Petition for Writ of Certiorari — Jonna Corporation, dba Premier Recycling Company, Petitioner v. City of Sunnyvale, California
Supreme Court briefMay 23, 2019
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No. ______
In the
Supreme Court of the United States
__________________
JONNA CORPORATION,
dba Premier Recycling Company,
Petitioner,
v.
CITY OF SUNNYVALE,
__________________
Respondent.
On Petition for Writ of Certiorari to the
United States Court of Appeals
for the Ninth Circuit
__________________
PETITION FOR WRIT OF CERTIORARI
__________________
JOHN DOUGLAS MOORE
Counsel of Record
1999 Harrison St., 18th Fl.
Oakland, CA 94612
(510) 893-6300
jmoore@recyclelaw.com
Counsel for Petitioner
May 23, 2019
Becker Gallagher · Cincinnati, OH · Washington, D.C. · 800.890.5001
i
QUESTIONS PRESENTED
The questions presented in this Petition are:
1. Did Petitioner Premier Recycling adequately
plead its Declaratory Judgment claim alleging a
violation of 42 U.S.C. Section 1983, pursuant to
FCRP 8; and
2. Did Respondent City of Sunnyvale’s application
of the California Supreme Court’s decision in
Waste Management of the Desert violate
Petitioner’s established property rights in an
unconstitutional manner?
ii
PARTIES TO THE PROCEEDING
Petitioner Jonna Corporation dba Premier Recycling
was the appellant in the court below. Respondent City
of Sunnyvale, California, was the appellee in the court
below. Jonna Corporation has no parents or
subsidiaries and is not publically held.
CORPORATE DISCLOSURE STATEMENT
Pursuant to Rule 29, Jonna Corporation has no
parent corporation and is not a publically held
corporation.
iii
TABLE OF CONTENTS
QUESTIONS PRESENTED . . . . . . . . . . . . . . . . . . . i
PARTIES TO THE PROCEEDING . . . . . . . . . . . . . . ii
CORPORATE DISCLOSURE STATEMENT . . . . . . ii
TABLE OF AUTHORITIES. . . . . . . . . . . . . . . . . . . vi
OPINIONS BELOW. . . . . . . . . . . . . . . . . . . . . . . . . . 1
JURISDICTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
CONSTITUTIONAL AND STATUTORY
PROVISIONS INVOLVED . . . . . . . . . . . . . . . . . . . . 2
STATEMENT OF THE CASE . . . . . . . . . . . . . . . . . . 3
REASONS FOR GRANTING THE PETITION . . . . 4
INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . 4
I. THE CIRCUIT SPLIT ABOUT PLEADING A
CLAIM UNDER SECTION 1983 . . . . . . . . . . . . . 9
A. Petitioner’s Operative Pleading . . . . . . . . . . . 9
B. The Court rulings for which review is
sought. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
C. Applicable rules for pleading a Substantive
Due Process violation . . . . . . . . . . . . . . . . . . 11
D. Conflict among the Ninth, Fifth and Seventh
Circuits. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
iv
II. THE COURT SHOULD SETTLE AN
IMPORTANT QUESTION OF LAW
CONCERNING THE APPLICATION OF STOP
THE BEACH . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
A. Stop the Beach and its Progeny . . . . . . . . . . 18
B. How the California Supreme Court impaired
established property rights . . . . . . . . . . . . . . 22
C. The Established Property Rights Set Forth in
the 1989 Legislation . . . . . . . . . . . . . . . . . . . 22
D. Compare the 1989 Legislation to the 1989
Supreme Court Interpretation . . . . . . . . . . . 27
E. Rules Of Statutory Interpretation . . . . . . . . 29
CONCLUSION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
APPENDIX
Appendix A Memorandum in the United States
Court of Appeals for the Ninth Circuit
(February 22, 2019) . . . . . . . . . . . App. 1
Appendix B Order Granting Motion to Dismiss the
First Amended Complaint in the
United States District Court Northern
District of California, San Jose Division
(November 9, 2017). . . . . . . . . . . . App. 5
Appendix C Order Granting City of Sunnyvale’s
Motion to Dismiss in the United
States District Court Northern
District of California, San Jose Division
(June 16, 2017) . . . . . . . . . . . . . . App. 36
v
Appendix D Cal. Pub. Res. Code. . . . . . . . . . . App. 79
§ 40000-40004 . . . . . . . . . . . . App. 79
§ 40050-40063 . . . . . . . . . . . . App. 84
§ 40100-40201 . . . . . . . . . . . App. 104
§ 41780-41786 . . . . . . . . . . . App. 126
Appendix E First
Amended
Complaint for
Declaratory Judgment and Injunctive
Relief (28 U.S.C. Section 2201) in the
United States District Court Northern
District of California, San Jose Division
(July 16, 2017). . . . . . . . . . . . . . App. 152
vi
TABLE OF AUTHORITIES
CASES
Asbell v. Kansas,
209 U.S. 251 (1908). . . . . . . . . . . . . . . . . . . . . . . 32
Bell Atlantic Corp. v. Twombly,
550 U.S. 544 (2007). . . . . . . . . . . . . . . . . . . . 11, 14
Bilsky v. Kappos,
561 U.S. 593 (2010). . . . . . . . . . . . . . . . . . . . . . . 29
Brownlee v. Conine,
957 F.2d 353 (7th Cir. 1992). . . . . . . . . . . . . 13, 14
C & A Carbone v. Town of Clarkstown,
511 U.S. 383 (1994). . . . . . . . . . . . . . . . . . . . . . . . 4
California Reduction Co. v. Sanitary Reduction
Works, 199 U.S. 306 (1905). . . . . . . . . . . . . . . 5, 37
Consumer Product Safety Comm’n v. GTE
Sylvania, Inc., 447 U.S. 102 (1980) . . . . . . . . . . 29
Evangelatos v. Superior Court,
44 Cal. 3d 1188 (1988) . . . . . . . . . . . . . . . . . . . . 28
Exxon Mobil Corp. v. Alapattah Svcs.,
545 U.S. 546 (2005). . . . . . . . . . . . . . . . . . . . . . . 29
GE Capital Corp. v. Posey,
415 F.3d 391 (5th Cir. 2005). . . . . . . . . . . . . . . . 14
Harris v. Appellate Division of Superior Court,
14 Cal.App. 5th (2017) . . . . . . . . . . . . . . . . . . . . 30
Jackson v. Marion County,
66 F.3d 151 (7th Cir. 1995) . . . . . . . . . . . . . . . . 13
vii
McGary v. City of Portland,
386 F.3d 1259 (9th Cir. 2004). . . . . . . . . . . . . . . 13
MedImmune, Inc. v. Genentech, Inc.,
549 U.S. 118 (2007). . . . . . . . . . . . . . . . . . . . . . . 12
Medrano v. Caliber Homes Loans, Inc.,
2014 U.S. Dist. LEXIS 177576 (CD CA 2014) . . 14
Northern Natural Gas Co. v. ONEOK Field
Servs. Co., L.L.C., 296 Kan. 906 (2013) . . . . . . . 20
PVM Redwood Co. v. United States,
686 F.2d 1327 (9th Cir. 1982). . . . . . . . . . . . . . . 18
Philadelphia v. New Jersey,
437 U.S. 617 (1978). . . . . . . . . . . . . . . . . . . . . 4, 31
Pruneyard Shopping Ctr. v. Robins,
447 U.S. 74 (1980). . . . . . . . . . . . . . . . . . . . . . . . 21
Rossa v. D.L. Falk Construction, Inc.,
53 Cal. 4th 387 (2014). . . . . . . . . . . . . . . . . . . . . 30
Shanks v. Dressel,
540 F.3d 1082 (9th Cir. 2008). . . . . . . . . . . . . . . 11
Shinnecock Indian Nation v. United States,
112 Fed. Cl. 369 (2013) . . . . . . . . . . . . . . . . . . . . 20
Steffel v. Thompson,
415 U.S. 452 (1974). . . . . . . . . . . . . . . . . . . . . . . 11
Stenberg v. Carhart,
530 U.S. 914 (2000). . . . . . . . . . . . . . . . . . . . . . . 29
viii
Stop the Beach Renourishment, Inc. v. Fla. Dep’t
of Envtl. Prot.,
560 U.S. 702 (2010). . . . . . . . . . . . . . . . . . . passim
Thunder Props. v. Treadway,
2016 U.S. Dist. LEXIS 43818 (D NV 2016) . . . . 20
United Haulers Ass’n v. Oneida-Herkimer Solid
Waste Mgmt. Auth., 550 U.S. 330 (2007) . . . . . . . 5
United States v. Millis,
621 F.3d 914 (9th Cir. 2014). . . . . . . . . . . . . . . . 28
Waste Management of the Desert v. Palm Springs
Recycling Center,
7 Cal.4th 478 (1994) . . . . . . . . . . . . . . . . . . passim
Watson v. Lake County,
No. 5:09-cv-399, 2011 U.S. Dist. LEXIS 162352,
2011 WL 13175635 (M.D. Fla. Feb. 23,
2011) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Webb’s Fabulous Pharms. v. Beckwith,
449 U.S. 155 (1980). . . . . . . . . . . . . . . . . . . . . 4, 21
Weigel v. Maryland,
950 F. Supp. 2d 811 (D MD 2013) . . . . . . . . . . . 20
Yamaguchi v. United States Dep’t of the Air Force,
109 F.3d 1475 (9th Cir. 1997). . . . . . . . . . . . . . . 12
Yates v. United States,
135 S. Ct. 1074 (2015). . . . . . . . . . . . . . . . . . . . . 30
In re Zhizhuzza,
147 Cal. 328 (1905) . . . . . . . . . . . . . . . . . . . . . . . 37
ix
CONSTITUTION AND STATUTES
U.S. Const. amend. XIV . . . . . . . . . . . . . . . . . . . . . 2, 3
28 U.S.C. § 1254(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
28 U.S.C. § 1291 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
28 U.S.C. § 1331 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
28 U.S.C. § 1367 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
28 U.S.C. § 2201 . . . . . . . . . . . . . . . . . . . . . . . . 2, 3, 11
42 U.S.C. § 1983 . . . . . . . . . . . . . . . . . . . 2, 3, 9, 13, 17
Cal. Green Building Standards Code § 5.408.1.1 . . . 8
Cal. Public Resources Code § 40000 et seq.. . . . . 3, 31
Cal. Public Resources Code § 40000 . 6, 24, 31, 32, 33
Cal. Public Resources Code § 40001 . . . . . . 31, 33, 37
Cal. Public Resources Code § 40004 . . . . . . . . . . . . 31
Cal. Public Resources Code § 40051 . . . . . . . . . 23, 25
Cal. Public Resources Code § 40059 . . . . . . . . passim
Cal. Public Resources Code § 40180 . . . 25, 31, 32, 33
Cal. Public Resources Code § 40191 . . . . . . . . . 25, 28
Cal. Public Resources Code § 41780 . . . . . . . . . . . . 23
Sunnyvale Municipal Code § 16.043.20. . . . . . . . . . . 8
RULES
Fed. R. Civ. P. 8 . . . . . . . . . . . . . . . . . . . . . . . 2, 13, 38
x
Fed. R. Civ. P. 12(b)(6) . . . . . . . . . . . . . . . . . . . . . 2, 13
Sup. Ct. R. 10 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
OTHER AUTHORITIES
https://www.merriam-webster.com/dictionary/
discard . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Melosi, Garbage in the Streets (University of
Pittsburg Press 2005) . . . . . . . . . . . . . . . . . . . . . . 5
1
PETITION FOR WRIT OF CERTIORARI
Jonna Corporation dba Premier Recycling (“Premier
Recycling”) respectfully petitions this Court for a Writ
of Certiorari to review the Judgment of the United
States Court of Appeal for the Ninth Circuit in this
case.
OPINIONS BELOW
The opinion of the Ninth Circuit Court of Appeals is
reported at Jonna Corp. v. City of Sunnyvale (9th Cir.
2018) 754 Fed. Appx. 592, 2019 U.S. App. LEXIS 5221,
86 Env’t Rep. Cas. (BNA) 3924 and is reproduced in the
appendix.
The opinion of the United States District Court
dismissing Petitioner’s First Amended Complaint is
reported at Jonna Corp. v. City of Sunnyvale (ND CA
2017) 2017 U.S. Dist. LEXIS 186348 and is reproduced
in the appendix. The opinion of the United States
District Court dismissing Petitioner’s Complaint with
leave to amend is reported at Jonna Corp. v. City of
Sunnyvale, 2017 U.S. Dist. LEXIS 93353 and is
reproduced in the appendix.
JURISDICTION
The Judgment of the Ninth Circuit was filed on
February 22, 2019. The jurisdiction of this Court is
invoked pursuant to 28 U.S.C. Section 1254(1). No
notifications pursuant to Rule 29.4 are required.
2
CONSTITUTIONAL AND STATUTORY
PROVISIONS INVOLVED
Clause One of the Fourteenth Amendment to the
Constitution, which provides that “(no) State (shall)
deprive any person of life, liberty, or property, without
due process of law.”
Federal Rule of Civil Procedure 8(a), which requires
that a pleading contain “…a short and plain statement
of the claim showing that the pleader is entitled to
relief.”
Federal Rule of Civil Procedure 12(b)(6), which
allows a Court to dismiss an action if the Complaint
“(fails) to state a claim upon which relief can be
granted.”
28 U.S.C. Section 2201, which provides that
In a case of actual controversy within its
jurisdiction…any court of the United States,
upon the filing of an appropriate pleading, may
declare the rights and other legal relations of
any interested party seeking such declaration,
whether or not further relief is or could be
sought. Any such declaration shall have the
force and effect of a final judgment or decree and
shall be reviewable as such.
42 U.S.C. Section 1983 which states that:
Every person who, under color of any statute,
ordinance, regulation, custom, or usage, of any
State or Territory or the District of Columbia,
subjects, or causes to be subjected, any citizen of
3
the United States or other person within the
jurisdiction thereof to the deprivation of any
rights, privileges, or immunities secured by the
Constitution and laws, shall be liable to the
party injured in an action at law, suit in equity,
or other proper proceeding for redress….”
Pertinent provisions of California’s Integrated
Waste Management Act, Public Resources Code Section
40000 et seq., which are reproduced in the appendix.
STATEMENT OF THE CASE
Premier Recycling filed a Complaint in the United
States District Court for the Northern District of
California alleging a claim under the Declaratory
Judgment Act, 28 U.S.C. Sec. 2201. The question
presented was whether Respondent City of Sunnyvale,
California violated the civil rights of Premier Recycling
under 42 U.S.C. Sec. 1983 and specifically violated
Plaintiff’s rights under the Fourteenth Amendment of
the United States Constitution, and California Public
Resources Code (Section 40059). The District Court had
subject matter jurisdiction under 28 U.S.C. Sec. 1331.
The District Court also had supplemental jurisdiction
to consider claims arising under California state law
pursuant to 28 U.S.C. Sec. 1367.
The appeal to the Ninth Circuit was from a final
judgment of the District Court that resolved all claims
of all parties. That Court had jurisdiction under 28
U.S.C. Section 1291.
4
REASONS FOR GRANTING THE PETITION
Rule 10 Application
This Petition seeks to resolve a conflict among the
Circuits about the adequacy of pleading a claim under
the Declaratory Judgment Act and the Civil Rights Act.
This Petition also seeks to resolve an important
question of law about whether, and under what
circumstances a state Supreme Court decision may be
found unconstitutional under Webb’s Fabulous Pharms.
v. Beckwith, 449 U.S. 155 (1980) and Stop the Beach
Renourishment, Inc. v. Fla. Dep’t of Envtl. Prot., 560
U.S. 702 (2010), if it eliminates established property
rights, and what remedies, if any, are available.
INTRODUCTION
This Petition also addresses an issue never before
addressed by this Court. In this Court’s jurisprudence,
“garbage” or, in today’s lingo, “solid waste”, was
addressed as something noxious and a public health
hazard1, as well as an “article of commerce”.2 Today
much of what used to be “garbage” is in fact reclaimed
through reuse, recycling, and composting, a result
endorsed by federal, state, and local legislatively-stated
policy. By removing materials from what used to be
called the “waste stream” before they became garbage
and turning these recovered materials into new, useful,
products, a lot of the public health issues about garbage
1
Philadelphia v. New Jersey, 437 U.S. 617 (1978)
2
C & A Carbone v. Town of Clarkstown, 511 U.S. 383 (1994)
5
collection have been reduced.3 In the context of conflict
between 1989 California legislation and a 1994 state
Supreme Court decision that changed established
property rights, Premier Recycling requests that this
Court revisit its 1905 holding in California Reduction
Co. v. Sanitary Reduction Works, 199 U.S. 306 (1905)
and decide whether police power justifies economic
regulation over the collection of recyclable materials, as
opposed to garbage.
This case addresses the competition for the
materials in the garbage between traditional garbage
collectors that landfill the material, pitted against
modern public policy and recyclers, such as Premier
Recycling that support these public policies; and what
is the constitutional limit of government impairment of
the property rights of businesses that collect what used
to be garbage but today is recycled. In 1994, the
California Supreme Court interpreted a 1989
California statute defining “solid waste” inconsistently
with the legislative intent and in a manner that
impaired existing property rights. Waste Management
of the Desert v. Palm Springs Recycling Center, 7
Cal.4th 478 (1994).
In what was then prompted by concern over
diminishing landfill capacity and the environmental
harm inflicted by landfills, the California legislature
3
For an historical review of the connection between the discovery
that germs cause disease and the local government mandate to
regulate safe garbage collection see Melosi, Garbage in the Streets
(University of Pittsburg Press 2005), cited by this Court in United
Haulers Ass’n v. Oneida-Herkimer Solid Waste Mgmt. Auth., 550
U.S. 330, 334 (2007).
6
passed laws in 1989 establishing strong and clear
policies favoring resource recovery, such as reuse,
recycling, and composting, and against landfilling4;
finding that landfills were harmful to the environment
and promoted overuse of finite virgin resources. This
legislation placed the burden of reducing material
going to landfill (called “diversion”) upon local
government. The legislation permitted local
governments to continue a practice of discharging their
health and safety obligations for garbage (now called
“solid waste”) collection by franchising collection rights
to private parties but required that an “exclusive
franchise” be limited only to those situations where
public health and safety required. 5
In a lawsuit between an exclusive franchisee and a
local recycling business, the state Supreme Court in
Waste Management of the Desert was asked to decide
the outer limit of a permissible exclusive solid waste
franchise under the new legislation. The intermediate
state Court of Appeal reversed a Judgment for
permanent injunction in favor of the exclusive
franchisee and its two city clients on the ground, inter
alia, that the franchisee’s interpretation of “solid
waste” under the new law was an unconstitutional and
excessive exercise of police power.6 The state Supreme
Court reversed the Court of Appeal decision without
analyzing the constitutional issue underlying the Court
of Appeal decision. Instead, the state Supreme Court
re-wrote the legislative definition of “solid waste” in a
4
Public Resources Code Section 40000(b)-(e)
5
PRC Section 40059
6
20 Cal.App.4th 586, 602-604 (1992)
7
manner inconsistent with the stated legislative intent
and the rights established in this legislation.
