Robert Gordon v. Eric Holder, Jr., et al

Filing

OPINION filed [1444043] (Pages: 37) for the Court by Judge Griffith, Opinion concurring in the judgment in part and dissenting in part (Pages: 5) by Judge Kavanaugh, Opinion concurring in part and concurring in the judgment (Pages: 1) by Judge Sentelle, terminating case [12-5031, 12-5051]

USCA Case #12-5031

Document #1444043

Filed: 06/28/2013

United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued October 22, 2012

Decided June 28, 2013

No. 12-5031
ROBERT GORDON,
APPELLEE
v.
ERIC H. HOLDER, JR., IN HIS OFFICIAL CAPACITY AS ATTORNEY
GENERAL OF THE UNITED STATES, ET AL.,
APPELLANTS

Consolidated with 12-5051

Appeals from the United States District Court
for the District of Columbia
(No. 1:10-cv-01092)

Michael P. Abate, Attorney, U.S. Department of Justice,
argued the cause for appellants/cross-appellees. With him on
the briefs were Stuart F. Delery, Acting Assistant Attorney
General, Ronald C. Machen Jr., U.S. Attorney, and Alisa B.
Klein and Mark B. Stern, Attorneys. Gerald C. Kell, Special
Trial Counsel, U.S. Department of Justice, entered an
appearance.

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Eric T. Schneiderman, Attorney General, Office of the
Attorney General for the State of New York, Barbara D.
Underwood, Solicitor General, Steven Wu, Special Counsel to
the Solicitor General, Irvin B. Nathan, Attorney General,
Office of the Attorney General for District of Columbia,
Samuel S. Olens, Attorney General, Office of the Attorney
General for the State of Georgia, David M. Louie, Attorney
General, Office of the Attorney General for the State of
Hawai=i, Lawrence G. Wasden, Attorney General, Office of the
Attorney General for the State of Idaho, Lisa Madigan,
Attorney General, Office of the Attorney General for the State
of Illinois, Gregory F. Zoeller, Attorney General, Office of the
Attorney General for the State of Indiana, Michael C.
Geraghty, Attorney General, Office of the Attorney General
for the State of Alaska, Tom Horne, Attorney General, Office
of the Attorney General for the State of Arizona, Dustin
McDaniel, Attorney General, Office of the Attorney General
for the State of Arkansas, Kamala D. Harris, Attorney
General, Office of the Attorney General for the State of
California, John W. Suthers, Attorney General, Office of the
Attorney General for the State of Colorado, George Jepsen,
Attorney General, Office of the Attorney General for the State
of Connecticut, Joseph R. Biden III, Attorney General, Office
of the Attorney General for the State of Delaware, Lori
Swanson, Attorney General, Office of the Attorney for the
State of Minnesota, Jim Hood, Attorney General, Office of the
Attorney General for the State of Mississippi, Jon Bruning,
Attorney General, Office of the Attorney General for the State
of Nebraska, Catherine Cortez Masto, Attorney General,
Office of the Attorney General for the State of Nevada,
Michael A. Delaney, Attorney General, Office of the Attorney
General for the State of New Hampshire, Gary K. King,
Attorney General, Office of the Attorney General for the State
of New Mexico, Roy Cooper, Attorney General, Office of the
Attorney General for the State of North Carolina, Tom Miller,

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Attorney General, Office of the Attorney General for the State
of Iowa, Derek Schmidt, Attorney General, Office of the
Attorney General for the State of Kansas, Jack Conway,
Attorney General, Office of the Attorney General for the
Commonwealth of Kentucky, William J. Schneider, Attorney
General, Office of the Attorney General for the State of Maine,
Douglas F. Gansler, Attorney General, Office of the Attorney
General for the State of Maryland, Martha Coakley, Attorney
General, Office of the Attorney General for the
Commonwealth of Massachusetts, Bill Schuette, Attorney
General, Office of the Attorney General for the State of
Michigan, Robert E. Cooper, Attorney General, Office of the
Attorney General for the State of Tennessee, Mark L. Shurtleff,
Attorney General, Office of the Attorney General for the State
of Utah, William H. Sorrell, Attorney General, Office for the
Attorney General for the State of Vermont, Robert M.
McKenna, Attorney General, Office for the Attorney General
for the State of Washington, Darrell V. McGraw, Jr., Attorney
General, Office of the Attorney General for the State of West
Virginia, Gregory A. Phillips, Attorney General, Office of the
Attorney General for the State of Wyoming, Wayne Stenehjem,
Attorney General, Office of the Attorney General for the State
of North Dakota, Michael DeWine, Attorney General, Office
of the Attorney General for the State of Ohio, E. Scott Pruitt,
Attorney General, Office of the Attorney General for the State
of Oklahoma, Linda L. Kelly, Attorney General, Office of the
Attorney General for the Commonwealth of Pennsylvania,
Peter F. Kilmartin, Attorney General, Office of the Attorney
General for the State of Rhode Island, Alan Wilson, Attorney
General, Office of the Attorney General for the State of South
Carolina, and Marty J. Jackley, Attorney General, Office of the
Attorney General for the State of South Dakota, were on the
brief for amici curiae States of New York, et al. in support of
appellants/cross-appellees.

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Allison M. Zieve and Greg A. Beck were on the brief for
amici curiae Campaign for Tobacco-Free Kids, et al. in support
of appellants/cross-appellees.
Linda Singer was on the brief for amicus curiae City of
New York in support of appellants/cross-appellees.
Scott A. Sinder was on the brief for amicus curiae National
Association of Convenience Stores, et al. in support of
appellants/cross-appellees.
Aaron
M.
Streett
argued
the
cause
for
appellee/cross-appellant . With him on the briefs were R. Stan
Mortenson and Sara E. Kropf. Richard P. Sobiecki entered an
appearance.
Before: GRIFFITH and KAVANAUGH, Circuit Judges, and
SENTELLE, Senior Circuit Judge.
Opinion for the court filed by Circuit Judge GRIFFITH.
Opinion concurring in the judgment in part and dissenting
in part filed by Circuit Judge KAVANAUGH.
Opinion concurring in part and concurring in the judgment
filed by Senior Circuit Judge SENTELLE.
GRIFFITH, Circuit Judge: Robert Gordon owns a business
that sold tobacco products across state lines. In the district
court, Gordon sought a preliminary injunction against the
enforcement of provisions of the Prevent All Cigarette
Trafficking Act (PACT Act) that require him to pay state and
local taxes and ban him from sending his products through the
U.S. mail. Gordon argues that the tax provisions violate the
Due Process Clause and the Tenth Amendment and that the

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mail ban runs afoul of the Due Process and Equal Protection
Clauses.
The district court enjoined the enforcement of the tax
provisions on due process grounds, but otherwise dismissed
Gordon’s claims. The government appeals the preliminary
injunction, and Gordon cross-appeals the district court’s
dismissal of, and refusal to grant a preliminary injunction for,
his remaining claims. For the reasons set forth below, we
affirm the district court’s decision in its entirety.
I
A
In most states, the liability for sales and use taxes falls
primarily on the buyer. U.S. Government Accountability
Office, GAO-03-714T, Internet Cigarette Sales: Limited
Compliance and Enforcement of the Jenkins Act Result in Loss
of State Tax Revenue 3 (2003) (hereinafter GAO Report);
WALTER HELLERSTEIN, STATE TAXATION ¶ 12.01 (3d ed.
2012). States require retailers to collect applicable taxes from
resident buyers and remit the receipts to the state. STEVEN
MAGUIRE, CONGRESSIONAL RESEARCH SERV., STATE
TAXATION OF INTERNET TRANSACTIONS 1 (2013). A state may
not, however, impose such an obligation on a retailer with
whom the state lacks minimum contacts. See Quill Corp. v.
North Dakota, 504 U.S. 298 (1992). 1 This means that most
1

The minimum contacts requirement derives from the Due
Process Clause. The Due Process Clause is not the only provision of
the Constitution that limits states’ authority to tax: the so-called
Dormant Commerce Clause prohibits states from requiring retailers
with whom the state lacks a “substantial nexus” to collect taxes,
absent congressional authorization. Quill, 504 U.S. at 311. The

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out-of-state retailers operate beyond the state’s regulatory
reach. When they cannot rely on retailers to collect taxes, states
find it both expensive and difficult to track the smaller
out-of-state purchases of their residents and to collect the
applicable taxes directly from them. This creates an
opportunity for tax evasion that is especially costly when it
comes to goods like tobacco products that are taxed at high
rates. GAO Report, supra, at 7. In an effort to eliminate this
opportunity for tobacco buyers, Congress passed the Jenkins
Act, which obligates retailers to report each interstate sale of
tobacco products to the tax authority of the consumer’s state.
Pub. L. No. 81-363, 63 Stat. 884 (1949).
More than a half century has elapsed since the passage of
the Jenkins Act, and as the Internet has made it easier for
consumers to order tobacco products from out-of-state sellers,
it has become more difficult for states and localities to collect
taxes on these transactions. H.R. Rep. No. 111-117, at 18-19
(2009); see also GAO Report, supra, at 8, 12-13. Remote
purchasing also makes it easier for parties to evade age
restrictions and otherwise traffic in cigarettes illegally. 15
U.S.C. § 375 note; see also H.R. Rep. No. 111-117, at 18.
Dormant Commerce Clause “nexus” test may be more demanding
than the Due Process Clause “minimum contacts” test, see id. at 313,
317-18, but it is not at issue in this case because Gordon challenges a
federal statute.
My concurring colleague criticizes this footnote as
“gratuitous.” Post, at 1 (Sentelle, J., concurring). I disclaim any
attempt to opine on the effect of the Dormant Commerce Clause,
which, as my colleague correctly points out, is not at issue in this
case. I include this incontrovertible description of the Supreme
Court’s Dormant Commerce Clause doctrine only to clarify that the
Due Process Clause is not the only provision that restricts a state’s
power to tax out-of-state retailers.

