People v. Monsanto, Co.
| Decision Date | 30 June 2022 |
| Docket Number | 2:22-cv-02399-ODW (SKx) |
| Parties | THE PEOPLE OF THE STATE OF CALIFORNIA, acting by and through the Los Angeles City Attorney, and THE CITY OF LOS ANGELES, Plaintiffs, v. MONSANTO CO., SOLUTIA INC., and PHARMACIA LLC, Defendants. |
| Court | U.S. District Court — Central District of California |
ORDER GRANTING MOTION TO REMAND [28]
Plaintiffs The People of the State of California, acting by and through the Los Angeles City Attorney (“California”), and the City of Los Angeles (“City”) move to remand this action to state court for lack of subject-matter jurisdiction. (Mot. Remand (“Motion” or “Mot.”), ECF No. 28.) Plaintiffs argue that Defendants Monsanto Company, Solutia Inc., and Pharmacia LLC cannot establish diversity jurisdiction under 28 U.S.C § 1332(a) because actions on behalf of the State of California, with certain exceptions not applicable here, are not subject to diversity jurisdiction. (Id. at 1.) The Court heard argument from the parties on June 27, 2022. For the reasons discussed below, the Court GRANTS the Motion.
This action arises from Monsanto's decades-long pollution of California's waterways with the toxic chemical polychlorinated biphenyl (“PCB”). (See Notice of Removal (“NOR”) Ex. A (“Compl.”), ¶ 1, ECF No. 1-1.) Plaintiffs allege that Monsanto sold PCB commercially from 1929-1977,[1] and produced 99% “of all PCBs used or sold within the United States.” (Id. ¶ 2.) According to Plaintiffs, Monsanto knew about the toxicity of PCBs from as early as 1937, yet nevertheless marketed its PCB products for a variety of common household uses. (Id. ¶¶ 4, 10.) Further, during the period it was selling PCB products, Monsanto knew that PCBs could not be contained and would eventually spread into California's waterways. (Id. ¶ 11.)
PCB is associated with a variety of ailments, including neurobehavioral changes, liver enlargement, and cancer. (Id. ¶¶ 62-63.) PCB has also had a devastating impact on wildlife, particularly fish, which are now too toxic for Californians to eat in large quantities. Plaintiffs claim that PCBs have done significant damage to the City's stormwater and wastewater systems and other properties. (Id. ¶¶ 154-60, 179-85.) PCBs have also contaminated Californian waterways, including Santa Monica Bay, Los Angeles Harbor, and Marina Del Rey. (Id. ¶ 161.) Accordingly, Plaintiffs allege, the toxicity of the water has resulted in California residents' loss of the use and enjoyment of California's natural resources. (Id. ¶¶ 167-78.)
On March 4, 2022, Plaintiffs filed this action against Defendants in the Los Angeles County Superior Court, asserting two claims pursuant to California Code of Civil Procedure 731. (See Compl. ¶¶ 186-206.) California asserts an abatement of public nuisance cause of action. (Id. ¶ 187.) Separately, the City asserts a public nuisance damages cause of action. (Id. ¶ 197.) Together, Plaintiffs seek (1) an abatement order that includes funding for future PCB abatement measures; (2) monetary damages for the City; (3) any other monetary damages permitted by law; (4) a judicial determination that Defendants are liable for future costs relating to the investigation, remediation, and removal of PCBs on the City's properties and resources held in trust; (5) attorneys' fees and litigation costs; (6) pre-judgment and post-judgment interest; and (7) other relief the Court finds proper. (Id. at 35, Prayer for Relief.)
Defendants removed the action to this Court, alleging diversity jurisdiction by excluding California. (NOR ¶¶ 11-26.) Plaintiffs now move to remand. (See Mot.) The Motion is fully briefed. (See Opp'n, ECF No. 37; Reply, ECF No. 39.)
Federal courts are courts of limited jurisdiction, having subject-matter jurisdiction only over matters authorized by the Constitution and Congress. U.S. Const. art. III, § 2, cl. 1; Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994). A suit filed in a state court may be removed to federal court if the federal court would have had original jurisdiction over the suit. 28 U.S.C. § 1441(a). Federal courts have original jurisdiction where an action presents a federal question under 28 U.S.C. § 1331, or diversity of citizenship under 28 U.S.C. § 1332. Accordingly, a defendant may remove a case from state court to federal court pursuant to the federal removal statute, 28 U.S.C. § 1441, based on federal question or diversity jurisdiction. Diversity jurisdiction requires complete diversity of citizenship among the adverse parties and an amount in controversy exceeding $75,000, exclusive of interest and costs. 28 U.S.C. § 1332(a).
