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Trader Joe’s Co. v. Hallatt

Ninth Circuit Applies Lanham Act to Wholly Foreign Sales.

American courts interpret statutes with a strong presumption that they do not apply extraterritorially,1×1. See EEOC v. Arabian Am. Oil Co., 499 U.S. 244, 248 (1991) (identifying this presumption as “a longstanding principle of American law”); see also Morrison v. Nat’l Austl. Bank Ltd., 561 U.S. 247, 255 (2010) (“When a statute gives no clear indication of an extraterritorial application, it has none.”). based on the belief “that Congress ordinarily legislates with respect to domestic, not foreign, matters.”2×2. Morrison, 561 U.S. at 255. Extraterritoriality arises, then, only when “the affirmative intention of the Congress” to reach beyond U.S. borders is “clearly expressed.”3×3. Benz v. Compania Naviera Hidalgo, S.A., 353 U.S. 138, 147 (1957). The federal trademark statute, the Lanham Act,4×4. Ch. 540, 60 Stat. 427 (1946) (codified as amended in scattered sections of 15 U.S.C.). carries a broad jurisdictional grant: the Act is intended “to regulate commerce within the control of Congress.”5×5. 15 U.S.C. § 1127 (2012). The Supreme Court concluded six decades ago in Steele v. Bulova Watch Co.6×6. 344 U.S. 280 (1952). that this grant included a limited extraterritorial application.7×7. Id. at 286–87. Yet the Court has not addressed the issue since, leaving the exact contours of the Act’s reach to the determination of lower courts.8×8. See Erika M. Brown, Essay, The Extraterritorial Reach of United States Trademark Law: A Review of Recent Decisions Under the Lanham Act, 9 Fordham Intell. Prop. Media & Ent. L.J. 863, 867–81 (1999) (discussing Second, Fifth, and Ninth Circuit case law interpreting Steele). Recently, in Trader Joe’s Co. v. Hallatt,9×9. 835 F.3d 960 (9th Cir. 2016). the Ninth Circuit extended the Act’s reach to wholly foreign sales for the first time. At first glance, the decision breaks with recent Supreme Court extraterritoriality jurisprudence, which has tended toward restricting the reach of U.S. law.10×10. See, e.g., RJR Nabisco, Inc. v. European Cmty., 136 S. Ct. 2090, 2108 (2016); see also The Supreme Court, 2015 Term — Leading Cases, 130 Harv. L. Rev. 487, 492 (2016) (identifying RJR Nabisco as the latest in a series of cases limiting extraterritorial jurisdiction). However, this apparent divergence in fact reflects extraterritoriality doctrine’s central trade-off between allowing judicial flexibility in the face of new factual scenarios and precluding judicial resolution of questions better left to Congress. Trader Joe’s highlights the challenges of basing a doctrine on such a compromise.

Michael Norman Hallatt began drawing the attention of Trader Joe’s employees in October 2011.11×11. Trader Joe’s, 835 F.3d at 964. Hallatt, a Canadian national with U.S. lawful permanent resident status, visited the Bellingham, Washington, Trader Joe’s store “several times per week,”12×12. Id. buying unusually large amounts of goods each visit.13×13. Id. at 964–65. Hallatt was distributing these goods in Canada, operating a store named “Pirate Joe’s” where he resold the Trader Joe’s items at “substantially inflated prices.”14×14. Id. at 964. Hallatt allegedly advertised his goods using Trader Joe’s intellectual property, including a store marquee that mimicked the company’s font and an interior design similar to the company’s distinctive trade dress.15×15. Id. at 964 & figs.1 & 2. Hallatt also operated a U.S.-accessible website and transported perishable goods in a manner that did not meet Trader Joe’s quality control standards, leading to “at least one complaint from a consumer who became sick after eating” goods purchased at Hallatt’s store.16×16. Id. at 964. After Hallatt refused to stop reselling the goods, Trader Joe’s banned him from its stores.17×17. Id. However, Hallatt was “undeterred,” attempting to evade detection first by disguising himself and traveling to stores all over the West Coast, and later by paying third parties to buy goods and deliver them to his store.18×18. Id. at 964–65. Trader Joe’s claimed that in total, Hallatt “spent more than $350,000” to stock his store.19×19. Id. at 965.

Trader Joe’s filed suit against Hallatt in the Western District of Washington, alleging violations of both federal and state trademark and unfair competition law.20×20. Id. Specifically, the complaint alleged four federal claims under the Lanham Act: (1) trademark infringement; (2) unfair competition, false endorsement, and false designation of origin; (3) false advertising; and (4) trademark dilution.21×21. Complaint at 9–12, Trader Joe’s Co. v. Hallatt, 981 F. Supp. 2d 972 (W.D. Wash. 2013) (No. C13-768). Trader Joe’s also brought two state law claims: (1) trademark dilution and (2) deceptive business practices violating the Washington Consumer Protection Act. Id. at 12–13. Judge Pechman, however, granted Hallatt’s motion to dismiss for lack of subject matter jurisdiction, holding that the Lanham Act did not apply to Hallatt’s conduct in Canada.22×22. Trader Joe’s, 981 F. Supp. 2d at 981. Judge Pechman did allow Trader Joe’s to amend its complaint to factually support diversity jurisdiction over the state law claims. Id. at 980–81. In a later opinion, Judge Pechman also dismissed the state law causes of action for failing to state a claim under Washington law. Trader Joe’s Co. v. Hallatt, No. C13-768, 2013 WL 12073234, at *5 (W.D. Wash. Dec. 18, 2013).

