UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT ELIZABETH FLYNT; HAIG No. 22-16376 KELEGIAN, Sr.; HAIG T. KELEGIAN, Jr., D.C. No. 2:16-cv-02831- Plaintiffs-Appellants, JAM-JDP

v. OPINION ROB BONTA, in his official capacity as Attorney General of the State of California; YOLANDA MORROW; PAULA D. LABRIE; ERIC C. HEINS; EDWARD YEE; CATHLEEN GALGIANI; WILLIAM LIU, in their official capacity as Commissioners of the California Gambling Control Commission,

Defendants-Appellees.

Appeal from the United States District Court for the Eastern District of California John A. Mendez, District Judge, Presiding

Argued and Submitted August 22, 2024 San Francisco, California

Filed March 14, 2025 2 FLYNT V. BONTA

Before: Daniel A. Bress and Lawrence VanDyke, Circuit Judges, and Robert S. Lasnik,* District Judge.

Opinion by Judge Bress

SUMMARY**

Commerce Clause

Affirming the district court’s judgment for California officials, the panel held that the cardroom licensing restrictions set forth in California Business and Professions Code §§ 19858(a) and 19858.5, which make a person ineligible for a California cardroom license if he owns more than a 1% financial interest in a business that engages in casino-style gambling or if he has control over such a business, do not violate the dormant Commerce Clause. The panel first rejected plaintiffs’ contention that §§ 19858(a) and 19858.5 violate the dormant Commerce Clause because they discriminate against interstate commerce. The provisions are not facially discriminatory nor do they have a discriminatory purpose or effect that favors in-state economic interests. Nothing in the text, history, or operation of §§ 19858(a) and 19858.5 suggests discrimination against interstate commerce.

* The Honorable Robert S. Lasnik, United States District Judge for the Western District of Washington, sitting by designation. ** This summary constitutes no part of the opinion of the court. It has been prepared by court staff for the convenience of the reader. FLYNT V. BONTA 3

The panel next rejected plaintiffs’ contention that the statutes are unconstitutional because they impermissibly regulate interstate commerce occurring wholly outside of California, precluding plaintiffs from investing in out-of- state casinos with no connection to the state. Plaintiffs’ extraterritoriality theory lacks merit because the statutes do not reach out and purport to regulate wholly out-of-state conduct; they instead condition a state license for conducting in-state activities on plaintiffs foregoing certain business interests, whether within or outside the state. Finally, the panel rejected plaintiffs’ contention that the statutes violate the dormant Commerce Clause by unduly burdening interstate commerce. Plaintiffs failed to demonstrate a significant or substantial burden on interstate commerce.

COUNSEL Erin M. Paris (argued) and Paul J. Cambria Jr., Lipsitz Green Scime Cambria LLP, Buffalo, New York, for Plaintiffs- Appellants. Joshua A. Klein (argued), Deputy Solicitor General, Office of the California Attorney General, Oakland, California; James G. Waian, Deputy Attorney General; T. Michelle Laird, Acting Senior Assistant Attorney General; Rob Bonta, California Attorney General; Office of the California Attorney General, San Diego, California; for Defendants- Appellees. Benjamin J. Horwich and Rowley J. Rice, Munger Tolles & Olson LLP, San Francisco, California, for Amicus Curiae Elevation Entertainment Group. 4 FLYNT V. BONTA

OPINION BRESS, Circuit J