Opinion
Civil Action No. 3:99-CV-O183-M
July 6, 2000
MEMORANDUM OPINION AND ORDER
Before the Court are Defendants' Objections to Magistrate Judge's Recommended Disposition of Motion to Dismiss, filed October 6, 1999, and Plaintiffs Motion for Partial Summary Judgment, filed January 13, 2000. The Court heard oral argument on April 21, 2000.
Having considered the record and the applicable law, for the reasons stated below, the Court SUSTAINS Defendants' Objections to Magistrate Judge's Recommended Disposition of Motion to Dismiss, and therefore GRANTS Defendants' Motion to Dismiss this case. Because that motion disposes of the case, the court will not reach the merits of Plaintiffs Motion for Partial Summary Judgment, and therefore DENIES it as moot.
I. Background
Plaintiff Cinemark USA, Inc. ("Cinemark") owns and operates movie theater complexes throughout the United States. Some of its theaters offer "stadium-style" seating, in which the seats are situated on steeply tiered stairs. Like other public accommodations, Cinemark's theaters are subject to the accessibility requirements of Title III of the ADA, 42 U.S.C. § 12101 et seq. The United States Department of Justice ("the Department") has promulgated regulations interpreting these provisions, 28 C.F.R. ch. I, pt. 36, app. A. At issue in this case is Section 4.33.3, which reads in relevant part:
AMC Entertainment, Inc. and American Multi-Cinema, Inc. (collectively, "AMC"), are intervenors in this suit and participated briefly in the oral argument. AMC has also filed briefing on these issues, which the Court has considered. To the extent AMC is involved in the same issues currently before the Court, AMC and Cinemark will be referred to collectively as "Cinemark."
Wheelchair areas shall be an integral part of any fixed seating plan and shall be provided so as to provide people with physical disabilities a choice of admission prices and lines of sight comparable to those for members of the general public. They shall adjoin an accessible route that also serves as a means of egress in case of emergency . . . When the seating capacity exceeds 300, wheelchair spaces shall be provided in more than one location.
EXCEPTION: Accessible viewing positions may be clustered for bleachers, balconies, and other areas having sight lines that require slopes of greater than 5 percent. Equivalent accessible viewing positions may be located on levels having accessible egress.
28 C.F.R. ch. I, pt. 36, app. A., § 4.33.3. Cinemark argues that the Department has historically interpreted this provision so that, in theaters with less than 300 seats, wheelchair seating may be located in a single area anywhere in the theater so long as the view is unobstructed. Thus, Cinemark's stadium theaters provide wheelchair seating clustered on the lower level near the entrance.
In December 1997, a group of disabled individuals sued Cinemark in federal district court in El Paso, Texas, in Lara v. Cinemark USA, Inc., No. EP-97-CA-502-H (W.D. Tex. 1997). The Lara plaintiffs alleged, inter alia, that Cinemark's El Paso stadium theaters violated Section 4.33.3. The Department filed an amicus curiae brief in connection with the defendant's motion for summary judgment in that case (the ` Lara Brief'). Therein, it argued that Section 4.33.3 required that wheelchair seating provide lines of sight comparable to other seats in the theater, and that this "line of sight" factor contained an "angle of viewing" component. Lara Brief at 7-10. The argument in the Lara Brief was that wheelchair seating thus had to be located within the same range of viewing angles as those offered to the general public in the stadium-style seats, adjusted for seat tilt.
Cinemark attempted to have the Department joined as a party to the Lara suit, arguing that this interpretation of Section 4.33.3 was a radical departure from the Department's previous position on this issue and that this interpretation constituted a new, substantive rule that had been adopted without satisfaction of the notice and comment requirements of the Administrative Procedure Act ("APA"), 5 U.S.C. § 701 et seq. The district court denied the motion. It subsequently found that Cinemark's El Paso theaters did not provide wheelchair seating with comparable lines of sight and therefore violated the ADA. See Lara v. Cinemark USA, Inc., 1998 WL 1048497 (W.D. Tex. Aug. 21, 1998). The Lara district court implicitly adopted the Department's position that the "comparable lines of sight" language of Section 4.33.3 includes a viewing angle component. Id. at *3 ("Either the row designated for the wheelchair-bound patrons is too close to the screen, or the screen is too high off the ground, or a combination of both.")