The state Supreme Court ruled that “solid waste” is
something the owner no longer wants and pays
someone to dispose.7 This definition has nothing to do
with whether the material goes to landfill or not. The
reasoning of the Court is poorly grounded. If someone
wanted to buy garbage, it could escape regulation for
the collection of garbage because the fact of purchase
makes it not garbage. Conversely, no matter what the
intrinsic value of the unwanted material (e.g. an old
faded Andy Warhol print), if someone disposed of it by
mailing it to a family member, say via Fedex (which
charges a fee to transport the material), the franchisee
could sue Fedex for interfering with the franchise.
Premier Recycling collects what is called
construction and demolition debris, or C&D, which is
the mixed wood, metal, drywall, cardboard, carpet,
asphalt, and concrete that is discarded at any
commercial building construction site. In many cities
adjacent to Sunnyvale, Premier Recycling is allowed to
and does charge the construction site owner/generator
a service fee to collect the C&D, which offsets the
vehicle and labor cost of collection. Many local
jurisdictions, including Sunnyvale, require a building
contractor to affirm the recycling of a fixed percentage
7
At p. 478 the Court states its rule: “The proper rule is this: If the
owner of property disposes of it for compensation--in common
parlance, sells it--it is not waste because it has not been discarded.
The owner is not required under the Act to transfer this property
to the exclusive franchisee. But, consistent with the purpose of the
Act, an owner cannot discard property as he sees fit. Discarding
the property renders the property waste and subjects it to the Act.
8
of the nonhazardous C&D generated as a condition to
obtain a building permit.8 LEED certification of
buildings likewise requires recycling of building
materials.9 Premier Recycling transports the C&D it
collects to the state-permitted recycling facility it owns
in San Jose, CA, where it sorts the material into its
constituent parts and, for the most part, sells the
sorted materials to a company that will use them to
make a new product; exactly the stated legislative goal
of recycling.
Sunnyvale, unlike adjacent cities such as San
Jose10, granted an exclusive garbage collection
franchise that bars competitive fee for service collection
of C&D. Sunnyvale itself owns a C&D recycling facility
that competes with Premier Recycling.11 Sunnyvale did
not comply with state law (Public Resources Code
Section 40059) because it never found that public
health and safety required the granting an exclusive
garbage collection franchise. The exclusivity aspect of
the franchise was concealed from the public; the issue
was never raised in a public hearing before Sunnyvale’s
City Council. Instead, City staff made the decision to
make the franchise exclusive behind the scenes and
closed doors.
8
See Sunnyvale Municipal Code Section 16.043.20 which adopts
the California Green Building Standards Code. Section 5.408.1.1
of that code requires the contractor to recycle or salvage 65% of all
nonhazardous waste generated.
9
California Green Building Standards Code. Section 5.408.1.1
10
Sunnyvale is in Santa Clara County. San Jose is the county seat
and the largest city within the county.
11
https://sunnyvale.ca.gov/property/recycling/getrid/center.htm
9
Premier Recycling did not have standing to
challenge the Waste Management of the Desert
precedent until Sunnyvale took formal action to
prevent Premier Recycling from collecting C&D for a
fee within the city. This occurred in 2017 when the
underlying action was filed. This action was filed in
federal court because no state lower court could refuse
to follow the Waste Management of the Desert
precedent.
I. THE CIRCUIT SPLIT ABOUT PLEADING A
CLAIM UNDER SECTION 1983
A. Petitioner’s Operative Pleading
Petitioner’s First Amended Complaint (this
operative pleading is reproduced in the appendix)
asserts a claim under the federal Declaratory
Judgment Act. The Declaratory Judgment claim
asserts a violation of the federal Civil Rights Act, 42
U.S.C. Section 1983. After reciting the background
cited above, Premier Recycling alleges that Sunnyvale
violated the Substantive Due Process Clause of the
Fourteenth Amendment and California Public
Resources Code (“PRC”) Section 40059 at FAC by
arbitrary and capricious application of Waste
Management of the Desert (App. 162-63).
B. The Court rulings for which review is
sought
The District Court first dismissed Petitioner’s
Complaint on the ground that it alleged insufficient
facts, as opposed to conclusory allegations, that
Sunnyvale had committed egregious conduct to support
its Substantive Due Process claim and then granted
10
leave to amend.12 After Premier Recycling amended its
Complaint, the District Court still found the allegations
too conclusory. The District Court stated (at *30-32):
“Despite the instant Court’s previous ruling that
Plaintiff must allege egregious government
action to state a substantive due process claim,
ECF No. 29 at 13-16, Plaintiff pleaded only
conclusory allegations that the California
Supreme Court’s decision was arbitrary. See
FAC ¶ 36. Plaintiff’s Opposition similarly
contains no specific allegations of egregious
government action beyond labeling the Waste
Management [*31] decision “egregious” and
“irrational.” Opp. at 2-4, 13-14, 17.
By failing to set forth any facts in the FAC to
show egregious government action, Plaintiff has
“fail[ed] to cure deficiencies by amendments
previously allowed.” Carvalho, 629 F.3d 876,
892-93. As a result, it is within the Court’s
discretion to find that further amendments
would be futile and to decline to allow further
amendments. Moreover, Plaintiff failed in its
Opposition to identify any facts that it could add
if given leave to amend yet another time. This
failure reinforces the Court’s conclusion that
allowing further amendments would be futile.”
The Ninth Circuit affirmed this viewpoint, stating
that Premier Recycling”…pleaded no facts to support
its allegations that the decision was ‘constitutionally
12
Jonna Corp. v. City of Sunnyvale, 2017 U.S. Dist. LEXIS 186348
at *4-6.
11
arbitrary.’” citing Shanks v. Dressel, 540 F.3d 1082,
1089 (9th Cir. 2008). But the Shanks Court affirmed a
grant of summary judgment, it made no determination
of the adequacy of pleading a Substantive Due Process
violation. The Shanks Court held that “Because
Spokane’s conduct did not deprive Logan Neighborhood
of a constitutionally cognizable property interest, we
affirm the district court’s entry of summary judgment
in favor of the city.” (op. p.1087)
C. Applicable rules for pleading a Substantive
Due Process violation
A complaint is sufficient if it gives the defendant
“fair notice” of what… the claim is and the grounds
upon which it rests.” Bell Atlantic Corp. v. Twombly,
550 U.S. 544, 555 (2007).
In determining the sufficiency, allegations of
material fact are deemed true “in the light most
favorable to the pleader.” Scheuer v. Rhodes, 416 U.S.
232, 236 (1974). The Scheuer Court stated: “Indeed it
may appear on the face of the pleadings that a recovery
is very remote and unlikely but that is not the test.”
Twenty-three years later, Bell Atlantic held that the
claim must be “plausible.”
Premier Recycling brought action under the
Declaratory Judgment Act, 28 U.S.C. Section 2201.
Congress intended the declaratory judgment procedure
to act as an alternative to injunctive relief and to be
utilized to test the constitutionality of state statutes.
Steffel v. Thompson, 415 U.S. 452, 466-468 (1974). To
fall within the Act’s ambit, the case of actual
controversy” (must be):
12
“definite and concrete, touching the legal
relations of parties having adverse legal
interests,’ . . . ‘real and substantial’ and ‘admi[t]
of specific relief through a decree of a conclusive
character, as distinguished from an opinion
advising what the law would be upon a
hypothetical state of facts.’” MedImmune, Inc. v.
Genentech, Inc., 549 U.S. 118, 127 (2007).
D. Conflict among the Ninth, Fifth and
Seventh Circuits
The Ninth Circuit’s pleading standards are set forth
in Yamaguchi v. United States Dep’t of the Air Force
109 F.3d 1475, 1481 (9th Cir. 1997). Yamaguchi states
that “Our system of notice pleading ‘does not require a
claimant to set out in detail the facts upon which he
bases his claim.’” (citation omitted) Instead, according
to the Court,
“all the Rules require is ‘a short and plain
statement of the claim’ that will give the
defendant fair notice of what the plaintiff’s claim
is and the grounds upon which it rests.” Id.
(footnote omitted) (quoting Fed.R.Civ.P. 8(a)(2)).
“[A] complaint should not be dismissed for
failure to state a claim unless it appears beyond
doubt that the plaintiff can prove no set of facts
in support of his claim which would entitle him
to relief.” Id. at 45-46 (footnote omitted)
(emphasis added). Thus, these liberal pleading
rules only require that the averments of the
complaint sufficiently establish a basis for
judgment against the defendant. Danning v.
Lavine, 572 F.2d 1386, 1388-89 (9th Cir. 1978).
13
This standard is similar to the one adopted by the
Seventh Circuit in Jackson v. Marion County, 66 F.3d
151, 153 (7th Cir. 1995) that under FRCP 8, as applied
to a claim arising under 42 U.S.C. Section 1983, like
this one, that “…a plaintiff in a suit in federal court
need not plead facts; he can plead conclusions.”
And because this case raises some novel issues, it is
noteworthy that motions to dismiss under FRCP
12(b)(6) are “especially disfavored” when the complaint
sets forth a novel legal theory that “can best be
assessed after factual development.” McGary v. City of
Portland, 386 F.3d 1259, 1270 (9th Cir. 2004).
In reversing a District Court decision to dismiss two
Section 1983 cases because they were “conclusory,
stale, and lacking in a factual basis”, Judge Posner of
the Seventh Circuit applied FRCP 8 in Brownlee v.
Conine, 957 F.2d 353, 354 (7th Cir. 1992) and held
that
The Federal Rules of Civil Procedure
establish a system of notice pleading rather than
of fact pleading, Fed. R. Civ. P. 8; Elliott v.
Thomas, 937 F.2d 338, 345 (7th Cir. 1991), so
the happenstance that a complaint is
“conclusory,” whatever exactly that overused
lawyers’ cliche means, does not automatically
condemn it. All the complaint need do to
withstand a motion to dismiss for failure to state
a claim is “outline or adumbrate” a violation of
the statute or constitutional provision upon
which the plaintiff relies, Sutliff, Inc. v. Donovan
14
Cos., 727 F.2d 648, 654 (7th Cir. 1984), and
connect the violation to the named defendants.
The Fifth Circuit went further in GE Capital Corp.
v. Posey, 415 F.3d 391, fn.6 (5th Cir. 2005) that “…the
mere fact that allegations can be characterized as
‘conclusional’ will not, alone, suffice to make them
insufficient” citing the Seventh Circuit in Brownlee.
This Court cited the Seventh Circuit decision in
Brownlee favorably in Bell Atlantic supra at 550 U.S.
544, 590.
Only one Court within the Ninth Circuit, Medrano
v. Caliber Homes Loans, Inc., 2014 U.S. Dist. LEXIS
177576 at *19-20 (CD CA 2014), has cited Brownlee,
and this Central District Court’s interpretation of
Brownlee is also at odds with both the District Court’s
ruling in this case which the Ninth Circuit affirmed.
The Medrano Court stated:
“What is the relevant difference between a
conclusory allegation on one hand, and a
sufficient allegation on the other? The
distinction can be a hard one to draw in formal
terms. See Brownlee v. Conine, 957 F.2d 353,
354 (7th Cir. 1992) (referring to the term
“conclusory,” in the context of pleading, as an ill
defined, “overused lawyers’ cliché”); see
generally 5 Charles Alan Wright, et al., Federal
Practice & Procedure § 1218 (3d ed.) (noting that
“years of frustrating experience” show that it is
“difficult, if not impossible, to draw meaningful
and consistent distinctions between or among
‘evidence,’ ‘facts,’ and ‘conclusions’” — concepts
that “tend[] to merge to form a continuum [with]
15
no readily apparent dividing markers . . . to
separate them”). Better instead to approach the
distinction in practical terms. To be effective, a
plaintiff’s complaint need only offer a set of facts
that put a defendant on notice of a legal wrong
the plaintiff alleges plausibly that the defendant
committed. See Twombly, 550 U.S. at 556-57
(holding that factual allegations must be enough
to raise a claim above a speculative level, and to
a plausible one); Skaff v. Meridien N. Am.
Beverly Hills, LLC, 506 F.3d 832, 841 (9th Cir.
2007) (noting that “the purpose of a complaint”
is “to give the defendant fair notice of the factual
basis of the claim”). (some record citations
omitted)
In this action, the District Court found that
Petitioner’s initial complaint did not meet FRCP 8’s
requirements because it failed to allege that
Sunnyvale’s action was “arbitrary or capricious” and
granted leave to amend to do so. (op. at * 46)
Petitioner’s FAC cured this asserted pleading defect
by alleging that Sunnyvale’s actions were “arbitrary
and capricious in each of Para. 22, 26, 27, and the
prayer for relief in the FAC (App. 164, 166-67).
Paragraphs 3-24 (App. 153-166) of the FAC allege
factually why the actions were arbitrary and capricious
and bearing no rational relation to any legitimate
government interest.
Premier Recycling submits that alleging an action
is arbitrary and capricious is itself a factual allegation.
Both words are adjectives. Adjectives modify nouns.
Conclusions are judgments, not nouns. In any event,
16
the FAC states the action was arbitrary and capricious
because:
Premier Recycling applied for a permit to haul C&D
for a fee under an Ordinance that allowed the issuance
of multiple permits and Sunnyvale denied a permit
because it had determined to allow only one hauler.
(App. 161)
Sunnyvale failed to perform the statutory condition
precedent (PRC Sec. 40059) to awarding an exclusive
solid waste franchise (App. 163))
Sunnyvale permits self-haul of C&D (App. 159-160)
while banning fee for service hauling of C&D, making
a rational public health and safety argument difficult;
Premier Recycling does not collect material within
the scope of Sunnyvale’s exclusive franchise; (App. 15759)
Premier Recycling alleged:
1. Premier Recycling applied for a license from
Sunnyvale to collect mixed C&D in the city for a
fee, accepting for that purpose that Sunnyvale’s
Ordinance required such a license. FAC Para.
17, App. 161;
2. Sunnyvale denied Petitioner’s license
application on the ground that Sunnyvale had
only one licensed collector of what the city
termed solid waste, even though Sunnyvale’s
Ordinance contemplates multiple licensees. FAC
Para. 18, App. 161-162;
17
3. Sunnyvale’s refusal to issue a license to Premier
Recycling deprived Premier Recycling of a
property interest under color of law in violation
of 42 U.S.C. Section 1983. FAC, Para. 26, App.
166-167);
4. Sunnyvale’s decision to have only one
licensee to collect what it terms “solid waste”
violated PRC Section 40059. FAC Para. 29,
App. 167;
5. Petitioner’s established property interests such
as lost contracts and business relationships were
impaired by the state Supreme Court decision,
Waste Management of the Desert, FAC, Paras, 30
and 33, App. 167-168;
6. The Waste Management of the Desert decision as
applied by Sunnyvale in denying a license to
Premier Recycling violates the 14th Amendment
because it is “so arbitrary that a rational basis
for the action cannot even be conceived post hoc.
FAC Para. 36, App. 169.
The facts alleged, not the conclusions, are that
Premier Recycling applied for, and was refused by,
Sunnyvale, a license as a disposal service operator.
That is the act under color of law that Premier
Recycling alleges. Premier Recycling alleges that this
denial caused it harm. Premier Recycling alleges that
the act of denying issuance of a permit denied Premier
Recycling rights arising both from the Constitution and
from state statute13, PRC Section 40059. Petitioner’s
13
Section 1983 states that relief may be provided to “Every person
who, under color of any statute, ordinance, regulation, custom, or
18
FAC enumerates which civil rights were violated under
color of law.
II. THE COURT SHOULD SETTLE AN
IMPORTANT QUESTION OF LAW
CONCERNING THE APPLICATION OF STOP
THE BEACH
A. Stop the Beach and its Progeny
In Stop the Beach Renourishment, Inc. v. Fla. Dep’t
of Envtl. Prot., 560 U.S. 702 (2010), four justices of this
Court, led by Justice Scalia found that an action of a
state Supreme Court that changed established property
rights could violate the Fifth Amendment Takings
Clause. Two of the remaining four14 justices, Justices
Kennedy and Sotomayor, stated that it was
unnecessary to decide the issue but that in theory,
should a state Supreme Court eliminate an established
property right, there would be a constitutional
violation. Justice Kennedy wrote: “If a judicial decision,
as opposed to an act of the executive or legislature
eliminates an established property right, the judgment
could be satisfied as a deprivation of property without
due process of law and that the Due Process Clause, in
both its substantive and procedural aspects is a central
limitation upon the exercise of judicial power.” (op
p. 735)
Premier Recycling withdrew its Takings Clause
claim due to the precedent of PVM Redwood Co. v.
usage, of any State” is deprived of “any rights, privileges, or
immunities secured by the Constitution and laws….”
14
Justice Stevens did not take part in the opinion. See op. p. 733)
19
United States, 686 F.2d 1327 (9th Cir. 1982). Premier
Recycling seeks review of the dismissal of its
Substantive Due Process claim.
The Ninth Circuit did not reference Stop the Beach
in its opinion in this case. The District Court opinion
states that a claim such as in Stop the Beach would
“…appear to raise “difficult procedural concerns” such
as ‘abstention and Rooker-Feldman, notice and
immunity’ that would be inherent in asking a federal
court to review a state court decision.”
But Justice Scalia pointedly stated that RookerFeldman did not preclude Takings Clause
responsibility (op p.727-728)
Justice Scalia rebuts the District Court’s concern by
stating:
There is no textual justification for saying
that the existence or the scope of a State’s power
to expropriate private property without just
compensation varies according to the branch of
government effecting the expropriation. Nor
does common sense recommend such a principle.
It would be absurd to allow a State to do by
judicial decree what the Takings Clause forbids
it to do by legislative fiat.15
15
Justice Scalia’s assessment was that the Takings clause, unlike
the ex post facto clauses, “is not limited to a specific branch of
government.” (op. p. 713-714). Likewise the Fourteenth
Amendment Due Process clause is not limited to a specific branch
of government.
20
The District Court also stated (at *17) that the “The
plurality disagreed with Justice Kennedy’s substantive
due process approach”, This is true.
But the District Court also cites (at *17) Watson v.
Lake County, No. 5:09-cv-399, 2011 U.S. Dist. LEXIS
162352, 2011 WL 13175635, at *6 n.2 (M.D. Fla. Feb.
23, 2011) for the proposition that “Notwithstanding the
fact that [Justice Kennedy’s] opinion has no
precedential value, it was also roundly criticized by a
plurality of the other justices. This Court refused to
apply such an unsettled rule to this case.”
Watson says no such thing. The cited portion of
Watson states that “Plaintiffs do not allege that an
unconstitutional taking has occurred, and therefore the
Supreme Court’s analysis is inapplicable here.”
At least two Courts have declined to follow Stop the
Beach because it was a plurality opinion that has “no
precedential value.” See Shinnecock Indian Nation v.
