On August 14, 2019, Judge Lorna Schofield of the Southern District of New York entered an Opinion and Order in The Art & Antique Dealers League of America, Inc. v. Seggos, 18 Civ. 2504, ruling on the constitutionality of provisions of New York State Environmental Conservation Law § 11-0535-a (the “State Ivory Law”) that restrict the display and sale of ivory within New York State beyond the restrictions already in place through the federal Endangered Species Act (16 U.S.C. § 1531 et seq.). The plaintiffs in this action, groups of arts and antiques dealers (“Plaintiffs”), had filed suit against Basil Seggos, in his official capacity as the Commissioner of the New York Department of Environmental Conservation, challenging the State Ivory Law on preemption and First Amendment grounds. In her Opinion and Order, Judge Schofield denied Plaintiffs’ motion for summary judgment in its entirety and granted in part and denied in part Defendant’s and intervenors’ (“Defendants”) motion to dismiss,[1] dismissing Plaintiffs’ preemption claim but permitting Plaintiffs’ First Amendment claim to proceed.

As discussed previously on this blog, the Endangered Species Act contains exemptions for “antique articles” that are 100 years of age or older and non-antique items that contain only a de minimis amount of ivory.[2] The State Ivory Law, however, permits exemptions for antique articles only if they are less than twenty percent (20%) ivory by volume, and does not contain an exemption for any non-antique item, even if the quantity of ivory in the item is de minimis.[3] Notwithstanding this discrepancy, Judge Schofield held that the federal law does not preempt the State Ivory Law.

Judge Schofield first found that the Endangered Species Act does not expressly preempt the State Ivory Law, because the State Ivory Law applies only to intrastate commerce, whereas the Endangered Species Act’s express preemption clause only voids state laws applicable to “interstate or foreign commerce.”[4] While Plaintiffs argued that “a state law cannot prohibit intrastate what a federal permit or exception otherwise allows interstate,” the court rejected this argument as simply “incorrect.”[5] The court then held that the Endangered Species Act does not “occupy an entire field of regulation, leaving no room for the States to supplement federal law,” so field preemption does not apply to the State Ivory Law.[6] Nor does conflict preemption apply, the court held, because New York State “will not deny permits for interstate or foreign commerce in ivory, obviating any purported conflict between the Endangered Species Act and the State Ivory Law.”[7]

However, the court denied Defendants’ motion to dismiss with respect to Plaintiffs’ argument that the State Ivory Law’s permit requirement violates the First Amendment. The State Ivory Law requires those seeking to engage in the “sale, offering for sale, purchase, trading, bartering, or distribution” of an ivory article to first obtain a state-issued license.[8] The court agreed with Plaintiffs that this restriction “prohibits the ‘physical[] display for sale’ of any item not authorized for intrastate sale under the State Ivory Law, even if the merchant is authorized under the Endangered Species Act to sell the item in interstate or foreign commerce.”[9]

The standard of review for restrictions on commercial speech is intermediate scrutiny. Under that standard, the court must determine whether “(1) the speech restriction concerns lawful activity; (2) the [State]’s asserted interest is substantial; (3) the prohibition directly advances that interest; and (4) the prohibition is no more extensive than necessary to serve that interest.”[10] Here, the court found that Plaintiffs “plead[] sufficient facts to make plausible Plaintiffs’ contention that the Display Restriction violates the First Amendment.”[11]

While Plaintiffs’ First Amendment argument survived Defendants’ motion to dismiss, the court, in denying Plaintiffs’ motion for summary judgment, held that it does not succeed as a matter of law, as no fact or expert discovery has yet taken place. The parties will now commence with discovery, giving both parties an opportunity to move for summary judgment once discovery closes.

It will be interesting to see whether the State can thread the needle to show a substantial interest in regulated in-state sales of antique ivory and objects containing only de minimis quantities of ivory, such that requiring a permit to display them is justified, directly advances that interest, and is no more extensive than necessary.

[1] The intervenor defendants are the Humane Society of the United States, the Center for Biological Diversity, the Natural Resource Defense Council, Inc. and the Wildlife Conservation Society.

[2] 16 U.S.C. 1539(h).

[3] N.Y. Env. Conservation Law 11-0535-A(3).

[4] 16 U.S.C. § 1535(f)) (“Any State law or regulation which applies with respect to the importation or exportation of, or interstate or foreign commerce in, endangered species or threatened species is void . . . .”). The court further noted that the State Ivory Law does not “prohibit what is authorized pursuant to an exemption or permit provided for in [the Endangered Species Act] or by any regulation which implements [the Endangered Species Act],” so the federal law’s preemption clause does not apply.

[5] Art & Antique Dealers League of Am., Inc. v. Seggos, No. 18 CIV. 2504 (LGS), 2019 WL 3817305, at *5 (S.D.N.Y. Aug. 14, 2019).

[6] Id. at *6.

[7] Id. at *7.

[8] Id.

[9] Id.

[10] Vugo, Inc. v. City of New York, No. 18-807, 2019 WL 3121891, at *7 (2d Cir. July 16, 2019).

[11] Seggos, 2019 WL 3817305, at *8.