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Finding the Jenkins Act inadequate, H.R. Rep. No. 111-117, at
18, Congress has sent the PACT Act into the breach.
The PACT Act is “aimed primarily at combating three
evils: tobacco sales to minors, [illicit] cigarette trafficking, and
circumvention of state taxation requirements.” Gordon v.
Holder (Gordon I), 632 F.3d 722, 723 (D.C. Cir. 2011). It does
so by restricting “delivery sales” of cigarettes and smokeless
tobacco products. A delivery sale is any sale in which either the
purchase or the delivery does not occur face-to-face. 15 U.S.C.
§ 375(5). Two sections of the Act are at issue here. Section 2a
prohibits delivery sales unless all applicable state and local
taxes are paid “in advance of the sale, delivery, or tender.” 15
U.S.C. § 376a(a)(3)-(4), (d). Delivery sellers must comply
with “all State, local, tribal, and other laws generally applicable
to sales of cigarettes or smokeless tobacco as if the delivery
sales occurred entirely within the specific State,” meaning that
they must collect any taxes that state or local laws require
in-state retailers to collect. 15 U.S.C. § 376a(a)(3). They are
subject to federal criminal and civil penalties if the applicable
taxes have not been paid in advance. 15 U.S.C. § 376a(d)(1)
(prohibition); 15 U.S.C. § 377 (penalties). Section 3 prohibits
sending tobacco products in the U.S. mail. 18 U.S.C. § 1716E.
As a result, tobacco delivery sellers must resort to private
carriers.
B
According to his complaint, Robert Gordon ran a business
selling tobacco products in the Alleghany Territory of the
Seneca Nation of Indians, located in western New York. After
starting his business in 2002, Gordon accepted orders in
person, over the phone, and occasionally online. At the height
of his business, Gordon took in two million dollars in revenue
every month. Ninety-five percent of that revenue came from

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sales to customers outside of New York. Gordon claims,
however, that he has never made a sale into some state and
local taxing jurisdictions within the United States. See Marcia
Gordon Second Decl. ¶ 13.
Gordon asserts that his business has suffered under the
PACT Act. Until recently, Gordon has enjoyed the protection
of a Western District of New York preliminary injunction
against the enforcement of the tax provisions, 2 but the mail
ban has taken its toll. The major private carriers – Federal
Express, United Parcel Service, and DHL – also refuse to
deliver tobacco products, leaving Gordon with only more
expensive couriers. On May 30, 2013, while this appeal was
pending, Gordon notified the court that he has found it
necessary to close his business.
C
Gordon’s case has been before us already. Gordon v.
Holder (Gordon I), 632 F.3d 722 (D.C. Cir. 2011). On June 28,
2010, the day before the PACT Act took effect, Gordon filed a
complaint alleging that the tax provisions and the mail ban are
unconstitutional and sought a preliminary injunction against
2

A group of plaintiffs brought a similar challenge to the PACT
Act in the Western District of New York, and that district court
granted a preliminary injunction against enforcement of the tax
provisions on due process grounds. See Red Earth LLC v. United
States, 728 F. Supp. 2d 238 (W.D.N.Y. 2010). The Second Circuit
upheld the preliminary injunction. Red Earth LLC v. United States,
657 F.3d 138 (2d Cir. 2011) (per curiam). On June 7, 2013, the
parties voluntarily stipulated to dismissal with prejudice, and the
court vacated the injunction. See Stipulation and Order of Dismissal,
Red Earth LLC v. United States, No. 10-CV-530 (W.D.N.Y. June 7,
2013).

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their enforcement. Id. at 723. The district court denied
Gordon’s motion the next day on the sole ground that it was too
late to stop the Act from taking effect. Id. at 724. Gordon
appealed.
We remanded Gordon’s motion to the district court to
consider the factors a plaintiff must demonstrate to obtain a
preliminary injunction. Gordon I, 632 F.3d at 726. On remand,
the district court enjoined the tax provisions on due process
grounds, but dismissed for failure to state a claim Gordon’s
Tenth Amendment challenge to the tax provisions and his due
process and equal protection challenge to the mail ban. See
Gordon v. Holder, 826 F. Supp. 2d 279 (D.D.C. 2011). Both
parties appealed.
We have jurisdiction to review the resolution of Gordon’s
motion for a preliminary injunction under 28 U.S.C.
§ 1292(a)(1), and the dismissal of his claims under 28 U.S.C.
§ 1291. The closure of Gordon’s business has not mooted his
appeal. His wife submitted a sworn declaration that she and
Gordon intend to reopen their business if they prevail, and that
they remain capable of doing so. Marcia Gordon Third Decl.
¶¶ 5-7. Gordon’s “uncontroverted intention to operate in the
future in ways that would violate” the PACT Act “keeps the
controversy alive.” See Unity08 v. FEC, 596 F.3d 861, 864
(D.C. Cir. 2010). 3

3

Because we are required to ascertain our jurisdiction before
proceeding to the merits of an appeal, see Steel Co. v. Citizens for a
Better Env’t, 523 U.S. 83 (1998), our conclusion that the closure of
Gordon’s business does not moot this case is final. Naturally, facts
may develop that moot the case in the future, at which point the
district court would be required to dismiss Gordon’s complaint. But
the district court is not, as our concurring colleague seems to suggest,

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II
As we explained in Gordon I, “‘[a] plaintiff seeking a
preliminary injunction must establish that he is likely to
succeed on the merits, that he is likely to suffer irreparable
harm in the absence of preliminary relief, that the balance of
the equities tips in his favor, and that an injunction is in the
public interest.’” 632 F.3d at 724 (quoting Winter v. Natural
Res. Def. Council, 555 U.S. 7, 20 (2008)). We review the
“district court’s weighing of the four preliminary injunction
factors and its ultimate decision to issue or deny such relief for
abuse of discretion.” Davis v. Pension Benefit Guar. Corp.,
571 F.3d 1288, 1291 (D.C. Cir. 2009). We review the district
court’s legal conclusions de novo and its findings of fact for
clear error. In re Navy Chaplaincy, 697 F.3d 1171, 1178 (D.C.
Cir. 2012). But, as the Supreme Court admonished in Ashcroft
v. ACLU, where “the underlying constitutional question is
close” we must “uphold the injunction and remand for trial on
the merits.” 542 U.S. 656, 664-65 (2004); see also Red Earth
LLC v. United States, 657 F.3d 138, 145 (2d Cir. 2011) (per
curiam) (“Because the district court reached a reasonable
conclusion on a close question of law, there is no need for us to
decide the merits at this preliminary stage.”). Under Ashcroft,
if the district court’s analysis of the preliminary injunction
factors reflects a reasonable conclusion about a close question
of constitutional law, and contains no other legal error, then we
must send the case back to the district court with the
preliminary injunction intact. We must refrain from resolving
novel and difficult constitutional questions, leaving them to be

post, at 1 (Sentelle, J., concurring), free to revisit our holding that the
case is currently an Article III case or controversy.

