning the petitioner that it “ha[d] been acting as an

unauthorized indirect air carrier in violation of [49 U.S.C.]

section 41101” and that it must cease and desist or face civil

penalties. Id. at 410. We explained that the letter was

reviewable, in part, because it represented the agency’s

2

Our concurring colleague is of course correct that the “conclusory

label[s]” a party invokes are irrelevant to whether we have subject-

matter jurisdiction. Concurring Op. 1. We do not hold Gulf

Coast’s use of the term “revocation” somehow gives this Court

jurisdiction over the Company’s claim under Section 204. In fact,

we agree that this Court has no jurisdiction to hear an appeal under

Section 204 over anything other than an order “denying an

application for, or suspending, revoking, or annulling, a basic

permit”—regardless of how the challenger labels it. All we have

done here is reject Gulf Coast’s argument to us that procedurally

defective revocations can proceed through district court under the

APA. That is reason enough to reject Gulf Coast’s appeal and

affirm the district court.

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definitive position on the legality of the petitioner’s actions and

because the letter “imposed an immediate and significant

burden” on the petitioner by declaring its operations unlawful,

among other reasons. Id. at 412. And in Ciba-Geigy Corp.

v. EPA, 801 F.2d 430 (D.C. Cir. 1986), we concluded that the

district court could review a letter warning that if the appellant

failed to revise the labels of a pesticide, the EPA would

consider that pesticide mislabeled and bring a misbranding

action. Id. at 433. That letter, we explained, was reviewable

because it reflected the agency’s definitive position on the

lawfulness of the company’s conduct and warned that failure

to “conform to the new labeling requirement” could subject the

company to “civil and criminal penalties.” Id. at 437.

Here, TTB’s letter informed Gulf Coast that

[A]s a result of the[] unreported changes, per . . .

27 U.S.C. § 204(g) . . . Gulf Coast Maritime

Supply, Inc. has been operating without the

required permits since September 2013 . . . .

Because you lack the required permits, you are

not authorized to engage in business as . . . an

alcohol beverage wholesaler or importer. Any

continued operation as such subjects you to all

applicable . . . [Federal Alcohol

Administration] Act criminal and civil

penalties.

J.A. 73 (emphasis added).

As in our earlier cases, this letter identifies how the agency

understands the law to apply to a particular party (Gulf Coast)

and warns the party of legal consequences (civil and criminal

penalties) that could follow if the party fails to comply with the

agency’s view. Although some of the facts surrounding Gulf

17

Coast’s purported ownership change may be in dispute, these

cases could be read to suggest that Gulf Coast, had it proceeded

differently, might have been able to bring an APA claim in

district court to test the agency’s determination that an

ownership change occurred and that the permits had therefore

automatically terminated. Gulf Coast, however, made no such

argument before us in response to the government’s

jurisdictional challenge. And because the issue was not

briefed, we do not decide it. See Tao v. Freeh, 27 F.3d 635,

641 n.7 (D.C. Cir. 1994).

The extent of Gulf Coast’s argument is that the APA

allows challenges in district court to allegedly procedurally

defective alcohol-permit revocations. That is simply not the

case. Because we reject that argument, and because Gulf

Coast has forfeited any other argument, we affirm the district

court’s order finding that it lacked jurisdiction over Gulf

Coast’s alcohol-permits claim.

V.

The district court was correct to conclude the AIA bars

Gulf Coast’s attempt to restore its tobacco permit, and equally

correct to conclude Gulf Coast’s sidestepping of the statutory

scheme provides no jurisdiction over its alcohol permit claim.

Affirmed.

BROWN, Circuit Judge, concurring in part: While I join

in the Court’s disposition and in Parts I–III, I write separately

as to Part IV. There, the Court’s analysis departs from the

statutory text to entertain Gulf Coast’s legal conclusion that its

alcohol permit was revoked, not automatically terminated.

The Court provides no reason for adopting Gulf Coast’s

labeling. This is unwarranted, as “we do not assume the truth

of legal conclusions, nor do we accept inferences that are

unsupported by the facts set out in the complaint.” Arpaio v.

