Friends of the Earth v. Sanderson Farms, Inc.

• Decision Date: 31 March 2021
• Docket Number: No. 19-16696,19-16696
• Citation: 992 F.3d 939
• Parties: FRIENDS OF THE EARTH, a Washington, D.C. non-profit corporation, on behalf of the general public ; Center for Food Safety, a California non-profit corporation, on behalf of the general public, Plaintiffs-Appellants, and Organic Consumers Association, a Minnesota non-profit corporation, on behalf of the general public, Plaintiff, v. SANDERSON FARMS, INC., a Mississippi corporation, Defendant-Appellee.
• Court: U.S. Court of Appeals — Ninth Circuit

992 F.3d 939

FRIENDS OF THE EARTH, a Washington, D.C. non-profit corporation, on behalf of the general public ; Center for Food Safety, a California non-profit corporation, on behalf of the general public, Plaintiffs-Appellants,

and

Organic Consumers Association, a Minnesota non-profit corporation, on behalf of the general public, Plaintiff,

v.SANDERSON FARMS, INC., a Mississippi corporation, Defendant-Appellee.

No. 19-16696

United States Court of Appeals, Ninth Circuit.

Argued and Submitted October 13, 2020 San Francisco, California

Filed March 31, 2021

Paige Tomaselli (argued), Greenfire Law PC, Berkeley, California; Gretchen Elsner, Elsner Law & Policy LLC, Santa Fe, New Mexico; for Plaintiffs-Appellants.

Michael A. Glick (argued), Gregg F. LoCascio, Paul J. Weeks, and Erin E. Cady, Kirkland & Ellis LLP, Washington, D.C., for Defendant-Appellee.

Before: M. Margaret McKeown and Jacqueline H. Nguyen, Circuit Judges, and Robert H. Whaley,^* District Judge.

McKEOWN, Circuit Judge:

Resolution of this appeal rests on whether two public interest groups, Friends of the Earth and Center for Food Safety (collectively, "the Advocacy Groups"), established organizational standing in their suit against Sanderson Farms, Inc., a major poultry producer, for false advertising related to the use of antibiotics. After nearly two years of litigation and nine months of fact discovery, Sanderson challenged whether the Advocacy Groups achieved standing by diverting resources to combat the allegedly misleading representations. In a thorough evaluation of the jurisdictional evidence, the district court dismissed the Advocacy Groups' claims for lack of organizational standing. We affirm.

BACKGROUND

The missions of the Advocacy Groups relate to the protection of human health, animal health, and the environment, including reduction of the routine use of antibiotics in animal agriculture. The Advocacy Groups advance their missions through myriad activities, including by informing consumers about the downsides of routine antibiotic use and by pressuring restaurants to stop sourcing meat from producers that routinely use antibiotics.

Though many chicken producers have stopped routine antibiotic practices, Sanderson has continued to use and defend its use of antibiotics. Sanderson supplies its chicken to, among others, Darden Restaurants, which owns Olive Garden. Because it purchased chickens raised by Sanderson, Olive Garden received an F grade in the Advocacy Groups' Chain Reaction reports, which rank "restaurant chains on their antibiotic policies" and practices. On August 1, 2016, the Advocacy Groups became aware that Sanderson marketed and advertised its chicken products as "100% Natural" and ran advertisements stating that there were "[n]o antibiotics to worry about here." As part of its work to combat routine antibiotic use, Center for Food Safety linked on Facebook to an August 1, 2016 New York Times article about Sanderson's defense of its antibiotic use and wrote that Sanderson "lag[ged] behind many in the industry" on protecting human health and animal well-being.

The next year, the Advocacy Groups sued Sanderson under California's Unfair Competition Law ("UCL"), Cal. Bus. & Prof. Code § 17200 et seq. , and False Advertising Law, id. § 17500 et seq ., for false advertising about Sanderson's chicken products being "100% Natural." After the first amendment to the complaint, Sanderson moved to dismiss, raising a facial challenge to the Advocacy Groups' organizational standing. The district court denied the motion because Friends of the Earth alleged that it had devoted additional time and resources to counteract Sanderson's misrepresentations and Center for Food Safety alleged that it had diverted resources away from its government watchdog work to respond to Sanderson's advertising.

Significant discovery followed. The Advocacy Groups produced the Chain Reaction reports, press releases, social media posts, action alerts emails, petitions, and the purported costs associated with these activities. At the close of fact discovery, Sanderson again moved to dismiss, this time raising a factual challenge to the Advocacy Groups' organizational standing.