In dismissing the federal claims, Judge Pechman relied on an extraterritoriality analysis first set out by the Ninth Circuit in the antitrust context in Timberlane Lumber Co. v. Bank of America, N.T. & S.A.23×23. 549 F.2d 597 (9th Cir. 1976); see also Trader Joe’s, 981 F. Supp. 2d at 976–77 (describing the Timberlane test). The Ninth Circuit transposed the Timberlane test to the Lanham Act in Wells Fargo & Co. v. Wells Fargo Express Co., 556 F.2d 406 (9th Cir. 1977). See Trader Joe’s, 981 F. Supp. 2d at 976–77. Under the Timberlane test, jurisdiction is properly exercised if three factors are demonstrated: the alleged conduct has “some effect on American foreign commerce”; that effect is sufficient to cause a cognizable injury under the Lanham Act; and the American commercial interests and links are “sufficiently strong in relation to those of other nations.”24×24. Trader Joe’s, 981 F. Supp. 2d at 976 (quoting Reebok Int’l, Ltd. v. Marnatech Enters., Inc., 970 F.2d 552, 554 (9th Cir. 1992)). Judge Pechman found that the alleged conduct did not fulfill the first two Timberlane requirements: extraterritorial jurisdiction had previously been deemed appropriate only when either the commercial activity occurred at least in part in the United States or the plaintiff “conducted business internationally.”25×25. Id. at 977. Both conditions were absent here.26×26. Id. Judge Pechman then turned to the third Timberlane prong, which itself requires balancing seven factors:

The degree of conflict with foreign law or policy, the nationality or allegiance of the parties and the locations or principal places of business of corporations, the extent to which enforcement by either state can be expected to achieve compliance, the relative significance of effects on the United States as compared with those elsewhere, the extent to which there is explicit purpose to harm or affect American commerce, the foreseeability of such effect, and the relative importance to the violations charged of conduct within the United States as compared with conduct abroad.27×27. Id. at 978 (quoting Reebok, 970 F.2d at 555).

Judge Pechman found that five of the seven factors tipped against extraterritoriality, and, combined with her finding on the first two Timberlane prongs, held that the court had no jurisdiction under the Lanham Act and granted the motion to dismiss.28×28. Id. at 978–80. Judge Pechman found only the second factor (geographic considerations) weighed in favor of extraterritoriality, citing Hallatt’s permanent resident status and frequent trips to the United States alongside Trader Joe’s American incorporation. Id. at 979. In addition, she found the fifth factor, “purpose to harm or affect,” to be likely neutral. Id. at 979–80.

The Ninth Circuit reversed.29×29. Trader Joe’s, 835 F.3d 960, 963 (9th Cir. 2016). Writing for the panel, Judge Christen30×30. Judge Christen was joined by Judges Paez and Bybee. held that the Lanham Act applied extraterritorially to Hallatt’s alleged conduct. Citing a recent Ninth Circuit case that had found a similar element within the Lanham Act was not jurisdictional,31×31. See La Quinta Worldwide LLC v. Q.R.T.M., S.A. de C.V., 762 F.3d 867 (9th Cir. 2014). The analysis in La Quinta relied on Arbaugh v. Y & H Corp., 546 U.S. 500 (2006), which distinguished factual elements specifically within a statute’s jurisdictional grant from those elsewhere, the latter of which must be treated as merits questions, id. at 513–14. In La Quinta, the court determined the statute’s “use in commerce” requirement, which does not appear in its jurisdictional grant, was a merits question. La Quinta, 762 F.3d at 872–73. Judge Christen found the Lanham Act’s territorial reach likewise was separate from the jurisdictional grant. Trader Joe’s, 835 F.3d at 967. the court held that the extraterritoriality determination too was properly treated as a merits question.32×32. Trader Joe’s, 835 F.3d at 967–68. Proceeding to the extraterritoriality analysis itself, Judge Christen applied the two-step framework recently announced by the Supreme Court in RJR Nabisco, Inc. v. European Community,33×33. 136 S. Ct. 2090 (2016). which requires first finding a “clear, affirmative indication” of extraterritoriality in the statute before next considering any congressionally imposed limits on that reach.34×34. Trader Joe’s, 835 F.3d at 966 (quoting RJR Nabisco, 136 S. Ct. at 2102). A clear statement of extraterritorial intent has long been found in the Lanham Act.35×35. See id. (citing Steele v. Bulova Watch Co., 344 U.S. 280, 286 (1952)). Thus the court’s analysis turned on the second step — whether, under the Timberlane test, the alleged conduct fit within the Act’s scope of “all commerce which may lawfully be regulated by Congress.”36×36. Id. (quoting 15 U.S.C. § 1127 (2012)).

Judge Christen, however, reached a different conclusion than did Judge Pechman under Timberlane. Analyzing the first two prongs together, she found the alleged conduct, though of a different nature than most foreign conduct regulated by the Lanham Act, had an effect on American commerce that caused Trader Joe’s a cognizable injury.37×37. Id. at 969–72. Specifically, she pointed to the allegations of lower quality control and potential reputational harm; the potential confusion of Canadian consumers who frequented both stores; and the fact that Hallatt engaged in some commercial activity in the United States — traveling, purchasing the goods, and paying third parties to purchase goods — as sufficient bases for a finding of “some effect” satisfying the first two Timberlane prongs.38×38. Id.

