B&G Foods N. Am., Inc. v. Embry

Decision Date17 March 2022
Docket NumberNo. 20-16971,20-16971
Parties B&G FOODS NORTH AMERICA, INC., Plaintiff-Appellant, v. Kim EMBRY; Noam Glick, Defendants-Appellees.
CourtU.S. Court of Appeals — Ninth Circuit

J. Noah Hagey (argued), Athul K. Acharya, David Kwasniewski, Tracy O. Zinsou, Braunhagey & Borden LLP, San Francisco, California, for Plaintiff-Appellant.

Shaun Markley (argued) and Craig M. Nicholas, Nicholas & Tomasevic, LLP, San Diego, California; Noam Glick, Glick Law Group, P.C., San Diego, California; Jonathan Weissglass, Law Office of Jonathan Weissglass, Oakland, California; for Defendants-Appellees.

Trenton H. Norris, Peg Carew Toledo, and David M. Barnes, Arnold & Porter Kaye Scholer LLP, San Francisco, California, for Amicus Curiae Consumer Brands Association.

Before: Ronald M. Gould, Mark J. Bennett, and Ryan D. Nelson, Circuit Judges.

BENNETT, Circuit Judge:

Plaintiff-Appellant B&G Foods North America, Inc. ("B&G"), a food manufacturer, sued Defendants-Appellees Kim Embry and her attorney, Noam Glick (collectively, "Defendants") under 42 U.S.C. § 1983. B&G alleges that Defendants violated its constitutional rights by threatening to sue and ultimately suing B&G to enforce California's Safe Drinking Water and Toxic Enforcement Act of 1986, better known as Proposition 65 or Prop. 65. The district court dismissed B&G's complaint based on the Noerr - Pennington doctrine1 and denied leave to amend based on futility. B&G challenges those determinations. We have jurisdiction under 28 U.S.C. § 1291. We affirm the district court's decision that the Noerr - Pennington doctrine bars B&G's complaint, but we reverse the denial of leave to amend and remand to give B&G an opportunity to amend.

I. FACTS AND PROCEDURAL BACKGROUND2

This case arises from Defendants' enforcement of Prop. 65, which, as relevant here, requires businesses to notify customers if their products contain chemicals "known to the state to cause cancer

." Cal. Health & Safety Code § 25249.6. California's Office of Environmental Health Hazard Assessment ("OEHHA") maintains a list of such chemicals. See id. § 25249.8. Acrylamide, the chemical at issue, is on the list based solely on "laboratory studies in which pure acrylamide was given to rats or mice." Studies on humans have shown that acrylamide does not increase the risk of cancer. Indeed, OEHHA conceded in 2007 that acrylamide is not known to cause cancer in humans.

Any "person in the public interest" may bring a Prop. 65 enforcement action upon satisfying certain requirements. Cal. Health & Safety Code § 25249.7(d). Private enforcers can seek injunctive relief and penalties of up to $2,500 per day per violation. Id. § 25249.7(a), (b)(1). A private enforcer receives 25% of any penalty collected, id. § 25249.12(d), and may also request reasonable attorneys' fees, Cal. Civ. Proc. Code § 1021.5. The state receives 75% of the penalty collected. Cal. Health & Safety Code § 25249.12(c).

Before bringing a private enforcement action, the person must give sixty days' notice of alleged violation ("NOV") to the Attorney General, other local prosecutors, and the alleged violator. Id. § 25249.7(d)(1). After receiving the NOV, the Attorney General must issue a no-merit letter if he believes the action is meritless, but the failure to do so is not an endorsement that the action has merit. Id. § 25249.7(e)(1). A no-merit letter doesn't prevent the person from bringing a private enforcement action. If the Attorney General or other prosecutor doesn't begin a prosecution within the sixty days' notice period, the person may commence a private enforcement action. Id. § 25249.7(d)(2).

California law offers businesses like B&G at least two exemptions under Prop. 65. First, a business need not provide a cancer

warning if it "can show that the exposure poses no significant risk assuming lifetime exposure at the level in question for substances known to the state to cause cancer." Id. § 25249.10(c). This is known as the "No Significant Risk Level" ("NSRL"). For some listed chemicals, like acrylamide, the OEHHA has published a quantitative NSRL. See Cal. Code Regs. tit. 27, § 25705. To determine whether exposure from a chemical in a food product exceeds the NSRL, the exposure is calculated based on the "average rate of intake or exposure for average users of the consumer product." Id. § 25721(d)(4). Because this scientific assessment is very burdensome and often inconclusive (as enforcers disagree on how average consumption should be calculated), businesses often choose to settle when their products pose no health risks. Second, another exemption applies to products "where chemicals in food are produced by cooking necessary to render the food palatable or to avoid microbiological contamination." Id. § 25703(b)(1). But to qualify under this exemption, a business must satisfy a vague standard—that "sound considerations of public health support" an alternative risk level. Id. § 25703(b). In sum, because the standards are unclear and burdensome to prove, businesses often choose to settle Prop. 65 cases for certainty and to avoid paying substantial legal fees.

