MEMORANDUM OPINION
CHRISTOPHER R. COOPER UNITED STATES DISTRICT JUDGE
The
34-day government shutdown that began in December 2018 and
ran through most of January 2019 disrupted the lives of
hundreds of thousands of federal employees and countless
others who depend on their services. Families missed
paychecks, furloughed workers were forced to moonlight, and
critical public functions were curtailed after unpaid civil
servants called in sick. All of those effects were entirely
predictable. But the shutdown also had myriad other, more
surprising consequences. One of them even threatened the
country's most treasured libation: beer. This case shows
how.
Under
federal law, any brewer who wishes to ship an alcoholic
beverage in interstate commerce must first submit for
regulatory approval the labels it will affix to its
containers. If a brewer forgoes the pre-approval process and
ships a container anyway, it risks criminal prosecution. The
government shutdown, however, effectively put the regulator
out of business, stalling the approval process for any labels
already in the pipeline. District of Columbia-based craft
brewer Atlas Brew Works had a few such labels, including one
for a perishable pale ale, “The Precious One, ”
that Atlas had already brewed. Without label approval, The
Precious One sat waiting in an Atlas fermenting tank, rather
than flowing freely at area watering holes. This pinched the
company's bottom line and left its expectant customers in
the lurch. But it also, Atlas said, constituted a First
Amendment violation: a law that prohibits speech without
regulatory approval becomes an outright ban on speech when
the approval process is shuttered. As Atlas puts it,
“[i]t cannot be denied the right to speak for lack of
meeting an impossible condition.” Am. Compl. at 2.
So
Atlas filed suit on January 15, 2019-24 days into the
shutdown. It sought a temporary restraining order and
preliminary injunction preventing the Justice Department from
prosecuting Atlas for proceeding with its labels without
pre-approval. See ECF No. 3. Given Atlas's
request for expedited review, the Court ordered the
government to promptly reply and held a hearing on the
matter. Within days of that hearing, the Court was poised to
issue a ruling.
But
then, on January 25, the shutdown ended. Just a few days
later, The Precious One label was approved, and Atlas was
once again able to speak via its beer labels without the fear
of prosecution. With Atlas no longer suffering an immediate
and potentially irreparable injury, the Court denied as moot
Atlas's motion for a temporary restraining order and
preliminary injunction. See Order, ECF No. 13. The
government asked the Court to go a step further, dismissing
the entire case as moot. Atlas countered that the case was
not moot and, in any event, that it fit within the
capable-of-repetition-yet-evading-review exception to the
ordinary mootness rule. It argued that another shutdown would
likely come, and that when it did, Atlas would suffer a
similar injury. The Court reserved judgment on that question
and ordered the parties to fully brief it. Id.
The
government has since followed up with a motion to dismiss
focused exclusively on the mootness question. Because the
shutdown that started this dispute has ended and the
likelihood of the same injury recurring is too speculative,
the Court finds the case moot and will grant the
government's motion.
I.
Background
A.
Statutory Framework
This
case involves the interplay of two fields of federal law-one
governs how the federal government can spend money, the other
regulates how purveyors of alcoholic beverages can label
their products. The Court will say a bit about each before
turning to the facts at hand. 1. The Appropriations
Clause and Anti-Deficiency Act Congress, per the
Constitution's Appropriations Clause, holds
“exclusive power over the federal purse.”
Rochester Pure Waters Dist. v. EPA, 960 F.2d 180,
185 (D.C. Cir. 1992); see U.S. Const., art. I,
§ 9, cl. 7 (“No Money shall be drawn from the
Treasury, but in Consequence of Appropriations made by
Law.”). The Constitution thereby “prevents
Executive Branch officers from even inadvertently obligating
the Government to pay money without statutory
authority.” U.S. Dep't of Navy v. Fed. Labor
Relations Auth., 665 F.3d 1339, 1347 (D.C. Cir. 2012).
“Federal statutes reinforce Congress's control over
appropriated funds.” Id. Key among these
statutes is the Anti-Deficiency Act (“ADA”), 31
U.S.C. §§ 1341-42, which “makes it unlawful
for government officials to ‘make or authorize an
expenditure or obligation exceeding an amount available in an
appropriation, '” U.S. Dep't of Navy,
665 F.3d at 1347 (quoting 31 U.S.C. § 1341(a)(1)(A)).
The ADA also prohibits any federal officer or employee from
working without an appropriation “except for
emergencies involving the safety of human life or the
protection of property.” 31 U.S.C. § 1342.