Turning then to Timberlane’s third prong, Judge Christen balanced the same seven factors as the district court but found only the final factor, the relative importance of domestic and foreign conduct, to counsel against extraterritorial application.39×39. Id. at 972–75. While acknowledging under that factor that “most of Hallatt’s infringing activity occurs abroad,”40×40. Id. at 975. Judge Christen nonetheless found that the Supreme Court’s admonition to “avoid unreasonable interference with other nations’ sovereign authority where possible” would not be contravened through extraterritorial application of the Lanham Act.41×41. Id. at 972 (quoting RJR Nabisco, Inc. v. European Cmty., 136 S. Ct. 2090, 2107 n.9 (2016)). Her analysis pointed to a lack of ongoing adversarial trademark proceedings in Canada, Hallatt’s permanent resident status, the availability of injunctive relief, the significance of potential reputational harm to Trader Joe’s, and Hallatt’s intent to “tread[] on Trader Joe’s’ goodwill and pirate[] Trader Joe’s’ intellectual property”42×42. Id. at 974. as facts outweighing the foreign location of the conduct itself.43×43. Id. at 972–74. Combining both parts of her analysis, then, Judge Christen found Trader Joe’s had stated a cognizable Lanham Act claim and reversed the district court’s dismissal.44×44. Id. at 975. Judge Christen did, however, affirm the district court’s dismissal of the state law claims. Id. at 975–78.

The broad precedential value of Judge Christen’s decision is at best unclear: while it may open the door to a new set of claims based on wholly foreign sales, the countervailing domestic nature of Hallatt’s purchases and his permanent resident status suggest that the applicability of the Lanham Act in this case may well be limited to its facts. Nonetheless, the decision is noteworthy because it highlights the trade-off in judicial competencies at the center of modern extraterritoriality doctrine. Specifically, the strong presumption against extraterritoriality reflects a reasonable concern over the relative expertises of the judiciary and Congress in determining the merits of extraterritorial application. At the same time, however, extraterritorial applications like that allowed in Trader Joe’s are based on complex balancing tests that promote judicial flexibility in the face of changing fact patterns. The stark difference between the two Trader Joe’s opinions illustrates the difficulty of applying a doctrine based on such a compromise.

The Supreme Court’s recent extraterritoriality jurisprudence has been defined by a trilogy of cases, culminating with its 2016 decision in RJR Nabisco. There, the Supreme Court reaffirmed the strength of the presumption against extraterritoriality by barring application of the civil cause of action created by the Racketeer Influenced and Corrupt Organizations Act45×45. 18 U.S.C. §§ 1961–1968 (2012). (RICO) to foreign conduct.46×46. RJR Nabisco, 136 S. Ct. at 2095. RJR Nabisco built on a trend of limiting extraterritoriality begun in two earlier cases: Morrison v. National Australia Bank Ltd.47×47. 561 U.S. 247 (2010) (holding the Securities Exchange Act of 1934, 15 U.S.C. §§ 78a–78pp (2012), did not apply to foreign transactions, Morrison, 561 U.S. at 265, even if the claim was based on domestic misrepresentations, id. at 270). and Kiobel v. Royal Dutch Petroleum Co.,48×48. 133 S. Ct. 1659 (2013) (holding the Alien Tort Statute, 28 U.S.C. § 1350 (2012), did not create a cause of action for foreign plaintiffs over wholly foreign harm, Kiobel, 133 S. Ct. at 1669). which limited the extraterritorial reach of securities and human rights statutes, respectively.49×49. See Timothy G. Nelson et al., RJR Nabisco and the Future of Extraterritoriality, Nat’l L.J. (July 4, 2016), http://www.nationallawjournal.com/id=1202761590365/RJR-Nabisco-and-the-Future-of-Extraterritoriality [https://perma.cc/Q7KP-TPWR]. In all three cases, however, the Supreme Court’s analysis dealt with only the first step of the extraterritoriality inquiry, the determination of “whether the presumption against extraterritoriality has been rebutted.”50×50. RJR Nabisco, 136 S. Ct. at 2101. The Supreme Court has looked with increasing scrutiny for “the affirmative intention of the Congress”51×51. Kiobel, 133 S. Ct. at 1664 (quoting Benz v. Compania Naviera Hidalgo, S.A., 353 U.S. 138, 147 (1957)). and found it lacking even in statutes that carry a clear foreign orientation52×52. See id. at 1667 (noting that even the intended use of the Alien Tort Statute to counter piracy on the high seas, an international jurisdiction, did not overcome the presumption). or contain some provisions that do meet the extraterritoriality threshold.53×53. See RJR Nabisco, 136 S. Ct. at 2102–03 (distinguishing RICO’s criminal provisions as exhibiting clear congressional intent for extraterritorial effect).

This narrowing of extraterritoriality by the Supreme Court has not, to date, affected the second step of RJR Nabisco, the inquiry into “the limits Congress has (or has not) imposed on the statute’s foreign application.”54×54. Id. at 2101. Federal courts have developed a variety of balancing tests to give meaning to this second step. For example, in the Lanham Act context, the Supreme Court in Steele confirmed that foreign conduct could fall within the Act’s scope of “commerce within the control of Congress.”55×55. 15 U.S.C. § 1127 (2012); see Steele v. Bulova Watch Co., 344 U.S. 280, 285 (1952). And the lower courts have been left to determine the extent of this reach using the type of balancing exemplified by the Timberlane test.56×56. See Elizabeth A. Rowe & Daniel M. Mahfood, Trade Secrets, Trade, and Extraterritoriality, 66 Ala. L. Rev. 63, 77–78 (2014) (arguing this determination has been “inconsistent and at times unpredictable,” id. at 77). Such tests are highly fact specific and seek to account for a multitude of competing considerations. And, as some commentators have noted, reliance on such “effects tests,” which tend to allow extraterritorial application when there are sufficient effects on U.S. commerce, is a likely “doctrinal culprit” for increasing comfort with extraterritoriality.57×57. Austen L. Parrish, The Effects Test: Extraterritoriality’s Fifth Business, 61 Vand. L. Rev. 1455, 1457 (2008); see also Anthony J. Colangelo, A Unified Approach to Extraterritoriality, 97 Va. L. Rev. 1019, 1021, 1045 (2011). The flexibility inherent in such tests has provided the lower courts a means of adjudicating factual situations that reflect the lessening relevance of borders to the existence of a sufficient jurisdictional nexus.