Obama, 797 F.3d 11, 19 (D.C. Cir. 2015). Indeed, we are to

disregard “labels and conclusions” when evaluating whether a

complaint states a claim for relief, see Bell Atl. Corp. v.

Twombly, 550 U.S. 544, 555 (2007), not indulge them. 1

1

To be sure, there is ambiguity over the extent to which the Supreme

Court’s decisions in Twombly and Ashcroft v. Iqbal, 556 U.S. 662

(2009) apply to FED. R. CIV. P. 12(b) challenges outside Rule

12(b)(6). And here, TTB did not move to dismiss under Rule

12(b)(6); only for lack of subject-matter jurisdiction under Rule

12(b)(1). Nevertheless, any ambiguity is beside the point:

Twombly and Iqbal certainly speak to the pleading standards for

stating a claim for relief under Rule 8, and Gulf Coast’s “revocation”

labeling fails to meet that standard. Cf. Xia v. Kerry, 73 F. Supp. 3d

33, 41 (D.D.C. 2014) (acknowledging a court’s power to “dismiss[]

a complaint sua sponte for failure to state a claim”). Under the

statutes at issue, whether Gulf Coast’s conclusory labeling of

“revocation” is true informs whether our subject-matter jurisdiction

is bona fide. We therefore must heed the limits on sufficient

jurisdictional pleading: (1) “we do not assume the truth of legal

conclusions,” Arpaio, 797 F.3d at 19; and (2) courts lack subject-

matter jurisdiction when the claim “clearly appears to be immaterial

and made solely for the purpose of obtaining jurisdiction or where

such a claim is wholly insubstantial and frivolous.” Steel Co. v.

Citizens for a Better Env’t, 523 U.S. 83, 89 (1998). There is no basis

to read the TTB letter as a revocation, rather than confirming Gulf

Coast’s alcohol permit automatically terminated. This leaves only

one logical conclusion: Gulf Coast labeled what happened a

“revocation” to invoke Article III jurisdiction. Dismissing the

Company’s claim for lack of jurisdiction is proper.

2

The Court manifests a misapprehension of pleading

standards. Testing the sufficiency of allegations requires

more than merely refusing to rest the Court’s legal conclusions

on the complaint’s; legal conclusions within the complaint are

to be disregarded, with the Court then homing in on the “well-

pleaded, nonconclusory factual” “nub of the plaintiff’s

[claim],” if any. See, e.g., Iqbal, 556 U.S. at 680 (explaining

the analysis in Twombly). Then, the Court is to determine

whether plausible legal conclusions are suggested from those

facts alone. See id. Unfortunately, the Court invokes this

step-by-step analysis only insofar as it facilitates its desired

ends:

First, far from disregarding the complaint’s legal

conclusions, the Court deploys Gulf Coast’s revocation

labeling as the premise for analyzing whether the district court

had jurisdiction over the Company’s alcohol permit claim. By

itself, this is impermissible. See id.

Second, after the Court concludes the district court lacked

jurisdiction because we (and our sister circuits) possess

jurisdiction over revocation claims under 27 U.S.C. § 204, the

Court (conveniently) drops Gulf Coast’s revocation label—lest

the Court have to explain why it does not want to deal with

Gulf Coast filing an amended complaint here, as the Company

requested. See Gulf Coast Opening Br. 39 (“If this Court finds

that it has exclusive jurisdiction over this matter, we ask that it

remand this matter to the district court with modification of the

Order so dismissal is not with prejudice and the action may be

filed before this Court, or in the consideration of judicial

economy, the Court deems the complaint to be filed in this

Court.”). By all but saying Gulf Coast’s revocation pleading

is “[f]ar from” plausible, see Op. 14, the Court’s entire

discussion of the extent of our jurisdiction over revocations is

3

proved a frolic; a cautionary tale in why one should not start on

the wrong foot.