Cinemark sought technical assistance from the Department in designing new theaters that would comply with the interpretation of Section 4.33.3 adopted by the Department in its Lara Brief The parties met on December 2, 1998, to discuss guidelines for new construction, and Cinemark submitted a proposal. On January 26, 1999, the Department, urging an interpretation consistent with what it advocated in its Lara Brief, informed Cinemark that its proposed design did not comply with Section 4.33.3. Two days later, Cinemark filed this declaratory judgment action. Cinemark alleges that the Department is unlawfully attempting to enforce a new, substantive rule without complying with the notice and comment procedures required by the APA. It also claims that the new regulations violate the Federal Register Act, 44 U.S.C. § 1501 et seq., insofar as they are sought to be applied to existing theaters.
Cinemark filed its Second Amended Complaint (the "Complaint") in this case on June 18, 1999. On July 13, 1999, the Department moved to dismiss Cinemark's Complaint on various grounds, including arguing that it had not taken "final agency action," and thus, this Court does not have jurisdiction to review its conduct. Magistrate Judge Jeff Kaplan heard oral argument on the Department's Motion to Dismiss on September 17, 1999, and subsequently recommended that the motion be denied. See generally Reporter's Transcript of Proceedings. Magistrate Judge Kaplan reasoned that it was readily apparent that the Department's actions marked the consummation of the agency's decision-making process, that the interpretation set forth by the Laradistrict court was not merely "tentative," and that the Department "clearly expects Cinemark to comply with its interpretation of 4.33.3" by undertaking substantial modifications to existing theaters. Reporter's Transcript of Proceedings at 25-26. In addition to finding that the Department's interpretation of Section 4.3 3.3 constitutes final agency action reviewable under the Administrative Procedure Act, Magistrate Judge Kaplan also found that Cinemark's case was not filed in anticipation of the Department's later enforcement suit filed in Cleveland, Ohio, and that Cinemark was not collaterally estopped by the ruling in the Lara case from arguing that its operational theaters complied with Section 4.3 3.3. Reporter's Transcript of Proceedings at 29- 31. The Department filed objections to these findings on October 6, 1999.
The Department argued that there are two primary reasons why this case should be dismissed, each of which was misconstrued by the Magistrate Judge. First, the Department contends that its interpretation of Section 4.33.3 is not "final agency action" subject to challenge under the Administrative Procedure Act because it has no legal consequences for Cinemark, AMC, or anyone else. Second, the Department argues that even if its interpretation was final agency action, a declaratory judgment action is not the appropriate vehicle by which to challenge it, and instead, this dispute should be resolved in the Department's enforcement actions filed in federal courts in Ohio and California.
This Court agrees with the Department that there is no "final agency action" in this case, and therefore this Court is without jurisdiction to hear this cause. Therefore, the Court sustains the Department's Objections to the Magistrate Judge's findings on this point, and necessarily grants Defendants' Motion to Dismiss. Alternatively, the Court agrees with the Department that this dispute should be resolved in the enforcement actions in Ohio and California, and therefore declines to exercise jurisdiction over this declaratory judgment action. This Court further denies Plaintiffs' partial summary judgment motion as moot.
II. Analysis and Decision
A. The Recommended Disposition Is Reviewed De Novo
The Magistrate Judge's recommendations as to the disposition of a motion to dismiss are subject to de novo review. See 28 U.S.C. 636(b)(1); Fed.R.Civ.P. 72(b). This means that the Court is to examine the entire record "with a fresh eye to factual matters," giving "no deference to the magistrate judge's legal conclusions." 12 CHARLES A. WRIGHT, ARTHUR R. MILLER, RICHARD L. MARCUS, FEDERAL PRACTICE PROCEDURE, § 3070.2 at 381 (1997); see also Campos v. United States Parole Comm'n, 984 F. Supp. 1011, 1014 (W.D. Tex. 1996), aff'd, 120 F.3d 49 (5th Cir. 1997). The statute was drafted "to maximize the district court's authority to review and reconsider the magistrate judge's decision." Freeman v. County of Bexar, 142 F.3d 848, 851 (5th Cir. 1998). Under this authority, the Court now turns to the relevant standards in determining a motion to dismiss for lack of subject matter jurisdiction.