United States, 112 Fed. Cl. 369, 385 (2013); Northern
Natural Gas Co. v. ONEOK Field Servs. Co., L.L.C.,
296 Kan. 906, 935 (2013).
One District Court within the Ninth Circuit
accepted as true that courts could make a “taking”, but
found that in the particular case the Nevada Supreme
Court had not done so. Thunder Props. v. Treadway,
2016 U.S. Dist. LEXIS 43818 at *9 (D NV 2016).
Likewise, one of the cases cited by the District Court
held that the possibility existed, but not in that
particular case. Weigel v. Maryland, 950 F. Supp. 2d
811, 837-838 (D MD 2013).
21
These Courts all disregarded the two Supreme
Court cases cited by Justice Scalia to support his
opinion in Stop the Beach, Pruneyard Shopping Ctr. v.
Robins, 447 U.S. 74, 76 (1980) and Webb’s Fabulous
Pharms. v. Beckwith, 449 U.S. 155 (1980).
Neither Pruneyard nor Webb’s was a plurality
decision. Webb’s was a unanimous decision. In
Pruneyard this Court considered the issue (op. p.79)
Before this Court, appellants contend that their
constitutionally established rights under the
Fourteenth Amendment to exclude appellees
from adverse use of appellants’ private property
cannot be denied by invocation of a state
constitutional provision or by judicial
reconstruction of a State’s laws of private
property. We postponed consideration of the
question of jurisdiction until the hearing of the
case on the merits.
The Pruneyard Court declined to find that the state
Supreme Court had ruled unconstitutionally. (op. p.88)
While Pruneyard was primarily a First Amendment
case, none of the justices disagreed with the premise
that a state Supreme Court might make an
unconstitutional ruling.
In Webb’s, a unanimous Court held that a Florida
county ordinance affirmed by the state Supreme Court
in fact violated the Takings Clause and reversed the
state Supreme Court decision. (op. p.164-65)
Premier Recycling of course was not a party to the
Waste Management of the Desert case being reviewed,
like the plaintiff was in Webb’s. Premier Recycling had
22
no standing to challenge the efficacy of that decision
until Premier Recycling had been injured by that
decision- here when Sunnyvale applied Waste
Management of the Desert to preclude Premier
Recycling from exercising a property right it enjoyed
before that case was decided. Premier Recycling did
not sue the state Supreme Court, nor did it have to.
According to Justice Scalia in Stop the Beach, “Where
the claimant was not a party to the original suit, he
would be able to challenge in federal court the taking
effected by the state supreme-court opinion to the same
extent that he would be able to challenge in federal
court a legislative or executive taking previously
approved by a state supreme-court opinion.”
B. How the California Supreme Court
impaired established property rights
In Justice Scalia’s formulation (op p.730) one
compares the property rights of a party before and after
the subject state Supreme Court decision. Premier
Recycling thus compares the legislature’s
comprehensive pro-recycling statutory scheme of 1989
against the state Supreme Court’s 1994 pro-garbage
interpretation. The state court did not even follow this
Court’s precedent or its own state law for the
interpretation of a statute.
C. The Established Property Rights Set Forth
in the 1989 Legislation
In 1989, California passed a landmark Integrated
Waste Management Act (“Act’) which completely recast
the relationship between recyclable materials/
commodities, and solid waste. The Legislature also
23
commanded that, upon the threat of $10,000/day fines,
each local government must reduce the amount of
material going to landfill by 50% by year 2000. See
PRC Section 41780. The legislature stated
unequivocally in PRC Section 40051 its policy goals:
In implementing this division, the board and
local agencies shall do both of the following:
(a) Promote the following waste management
practices in order of priority:
(1) Source reduction.
(2) Recycling and composting.
(3) Environmentally safe transformationi and
environmentally safe land disposal, at the
discretion of the city or county.
(b) Maximize the use of all feasible source
reduction, recycling, and composting options in
order to reduce the amount of solid waste that
must be disposed of by transformation and land
disposal…..
In other words, after first reducing the amount of
post-consumer discards, local agencies of the state
must first apply methods of resource recovery to the
post-consumer discards such as reuse, re-processing,
and composting. Unless and until these post-consumer
discards had passed through the available recovery
processes, the discards do not become solid waste,
which is the residue after this “order of priority” is
followed. In the industry parlance, “nothing is waste
until it is wasted.”
The policy behind this legislative direction that
landfills are environmentally harmful and that virgin
24
resources need to be conserved is also made clear in
PRC Section 40000 which states in part:
The Legislature hereby finds and declares all of
the following:
***
(b) Over 90 percent of California’s solid waste
currently is disposed of in landfills, some of
which pose a threat to groundwater, air
quality, and public health.
***
(e) The reduction, recycling, or reuse of solid
waste generated in the state will, in addition to
preserving landfill capacity in California, serve
to conserve water, energy, and other
natural resources within this state, and to
protect the state’s environment.” (emphasis
added)
Specifically as it relates to the activity of Premier
Recycling recovering recyclable commodities at
construction job sites, hauling the mixed C&D to its
permitted facility, then selling the sorted materials and
placing them back in commerce, the Legislature stated
in PRC Section 40001(e):
The Legislature further declares that market
development is the key to successful and
cost-effective implementation of
the…diversion requirements required pursuant
to Section 41780, and that the state must take a
leadership role, …in encouraging the expansion
25
of markets for recycled products by working
cooperatively with the public, private, and
nonprofit sectors. (emphasis added)
The Act defines “Recycle” in PRC Sec. 40180 as
… the process of collecting, sorting, cleansing,
treating, and reconstituting materials that
would otherwise become solid waste, and
returning them to the economic mainstream in
the form of raw material for new, reused, or
reconstituted products which meet the quality
standards necessary to be used in the
marketplace. “Recycling” does not include
transformation16, as defined in Section 40201 or
EMSW conversion.
If the verb “to recycle” means “collecting, sorting…,
and reconstituting materials that would otherwise
become solid waste”, then the results of that process
logically are “recyclable materials.” The key phrase in
Section 40180 is “that otherwise would become
solid waste.” This is consistent with the legislativelycommanded “order of priority” in PRC Section 40051
supra that recycling or composting options must be
used on materials before they become solid waste.
The Act defines “solid waste” in PRC Section
40191(a)17 to mean:
Except as provided in subdivision (b), “solid
waste” means all putrescible and nonputrescible
16
17
i.e. incineration
Section 40191(b) contains exclusions to this definition not
relevant to this case.
26
solid, semisolid, and liquid wastes, including
garbage, trash, refuse, paper, rubbish, ashes,
industrial wastes, demolition and construction
wastes, abandoned vehicles and parts thereof,
discarded home and industrial appliances,
dewatered, treated, or chemically fixed sewage
sludge which is not hazardous waste, manure,
vegetable or animal solid and semisolid wastes,
and other discarded solid and semisolid wastes.
Although the Waste Management of the Desert Court
interpreted this statutory definition, it never stated
that the definition was so ambiguous that it required
interpretation.
An exclusive franchise may be granted for the
collection of solid waste only if “the public health,
safety, and well-being so require.” PRC Section
40059(a)(2). Section 40059 implies that the
governmental agency, here Sunnyvale, awarding the
franchise, make some finding, in open session that the
public health, safety, and well-being to Sunnyvale’s
citizens require the grant of an exclusive franchise.
The Act does not provide for the franchising of
collection of recyclable materials, i.e. what Plaintiff
collects.
The record before the District Court does not reveal
any finding by Sunnyvale that the public health, safety,
and well-being require an exclusive franchise of solid
waste.
27
D. Compare the 1989 Legislation to the 1989
Supreme Court Interpretation
In 1994 the California Supreme Court was
confronted with where the line should be drawn
between recyclable materials and solid waste, having
assumed, without stating so, that the definition of
“solid waste” in PRC Section 40091 was ambiguous.
Waste Management of the Desert v. Palm Springs
Recycling Center, 7 Cal.4th 478 (1994).
The city of Rancho Mirage granted a franchise and
passed a conforming ordinance granting to Waste
Management of the Desert (WMD) the exclusive right
to “collect, receive, transport, segregate, recycle, and
dispose of residential and commercial refuse” of the
type customarily deposited by residents and
businesses in collection containers or areas for pickup
and disposal.
This ordinance is similar to the one challenged in
this case. Palm Springs Recycling Center was a
business that collected recyclable materials from
commercial accounts in Rancho Mirage. WMD and the
city sued to enjoin this activity.
The trial court issued a preliminary injunction and
then a Judgment in favor of WMD and City
permanently enjoining Palm Springs Recycling Center
“from placing bins or other receptacles within the City
for the purpose of collecting recyclable materials and
from collecting or removing recyclable materials from
within the City.” The trial court did not attempt to
distinguish recyclable materials from solid waste.
28
The Court of Appeal reversed at 20 Cal.App.4th
586 (1992), holding that the materials collected by
Palm Springs Recycling Center were not “discarded”
and therefore not within the definition of solid waste in
PRC Section 40191. The Court of Appeal also found
that the City’s actions were an unconstitutional
exercise of its police power- the issue presented in this
case.
In reversing the Court of Appeal, the state Supreme
Court also focused on the term “discarded” because the
definition of solid waste under Section 40191 has a
residual category of “other discarded” solid and
semisolid waste. The Court did not cite any legislative
history of the Act in interpreting the meaning of
“discard”. Nor did it cite any of the policies of the Act,
such as are quoted supra. The Court did not even follow
its own precedent for resolving statutory ambiguities
first by examining “…the language and purposes of the
statutory schemes as a whole.”Evangelatos v. Superior
Court, 44 Cal. 3d 1188, 1202 (1988).
The Court instead focused on its own, selective,
dictionary definition of “discard” and then legislated it
as the definition of solid waste. The more common
dictionary definition of “discard” is “to get rid of as
unwanted or useless.” The Ninth Circuit used this
same definition of “discard” (to get rid of as unwanted
or useless) in United States v. Millis, 621 F.3d 914, 917
(9th Cir. 2014) (purified water in a bottle was not
“garbage”). The Waste Management of the Desert court
used something else of the Court’s own making.
29
E. Rules Of Statutory Interpretation
The starting point for interpretation of a statute “is
the language of the statute itself. Absent a clearly
expressed legislative intention to the contrary, that
language must ordinarily be regarded as conclusive.”
Consumer Product Safety Comm’n v. GTE Sylvania,
Inc., 447 U.S. 102, 108 (1980).
“When a statute includes an explicit definition, (the
Court) must follow that definition, even if it varies from
that term’s ordinary meaning.” Stenberg v. Carhart,
530 U.S. 914, 942 (2000).
“(The) established rule of statutory interpretation
cannot be overcome by judicial speculation as to the
subjective intent of various legislators in enacting the
(legislation).” Bilsky v. Kappos, 561 U.S. 593, 608
(2010).
“In order to determine the scope of (a statute), (the
Court) must examine the statute’s text in light of
context, structure, and related statutory provisions.”
Exxon Mobil Corp. v. Alapattah Svcs., 545 U.S. 546,
558 (2005).
California state law
interpretation is similar.
governing
statutory
“It is well settled that the primary goal when
interpreting a statute or rule is to determine the
drafters’ intent in order to give effect to the rule’s
purpose. “‘The court begins with the language used.
[Citation.] The court attempts to give effect to the
usual, ordinary import of the language and to avoid
making any language mere surplusage. [Citations.]
30
“The words must be construed in context in light of the
nature and obvious purpose of the statute where they
appear. …” Harris v. Appellate Division of Superior
Court, 14 Cal.App. 5th 142, 148 (2017) citing Rossa v.
D.L. Falk Construction, Inc., 53 Cal. 4th 387, 397
(2014).
While California and Federal courts, including the
Harris Court, employ the dictionary at times in
construing ambiguous statutes, this Court cautioned
about dictionary use in Yates v. United States 135
S. Ct. 1074, 1081-1082 (2015)
Whether a statutory term is unambiguous,
however, does not turn solely on dictionary
definitions of its component words. Rather,
“[t]he plainness or ambiguity of statutory
language is determine [not only] by reference to
the language itself, [but as well by] the specific
context in which that language is used, and the
broader context of the statute as a whole.”
Robinson v. Shell Oil Co., 519 U.S. 337, 341, 117
S. Ct. 843, 136 L. Ed. 2d 808 (1997). See also
Deal v. United States, 508 U.S. 129, 132, 113
S. Ct. 1993, 124 L. Ed. 2d 44 (1993) (it is a
“fundamental principle of statutory construction
(and, indeed, of language itself) that the
meaning of a word cannot be determined in
isolation, but must be drawn from the context in
which it is used”). Ordinarily, a word’s usage
accords with its dictionary definition. In law as
in life, however, the same words, placed in
different contexts, sometimes mean different
things.
31
In this case, the Waste Management of the Desert
Court also added into these definitions an economic
component that results in a changed “policy” that is the
opposite of what the Legislature intended and the
rights that the Legislature created.
The Court in Waste Management of the Desert did
not refer to any of the language in the landmark
statutory scheme that declares its purpose, such as
PRC Sections 40001, 40004, and 40180. The Court did
not mention the mandated hierarchy of materials
handling stated in PRC Section 40180. The Court did
not cite the definition of “recycle” in PRC Section
40051.The Court explicitly did not consider any
constitutional issue in its construction of the terms
“solid waste” and “discard”. (op. at p. 490) Thus, the
Court did not follow, or even observe, the statutory
rules of construction endorsed by either this Court or
itself. The stated policies of the statutes considered by
the Court18 explicitly state a different purpose than the
Court’s own speculative interpretation.
By enacting PRC Section 40000 et seq., the state
Legislature decided and declared that there was too
much garbage, i.e. the garbage that historically has
been regulated by local government.19
18
See Public Resources Code Sections 40000-40001, 40004, and
40180.
19
Although this Court has held that “solid waste” is an article of
commerce for purposes of applying the Commerce Clause, it has
never defined what “solid waste” means for this purpose. See
Philadelphia v. New Jersey (1978) 437 US 617, 622-623. Writing in
dissent, Justice (later Chief Justice) Rehnquist expressed the view
that garbage was the equivalent of “germ-infected rags or diseased
32
To counteract the environmental harm of landfills
and incineration and the wasting of virgin resources
declared by the Legislature, the state Legislature made
clear that recycling was preferred over landfilling (PRC
Sec. 40000(e) and that the act of recycling was defined
to be (PRC Sec. 40180)
… the process of collecting, sorting, cleansing,
treating, and reconstituting materials that
would otherwise become solid waste, and
returning them to the economic mainstream in
the form of raw material for new, reused, or
reconstituted products…. (emphasis added)
Instead of focusing on whether “discarded” material
was in fact recycled, and entitled to statutory
preference, the Court in Waste Management of the
Desert added an economic component to the meaning of
discarding and recycling, that the dividing line of waste
v. recyclable was whether or not someone bought it
from the owner.
The Court revealed its focus on garbage, not
recycling. First, the Court stated, (at p. 485)
The Act’s very title, the California Integrated
Waste Management Act of 1989, and its
repeated references to “solid waste,” “solid waste
handling,” “recycling of solid wastes,” and the
like strongly indicate the Legislature was
concerned with just what it said--waste--and
meat”, citing Asbell v. Kansas, 209 U.S. 251 (1908), which upheld
a Kansas statute banning the import of cattle unless first
inspected at the border.
33
not with materials of economic value to
their owner. (emphasis added)
That is not a rational construction of what the
Legislature said and the Court cites no such language
of intent. The repeated references in the legislation to
“waste” are in the context of declaring it to be a noxious
substance that must be reduced and recycled. PRC
Section 40000(d) and (e). The legislation expressly
does concern “materials of economic value to their
owner.” (PRC Secs. 40001(e), 40180).
The entire point of the 1989 legislation was to
create a hierarchy of materials handling so that,
before they become “waste”, discarded (i.e. unwanted
by the owner/generator) materials are first processed
for reuse, recycling, and composting to encourage
market development of the businesses performing the
reclamation of materials. The Legislature determined
that recycling involved processing materials “that
otherwise would become solid waste” and that the
Legislature intended to put these reconstituted
products back into use “in the market.” PRC Section
40180.
The Court then opined that (at p.485)
The commonly understood meaning of “waste” is
something discarded “as worthless or useless.”
(Amer. Heritage Dict. (1985) p. 1365, col. 1; 19
Oxford English Dict. (2d ed. 1989), p. 958, col. 1.)
The Court continued to explain its definition in
economic terms (p. 485).
34
“If the owner sells his property--that is, receives
value for it--the property cannot be said to be worthless
or useless in an economic sense and is thus not waste
from the owner’s perspective.”
But the American Heritage Dictionary online
edition today offers two relevant definitions of “waste”,
neither of which are what the Court used20. Today’s
definition is either: a) “An unusable or unwanted
substance or material…” or b) “garbage; trash”.
According to this same dictionary, “garbage” is
synonymous with “trash” and “trash” means, “a.
Worthless or discarded material or objects”
But the Legislature never said that waste or value
is judged from the owner’s perspective. The mixed C&D
collected by Premier Recycling is not worthless or
useless or “unwanted”; it is sorted and then sold to
manufacturers of reconstituted products, exactly what
the legislation was designed to promote. The
Legislature did not state where, in the post-consumer
supply chain, the discards must realize “value”. The
legislation commands that post-consumer discards be
put through reclamation processes before the discards
are deemed “waste”. At the end of this process, when
no one wants the discard, and its end destination is
the landfill, only then does the material becomes
“waste”, as the Legislature intended that term to mean.
20
Illustrating a problem of using dictionary definitions; the edition
cited by the Court is no longer in print or readily available.
35
What Premier Recycling collects is not “worthless”,
or “useless”, or “unwanted”. It sells the sorted C&D to
a buyer who values, uses, and wants it. The mixed
C&D has a value to the owner/generator that hires
Premier Recycling to collect it. Creating a test of
whether the owner “sells” the discards is not what the
Legislature intended and does not reflect marketplace
reality. The evidence may show that Premier Recycling
charges a lower collection fee than the franchised
hauler because Petitioner’s collection costs are offset by
the sale of the sorted materials. This gives “value” to
the owner/generator. The mixed C&D has value at the
instant Premier Recycling collects it and never loses
that value.
The Court continued its interpretation of the
legislation by stating, “Discard” means “to throw
away.”. (p.468).
Today’s Merriam-Webster online definition21 of the
term adds the phrase, “…to get rid of something as
worthless or useless” Logically, nothing becomes either
solid waste or recyclable until the owner no longer
wants it. If unwanted material goes to a landfill it is
wasted and waste is disfavored as a matter of policy; if
material is recycled it is favored by policy and must
mean that the material has worth to someone postconsumer.
But the real rationale for the Court’s decision may
be inferred from its criticism of the Court of Appeal and
its reasoning to reverse the court of Appeal:
21
https://www.merriam-webster.com/dictionary/discard
36
“The Court of Appeal also relied heavily on
this statutory definition of “waste” in concluding
that “only discarded waste materials become
solid waste subject to ‘handling’ “ under the Act.