Third, the Court claims Gulf Coast could have engaged in

a wild-goose chase through the outer reaches of our “final

agency action” case law to state an APA claim in district court

over the permit’s automatic termination. But if Gulf Coast’s

alcohol permit claim is deficient because the Company sought

jurisdiction under the wrong statute or in the wrong court, or

simply failed to draw the same liability theories as the Court

from plead facts, why is prejudicial dismissal not reversible

error? Because “[t]he court should freely give leave [to

amend a complaint] when justice so requires,” FED. R. CIV. P.

15 (a)(2), dismissals without prejudice are standard fare. I

have no problem affirming the district court’s dismissal with

prejudice because any amendment would be futile. The

statutory scheme set forth by Congress establishes a process

that precludes Gulf Coast from doing what it did: Refusing to

apply for a new permit application, using the signature stamp

of its deceased owner to continue operating with an

automatically terminated permit, and then coming to an Article

III court to ask for the due process afforded to revocations.

But the Court is not content with a straightforward, textual

analysis. Why are we not giving Gulf Coast the opportunity

to test the Court’s intriguing theory with an amended

complaint? Cf. City of Dover v. United States EPA, 40 F.

Supp. 3d 1, 5–6 (D.D.C. 2013) (“[B]ecause the Court did

suggest an alternative theory based on the facts pled, plaintiffs

should have been permitted to test that theory. . . . It was error,

then, to dismiss plaintiffs’ complaint with prejudice.”).

By adopting Gulf Coast’s legal conclusion, the Court is led

astray from some basic points that 27 U.S.C. § 204 and our

precedent establish: (1) This Court and the district court lack

jurisdiction over Gulf Coast’s alcohol permit claim because

4

there is no jurisdiction over automatic terminations without the

denial of a new permit application; (2) The April 2016 TTB

letter is not “final agency action;” and (3) Even if the April

2016 letter could somehow be considered “final agency

action,” 27 U.S.C. § 204 adequately displaces APA review of

automatic terminations. For these reasons, and for the Court’s

lack of reasons, I write separately—even as I agree that the

district court lacked jurisdiction over Gulf Coast’s alcohol

permit claim.

I.

Like its tobacco permit claim, Gulf Coast insists the APA

affords it a right to notice and an opportunity to be heard before

its alcohol permit may cease operating. But Gulf Coast’s

argument is not based in the statutory scheme Congress enacted

to regulate alcohol permits.

27 U.S.C. § 204 sets forth the alcohol permitting scheme.

The statute provides a certain process due when a permit is

“revoked,” “suspended,” or “annulled” that is not due when

events result in an “automatically terminated” permit.

Compare id. § 204(e) (explicitly requiring “due notice and

opportunity for hearing to the permittee” when a permit is

subject to “revocation, suspension, and annulment”) with id. §

204(g) (“A basic permit shall continue in effect until

suspended, revoked or annulled as provided herein . . . except

that . . . if transferred by operation of law or if actual or legal

control of the permittee is acquired, directly or indirectly,

whether by stock-ownership or in any other manner, by any

person, then such permit shall be automatically terminated . . .

.” (emphasis added)). Section 204(g) goes on to explain,

similar to the tobacco permit scheme, that an automatically

terminated permit may be succeeded by a timely-filed

application for a new permit. See id. There is no such

5

proviso within § 204(e) if a permit is revoked, suspended, or

annulled. This distinction informs the meaning of § 204(h)’s

discussion of judicial review.

Section 204(h) does not mention appeals from an

automatic termination, but it does mention appeals “from any

order of the Secretary of the Treasury denying an application

for . . . a basic permit.” Id. § 204(h). The section similarly

authorizes appeals in response to a permit’s suspension,

revocation, or annulment. See id. With suspensions,

revocations, and annulments being explicitly cross-referenced,

the natural reading of § 204(h)’s reference to “denying an

application for . . . a basic permit” encompasses the denial of a

new permit application filed in response to an automatically

terminated permit. The upshot of this reading is that, like in

the tobacco permitting scheme, revocation and automatic

termination are not the same. Nevertheless, Gulf Coast

persists in claiming its entitlement to § 204’s revocation

process when its alcohol permit automatically terminated.