Courts strictly construe the removal statute against removal jurisdiction, and “[f]ederal jurisdiction must be rejected if there is any doubt as to the right of removal in the first instance.” Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992). The party seeking removal bears the burden of establishing federal jurisdiction. Id.
Plaintiffs argue that this Court lacks jurisdiction because California is a party to the action and defeats diversity.[2] (Mot. 1.) Defendants contend that California is not a real party in controversy and that complete diversity exists between themselves and the only real plaintiff in the case, the City. (NOR ¶¶ 11-20; Opp'n 1.)
To determine diversity of citizenship, the Court looks to the face of the complaint. Miller v. Grgurich, 763 F.2d 372, 373 (9th Cir. 1985). Here, in the Complaint, Plaintiffs identify “the People of the State of California” as a plaintiff. (Compl. ¶ 22.) “The ‘People of the State' and ‘The State' are descriptive of the same sovereignty.” California v. Purdue Pharma L.P., No. SACV 14-1080-JLS (DFMx), 2014 WL 6065907, at *3 (C.D. Cal. Nov. 12, 2014) (quoting People by & Through Dep't of Pub. Works v. Glen Arms Estate, Inc., 230 Cal.App. 2d 841, 854 n.10 (1964)). A state is not a citizen for the purposes of diversity. Fifty Assocs. v. Prudential Ins. Co., 446 F.2d 1187, 1191 (9th Cir. 1970). However, “the mere presence on the record of the state as a party plaintiff will not defeat the jurisdiction of the federal court when it appears that the state has no real interest in the controversy.” Ex Parte Nebraska, 209 U.S. 436, 444 (1908). Thus, the Court is required to “look behind the pleadings to ensure that parties are not improperly creating or destroying diversity jurisdiction.” Mississippi ex rel. Hood v. AU Optronics Corp., 571 U.S. 161, 174 (2014) (citing Wecker v. Nat'l Enameling & Stamping Co., 204 U.S. 176, 185-86 (1907)).
The Ninth Circuit instructs courts determining whether a state is a real party in interest to examine “the essential nature and effect of the proceeding as it appears from the entire record.” Dep't of Fair Emp. & Hous. v. Lucent, 642 F.3d 728, 740 (9th Cir. 2011) (quoting Geeslin v. Merriman, 527 F.2d 452, 455 (6th Cir. 1975)).
First, a court should analyze relevant state law to determine whether the state has a specific and concrete interest in the litigation or only a general one. Id. at 738. Then, the court should review the remedies the plaintiffs requested. Id. at 739. If the “relief sought is that which inures to it alone,” the state may be a real party in interest. Id. at 737 (quoting Mo., Kan. & Tex. Ry. Co. v. Hickman (“Missouri Railway”), 183 U.S. 53, 59 (1901)).
In Lucent, the Ninth Circuit found the plaintiff, California Department of Fair Employment and Housing acting on behalf of the State of California, did not meet this standard when it brought a wrongful termination action for Lucent's former employee. Id. at 735. There, the court concluded that California possessed only a general interest in the litigation and that most of the forms of relief requested “could be obtained by the individual aggrieved.” Id. at 738-39. Therefore, because California's interest was not concrete and the requested remedies did not inure to California alone, the Ninth Circuit held that California was not a real party in interest.
One year later, in Nevada v. Bank of America Corp., the Ninth Circuit clarified its holding in Lucent and emphasized that the state needed only have a “substantial interest” in the remedies to be considered a real party in interest. 672 F.3d 661, 671 (9th Cir. 2012). In Nevada, Nevada's Attorney General filed a complaint in Nevada state court on behalf of Nevada consumers against Bank of America and related entities for deceptive trade practices in relation to the 2008 mortgage crisis. Id. at 664. Bank of America removed the case to federal court based on the Class Action Fairness Act (“CAFA”). Id. at 665. However, the Ninth Circuit found that, unlike California in Lucent, Nevada had a “specific, concrete interest in eliminating any deceptive practices” that had allegedly injured many Nevadans, as well as a substantial interest in the requested remedies including injunctive relief and civil penalties. Id. at 670-71. Therefore, after examining the entire record, the court held that Nevada was a real party in interest, which destroyed diversity for CAFA jurisdiction. Id. at 672.
As discussed below, the Court finds the present case more analogous to Nevada than Lucent: California is a real party in interest here and remand is required.
Defendants argue that the relief sought and interests served are local and the State of California is therefore not a real party in interest here, meaning the complete diversity between the remaining parties supports the Court's subject matter jurisdiction. (NOR ¶¶ 14-17.) Plaintiffs contend that, under Nevada, California is a real party in interest...
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