State ex rel. Koster v. Harris

• Citation: 847 F.3d 646
• Decision Date: 17 November 2016
• Docket Number: No. 14-17111,14-17111
• Parties: State of MISSOURI EX REL. Chris KOSTER, Attorney General; State of Nebraska ex rel. Jon Bruning, Attorney General; State of Oklahoma ex rel. E. Scott Pruitt, Attorney General; State of Alabama ex rel. Luther Strange, Attorney General; Commonwealth of Kentucky ex rel. Jack Conway, Attorney General; Terry E. Branstad, Governor of State of Iowa, Plaintiffs–Appellants, v. Kamala D. HARRIS, in her official capacity as Attorney General of the State of California; Karen Ross, in her official capacity as Secretary of the California Department of Food and Agriculture, Defendants–Appellees, and Humane Society of the United States; Association of California Egg Farmers, Intervenor–Defendants–Appellees.
• Court: U.S. Court of Appeals — Ninth Circuit

847 F.3d 646

State of MISSOURI EX REL. Chris KOSTER, Attorney General; State of Nebraska ex rel. Jon Bruning, Attorney General; State of Oklahoma ex rel. E. Scott Pruitt, Attorney General; State of Alabama ex rel. Luther Strange, Attorney General; Commonwealth of Kentucky ex rel. Jack Conway, Attorney General; Terry E. Branstad, Governor of State of Iowa, Plaintiffs–Appellants,

v.Kamala D. HARRIS, in her official capacity as Attorney General of the State of California; Karen Ross, in her official capacity as Secretary of the California Department of Food and Agriculture, Defendants–Appellees,andHumane Society of the United States; Association of California Egg Farmers, Intervenor–Defendants–Appellees.

No. 14-17111

United States Court of Appeals, Ninth Circuit.

Argued and Submitted October 19, 2016, San Francisco, California

Filed November 17, 2016

Amended January 17, 2017

J. Andrew Hirth (argued), Deputy General Counsel, Office of the Missouri Attorney General, Jefferson City, Missouri, for Plaintiffs–Appellants.

Paul Stein (argued) and Stephanie F. Zook, Deputy Attorneys General; Constance L. LeLouis, Supervising Deputy Attorney General; Douglas J. Woods, Senior Assistant Attorney General; Kamala D. Harris, Attorney General; Office of the Attorney General, San Francisco, California; for Defendants–Appellees.

Bruce Wagman (argued), Schiff Hardin LLP, San Francisco, California; Rebecca Cary and Peter A. Brandt, Humane Society of the United States, Washington, D.C.; Jonathan Y. Ellis and J. Scott Ballenger, Latham & Watkins LLP, Washington, D.C.; for Intervenor–Defendant–Appellee Humane Society of the United States.

Carl Nichols (argued), Thomas G. Sprankling, Adam I. Klein, and Francesco Valenti, Wilmer Cutler Pickering Hale and Dorr LLP, Washington, D.C.; Randall R. Lee, Wilmer Cutler Pickering Hale and Dorr LLP, Los Angeles, California; for Intervenor–Defendant–Appellee Association of California Egg Farmers.

Sean D. Reyes, Utah Attorney General; Parker Douglas, Utah Federal Solicitor; Utah Attorney General's Office, Salt Lake City, Utah; for Amicus Curiae State of Utah.

Timothy S. Bishop, Michael B. Kimberly, and James F. Tierney, Mayer Brown LLP, Washington, D.C.; Ellen B. Steen and Danielle Hallcom Quist, America Farm Bureau Federation, Washington, D.C.; for Amicus Curiae American Farm Bureau Federation.

Diane L. McGimsey, Edward E. Johnson, Janet Y. Galeria, and Jonathon D. Townsend, Sullivan & Cromwell LLP, Los Angeles, California, for Amici Curiae Animal Legal Defense Fund; Compassion Over Killing, Inc.; and Farm Sanctuary, Inc.

Before: Susan P. Graber and Mary H. Murguia, Circuit Judges, and Raner C. Collins,^* Chief District Judge.

ORDER

The opinion filed November 17, 2016, and published at 842 F.3d 658, is amended by the opinion filed concurrently with this order. No further petitions for rehearing or rehearing en banc may be filed.

OPINION

GRABER, Circuit Judge:

California enacted laws and regulations prescribing standards for the conditions under which chickens must be kept in order for their eggs to be sold in the state. Plaintiffs are six states, which sued to block enforcement of those laws and regulations before they took effect. We agree with the district court that Plaintiffs lacked standing to bring this case as parens patriae . We also hold that the district court did not err in denying Plaintiffs leave to amend their complaint. But because the action should have been dismissed without prejudice, we affirm but remand with instructions to dismiss the action without prejudice.

In the 2008 general election, California voters adopted Proposition 2, which enacted new standards beginning on January 1, 2015, for housing farm animals within California including, as relevant here, egg-laying hens. Cal. Health & Safety Code §§ 25990 –94. Under Proposition 2, hens may not be confined for the majority of any day "in a manner that prevents [them] from: (a) Lying down, standing up, and fully extending [their] limbs; and (b) Turning around freely." Id. § 25990. A violation of these standards is punishable by a $1,000 fine or imprisonment of 180 days in county jail, or both. Id. § 25993.