Plaintiffs22 object to this approach, contending it
would eviscerate the Act because owners could
discard all their property--recyclable and
otherwise--as they see fit and thereby render an
exclusive solid waste handling franchise a
nullity as a practical matter. In other words, the
Court of Appeal opinion might be read to mean
that a property owner could decide unilaterally
with whom he will discard his waste. If three
competing waste handlers (the exclusive
franchisee and two others) placed their
respective receptacles at the owner’s
curbside, he could put his waste into
whichever container he chooses. Perhaps
the Court of Appeal did not intend that result,
but its opinion might be read as suggesting as
much and, if so, we believe this result would be
inconsistent with the Act’s apparent intent. If,
however, the concept of being discarded is
properly understood, this perceived problem is
easily avoided.” (emphasis added)
The boldfaced portion of this “parade of horribles”
makes no mention of recyclable materials, it discusses
“waste.” “Waste” is something that results from a
failure to reuse, recycle, or compost the material. A
recycled material is not waste. To be recycled,
22
Plaintiffs in the case were the franchised garbage hauler and the
public entities involved.
37
something must be “recyclable”. When the Court is
concerned about “competing waste collectors” it must
not mean the collection of recyclable materials, unless
the Court actually is equating the two things, itself at
variance with the legislative intent. That might have
been the regulatory intent in 190523 but not how it
unconstitutionally “changed course” in 1989.
The 1989 legislative intent is to reduce waste, not
eliminate competition for the materials that the owner
does not want. And the Legislature provided discretion
to local agencies to grant exclusive “waste” collection
franchises only if the public health and safety so
require; exactly the discretion that Sunnyvale did not
exercise in this case. Sunnyvale has unchallenged
statutory power to have only one “waste” collector and
avoid the Court’s concern that multiple waste collectors
might undermine a city’s power to want exclusivity in
its waste collection system. But Sunnyvale did not
exercise this power for any reason that the Legislature
intended.
The 1989 legislation prefers that materials be
recycled. The legislation does not dictate who must
collect the recyclable material. So if there are “multiple
collectors of recyclable material” within a jurisdiction,
this is market capitalism of the type the legislation
states that it wanted to promote. PRC Section 40001(e).
23
Both this Court’s and the state court’s jurisprudence on the need
for garbage franchising is from 1905, not long after the germ
theory of disease was accepted and the United States still suffered
plague and cholera outbreaks. See California Reduction Co. v.
Sanitary Reduction Works, 126 F. 29 (9th Cir. 1903) cert granted
199 U.S. 306 (1905); In re Zhizhuzza 147 Cal. 328, 329 (1905).
38
What the 1994 Waste Management of the Desert
Court may have intended is a reflection of judicial
history recognizing that if waste is not handled safely
and collected regularly it can become a health hazard,
a view that Premier Recycling shares. The Court may
have thought that allowing multiple “waste” collectors
within a jurisdiction might impair a local government’s
obligations to regulate safe waste collection and
disposal, a view which Premier Recycling does not
contest.
The 1994 “change of course” by the Court from the
1989 legislation is its imposition of an economic
component of value to the owner into a definition of
“waste”, which the legislation views as a residual
category of materials, left over after all reclamation
options are exhausted. The 1989 legislation
contemplates this undeniable truth; if post-consumer
material goes to a landfill or to an incinerator, it is
“waste(d)”; if post-consumer material is reclaimed and
put back into the stream of commerce (no matter who
in the supply chain values it) then it was recycled,
which is the intent of the legislation.
CONCLUSION
Petitioner’s action was designed to test the
constitutional limit of local regulation of the fee for
service collection of nonhazardous recyclable material
like wood, metal, and cardboard. Petitioner alleged its
claim with as much factual detail as possible to comply
with the notice pleading requirements of FRCP 8.
Without intervention by this Court, there is no hope
in California to level the economic playing field for
39
collectors of recyclable materials that are meeting
California’s policy goals.24
Respectfully submitted,
John Douglas Moore
Counsel of Record
1999 Harrison St., 18th Fl.
Oakland, CA 94612
(510) 893-6300
jmoore@recyclelaw.com
Counsel for Petitioner
24
Garbage franchises traditionally have reimbursed the franchisee
for all of its costs plus added profit. The franchisee is paid by
ratepayers. Sometimes the franchisee will lease land and
equipment from an affiliated entity and pass on these “costs” at far
above market rates. A savvy franchisee gifted with this type of
contract will invest some of its profit back into re-election
campaigns of the elected officials who voted to award it. Likewise
the garbage collection lobby effectively blocks change at the state
level. This system would be tested factually in court should this
Petition be granted.
APPENDIX
i
APPENDIX
TABLE OF CONTENTS
Appendix A Memorandum in the United States
Court of Appeals for the Ninth Circuit
(February 22, 2019) . . . . . . . . . . . App. 1
Appendix B Order Granting Motion to Dismiss the
First Amended Complaint in the
United States District Court Northern
District of California, San Jose Division
(November 9, 2017). . . . . . . . . . . . App. 5
Appendix C Order Granting City of Sunnyvale’s
Motion to Dismiss in the United
States District Court Northern
District of California, San Jose Division
(June 16, 2017) . . . . . . . . . . . . . . App. 36
Appendix D Cal. Pub. Res. Code. . . . . . . . . . . App. 79
§ 40000-40004 . . . . . . . . . . . . App. 79
§ 40050-40063 . . . . . . . . . . . . App. 84
§ 40100-40201 . . . . . . . . . . . App. 104
§ 41780-41786 . . . . . . . . . . . App. 126
Appendix E First
Amended
Complaint for
Declaratory Judgment and Injunctive
Relief (28 U.S.C. Section 2201) in the
United States District Court Northern
District of California, San Jose Division
(July 16, 2017). . . . . . . . . . . . . . App. 152
App. 1
APPENDIX A
NOT FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
No. 17-17459
D.C. No. 17-cv-00956-LHK-HRL
[Filed February 22, 2019]
________________________________
JONNA CORPORATION, DBA
)
Premier Recycling Company
)
)
Plaintiff-Appellant, )
)
v.
)
)
CITY OF SUNNYVALE,
)
)
Defendant-Appellee. )
________________________________ )
MEMORANDUM*
Appeal from the United States District Court
for the Northern District of California
Lucy H. Koh, District Judge, Presiding
*
This disposition is not appropriate for publication and is not
precedent except as provided by Ninth Circuit Rule 36-3.
App. 2
Submitted February 15, 2019**
San Francisco, California
Before: SCHROEDER and RAWLINSON, Circuit
Judges, and LASNIK,*** District Judge.
Jonna Corporation, dba Premier Recycling
Company (“Premier”), appeals the dismissal of its First
Amended Complaint (“FAC”) on November 9, 2017. We
have jurisdiction under 8 U.S.C. § 1291, and we affirm.
We review de novo a dismissal of a complaint, and
we review for abuse of discretion a denial of leave to
amend a complaint. United States ex rel. Anita Silingo
v. WellPoint, Inc., 904 F.3d 667, 676 (9th Cir. 2018);
(citing United States v. Corinthian Colleges, 655 F.3d
984, 991, 995 (9th Cir. 2011)).
The City of Sunnyvale (“the City”) has an exclusive
franchise arrangement for the collection of waste and
recycling materials with Bay Counties Waste Services.
The California Supreme Court held in 1994 that cities
were authorized to grant exclusive franchises of this
sort for “solid waste.” Waste Mgmt. of the Desert, Inc.
v. Palm Springs Recycling Ctr., Inc., 869 P.2d 440, 442
(Cal. 1994) (in bank). In its FAC, Premier challenged
the City’s exclusive franchise, alleging a declaratory
relief action premised on the Takings Clause of the
United States Constitution and the Fourteenth
**
The panel unanimously concludes this case is suitable for
decision without oral argument. See Fed. R. App. P. 34(a)(2).
***
The Honorable Robert S. Lasnik, United States District Judge
for the Western District of Washington, sitting by designation.
App. 3
Amendment’s guarantee of substantive due process. In
its opposition to the City’s motion to dismiss, it
abandoned its Takings Clause claim, and clarified that
its due process claim was based not on any actions by
the City, but on the California Supreme Court’s
definition of “waste,” which includes within its ambit
the construction and demolition debris that Premier
collects. Waste Mgmt. of the Desert, Inc., 869 P.2d at
445. To the extent that Premier now asserts a
substantive due process violation by the City, those
claims have been waived. Solis v. Matheson, 563 F.3d
425, 437 (9th Cir. 2009).
As Premier concedes, we must apply rational basis
review to its claims. Witt v. Dep’t of Air Force, 527 F.3d
806, 817 (9th Cir. 2008). Under this standard, “only
egregious official conduct can be said to be arbitrary in
the constitutional sense: it must amount to an abuse of
power lacking any reasonable justification in the
service of a legitimate governmental objective.” Shanks
v. Dressel, 540 F.3d 1082, 1088 (9th Cir. 2008) (quoting
Cty. of Sacramento v. Lewis, 523 U.S. 833, 846 (1998))
(internal quotation marks omitted). Even assuming, as
the district court did, that Premier’s substantive due
process claim based on a state court’s interpretation of
state law is sustainable in a federal court, Premier does
not satisfy this “exceedingly high burden.” Id. (quoting
Matsuda v. City & County of Honolulu, 512 F.3d 1148,
1156 (9th Cir. 2008)). It expressed disagreement with
the California Supreme Court’s definition of “waste,”
Waste Mgmt. of the Desert, Inc., 869 P.2d at 444, but
it pleaded no facts to support its allegations that the
decision was “constitutionally arbitrary.” Shanks, 540
F.3d at 1089. The district court did not err in
App. 4
dismissing the FAC. Nor did it abuse its discretion in
denying leave to amend. See Carvalho v. Equifax Info.
Servs., LLC, 629 F.3d 876, 892-93 (9th Cir. 2010).
AFFIRMED.
App. 5
APPENDIX B
UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF CALIFORNIA
SAN JOSE DIVISION
Case No. 17-CV-00956-LHK
[Filed November 9, 2017]
_____________________________
JONNA CORPORATION,
)
)
Plaintiff,
)
)
v.
)
)
CITY OF SUNNYVALE, CA,
)
)
Defendant.
)
_____________________________ )
ORDER GRANTING MOTION TO DISMISS
THE FIRST AMENDED COMPLAINT
Re: Dkt. No. 34
Plaintiff Jonna Corporation (“Plaintiff”), doing
business as Premier Recycling, sues Defendant City of
Sunnyvale (“the City”) because the City refused to
provide Plaintiff a license to collect construction and
demolition debris in the City. Before the Court is the
City’s Motion to Dismiss the First Amended Complaint.
ECF No. 34 (“Mot.”). Having considered the
submissions of the parties, the relevant law, and the
App. 6
record in this case, the Court GRANTS the City’s
Motion to Dismiss the First Amended Complaint.
I. BACKGROUND
A. Factual Background
In 1991, the City entered into an exclusive franchise
agreement for the collection of solid waste in the City
(“Exclusive Franchise Agreement”) with Bay Counties
Waste Services, Inc. (“Bay Counties”), formerly
Specialty Solid Waste & Recycling, Inc., for a term of
ten years. First Amended Complaint (“FAC”), ECF No.
33 at 9; ECF No. 35-1 at 16; Sunnyvale Ordinance No.
2771-04.1 The Exclusive Franchise Agreement has been
amended and extended a number of times, and now
extends through at least June 30, 2021. Sunnyvale
Ordinance No. 2949-11. Under the Exclusive Franchise
Agreement, Bay Counties is the sole collector of solid
waste, including recyclable materials and construction
debris, in the City. FAC at 9. The Sunnyvale Municipal
Code forbids any party from collecting solid waste for
a fee without a franchise or license. Sunnyvale Mun.
Code § 8.16.150 (“It is unlawful for any person to
engage in the business of collecting solid waste within
the city, or to haul the same through any street or
public right-of-way in the city, unless such person has
been granted a franchise or license to do so by the
city.”). Bay Counties is the only entity that has been
awarded such a franchise or license. FAC at 9.
1
In this section, the Court refers to documents of which the City
requests judicial notice. In Section III below, the Court discusses
and grants judicial notice of all of these documents except those to
which Plaintiff objected.
App. 7
Plaintiff is a California corporation based in Santa
Clara County that “is in the business of collecting
discarded wood, metal, asphalt, concrete, and drywall
from commercial construction and demolition sites”
(“construction and demolition debris”). FAC ¶¶ 3, 5. On
October 19, 2016, Plaintiff applied to the City for a
franchise or license to collect construction and
demolition debris under Sunnyvale Municipal Code
§ 8.16.090. Id. ¶ 17; see also Sunnyvale Mun. Code
§ 8.16.090 (“The city council shall provide for the
collection and disposal of solid waste and recyclable
materials generated from residences within the city by
the issuance of a franchise or license, or franchises and
licenses, to disposal service operators.”). On November
7, 2016, the City denied Plaintiff’s application for a
franchise or license. FAC ¶ 18. The City’s denial letter
stated that “[w]hile the Sunnyvale Municipal Code does
allow for the possibility of the City issuing multiple
license holders/franchisees, the City’s current policy is
to issue an exclusive franchise to a single disposal
service operator. This franchise extends to collection of
all solid waste, including [construction and demolition]
material, as described in more detail in Chapter 8.16 of
the Code.” Id.
B. Procedural History
On February 24, 2017, Plaintiff filed the instant
suit. See ECF No. 1. Plaintiff asserted two causes of
action: declaratory relief and mandamus. The
declaratory relief cause of action was based on the
following theories: (1) violation of the Takings Clause
of the U.S. Constitution; (2) violation of the guarantee
of substantive due process of Fifth and Fourteenth
App. 8
Amendments to the U.S. Constitution; (3) violation of
the Equal Protection Clause in the Fourteenth
Amendment of the U.S. Constitution and Article I,
Section 7 of the California Constitution; (4) violation of
the Commerce Clause of the U.S. Constitution; (5) the
City’s use of the wrong definition of “solid waste” under
California law; and (6) violation of California Public
Resources Code § 40059. Id. ¶¶ 26-31. Plaintiff’s
mandamus cause of action stated that the City had a
mandatory duty to issue a franchise or license to
Plaintiff under Sunnyvale Municipal Code § 8.16.090,
and thus the Court should compel the issuance of such
a license. Id. ¶¶ 32-34.
On March 4, 2017, the City filed a motion to dismiss
the complaint. ECF No. 16. On April 18, 2017, Plaintiff
filed an opposition. ECF No. 18. On April 25, 2017, the
City filed a reply. ECF No. 19. On June 16, 2017, the
Court granted the City’s motion to dismiss after finding
that Plaintiff had failed to satisfy the takings
exhaustion requirement and had failed to allege that
the City’s exclusive franchise policy was arbitrary and
capricious, as substantive due process would require.
ECF No. 29 at 12-16. The Court also dismissed
Plaintiff’s equal protection theory based on Plaintiff’s
failure to plead that it was similarly situated to any
other group that had been awarded a franchise or
license and on Plaintiff’s failure to adequately allege
that the City’s exclusive franchise policy was irrational.
Id. at 16-20. The Court dismissed Plaintiff’s dormant
Commerce Clause theory because Plaintiff failed to
adequately plead that the exclusive franchise policy
discriminated against out-of-state interests or that it
burdened interstate commerce. Id. at 25-26. Because
App. 9
the Court had dismissed all of the bases for declaratory
relief over which it had original jurisdiction, the Court
declined to exercise supplemental jurisdiction over
Plaintiff’s remaining state law theories for Plaintiff’s
declaratory relief cause of action and Plaintiff’s
mandamus cause of action, which was based on state
law. Id. at 26-29.
The Court provided Plaintiff leave to amend its
complaint within thirty days. ECF No. 29 at 29. The
Court cautioned that “[f]ailure to file an amended
complaint within 30 days or failure to cure the
deficiencies identified in this Order will result in
dismissal with prejudice of the claims dismissed in this
Order.” Id.
Plaintiff filed its First Amended Complaint on July
16, 2017. In the FAC, Plaintiff alleged a declaratory
relief cause of action premised on the Takings Clause
of the U.S. Constitution and the Fourteenth
Amendment’s guarantee of substantive due process.
Plaintiff abandoned its Equal Protection Clause and
Commerce Clause theories and also abandoned the
mandamus cause of action.
The City filed a motion to dismiss on July 28, 2017.
See Mot. The City also filed a request for judicial
notice. ECF No. 35 (“RJN”). On August 11, 2017,
Plaintiff filed an opposition and objections to the City’s
RJN. ECF No. 37 (“Opp.”). In its opposition, Plaintiff
withdrew its Takings Clause theory. Opp. at 2. The
City replied on August 18, 2017. ECF No. 38 (“Reply”).
App. 10
II. LEGAL STANDARD
A. Motion to Dismiss Pursuant to Federal Rule of
Civil Procedure 12(b)(6)
Pursuant to Federal Rule of Civil Procedure
12(b)(6), a defendant may move to dismiss an action for
failure to allege “enough facts to state a claim to relief
that is plausible on its face.” Bell Atl. Corp. v.
Twombly, 550 U.S. 544, 570 (2007). “A claim has facial
plausibility when the plaintiff pleads factual content
that allows the court to draw the reasonable inference
that the defendant is liable for the misconduct alleged.
The plausibility standard is not akin to a ‘probability
requirement,’ but it asks for more than a sheer
possibility that a defendant has acted unlawfully.”
Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (internal
citations omitted). For purposes of ruling on a Rule
12(b)(6) motion, the Court “accept[s] factual allegations
in the complaint as true and construe[s] the pleadings
in the light most favorable to the nonmoving party.”
Manzarek v. St. Paul Fire & Marine Ins. Co., 519 F.3d
1025, 1031 (9th Cir. 2008).
However, a court need not accept as true allegations
contradicted by judicially noticeable facts, Shwarz v.
United States, 234 F.3d 428, 435 (9th Cir. 2000), and
the “[C]ourt may look beyond the plaintiff’s complaint
to matters of public record” without converting the
Rule 12(b)(6) motion into one for summary judgment,
Shaw v. Hahn, 56 F.3d 1128, 1129 n.1 (9th Cir. 1995).
Nor is the Court required to assume the truth of legal
conclusions merely because they are cast in the form of
factual allegations.” Fayer v. Vaughn, 649 F.3d 1061,
1064 (9th Cir. 2011) (per curiam) (quoting W. Mining
App. 11
Council v. Watt, 643 F.2d 618, 624 (9th Cir. 1981)).
Mere “conclusory allegations of law and unwarranted
inferences are insufficient to defeat a motion to
dismiss.” Adams v. Johnson, 355 F.3d 1179, 1183 (9th
Cir. 2004); accord Iqbal, 556 U.S. at 678. Furthermore,
“‘a plaintiff may plead [him]self out of court’” if he
“plead[s] facts which establish that he cannot prevail
on his . . . claim.” Weisbuch v. County of Los Angeles,
119 F.3d 778, 783 n.1 (9th Cir. 1997) (quoting Warzon
v. Drew, 60 F.3d 1234, 1239 (7th Cir. 1995)).
