Pactiv Corp. v. Chester

Decision Date28 September 2006
Docket NumberCivil No. 05-71116.
Citation455 F.Supp.2d 680
PartiesPACTIV CORPORATION, a Delaware corporation, Plaintiff, v. Steven E. CHESTER, Director of the Michigan Department of Environmental Quality, and Michael Cox, Attorney General for the State of Michigan, Defendants.
CourtU.S. District Court — Eastern District of Michigan

Jay E. Brant, Jeffrey L. Woolstrum, Joseph M. Polito, Honigman, Miller, Detroit, MI, for Plaintiff.

Kathleen L. Cavanaugh, Celeste R. Gill, MI Dept. of Attorney General, Lansing, MI, for Defendants.

AMENDED1 OPINION AND ORDER DENYING THE MOTION FOR PARTIAL SUMMARY JUDGMENT ON COUNTS II AND III

FEIKENS, District Judge.

Previously, I found I have jurisdiction to hear Plaintiff's claims that M.C.L. §§ 324.20114(1)(h) and 324.20137(1) violate its constitutional due process rights, to the extent that the statutes require Pactiv Corp. (Pactiv) to undertake planning and penalize the failure to properly plan without first providing notice and an opportunity to be heard.2 Pactiv Corp. v. Chester, 419 F.Supp.2d 956 (E.D.Mich.2006). I also declined to take jurisdiction over the state law claim. Id. I now turn to the merits of the remainder of the motion.

FACTUAL BACKGROUND

I previously stated the factual background for this matter in my Opinion and Order of January 30, 2006, and I will not repeat it here. 419 F.Supp.2d at 960-63.

ANALYSIS
I. Standard for Dismissal of the Claims

The general rule is that "some discovery must be afforded the non-movant before summary judgment in granted." White's Landing Fisheries, Inc. v. Buchholzer, 29 F.3d 229, 231 (6th Cir.1994). Discovery has not yet begun in this matter. Therefore, although Defendants' motion is for summary judgment, I will apply the standard for motions to dismiss under Fed. R.Civ.P. 12(b)(6) to the remainder of Defendants' motion. A motion to dismiss may be granted under Fed.R.Civ.P. 12(b)(6), "only if it is clear that no relief could be granted under any set of facts that could be proved consistent with the allegations." Hishon v. King & Spalding, 467 U.S. 69, 73, 104 S.Ct. 2229, 81 L.Ed.2d 59 (1984). In reviewing the motion, courts "must construe the complaint in the light most favorable to the plaintiff, accept all of the complaint's factual allegations as true, and determine whether the plaintiff undoubtedly can prove no set of facts in support of his claim that would entitle him to relief." Ziegler v. IBP Hog Mkt., Inc., 249 F.3d 509, 512 (6th Cir.2001).

II. Statute of Limitations

In the second hearing on this matter, I asked both parties to submit briefing on the statute of limitations applicable to actions brought for violation of M.C.L. § 324.20114(1)(h), which is part of Michigan's Natural Resources and Environmental Protection Act (hereinafter the Act). (Tr. of Apr. 13, 2006 at 24-27.) I had a responsibility to raise this issue, because it goes toward the justiciability of this action and thus this court's jurisdiction. Kontrick v. Ryan, 540 U.S. 443, 456, 124 S.Ct. 906, 157 L.Ed.2d 867 (2004) (citing Mansfield, C. & L.M.R. Co. v. Swan, 111 U.S. 379, 382, 4 S.Ct. 510, 28 L.Ed. 462 (1884) (court must consider subject matter jurisdiction even if parties fail to raise it)). If it is too late for the government to bring an action against Plaintiff, then Plaintiffs claims potentially would be moot, as there would be no lawful means for Defendants to seek any penalty from Plaintiff for the failure to plan in accordance with the request under M.C.L. § 324.20114(1)(h).

Defendants assert the applicable statute of limitations requires that actions be filed "within [three] years after discovery of the violation for which the civil fines are assessed." M.C.L. § 324.20140(1)(c). Defendants aver that they could not have discovered Plaintiff's noncompliance with the planning requirements before July 28, 2004, and thus the limitations period will not expire until July 28, 2007.' (Defs.' Br. of Apr. 28, 2006, 3.) Defendants also assert that the violations are continuing daily, and thus liability is growing daily, but that the law's structure only allows the government to recover at most three years worth of daily fines. Id. at 7. Plaintiff concedes no point of fact or law relating to the statute of limitations, but notes that Defendants' position means that its potential liability is still increasing daily. (Pl.'s Br. of May 8, 2006, 2.)