In 2010, California's legislature adopted Assembly Bill 1437 ("AB1437"), which mandated, also beginning on January 1, 2015, that "a shelled egg shall not be sold or contracted for sale for human consumption in California if the seller knows or should have known that the egg is the product of an egg-laying hen that was confined on a farm or place that is not in compliance with animal care standards set forth in [Proposition 2]." Cal. Health & Safety Code § 25996. Therefore, all eggs sold in California must comply with Proposition 2. In 2013, the California Department of Food and Agriculture promulgated egg-related regulations, including salmonella prevention measures and minimum cage sizes for egg-laying hens, all of which also carried an effective date of January 1, 2015. Cal. Code Regs. tit. 3, § 1350(d)(1).

On February 3, 2014, the State of Missouri filed a complaint in the Eastern District of California, asking the court to declare AB1437 and California Code § 1350(d)(1) (collectively the "Shell Egg Laws") invalid, as violating the Commerce Clause or as preempted by federal statute, and to enjoin California from enforcing the laws. Plaintiffs then filed their First Amended Complaint (the "complaint"), joining the States of Nebraska, Oklahoma, Alabama, and Kentucky and the Governor of Iowa as additional plaintiffs. The Humane Society of the United States and the Association of California Egg Farmers ("Intervenors") moved to intervene as defendants, which the court allowed. Defendants filed a motion to dismiss for lack of subject matter jurisdiction; Intervenors filed their own, similar motions. The district court granted the motions to dismiss, with prejudice. The court concluded that Plaintiffs lacked standing as parens patriae , held that their claim was not justiciable, and denied leave to amend as futile. Plaintiffs timely appeal.

A. Parens Patriae Standing

States asserting parens patriae standing must meet both the basic requirements of Article III standing and the unique requirements of that doctrine. Table Bluff Reservation (Wiyot Tribe) v. Philip Morris, Inc. , 256 F.3d 879, 885 (9th Cir. 2001). "To establish Article III standing, an injury must be concrete, particularized, and actual or imminent; fairly traceable to the challenged action; and redressable by a favorable ruling." Clapper v. Amnesty Int'l USA , ––– U.S. ––––, 133 S.Ct. 1138, 1147, 185 L.Ed.2d 264 (2013) (internal quotation marks omitted). In a parens patriae case, there are two additional requirements. First, "the State must articulate an interest apart from the interests of particular private parties, i.e. , the State must be more than a nominal party." Alfred L. Snapp & Son, Inc. v. Puerto Rico ex rel. Barez ("Snapp") , 458 U.S. 592, 607, 102 S.Ct. 3260, 73 L.Ed.2d 995 (1982). Second, "[t]he State must express a quasi-sovereign interest." Id. On de novo review, Habeas Corpus Res. Ctr. v. U.S. Dep't of Justice , 816 F.3d 1241, 1247 (9th Cir. 2016), we conclude that Plaintiffs have not met the first requirement. We therefore need not, and do not, reach the second part of the test, nor do we reach the issue of ripeness.

There are no "definitive limits on the proportion of the population of the State that must be adversely affected." Snapp , 458 U.S. at 607, 102 S.Ct. 3260. But "more must be alleged than injury to an identifiable group of individual residents." Id. "[T]he indirect effects of the injury must be considered as well in determining whether the State has alleged injury to a sufficiently substantial segment of its population." Id.¹

Concerning the parties, the complaint alleges: "Missouri farmers produced nearly two billion eggs in 2012 and generated approximately $171 million in revenue for the state"; "Nebraska is one of the top ten largest egg producers in the United States"; "Alabama is one of the top fifteen largest egg producers in the United States"; "Kentucky farmers produced approximately 1.037 billion eggs in 2012 and generated approximately $116 million in revenue for the state"; "Oklahoma farmers produced more than 700 million eggs in 2012 and generated approximately $90 million in revenue for the state"; and "Iowa is the number one state in egg production[,] Iowa farmers produce over 14.4 billion eggs per year," and "[t]he cost to Iowa farmers to retrofit existing housing or build new housing that complies with AB1437 would be substantial."

The laws "forc[e] Plaintiffs' farmers either to forgo California's markets altogether or accept significantly increased production costs just to comply." That is, "Plaintiffs' egg farmers must choose either to bring their entire operations into compliance ... or else simply leave the California marketplace." "[T]he necessary capital improvements [would] cost Plaintiffs' farmers hundreds of millions of dollars," and, without access to the California market, "supply would outpace demand by half a billion eggs, causing the price of eggs—as well as egg farmers' margins—to fall throughout the Midwest and potentially forc[e] some Missouri producers out of business. The same goes for egg producers in Nebraska, Alabama, Oklahoma, Kentucky, and Iowa."

In short, the complaint alleges the importance of the California market to egg farmers in the Plaintiff States and the difficult choice that egg farmers face in deciding whether to comply with the Shell Egg Laws. The complaint contains no specific allegations about the statewide magnitude of these difficulties² or the extent to which they affect more than just an "identifiable group of individual" egg farmers. Snapp , 458 U.S. at 607, 102 S.Ct. 3260.

Plaintiffs advance several theories to demonstrate "an interest apart from the interests of particular private parties" and an effect on "a sufficiently substantial segment of [the] population." Id. First, Plaintiffs allege harm...