Calm Ventures LLC v. Newsom

• Decision Date: 13 July 2021
• Docket Number: CV 20-11501-JFW(PVCx)
• Parties: CALM VENTURES LLC v. Gavin NEWSOM, et al.
• Court: U.S. District Court — Central District of California

548 F.Supp.3d 966

CALM VENTURES LLC

v.Gavin NEWSOM, et al.

CV 20-11501-JFW(PVCx)

United States District Court, C.D. California.

Filed July 13, 2021

Dev Deep Das, Alexandra S. Kazarian, Mark John Geragos, Matthew Michael Hoesly, Geragos and Geragos APC, Los Angeles, CA, Mark P. Meuser, Harmeet K. Dhillon, Dhillon Law Group Inc., San Francisco, CA, for Calm Ventures LLC.

Anthony J. Tartaglio, CAAG - Office of Attorney General California Department of Justice, San Francisco, CA, for Gavin Newsom, Xavier Becerra, Erica S. Pan, Rob Bonta.

PROCEEDINGS (IN CHAMBERS): ORDER GRANTING DEFENDANTS’ MOTION TO DISMISS [filed 5/14/21; Docket No. 60]

JOHN F. WALTER, UNITED STATES DISTRICT JUDGE

On May 14, 2021, Defendants Gavin Newsom ("Newsom"), Rob Bonita ("Bonita"), and Erica Pan ("Pan") in their official capacities (collectively, "Defendants"), filed a Motion to Dismiss ("Motion"). On May 24, 2021, Plaintiff Calm Ventures LLC, d/b/a Pineapple Hill Saloon and Grill ("Plaintiff") filed its Opposition. On May 27, 2021, Defendants filed a Reply. Pursuant to Rule 78 of the Federal Rules of Civil Procedure and Local Rule 7-15, the Court found the matter appropriate for submission on the papers without oral argument. The matter was, therefore, removed from the Court's June 14, 2021 hearing calendar and the parties were given advance notice. After considering the moving, opposing, and reply papers, and the arguments therein, the Court rules as follows:

I. Factual and Procedural Background

A. Factual Background

The Court and the parties are very familiar with the COVID-19 pandemic and the devastating impact it has had on society. In the United States, it is estimated that approximately 114.6 million people in the United States have been infected with COVID-19 and over 600,000 have died so far. In California, over 3,700,000 people have been infected and over 63,000 people have died so far. As a result of the pandemic, most state and local governments enacted a variety of restrictions on businesses and public gatherings in an effort to prevent or limit the transmission of the virus.¹ See Slidewaters LLC v. Washington State Department of Labor and Industries , 4 F.4th 747 (9th Cir. 2021). Those restrictions have changed and evolved over time as conditions in various parts of the country changed and as the scientific understanding of COVID-19 improved. In addition, the overwhelming majority of those restrictions have now been removed or eliminated following the emergency approval of multiple vaccines that appear to offer recipients a high degree of protection against COVID-19 and a nationwide effort to administer those vaccines to as many individuals as possible.

On August 28, 2020, the California Department of Public Health ("CDPH") issued a Statewide Public Health Officer Order known as the Blueprint for a Safer Economy ("Blueprint"), which is a framework of risk tiers and sector-specific restrictions applied and periodically adjusted on a county-by-county basis by the State of California (the "State").² Counties are assigned one of four tiers based on that county's COVID-19 infection rate and other metrics: "Tier 1/Purple – Widespread"; "Tier 2/Red – Substantial"; "Tier 3/Orange – Moderate"; or "Tier 4/Yellow – Minimal." Which activities or businesses are permitted to open in each tier, and what restrictions are required, is determined based on criteria that reflect the risk of transmission the particular business or activity poses, including the "[a]bility to accommodate face covering wearing at all times (e.g. , eating and drinking would require removal of face coverings)"; the "[a]bility to physically distance between individuals from different households"; the "[a]bility to limit duration of exposure"; the "[a]bility to limit amount of mixing of people from differing households and communities"; and the "[a]bility to limit activities that are known to cause increased spread (e.g. , singing, shouting, heavy breathing; loud environs will cause people to raise voice)."

Plaintiff owns a restaurant, Pineapple Hill Saloon & Grill, that is located in Los Angeles County (the "County"), and challenges the COVID-related restrictions put in place by the State regarding the operation of restaurants during the pandemic. When Plaintiff filed this action, the County was in Tier 1/Purple, which limited restaurants to outdoor dining with modifications and takeout and delivery.³ However, beginning approximately March 15, 2021, the County moved to Tier 2/Red, which allowed restaurants to offer indoor dining with modifications⁴ as well as outdoor dining and takeout and delivery. On approximately April 5, 2021, the County moved to Tier 3/Orange, which allowed the expansion of indoor dining at restaurants to fifty percent capacity or 200 diners (whichever was fewer). On approximately May 4, 2021, the County moved to Tier 4/Yellow. On June 15, 2021, the Governor terminated the executive orders that had put into place the Stay at Home Order and the Blueprint. As a result, the county tier system, capacity limits on businesses (including restaurants), and physical distancing requirements (including in restaurants) ended in the State of California (subject to local requirements) on June 15, 2021.⁵