B. Leave to Amend
Under Rule 15(a) of the Federal Rules of Civil
Procedure, leave to amend “shall be freely granted
when justice so requires,” bearing in mind “the
underlying purpose of Rule 15 to facilitate decision on
the merits, rather than on the pleadings or
technicalities.” Lopez v. Smith, 203 F.3d 1122, 1127
(9th Cir. 2000) (en banc) (ellipses omitted). However, a
court “may exercise its discretion to deny leave to
amend due to ‘undue delay, bad faith or dilatory motive
on part of the movant, repeated failure to cure
deficiencies by amendments previously allowed, undue
prejudice to the opposing party . . . , [and] futility of
amendment.’” Carvalho v. Equifax Info. Servs., LLC,
629 F.3d 876, 892-93 (9th Cir. 2010) (alterations in
original) (quoting Foman v. Davis, 371 U.S. 178, 182
(1962)).
III. REQUEST FOR JUDICIAL NOTICE
The City has requested judicial notice of a range of
legislative enactments including sections of the
Sunnyvale Municipal Code, public record documents,
App. 12
and correspondence. ECF No. 35. The Court may take
judicial notice of matters that are either “generally
known within the trial court’s territorial jurisdiction”
or “can be accurately and readily determined from
sources whose accuracy cannot reasonably be
questioned.” Fed. R. Evid. 201(b). Public records,
including judgments and other publicly filed
documents, are proper subjects of judicial notice. See,
e.g., United States v. Black, 482 F.3d 1035, 1041 (9th
Cir. 2007). However, to the extent any facts in
documents subject to judicial notice are subject to
reasonable dispute, the Court will not take judicial
notice of those facts. See Lee v. City of Los Angeles, 250
F.3d 668, 689 (9th Cir. 2001), overruled on other
grounds by Galbraith v. County of Santa Clara, 307
F.3d 1119 (9th Cir. 2002).
With the exception of the November 7, 2016 letter,
the City previously requested judicial notice of these
documents in connection with its first round motion to
dismiss. ECF No. 17 at 1-3. Plaintiff did not object to
the City’s request for judicial notice at that time. See
ECF No. 18. In its Order on June 16, 2017, the Court
granted the City’s request for judicial notice of these
documents. ECF No. 29 at 6-8. In its June 16, 2017
Order, the Court concluded that these “documents are
legislative enactments, ordinances, or regulations that
are subject to judicial notice,” or “are of public record,
and thus are documents for which judicial notice is
appropriate.” ECF No. 29 at 7 (citing Long Beach Area
Peace Network v. City of Long Beach, 574 F.3d 1011,
1026 (9th Cir. 2009) (taking judicial notice of a local
ordinance, a local regulation, and a local municipal
code); Abdullah v. U.S. Sec. Assocs., Inc., 731 F.3d 952,
App. 13
959 n.10 (9th Cir. 2013) (taking judicial notice of
opinion letters of California Division of Labor
Standards Enforcement); and Law v. City of Berkeley,
No. 15-cv-05343-JSC, 2016 WL 4191645, at *4 (N.D.
Cal. Aug. 9, 2016) (taking judicial notice of city council
minutes)).
The November 7, 2016 letter, in which the City
denied Plaintiff’s application for a license to collect
construction and demolition debris, was referenced on
page 9 of the FAC. See FAC at 9; RJN Exh. J. A court
may consider documents that were referenced but not
attached to the complaint for purposes of deciding a
Rule 12(b)(6) motion. Davis v. HSBC Bank Nev., NS.,
69 1 F.3d 1152, 1159-1160 (9th Cir. 2012); Branch v.
Tunnell, 14 F.3d 449,454 (9th Cir. 1994).
Plaintiff now objects to the City’s request for judicial
notice of two documents: the January 11, 2005
Extended and Second Restated Agreement (“the
Agreement”), and the February 15, 2011 Staff Report
(“the Report”). Opp. at 15. Plaintiff argues that the
Court cannot take judicial notice of the recitals in the
Agreement because the facts in the recitals are
themselves disputed. Opp. at 16. It appears to make a
similar argument as to the Report. Accordingly, the
Court has not considered the Agreement or the Report
in ruling on the instant motion. The City’s request for
judicial notice of the other documents is GRANTED.
IV. DISCUSSION
In its Opposition to the instant motion, Plaintiff
stated, “In light of PVM Redwood Co. v. United States,
686 F.2d 1327 (9th Cir. 1982), which had not been cited
App. 14
previously by the City or the Court, and of which
[Plaintiff] was unaware, [Plaintiff] must withdraw its
Takings Clause claim under [Federal Rule of Civil
Procedure] 11.” Opp. at 1-2. Plaintiff further stated
that “[Plaintiff] has not renewed, and has therefore
withdrawn, its previous claims under the Equal
Protection Clause, the Commerce Clause, and its
supplemental mandamus claim.” Id. at 2. Thus,
Plaintiff stated that its Opposition “tries to clarify
[Plaintiff]’s theory of this case on its substantive due
process claim and related supplemental state law
claim.” Id. Plaintiff’s FAC consists of one declaratory
relief cause of action. The Court addresses Plaintiff’s
substantive due process theory, then Plaintiff’s state
law theories, of Plaintiff’s declaratory relief cause of
action.
A. Substantive Due Process
Because Plaintiff’s theory of its declaratory relief
cause of action has shifted between the original
complaint and the FAC and again between the FAC
and Plaintiff’s Opposition, the Court first describes
Plaintiff’s substantive due process theory of its
declaratory relief cause of action. The Court then
analyzes Plaintiff’s cause of action.
1. Plaintiff’s Theory of the Alleged
Substantive Due Process Violation
Plaintiff’s substantive due process theory hinges on
the California Supreme Court’s interpretation of the
California Integrated Waste Management Act of 1989
(“the Act”). Accordingly, the Court first explains the
statutory and legal background of Plaintiff’s argument.
App. 15
The Act permits cities to grant exclusive franchises for
solid waste handling services. CAL. PUB. RES. CODE
§ 40059(a)(2). “Solid waste handling” means “the
collection, transportation, storage, transfer, or
processing of solid wastes.” Id. § 40195. As relevant
here, the Act defines “solid waste” to include “all
putrescible and nonputrescible solid, semisolid, and
liquid wastes, including garbage, trash, refuse, paper,
rubbish, ashes, industrial wastes, [and] demolition and
construction wastes.” Id. § 40191(a). The Act does not
separately define “waste,” which is used in the broader
definition of “solid waste.”
In 1994, the California Supreme Court interpreted
the term “waste” as used in the Act in Waste
Management of the Desert, Inc. v. Palm Springs
Recycling Center, Inc., 869 P.2d 440 (Cal. 1994). In
Waste Management, the city of Rancho Mirage had
awarded the plaintiff an exclusive franchise for
collecting “waste matter, garbage, and rubbish.” Id. at
441. The plaintiff sought an order enjoining the
defendant from collecting recyclable materials from
commercial customers. Id. The question that the
California Supreme Court addressed was “whether
property with a market value to its owner—for
example, a recyclable material—is ‘waste’ within the
scope of the Act and its exclusive franchise provision.”
Id. at 442. The California Supreme Court held that
such “property is not ‘waste’ until it is discarded.” Id.
“This
construction
encompasses
two
concepts—value and discarding—that in this context
must be considered in relation to one another.” Id. With
regard to value, the California Supreme Court
App. 16
reasoned that “[t]he commonly understood meaning of
‘waste’ is something discarded ‘as worthless or
useless.’” Id. at 443 (quoting Am. Heritage Dict. (1985);
Oxford English Dict. (2d ed. 1989)). The California
Supreme Court went on:
If the owner sells his property—that is, receives
value for it—the property cannot be said to be
worthless or useless in an economic sense and is
thus not waste from the owner’s perspective.
Conversely, if the owner voluntarily disposes of
the property without receiving compensation or
other consideration in exchange—that is, throws
it away—the obvious conclusion is that the
property has no economic value to the owner.
Id. With regard to discarding, the California Supreme
Court distinguished “discarding,” which it defined as
“throw[ing] away,” from “disposing,” which it defined as
“transfer[ring] or part[ing] with, as by giving or
selling.” Id. (quoting Am. Heritage Dict. (2d college ed.
1982)). The California Supreme Court then illustrated
its interpretation of “waste” by way of example:
Assume that, as in this case, there is an
exclusive franchise. A property owner throws his
recyclables into the receptacle provided by the
franchisee and does so without receiving
compensation. He has plainly discarded his
property, and it is thus waste under the Act.
Could he instead throw the property into the bin
of a competing waste hauler without receiving
compensation? No, because by disposing of the
property without receiving compensation, he has
discarded the property and thereby rendered it
App. 17
waste that is subject to the exclusive franchise.
If, however, he is paid for the material by the
franchisee’s competitor, the owner has sold the
property and thus has not discarded it, so it has
not become waste.
Id. at 444.
In the instant case, Plaintiff “charges a service fee
for the collection of mixed [construction and demolition
debris] in debris boxes and roll-offs, to offset its costs of
the labor and transportation to bring the [construction
and demolition debris] from a construction site” to
Plaintiff’s materials recovery facility in San Jose. FAC
¶ 8. Thus, under the California Supreme Court’s
opinion in Waste Management, the construction and
demolition debris that Plaintiff seeks a license to
collect is solid waste, notwithstanding the fact that the
debris is recyclable, because Plaintiff does not buy the
debris from its owners. Accordingly, Plaintiff’s business
falls within the scope of Bay Counties’ exclusive
franchise, and so Sunnyvale denied Plaintiff’s license
application. In Plaintiff’s view, this is the wrong result,
both as a matter of policy and as a matter of statutory
interpretation. See Opp. at 3, 13; FAC ¶¶ 5-16, 19-24.
Plaintiff tries to frame this dispute as a constitutional
issue.
As Plaintiff clearly states in its Opposition, its
substantive due process theory focuses on the action of
the California Supreme Court in deciding Waste
Management. Plaintiff does not “dispute that a
California city may grant an exclusive franchise for the
collection of solid waste. [Plaintiff] does not assert that
Sunnyvale acted unconstitutionally in enacting its solid
App. 18
waste ordinance.” Opp. at 2 (emphasis removed).
Plaintiff “does not contest that Sunnyvale correctly
interprets how the California Supreme Court
interpreted the statutory definition of ‘solid waste’ to
include discarded material that one pays another to
dispose.” Id. at 2-3 (emphasis removed). Rather,
Plaintiff contends that “the California Supreme Court
acted unconstitutionally when it adopted th[e]
interpretation of solid waste [in Waste Management] as
applied to Sunnyvale’s denial of a permit.” Opp. at 3.
Indeed, Plaintiff plainly states that it was the “judicial
branch [that] made the egregious decision”
underpinning its substantive due process theory. Id. at
4; see also id. at 17 (“The [Waste Management] decision
is an irrational misinterpretation of the state statutory
definition of ‘solid waste’ as well as the intent of the
Integrated Waste Management Act.”). The heart of
Plaintiff’s argument appears to be that there is no
rational basis for the California Supreme Court to
adopt a test that turned, at least in part, on whether
the owner of the material pays or is paid for disposal of
the material. See id. at 13.
2. Analysis
a. Bringing a Substantive Due Process
Claim Based on a State Court Decision
Outside the context of habeas corpus proceedings,
there appears to be little precedent for the type of claim
that Plaintiff brings here: a substantive due process
claim brought in the lower federal courts based on a
state supreme court interpretation of state law. The
only case that Plaintiff cites for the viability of such a
claim is Stop the Beach Renourishment, Inc. v. Florida
App. 19
Department of Environmental Protection, 560 U.S. 702
(2010).2 See Opp. at 7-12. In Stop the Beach, a plurality
of the U.S. Supreme Court endorsed the existence of a
judicial takings cause of action. 560 U.S. at 707, 71315. In a partial concurrence, Justice Kennedy, joined by
Justice Sotomayor, declined to endorse a judicial
takings cause of action. Id. at 735-37 (Kennedy, J.,
concurring in part and concurring in the judgment). In
Justice Kennedy’s view, “[i]f a judicial decision, as
opposed to an act of the executive or the legislature,
eliminates an established property right, the judgment
could be set aside as a deprivation of property without
due process of law.” Id. at 735. Justice Kennedy
concluded that “[t]he Court would be on strong footing
in ruling that a judicial decision that eliminates or
substantially changes established property rights . . .
is ‘arbitrary or irrational’ under the Due Process
Clause.” Id. at 737. The plurality disagreed with
Justice Kennedy’s substantive due process approach,
see id. at 721 (Scalia, J.) (plurality opinion), and other
federal courts have declined to rely on Justice
Kennedy’s concurrence, see, e.g., Weigel v. Maryland,
950 F. Supp. 2d 811, 836 n.61 (D. Md. 2013) (“Justice
Kennedy’s concurrence in Stop the Beach is insufficient
to render the Plaintiffs’ claim cognizable.”); Watson v.
Lake County, No. 5:09-cv-399, 2011 WL 13175635, at *6
n.2 (M.D. Fla. Feb. 23, 2011) (“Notwithstanding the
2
The other cases that Plaintiff cites concern the viability of a
judicial takings cause of action—not a substantive due process
cause of action. Because Plaintiff explicitly abandoned its judicial
takings theory, see Opp. at 2 (“[Plaintiff] must withdraw its
Takings Clause claim under FRCP 11”), these cases do not help
Plaintiff.
App. 20
fact that [Justice Kennedy’s] opinion has no
precedential value, it was also roundly criticized by a
plurality of the other justices. This Court refused to
apply such an unsettled rule to this case.”). Plaintiff
cites no case from the Ninth Circuit endorsing the
availability of a substantive due process claim based on
a state court interpretation of state law, and the Court
is aware of none outside the habeas corpus context.
Indeed, such a cause of action would appear to raise
“difficult procedural concerns” such as “abstention and
Rooker-Feldman, notice and immunity” that would be
inherent in asking a federal court to review a state
court decision. Frederic Bloom, et al., Suing Courts, 79
U. CHI. L. REV. 553, 595 (2012); see also Stacey L.
Dogan et al., Judicial Takings and Collateral Attack on
State Court Property Decisions, 6 DUKE J. CONST. L. &
PUB. POL’Y 107, 119-23 (opining that federal courts
should engage in review of state court decisions on
state law “as infrequently as possible”). “[O]nly state
courts may authoritatively construe state statutes.”
BMW of N. Am., Inc. v. Gore, 517 U.S. 559, 577 (1996).
Normally, “[f]ederal courts will not review a state
supreme court’s interpretation of its own statute unless
that interpretation is clearly untenable and amounts to
a subterfuge to avoid federal review of a deprivation by
the state of rights guaranteed by the Constitution.”
Knapp v. Cardwell, 667 F.2d 1253, 1260 (9th Cir. 1982)
(citing, e.g. Mullaney v. Wilbur, 421 U.S. 684, 691 &
n.11 (1975)); see also Demorest v. City Bank Farmers
Tr. Co., 321 U.S. 36, 42 (1944) (“[I]f there is no evasion
of the constitutional issue, . . . and the nonfederal
ground of decision has fair support, . . . this Court will
not inquire whether the rule applied by the state court
App. 21
is right or wrong, or substitute its own view of what
should be deemed the better rule for that of the state
court.” (quoting Broad River Power Co. v. South
Carolina, 281 U.S. 537, 540 (1930)); Vandevere v.
Lloyd, 644 F.3d 957, 963 n.4 (9th Cir. 2011) (“We also
note that a federal court remains free to conclude that
a state supreme court’s purported definition of a
property right really amounts to a subterfuge for
removing a pre-existing, state-recognized property
right.”). “Something more than a mistaken construction
on a close question is thus required in order to support
federal intervention.” Dogan, supra, at 123.
The Court need not decide whether such a cause of
action is available, however, because even if it were
available, Plaintiff has failed to plead “enough facts to
state a claim to relief that is plausible on its face.”
Twombly, 550 U.S. at 570.
b. Even if Such a Claim is Cognizable,
Plaintiff’s Claim Fails
“Substantive due process protects individuals from
arbitrary deprivation of their liberty by government.”
Brittain v. Hansen, 451 F.3d 982, 991 (9th Cir. 2006).
“Substantive due process cases typically apply strict
scrutiny in the case of a fundamental right and rational
basis review in all other cases.” Witt v. Dep’t of Air
Force, 527 F.3d 806, 817 (9th Cir. 2008). “When a
fundamental right is recognized, substantive due
process forbids the infringement of that right ‘at all, no
matter what process is provided, unless the
infringement is narrowly tailored to serve a compelling
state interest.’” Id. (quoting Reno v. Flores, 507 U.S.
292, 301-02 (1993) (emphasis omitted)). Fundamental
App. 22
interests that warrant strict scrutiny include the right
to marry and the right to vote, among others. See, e.g.,
Kramer v. Union Free Sch. Dist. No. 15, 395 U.S. 621,
627–28 (1969) (recognizing right to vote as
fundamental right); Loving v. Virginia, 388 U.S. 1, 12
(1967) (“Marriage is one of the ‘basic civil rights of
man,’ fundamental to our very existence and
survival.”).
In cases not involving fundamental rights, where
rational basis review applies, “the Court determines
whether governmental action is so arbitrary that a
rational basis for the action cannot even be conceived
post hoc.” Witt, 527 F.3d at 817. Rational basis review
is a “highly deferential” standard. Flynn v. Holder, 684
F.3d 852, 858 (9th Cir. 2012). Indeed, “[w]hen executive
action like a discrete permitting decision is at issue,
only ‘egregious official conduct can be said to be
arbitrary in the constitutional sense’: it must amount
to an ‘abuse of power’ lacking any ‘reasonable
justification in the service of a legitimate governmental
objective.’” Shanks v. Dressel, 540 F.3d 1082, 1088 (9th
Cir. 2008) (quoting County of Sacramento v. Lewis, 523
U.S. 833, 846 (1998)). In other words, substantive due
process is violated by “executive abuse of power . . .
which shocks the conscience.” Brittain, 451 F.3d at 846;
accord Costanich v. Dep’t of Soc. & Health Servs., 627
F.3d 1101, 1111 (9th Cir. 2010). Even “[o]fficial
decisions that rest on an erroneous legal interpretation
are not necessarily constitutionally arbitrary.” Shanks,
540 F.3d at 1089. Plaintiff concedes that rational basis
review applies here because no fundamental right is at
stake. Opp. at 3; see also Samson v. City of Bainbridge
Island, 683 F.3d 1051, 1058 (9th Cir. 2012)
App. 23
(“[G]overnment action that affects only economic
interests does not implicate fundamental rights.”
(internal quotation marks omitted)).
“To state a substantive due process claim,” a
plaintiff must typically “show as a threshold matter
that a state actor deprived it of a constitutionally
protected life, liberty or property interest.” Shanks, 540
F.3d at 1087. However, when the government action
clearly falls short of constitutional arbitrariness, the
Court need not reach whether Plaintiff possessed a
property or liberty interest. See City of Cuyahoga Falls,
Ohio v. Buckeye Comty. Hope Found., 538 U.S. 188, 198
(2003) (“We need not decide whether respondents
possessed a property interest in the building permits,
because the city engineer’s refusal to issue the permits
. . . in no sense constituted egregious or arbitrary
government conduct.”). Such is the case here.