Embry, represented by Glick, has filed or threatened to file dozens of Prop. 65 acrylamide suits against food businesses and retailers. Over the last few years, Defendants have obtained about $1.7 million in penalties and fines from these actions. Consistent with Defendants' past practice, they began a Prop. 65 enforcement action against B&G. Glick, on behalf of Embry, served an NOV on B&G and the Attorney General (and others). The NOV alleged that B&G was violating Prop. 65 because its "Cookie Cakes" contain acrylamide and B&G provides no cancer

warning. The Attorney General did not issue a no-merit letter and did not begin enforcement proceedings. Embry, again represented by Glick, then sued B&G in state court, alleging that B&G's Cookie Cakes contain acrylamide and that B&G's failure to warn customers of that fact violates Prop. 65. Although B&G doesn't add acrylamide to its Cookie Cakes, they contain some amount of acrylamide formed during the baking process.

On the same day Embry sued B&G, B&G sued Defendants. B&G's complaint alleges that the naturally occurring acrylamide found in its Cookie Cakes does not cause cancer

. B&G claims Defendants are liable under 42 U.S.C. § 1983 because the NOV and suit against B&G requires B&G to engage in false compelled speech in violation of the First Amendment. B&G seeks, among other things, an injunction barring any threats or lawsuits about acrylamide found in its Cookie Cakes, a declaration that Prop. 65's cancer

warning as applied to its Cookie Cakes violates the First Amendment, and damages.

Defendants moved to dismiss the complaint under Federal Rule of Civil Procedure 12(b)(6), arguing that (1) they are not state actors,3 and (2) the Noerr - Pennington doctrine bars the action. B&G argued in opposition that Defendants are state actors in enforcing Prop. 65. It also argued that the Noerr - Pennington doctrine doesn't apply because (1) the doctrine protects First Amendment rights and states have no First Amendment rights, and (2) the sham exception to Noerr - Pennington applies because Defendants' Prop. 65 lawsuit is objectively meritless and brought for the wrongful subjective purpose of extorting money from businesses.

The district court granted the motion to dismiss with prejudice. Assuming without deciding that Defendants were state actors, the court determined that Noerr - Pennington immunized Defendants from § 1983 liability. The district court rejected B&G's argument that Defendants had no First Amendment petitioning rights protected by Noerr - Pennington . It reasoned that while states themselves do not have First Amendment rights, under Ninth Circuit precedent, government actors may receive Noerr - Pennington immunity when they petition on behalf of the public. The district court found that Defendants' petitioning activities—sending prelitigation communications and suing—were done to enforce Prop. 65, which was a ballot measure sanctioned by California voters, and thus Defendants were petitioning on behalf of the public and entitled to Noerr - Pennington immunity. The district court also rejected B&G's arguments that Defendants' Prop. 65 enforcement action was a sham, because Defendants had been largely successful given the allegation in B&G's complaint that "over the last few years, [Defendants] have extracted nearly $1.7 million in penalties and fines from food companies" in acrylamide suits. After determining that the complaint should be dismissed, the district court denied B&G leave to amend. The district court reasoned that any amendment would be futile because "[t]he Noerr - Pennington doctrine would apply equally to all claims based on Embry's acrylamide litigation against B&G." B&G timely appealed.

II. STANDARD OF REVIEW

We review de novo "a district court's dismissal based on the Noerr Pennington doctrine." Kearney v. Foley & Lardner, LLP , 590 F.3d 638, 643 (9th Cir. 2009). In doing so, "[w]e accept as true the well-pleaded factual allegations in the complaint" and construe them in the nonmoving party's favor. Ebner v. Fresh, Inc. , 838 F.3d 958, 962 (9th Cir. 2016).

"We review the denial of leave to amend for an abuse of discretion, but we review the question of futility of amendment de novo." United States v. United Healthcare Ins. Co. , 848 F.3d 1161, 1172 (9th Cir. 2016) (citations omitted).

III. DISCUSSION
A. The Noerr- Pennington Doctrine

"The Noerr Pennington doctrine derives from the Petition Clause of the First Amendment and provides that ‘those who petition any department of the government for redress are generally immune from statutory liability for their petitioning conduct.’ " Kearney , 590 F.3d at 643–44 (quoting Sosa v. DIRECTV, Inc. , 437 F.3d 923, 929 (9th Cir. 2006) ). "The doctrine immunizes petitions directed at any branch of government,...

To continue reading

Request your trial
12 cases
  • Cal. Chamber of Commerce v. Council for Educ. & Research on Toxics
    • United States
    • U.S. Court of Appeals — Ninth Circuit
    • 17 Marzo 2022
  • D'Augusta v. Am. Petroleum Inst.
    • United States
    • U.S. District Court — Northern District of California
    • 9 Enero 2023
    ... ... Capital Corporation, Continental Resources Inc., Devon Energy ... Corporation, Energy Transfer LP, Exxon Mobil Corporation, ... Noerr-Pennington .” See B&G Foods N ... Am., Inc. v. Embry , 29 F.4th 527, 540 (9th Cir. 2022) ... Taken as true, the ... ...
  • Morris v. State
    • United States
    • U.S. Court of Appeals — Ninth Circuit
    • 22 Julio 2022
    ... ... de novo. Mudpie, Inc. v. Travelers Cas. Ins. Co. of ... Am., 15 F.4th 885, 889 (9th Cir ... B&G Foods N. Am., Inc. v. Embry, 29 F.4th 527, ... 541 (9th Cir. 2022) ... ...
  • Sanderling Mgmt. v. Snap Inc.
    • United States
    • U.S. Court of Appeals — Federal Circuit
    • 12 Abril 2023
    ... ... reviews the question of futility of amendment de novo." ... B&G Foods N. Am., Inc. v. Embry, 29 F.4th 527, ... 534 (9th Cir. 2022) ... ...
  • Request a trial to view additional results

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT