## Facts

- California enacted Fish & Game Code § 2021(b), making it unlawful to possess, sell, offer for sale, trade, or distribute shark fins in the state, subject to limited exceptions.
- Nonprofit and political organizations associated with participants in the shark-fin trade challenged the law.
- Plaintiffs alleged the statute was preempted by the Magnuson-Stevens Fishery Conservation and Management Act (MSA) and invalid under the dormant Commerce Clause.
- The district court dismissed the amended complaint with prejudice, concluding there was no preemption or Commerce Clause violation and that further amendment would be futile.
- Plaintiffs appealed; state officials and conservation organizations defended the statute.

## Issues

1. Whether the MSA preempts California’s in-state ban on possessing and selling shark fins under field preemption or conflict (obstacle/impossibility) preemption.
2. Whether the statute violates the dormant Commerce Clause by impermissibly regulating extraterritorial commerce or by imposing burdens on interstate commerce that are clearly excessive in relation to local benefits.
3. Whether the district court abused its discretion by dismissing with prejudice without further leave to amend.

## Decision

- The Ninth Circuit affirmed dismissal with prejudice.
- The court held the MSA does not preempt § 2021(b) because Congress did not occupy the field of shark conservation or on-land shark-fin commerce, and plaintiffs did not show an actual conflict with federal law.
- The court held the statute does not violate the dormant Commerce Clause because it regulates only in-state possession and sales, is not an extraterritorial price-control or out-of-state transaction rule, and survives Pike balancing.
- The court held further amendment would be futile and the district court did not abuse its discretion.

## Legal Principles

- In areas of traditional state police power (including wildlife and in-state commerce), courts apply a presumption against federal preemption absent clear congressional intent.
- Field preemption requires a showing that Congress intended federal law to occupy the relevant regulatory field; federal fisheries management does not, by itself, displace state regulation of possession and sales on land.
- Conflict preemption requires an “actual conflict,” such as impossibility of dual compliance or a state rule that stands as an obstacle to federal objectives; federal authorization to fish does not create a protected right to an in-state market for particular products.
- A nondiscriminatory state law regulating in-state conduct is not per se invalid under the dormant Commerce Clause merely because it has downstream effects on out-of-state markets.
- Under Pike v. Bruce Church, a nondiscriminatory law is upheld unless its incidental burdens on interstate commerce are clearly excessive in relation to legitimate local benefits such as conservation, animal-welfare aims, and public health.
- Leave to amend may be denied when the legal defects cannot be cured by additional factual allegations and amendment would be futile.

## Conclusion

The Ninth Circuit upheld California’s shark-fin possession and sales ban, rejecting claims that federal fisheries law displaced the state’s in-state market regulation and concluding the law’s incidental effects on interstate commerce were justified by substantial local conservation and related interests; dismissal with prejudice was affirmed as further amendment would not cure the legal deficiencies.


Chinatown Neighborhood Ass’n v. Harris, 794 F.3d 1136 (9th Cir. 2015)