B. Motion to Dismiss Standard
Absent a waiver of sovereign immunity, a court lacks jurisdiction over claims against the United States. See United States v. Mitchell, 463 U.S. 206, 212 (1983). Plaintiff must show that a waiver of such sovereign immunity occurred. Without such a showing, this Court lacks jurisdiction over any claims against the United States. Id. It is apparent that the only source of waiver in this case would have occurred under the Administrative Procedure Act. See 5 U.S.C. § 702.
Although Cinemark also claims jurisdiction under several other statutes, including the Tucker Act, the Federal Tort Claims Act, and the Mandamus and Venue Act, this Court concludes that none of these statutes provide the requisite waiver of sovereign immunity required in order to assert jurisdiction in this case.
The APA provides judicial review by a district court of "agency action" in a case brought by a "person suffering legal wrong because of agency action." 5 U.S.C. § 702. Such review, however, is limited in various respects by other sections of the APA. Specifically, agency action can be reviewed only if it is "final," and only if the plaintiff has "no other adequate remedy in a court." 5 U.S.C. § 704. Unless Cinemark and AMC can demonstrate that they challenge "final agency action" and that they are without adequate alternative remedy, there is no waiver of sovereign immunity and this Court does not have jurisdiction. Veldhoen v. United States Coast Guard, 35 F.3d 222, 225 (5th Cir. 1994); Taylor-Callahan-Coleman Counties Dist. Adult Probation Dep't v. Dole, 948 F.2d 953, 956 (5th Cir. 1991).
C. There Is No Final Agency Action Permitting Judicial Review
In arguing that final agency action has indeed occurred, Cinemark notes that the context, history, and function of Section 4.33.3 establish that the purpose of the "choice of . . . lines of sight comparable" clause was to ensure that wheelchair locations were reasonably dispersed throughout large assembly areas. Indep. Living Resources v. Oregon Arena Corp., 982 F. Supp. 698, 742-43 (D. Or. 1997) (examining the legislative and enforcement history of Section 4.33.3 and concluding that "Standard 4.33.3 actually was concerned only with the dispersal of wheelchair spaces" and that "the term "lines of sight' in the final rule was a reference to the distribution of the seats in the arena or stadium, e.g., views from behind the plate, or first and third base, or the fifty-yard line")). In accordance with this, Cinemark contends that at all times from 1991 to 1998, the Department had consistently interpreted, advised about, and enforced Section 4.33.3 in a manner such that (1) the "dispersal" requirement for wheelchair seating did not apply in auditoria having 300 or fewer seats; (2) that wheelchair seating could be located in a single, integrated location in the auditorium, and (3) that seating locations near an access way in these auditorium would be "ideal."
Cinemark argues that the interpretation of Section 4.33.3 that the Department promulgated in its Lara Brief was not only inconsistent with the Department's historical pronouncements concerning wheelchair placements, but that it also created new construction requirements concerning the placement of wheelchair locations in stadium-style movie theaters. It argues that the Department has promulgated a "legislative rule" that "grants rights, imposes obligations, or produces significant effects on private interests;" that this rule was implemented without the "notice and comment" required by the APA; and that this rule will have a "substantial impact" on Cinemark and other members of the movie theater industry. It encourages this Court to determine that the rules set out in the Department's Lara Brief are legislative in character, and to "hold unlawful and set aside" the Lara Brief as statutorily unauthorized agency action.