This judicial flexibility may well be a powerful tool. Allowing for recognition of new types of rights — and harms arising from infringement of those rights — under a given statute could be an important means of regulating an increasingly globalized world. And when Congress has potentially underregulated a given field, or left the extent of its regulation unclear, judicial discretion to apply U.S. law in the face of compelling facts may be valuable.58×58. Cf. William S. Dodge, Extraterritoriality and Conflict-of-Laws Theory: An Argument for Judicial Unilateralism, 39 Harv. Int’l L.J. 101, 104–05 (1998) (arguing for a “unilateral” approach to extraterritoriality determinations, by which courts may apply domestic law “whenever doing so appears to advance the purposes of the statute,” id. at 104, to correct legislative shortcomings and incentivize international negotiations toward harmonizing the regulation in question, id. at 105). This need for flexibility certainly has been identified in the Lanham Act context, as the prospect of cognizable harm from foreign conduct continues to grow, whether via the increasing ubiquity of online commerce or the ongoing proliferation of multinational corporations.59×59. See, e.g., Brendan J. Witherell, The Extraterritorial Application of the Lanham Act in an Expanding Global Economy, 97 Trademark Rep. 1090, 1124–25 (2007); Anna R. Popov, Note, Watering Down Steele v. Bulova Watch Co. to Reach E-Commerce Overseas: Analyzing the Lanham Act’s Extraterritorial Reach Under International Law, 77 S. Cal. L. Rev. 705, 706 (2004). Judge Christen’s determination that the Lanham Act protected Trader Joe’s intellectual property from the potential reputational harm from cross-border flows of information and people,60×60. Trader Joe’s, 835 F.3d at 971. for example, can be seen as addressing exactly this need. And such a determination, in departing from the limited scope of previously recognized harms, was possible only due to the capacious and flexible nature of the balancing test deployed.

Yet there is also a strong set of countervailing costs to be weighed against the flexibility of such “effects tests” here. As in areas of the law beyond extraterritoriality, flexibility can be a mask for ambiguity, allowing the contours of legal rights to vary case-by-case.61×61. Cf. generally T. Alexander Aleinikoff, Constitutional Law in the Age of Balancing, 96 Yale L.J. 943 (1987) (describing the limitations of balancing tests in defining constitutional rights). More specific to the extraterritoriality context, moreover, is the danger of such ambiguity when “international friction,” or the possibility of foreign relations fallout, is an interest at stake.62×62. RJR Nabisco, Inc. v. European Cmty., 136 S. Ct. 2090, 2106 (2016). The third Timberlane prong deals exclusively with this issue of “international comity”; Judge Pechman and Judge Christen, however, arrived at opposing conclusions regarding five out of the seven factors within this prong.63×63. Compare Trader Joe’s Co. v. Hallatt, 981 F. Supp. 2d 972, 978–80 (W.D. Wash. 2013) (district court finding five factors tilt against extraterritoriality and one to be neutral), with Trader Joe’s, 835 F.3d at 972–75 (circuit court finding six factors tilt toward extraterritoriality). Though it has been argued that courts may in fact be best suited to making these determinations,64×64. See Jonathan Turley, Dualistic Values in the Age of International Legisprudence, 44 Hastings L.J. 185, 271 (1993) (“[C]ourts are now the best — and perhaps only — institution for reconciling conflicts between municipal and international values.”). the dueling opinions in Trader Joe’s suggest that perhaps this calculus pushes judicial expertise too far, and thus the balancing should be left to political actors more capable of accounting for foreign affairs considerations. In fact, the Supreme Court’s recent reaffirmation of the presumption at step one may well have been driven largely by a recognition of the dangers of “the international discord that can result when U.S. law is applied to conduct in foreign countries”65×65. RJR Nabisco, 136 S. Ct. at 2100. and an acknowledgment that courts are ill suited to evaluate this risk.66×66. E.g., Kiobel v. Royal Dutch Petroleum Co., 133 S. Ct. 1659, 1661 (2013). Moreover, deference to the political branches may also explain why courts are more comfortable with extraterritoriality in the criminal context, where the executive has already undertaken this interest balancing in a way no civil plaintiff (or even, perhaps, a judge) could.67×67. RJR Nabisco’s comfort with RICO’s extraterritorial criminal provisions is one example of this distinction. 136 S. Ct. at 2102–03; see also, e.g., United States v. Schmidt, 845 F.3d 153, 156–57 (4th Cir. 2017) (upholding guilty plea under sex offense statute relying on an expansive view of Congress’s ability to regulate “foreign commerce”); Robert J. Anello & Richard F. Albert, Questionable Extraterritorial Extension of Foreign Corrupt Practices Act, N.Y. L.J. (Oct. 3, 2016), http://www.newyorklawjournal.com/home/id=1202769112983/Questionable-Extraterritorial-Extension-of-Foreign-Corrupt-Practices-Act [https://perma.cc/NZ8X-Z48Q] (identifying the trend toward extraterritoriality as especially “significant” in the Foreign Corrupt Practices Act context).

