Opposition Brief — California v. M&P Investments

No. 02-1081 FIL es

|

ORE,

rFR 24 2003

Jn The

Supreme Court of the Anited States

+

PEOPLE OF THE STATE OF CALIFORNIA,

Petitioner,

v.

M&P INVESTMENTS, DAVID MUSTIN, ESTATE OF

FRANK PAUL, JACK ALQUIST, GUILD CLEANERS,

INC., ESTATE OF DWIGHT ALQUIST, PAUL MARIANO,

VICTOR LEONARDINI, AND DELANO GOTELLI,

Respondents.

¢

On Petition For Writ Of Certiorari

To The United States Court Of Appeals

For The Ninth Circuit

¢

RESPONDENTS GUILD CLEANERS, INC. AND

JACK ALQUIST’S BRIEF IN OPPOSITION

¢ |

RHONDA CATE CANBY, Counsel of Record

STEPHEN J. MEYER

STEVEN H. GOLDBERG

JEAN M. HOBLER

DOWNEY BRAND SEYMOUR & ROHWER

555 Capitol Mall, 10th Floor

Sacramento, California 95814

(916) 444-1000

(916) 441-4021 (fax)

LORI J. GUALCO

LAW OFFICES OF LORI J. GUALCO

455 Capitol Mall, Suite 210

Sacramento, California 95814

(916) 442-6660

(916) 442-0145 (fax)

COCKLE LAW BRIEF PRINTING CO. (800) 225-6964

OR CALL COLLECT (402) 342-2831

QUESTIONS PRESENTED

Petitioner City of Lodi (the “City”) asks this Court to

review a one-sentence order from the Ninth Circuit that

finds no basis for interlocutory appellate jurisdiction over

an order from the district court. That district court order

analyzed an issue of California law never before ruled

upon by California courts and required the parties to

further brief a preliminary injunction motion in light of

the district court’s factual finding that the State was not,

and never had been, a party to the litigation. Because of

subsequent appealable orders, the same question pre-

sented to this Court is now pending before the Ninth

Circuit.

(1) Did the Ninth Circuit misapply a properly stated

rule of law governing interlocutory jurisdiction of the

federal appellate courts when it dismissed the City’s

appeal for lack of jurisdiction?

(2) Should this Court step in six months before trial

to decide an unresolved question of California law even

though the Ninth Circuit is currently considering that

question?

(3) Did the district court err in determining that the

City was the real party in interest when the City concedes

it does not represent the State yet sues in the name of “the

People of the State of California”?

LIST OF PARTIES

Petitioner’s list of parties is accurate, except for the

inclusion of the Attorney General of the State of Califor-

nia, Bill Lockyear. The State of California has not waived

its sovereign immunity and has never appeared before the

U.S. District Court or the Ninth Circuit Court of Appeals

in this matter.

CORPORATE DISCLOSURE

No parent or publicly held company owns 10% or more

of the stock of Guild Cleaners, Inc.

ili

TABLE OF CONTENTS

Page

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CORPORATE DISCLOSURE ............cccccssssccssscccsseees il

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STATEMENT OF THE CASE ...................cecccssceeeeeeees 1

REASONS FOR DENYING THE PETITION............ 5

A. The Ninth Circuit Properly Dismissed the

Appeal Because No Federal Statute Conferred

Jurisdiction Over the May 3, 2002 Order.........

-

The Ninth Circuit’s Order Does Not De-

termine Any Question of Federal Law.......

The Ninth Circuit’s Order Does Not Con-

flict with the Precedents of Any Other Cir-

Di Cella neue dandiinedsseiddanndidersseoereesee

The Collateral Order Doctrine Did Not

Confer Jurisdiction Upon the Ninth Cir-

cuit Because the Appealed Order Deter-

mined an Issue Central to the Determi-

nation of Equitable Relief, i.e., the Identity

of the Plaintiff Seeking Relief...................

a. The Issue Resolved in the District

Court’s May 3, 2002 Order Is Insepara-

ble from the Merits of Injunctive Relief ..