After review of the record, the district court dismissed the case for lack of subject matter jurisdiction, finding that the Advocacy Groups had not diverted resources to combat the advertisements; rather, the activities were continuations of their ongoing work to discourage routine antibiotic use.

ANALYSIS

I. THE ADVOCACY GROUPS FAILED TO ESTABLISH STANDING THROUGH A DIVERSION OF RESOURCES TO COMBAT SANDERSON'S ADVERTISING

To establish organizational standing, the Advocacy Groups needed to show that the challenged conduct frustrated their organizational missions and that they diverted resources to combat that conduct. Am. Diabetes Ass'n v. U.S. Dep't of the Army , 938 F.3d 1147, 1154 (9th Cir. 2019). Only the diversion of resources component is at issue on appeal. Organizations divert resources when they "alter[ ] their resource allocation to combat the challenged practices," but not when they go about their " ‘business as usual.’ " Id. (quoting Nat'l Council of La Raza v. Cegavske , 800 F.3d 1032, 1040–41 (9th Cir. 2015) ).

Diversion of resources has been found when organizations "expended additional resources that they would not otherwise have expended, and in ways that they would not have expended them." Nat'l Council of La Raza , 800 F.3d at 1040. This requirement was satisfied, for example, when an organization designed and disseminated literature to redress the effects of the challenged discrimination, Fair Hous. of Marin v. Combs , 285 F.3d 899, 905 (9th Cir. 2002), and when an organization started new campaigns targeting discriminatory roommate preference practices, Fair Hous. Council of San Fernando Valley v. Roommate.com, LLC , 666 F.3d 1216, 1219 (9th Cir. 2012). In contrast, courts have found that merely continuing ongoing activities does not satisfy this requirement. See NAACP v. City of Kyle , 626 F.3d 233, 238–39 (5th Cir. 2010) (holding that there was no injury sufficient for organizational standing where the resource expenditures were litigation-related or were no different than the organizations' ongoing lobbying activities); Fair Hous. Council of Suburban Phila. v. Montgomery Newspapers , 141 F.3d 71, 78 (3d Cir. 1998) (holding that organizational standing was not satisfied where the activities were "part of the [organization]'s normal day-to-day operations").

Two temporal bookends put into perspective the timing of the advocacy here. Because the Advocacy Groups did not learn of Sanderson's alleged misrepresentations until August 1, 2016, resources expended before that date are not pertinent. And activities undertaken after suit was filed in June 2017, such as expending resources on the litigation and litigation publicity, do not confer standing. See La Asociacion de Trabajadores de Lake Forest v. City of Lake Forest , 624 F.3d 1083, 1088 (9th Cir. 2010) (noting that a plaintiff "cannot manufacture the injury by incurring litigation costs"). Nor does the theory of ongoing injury hold water if the Advocacy Groups have not established injury in the first place.

The question, then, is whether the Advocacy Groups' activities were "business as usual" and a continuation of existing advocacy, or whether they were an affirmative diversion of resources to combat Sanderson's representations. Well before August 2016, the Advocacy Groups undertook various initiatives to further their goal of reducing routine antibiotic use in animal agriculture. Since at least 2014, the mission of Friends of the Earth has entailed "encouraging buyers not to purchase meat that was raised at some point in the supply chain with routine antibiotics," and in 2015, the organization endeavored to convince Sanderson buyers to source from other suppliers. Similarly, one of the core missions of Center for Food Safety is "limiting use of antibiotics in animal agriculture."

In examining the extensive discovery, it turns out that during the relevant period—August 2016 to June 2017—the Advocacy Groups did not publish action alerts or other advice to their members targeting the advertising; did not address Sanderson's advertising in any campaign, press release, blog post, or other communication; did not petition Sanderson; and did not protest Sanderson's advertising. This notable absence of evidence led the district court to conclude that the Advocacy Groups "failed to produce evidence demonstrating they expended additional resources to address Sanderson's advertisements, as opposed to its practices."¹ Once Sanderson's misleading advertisements were brought to the attention of the Advocacy Groups, they simply continued doing what they were already doing—publishing reports on and informing the public of various companies' antibiotic practices. This evidentiary void cannot be filled by emails in which the Advocacy Groups' employees shared articles about Sanderson's practices and deceptive advertisements, querying internally whether something should be done; evidence of any diversion of resources remains missing.

The Advocacy Groups attempted to distinguish Sanderson-related expenditures from ongoing activities by pointing to post-discovery information offered by their designated representatives, Marcelin Keever and Rebecca Spector. Keever stated that "because of [Sanderson's]...