This trade-off between preserving judicial flexibility to ensure U.S. law is applied where the facts demand it and acknowledging the limitations of judicial expertise in making such determinations is at the heart of modern extraterritoriality doctrine. The resulting “messiness” has prompted calls for changes to the doctrine to better reflect the source of congressional power to regulate68×68. See Colangelo, supra note 57, at 1021–25. or, more radically, to do away with territoriality as a basis for jurisdiction altogether.69×69. See Paul Schiff Berman, The Globalization of Jurisdiction, 151 U. Pa. L. Rev. 311 (2002). However, the Court’s clarification of the two-step extraterritoriality test in RJR Nabisco has entrenched the existing uneasy compromise: the strengthened presumption at step one emphasizes the judiciary’s unwillingness to overstep its institutional competency, while the continuing use of balancing at the second step allows for judicial flexibility where Congress has been clear in its extraterritorial intent, if not in its limits. Trader Joe’s, meanwhile, highlights the unpredictable nature of a doctrine resting on such a compromise, as the two opinions came to almost uniformly opposite conclusions about the applicability of U.S. law to the same set of facts. Such piecemeal and inconsistent applications, punctuated by occasional sweeping repudiations of extraterritoriality such as those seen in the recent Supreme Court trilogy, will likely continue to be the norm as a result.

Political gerrymanders predate the founding of the United States.70×70. In the early 1700s, “counties conspired to minimize the political power of the city of Philadelphia by refusing to allow it to merge or expand into surrounding jurisdictions, and denying it additional representatives.” Vieth v. Jubelirer, 541 U.S. 267, 274 (2004) (plurality opinion) (citing Elmer C. Griffith, The Rise and Development of the Gerrymander 26–28 (1974)). However, the judicial branch has yet to develop a coherent approach to delineating the constitutional limits of partisan gerrymanders. In fact, in 2004, a plurality of Justices in Vieth v. Jubelirer71×71. 541 U.S. 267 (2004). resigned themselves to the idea that partisan gerrymandering claims are nonjusticiable because “no judicially discernible and manageable standards for adjudicating political gerrymandering claims have emerged.”72×72. Id. at 281 (plurality opinion). Four Justices dissented, offering various standards for adjudicating such cases. See id. at 319–20 (Stevens, J., dissenting); id. at 343 (Souter, J., dissenting); id. at 355–56 (Breyer, J., dissenting). However, in his concurrence, Justice Kennedy held out hope for judicial review, challenging lower courts to search for the kind of standard that the plurality had given up on finding.73×73. Id. at 311–13 (Kennedy, J., concurring in the judgment) (“That no such standard has emerged in this case should not be taken to prove that none will emerge in the future. Where important rights are involved, the impossibility of full analytical satisfaction is reason to err on the side of caution.” Id. at 311.). Recently, in Whitford v. Gill,74×74. No. 15-cv-421-bbc, 2016 WL 6837229 (W.D. Wis. Nov. 21, 2016), appeal docketed, No. 16-1161 (U.S. Mar. 24, 2017). a three-judge panel of the U.S. District Court for the Western District of Wisconsin outlined a method for evaluating claims of partisan gerrymandering and struck down a state redistricting scheme as unconstitutionally partisan.75×75. Id. at *1. On January 27, 2017, the court ordered the defendants to enact a new districting plan by November 1, 2017. Whitford v. Gill, No. 15-cv-421-bbc, 2017 WL 383360, at *3 (W.D. Wis. Jan. 27, 2017), appeal docketed, No. 16-1161 (U.S. Mar. 24, 2017). By narrowly defining the degree and duration of partisan advantage that would rise to the level of invidiousness and employing an innovative measure of voting power, the majority put forth a discernible and manageable standard for assessing claims of partisan gerrymandering.

When population changes reported in the 2010 census prompted the redrawing of state legislative district lines in Wisconsin, Republicans held a majority in both houses of the state legislature, and a Republican was governor.76×76. Whitford, 2016 WL 6837229, at *3. In Wisconsin, the state legislature is responsible for drafting new district lines. Wis. Const. art. IV, § 3. Reapportionment schemes must ensure districts maintain roughly equal populations to satisfy the Fourteenth Amendment’s one-person, one-vote requirement.77×77. See Evenwel v. Abbott, 136 S. Ct. 1120, 1124 (2016); Reynolds v. Sims, 377 U.S. 533, 568 (1964) (“[T]he Equal Protection Clause requires that the seats in both houses of a bicameral state legislature must be apportioned on a population basis.”). District lines must also comply with traditional criteria like contiguity and compactness78×78. For example, the Wisconsin Constitution requires that new district lines create contiguous and compact areas and reflect, to the extent possible, the borders of other political subdivisions. Wis. Const. art. IV, § 4. Relevant political subdivisions include “county, precinct, town or ward lines.” Id. Districts must also be drawn so that “no assembly district shall be divided in the formation of a senate district.” Id. § 5. These considerations mirror the “traditional criteria” used to evaluate gerrymandering under federal law. Miller v. Johnson, 515 U.S. 900, 916 (1995). and with requirements of the Voting Rights Act.79×79. Pub. L. No. 89-110, 79 Stat. 437 (1965) (codified as amended in scattered sections of 52 U.S.C.).

Over the course of several months, staff members of Republican legislative leaders80×80. Whitford, 2016 WL 6837229, at *3. drafted district maps that achieved varying levels of partisan advantage.81×81. Versions of maps were even labeled according to whether the advantage secured by the particular map was “Assertive” or “Aggressive.” Id. at *6. The team used redistricting software that provided data on population demographics and current political boundaries to help them make decisions and to keep an eye on adherence to state and federal requirements.82×82. Id. at *4–5. The drafters also used the software to create a metric to assess the partisan composition of new districts, confirming with a political science professor that their score was an accurate proxy for an area’s political makeup.83×83. Id. That same professor provided the drafters with visuals depicting “the partisan performance of a particular map under all likely electoral scenarios.”84×84. Id. at *7.