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settled at a later stage, with the benefit of further factual and
legal development.
The government and dissent argue that Ashcroft’s gloss on
the standard of review applies only to preliminary injunctions
based on the First Amendment, when the government bears a
special burden to justify the challenged law with a compelling
governmental interest. Appellants’ Reply Br. 16 n.9 (citing
Gonzales v. O Centro Espirita Beneficente Uniao do Vegetal,
546 U.S. 418, 429-30 (2006)). We disagree. The Ashcroft
Court expressly derived its deferential approach “from
established standards of appellate review” set out in Walters v.
National Association of Radiation Survivors – a case involving
a preliminary injunction based, like the one here, on the Due
Process Clause. Ashcroft, 542 U.S. at 664 (quoting Walters,
473 U.S. 305, 336 (1985) (O’Connor, J., concurring)). Our
sister circuits have also applied Ashcroft’s standard of review
to preliminary injunctions based on due process challenges.
See Red Earth, 657 F.3d at 145 (applying Ashcroft to an
identical due process challenge to the PACT Act);
Reproductive Health Serv. of Planned Parenthood of St. Louis
Region v. Nixon, 428 F.3d 1139, 1145 (8th Cir. 2005)
(applying Ashcroft to a constitutional challenge to an abortion
regulation). In fact, we find no case expressly limiting
Ashcroft’s command to First Amendment challenges. To be
sure, Ashcroft was a First Amendment case, and certain
features of the Court’s analysis naturally have no bearing
outside the First Amendment context. For example, the Court
affirmed the district court’s conclusion that the plaintiff was
likely to succeed on the merits because the government had not
met its special First Amendment burden to justify the
challenged restrictions on speech with a compelling
governmental interest. See Gonzales, 546 U.S. at 429
(describing Ashcroft). But the Ashcroft Court’s description of
our standard of review is not so restricted. It reflects the

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general principle that, even though Congress has provided for
interlocutory review of preliminary injunctions, premature
resolution of difficult constitutional questions is undesirable.
Cf. Pearson v. Callahan, 555 U.S. 223, 239 (2009) (describing
the dangers of premature resolution of constitutional
questions); Mitchell v. Forsyth, 472 U.S. 511, 549-50 (1985)
(Brennan, J., dissenting) (“[R]esolution of even the most
abstract legal disputes is advanced by the presence of a
concrete set of facts.”). Thus, the Court’s command to uphold
the injunction when “the underlying constitutional question is
close” binds us today.
We conclude that the district court did not abuse its
discretion by entering a preliminary injunction.
A
We begin with the district court’s assessment of Gordon’s
likelihood of success on the merits, which is left untouched by
the closure of Gordon’s business. The district court held that
Gordon is likely to succeed on the merits of his due process
challenge. Gordon, 826 F. Supp. 2d at 293. Because we find
the underlying constitutional questions to be close, we affirm
the district court’s conclusion. See Ashcroft, 542 U.S. at
664-65. 4
4

For this reason, contrary to my concurring colleague’s
statement, Part II.A “elevat[es]” nothing “to circuit law.” Post, at 1
(Sentelle, J., concurring). The legal premises of Gordon’s due
process challenge remain fair game on remand; we merely conclude
that the questions they raise are too close to call at this stage. See
Sherley v. Sebelius, 689 F.3d 776, 781 (D.C. Cir. 2012) (“[T]he
decision of a trial or appellate court whether to grant or deny a
preliminary injunction does not constitute law of the case for the
purpose of further proceedings and does not limit or preclude the
parties from litigating the merits.” (citation omitted)).

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Gordon argues that the PACT Act “violates nonresident
tobacco retailers’ due process rights . . . by subjecting them to
taxes in state and local forums without regard to whether they
have minimum contacts with the taxing jurisdiction.” 5
Appellee’s Br. 21. This argument presents two substantial and
novel constitutional questions. First, does the Due Process
Clause require minimum contacts between the state or local
taxing authority and the nonresident seller even when the
federal government is the source of the seller’s duty to collect
taxes? And second, if due process requires minimum contacts
with the state or local taxing jurisdiction, does a single delivery
sale to a buyer in that jurisdiction create minimum contacts?
Both are questions of law, but they are matters of first
impression, and their resolution would benefit from fuller
factual development below. See Pearson, 555 U.S. at 239. We
do not settle them here because we need not do so to affirm the
preliminary injunction.
1
Although it is well-settled that the Due Process Clause
requires minimum contacts between the taxing sovereign and
the taxed entity, see Miller Bros. Co. v. Maryland, 347 U.S.
340, 342, 344-45 (1954), this appeal presents a unique twist on
that principle: with which sovereign must the taxed entity
possess minimum contacts when there is one sovereign that
defines and benefits from the tax obligation (in this case, the
state or local government), and another that imposes and
5

As discussed above, Gordon is formally “collecting” taxes
owed by the buyer and remitting them to the state, rather than paying
them. Under the Due Process Clause, we treat an obligation to collect
taxes the same as an obligation to pay taxes. See Quill, 504 U.S. at
319 (Scalia, J., concurring) (collecting cases).

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enforces the obligation (in this case, the federal government)?
Gordon and the government think that the question can be
resolved by reference to precedent. We do not. This question is
novel and close, and we cannot say that the district court’s
conclusion that Gordon is likely to succeed on the merits is an
abuse of discretion. We are therefore bound to affirm its
determination. See Ashcroft, 542 U.S. at 664-65.
For its part, the government argues that the Act is
constitutional because Gordon has minimum contacts with the
federal government, the sovereign that imposed and will
enforce his tax obligations. The government correctly points
out that this is not the first time a seller has challenged
Congress’s power to oblige participants in interstate commerce
to comply with state-defined duties. The Supreme Court has
twice upheld federal laws against similar challenges – one to
the Ashurst-Sumners Act and one to the Webb-Kenyon Act.
See Ky. Whip & Collar Co. v. Ill. Cent. Ry. Co., 299 U.S. 334
(1937); James Clark Distilling Co. v. W. Maryland Ry. Co.,
242 U.S. 311 (1917). The Ashurst-Sumners Act made “it
unlawful knowingly to transport in interstate or foreign
commerce goods made by convict labor into any State where
the goods are intended to be received, possessed, sold, or used
in violation of its laws.” Kentucky Whip & Collar Co., 299
U.S. at 343. The Webb-Kenyon Act prohibited “the
transportation in interstate commerce of all liquor
‘intended . . . to be received, possessed, sold, or in any manner
used . . . in violation of any law of” the destination state. James
Clark Distilling Co., 242 U.S. at 321. In both cases, the
Supreme Court deemed it irrelevant that the states defined the
companies’ legal duties because the “will” behind the two laws
was Congress’s, not the states’. Ky. Whip & Collar Co., 299
U.S. at 347-52; James Clark Distilling Co., 242 U.S. at 326.
The “will” behind the PACT Act is also Congress’s, so the
government argues that these precedents require us to

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disregard the role the states play in defining Gordon’s legal
duties. Appellants’ Br. 25, 27; see also Musser’s Inc. v. United
States, No. 10-4355, 2011 WL 4467784, *5 (E.D. Pa. Sept. 26,
2011) (“[T]he Act’s tax-payment requirement is not being
imposed by a state, acting unilaterally, but by Congress, and
the legislative due process analysis must reflect the federal
character of the legislation.”). Because Congress’s “will”
converts the state taxes into federal duties, the argument goes,
the Due Process Clause demands minimum contacts only
between Gordon and the federal government.
The government’s argument overlooks an important
distinction: The challenges to the federal statutes at issue in
James Clark Distilling Company and Kentucky Whip & Collar
Company were brought under the Commerce Clause; unlike
Gordon’s challenge, they raised no issue of minimum contacts
under the Due Process Clause. 6 See James Clark Distilling
6

The parties in those cases raised due process challenges, but
not of the sort we consider here. See James Clark Distilling Co., 242
U.S. at 320 (“That government can, consistently with the due process
clause, forbid the manufacture and sale of liquor and regulate its
traffic, is not open to controversy . . . .”); id. at 332 (“It is only
necessary to point out that the considerations which we have stated
dispose of all contentions that the Webb-Kenyon Act is repugnant to
the due process clause of the Fifth Amendment, since what we have
said concerning that clause in the Fourteenth Amendment as applied
to state power is decisive.”); Ky. Whip & Collar Co., 299 U.S. at 352
(“In the congressional action there is nothing arbitrary or capricious
bringing the statute into collision with the requirements of due
process of law.”).
The government and the dissent, post, at 2-3 (Kavanaugh, J.,
dissenting), identify several other federal statutes that subject
out-of-state sellers to state regulation. These statutes likewise have
never been scrutinized under the Due Process Clause. The one

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Co., 242 U.S. at 326; Ky. Whip & Collar Co., 299 U.S. at 348.
“As the Supreme Court has explained, the inquiries are
analytically distinct and should not be treated as if they were
synonymous.” Gordon I, 632 F.3d at 725 (citation omitted).
Congress’s “will” was enough to cure any Commerce Clause
defect in the Ashurst-Sumners and Webb-Kenyon Acts
because Congress may authorize states to regulate interstate
commerce. Id. But a medicine that cures one ailment may be
feckless against the next. No doctor would prescribe penicillin
for a broken arm; nor will we uncritically hand out the
Supreme Court’s Commerce Clause prescription when a
litigant comes to us complaining of a due process injury.
Congress’s “will” might cure the due process injury that would
otherwise arise if the states tried unilaterally to impose taxes on
Gordon. But to reach that conclusion, we must conduct a closer

exception is the Jenkins Act, which a three judge district court once
upheld against a due process challenge. See Consumer Mail Order
Ass’n of Am. v. McGrath, 94 F. Supp. 705 (D.D.C. 1950). But that
Act is distinguishable because the federal government imposed,
defined, and enforced the duty, rather than incorporating a duty
created by state law. See 15 U.S.C. § 376 (setting out detailed
requirements for the report the seller must submit to the state).
All of these federal laws are distinguishable from the PACT Act
for an additional reason: the state laws they incorporate do not
impose a duty to collect taxes; they regulate commercial activity
instead. The Court has long held that mere contact through the U.S.
mail provides the “minimum contact” required for a state to assert
regulatory, as distinguished from taxation, jurisdiction. See
Travelers Health Ass’n v. Virginia ex rel. State Corp. Comm’n, 339
U.S. 643, 646-50 (1950). For that reason, the laws cited by the
government and the dissent arguably satisfy the Due Process Clause
even if Gordon is correct that the Clause requires minimum contacts
between the seller and the state or locality.