7

iv

TABLE OF CONTENTS -— Continued

Page

b. The Collateral Order Doctrine Did not

Confer Jurisdiction on the Ninth Cir-

cuit Because the District Court’s Order

Was Effectively Reviewable Absent

Immediate Appeal ..................cseeeeeeeeees 10

4. The May 3, 2002 Order Did not Send a

Party Out of Court: “The People’s” Motion

for Injunctive Relief Has Since Been

Granted by the District Court................... 11

B. This Court Should Deny the City’s Petition for

a Writ of Certiorari Because the Order Ap-

pealed from Is Interlocutory....................ceceeee 13

C. Reviewing the District Court’s Order Would

Require this Court to Review a Fact-Specific |

Order Interpreting State Law, Although the

Same Order Has Not Been Previously Re-

viewed in Any State or Federal Court and the |

Same Issues Are Currently Before the Ninth

Circuit Court of Appeals for Review on the

PE Siradhskachinnnntinsomesatenice A btckietecicateaey ek canines 14

1. The District Court’s Order Relied Upon

Fact-Specific Determinations of the Ac-

tions and Motivations of the City of Lodi

in Presenting Itself as the State of Cali-

NE asec cnc dhssplcauceranhedlnersenenabeisnsanenredl 15

2. The City Has Requested Review of a State

Law Determination Before the Ninth Cir-

cuit Court of Appeals Has Considered this

BONN Gh TIO Tos hace sivscnsinceesconsienccenenenss 17

3. No Lower Court Has Acted in Any Fashion

Requiring this Court to Invoke Its Super-

SI PE oi si disnecnsciaicersandsateseteniess 18

TABLE OF CONTENTS - Continued

Page

D. The District Court’s May 3, 2002 Order was a

Valid Interpretation of State Law.................... 20

E. The City’s Petition for a Writ of Certiorari

Contains Legal and Factual Misstatements

Bearing on the Issues Properly Before the

Court if Certiorari Is Granted ......................06 21

CHAIN desta carsitiniecsnesecesiacbccsneiataiatramurteeental 23

TABLE OF AUTHORITIES

Page

FEDERAL CASES

Amer. Construction Co. v. Jacksonville, T-&K.W. Ry.

ee ee. Ce: SMR Rares ment evn meh 13

Bhd. of Locomotive Firemen v. Bangor & Aroostock

BR. CoO, SED UTES CRD netesersiciiaicserserteerieveeunaes 13

Bruner v. United States, 343 U.S. 112 (1952)............0.. 19

Butner v. United States, 440 U.S. 48 (1979)........... eee 17

Catiin v. United States, 324 U.S. 229 (1945)... 11

Cohen v. Beneficial Indus. Loan Corp., 337 U.S. 541

Ca cine cancia Mh ccccenbaiinaneaneananaen 7,10

Coopers & Lybrand v. Livesay, 437 U.S. 463 (1981) .....7, 10

Digital Equip. Corp. v. Desktop Direct, Inc., 511

0. Be CI in kiccivistneciigsoeeeiinedunentinnae 7

Division 580, Amalgamated Transit Union uv.

Central N.Y. Reg Transit Auth., 556 F.2d 659 (2d

Ue RIF Oo besvssxssacdiserencintescnunae aaa ea 8

Dr. Seuss Enter., L.P. v. Penguin Books, 924 F. Supp.

LEBS GB. Sak... RIE ovtittticcsneserccceineaniieniani 8

Falls City Indus., Inc. v. Vanco Beverage, Inc., 460

U2. GES I kite ccmandiaiaiusatennas 8

Feliciano v. Gaztambide, 836 F.2d 1 (1st Cir. 1987)........... 8

Firestone Tire & Rubber Co. v. Risjord, 449 U.S.

LAS ncicscdancisiesntecessneucecgieecennmaanabemaaacaaan 10

Grupo Mexicano de DeSarrollo S.A. v. Alliance

Bond Fund, Inc., 527 U.S. 308 (1999) .................ccsscceees 19

H.H. Robertson, Co. v. United Steel Deck, Inc., 820

Fe BG CE. Ce i iincicckcctinieeevnaiuannn 8

vii

TABLE OF AUTHORITIES — Continued

Page

Hamilton-Brown Shoe Co. v. Wolf Bros. & Co., 240

Re I II a Tati eehchaar cat oe nies todpistdiiiapeialinhicdabimmiatohsties 13

Herrington v. County of Sonoma, 706 F.2d 938 (9th

Rete: AIT ns:iucadenhedcenhsoinatindebenisnaibniehiiemmaibnbiihddanccbaaebateisebanenen 11