Republican leadership reviewed several drafts of regional maps with the relevant partisan scores and chose drafts for each region.85×85. Id. The drafters combined these selections to create the final map and performed additional partisan evaluations.86×86. Id. at *7–8. The political science professor determined “that Republicans would maintain a majority under any likely voting scenario.”87×87. Id. at *8; see also id. (“[I]ndeed, [Republicans] would maintain a 54 seat majority while garnering only 48% of the statewide vote. The Democrats, by contrast, would need 54% of the statewide vote to capture a majority.”). The final map and information about the partisan makeup of the voters in the relevant districts was presented to Republican legislators.88×88. Id. Notes from one of the drafters included the statements: “‘The maps we pass will determine who’s here 10 years from now,’ and ‘[w]e have an opportunity and an obligation to draw these maps that Republicans haven’t had in decades.’” Id. (alteration in original) (citation omitted). The redistricting plan was passed by the state legislature, signed by the Governor, and published as Act 43 on August 23, 2011.89×89. 2011 Wis. Sess. Laws 708. In the 2012 election, Republicans won 60.6% of the assembly seats with just 48.6% of the statewide vote and, in the 2014 election, won 63.6% of the assembly seats with 52% of the vote.90×90. Whitford, 2016 WL 6837229, at *9.

After these elections, plaintiffs — registered Wisconsin voters who “almost always vote for Democratic candidates” — alleged that Act 43 purposely and discriminatorily diluted Democrats’ votes statewide.91×91. Id. The majority addressed standing at the end of the opinion, finding that the plaintiffs suffered a cognizable harm caused by Act 43 and that a favorable decision could redress the harm. Id. at *67–70. In particular, they accused the state of employing gerrymander-ing techniques that “wasted”92×92. Per the majority: “‘Wasted’ is merely a term of art used to describe votes cast for losing candidates and votes cast for winning candidates in excess of 50% plus one . . . .” Id. at *9 n.79. Democrats’ votes — both by spreading them out so they could not achieve a district majority (“cracking”) and by concentrating voters in a small number of districts to limit the number of seats their party could win (“packing”).93×93. Complaint at 14–15, Whitford, 2016 WL 6837229 (No. 15-cv-421-bbc), 2015 WL 4651084. This strategy, they claimed, constituted an unconstitutional gerrymander.94×94. Id. at 3–5. The plaintiffs claimed First and Fourteenth Amendment violations. Id. at 1.

A three-judge panel of the U.S. District Court for the Western District of Wisconsin agreed.95×95. Whitford, 2016 WL 6837229, at *1. Writing for the majority, Judge Ripple96×96. Judge Ripple, a judge on the on the U.S. Court of Appeals for the Seventh Circuit, was sitting by designation. He was joined by Judge Crabbe. first engaged in a lengthy exegesis of Supreme Court precedent on gerrymandering,97×97. Whitford, 2016 WL 6837229, at *17–35. maintaining that precedent still held that “an excessive injection of politics is unlawful.”98×98. Id. at *18 (quoting Vieth v. Jubelirer, 541 U.S. 267, 293 (2004) (plurality opinion) (emphasis omitted)). To identify excessive partisanship, the majority adopted the plaintiffs’ three-prong standard: a districting plan violates the Constitution if it “(1) is intended to place a severe impediment on the effectiveness of the votes of individual citizens on the basis of their political affiliation, (2) has that effect, and (3) cannot be justified on other, legitimate legislative grounds.”99×99. Id. at *35; see also Complaint, supra note 24, at 9–24. The majority did not provide distinct standards for First and Fourteenth Amendment claims but offered this test for evaluating both.

The majority then applied each prong of the test to Act 43. First, recognizing that precedent allows for some political considerations in redistricting and the political reality that partisan considerations will inevitably play some role,100×100. Whitford, 2016 WL 6837229, at *36. the majority needed to define intent in a way that created a rational dividing line between legal partisan considerations and invidious partisan gerrymandering. To accomplish this objective, the majority focused on a clear definition of the harm associated with unconstitutional partisan gerrymanders: entrenchment of power.101×101. Id. at *38 (“[A]n intent to entrench a political party in power signals an excessive injection of politics into the redistricting process . . . .”). The majority adopted a narrow definition of entrenchment as “making that party — and therefore the state government — impervious to the interests of citizens affiliated with other political parties.”102×102. Id. The majority inferred the intent to entrench from the kinds of maps that were generated and the analysis that was undertaken.103×103. Id. at *41.

This anti-entrenchment principle guided the rest of the majority’s analysis as well. In assessing the effects prong, the majority reviewed election results from 2012 and 2014, as well as statistical analyses offered by expert witnesses, determining that the districting map had achieved its intended effect.104×104. Id. at *46–48. The majority also employed a new measure called the Efficiency Gap (EG) to corroborate these findings. The EG evaluates the effect of a political gerrymander by comparing the number of wasted votes for each party: “Because the party with a favorable EG wasted fewer votes than its opponent, it was able to translate, with greater ease, its share of the total votes cast in the election into legislative seats.”105×105. Id. at *9. The majority determined that Wisconsin’s pro-Republican EG of 13% for the 2012 elections and 10% for the 2014 elections demonstrated invidious partisan gerrymandering.106×106. See id. at *51–52. The majority cited two versions of the EG calculation: full and simplified. Because the full method was not used to perform durational analysis, the simple method is primarily cited here. Additional analysis demonstrated that an EG over 7% in the first election under a given plan would allow for partisan advantage to extend through the life of the districting scheme.107×107. Id. at *51.

With the first two prongs satisfied, the majority turned to the third prong, discussing possible justifications for the entrenchment caused by Act 43.108×108. Id. at *56–67. In particular, the majority noted that Democrats’ tendency to live in more concentrated areas created a natural Republican advantage.109×109. Id. at *62. But the majority found this justification insufficient: it did not “explain the magnitude of Act 43’s partisan effect, and . . . why the plan’s drafters created and passed on several less burdensome plans that would have achieved their lawful objectives in equal measure.”110×110. Id. at *65.