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examination of “the Due Process principles of fair play and
substantial justice.” Id. (internal quotation marks omitted).
Sensitive to the distinctions between the Due Process and
Commerce Clauses, Gordon argues that the answer to this
question is found in the principles set out in Quill Corp. v.
North Dakota, 504 U.S. 298 (1992). In Quill, an out-of-state
mail-order catalogue business challenged a state law that
compelled “every person who engages in regular or systematic
solicitation of a consumer market in” North Dakota to collect
use taxes from its customers and remit them to the state. Id. at
302-03 (internal quotation marks omitted). Even though Quill
was a Delaware corporation with no physical presence in North
Dakota, the state statute required the company to collect North
Dakota use taxes because it engaged in “regular or systematic
solicitation” in the state, as defined by the statute. Id. (internal
quotation marks omitted). Quill challenged the law under the
Due Process and Commerce Clauses. Id. at 303-04. Before
addressing these separate challenges, the Court discussed the
differences between the clauses as they relate to the state’s
power to regulate an entity located in another state. Id. at
305-06. In dicta, the Court explained: “While Congress . . .
may authorize state actions that burden interstate commerce, it
does not similarly have the power to authorize violations of the
Due Process Clause.” Id. at 305 (internal citations omitted).
Then, the Court set out the fundamental rule that the Due
Process Clause requires minimum contacts between the taxing
sovereign and the taxed entity. Id. at 306. Taken together,
Gordon argues, the legal principles set forth in Quill prohibit
Congress from imposing state or local taxes on out-of-state
sellers who lack minimum contacts with the state or locality.
Even the government concedes that, after Quill, Congress
may not authorize a state to impose the duty to collect state use
taxes on delivery sellers lacking minimum contacts with the

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state. But that is not what the PACT Act does. Section 2a does
not address itself to states at all. Rather than authorizing the
states to impose on Gordon a state duty to collect state taxes,
the PACT Act imposes on Gordon a federal duty to collect
state taxes. States would enforce their own taxes if Congress
merely authorized them to tax, whereas they must rely on the
federal government to do so under the PACT Act. Because this
distinction may make all the difference under the Due Process
Clause, the precedent on which Gordon relies does not resolve
our constitutional question.
Finding no conclusive precedent, we turn to first
principles and there find support for Gordon’s argument that
due process requires minimum contacts with the state or local
government that defines the tax. 7 At its most basic level, “[t]he
7

My concurring colleague asserts that no court has “undertaken
th[is] search before affirming the legitimacy of a tax.” Post, at 1
(Sentelle, J., concurring). We need look no further than Quill to find
an example of the Supreme Court returning to first principles to
understand what type of “minimum contacts” serve to legitimate a
state tax. See, e.g., Quill, 504 U.S. at 312 (comparing the principles
that animate the Due Process Clause with those that animate the
Dormant Commerce Clause); see also New York ex rel. Cohn v.
Graves, 300 U.S. 308, 312-13 (1937); Pollock v. Farmers’ Loan &
Trust Co., 157 U.S. 429, 555-57 (1895), overruled by U.S. CONST.
amend. XVI. It seems to me that this approach is to be encouraged
when we are asked to apply existing law to novel cases. See, e.g.,
FCC v. Fox TV Stations, Inc., 556 U.S. 502, 531-32 (2009) (Thomas,
J., concurring) (criticizing the Court for not “looking to first
principles to evaluate the constitutional question” when faced with
novel fact patterns); Morse v. Frederick, 551 U.S. 393, 421 (2007)
(Thomas, J., concurring) (criticizing the Court for tinkering with
constitutional doctrines without “returning to first principles”);
United States v. Lopez, 514 U.S. 549, 552 (1995) (looking to the first
principles of our structure of government to determine the legitimacy

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Due Process Clause protects an individual’s right to be
deprived of life, liberty, or property only by the exercise of
lawful power.” J. McIntyre Mach., Ltd. v. Nicastro, __ U.S. __,
131 S. Ct. 2780, 2789 (2011) (plurality opinion) (citations
omitted). When it comes to the power to tax, the elements of
“lawful power” are (1) “some definite link, some minimum
connection, between a state and the person, property or
transaction it seeks to tax,” and (2) a rational relationship
between “the income attributed to the State for tax purposes”
and “values connected with the taxing state.” Quill, 504 U.S. at
306 (internal quotation marks omitted).
i
We demand “minimum connections” because a taxation
regime that does not rest on “minimum connections” lacks
democratic legitimacy. See Quill, 504 U.S. at 312 (“[T]he due
process nexus analysis requires that we ask whether an
individual’s connections with a State are substantial enough to
legitimate the State’s exercise of power over him.”). The
government would have us ignore the role of state and local
governments in subjecting Gordon to their own tax laws, but it
seems to me that the powers the states wield as a result of the
PACT Act implicate the democratic principles that undergird
the Due Process Clause. 8
of Congress’s novel exercise of its commerce power); Regents of
Univ. of Cal. v. Bakke, 438 U.S. 265, 299 (1978) (Powell, J.) (“In
expounding the Constitution, the Court’s role is to discern principles
sufficiently absolute to give them roots throughout the community
and continuity over significant periods of time, and to lift them
above the level of the pragmatic political judgments of a particular
time and place.” (internal quotation marks omitted)).
8

By examining these principles, I am emphatically not
announcing a new test. See post, at 1 (Sentelle, J., concurring). I am

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The demand that taxation regimes possess democratic
legitimacy finds deep roots in the founding of our republic. See
THE DECLARATION OF INDEPENDENCE para. 15 (U.S. 1776)
(“He has combined with others to subject us to a jurisdiction
foreign to our constitution, and unacknowledged by our laws;
giving his Assent to their Acts of pretended Legislation: . . .
For imposing Taxes on us without our Consent . . . .”);
EDMUND BURKE, THE POLITICAL TRACTS AND SPEECHES OF
EDMUND BURKE, ESQ. 100 (1777) (“[I]n prudence we ought
not to be quite so ready with our taxes, until we can secure the
desired representation in parliament.”); Speech of Lord
Camden on the American Declaratory Bill (1766), in 16 THE
PARLIAMENTARY HISTORY OF ENGLAND, FROM THE EARLIEST
PERIOD TO THE YEAR 1803 (T. Hansard ed., 1813) (“[T]he
British Parliament have no right to tax the
Americans. . . . [T]axation and representation are inseparable –
this position is founded on the laws of nature; . . . for whatever
is a man’s own, is absolutely his own; no man has a right to
take it from him without his consent, either expressed by
himself or representative . . . .”); see also Pollack v. Farmers’
Loan & Trust Co., 157 U.S. 429, 556 (1895) (“The men who
framed and adopted [the Constitution] had just emerged from
the struggle for independence whose rallying cry had been that
‘taxation and representation go together.’ . . . The principle
was that the consent to those who were expected to pay it was
essential to the validity of any tax.”); Slaughter-House Cases,
83 U.S. 36, 115 (1873) (Bradley, J., dissenting) (“A violation
only looking for guidance about how to apply the old one. Our
precedent tells us to look for minimum contacts. But with which
sovereign? Never before have there been two potential answers to
this question, as there are in this case. As I have weighed the
answers, it has been helpful to me to understand why we require
minimum contacts to begin with.