2.
The Regulation of Alcohol Labels
The
Federal Alcohol Administration Act (“FAA Act”),
27 U.S.C. § 201 et seq., regulates the content
of labels affixed to malt beverages shipped in interstate
commerce. It requires or forbids various types of speech on
the labels and makes it a crime to introduce into interstate
commerce any beverage that is not “bottled, packaged,
and labeled in conformity with” regulations established
by the Secretary of the Treasury. 27 U.S.C. § 205(e).
Those regulations prohibit false, misleading, and obscene
statements, and statements that disparage competitors'
products. Id. They also require that labels contain
certain other information, including the beverage's
manufacturer, identity, and net contents. Id.; 27
C.F.R. Part 7.
To
facilitate compliance with these regulations, the FAA Act
created a regulatory process that requires sellers to obtain
a Certificate of Label Approval (“COLA”)
attesting to a label's conformity with the Act and its
attendant regulations before shipping a product in
interstate commerce. 27 U.S.C. § 205(e). A Treasury
regulation provides likewise. 27 C.F.R. § 7.41(a). An
entity within the Treasury-the Alcohol and Tobacco Tax and
Trade Bureau (“TTB”)- administers the FAA Act,
including the COLA requirement. The Attorney General of the
United States is authorized “to prevent and restrain
violations of” the FAA Act. 27 U.S.C. § 207.
Shipping beer in interstate commerce without a COLA, in
violation of 27 U.S.C. § 205, is a misdemeanor
punishable by a fine up to $1, 000 per offense. Id.
§ 207.
B.
Factual Background
On
November 28, 2018, Atlas sought a COLA for a label that would
adorn individual cans of The Precious One. See Mot.
for TRO, Ex. 2, ECF No. 3-2. The TTB approved that COLA on
December 17, 2018. Then, on December 20, Atlas sought a COLA
for a “keg collar” label for the same beer. Am.
Compl. ¶ 29.[1] But just two days later, appropriations
lapsed for scores of government agencies, including the TTB,
which had not yet acted on Atlas's COLA application for
The Precious One's keg collar label. Id. The
TTB's home page informed visitors that the appropriations
lapse had led to a “cessation of TTB operations with
limited access to” its web site. Id. ¶
26. The TTB web site also stated that COLA “submissions
will not be reviewed or approved until appropriations are
enacted.” Id.
The
TTB's closure put Atlas over a barrel. Id.
¶¶ 33-35. The Precious One is perishable, and Atlas
intended to market it as a seasonal beer February through
April. Id. ¶ 34. But without label approval,
Atlas said all of the beer set aside for out-of-state
distribution via its kegs was languishing in a fermenting
tank. Id. Atlas feared that it would lose thousands
of dollars if the shutdown persisted much longer, and it
lamented the opportunity cost incurred by the tying up of one
of its fermenting tanks. Id. ¶¶
34-35.[2]
To put
an end to the stalemate, Atlas on January 15, 2019 filed suit
and sought a temporary restraining order and preliminary
injunction against then-Acting Attorney General Matthew
Whitaker.[3] See ECF No. 3. The temporary
restraining order would have enjoined the government from
prosecuting Atlas for proceeding with The Precious One keg
collar label without a COLA, while the preliminary injunction
would have applied more broadly to all of Atlas's pending
COLA applications and perhaps even to other brewers
nationwide. See id. The Court ordered the government
to file an opposition by January 18, see Minute
Order, Jan. 15, 2019, and held an expedited hearing on the
motion four days later, see Minute Entry, Jan. 22,
2019.