Judge Griesbach dissented.111×111. Id. at *71 (Griesbach, J., dissenting). First, he took issue with the majority’s inclusion of intent in the test for partisan gerrymandering, noting that the Constitution should address political intent, if it needed to be addressed at all, by making a different body responsible for redistricting — an action outside the scope of the court’s authority.112×112. Id. at *73. He also argued against the use of entrenchment as a touchstone for unconstitutionality, maintaining instead that a standard based on deviation from traditional districting criteria would be more acceptable to the Supreme Court.113×113. See id. at *79–80. Judge Griesbach also noted that, of the five Justices who accepted the justiciability of partisan gerrymandering, three put forward standards that consider deviation from traditional standards of districting. Id. at *79.

Finally, the dissent decried the majority’s “elevat[ion of] the efficiency gap theory from the annals of a single, non-peer-reviewed law review article to the linchpin of constitutional elections jurisprudence.”114×114. Id. at *84 (referring to Nicholas O. Stephanopoulos & Eric M. McGhee, Partisan Gerrymandering and the Efficiency Gap, 82 U. Chi. L. Rev. 831 (2015)). Judge Griesbach pointed to a series of shortcomings that rendered the EG measure unreliable. For example, on the theoretical side, the EG measure conceived of proportional representation as a right115×115. Id. at *84–88. and mischaracterizes losing votes as wasted, even though “they shape the larger political debate.”116×116. Id. at *90. Judge Griesbach also pointed to practical issues, including the EG measure’s volatile nature — created by the high number of wasted votes inherent in close races — and the fact that it can be significantly reduced by controlling for political geography.117×117. Id. at *92–98.

The Whitford majority effectively addressed key justiciability issues raised by the Supreme Court in Vieth, answering the Court’s call for a discernible and manageable standard for assessing constitutional claims of partisan gerrymandering. The majority confined its definition of entrenchment to the egregious facts at issue in this case and kept its standard grounded in clear and long-standing equal protection principles.118×118. See, e.g., Reynolds v. Sims, 377 U.S. 533, 565 (1964) (emphasizing the need for “each citizen [to] have an equally effective voice in” state elections). In this way, the majority identified a dividing line between the inevitable and the invidious use of partisanship in the redistricting process. Furthermore, this definition and the assessment that the majority undertook — supported by the EG measure — evinces the standard’s manageability.

First, the anti-entrenchment principle at the foundation of the majority’s test offers a discernible dividing line between inherent and invidious gerrymandering. Even the Vieth plurality acknowledged that some level of partisan consideration is unconstitutional.119×119. See Vieth v. Jubelirer, 541 U.S. 267, 293 (2004) (plurality opinion). Thus, the challenge left for lower courts was not establishing whether high levels of partisan consideration ever violated equal protection, but when the line was crossed. For decades, equal protection jurisprudence has focused on protecting against vote dilution.120×120. See Fortson v. Dorsey, 379 U.S. 433, 439 (1965); Reynolds, 377 U.S. at 555 (“And the right of suffrage can be denied by a debasement or dilution of the weight of a citizen’s vote just as effectively as by wholly prohibiting the free exercise of the franchise.”). By its very nature, an anti-entrenchment principle — which looks for districting schemes that curtail the impact of shifts in voting — allows courts to identify and thus prevent the degradation of voting rights by partisan gerrymanders.121×121. See Michael J. Klarman, Majoritarian Judicial Review: The Entrenchment Problem, 85 Geo. L.J. 491, 506–07 (1997) (“[E]ntrenching efforts by current majorities . . . are inconsistent with a future majority’s right to control its own destiny.” Id. at 506.); see also Samuel Issacharoff & Pamela S. Karlan, Where to Draw the Line?: Judicial Review of Political Gerrymanders, 153 U. Pa. L. Rev. 541, 544 n.17 (2004) (“[O]ne person, one vote’s individualistic rhetoric may have come to obscure its original purposes of combating entrenchment and safeguarding majority rule.”). By tying its standard to this cognizable constitutional harm, the majority established a discernible test.122×122. With this test, the majority addresses the concern that the “Court may not willy-nilly apply standards — even manageable standards — having no relation to constitutional harms.” Vieth, 541 U.S. at 295 (plurality opinion).

Additionally, given the degree and likely duration of the electoral advantage attained by the Republicans in this case, the majority was able to rely on a narrow definition of entrenchment and thus provide a more easily discernible standard than tests previously rejected by the Supreme Court.123×123. This factor also speaks to the standard’s manageability. However, because some level of partisanship can exist in redistricting processes, Whitford, 2016 WL 6837229, at *36, it is important to discuss here that courts could identify unconstitutional partisan influence under this standard when it exists. While acknowledging that less egregious or enduring schemes than those reached by its test might violate equal protection standards,124×124. Id. at *38 (noting that “gray may span the area between acceptable and excessive”). the majority wisely avoided answering that broader question. Instead, the majority focused on the duration of voter disenfranchisement to establish definable bounds.125×125. For example, a districting scheme that renders it unlikely that the opposing party would ever attain majority power even with majority votes would be unconstitutional, whereas a scheme that is responsive to changes in parties’ vote shares over time would be permissible. While it chose not to identify an exact numerical threshold,126×126. See Whitford, 2016 WL 6837229, at *55 n.311 (noting that, because the EG in the current case far exceeded the 7% threshold put forward by the plaintiffs, it was not necessary to “reach the propriety of the 7% number”). the majority drew the line at the point when partisan advantage — intended and effectuated through a particular redistricting plan — will persist despite reasonable swings in parties’ vote shares.127×127. See id. at *52. Including consideration of a “future majority” addresses the dissent’s argument that entrenchment must be carried out by a current minority, id. at *76 (Griesbach, J., dissenting). In establishing this line, the majority sidestepped a potential pitfall to which other proposed standards have fallen prey: indeterminacy.128×128. See Vieth v. Jubelirer, 541 U.S. 267, 281–84 (2004) (plurality opinion) (criticizing the Davis v. Bandemer, 478 U.S. 109 (1986), effects prong, which required an analysis of voter influence on the election, as being nebulous, indeterminate, and unenforceable). Whitford’s standard does not rely on “some indeterminate period.”129×129. Id. at 300. Instead, it bases its assessment on likely outcomes for the duration of the district map at issue — that is, through the next decennial period.130×130. See Whitford, 2016 WL 6837229, at *44; see also id. at *51–52 (“[N]early all [redistricting] plans that resulted in a 7% efficiency gap favoring one party in the first election year will retain an efficiency gap that favors that same party, even when one adjusts a party’s statewide vote share by five points.” Id. at *51.).