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of . . . the principle that recognizes the property of the people
as their own, and which, therefore, regards all taxes for the
support of government as gifts of the people through their
representatives, and regards taxation without representation as
subversive of free government, was the origin of our own
revolution.”). Our due process jurisprudence ensures
democratic legitimacy by relying on the mechanism of “fair
warning.” See Quill, 504 U.S. at 312. In Quill, the Supreme
Court reasoned that “if a foreign corporation purposefully
avails itself of the benefits of an economic market in the forum
State” and “engage[s] in continuous and widespread
solicitation of business within a State,” then it “clearly has ‘fair
warning that [its] activity may subject [it] to the jurisdiction of
a foreign sovereign.’” Id. at 307-08 (quoting Shaffer v. Heitner,
433 U.S. 186, 218 (1977) (Stevens, J., concurring) (alterations
in original)). Fairly warned that a state might tax them, persons
can participate, at least through petitioning and speech, in the
political process that decides whether it will. Cf. Borough of
Duryea v. Guarnieri, __ U.S. __, 131 S. Ct. 2488, 2499-500
(2011) (“Petitions allow[] participation in democratic
governance even by groups excluded from the franchise.”
(citation omitted)). Fairly warned that a state will tax certain
conduct, the decision to engage in that conduct is tantamount to
consent to be taxed. Cf. Int’l Shoe Co. v. Washington, 326 U.S.
310, 318 (1945) (“[S]ome of the decisions holding the
corporation amenable to suit have been supported by resort to
the legal fiction that it has given its consent to service and suit,
consent being implied from its presence in the state through the
acts of its authorized agents.” (citations omitted)).
These principles give strength to Gordon’s argument that
even a federal duty to comply with state and local tax laws may
transgress due process limits on the taxation power. True
enough, Gordon possesses minimum contacts with the federal
government that will enforce his duty, but should we not also

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demand that he possess minimum contacts with the state and
local governments that will define his duty? The Framers saw
the legislative process – which defines rather than enforces our
duties – as the bulwark against oppressive taxation. 9 THE
FEDERALIST NO. 35 (Alexander Hamilton) (“Is it not natural
that a man who is a candidate for the favor of the
people, . . . should be willing to allow them their proper degree
of influence upon his conduct? This dependence, and the
necessity of being bound himself . . . by the [taxes] to which he
gives his assent, are the true, and they are the strong chords of
sympathy between the representative and the constituent.”);
THE FEDERALIST NO. 84 (Alexander Hamilton) (arguing that
the people can rely on legislative accountability to ensure that
legislatures do not exercise their taxing discretion to eliminate
the freedom of the press). And the Supreme Court has long
acknowledged the importance of this structural check. See
McCulloch v. Maryland, 17 U.S. (4 Wheat.) 316, 428 (1819)
(“The only security against the abuse of th[e] power [to tax], is
found in the structure of the government itself. In imposing a
tax the legislature acts upon its constituents. This is in general a
sufficient security against erroneous and oppressive
taxation.”); Int’l Harvester Co. v. Wisconsin Dep’t of Taxation,
322 U.S. 435, 451 (1944) (Jackson, J., dissenting)
(“Representation is the ordinary guaranty of fairness in
taxation.”); Helvering v. Gerhardt, 304 U.S. 405, 415 (1938)
(“State taxation of national instrumentalities is subject to no
[democratic] restraint, for the people outside the state have no
9

By focusing on enforcement alone, my dissenting colleague is
missing an important piece of the picture. See post, at 2-3
(Kavanaugh, J., dissenting). His preoccupation with the question of
which government will hail Gordon into court obscures important
distinctions between “the due process standards for adjudicative
jurisdiction and those for legislative (or prescriptive) jurisdiction.”
See Quill, 504 U.S. at 319-20 (Scalia, J., concurring).

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representatives who participate in the legislation; and in a real
sense, as to them, the taxation is without representation.”).
Without fair warning of which state and local legislatures will
be constructing his tax burden, Gordon would lose a critical
safeguard at the heart of democratic legitimacy. Gordon’s
“minimum connection” with Congress affords him some
security, to be sure, but it is not clear that his attenuated
recourse to Congress to redress “erroneous or oppressive”
taxes levied by state and local legislatures satisfies the Due
Process Clause.
ii
Another “simple but controlling question” to test the
lawfulness of an exercise of taxation power is “whether the
state has given anything for which it can ask return.” See Nat’l
Bellas Hess v. Dep’t of Revenue, 386 U.S. 753, 756 (1967)
(internal quotation marks omitted); see also Quill, 504 U.S. at
306. Cf. New York ex rel. Cohn v. Graves, 300 U.S. 308, 313
(1937) (“Enjoyment of the privileges of residence in the state
and the attendant right to invoke the protection of its laws are
inseparable from responsibility for sharing the costs of
government.”). In order to protect this principle of just
exchange, we uphold “the power of a state to impose liability
on an out-of-state seller to collect a local use tax [when] the
out-of-state seller was plainly accorded the protections and
services of the taxing state.” Nat’l Bellas Hess, 386 U.S. at
757. When minimum contacts with the state or locality are
present, the taxed party receives “the benefits and protections
of the laws of [the] state,” Int’l Shoe Co., 326 U.S. at 319, and
there is no due process problem with the state or locality
extracting revenue from that party’s transactions. But when
minimum contacts with that state or locality are lacking, the
state or locality offers no services or protections to justify the
tax it receives. Gordon may be correct that the due process

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defects of this imbalanced exchange do not disappear simply
because the federal government brokers it.
In light of these principles, the district court did not abuse
its discretion by concluding that Gordon is likely to succeed on
this first step of his merits argument. In so holding, we caution
that we are not deciding as a matter of law which sovereign a
court must look to in completing its minimum contacts
analysis. That question is one of significant moment, touching
core federalism concerns. J. McIntyre Mach., Ltd., 131 S. Ct. at
2789. And as this discussion reveals, the PACT Act has been
cast in a mold that has never been constitutionally tested. We
are unwilling to resolve such an important and novel
constitutional question without the benefit of further factual
development.
Before we may affirm the preliminary injunction,
however, we must address the second constitutional question
that informed the district court’s conclusion that Gordon is
likely to succeed on the merits of his claim.
2
Under Section 2a of the PACT Act, Gordon’s obligation to
collect a given state or local tax attaches when he initiates a
transaction within that jurisdiction. Gordon’s due process
challenge presents the question whether a single sale is enough
to establish minimum contacts with that jurisdiction. The
government asserts it is, providing a constitutional basis for the
Act even if Gordon is correct that the Due Process Clause
demands minimum contacts with the state or local taxing
authority. Appellants’ Br. 30-33. Once again, the question is a
close one, deserving of further development at a trial on the
merits, so we affirm and remand. See Red Earth, 657 F.3d at
145 (affirming a preliminary injunction against Section 2a of

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the PACT Act on this ground and remanding for a trial on the
merits).
Due process jurisprudence on “minimum contacts” has
evolved significantly over the past half-century. In National
Bellas Hess v. Department of Revenue, the Supreme Court held
that minimum contacts do not exist between a state and a seller
“whose only connection with customers in the State is by
common carrier or the United States mail.” 386 U.S. at 758;
see also Miller Bros. Co., 347 U.S. at 344-45. National Bellas
Hess was commonly understood to require that the seller have
some “physical presence” in the taxing state. Quill, 504 U.S. at
306-07. Thirty years later, in Quill, the Supreme Court
overruled that holding. Id. at 308. Relying on “comparable”
reasoning in cases concerning the personal jurisdiction of
courts, the Court concluded that North Dakota’s imposition of
a duty to collect a use tax on Quill did not violate the Due
Process Clause, even though Quill’s only contacts with citizens
of North Dakota occurred by means of mail or common carrier.
Id. The court relied on the fact that Quill purposefully directed
its activities at residents of North Dakota, that it had conducted
a high volume of business with customers in that state, and that
the use tax was “related to the benefits Quill receives from
access to the state.” Id.
But “[t]he Supreme Court has never found ‘that a single
isolated sale . . . is sufficient’” to establish minimum contacts.
Red Earth, 657 F.3d at 145 (quoting J. McIntyre Mach., Ltd.,
131 S. Ct. at 2792 (Breyer, J., concurring)). While it may prove
to be the case that, in the Internet age, a single sale establishes
“minimum contacts” as a matter of law, this seems like
precisely the sort of difficult constitutional question on which
our analysis would benefit from factual development. For
example, how difficult is it for a delivery seller to identify and
calculate applicable taxes at the point of sale? What sorts of

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services do states provide to delivery sellers (e.g., a forum for
collecting debts from buyers, trash disposal for shipping
cartons)? Without this knowledge, we find no reason to upset
the district court’s reasonable conclusion that Gordon has
demonstrated a likelihood of success on the merits of his due
process challenge to the tax provisions of the PACT Act. We
underscore that our analysis is preliminary; we make no final
determination on the merits of Gordon’s due process
challenge.
B
We likewise hold that the district court did not abuse its
discretion in determining where the public interest lies when it
concluded that “enforcement of a potentially unconstitutional
law that would also have severe economic effects is not in the
public interest.” Gordon, 826 F. Supp. 2d at 297.
Relying upon United States v. Oakland Cannabis Buyer’s
Coop., 532 U.S. 483, 497 (2001), the government argues that
the court erred as a matter of law “by failing to give any
deference to Congress’s assessment of where the public
interest lies.” Appellants’ Br. 39. 10 In Oakland, the
government invoked the Controlled Substances Act to enjoin
the cooperative from distributing marijuana. Citing the “public
interest,” the district court modified the injunction to permit
distribution in cases of medical necessity. 532 U.S. at 495. The
Supreme Court overturned the court of appeals decision
affirming the modified injunction, holding that the district
10

The government also seeks support for this argument in Able
v. United States, 44 F.3d 128, 131-32 (2d Cir. 1995). The
government’s reliance on Able is misplaced. The cited holding
relates not to the “public interest,” but to the “likelihood of success
on the merits.” Id. at 130-31.