II.

Gulf Coast claims a letter from TTB establishes that its

permit was revoked. As mentioned above, in April of 2016,

TTB wrote Gulf Coast, stating “[i]nformation recently received

by [TTB] provide[d] the agency with reason to believe that”

Gulf Coast was operating without valid permits. JA 72. The

letter informed Gulf Coast that “such activities violate federal

law,” and “[c]ontinued operation without the required permits[]

subjects you to criminal penalties and potential civil liability.”

Id. It then goes on to note Gulf Coast’s unreported change in

ownership—characterizing that ownership change as satisfying

the “automatic termination” definitions within the alcohol and

tobacco permitting schemes—and concludes, “as a result of

these unreported changes, per . . . 27 U.S.C. § 204(g) . . . [Gulf

6

Coast] has been operating without the required permits since

September 2013.” JA 73 (emphasis added). As to Gulf

Coast’s alcohol permit, revocation is neither mentioned nor

alluded to, and the statutory process afforded to revocations

(under either the alcohol permitting statute or the APA) is not

cited. But to Gulf Coast, this correspondence was a “letter

decision” that its alcohol permit retroactively terminated—by

which the Company means, “revoked”—making the letter

“final agency action” subject to judicial review under the APA.

See, e.g., Gulf Coast Opening Br. 29.

Section 204 renders the denial of a new permit

application—an application made in response to an

automatically terminated permit—final agency action subject

to judicial review. See 27 U.S.C. § 204(h) (stating the mere

application for a new permit allows “the outstanding basic

permit [to] continue in effect until such application is finally

acted on by the Secretary of the Treasury,” and if that “final[]

act[ion]” is denial, judicial review may ensue in a circuit court

of appeals). Gulf Coast did not avail itself of this process;

short-circuiting the statute’s course by skipping over the new

permit application. Doing so left the Company without the

statutorily specified “final agency action” that would trigger

judicial review, either under the alcohol permit statute or the

APA. See, e.g., Reliable Automatic Sprinkler Co. v.

Consumer Prods. Safety Comm’n, 324 F.3d 726, 731 (D.C. Cir.

2003); see also 5 U.S.C. § 704. The letter is not a stand-in for

Gulf Coast’s end-run around § 204(h).

Deeming the April 2016 letter “final agency action” would

be an unjustifiable expansion of the APA’s scope. The letter’s

content and purpose are merely advisory; it reminds Gulf Coast

of the consequences of operating with a terminated permit and

without a new permit application. Informing Gulf Coast of

extant facts does not “impose[] an obligation, den[y] a right, or

7

fix[] some legal relationship.” See, e.g., Reliable Automatic

Sprinkler, 324 F.3d at 731 (discussing what constitutes “final

agency action” under the APA). The letter is reasonably read

as indicating when the statutory trigger automatically

terminating Gulf Coast’s alcohol permit occurred—upon the

company’s failure to timely report an ownership change. But

“final agency action” rests on the agency consummating its

decision-making process. See Bennett v. Spear, 520 U.S. 154,

177–78 (1997). Moreover, the legal consequences (civil and

criminal penalties) identified within the TTB letter are clearly

understood to reference the consequences of operating without

a valid alcohol permit, not the consequences of refusing to

comply with the letter. This also disqualifies the letter from

constituting “final agency action.” Cf. id. Reading the letter

in line with Gulf Coast’s legal theory, as the Court does,

impermissibly “accept[s] inferences that are unsupported by

the facts.” Food & Water Watch, Inc. v. Vilsack, 808 F.3d

905, 913 (D.C. Cir. 2015).

III.

As both the Supreme Court and this Court recognize, the

APA is not to “duplicate existing procedures for review of

agency action” or “provide for additional judicial remedies in

situations where Congress has provided special and adequate

review procedures.” Bowen v. Massachusetts, 487 U.S. 879,

903 (1988); Citizens for Responsibility and Ethics in

Washington v. U.S. Dep’t of Justice, 846 F.3d 1234, 1244 (D.C.