Furthermore, the anti-entrenchment principle does not demand proportional outcomes, which the Vieth plurality dismissed as not protected by the Constitution.131×131. Vieth, 541 U.S. at 288 (plurality opinion). While the dissent criticized the majority’s anti-entrenchment principle as requiring proportional representation,132×132. Whitford, 2016 WL 6837229, at *85–86 (Griesbach, J., dissenting). the question at the core of the anti-entrenchment principle is not whether outcomes are precisely proportional. Instead, it is whether disproportional outcomes are more or less fixed because one vote is more effective than another.133×133. As the majority explains: “To say that the Constitution does not require proportional representation is not to say that highly dis proportional representation may not be evidence of a discriminatory effect.” Id. at *53 (majority opinion).

Second, defining entrenchment by the durability of the districting scheme, the majority provided a standard that is manageable. Though the Court has not adopted clear criteria for assessing manageability,134×134. In fact, Professor Richard Fallon accuses the Court of “mak[ing] its judgments about whether proposed standards count as judicially manageable under criteria that would themselves fail to qualify as judicially manageable.” Richard H. Fallon, Jr., Judicially Manageable Standards and Constitutional Meaning, 119 Harv. L. Rev. 1274, 1278 (2006). intelligibility is paramount.135×135. See id. at 1285; see also Mitchell N. Berman, Managing Gerrymandering, 83 Tex. L. Rev. 781, 813 (2005) (“Without a clearer definition of excessive partisanship, we cannot know whether [a] test does a tolerable job of separating excessive partisanship from permissible partisanship.”); cf. Vieth, 541 U.S. at 291 (plurality opinion) (looking for “[s]ome criterion more solid and more demonstrably met than” a fairness standard). By providing a narrow understanding of entrenchment as a party maintaining control “under any likely future electoral scenario for the remainder of the decade,”136×136. Whitford, 2016 WL 6837229, at *44 (emphasis added). the majority drew one line against which the constitutionality of districting schemes can be assessed.137×137. See Fallon, supra note 65, at 1285 (defining intelligibility as “capability of being understood” (quoting Webster’s New Twentieth Century Dictionary of the English Language 954 (2d ed. unabr. 1979))). Even though this standard will not provide a clear answer to all partisan gerrymandering claims, this characteristic does not undermine the manageability of the test. Courts, drafters, and voters alike will still be able to identify “precisely what [courts are] testing for, [and] precisely what fails [this] test.”138×138. Vieth, 541 U.S. at 300 (plurality opinion) (criticizing a test proposed by Justice Breyer as identifying neither).

While the majority does not rely on the EG to find entrenchment,139×139. The court did not seem to foreclose the use of additional measures. the measure shores up the standard’s viability by showing it to be susceptible to quantification and thus replication. In dismissing specific tests proposed in dissenting opinions, the Vieth plurality criticized Justice Souter’s test for not actually evaluating the level of vote dilution140×140. Vieth, 541 U.S. at 297 (plurality opinion) (“[N]o element of his test looks to the effect of the gerrymander on the electoral success, the electoral opportunity, or even the political influence, of the plaintiff’s group.”). and Justice Breyer’s test for “provid[ing] no real guidance for the journey”141×141. Id. at 299. to demonstrating “unjustified entrenchment.”142×142. Id. (emphasis omitted) (quoting id. at 360 (Breyer, J., dissenting)). A majority in Vieth also found that the Davis v. Bandemer143×143. 478 U.S. 109 (1986). effects test — which was the accepted standard for assessing partisan gerrymandering until Vieth — created an uncertain threshold focused on a group’s “chance to effectively influence the political process.”144×144. Vieth, 541 U.S. at 282 (plurality opinion) (quoting Bandemer, 478 U.S. at 133); see also id. at 308 (Kennedy, J., concurring in the judgment) (agreeing that the Bandemer standard is inadequate); id. at 345–46 (Souter, J., dissenting) (same). The standard did not identify the level at which lack of influence becomes unconstitutional.145×145. See id. at 282–83 (plurality opinion). The EG measure helps the Whitford test avoid the ambiguity of these other tests by outlining the statistics to assess: the wasted votes of one party, the wasted votes of the other party, and the durability of partisan advantage over time.146×146. See Whitford, 2016 WL 6837229, at *51–52.

The Whitford majority established that there is a discernible distinction between the inevitable and the invidious use of partisanship in the redistricting process by adopting a narrow definition of entrenchment. With the support of the EG, the majority demonstrated the manageability of this standard. As a result, the majority successfully navigated the ambiguous and uncertain precedents currently governing partisan gerrymandering claims and showed that Justice Kennedy’s patience was justified.