Cavalier Knight's Challenge to N.Y. Bricks-and-Mortar Requirement for Gun Dealers Can Go Forward

An excerpt from Knight v. City of New York, decided yesterday by the Second Circuit, in an opinion by Judges Denny Chin, Richard Sullivan, and Maria Araújo Kahn:

Cavalier D. Knight, a would-be gun dealer residing in New York City [challenges a New York City regulation requiring] applicants for firearms dealer licenses to “maintain a place of business in the city,” which effectively requires the applicant to maintain a brick-and-mortar location.

The trial court concluded Knight lacked standing to bring the challenge, but the appellate court reversed, and sent the case back down for a substantive Second Amendment analysis:

To satisfy Article III’s standing requirement, “a plaintiff must demonstrate: (1) injury-in-fact, which means ‘an actual or imminent’ and ‘concrete and particularized’ harm to a ‘legally protected interest’; (2) causation of the injury, which means that the injury is ‘fairly traceable’ to the challenged action of the defendant; and (3) redressability, which means that it is ‘likely,’ not speculative, that a favorable decision by a court will redress the injury.” For an injury in fact to be concrete and particularized, it must “actually exist” and “affect the plaintiff in a personal and individual way.” …

As alleged, the City informed Knight that without a brick-and-mortar location, he would be ineligible for a dealer license. The district court, however, held that this aspect of Knight’s claim is not redressable because even with a dealer license, unchallenged New York City zoning provisions would prohibit Knight’s contemplated business.

As the magistrate judge observed, Knight plans to handle the administrative aspects of his business from his Manhattan apartment while storing his inventory at an off-site location. But under the City’s zoning laws, a residence may not be used to sell products manufactured elsewhere than in the home and offsite storage of inventory is prohibited. According to the district court and magistrate judge, any prospective relief with respect to the place-of-business requirement would therefore make no material difference to Knight’s ability to run his business.

We disagree, and conclude that the district court’s understanding of Knight’s alleged injuries, and thus of its ability to provide effective relief, was too narrow. It is well-established that a credible threat of criminal prosecution can give rise to a discrete, redressable injury under Article III…. Here, Knight alleges … [that h]e plans to run a commercial gun dealing business in New York and has taken several concrete steps toward that goal, including obtaining a federal firearms license and consulting with federal and local agencies regarding his contemplated business. Because the commercial availability of firearms is often “necessary to a citizen’s effective exercise of Second Amendment rights,” Knight’s proposed course of conduct is at least arguably affected with a constitutional interest. But without the dealer license Knight seeks—which he cannot obtain by virtue of the challenged place-of-business requirement—such conduct is specifically prohibited by state law. Knight therefore has plausibly alleged that if he starts running his business without a dealer license, he will face a credible threat of criminal prosecution. Indeed, Knight alleges that a City law-enforcement official personally threatened him with criminal prosecution for unlicensed gun dealing.

Because Knight’s vulnerability to criminal prosecution for running an unlicensed gun business gives rise to a cognizable Article III injury, we next consider whether that injury is plausibly redressable through his challenges to the place-of-business requirement. It is…. Knight’s requested injunction requiring Defendants to grant him a dealer license (or simply requiring them to evaluate his license application without requiring a brick-and-mortar location) is … likely to relieve him of the threat of felony prosecution for running an unlicensed gun dealership….

The possibility that Knight could still be subject to enforcement proceedings under the City’s zoning laws does not defeat redressability. To satisfy Article III, a plaintiff must show that his requested relief would provide meaningful redress for an injury, not that it would relieve him of every injury. And even when a plaintiff’s requested relief “cannot provide full redress” with respect to an injury, a federal court’s “ability to effectuate a partial remedy satisfies the redressability requirement.” We therefore agree with the well-reasoned view of the Seventh and Eighth Circuits that a district court’s ability to reduce the plaintiff’s aggregate criminal exposure can satisfy redressability…. “[R]emoving an additional layer of criminal liability [is] a form of redress sufficient to confer standing, even though the underlying behavior [is] still subject to prosecution.” …

Here, with a dealer license in hand, Knight could not be criminally prosecuted for unlicensed commercial gun dealing. Thus, his risk of prosecution “would be reduced to some extent,” even if not eliminated entirely, if he had a dealer license. And in the event that the City were to target Knight for separate violations of its zoning laws, the range of possible penalties would likely be lower than the penalties he would face for being an unlicensed gun dealer. Compare, e.g., N.Y. Penal Law § 265.13(2) (class B felony to sell a total of three or more firearms in any one-year period), with N.Y.C. Admin. Code § 28-203.1 (misdemeanor offense to commit an “immediately hazardous” zoning violation; even lower penalties for “major violation[s]” and “lesser violation[s]“).

We also observe that Knight has consistently taken the position in this litigation that the City’s zoning laws would not bar his contemplated gun business. Knight may be wrong about that, but it is the lack of a dealer license—and the attendant threat of criminal prosecution for running an unlicensed gun dealership—that matters for purposes of the redressability of his asserted injury, not a local zoning restriction….

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