In response, the Department argues that its Lara Brief neither purports to be a rule, nor purports to create new construction requirements for stadium-style theaters. The Department contends that it has consistently maintained that Section 4.33.3 should be interpreted as applied to stadium-style theaters in the manner described in the Lara Brief The Department provides a detailed analysis on the differences between legislative and interpretive rules in support of its argument that the Lara Brief is an interpretive rule, which is a rule "issued by an agency to advise the public of the agency's construction of the statutes and rules which it administers." Shalala v. Guernsey Memorial Hosp., 514 U.S. 87, 99 (1995). The Department concludes that the Lara Briefs interpretation of Section 4.33.3 provides guidance to the agency, to courts, and to regulated entities as to what the Section requires, but is not "finally determinative" of whether a particular theater's seat placement violates the ADA. See Professionals Patients for Customized Care v. Shalala, 56 F.3d 592, 597 (5th Cir. 1995).
In finding that the Department has the more persuasive argument, the Court is guided by the determination of other courts on this precise issue. On March 22, 2000, a federal court in Ohio ruled that the Department's "filing of complaints in [its] enforcement actions; correspondence discussing settlement or alleged violations of the ADA; and, amicus briefs [specifically, the Lara brief] are not `final' agency actions." United States of America v. Cinemark USA, Inc., No. 1:99-CV-0705, at 6 (N.D. Ohio Mar. 22, 2000) (order granting motion to dismiss counterclaim). Relying on Federal Trade Comm'n v. Standard Oil Co., 449 U.S. 232 (1980), in which the Supreme Court found insufficient to satisfy the finality requirement the FTC's issuance of a complaint averring that there was "reason to believe" that a party was in violation of the FTC Act, the Ohio district court found that the Department's formulation of a "reason to believe" that Cinemark was violating the ADA was merely a determination that, failing settlement, adjudicatory proceedings would commence. Ohio Order of March 22, 2000 at 7 (citing Standard Oil, 449 U.S. at 239-43). The Ohio court found that if it were to adopt Cinemark's position that the Department's actions to that point constituted reviewable final agency action, then the United States would be subject to suit any time the Attorney General initiated an investigation or filed a complaint based on the belief that some party was unlawfully discriminating against persons with disabilities. Id. at 8. The court also found that:
Cinemark's Motion to Reconsider such Order was denied on June 7, 2000.
[m]uch like the filing of a complaint, the filing of an amicus brief by an agency whose mandate it is to enforce the Act at issue is not final agency action because an amicus brief, by itself, does not determine `rights or obligations' and is not such an action from which `legal consequences will flow.' Rather, where the agency cannot issue its own orders or fines (as the Department here could not), it is the domain of the courts to determine rights and obligations.Id. at 9(quoting Bennett v. Spear, 520 U.S. 154, 178 (1997)). As the Department's actions were not "final" agency actions, the court concluded that the APA waiver of sovereign immunity did not apply to Cinemark's APA counterclaim, and thus dismissed it.
The United States District Court for the Central District of California made a similar determination in United States v. AMC Entertainment, No. CV 99-1034 MMM, on September 8. 1999. There, the court stated:
Based on everything that is presently before the Court, the Court believes that the case law compels the conclusion that there has not been final agency action taken by the Government with respect to the interpretation of the standard that is set forth in the Lara Brief and that the Government's discovery responses state, in fact, its interpretation of that standard for all purposes and the one that it intends to advance in this case. So the Court finds that the first prong of the jurisdictional test is not met.
With respect to the second prong, whether or not assuming there were [sic] final agency action, AMC has an otherwise adequate remedy at law, based upon the conversation this morning the Court believes that AMC is adequately protected and has an adequate opportunity to advance its violation of the APA claim, if you will, through the affirmative defense that it has already provided in its answer.
Reporter's Transcript of Proceedings at 27.
Thus, to date, two district courts addressing this precise issue have found in favor of the Department and held that its Lara Brief did not constitute final agency action. However, although this Court finds such decisions persuasive, it is not bound by them.
What the Court finds dispositive is the Fifth Circuit's recent decision in Lara v. Cinemark USA, Inc., 207 F.3d 783 (5th Cir. 2000), which was issued after the Magistrate Judge rendered his decision. The district court's decision in Lara, as to which the Lara Brief was originally filed, was overruled by the Fifth Circuit after Magistrate Judge Kaplan ruled upon Defendants' Motion to Dismiss and immediately prior to oral argument before this Court.