Huddleston v. Dwyer, 322 U.S. 232 (1944)... 17

Mercantile Nat'l Bank v. Langdeau, 371 U.S. 555

FI chciciiectinconechssiaieahceenaecbeadacssabubenkecalanueiaaiaitabibeddiaanGincen 7

Ramirez v. Fox Television Station, Inc., 998 F.2d

Pe a I bic nececiaceih vekisnsveniacetdndouiicehpendounsintindenees 11

The Wharf (Holdings) Ltd. v. United Int'l Holdings,

See See I Ie Ei iatenntetepsenenesncdnatiisetencesenetmmoinens 17

Thermtron Products v. Hermansdorfer, 423 U.S.

PE ATT Lien bonsiaicicabesuaickeeapsaiicdinandas on cibicsratd testa tdbecaadbelte 19

United States v. Lee, 786 F.2d 951 (9th Cir. 1986) ............ 11

United States v. MacDonald, 435 U.S. 850 (1978)............ 10

United States v. Ryan, 402 U.S. 530 (1971)... 10

Wakefield v. Thompson, 177 F.3d 1160 (9th Cir.

SITE cons vase tlndcctctqcaleceduaide ate diouaacnuaeanenaanasabplieaaagaainaenn 11

FEDERAL STATUTES

BE I TE ih ise dick ochch ound ciadanbainacneenmaaueiianineds 11, 14

RS Sane FT oe ee cee eM NY me 2

FEDERAL RULES OF COURT

Bs PICTUS Mire caniagncdadatsebenlaseaustidlecnnsheatccsmaconsedennns 5, 15, 19

SN aie Ms IED cp tisiesicnevciconte ceinecaconsnne dimiensnncessiinnnianesntamiaeeseats 21

Vili

TABLE OF AUTHORITIES — Continued

Page

5 SR ee ee 15, 18, 20

I Te Tc tee ee 6

STATE STATUTES

Ree NE GIETE TEY TPT TIEE sincsemeiencincetiiananedanuasneandinsseten 4,15, 17, 20

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JURISDICTION

Jurisdiction over the question presented by the City’s

petition is pending in the Ninth Circuit. The district court

issued the contested order on May 3, 2002, to facilitate its

consideration of the City’s motions for preliminary injunc-

tion. The Ninth Circuit Court of Appeals dismissed the

appeal of that order for lack of jurisdiction on September

13, 2002, and denied Petitioner’s motion for reinstatement

of the appeal on November 18, 2002. On December 31,

2002, the district court issued orders on the City’s two

motions for preliminary injunction. Pursuant to an exten-

sion of time to file its writ petition, the City of Lodi filed

its petition in this Court on January 13, 2003, four days

before filing in the district court a motion for reconsidera-

tion of the same contested order. On January 30, 2003, the

City filed a notice of appeal to the Ninth Circuit regarding

one of the injunctive orders issued by the district court,

including as an issue on appeal the identity of the real

party in interest pursuing nuisance abatement claims in

the name of the People of the State of California’ — the

identical issue the City asks this Court to review.

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STATEMENT OF THE CASE

| The City invoked the jurisdiction of the United States

| District Court in November 2000, filing a complaint that

contained a single count seeking injunctive relief under

' After the City noticed an appeal to the Ninth Circuit of one of two

December 31, 2002 orders on injunctive relief, the City withdrew its

motion for reconsideration by the district court of its May 3, 2002 order.

2

the Resources Conservation and Recovery Act (“RCRA”),

42 U.S.C. §6972(a)(1)(B), along with several counts

seeking injunctive relief and cost recovery under state law.

In April 2002, the City voluntarily dismissed its RCRA

claim, and the district court exercised its discretion to

retain supplemental jurisdiction over the state law claims

‘to avoid prejudice to the parties.

The City’s complaint alleged five causes of action,

three for injunctive relief and two for cost recovery. The

injunctive relief causes of action were brought only in the

name of “the People of the State of California.” The cost

recovery actions were pursued only in the name of the

City. Defendants Guild Cleaners, Inc. and Jack Alquist

(collectively, “Guild”) asserted defenses, including unclean

hands, to all five causes of action and filed counterclaims

against the City alleging that the City had contributed to

the contamination for which it sought joint and several

injunctive relief.