Cir. 2017). An “adequate” remedy “need not provide relief

identical to relief under the APA,” Garcia v. Vilsack, 563 F.3d

519, 522 (D.C. Cir. 2009)—it can, in fact, be less generous than

APA relief, see id. (stating a remedy is not “adequate” when

that remedy itself “offers only doubtful and limited relief”); see

also Council of & for the Blind of Del. Cnty. Valley, Inc. v.

Regan, 709 F.2d 1521, 1532–33 (D.C. Cir. 1983) (explaining

8

that the alternative review need not be “more effective” than

APA review). Accordingly, even if one were to consider the

letter TTB issued “final agency action”—rather than merely

advising Gulf Coast of extant facts and the consequences of

operating without a permit—§ 204 displaces judicial review

under the APA.

The new permit application process allowed for Gulf

Coast to seek judicial review of the alcohol permit’s automatic

termination. Upon the transfer of Mr. Geller’s stock, Gulf

Coast could have filed an application for a new permit with

TTB while citing no change in ownership. TTB,

independently verifying the ownership assertion in the

application and being aware of Mr. Geller’s death and

corresponding stock transfer, might have denied the new

permit application. If so, § 204(h) would have allowed Gulf

Coast to appeal that denial to a circuit court, where Gulf Coast

could contest whether an ownership change occurred. During

the new permit application process, Gulf Coast could have

continued operating under its prior alcohol permit without

risking any penalty. Had the Company then appealed the new

permit denial, § 204(h) would have stayed TTB’s decision—

preserving Gulf Coast’s old permit, and thus continuing to

immunize it from penalties.

To be sure, § 204 required Gulf Coast to do what it claims

it did not have to do—file an application for a new permit. But

even then, as explained above, Gulf Coast was under no

obligation to cite any ownership change; TTB bore the burden

of establishing whether Gulf Coast’s assertion of ownership

was bona fide before approving a new permit application.

Section 204 therefore gave Gulf Coast the opportunity to

contest any TTB assertion of an ownership change; the “same

genre” of relief the Company asks for under the APA here,

placing § 204 within the realm of “adequate” APA

9

displacement. See El Rio Santa Cruz Neighborhood Health

Ctr. V. U.S. Dep’t of Health & Human Servs., 396 F.3d 1265,

1271 (D.C. Cir. 2005). The additional paperwork may seem

cumbersome, but it is also de-minimis when compared to the

risk Gulf Coast took in not filing anything at all after the stock

transfer. In any event, an adequate alternative to APA review

need not be “more effective” or more equitable than APA

review. See Council of & for the Blind of Del. Cnty. Valley,

709 F.2d at 1532–33; cf. Fornaro v. James, 416 F.3d 63, 69

(D.C. Cir. 2005) (“Yet however unsatisfactory the CSRA’s

approach may appear to the plaintiffs, the fact that a remedial

scheme chosen by Congress vindicates rights less efficiently

than a collective action does not render the CSRA remedies

inadequate for purposes of mandamus.”). Here, the alcohol

permitting statute afforded Gulf Coast an adequate opportunity

to seek judicial review of its ownership status. That Gulf

Coast chose—and it was a choice—to not take advantage of the

process Congress articulated does not make the process

inadequate. Cf. Women’s Equity Action League v. Cavazos,

906 F.2d 742, 751 (D.C. Cir. 1990) (“Plaintiffs urge, however,

that individual actions against discriminators cannot redress the

systemic lags and lapses by federal monitors about which they

complain. . . . But under our precedent, situation-specific

litigation affords an adequate, even if imperfect, remedy.”).

I agree with my colleagues that the district court lacked

jurisdiction over Gulf Coast’s alcohol permit claim. But I do

not agree with their intriguing theories for bending pleading

standards, the statute Congress enacted, and our precedent on

“final agency action.” We should affirm the judgment of the

district court because neither it—nor we—possess jurisdiction

over Gulf Coast’s alcohol permit claim.