Defendants make a plausible argument that this case is not moot, but that argument relies on both factual and legal suppositions. As stated above, there has not been discovery on these points, and thus even if Plaintiff wished to assert mootness of this action due to the period having run, it likely would not be able to carry its "heavy burden" of demonstrating such mootness without a chance to `conduct discovery and determine the applicable facts. Cleveland Branch, N.A.AC.P. v. City of Parma, 263 F.3d 513, 531 (6th Cir.2001) (citing County of Los Angeles v. Davis, 440 U.S. 625, 631, 99 S.Ct. 1379, 59 L.Ed.2d 642 (1979)). Under this reasoning, I find that mootness has not been sufficiently demonstrated at this time, and therefore this claim is still legally justiciable. I note to the parties that this Court may have to return to this issue at the close of discovery, and urge them to take that into consideration as this case progresses.

III. Federal Question Jurisdiction and the Declaratory Judgment Act

A federal court lacks jurisdiction to hear a claim under the Declaratory Judgment Act when a complaint essentially asserts a defense to an impending state court action brought under state law, because federal question jurisdiction does not exist i he only federal question is a defense. Public Sera Comm'n v. Wycoff Co., 344 U.S. 237, 248, 73 S.Ct. 236, 97 L.Ed. 291 (1952). Plaintiff asserts that jurisdiction exists in this case, however, because,42 U.S.C. § 1983 provides a federal statutory remedy independent of the Declaratory Judgment Act. Plaintiff argues it is thus bringing suit to remedy the breach of a federal right, not simply to assert a defense to an impending state court action. (Pl.'s Br. of April 27, 2006.) I agree, and therefore find I have jurisdiction to decide the due process claims. I have jurisdiction to hear both the "as applied" and a "pattern and practice" due process challenges, seeking similar relief, brought under two federal statutes: the Declaratory Judgment Act and 42 U.S.C. § 1983. (Pl.'s Br. of Feb. 13, 2006, 1.)

IV. Standard for Due Process Challenges

There is a two-step analysis for procedural due process issues: first, determine whether a protected interest exists, and second, determine what procedures are required to protect that interest. Morrison v. Warren, 375 F.3d 468, 474 (6th Cir.2004) (citing Johnston-Taylor v. Gannon, 907 F.2d 1577, 1581 (6th Cir.1990)); see also Board of Regents v. Roth, 408 U.S. 564, 569, 92 S.Ct. 2701, 33 L.Ed.2d 548 (1972) ("The requirements of procedural due process apply only to the deprivation of interests encompassed by the Fourteenth Amendment's protection of liberty and property").

There is no "all-embracing test for deciding due process claims." Dusenbery v. United States, 534 U.S. 161, 168, 122 S.Ct. 694, 151 L.Ed.2d 597 (2002). The Supreme Court has used several tests to analyze due process claims. In Mathews v. Eldridge, the Court used balancing test of three factors to determine what process was due: (1) the nature of the private interest affected by the official action; (2) the risk of erroneous deprivation of such an interest through the procedures used and the probable value of additional or substitute procedural safeguards; and (3) the government's interest, including the "function involved and the fiscal and administrative burdens that the additional or substitute procedural requirement would entail." 424 U.S. 319, 335, 96 S.Ct. 893, 47 L.Ed.2d 18 (1976). Plaintiff raises the possibility of an altogether different test of constitutionality articulated in a series of cases beginning with Ex parte Young, 209 U.S. 123, 28 S.Ct. 441, 52 L.Ed. 714 (1908). In Ex parte Young, the Court set forth yet another standard that potentially bears on the question of when parties must be permitted certain process:

A law which [imposes] conditions upon the right appeal for judicial relief as works in abandonment of the right rather than face the conditions upon which it is offered or may be obtained, is also unconstitutional. It may therefore be said that when the penalties for disobedience are by fines so enormous [...] as to intimidate the company and its officers from resorting to the courts to test the validity of the legislation, the result is the same as if the law in terms prohibited the company from seeking judicial construction of laws which deeply affect its rights.

Id. at 147, 28 S.Ct. 441.

I will address first what type of interest is at issue here, and then analyze what process is needed under the Mathews v. Eldridge test. Finally, I will turn to the other test of constitutionality described in Ex parte Young.

V. Type of Interest Protected by Due Process

Plaintiff was not afforded notice or a chance to object formally to the issuance of the demand letters before the agency took the final action of issuing the letters under M.C.L. § 324.20114(1)(h). However, that is not a violation of due process if the issuance of the demand under that statute does not implicate interests protected by the Fourteenth Amendment. Roth, 408 U.S. at 569, 92 S.Ct. 2701. I turn now to the analysis of that question.

A. Binding Precedent

In Hodel v. Va. Surface Mining & Reclamation Ass'n, the Supreme Court held that an order requiring a mine operator to cease operations did implicate due process concerns, because the order fell into the emergency situation "exception to the normal rule that due process requires a hearing prior to deprivation of a property right." 452 U.S. 264, 299-300, 101 S.Ct. 2352, 69...

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