But on
January 25, before the Court had issued a ruling on the
motion, leaders in Washington announced that a deal had been
reached to restore appropriations. The Court held a status
conference the following Monday to discuss whether
Atlas's demands had been mooted by the end to the
shutdown. See Minute Order, Jan. 27, 2019. Atlas
argued that its request for emergency injunctive relief had
not yet been mooted because the TTB had not yet approved The
Precious One label. The government, for its part, assured the
Court that the approval was imminent. The Court thus deferred
ruling on the matter until the government had provided notice
that the label had been approved. That notice came the next
day, see Notice of Label Approval, ECF No. 12, and
the Court proceeded to deny as moot Atlas's motion for a
temporary restraining order and a preliminary injunction,
see Order, ECF No. 13. The Court did not, however,
dismiss the entire case as moot, instead inviting the
government to submit an answer or revised motion to dismiss
regarding Atlas's demand for declaratory relief. See
id.
The
government, on February 28, filed its motion to dismiss.
See Motion to Dismiss for Lack of Jurisdiction
(“MTD”), ECF No. 14. Two weeks later, Atlas
opposed that motion, but it also amended its complaint.
See Amended Complaint, ECF No. 19; Memorandum in
Opposition, ECF No. 20. The parties thereafter agreed to
reset the briefing schedule, this time focused on the new
allegations in the amended complaint. See Joint
Motion for Briefing Schedule, ECF No. 21. The motion has now
been fully briefed, and it is ripe for the Court's
resolution.
II.
Legal Standard
The
government has filed a motion to dismiss Atlas's
complaint as moot, which “is properly brought under
[Federal Rule of Civil Procedure] 12(b)(1) because mootness
itself deprives the court of jurisdiction.” Indian
River Cty. v. Rogoff, 254 F.Supp.3d 15, 18 (D.D.C.
2017). “Unlike some jurisdictional questions such as
standing or ripeness, the party asserting mootness . . .
bears the ‘initial heavy burden' of establishing
that the case is moot.” Zukerman v. USPS, --
F.Supp.3d --, No. 15-cv-2131, 2019 WL 1877173, at *4 (D.D.C.
Apr. 26, 2019) (quoting Honeywell Int'l, Inc. v.
NRC, 628 F.3d 568, 576 (D.C. Cir. 2010)). When
evaluating a motion to dismiss, “the Court must treat
the complaint's factual allegations as true and afford
the plaintiff the benefit of all inferences that can be
derived from the facts alleged.” Indian River
Cty., 254 F.Supp.3d at 18 (internal quotation marks
omitted). “But because the Court has an
‘affirmative obligation to ensure that it is acting
within the scope of its jurisdictional authority,
'” id. (quoting Grand Lodge of
Fraternal Order of Police v. Ashcroft, 185 F.Supp.2d 9,
13 (D.D.C 2001)), the ‘[p]laintiff[s'] factual
allegations in the complaint . . . will bear closer scrutiny
in resolving a 12(b)(1) motion than in resolving a 12(b)(6)
motion [for failure to state a claim], '”
id. (quoting Delta Air Lines, Inc. v.
Export-Import Bank of United States, 85 F.Supp.3d 250,
259 (D.D.C. 2015)). In addition, the Court “may
consider materials outside the pleadings in deciding whether
to grant a motion to dismiss for lack of jurisdiction.”
Id. (internal quotation marks omitted).
III.
Analysis
The
government contends that the case has been mooted by the
restoration of appropriations and the processing of
Atlas's labels. Atlas responds, first, that the case has
not been mooted and, second, that, even if it has been, the
underlying dispute is capable of repetition yet will evade
judicial review, meaning that the Court should still resolve
it. The Court takes these issues in turn.
A.
Mootness
“Federal
courts lack jurisdiction to decide moot cases because their
constitutional authority extends only to actual cases or
controversies.” Iron Arrow Honor Soc'y v.
Heckler, 464 U.S. 67, 70 (1983). The Constitution's
case or controversy requirement “means that, throughout
the litigation, the plaintiff must have suffered, or be
threatened with, an actual injury traceable to the defendant
and likely to be redressed by a favorable judicial
decision.” Spencer v. Kemna, 523 U.S. 1, 7
(1998) (internal citations and quotation marks omitted).
“A case becomes moot-and therefore no longer a
‘Case' or ‘Controversy' for purposes of
Article III-‘when the issues presented are no longer
‘live' or the parties lack a legally cognizable
interest in the outcome.'” Already, LLC v.
Nike, Inc., 568 U.S. 85, 91 (2013) (quoting Murphy
v. Hunt, 455 U.S. 478, 481 (1982) (per curiam)).
“An intervening event ...