Assuming the availability of a substantive due
process cause of action based on a state court
interpretation of state law, Plaintiff has not alleged
that the California Supreme Court’s action in deciding
Waste Management was sufficiently arbitrary and
egregious to meet Plaintiff’s “exceedingly high burden”
of stating a viable substantive due process claim that
would survive rational basis review. Matsuda v. City &
Cty. of Honolulu, 512 F.3d 1148, 1156 (9th Cir. 2008)
(internal quotation marks omitted); see Weigel, 950 F.
Supp. 2d at 835-36 (“Therefore, to the extent that any
standard of review applies to substantive due process
challenges to judicial decisions, it would be the rational
basis standard.”).
App. 24
The Ninth Circuit’s decision in Shanks, 540 F.3d
1082, is instructive. In Shanks, property owners
contended that the city of Spokane erroneously issued
building permits that decreased the value of their
property. Id. at 1088. Specifically, the property owners
alleged that Spokane violated several municipal
ordinances when it issued defendants a permit to build
a “box-like dormitory building” in a historic
neighborhood. Id. at 1084-85. The district court ruled
that the property owners had not stated a substantive
due process claim, and the Ninth Circuit affirmed. Id.
at 1086, 1089.
The Ninth Circuit in Shanks explained that “[t]he
conduct [the plaintiffs] allege[d]—a routine, even if
perhaps unwise or legally erroneous, executive decision
to grant a third-party a building permit—falls short of
being constitutionally arbitrary. There is no suggestion,
for instance, of a sudden change in course, malice, bias,
pretext or, indeed, anything more than a lack of due
care on Spokane’s part.” Id. at 1089. The Ninth Circuit
determined that it was “at least fairly debatable” that
Spokane’s action furthered a legitimate interest in
facilitating residential housing in a residential
neighborhood. Id. The Ninth Circuit then concluded,
“When reviewing a substantive due process challenge,
this suffices; our task is not to balance the public
interest supporting the government action against the
severity of the private deprivation.” Id. (internal
quotation marks omitted).
The reasoning in Shanks makes clear that
Plaintiff’s substantive due process theory here fails.
Even assuming that Plaintiff’s statutory interpretation
App. 25
arguments have some merit as a matter of California
law, “[i]t is clearly established that not every state law
violation gives rise to a substantive due process
violation.” Schmidt v. Hoover, No. C 08-5809 PJH, 2009
WL 1011715, at *5 (N.D. Cal. Apr. 15, 2009) (citing
Lewis, 523 U.S. at 847-48; Shanks, 540 F.3d at 1089).
“[O]nly the most egregious official conduct can be said
to be arbitrary in the constitutional sense.” Lewis, 523
U.S. at 846. Here, Plaintiff has alleged nothing more
than “a routine, even if perhaps unwise or legally
erroneous” statutory interpretation by the California
Supreme Court. Plaintiff calls the California Supreme
Court’s decision “egregious,” “arbitrary,” and
“irrational,” FAC ¶ 36, Opp. at 4, 17, but Plaintiff
pleads no facts to support these labels. Such
“conclusory allegations of law . . . are insufficient to
defeat a motion to dismiss.” Adams, 355 F.3d at 1183.
Moreover, like in Shanks, here there is no suggestion
of “a sudden change in course, malice, bias, [or]
pretext” on the part of the California Supreme Court.
Id.
To the contrary, the California Supreme Court’s
decision appears to be nothing more than a reasoned
decision interpreting a state statute using standard
methods of statutory interpretation. In interpreting the
term “waste,” the majority decision in Waste
Management relied on dictionary definitions of words
not expressly defined by the Act—a standard, widely
used method of statutory interpretation. See, e.g.,
Kasten v. Saint-Gobain Performance Plastics Corp., 563
U.S. 1, 7-8 (2011) (Breyer, J.) (comparing dictionary
definitions of the word “file”); MCI Telecomm. Corp. v.
Am. Tel. & Tel. Co., 512 U.S. 218, 225 (1994) (Scalia,
App. 26
J.) (canvassing dictionary definitions of the word
“modify”).
The California Supreme Court also considered
whether various constructions of the term “waste”
would be consistent with the California legislature’s
intent—another common method of statutory
interpretation. Specifically, the California Supreme
Court concluded that a construction of “waste” that did
not address the value of the material discarded would
be inconsistent with the Act’s intent. The California
Supreme Court explained that an interpretation solely
based on the “discarding” element “might be read to
mean that a property owner could decide unilaterally
with whom he will discard his waste. If three
competing waste handlers (the exclusive franchisee and
two others) placed their respective receptacles at the
owner’s curbside, he could put his waste into whichever
container he chooses.” Waste Management, 869 P.2d at
4443. As the plaintiffs in Waste Management argued,
such an approach relying solely on the “discarding”
element “would eviscerate the Act because owners
could discard all their property—recyclable and
otherwise—as they see fit and thereby render an
exclusive solid waste handling franchise a nullity as a
practical matter.” Id.
As this Court and other courts have explained,
granting an exclusive franchise for solid waste
handling is rationally related to legitimate government
interests. See ECF No. 29 at 14-16 (noting that Bay
Counties is more efficient at recycling construction and
demolition debris than Plaintiff); Waste Mgmt. of
Alameda Cty., Inc. v. Biagini Waste Reduction Sys.,
App. 27
Inc., 74 Cal. Rptr. 2d 676, 683 (Ct. App. 1998)
(exclusive franchise allows municipality to “protect[]
against the hazards of indiscriminate or unsafe waste
disposal”); Waste Res. Techs. v. Dep’t of Pub. Health, 28
Cal. Rptr. 2d 422, 429 (Ct. App. 1994) (exclusive
franchise results in lower costs for residents and
increased efficiency in programs); G. Fruge Junk Co. v.
City of Oakland, 637 F. Supp. 422, 425 (N.D. Cal. 1986)
(exclusive franchise “rationally related to public health
and environmental concerns because it facilitates
efficient regulation of potentially hazardous activities”);
see also Phillip O’Connell & Terri Esparza, The Golden
Dustman in the Golden State: Exclusive Contracts for
Solid Waste Collection and Disposal in California, 32
URB. LAW. 281, 287 (2000) (noting that multiple waste
collectors means more large trucks in a city, which
impacts traffic and residents’ safety). As a result, the
California Supreme Court’s interpretation of the Act to
preserve cities’ ability to grant exclusive franchises was
also rationally related to legitimate government
interests.
Finally, the California Supreme Court’s
interpretation of the term “waste” is consistent with
the decisions of other courts and commissions that have
considered similar questions, which suggests the
California Supreme Court’s decision was not arbitrary,
egregious, or clearly untenable. First, like in Waste
Management, 869 P.2d at 442-44, other courts and
commissions have looked to whether the actor
discarding material paid or was paid to discard it. In
1965, the now-disbanded Interstate Commerce
Commission considered whether the producers of
demolition debris sold the debris or paid to have it
App. 28
removed as part of an inquiry into whether the debris
constituted “property.” Pleasant Hill Bayshore
Disposal, Inc. v. Chip-It Recycling, Inc., 110 Cal. Rptr.
2d 708, 718 (Ct. App. 2001) (citing Joray Trucking
Corp. Common Carrier Application, 99 M.C.C. 109, 110
(1965)).
In 1991, the Virginia Supreme Court held that
whether something is “waste” turned in part on
whether it was “discarded material,” which the
Virginia Supreme Court said should be evaluated from
the perspective of the actor discarding the material, not
the actor collecting it. Ticonderoga Farms, Inc. v.
County of Loudoun, 409 S.E.2d 446, 449 (Va. 1991).
Applying reasoning similar to that of the California
Supreme Court in Waste Management, the Virginia
Supreme Court explained, “The materials are brought
to [Ticonderoga Farms] by developers, builders, and
others who have so strong an incentive to discard them
that they are willing to pay [Ticonderoga Farms] a fee
to receive them. From that perspective, it is difficult to
conceive a clearer example of ‘discarded material.’” Id.
Moreover, other federal courts have interpreted the
federal Resources Conservation and Recovery Act’s
definition of “solid waste” to include some recyclable
materials. See, e.g., Owen Elec. Steel Co. v. Browner, 37
F.3d 146 (4th Cir. 1994) (holding that metal slag was a
solid waste even though it was later recycled); United
States v. Ilco, 996 F.2d 1126 (11th Cir. 1993) (same for
batteries); U.S. Brewers’ Ass’n v. EPA, 600 F.2d 974
(D.C. Cir. 1979) (upholding EPA regulation of beverage
container recycling despite claims that the bottles,
until discarded, were not solid waste). Even though
App. 29
different statutory definitions of “solid waste” were at
play in these cases and Waste Management, these cases
undercut Plaintiff’s argument that the California
Supreme Court’s interpretation of “waste” is plainly
irrational because it includes some recyclable material.
Thus, Plaintiff has failed to plead a plausible
substantive due process claim because Plaintiff has not
put forward any facts that the California Supreme
Court acted irrationally, arbitrarily, or egregiously in
deciding Waste Management. Rather, the most the
Court can conclude from Plaintiff’s FAC is that Waste
Management may be a “mistaken construction on a
close question.” Dogan, supra, at 123. But more than
that is required for a federal court to intervene in a
state court’s construction of a state statute, and more
than that is required to state a substantive due process
claim. See id.; Shanks, 540 F.3d at 1088 (“[O]nly
‘egregious official conduct can be said to be arbitrary in
the constitutional sense’: it must amount to an ‘abuse
of power’ lacking any ‘reasonable justification in the
service of a legitimate governmental objective.’”
(quoting Lewis, 523 U.S. at 846)). The fact that
Plaintiff anticipates resistance to its argument in the
state courts and in the state legislature does not
transform a dispute about the correct interpretation of
a state statute regulating solid waste handling into a
constitutional issue. See FAC ¶ 35; Opp. at 17 (arguing
that national waste haulers have too much influence in
the state legislature and comparing Plaintiff to
“plaintiffs in the 1940s civil rights cases where the
Supreme Court had interpreted the 14th Amendment
to mean ‘separate but equal’ and Congressional
App. 30
democrats from the South blocked all legislation to cure
that evil”).
Accordingly, the Court GRANTS the City’s motion
to dismiss the FAC’s declaratory relief cause of action
to the extent it relies on a substantive due process
theory of relief.
c. Leave to Amend
Plaintiff has abandoned its Equal Protection Clause,
Commerce Clause, and Takings Clause theories of
declaratory relief, Opp. at 2, likely reflecting Plaintiff’s
own recognition that it is unable to state a plausible
claim under these theories.
In addition, Plaintiff has now been afforded two
opportunities to state a viable declaratory relief cause
of action based on substantive due process, but it has
been unable to do so. Plaintiff first alleged in the
original complaint that the City’s permitting decisions
violated its substantive due process rights. See ECF
No. 29 at 14-15; ECF No. 1 at ¶¶ 16, 24, 27. The Court
ruled that Plaintiff had failed to allege that the City’s
permitting decisions were arbitrary and capricious
because the City’s permitting decisions were rationally
related to legitimate government interests. Id. at 15-16.
Plaintiff did not attempt to remedy this deficiency in
the FAC. Plaintiff did not allege additional facts
showing that the City’s permitting decisions were “a
sudden change in course, malice, bias, pretext,” or
otherwise arbitrary or egregious. In fact, Plaintiff
conceded in its Opposition that it did not dispute the
City’s authority to grant an exclusive franchise for the
collection of solid waste, nor did it contest the City’s
App. 31
interpretation of the Waste Management decision. Opp.
at 2.
Instead of pleading facts to show egregious action by
the City, Plaintiff shifted its substantive due process
theory to focus on the California Supreme Court as the
relevant government actor. See FAC ¶ 36; Opp. at 2-3.
Despite the instant Court’s previous ruling that
Plaintiff must allege egregious government action to
state a substantive due process claim, ECF No. 29 at
13-16, Plaintiff pleaded only conclusory allegations that
the California Supreme Court’s decision was arbitrary.
See FAC ¶ 36. Plaintiff’s Opposition similarly contains
no specific allegations of egregious government action
beyond labeling the Waste Management decision
“egregious” and “irrational.” Opp. at 2-4, 13-14, 17.
By failing to set forth any facts in the FAC to show
egregious government action, Plaintiff has “fail[ed] to
cure deficiencies by amendments previously allowed.”
Carvalho, 629 F.3d 876, 892-93. As a result, it is within
the Court’s discretion to find that further amendments
would be futile and to decline to allow further
amendments. Moreover, Plaintiff failed in its
Opposition to identify any facts that it could add if
given leave to amend yet another time. This failure
reinforces the Court’s conclusion that allowing further
amendments would be futile.
Plaintiff may have a viable state law argument, but
its constitutional arguments clearly fail. Accordingly,
the FAC is dismissed with prejudice as to the
constitutional theories of declaratory relief. See
Yagman v. Garcetti, 852 F.3d 859, 867 (9th Cir. 2017)
(affirming dismissal with prejudice of substantive due
App. 32
process claim on futility grounds); Kay v. Placer
County, 219 F. App’x 679, 682 (9th Cir. 2007)
(unpublished) (affirming dismissal of constitutional
causes of action with prejudice because amendment
would be futile and commenting that plaintiffs had
“sought to recast what are, at best, state-law claims
into federal causes of action. Amendment will not cure
this fundamental flaw.”).
B. State Law Theories
Plaintiff’s remaining theories of relief are based on
state law. Plaintiff argues two state law theories of
relief, namely: (1) that the City uses the wrong
definition of solid waste under California law, and
(2) that the City violated California Public Resources
Code § 40059. FAC ¶¶ 28-29, 31.
“[T]he Declaratory Judgment Act does not by itself
confer federal subject-matter jurisdiction.” Nationwide
Mut. Ins. Co. v. Liberatore, 408 F.3d 1158, 1161 (9th
Cir. 2005). Before declaratory relief may be granted,
federal subject matter jurisdiction requirements must
be satisfied. Skelly Oil Co. v. Phillips Petroleum Co.,
339 U.S. 667, 671 (1950) (requiring independent
subject matter jurisdiction on a declaratory relief cause
of action).
A federal court may exercise supplemental
jurisdiction over state law claims “that are so related to
claims in the action within [the court’s] original
jurisdiction that they form part of the same case or
controversy under Article III of the United States
Constitution.” 28 U.S.C. § 1367(a). Conversely, a court
may decline to exercise supplemental jurisdiction
App. 33
where it “has dismissed all claims over which it has
original jurisdiction.” 28 U.S.C. § 1367(c)(3); see also
Albingia Versicherungs A.G. v. Schenker Int’l, Inc., 344
F.3d 931, 937-38 (9th Cir. 2003) (as amended) (holding
that Section 1367(c) grants federal courts the discretion
to dismiss state law claims when all federal claims
have been dismissed). In considering whether to retain
supplemental jurisdiction, a court should consider
factors such as “economy, convenience, fairness, and
comity.” Acri v. Varian Assocs., 114 F.3d 999, 1001 (9th
Cir. 1997) (en banc) (citations and internal quotation
marks omitted). However, “in the usual case in which
all federal-law claims are eliminated before trial, the
balance of factors . . . will point toward declining to
exercise jurisdiction over the remaining state law
claims.” Exec. Software N. Am., Inc. v. U.S. Dist. Court,
24 F.3d 1545, 1553 n.4 (9th Cir. 1994) (emphasis
omitted), overruled on other grounds by Cal. Dep’t of
Water Res. v. Powerex Corp., 533 F.3d 1087 (9th Cir.
2008).
Here, the factors of economy, convenience, fairness,
and comity support dismissal of Plaintiff’s remaining
state law theories of relief. This case is still at the
pleading stage, and no discovery has taken place.
Federal judicial resources are conserved by dismissing
the state law theories of relief at this stage. The Court
finds that dismissal promotes comity as it enables
California courts to interpret questions of state law.
The fact that this case is brought under the federal
declaratory judgment act does not affect this result. See
Anbar v. Deutsche Bank Nat’l Tr. Co., No. 13cv1318WQH-RBB, 2013 WL 5937274, at *3 (S.D. Cal. Nov. 4,
App. 34
2013) (declining supplemental jurisdiction
declaratory judgment cause of action).
on
Under similar circumstances, in Houlton Citizens’
Coalition v. Town of Houlton, 175 F.3d 178 (1st Cir.
1999), after the First Circuit found that the defendant’s
exclusive franchise agreement was not prohibited
under the Takings Clause or the dormant Commerce
Clause, the First Circuit discussed a claim that the
exclusive franchise agreement was invalid under the
town charter. Id. at 192. The First Circuit noted that
the district court “should not have ventured to
adjudicate the town charter claim,” and that declining
supplemental jurisdiction was the “option of choice.” Id.
The Court finds that similar logic applies to Plaintiff’s
state law theories of relief here. For these reasons, the
Court declines to exercise supplemental jurisdiction
over Plaintiffs’ state law theories of relief. Moreover,
with the dismissal with prejudice of the constitutional
basis for Plaintiff’s declaratory relief cause of action,
this Court no longer has federal question jurisdiction
over this case. See Nationwide Mut. Ins. Co., 408 F.3d
at 1161 (“[T]he Declaratory Judgment Act does not by
itself confer federal subject-matter jurisdiction.”). The
Court also lacks diversity jurisdiction because both
parties are citizens of California. Thus, the Court
doubts whether it even has jurisdiction to continue to
preside over this case.
Accordingly, the Court GRANTS without prejudice
the City’s motion to dismiss the FAC’s declaratory
relief cause of action to the extent it is based on
Plaintiff’s state law theories of relief. Plaintiff may
refile in state court.
App. 35
V. CONCLUSION
For the foregoing reasons, the Court GRANTS the
City’s Motion to Dismiss the First Amended Complaint,
which consists of one declaratory relief cause of action.
This dismissal is with prejudice as to the constitutional
theories, and without prejudice as to the state law
theories, of Plaintiff’s declaratory relief cause of action.
IT IS SO ORDERED.
Dated: November 9, 2017
/s/Lucy H. Koh
LUCY H. KOH
United States District Judge
App. 36
APPENDIX C
UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF CALIFORNIA
SAN JOSE DIVISION
Case No. 17-CV-00956-LHK
[Filed June 16, 2017]
_____________________________
JONNA CORPORATION,
)
)
Plaintiff,
)
)
v.
)
)
CITY OF SUNNYVALE, CA,
)
)
Defendant.
)
_____________________________ )
ORDER GRANTING CITY OF SUNNYVALE’S
MOTION TO DISMISS
Re: Dkt. No. 16
Plaintiff Jonna Corporation (“Plaintiff”) sues
Defendant City of Sunnyvale (“Defendant” or “the
City”) because the City refused to provide Plaintiff a
license to collect construction and demolition debris in
the City. Before the Court is the City’s Motion to
Dismiss. ECF No. 16 (“Mot.”). Having considered the
parties’ briefing, the relevant law, and the record in
App. 37
this case, the Court GRANTS the City’s Motion to
Dismiss.