B. Procedural History

On December 20, 2020, Plaintiff filed a Complaint against Defendants. On January 21, 2021, Plaintiff filed a First Amended Complaint which added several plaintiffs, including hair salons, nail salons, skin care business, and restaurants located in other counties in the State. On February 9, 2021, the Court issued and Order to Show Cause Re: Misjoinder ("OSC"), ordering Plaintiff to show cause in writing why one or more of the newly added plaintiffs should not be severed from the action. After Plaintiff filed its Response to the OSC on February 12, 2021, the Court issued an Order severing all the newly added plaintiffs on February 18, 2021 and ordering Plaintiff to file a Second Amended Complaint. On February 26, 2021, Plaintiff filed a Second Amended Complaint ("SAC"), alleging claims for relief for: (1) violation of First Amendment freedom of assembly clause pursuant to 42 U.S.C. § 1983 ; (2) violation of the Due Process Clause of the Fifth and Fourteenth Amendments pursuant to 42 U.S.C. § 1983 ; (3) violation of the Equal Protection Clause of the Fourteenth Amendment pursuant to 42 U.S.C. § 1983 ; (4) violation of the Due Process Clause of the Fifth and Fourteenth Amendments pursuant to 42 U.S.C. § 1983 ; and (5) excessive fines/cruel and unusual punishment in violation of the Eighth Amendment pursuant to 42 U.S.C. § 1983.

On March 25, 2021, the Court denied Plaintiff's Motion for Preliminary Injunction. In the March 25, 2021 Order, the Court dismissed Plaintiff's claims to the extent they relied on alleged violations of California state law, including the California Administrative Procedure Act, the California Emergency Services Act, and the California Health and Safety Act on the basis of Eleventh Amendment sovereign immunity.

II. Legal Standard

A motion to dismiss brought pursuant to Federal Rule of Civil Procedure 12(b)(6) tests the legal sufficiency of the claims asserted in the complaint. "A Rule 12(b)(6) dismissal is proper only where there is either a ‘lack of a cognizable legal theory’ or ‘the absence of sufficient facts alleged under a cognizable legal theory.’ " Summit Technology, Inc. v. High-Line Medical Instruments Co., Inc. , 922 F. Supp. 299, 304 (C.D. Cal. 1996) (quoting Balistreri v. Pacifica Police Dept. , 901 F.2d 696, 699 (9th Cir. 1988) ). However, "[w]hile a complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual allegations, a plaintiff's obligation to provide the ‘grounds’ of his ‘entitlement to relief’ requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Bell Atlantic Corp. v. Twombly , 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) (internal citations and alterations omitted). "[F]actual allegations must be enough to raise a right to relief above the speculative level." Id.

In deciding a motion to dismiss, a court must accept as true the allegations of the complaint and must construe those allegations in the light most favorable to the nonmoving party. See, e.g., Wyler Summit Partnership v. Turner Broadcasting System, Inc. , 135 F.3d 658, 661 (9th Cir. 1998). "However, a court need not accept as true unreasonable inferences, unwarranted deductions of fact, or conclusory legal allegations cast in the form of factual allegations." Summit Technology , 922 F. Supp. at 304 (citing Western Mining Council v. Watt , 643 F.2d 618, 624 (9th Cir. 1981) cert. denied , 454 U.S. 1031, 102 S.Ct. 567, 70 L.Ed.2d 474 (1981) ).

"Generally, a district court may not consider any material beyond the pleadings in ruling on a Rule 12(b)(6) motion." Hal Roach Studios, Inc. v. Richard Feiner & Co. , 896 F.2d 1542, 1555 n. 19 (9th Cir. 1990) (citations omitted). However, a court may consider material which is properly submitted as part of the complaint and matters which may be judicially noticed pursuant to Federal Rule of Evidence 201 without converting the motion to dismiss into a motion for summary judgment. See, e.g., id. ; Branch v. Tunnell , 14 F.3d 449, 454 (9th Cir. 1994).

Where a motion to dismiss is granted, a district court must decide whether to grant leave to amend. Generally, the Ninth Circuit has a liberal policy favoring amendments and, thus, leave to amend should be freely granted. See, e.g., DeSoto v. Yellow Freight Systems, Inc. , 957 F.2d 655, 658 (9th Cir. 1992). However, a Court does not need to grant leave to amend in cases where the Court determines that permitting a plaintiff to amend would be an exercise in futility. See, e.g., Rutman Wine Co. v. E. & J. Gallo Winery , 829 F.2d 729, 738 (9th Cir. 1987) ("Denial of leave to amend is not an abuse of discretion where the pleadings before the court demonstrate...