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court’s considerable discretion to fashion equitable relief is
bounded when it comes to deciding whether the “public
interest” favors an injunction. Id. at 497. The district court
could not “‘ignore the judgment of Congress, deliberately
expressed in legislation’” by considering “any and all factors
that might relate to the public interest.” Id. (quoting Virginian
Ry. Co. v. Ry. Sys. Fed’n No. 40, Emps. Dep’t of the Am. Fed’n
of Labor, 300 U.S. 515 (1937)).
The district court did not transgress the limits on its
discretion here. Oakland prohibits a district court from
second-guessing Congress’s lawful prioritization of its policy
goals. Id. For example, under the rationale of Oakland, it
would have been wrong for the district court to hold that the
public interest in preserving tobacco industry jobs outweighs
the public health harms attributable to underage smoking. Such
a holding would interfere with Congress’s “delegated powers”
to “decide[] the order of priorities.” Id. (internal quotation
marks omitted). But the district court here did not second-guess
Congress’s policy priorities – only the lawfulness of
Congress’s means of achieving those priorities. In doing so, the
court acknowledged the obvious: enforcement of an
unconstitutional law is always contrary to the public interest.
See, e.g., Lamprecht v. FCC, 958 F.2d 382, 390 (D.C. Cir.
1992); G & V Lounge v. Michigan Liquor Control Comm’n, 23
F.3d 1071, 1079 (6th Cir. 1994); Llewlyn v. Oakland Cnty.
Prosecutor’s Office, 402 F. Supp. 1379, 1393 (E.D. Mich.
1975) (“[I]t may be assumed that the Constitution is the
ultimate expression of the public interest.”). The Constitution
does not permit Congress to prioritize any policy goal over the
Due Process Clause.

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C
Finally, we hold that the district court did not abuse its
discretion when it concluded that Gordon was likely to suffer
irreparable harm and that the balance of the equities tips in his
favor.
Gordon argued that the PACT Act would cause him
irreparable harm because it threatened the existence of his
business and violated his constitutional rights. “[S]uits for
declaratory and injunctive relief against the threatened
invasion of a constitutional right do not ordinarily require
proof of any injury other than the threatened constitutional
deprivation itself.” Davis v. District of Columbia, 158 F.3d
1342, 1346 (D.C. Cir. 1998). Thus, “[a]lthough a plaintiff
seeking equitable relief must show a threat of substantial and
immediate irreparable injury, a prospective violation of a
constitutional right constitutes irreparable injury for these
purposes.” Id. (internal citation omitted). The district court did
not abuse its discretion by concluding that Gordon had
demonstrated such a threat: when he was in business, the Act
required Gordon to pay what he alleges are unconstitutional
taxes or else risk criminal and civil penalties.
Similarly, the district court concluded that “a potential
deprivation of [Gordon’s] constitutional right to due
process . . . outweighs the possible injury to defendants from
enjoining enforcement until the merits of Gordon’s claim can
be determined.” Gordon, 826 F. Supp. 2d at 297. Although the
preliminary injunction might temporarily frustrate the federal
government’s interest in enforcing state and local tax laws, the
district court permissibly gave greater weight to the possibility
that Gordon could suffer an ongoing constitutional violation
while this litigation proceeds.

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Now that Gordon’s business has ceased operations, he
arguably no longer faces the dilemma on which the district
court based its finding of irreparable injury. Neither does the
government face the prospect of watching Gordon’s cigarette
sales go untaxed. As the administrator of the injunction, the
district court is better placed than we are to judge its ongoing
necessity. Our charge in a § 1292(a)(1) appeal is limited to
determining whether the district court acted within its
discretion by issuing the preliminary injunction in the first
instance. Finding no abuse of discretion, we decline the
government’s invitation to vacate the injunction. In reaching
that decision, we are sensitive to the gravity of enjoining an act
of Congress, even temporarily. The government remains free
to petition the district court for relief from the preliminary
injunction in light of the changed circumstances. See FED. R.
CIV. P. 60(b) (empowering the district court to “relieve a party”
from an order).
III
Before we turn to the claims the district court dismissed,
we must consider the government’s argument that the
preliminary injunction is overbroad. The government argues
that the injunction, which bars it from enforcing the tax
provisions against Gordon at all, should have prohibited it only
from enforcing the provisions against Gordon’s sales into
jurisdictions with which he lacks minimum contacts. We hold
that the district court adequately fulfilled its duty to “maintain
the act in so far as it is valid.” Red Earth, 657 F.3d at 145
(quoting Alaska Airlines, Inc. v. Brock, 480 U.S. 678, 684
(1987)). By demanding that the injunction be narrower, the
government asks the district court to put the cart before the
horse. To accede to the government’s argument, the district
court would not only have to define the much-disputed concept
of “minimum contacts,” but would also have to engage in

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significant fact-finding to determine where around the country
Gordon has established minimum contacts. See Marcia Gordon
Second Decl. ¶ 13 (“There are several states in which we have
made zero or very few sales. In addition, there are many local
jurisdictions in which we have never made a sale.”).
Preliminary injunction hearings are ill-suited for such fine
tailoring.
More fundamentally, we are not convinced by the
government’s premise: that Gordon may challenge the PACT
Act only “as applied” against his sales into jurisdictions with
which he lacks minimum contacts. The government points out
that a court may find a statute to be invalid on its face only if a
plaintiff has shown that the Act has no “plainly legitimate
sweep.” Wash. State Grange v. Wash. State Repub. Party, 552
U.S. 442, 449 (2008) (citation omitted); see also United States
v. Salerno, 481 U.S. 739, 745 (1987) (holding that facial
challenges will be sustained only if “no set of circumstances
exist under which the Act would be valid”). The government
argues that any facial challenge to the PACT Act must fail
because there is no dispute that the federal government may
compel a delivery seller to collect taxes for at least those state
and local governments with which it has minimum contacts.
Thus, the Act has a “plainly legitimate sweep,” even if it
sweeps too broadly.
But when a statute erases the boundaries that define a
sovereign’s jurisdiction, as the PACT Act does to the
boundaries of state and local taxing jurisdictions, any
legitimate application is pure happenstance. It is perhaps this
consideration that has led the Supreme Court to sustain facial
challenges to laws that omit constitutionally-required
jurisdictional elements, even though all such laws necessarily
have a “plainly legitimate sweep.” For example, in United
States v. Lopez, the Supreme Court struck down the Gun-Free

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School Zones Act of 1990, a federal law that prohibited
individuals from knowingly possessing firearms within school
zones. 514 U.S. 549, 551 (1995). The text of the statute
“contain[ed] no jurisdictional element which would ensure,
through case-by-case inquiry, that the firearm possession in
question affects interstate commerce.” Id. at 561; see also
United States v. Morrison, 529 U.S. 598, 613 (2000) (relying
on Lopez to sustain a facial challenge to the Violence Against
Women Act). Similarly, if Gordon’s due process analysis is
correct, the PACT Act contains “no jurisdictional element
which would ensure” that the taxes it imposes comport with the
Due Process Clause. It permits state and local taxing powers to
bleed over from legitimate objects of taxation to cover objects
foreign to the state or local jurisdiction. Following the Supreme
Court’s lead, we are not willing to hold – at the preliminary
injunction stage – that Gordon is unable to maintain a facial
challenge.
IV
We review de novo the district court’s dismissal of
Gordon’s remaining claims. See Schrader v. Holder, 704 F.3d
980, 984 (D.C. Cir. 2013).
A
Gordon argues that Section 2a violates the Tenth
Amendment by commandeering states to administer a federal
taxation scheme. 11 The district court properly dismissed this
Tenth Amendment challenge for failure to state a claim for
11

Gordon has standing to bring a claim that he was injured by
Congress’s “disregard of the federal structure of our Government,”
as reflected in the Tenth Amendment. See Bond v. United States, __
U.S. __, 131 S. Ct. 2355, 2366-67 (2011).

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relief. As the government points out, the type of burden the
PACT Act creates is different in kind from the burdens the
Supreme Court held to violate the Tenth Amendment in New
York v. United States, 505 U.S. 144 (1992), and Printz v.
United States, 521 U.S. 898 (1997).
This is not a case in which “the Federal Government [is]
compel[ling] the States to implement, by legislation or
executive action, federal regulatory programs.” Printz, 521
U.S. at 925. Instead of drafting states to enforce federal law,
the PACT Act pledges the federal government to enforce state
law. See 15 U.S.C. § 377 (imposing federal criminal penalties
for violating the delivery sale provisions of the PACT Act).
States may still craft their tax codes to accomplish their own
policy goals. If a state wishes to increase tobacco consumption
or to promote its use among minors, it retains the discretion to
do so.
In fact, the challenged provisions of the PACT Act do not
direct the states to do anything. Any administrative burden that
results is merely incidental to Congress’s lawful exercise of its
power to regulate the private participants in interstate
commerce. In New York, the Court left open the possibility that
Congress could pursue permissible policy goals by directly
regulating private parties rather than states. 505 U.S. at 159-60.
That is what Congress has done here.
The affirmative burdens placed on the states in Printz and
New York were unavoidable. By contrast, states may avoid any
burdens imposed by the PACT Act – a distinction the Supreme
Court has treated as constitutionally significant. In FERC v.
Mississippi, for example, the Court rejected a Tenth
Amendment challenge to a federal statute that called for states
to consider federal standards in regulating public utilities. 456
U.S. 742 (1982). The Court emphasized that “if a State has no

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utilities commission, or simply stops regulating in the field, it
need not even entertain the federal proposals.” Id. at 764; see
also Hodel v. Va. Surface Mining & Reclamation Ass’n, Inc.,
452 U.S. 264, 288 (1981) (affirming a federal statute with
similar reasoning). The Court in New York distinguished FERC
v. Mississippi on these grounds, noting that there was nothing
in the law at issue in FERC “directly compelling” the state to
participate in the federal regulatory program. New York, 505
U.S. at 161-62; see also Printz, 521 U.S. at 925-26. This case is
much more like FERC than New York. If states wish to tax
delivery sales of tobacco products, they may have to answer
the federal call to accept pre-paid taxes from out-of-state
sellers. Still, they may avoid that federal mandate altogether by
not taxing tobacco delivery sales. Congress may lawfully
present states with this Hobson’s choice because it has the
power to prevent states from taxing interstate commerce
altogether. See FERC, 456 U.S. at 759.
Additionally, the PACT Act does not blur the lines of
political accountability as did the statute challenged in New
York, 505 U.S. at 169. Here, states still freely set the tax rates
for which they may be held accountable. And because the Act
applies directly to the sellers, it is clear that Congress is the
source of the new duty, not the states. See United States v.
Morrison, 529 U.S. 598, 654 n.21 (2000) (Souter, J.,
dissenting) (“Had Congress chosen . . . to proceed instead by
regulating the States, rather than private individuals, this
accountability would be far less plain.”).
The PACT Act regulates individuals, not states; its only
incidental effect on the states is to require them to collect
additional tax revenue if they choose to join Congress in
regulating interstate commerce in tobacco products. This sort
of burden is constitutionally permissible.

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B
The district court also properly dismissed Gordon’s Fifth
Amendment challenge to the PACT Act’s ban on shipping
tobacco products in the U.S. mail. Gordon argues that the ban
deprives him of due process and the equal protection of the
laws.
There is no dispute that the district court properly applied
rational basis review to the mail ban. Accordingly, Gordon has
a claim only if he can show that there is no “rational
relationship between [the ban] and some legitimate
governmental purpose.” Am. Bus. Ass’n v. Rogoff, 649 F.3d
734, 742 (D.C. Cir. 2011) (citation omitted). This burden “to
negative every conceivable basis which might support” the law
is especially difficult to meet. FCC v. Beach Commc’ns, Inc.,
508 U.S. 307, 315 (1993). Rational basis review “is not a
license for courts to judge the wisdom, fairness, or logic of
legislative choices.” Id. at 313. Courts must uphold legislation
“[e]ven if the classification involved . . . is to some extent both
underinclusive and overinclusive . . . .” Vance v. Bradley, 440
U.S. 93, 108 (1979). In the ordinary case, “a law will be
sustained if it can be said to advance a legitimate government
interest, even if the law seems unwise or works to the
disadvantage of a particular group, or if the rationale for it
seems tenuous.” Romer v. Evans, 517 U.S. 620, 632 (1996).
Gordon argues that this is no ordinary case because
Congress has never before banned the shipment of a product
that is legal in all fifty states and does not present a danger to
the mail or mail carriers. Appellee’s Br. 47. Unprecedented
laws, he asserts, are subject to more “careful” rational basis
review under Romer v. Evans. Appellee’s Br. 50; see also
Romer, 517 U.S. at 633 (discussing the unprecedented nature
of the law under review). We need not decide whether Romer

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announced such a rule because the mail ban is not
unprecedented. The government provides – and Gordon fails to
distinguish – several examples of articles Congress has banned
from the U.S. mail that are legal in all fifty states and do not
present a danger to the mail or mail carriers. See, e.g., 39
U.S.C. § 3002 (making vehicle master keys nonmailable); id.
§ 3002a (making locksmithing devices nonmailable). We
therefore examine this law as we examine any other law that
does not infringe on a fundamental right or involve a suspect
classification.
Although we are by no means restricted to the stated
reasons for passing a law in our search for a “rational basis,”
Beach Commc’ns, 508 U.S. at 315, we need look no further
than the statute itself to discern three rational bases for the mail
ban. As we observed in Gordon I, Section 1 of the Act reveals
that it was “aimed primarily at combating three evils: tobacco
sales to minors, [illicit] cigarette trafficking, and
circumvention of state taxation requirements.” 632 F.3d at 723
(citing Pub. L. No. 111-154, § 1(b)). Gordon does not dispute
that these purposes are “legitimate governmental purposes,”
but argues that the mail ban fails to advance them because it is
duplicative, overinclusive in some ways, and underinclusive in
others. His arguments ask us to engage in a higher level of
scrutiny than rational basis review allows.
For example, Gordon argues that Congress could have
accomplished the goal of preventing illicit cigarette trafficking
by enhancing penalties for violations of existing laws, rather
than broadly excluding both licit and illicit tobacco deliveries
from the mail. Once again, the legislative record reveals a
rational basis for choosing one path over the other: delivery
sellers “have been very successful at eluding traditional
enforcement measures, by making their cigarette and
smokeless tobacco deliveries by mail.” H.R. Rep. No. 111-117,

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at 19 (2009). Our standard of review does not permit us to
second-guess the wisdom of that choice.
With respect to sales to minors, Gordon argues that the
mail ban is duplicative because Congress promulgated age
verification requirements in 15 U.S.C. § 376a(b)(4). Yet his
next argument betrays an awareness that age verification
requirements are only partially effective. He claims that the
mail ban is underinclusive because it does not cover underage
sales that occur at brick and mortar stores, which are also
subject to age verification requirements. See Appellee’s Br. 54
n.14 (citing Tobacco Free Kids Org., Where Do Youth Smokers
Get Their Cigarettes?, http://www.tobaccofreekids.org/resear
ch/factsheets/pdf/0073.pdf (last accessed June 7, 2013)). But
Congress “must be allowed leeway to approach a perceived
problem incrementally.” Beach Commc’ns, 508 U.S. at 316.
Congress’s judgment that the existing enforcement
mechanisms must be supplemented by the partial solution of a
mail ban is entirely rational.
Finally, Gordon argues that the mail ban is duplicative
because the tax provisions already effectively prevent
circumvention of state taxes. But as we note above, Congress
concluded that the mail enables determined sellers to evade the
law – including, presumably, the PACT Act’s command that
sellers pay state and local taxes in advance of the sale. It is
entirely rational for Congress to buttress other legal provisions
by closing a popular channel for noncompliant commerce.
Because Gordon has not met his high burden “to negative
every conceivable basis” for the Act, Beach Commc’ns, 508
U.S at 315, the district court was correct to dismiss Gordon’s
claim. And because the only challenge to the mail ban was
properly dismissed, we need not decide whether the district

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court should have granted a preliminary injunction against the
mail ban.
V
For the foregoing reasons, the district court’s decision is
affirmed and the case is remanded for further proceedings
consistent with this opinion.
So ordered.

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KAVANAUGH, Circuit Judge, concurring in the judgment
in part and dissenting in part: The majority opinion holds
that key tax-related provisions of the Prevent All Cigarette
Trafficking Act may be unconstitutional under the Due
Process Clause’s minimum contacts principle. The majority
opinion therefore affirms the District Court’s preliminary
injunction barring the Federal Government from enforcing
those provisions of the statute. I respectfully disagree. To
obtain a preliminary injunction, a plaintiff must show, among
other things, a likelihood of success on the merits. In my
view, Gordon’s Due Process Clause claim lacks merit. I
would therefore vacate the preliminary injunction entered by
the District Court.
In 2010, Congress passed and President Obama signed
the Prevent All Cigarette Trafficking Act. That law requires
cigarette sellers to comply with various state tax laws. The
law was prompted by Congress’s finding that Internet
cigarette sellers were not complying with federal, state, and
local tax laws, resulting in billions of dollars in lost tax
revenue each year.
Importantly for present purposes,
violations of the Act are subject to federal criminal
prosecution or federal civil suit. In such federal lawsuits, the
United States is the relevant sovereign and jurisdiction. As I
will explain, when the Federal Government (not a State)
regulates a U.S. seller such as Gordon, there is no Due
Process Clause minimum contacts issue.
To begin, it is well-settled that Congress may enact
federal laws that require sellers of a product to comply with
certain state laws. So long as the federal law is otherwise
justified under the Constitution – for example, as a Commerce
Clause regulation of commercial activity – the fact that the
federal law piggy-backs on state law in this fashion is
irrelevant. The Supreme Court has long upheld federal laws
of that sort. See Kentucky Whip & Collar Co. v. Illinois
Central Railroad Co., 299 U.S. 334 (1937); Clark Distilling

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Co. v. Western Maryland Railway Co., 242 U.S. 311 (1917).
A number of federal laws follow that model. See, e.g., 7
U.S.C. §§ 1571, 1573 (no transfer of agricultural seeds into a
State in violation of state law); 16 U.S.C. § 3372(a)(2) (no
transfer of wildlife taken in violation of any state law); 18
U.S.C. §§ 842(c) (no transfer of explosives into a State where
they are illegal under state law); 18 U.S.C. § 922(b)(2) (no
transfer of firearms into a State where they are illegal under
state law); 21 U.S.C. § 831(b) (online pharmacies must
comply with the law of any State in which they do business or
offer to do business); 31 U.S.C. § 5362(10)(A) (no online bets
can be accepted where the bet is illegal in the State in which it
is made); see also United States v. Kimbell Foods, Inc., 440
U.S. 715, 728 (1979) (“state law may be incorporated as the
federal rule of decision”); Board of County Commissioners of
the County of Jackson, Kansas v. United States, 308 U.S. 343,
351-52 (1939) (“the state law has been absorbed, as it were,
as the governing federal rule not because state law was the
source of the right but because recognition of state interests
was not deemed inconsistent with federal policy”); Henry M.
Hart, Jr., The Relations Between State and Federal Law, 54
COLUM. L. REV. 489, 498 (1954) (“Congress rarely enacts a
complete and self-sufficient body of federal law. The federal
statutes are full of references, both explicit and implicit, to the
law of some state.”) (footnote omitted).
There is no dispute here that the relevant provisions of
the Prevent All Cigarette Trafficking Act are valid under the
Commerce Clause.
The question concerns the law’s
compliance with the minimum contacts principle of the Due
Process Clause.
When Congress enacts a federal law of this kind and
renders violators of that law subject to federal criminal
prosecution or federal civil suit, the law does not violate the

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minimum contacts principle of the Due Process Clause. The
reason is quite simple: In such federal-law cases, the relevant
sovereign and jurisdiction is the United States, not one of the
individual States. There is no Due Process minimum contacts
issue raised by a federal-law suit against a seller located in the
United States. That was the conclusion reached by a threejudge District Court in this Circuit when it rejected a similar
Due Process Clause minimum contacts challenge to the
Jenkins Act. That Act required cigarette shippers to report
out-of-state sales to the buyer’s state tobacco administrator.
The Supreme Court summarily affirmed the Court’s decision.
See Consumer Mail Order Association of America v.
McGrath, 94 F. Supp. 705, 712 (D.D.C. 1950), aff’d, 340 U.S.
925 (1951). I would reach the same conclusion here. See
Musser’s Inc. v. United States, 2011 WL 4467784, at *5 (E.D.
Pa. 2011) (denying preliminary injunction in Due Process
Clause challenge to Prevent All Cigarette Trafficking Act).
To be sure, a seller like Gordon may raise a Due Process
Clause minimum contacts objection in any state-law
proceeding. See Quill Corp. v. North Dakota, 504 U.S. 298
(1992). But the Prevent All Cigarette Trafficking Act does
not negate a seller’s ability to raise a Due Process Clause
minimum contacts objection in state-law cases.
In my view, therefore, Gordon’s Due Process Clause
claim is entirely without merit. 1 To grant a preliminary
injunction, however, a District Court must find a likelihood of
success on the merits, among other things. See Winter v.
Natural Resources Defense Council, 555 U.S. 7, 20 (2008)
1

The alternative Tenth Amendment argument advanced by
Gordon in support of the preliminary injunction is likewise without
merit, as the majority opinion explains and the District Court also
concluded.

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(“A plaintiff seeking a preliminary injunction must establish
that he is likely to succeed on the merits . . . .”); Munaf v.
Geren, 553 U.S. 674, 690 (2008) (“a party seeking a
preliminary injunction must demonstrate, among other things,
a likelihood of success on the merits”) (internal quotation
marks omitted); Davis v. Pension Benefit Guaranty Corp.,
571 F.3d 1288, 1296 (D.C. Cir. 2009) (Kavanaugh, J.,
concurring) (“In light of the Supreme Court’s recent
decisions, I tend to agree . . . that the old sliding-scale
approach to preliminary injunctions – under which a very
strong likelihood of success could make up for a failure to
show a likelihood of irreparable harm, or vice versa – is no
longer controlling, or even viable. It appears that a party
moving for a preliminary injunction must meet four
independent requirements.”) (citation and internal quotation
marks omitted); cf. Nken v. Holder, 556 U.S. 418, 438 (2009)
(Kennedy, J., concurring) (“When considering success on the
merits and irreparable harm, courts cannot dispense with the
required showing of one simply because there is a strong
likelihood of the other.”).
When, as here, a District Court incorrectly finds a
likelihood of success on the merits, that legal error constitutes
an abuse of discretion, and we must vacate the preliminary
injunction. See Kiyemba v. Obama, 561 F.3d 509, 513 (D.C.
Cir. 2009) (“If the moving party can show no likelihood of
success on the merits, then preliminary relief is obviously
improper and the appellant is entitled to reversal of the order
as a matter of law.”); Air Line Pilots Association International
v. Eastern Air Lines, Inc., 863 F.2d 891, 894 (D.C. Cir. 1988)
(“We reverse the district court and hold that it should not have
granted the motions for a preliminary injunction because the
unions did not show a substantial likelihood of success on the
merits.”); see generally So v. Suchanek, 670 F.3d 1304, 1310
(D.C. Cir. 2012) (“A district court by definition abuses its

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discretion when it makes an error of law.”) (internal quotation
marks omitted). 2
Because Gordon’s Due Process Clause claim is meritless,
I would vacate the District Court’s preliminary injunction
against enforcement of the tax-related provisions of the Act.
As to Gordon’s cross-appeal challenging the District Court’s
denial of a preliminary injunction to enjoin enforcement of
the Act’s mailing ban on Fifth Amendment grounds, I would
affirm the District Court because Gordon has not shown a
likelihood of success on the merits of that claim, for reasons
the majority opinion explains.

2

In certain First Amendment cases, the Supreme Court has
said that a court of appeals may affirm a District Court’s
preliminary injunction so long as the plaintiff has presented a
“close” question on the merits. See Ashcroft v. ACLU, 542 U.S.
656, 664-65 (2004). But the “close” question standard is not the
usual rule for preliminary injunctions or for appellate review of
preliminary injunctions. And even if a close question were enough,
Gordon has not presented a close question here.

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SENTELLE, Senior Circuit Judge, concurring in part and
concurring in the judgment: I reluctantly concur in the result
announced in Judge Griffith’s opinion. While this case may not
be moot, it is not entirely clear what it is the parties are still
litigating about, and I hope that the district court re-examines the
mootness question with the benefit of a more full record.
I do not join fully in Judge Griffith’s opinion because I
think it opines on matters far beyond the issues before the court,
and I do not wish to elevate those opinions to circuit law.
First, footnote 1 of Judge Griffith’s opinion indulges, I think
quite gratuitously, in a discussion of the effect of the so-called
“Dormant Commerce Clause.” So far as I can tell, no party in
this case relies upon the Dormant Commerce Clause, the
Dormant Commerce Clause is not relied upon in the briefs, the
Dormant Commerce Clause has nothing to do with the result,
and this case has nothing to do with the Dormant Commerce
Clause.
Further, I cannot support Judge Griffith’s opinion in its test
of “democratic legitimacy” for the minimum contacts necessary
to provide due process for taxation. Griffith op. at 19 21. The
search for democratic underpinnings for constitutional
provisions may be academically interesting, but I find no case in
which this court, the Supreme Court, or any other federal court
has undertaken that search before affirming the legitimacy of a
tax. Because Judge Griffith’s opinion supplies sufficient indicia
of minimum contacts without relying on this novel approach, I
join the result, indeed I join most of the opinion, but I cannot
fully join the elevation to circuit law of a new test for minimum
contacts, or of the discussion of the attributes of the “Dormant
Commerce Clause.”

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