I. BACKGROUND
A. Factual Background
In 1990, the City entered into an exclusive franchise
agreement for the collection of solid waste in the City
(“Exclusive Franchise Agreement”) with Bay Counties
Waste Services, Inc. (“Bay Counties”), formerly
Specialty Solid Waste & Recycling, Inc., for a term of
ten years. ECF No. 1 (“Compl.”) ¶ 21; see also ECF No.
17-1 at 39, Sunnyvale Ordinance No. 2771-04.1 That
Exclusive Franchise Agreement has been amended and
extended a number of times, and now extends through
at least June 30, 2018. ECF No. 17-3 at 13, Sunnyvale
Ordinance No. 2949-11. Under the Exclusive Franchise
Agreement, Bay Counties is the sole collector of solid
waste, including recyclable materials and construction
debris, in the City. ECF No. 17-2 (“Franchise Agmt.”)
at 18 (“City hereby extends its previous grant to
Contractor of the exclusive franchise, right and
privilege to engage in the business of collecting and
transporting Solid Waste generated within the City”),
16 (“‘[S]olid waste’ means . . . Garbage, Rubbish,
Construction Debris, Yardwaste, and Recyclable
Materials.”). The Sunnyvale Municipal Code forbids
any party to collect solid waste for a fee without a
franchise or license. Sunnyvale Mun. Code § 8.16.150
1
The Court refers to documents in this section, such as Sunnyvale
Ordinance No. 2771-04, of which Defendant requests judicial
notice. The Court discusses and grants judicial notice as to all of
these documents below in Section III.A.
App. 38
(“It is unlawful for any person to engage in the
business of collecting solid waste within the city, or to
haul the same through any street or public right-of-way
in the city, unless such person has been granted a
franchise or license to do so by the city.”).2 Bay
Counties is the only entity that has been awarded such
a franchise or license. Franchise Agmt. at 18.
Plaintiff is a California corporation based in Santa
Clara County that “is in the business of collecting
discarded wood, metal, asphalt, concrete, and drywall
from commercial construction and demolition sites”
(“construction and demolition debris”). Compl. ¶ 5. On
October 19, 2016, Plaintiff applied to the City for a
franchise or license to collect construction and
demolition debris under Sunnyvale Municipal Code
§ 8.16.090. Id. ¶ 17; see also Sunnyvale Mun. Code
§ 8.16.090 (“The city council shall provide for the
collection and disposal of solid waste and recyclable
materials generated from residences within the city by
the issuance of a franchise or license, or franchises and
licenses, to disposal service operators.”). On November
7, 2016, the City denied Plaintiff’s application for a
2
The Sunnyvale Municipal Code has exceptions to this solid waste
franchise or license requirement that do not apply here. See
Sunnyvale Mun. Code § 8.16.160. Those exceptions include:
(1) self-hauling by residential househoulders, (2) gardeners
removing materials incidental to their work, (3) hauling of
recyclable materials by recyclers, junk dealers, or businesses that
buy and market recyclable materials, (4) hauling of worn, spent, or
defective equipment by a commercial business, (5) hauling by a
contractor who was hired for construction or demolition work, or
(6) businesses that dispose of secret, confidential or sensitive
documents. Id.
App. 39
franchise or license. Compl. ¶ 18. The City’s denial
letter stated that “[w]hile the Sunnyvale Municipal
Code does allow for the possibility of the City issuing
multiple license holders/franchisees, the City’s current
policy is to issue an exclusive franchise to a single
disposal service operator. This franchise extends to
collection of all solid waste, including [construction and
demolition] material, as described in more detail in
Chapter 8.16 of the Code.” Id.
B. Procedural History
On February 24, 2017, Plaintiff filed the instant
suit. See Compl. Plaintiff asserts two causes of action:
declaratory relief and mandamus. However, the
declaratory relief cause of action is based on the
following theories of relief: (1) violation of the Takings
Clause of the United States Constitution, (2) violation
of the Substantive Due Process clause in the Fifth and
Fourteenth Amendments to the United States
Constitution, (3) violation of the Equal Protection
clause in the Fourteenth Amendment of the United
States Constitution and Article I, Section 7 of the
California Constitution, (4) violation of the Commerce
Clause of the United States Constitution, (5) the City’s
use of the wrong definition of “solid waste” under
California law, and (6) violation of California Public
Resources Code § 40059. Id. ¶¶ 26–31. Plaintiff’s
mandamus cause of action merely states that the City
had a mandatory duty to issue a franchise or license to
Plaintiff under Sunnyvale Municipal Code § 8.16.090,
and thus the Court should compel the issuance of such
a license. Id. ¶¶ 32–34.
App. 40
This case was assigned to Magistrate Judge Howard
Lloyd on February 27, 2017. ECF No. 4. On March 8,
2017, Plaintiff declined Magistrate Judge jurisdiction,
ECF No. 7, and on March 9, 2017, the instant case was
reassigned to the undersigned judge, ECF No. 9. On
March 20, 2017, the City filed a motion to dismiss the
instant suit that was noticed for hearing before
Magistrate Judge Howard Lloyd. ECF No. 13.
On April 4, 2017, the City filed an amended motion
to dismiss that was identical to the original motion to
dismiss except that it was noticed for hearing before
the undersigned judge. ECF No. 16 (“Mot.”).3 On April
18, 2017, Plaintiff filed an opposition to the City’s
amended motion, ECF No. 18 (“Opp’n”), and an
“Appendix” of defined terms, ECF No. 18-1. On April
25, 2017, the City filed a reply, ECF No. 19 (“Reply”),
and an objection to Plaintiff’s Appendix of defined
terms, ECF No. 20.4
3
Accordingly, the City’s first motion to dismiss, ECF No. 13, is
DENIED as moot.
4
Under Civil Local Rule 7-3(c), “[a]ny evidentiary and procedural
objections to the opposition must be contained within the reply
brief or memorandum.” Accordingly, because the City filed its
objections to the Appendix in a separate document, the Court
DENIES the City’s objections. However, the Court notes that
Plaintiff’s Appendix of defined terms contains a number of
references to case law, and is akin to legal argument. Plaintiff’s
opposition to the City’s motion is 25 pages long, the full length
allowed by Civil Local Rule 7-3(a). Accordingly, the Court
STRIKES Plaintiff’s Appendix as argument in excess of the page
limit set forth by the Civil Local Rules.
App. 41
II. LEGAL STANDARD
A. Motion to Dismiss Under Rule 12(b)(6)
Rule 8(a)(2) of the Federal Rules of Civil Procedure
requires a complaint to include “a short and plain
statement of the claim showing that the pleader is
entitled to relief.” A complaint that fails to meet this
standard may be dismissed pursuant to Federal Rule
of Civil Procedure 12(b)(6). The U.S. Supreme Court
has held that Rule 8(a) requires a plaintiff to plead
“enough facts to state a claim to relief that is plausible
on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544,
570 (2007). “A claim has facial plausibility when the
plaintiff pleads factual content that allows the court to
draw the reasonable inference that the defendant is
liable for the misconduct alleged.” Ashcroft v. Iqbal, 556
U.S. 662, 678 (2009). “The plausibility standard is not
akin to a probability requirement, but it asks for more
than a sheer possibility that a defendant has acted
unlawfully.” Id. (internal quotation marks omitted).
For purposes of ruling on a Rule 12(b)(6) motion, a
court “accept[s] factual allegations in the complaint as
true and construe[s] the pleadings in the light most
favorable to the nonmoving party.” Manzarek v. St.
Paul Fire & Marine Ins. Co., 519 F.3d 1025, 1031 (9th
Cir. 2008).
However, a court need not accept as true allegations
contradicted by judicially noticeable facts, Shwarz v.
United States, 234 F.3d 428, 435 (9th Cir. 2000), and
the “[C]ourt may look beyond the plaintiff’s complaint
to matters of public record” without converting the
Rule 12(b)(6) motion into one for summary judgment,
Shaw v. Hahn, 56 F.3d 1128, 1129 n.1 (9th Cir. 1995).
App. 42
Nor is the court required to “‘assume the truth of legal
conclusions merely because they are cast in the form of
factual allegations.’” Fayer v. Vaughn, 649 F.3d 1061,
1064 (9th Cir. 2011) (per curiam) (quoting W. Mining
Council v. Watt, 643 F.2d 618, 624 (9th Cir. 1981)).
Mere “conclusory allegations of law and unwarranted
inferences are insufficient to defeat a motion to
dismiss.” Adams v. Johnson, 355 F.3d 1179, 1183 (9th
Cir. 2004); accord Iqbal, 556 U.S. at 678. Furthermore,
“a plaintiff may plead herself out of court” if she
“plead[s] facts which establish that [s]he cannot prevail
on h[er] . . . claim.” Weisbuch v. Cty. of L.A., 119 F.3d
778, 783 n.1 (9th Cir. 1997).
B. Leave to Amend
If the Court determines that the complaint should
be dismissed, it must then decide whether to grant
leave to amend. Under Rule 15(a) of the Federal Rules
of Civil Procedure, leave to amend “should be freely
granted when justice so requires,” bearing in mind that
“the underlying purpose of Rule 15 . . . [is] to facilitate
decision on the merits, rather than on the pleadings or
technicalities.” Lopez v. Smith, 203 F.3d 1122, 1127
(9th Cir. 2000) (en banc). When dismissing a complaint
for failure to state a claim, “a district court should
grant leave to amend even if no request to amend the
pleading was made, unless it determines that the
pleading could not possibly be cured by the allegation
of other facts.” Id. at 1130 (quoting Doe v. United
States, 58 F.3d 494, 497 (9th Cir. 1995)). Nonetheless,
a court “may exercise its discretion to deny leave to
amend due to ‘undue delay, bad faith or dilatory motive
on part of the movant, repeated failure to cure
App. 43
deficiencies by amendments previously allowed, undue
prejudice to the opposing party. . . , [and] futility of
amendment.’” Carvalho v. Equifax Info. Servs., LLC,
629 F.3d 876, 892–93 (9th Cir. 2010) (alterations in
original) (quoting Foman v. Davis, 371 U.S. 178, 182
(1962)).
III. DISCUSSION
The City argues that Plaintiff has failed to
adequately plead its declaratory relief and mandamus
causes of action. The City also requests judicial notice
of a number of documents. The Court first addresses
the City’s request for judicial notice. The Court then
addresses Plaintiff’s declaratory relief and mandamus
causes of action in turn.
A. Request for Judicial Notice
The Court first addresses the City’s request for
judicial notice. ECF No. 17. The Court may take
judicial notice of matters that are either “generally
known within the trial court’s territorial jurisdiction”
or “can be accurately and readily determined from
sources whose accuracy cannot reasonably be
questioned.” Fed. R. Evid. 201(b). Public records,
including judgments and other publicly filed
documents, are proper subjects of judicial notice. See,
e.g., United States v. Black, 482 F.3d 1035, 1041 (9th
Cir. 2007) (“[Courts] may take notice of proceedings in
other courts, both within and without the federal
judicial system, if those proceedings have a direct
relation to matters at issue.”); Rothman v. Gregor, 220
F.3d 81, 92 (2d Cir. 2000) (taking judicial notice of a
filed complaint as a public record).
App. 44
However, to the extent any facts in documents
subject to judicial notice are subject to reasonable
dispute, the Court will not take judicial notice of those
facts. See Lee v. City of L.A., 250 F.3d 668, 689 (9th Cir.
2001) (“A court may take judicial notice of matters of
public record . . . But a court may not take judicial
notice of a fact that is subject to reasonable dispute.”)
(internal quotation marks omitted), overruled on other
grounds by Galbraith v. Cty. of Santa Clara, 307 F.3d
1119 (9th Cir. 2002).
The City requests judicial notice of the following
legislative enactments:
• Sections 400, 1600, 1601, and 1602 of the City of
Sunnyvale’s Charter;
• Chapter 8.16 of the Sunnyvale Municipal Code;
• City of Sunnyvale Ordinance No. 2771-04, which
is titled “An Ordinance of the City Council of the
City of Sunnyvale Extending the Term of the
Franchise with Bay Counties Waste Services,
Inc. for the Collection of Solid Waste,” as
Adopted and Restated by Ordinance 2572-97;
• The January 11, 2005 Extended and Second
Restated Agreement Between City of Sunnyvale
and Bay Counties Waste Services, Inc. for Solid
Waste Collection and Recycling, which is an
attachment to City of Sunnyvale Ordinance No.
2771-04;
• City of Sunnyvale Ordinance No. 2949-11, which
is titled “An Ordinance of the City Council of the
City of Sunnyvale Adopting the First
App. 45
Amendment to Extended and Second Restated
Agreement Between the City of Sunnyvale and
with Bay Counties Waste Services, Inc. for the
Collection of Solid Waste and Recycling”;
• The September 30, 2010 First Amendment to
Extended and Second Restated Agreement
Between City of Sunnyvale and Bay Counties
Waste Services, Inc. for Solid Waste Collection
and Recycling, which is an attachment to City of
Sunnyvale Ordinance No. 2949-11.
The above documents are legislative enactments,
ordinances, or regulations that are subject to judicial
notice. See Long Beach Area Peace Network v. City of
Long Beach, 574 F.3d 1011, 1026 (9th Cir. 2009)
(taking judicial notice of a local ordinance, a local
regulation, and a local municipal code). Accordingly,
the Court GRANTS the City’s request for judicial notice
of these documents.
The Court also requests judicial notice of the
following public record documents:
• A December 14, 2004 City of Sunnyvale Staff
Report to the City’s Mayor and City Council
about the extension of the Exclusive Franchise
Agreement with Bay Counties;
• Minutes from the December 14, 2004 Sunnyvale
City Council Public Hearings;
• February 15, 2011 City of Sunnyvale Staff
Report to the City’s Mayor and City Council
about the modification of the Exclusive
Franchise Agreement with Bay Counties;
App. 46
• April 13, 2011 Correction to Approved Minutes
of the February 15, 2011 City Council Meeting;
The above documents are documents that are of
public record, and thus are documents for which
judicial notice is appropriate. See Abdullah v. U.S. Sec.
Assocs., Inc., 731 F.3d 952, 959 n.10 (9th Cir. 2013)
(taking judicial notice of opinion letters of California
Division of Labor Standards Enforcement); Law v. City
of Berkeley, 2016 WL 4191645, at *4 (N.D. Cal. Aug. 9,
2016) (taking judicial notice of city council minutes).
Accordingly, the Court GRANTS the City’s request for
judicial notice of these documents.
B. Declaratory Relief
Plaintiff asserts two causes of action: declaratory
relief and mandamus. However, the declaratory relief
cause of action is based on the following six theories of
relief: (1) violation of the Takings Clause of the United
States Constitution, (2) violation of the Substantive
Due Process clause in the Fifth and Fourteenth
Amendments to the United States Constitution,
(3) violation of the Equal Protection clause in the
Fourteenth Amendment of the United States
Constitution and Article I, Section 7 of the California
Constitution, (4) violation of the Commerce Clause of
the United States Constitution, (5) the City’s use of the
wrong definition of “solid waste” under California law,
and (6) violation of California Public Resources Code
§ 40059. Compl. ¶¶ 26–31.
The Court first addresses Plaintiff’s declaratory
relief cause of action, which is brought under the
Declaratory Judgment Act, 28 U.S.C. § 2201. The
App. 47
Declaratory Judgment Act provides that “[i]n a case of
actual controversy within its jurisdiction . . . any court
of the United States . . . may declare the rights and
other legal relations of any interested party seeking
such declaration, whether or not further relief is or
could be sought.” 28 U.S.C. § 2201(a). To fall within the
Act’s ambit, the “case of actual controversy” must be
“‘definite and concrete, touching the legal relations of
parties having adverse legal interests,’. . . ‘real and
substantial’ and ‘admi[t] of specific relief through a
decree of a conclusive character, as distinguished from
an opinion advising what the law would be upon a
hypothetical state of facts.’” MedImmune, Inc. v.
Genentech, Inc., 549 U.S. 118, 127 (2007) (alteration in
original) (quoting Aetna Life Ins. Co. of Hartford, Conn.
v. Haworth, 300 U.S. 227, 240–41 (1937)).
Defendant argues that Plaintiff’s declaratory relief
cause of action fails because the complaint fails to
allege “any cognizable legal theory for declaratory
relief.” Mot. at 2. As noted above, Plaintiff’s complaint
asserts six legal theories in support of its declaratory
relief cause of action. The Court addresses Plaintiff’s
constitutional legal theories first, in the following
order: (1) violation of the Takings Clause of the United
States Constitution, (2) violation of the Substantive
Due Process Clause in the Fifth and Fourteenth
Amendments to the United States Constitution,
(3) violation of the Equal Protection Clause in the
Fourteenth Amendment of the United States
Constitution and Article I, Section 7 of the California
Constitution, and (4) violation of the Commerce Clause
of the United States Constitution. The Court then
addresses together Plaintiff’s state law theories of
App. 48
relief: (1) the City’s use of the wrong definition of “solid
waste” under California law, and (2) violation of Public
Resources Code § 40059.
1. Takings Clause
The Takings Clause of the Fifth Amendment states
that “private property [shall not] be taken for public
use, without just compensation.” U.S. Const. amend. V.
This clause applies to the states and their political
subdivisions through the Fourteenth Amendment. See
Palazzolo v. Rhode Island, 533 U.S. 606, 617 (2001)
(“The Takings Clause of the Fifth Amendment [is]
applicable to the States through the Fourteenth
Amendment.” (citing Chicago, B. & Q. R. Co. v.
Chicago, 166 U.S. 226, 239 (1897))). Although the
prototypical case involves “physical invasions,
occupations, or removals of property,” in some cases,
“overly assiduous government regulation can create an
unconstitutional taking” of property. Houlton Citizens’
Coal. v. Town of Houlton, 175 F.3d 178, 189–90 (1st
Cir. 1999).
The first step in . . . [a] taking analys[i]s is to
determine whether there is a property right that is
protected by the Constitution.” Peterson v. U.S. Dep’t of
Interior, 899 F.2d 799, 807 (9th Cir. 1990) (citation
omitted). The Peterson court cites to Bowen v. Public
Agencies Opposed to Soc. Sec. Entrapment, 477 U.S. 41
(1986), in which the United States Supreme Court held
that the contractual right at issue in that case “did not
rise to the level of ‘property’” within the meaning of the
Takings Clause because it “[could] not be viewed as
conferring any sort of ‘vested right.’” Id. at 54–5.
“Without a proerty right, there could be no ‘taking
App. 49
within the meaning of the Fifth Amendment.’” Id. at
55–56.