In fact, Magistrate Judge Jeff Kaplan made his recommendations without the benefit of the California and Ohio district court decisions discussed above, which were made thereafter.
In Lara, Cinemark appealed principally on the grounds that the district court had incorrectly interpreted and applied the ADA and the ADA Guidelines, noting that the district court below had held that Cinemark violated Section 4.33.3 because its Tinseltown theaters failed to provide wheelchair-bound patrons with "lines of sight comparable to those for members of the general public." Id. at 786. The district court had noted that while the general public could choose to sit in any row, Tinseltown confined wheelchair-bound patrons to an area with an "average viewing angle . . . [of] above thirty-five degrees, which the Plaintiffs expert witness has properly described as `well into the discomfort zone.'" Id. On appeal, Cinemark argued both that Section 4.33.3 does not apply to its theaters and, alternatively, that Cinemark provides wheelchair-users with comparable lines of sight.
Using language relevant to the issue at hand here, the Fifth Circuit held that:
In light of the lack of any evidence that the Access Board intended Section 4.33.3 to impose a viewing angle requirement, the Board's recent statement that it had not yet decided whether to adopt the Department's litigating position with respect to stadium-style theaters, and the common meaning of "lines of sight," we cannot conclude that the phrase "lines of sight comparable" requires anything more than that theaters provide wheelchair-bound patrons with unobstructed views of the screen.Id. at 789 (internal citations omitted) (emphasis added). The Fifth Circuit thus concluded that the district court erred, as a matter of law, in finding that Cinemark failed to provide wheelchair-bound patrons with lines of sight comparable to those for members of the general public.
Almost the entirety of the Department's Lara Brief is devoted to analyzing the "lines of sight comparable to those for members of the general public" language of Section 4.33.3. The Fifth Circuit rejected that position and, importantly, characterized the Department's Lara Brief as a "litigating position," which is certainly not equivalent to a final agency action in the sense urged by Cinemark in this case.
This Court recognizes that the Fifth Circuit was not required to address the issue before this Court in the direct manner of the other two district courts, as previously discussed. However, the Court agrees with the Fifth Circuit's characterization of the Lara Brief as a "litigating position," which does not provide specific regulatory guidance, and finds it is not final agency action. Were this Court to hold otherwise, the United States would potentially be subject to a lawsuit every time it opened an investigation, drafted an interpretation, or filed a complaint based on an interpretation of the law that was not shared by the regulated entity. The requirement of final agency action is intended to eliminate just such a scenario. This Court therefore follows the lead of the Ohio and California district courts.
D. This Court's Determination to Hear this Action is Discretionary
In the alternative, the Court declines to exercise jurisdiction. This Court's determination to hear a declaratory judgment action is uniquely discretionary. See Wilton v. Seven Falls Co., 515 U.S. 277, 286-88 (1995). In other words, the Declaratory Judgment Act, 28 U.S.C. § 2201, "gives the court a choice, not a command." Dresser Industries, Inc. v. Ins. Co. of North America, 358 F. Supp. 327, 330 (N.D. Tex.), aff'd, 475 F.2d 1402 (5th Cir. 1973).
This Court notes that parallel proceedings in California and Ohio involve the same parties to the present suit, and that the matters in controversy to those parties may be fully litigated by either of those courts. Accordingly, this Court declines to exercise jurisdiction over this declaratory judgment action, instead deferring to the pending enforcement actions already well under way in California and Ohio. See Pacific Employers Ins. Co. v. M/V Capt. W.D. Cargill, 751 F.2d 801, 804 (5th Cir. 1985); Days Inn v. Reno, 935 F. Supp. 874, 878 (W.D. Tex. 1996).
III. Conclusion
Accordingly, Defendants' Objections to Magistrate Judge's Disposition of Motion to Dismiss are SUSTAINED, and Defendants' Motion to Dismiss is GRANTED. Because this Court lacks jurisdiction, Plaintiffs Partial Motion for Summary Judgment is not addressed and DENIED as moot.
SO ORDERED.
July 6, 2000.