The Court notes that there is a question whether
Plaintiff has adequately alleged that Plaintiff
possessed property that is protected by the Takings
Clause. See Hagan v. United States, 2002 WL 338882,
at *8 n.10 (E.D. Pa. Mar. 2, 2002) (dismissing takings
claim because “right to practice his profession as a
Certified Public Accountant” was not cognizable
property under the Takings Clause). The Court need
not reach this issue here because, as the Court finds
below, Plaintiff has failed to adequately plead
exhaustion of state court remedies. However, if
Plaintiff chooses to file an amended complaint, Plaintiff
must adequately allege that Plaintiff possessed a
property interest protected by the Takings Clause.
Assuming Plaintiff has established that a cognizable
property interest is at issue, the determination
whether a taking has occurred within the meaning of
the Takings Clause depends on the particular
circumstances of a case. See Tahoe-Sierra Pres.
Council, Inc. v. Tahoe Reg’l Planning Agency, 535 U.S.
302, 326 (2002) (“[W]e have ‘generally eschewed’ any
set formula for determining how far is too far, choosing
instead to engage in ‘essentially ad hoc, factual
inquiries.’” (internal quotation marks omitted)). The
United States Supreme Court has identified a number
of factors courts may consider when determining
whether a state action constitutes a taking of property:
(1) “the character of the governmental action,” i.e.,
whether it “can be characterized as a physical invasion
by government,” rather than arising from “some public
App. 50
program adjusting the benefits and burdens of
economic life to promote the common good”; (2) “the
economic impact of the regulation on the claimant”;
and (3) “the extent to which the regulation has
interfered with distinct investment-backed
expectations.” Penn Cent. Transp. Co. v. N.Y. City, 438
U.S. 104, 124 (1978).
The Court notes that there is a question whether
Plaintiff has adequately alleged that any alleged taking
was not merely incidental to the City’s exercise of its
police powers. See Houlton, 175 F.3d at 190 (“[C]ourts
steadfastly have rejected the proposition that the grant
of an exclusive contract for refuse collection constitutes
a taking vis-à-vis other (competing) trash haulers”).
The Court need not reach this issue here because, as
the Court finds below, Plaintiff has failed to adequately
plead exhaustion of state court remedies. However, if
Plaintiff chooses to file an amended complaint, Plaintiff
must adequately allege that any taking that occurred
was not merely incidental to the City’s exercise of its
police powers.
Plaintiff argues that it has been subject to an
unconstitutional taking because the City does not allow
Plaintiff to collect construction and demolition debris
for a service fee. Plaintiff asserts that this alleged
taking was perpetrated by two state actions. First,
Plaintiff argues that the City’s denial of Plaintiff’s
application for a franchise or license was a taking.
Second, Plaintiff argues that the California Supreme
Court’s decision in Waste Management of the Desert v.
Palm Springs Recycling Center, 7 Cal. 4th 478 (1994),
was a “judicial taking.”
App. 51
A cause of action for a “judicial taking” was
recognized by the plurality in Stop the Beach
Renourishment, Inc. v. Florida Department of
Environmental Protection, 560 U.S. 702 (2010).
However, a majority of the United States Supreme
Court did not hold that such a cause of action was
available. Id. at 733–45. As a district court in this
district has stated: “The contours and viability of the
theory of so-called ‘judicial takings’—where a court
decision may be deemed to have effectively taken
property rights from an individual—are unclear even
in the courts of this country.” Eliahu v. Israel, 2015 WL
981517, at *5 n.5 (N.D. Cal. Mar. 3, 2015), aff’d sub
nom. Eliahu v. State of Israel, 659 F. App’x 451 (9th
Cir. 2016).
In this case, the Court need not reach whether the
Takings Clause protects against “judicial takings”
because Plaintiff has failed to satisfy the prerequisites
for a takings claim regardless of whether that taking
was caused by the City or the California Supreme
Court. To bring a claim based on the Takings Clause in
federal court, “a plaintiff must establish two things:
(1) the governmental entity has reached a final decision
on the applicability of the regulation to the plaintiff’s
property; and (2) the plaintiff is unable to receive just
compensation from the government.” San Remo Hotel
v. City & Cty. of S.F., 145 F.3d 1095, 1102 (9th Cir.
1998).
The Court need not reach the first San Remo
requirement because Plaintiff fails to satisfy the second
San Remo requirement. Under the second San Remo
requirement, if administrative procedures or a state
App. 52
court cause of action is available to obtain just
compensation, a plaintiff must first pursue that avenue
of relief. See San Remo, 145 F.3d at 1102 (requiring the
plaintiff to first pursue state law inverse condemnation
before bringing a federal cause of action). To avoid this
requirement, the plaintiff must show that any state
law avenues of relief are “inadequate.” Id.
Here, the complaint contains no allegation that
Plaintiff pursued compensation through state law
avenues or that such avenues are inadequate. There
may be administrative procedures to appeal the license
denial or a cause of action that can be brought in state
court to obtain just compensation. However, Plaintiff
has failed to adequately allege that such avenues of
relief have been exhausted or are inadequate. Thus,
Plaintiff has failed to satisfy the exhaustion
requirement for a takings claim. See Smith v. Cty. of
Santa Cruz, 2014 WL 1118014, at *5 (N.D. Cal. Mar.
19, 2014) (dismissing takings claim where the plaintiff
failed to adequately allege that it had exhausted state
law remedies).
Accordingly, the Court GRANTS the City’s Motion
to Dismiss Plaintiff’s declaratory relief cause of action
to the extent it relies on a Takings Clause theory of
relief. The Court grants leave to amend because
Plaintiff may be able to allege facts that demonstrate
that state remedies have been exhausted or are
inadequate.
App. 53
2. Substantive Due Process
Plaintiff alleges that the City’s denial of a license to
collect construction and demolition debris was
“arbitrary and capricious,” and thus violates the
requirements of substantive due process. Plaintiff
asserts violations of substantive due process under
both the Fifth Amendment and Fourteenth
Amendment. See Compl. ¶¶ 26–27. However, the Fifth
Amendment’s Due Process Clause only applies to the
federal government. Bingue v. Prunchak, 512 F.3d
1169, 1174 (9th Cir. 2008). Because Defendant is not a
federal actor, the Court GRANTS the City’s Motion to
Dismiss Plaintiff’s Fifth Amendment due process
theory of relief with prejudice. However, the
Fourteenth Amendment has its own guarantee of due
process against state action equivalent to the Fifth
Amendment’s provisions against the federal
government. See Betts v. Brady, 316 U.S. 455, 462
(1942), overruled on other grounds by Gideon v.
Wainwright, 372 U.S. 335 (1963). Thus, the Court
analyzes Fourteenth Amendment substantive due
process theory of relief.
“Substantive due process protects individuals from
arbitrary deprivation of their liberty by government.”
Brittain v. Hansen, 451 F.3d 982, 991 (9th Cir. 2006).
Substantive due process is violated by “executive abuse
of power . . . which shocks the conscience.” Id. at 846;
accord Costanich v. Dep’t of Soc. & Health Servs., 627
F.3d 1101, 1111 (9th Cir. 2010). “Substantive due
process cases typically apply strict scrutiny in the case
of a fundamental right and rational basis review in all
other cases.” Witt v. Dep’t of Air Force, 527 F.3d 806,
App. 54
817 (9th Cir. 2008). “When a fundamental right is
recognized, substantive due process forbids the
infringement of that right ‘at all, no matter what
process is provided, unless the infringement is
narrowly tailored to serve a compelling state interest.’”
Id. (quoting Reno v. Flores, 507 U.S. 292, 301–02 (1993)
(emphasis omitted)). Fundamental interests that
warrant strict scrutiny include the right to marry and
the right to vote, among others. See, e.g., Kramer v.
Union Free Sch. Dist. No. 15, 395 U.S. 621, 627–28
(1969) (recognizing right to vote as fundamental right);
Loving v. Virginia, 388 U.S. 1, 12 (1967) (“Marriage is
one of the ‘basic civil rights of man,’ fundamental to our
very existence and survival”).
In other cases not involving fundamental rights
where rational basis review applies, “the Court
determines whether governmental action is so
arbitrary that a rational basis for the action cannot
even be conceived post hoc.” Witt, 527 F.3d at 817.
Indeed, “[w]hen executive action like a discrete
permitting decision is at issue, only ‘gregious official
conduct can be said to be arbitrary in the constitutional
sense’: it must amount to an ‘abuse of power’ lacking
any ‘reasonable justification in the service of a
legitimate governmental objective.’” Shanks v. Dressel,
540 F.3d 1082, 1088 (9th Cir. 2008) (quoting Cty. of
Sacramento v. Lewis, 523 U.S. 833, 846 (1998)). Indeed,
even “[o]fficial decisions that rest on an erroneous legal
interpretation are not necessarily constitutionally
arbitrary.” Id.
Plaintiff asserts that its “right to labor” has been
violated here. Opp’n at 15. The United States Supreme
App. 55
Court has held that the “liberty component of the
Fourteenth Amendment’s Due Process Clause includes
some generalized due process right to choose one’s field
of private employment, but a right which is
nevertheless subject to reasonable government
regulation.” Conn v. Gabbert, 526 U.S. 286, 292 (1999).
Cases identifying a violation of such a right “all deal
with a complete prohibition of the right to engage in a
calling[.]” Id. However, even where the “right to labor”
has been violated, the right to choose one’s chosen
profession is not a “fundamental right” within the
meaning of the Due Process Clause, and thus is not
subject to strict scrutiny. Therefore, this Court will
apply rational basis review. See Dittman v. California,
191 F.3d 1020, 1030 (9th Cir. 1999) (applying rational
basis review to claim based on “right to choose one’s
field of private employment”).
Here, Plaintiff was denied a license to transport
construction and demolition debris in the City.
However, Plaintiff was not denied the right to be a
hauler of construction and demolition debris in all
instances. The complaint alleges that Plaintiff is based
in Santa Clara County, not in Sunnyvale in particular.
Indeed, Plaintiff fails to allege what portion of its
business, if any, has been eliminated by the City’s
decision. Moreover, Plaintiff does not allege that it is
precluded from hauling construction and demolition
debris in other locations in Santa Clara County or
elsewhere. See Novin v. Fong, 2014 WL 6956923, at *8
(N.D. Cal. Dec. 8, 2014) (denying substantive due
process claim because the plaintiff “was not denied the
right to be a car dealer in all instances, he was only
denied a permit applicable to Novin’s Property”).
App. 56
Accordingly, Plaintiff has failed to adequately allege
that Plaintiff’s right to engage in the construction and
demolition waste collection profession was entirely
eliminated, or to what extent it was even abridged, by
the Exclusive Franchise Agreement. See Conn, 526
U.S. at 292 (holding that the right to labor only violates
due process where there was a “complete prohibition of
the right to engage in a calling”).
Even if Plaintiff’s “right to labor” was violated to
some extent, under rational basis review, Plaintiff has
failed to allege facts that show that the City’s Exclusive
Franchise Agreement and denial of Plaintiff’s permit
application are “so arbitrary that a rational basis for
the action cannot even be conceived post hoc.” Witt, 527
F.3d at 817. Indeed, as discussed below, the
constitutional and statutory scheme and relevant case
law show that the Exclusive Franchise Agreement and
the permit denial have a rational basis.
The California Constitution provides that “[a]
county or city may make and enforce within its limits
all local, police, sanitary, and other ordinances and
regulations not in conflict with general laws.” Cal.
Const. art. XI, § 7 (emphasis added). The Waste
Management Act provides that the City has discretion
to grant exclusive franchises as “public health, safety,
and well-being so require.” Cal. Pub. Res. Code
§ 40059(a)(2). The City has passed a municipal code
with the purpose of “promot[ing] the public health,
welfare and safety of the community by establishing
reasonable regulations relating to the . . . collection and
disposal of garbage, trash, rubbish, debris and other
discarded matter, goods and material, and recyclable
App. 57
materials.” Sunnyvale Mun. Code § 8.16.010. Pursuant
to that purpose, the Sunnyvale Municipal Code
requires the Sunnyvale City Council to “provide for the
collection and disposal of solid waste and recyclable
materials generated from residences within the city by
the issuance of a franchise or license, or franchises and
licenses, to disposal service operators.” Id. § 8.16.090.
Under these provisions, the Sunnyvale City Council
has entered an Exclusive Franchise Agreement with
Bay Counties for the collection of solid waste, as
codified in multiple ordinances. See, e.g., ECF No. 17-1
at 39, Sunnyvale Ordinance No. 2771-04 (extending
exclusive franchise agreement). The Sunnyvale City
Council has expressly found that the adequate
collection of solid waste is essential for “public health,
safety and well-being” and that the Exclusive
Franchise Agreement with Bay Counties is “in the best
interest of City and its residents.” Franchise Agmt. at
9.
Courts have explicitly described why a
municipality’s use of an exclusive franchise for waste
collection is a rational choice that is neither arbitrary
nor capricious. Exclusive franchise agreements for
waste collection provide “economic advantages accruing
from exclusivity [that] result in lower charges (for
residential as opposed to commercial users) and
increased efficiency in a number of programs (e.g., a
curbside recycling program) that benefit refuse
producers.” Waste Res. Techs. v. Dep’t of Pub. Health,
23 Cal. App. 4th 299, 310 (1994). Moreover, exclusive
franchises are “rationally related to public health and
environmental concerns, as it facilitates efficient
App. 58
regulation of potentially hazardous activities.” G. Fruge
Junk Co. v. City of Oakland, 637 F. Supp. 422, 425
(N.D. Cal. 1986) (denying substantive due process and
equal protection challenges to exclusive franchise
agreement). Indeed, the use of a single waste collector
allows a municipality to “protect[] against the hazards
of indiscriminate or unsafe waste disposal.” Waste
Mgmt. of Alameda Cty., Inc. v. Biagini Waste Reduction
Sys., Inc., 74 Cal. Rptr. 2d 676, 683 (1998). Without an
exclusive franchise, a competitive “race to the bottom”
with respect to waste collection may occur, in which
competing waste collectors cut corners to the detriment
of public health. Id.
Additionally, more than one waste collector would
mean more large trucks in the City, and “routine
operation of large trucks in residential areas and in a
municipality’s central traffic arteries creates
substantial safety and traffic concerns.” Phillip
O’Connell & Terri Esparza, The Golden Dustman in the
Golden State: Exclusive Contracts for Solid Waste
Collection and Disposal in California, 32 URB. LAW.
281, 287 (2000). These concerns are sufficiently
important that at least one court has noted that “most
local governments in California have opted for
exclusive garbage collection arrangements.” Waste Res.
Techs., 23 Cal. App. 4th at 309 (noting “that the
practice is indeed widespread”).
Given these strong local concerns and the discretion
provided to the City, Plaintiff has failed to allege that
the City’s decision to provide an exclusive franchise to
Bay Counties, and thus to deny Plaintiff’s license
application, is arbitrary and capricious. In fact, an
App. 59
exclusive franchise in waste collection is rationally
related to “legitimate governmental objective[s]” such
as efficient garbage collection, public health, and safety
of residents.
Moreover, the City’s letter denying Plaintiff’s
license application provides another rational reason
why the license was denied. In its permit application,
Plaintiff asserted that over “70% of all [construction
and demolition] discards collected by [Plaintiff] are put
back into the stream of commerce.” Compl. at 21. In
response, the City noted that 78% of its construction
and demolition materials are put back into the stream
of commerce. Id. at 24. Thus, the fact that Plaintiff is
not as efficient as the City’s current waste collector is
another rational basis for not allowing Plaintiff to
collect construction and demolition debris within the
City.
Accordingly, the Court GRANTS the City’s Motion
to Dismiss Plaintiff’s declaratory relief cause of action
to the extent it is based on substantive due process.
The Court provides leave to amend because Plaintiff
may be able to plead facts that show arbitrary and
capricious state action.
3. Equal Protection
Plaintiff alleges a violation of equal protection
under the United States Constitution and the
California Constitution. “The Equal Protection Clause
of the Fourteenth Amendment commands that no State
shall ‘deny to any person within its jurisdiction the
equal protection of the laws,’ which is essentially a
direction that all persons similarly situated should be
App. 60
treated alike.” City of Cleburne v. Cleburne Living Ctr.,
Inc., 473 U.S. 432, 439 (1985) (quoting Plyler v. Doe,
457 U.S. 202, 216 (1982)).5 Consequently, “[t]he equal
protection clause forbids the establishment of laws
which arbitrarily and unreasonably create dissimilar
classifications of individuals when, looking to the
purpose of those laws, such individuals are similarly
situated. It also forbids unequal enforcement of valid
laws, where such unequal enforcement is the product
of improper motive.” Williams v. Field, 416 F.2d 483,
486 (9th Cir. 1969) (citing Yick Wo v. Hopkins, 118 U.S.
356 (1886), and People v. Harris, 5 Cal. Rptr. 852 (Cal.
App. Dep’t Super. Ct. 1960)). However, “government
actions that do not affect fundamental rights or liberty
interests and do not involve suspect classifications will
be upheld if they are rationally related to a legitimate
state interest.” Fields v. Palmdale Sch. Dist., 427 F.3d
1197, 1209 (9th Cir. 2005) (as amended).
Even if a plaintiff does not allege that he or she is
part of a class or group of persons that is suffering
discrimination, the United States Supreme Court has
“recognized successful equal protection claims brought
5
The California Constitution states that “[a] person may not be
deprived of life, liberty, or property without due process of law or
denied equal protection of the laws.” Cal. Const. art. I, §7. The
Court considers Plaintiff’s equal protection theory of relief under
the United States Constitution and the California Constitution
together because “equal protection under the California
Constitution is ‘substantially the equivalent of the equal protection
clause of the Fourteenth Amendment to the United States
Constitution.’” Kimco Staffing Servs., Inc. v. California, 236 Cal.
App. 4th 875, 884 (2015) (quoting Manduley v. Superior Court, 27
Cal. 4th 537, 571 (2002)) (internal quotation marks omitted).
App. 61
by a ‘class of one,’ where the plaintiff alleges that she
has been intentionally treated differently from others
similarly situated and that there is no rational basis for
the difference in treatment.” Vill. of Willowbrook v.
Olech, 528 U.S. 562, 564 (2000) (per curiam). However,
such claims are “constrained” to avoid “provid[ing] a
federal cause of action or review of almost every
executive or administrative government decision.”
Engquist v. Or. Dep’t of Agric., 478 F.3d 985, 993 (9th
Cir. 2007). Thus, if a “class of one” equal protection
claim is brought, the Plaintiff must plead with
specificity the “similarly situated group” that is treated
differently. Andy’s BP, Inc. v. City of San Jose, 2013
WL 485657, at *5 (N.D. Cal. Feb. 6, 2013), aff’d, 605 F.
App’x 617 (9th Cir. 2015) (citation omitted).
Whether Plaintiff asserts a traditional
classification-based equal protection claim or a “class of
one” equal protection claim, rational basis review
applies here. Plaintiff only asserts a “right to labor,”
which is not a fundamental right or liberty interest, see
Conn, 526 U.S. at 291–92 (holding that the “Due
Process Clause includes some generalized due process
right to choose one’s field of private employment, but a
right which is nevertheless subject to reasonable
government regulation”), and fails to allege t
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