In Fall 2001, the City, in the name of “the People,”

moved for preliminary injunctive relief against Guild.

That motion’s prayer for relief stated: “the State requests

this Court ... issue the preliminary injunction.... ” On

December 14, 2001, the district court verbally indicated

that it intended to grant an injunction to the State, took

the matter under submission, and ordered further briefing

on the scope and form of an order for preliminary injunc-

tive relief. The hearing on the scope and form of the

injunction was set for January 25, 2002.

Just prior to the January 25 hearing, the court re-

ceived a joint letter from the California Department of

Toxic Substances Control (““DTSC”) and the California

Regional Water Quality Control Board (the “Regional

3

Board”), State agencies with jurisdiction over environ-

mental issues. The letter declared that the district court

had no jurisdiction over the DTSC and the Regional Board

and therefore could not bind the agencies in any prelimi-

nary injunction order.’ In response, the district court

continued the hearing on the form and scope of the order,

and instead held a hearing on January 25, 2002, to deter-

mine whether the State was a party to the litigation.

Following that hearing, the district court asked the parties

and amicus curiae’ to brief the issues fully.

On May 3, 2002, following further briefing and an-

other full hearing in which the parties, the California

Attorney General, and counsel for the State agencies

participated, the court issued an interlocutory order, which

asked: “[W]ho is the plaintiff ‘People of the State of Cali-

fornia? Is it a party separate and distinct from the City

itself?” (Pet. App. 15a.) After engaging in thoughtful

analysis of the arguments presented by all parties and

amicus curiae, the district court answered those questions:

* The agencies stated: “DTSC and the RWQCB are not parties to

the litigation, have not submitted themselves to the jurisdiction of the

court, and have not waived their 11th Amendment immunity. ... The

Preliminary Injunction should not, therefore, contain language that

purports to require, authorize, forbid or otherwise regulate the per-

formance of any actions by DTSC or the RWQCB in the enforcement

and ert ota of proposed cleanup related activities. ...”

* Amicus curiae before the district court are the DTSC, the

Regional Board, and the California Attorney General. No State agency

or agent has appeared in this action and, in fact, the DTSC and the

Regional Board continue to assert that the federal courts have never

obtained jurisdiction over any branch of California’s government in

regard to this case.

ee

4

“[U]nder CCP § 731 the City Attorney in this case has but

one client — the City of Lodi.” (Pet. App. 26a.)

The district court found that the plaintiff “People of

the State of California” could not be distinguished from

the plaintiff “City of Lodi.” Because the court’s determina- |

tion from the bench that injunctive relief was appropriate |

rested in large part upon the court’s understanding that

the party seeking injunctive relief was the innocent State,

and not the potentially liable City, the court withdrew its

December 14, 2001 oral statement regarding its intent to

issue an injunction. (Pet. App. 28a.) The district court then

required supplemental briefing, and reset the hearing on

preliminary injunctive relief for August 9, 2002. (Pet. App.

32a-33a.)

The City appealed the district court’s May 3, 2002

order to the Ninth Circuit Court of Appeals, claiming

interlocutory jurisdiction based on: (1) the “dissolution” of

a preliminary injunction; (2) the collateral order doctrine;

and (3) the argument that the May 3, 2002 order had

effectively sent a party out of court. Guild moved to dis-

miss the appeal, demonstrating that: (1) no preliminary

injunction had ever issued and so could not be dissolved by |

the May 3, 2002 order; (2) the determination of the iden-

tity of a party seeking equitable relief was not collateral,

but was central to the question of that party’s ability to

obtain injunctive relief; and (3) no party had been sent out

of court. Thereafter, the Ninth Circuit dismissed the

appeal for lack of jurisdiction in a one-sentence, unpub-

lished order issued on September 13, 2002.

,

v

AOL TTS

5

REASONS FOR DENYING THE PETITION

A. The Ninth Circuit Properly Dismissed the Ap-

peal Because No Federal Statute Conferred Ju-

risdiction Over the May 3, 2002 Order

“A petition for a writ of certiorari is rarely granted

when the asserted error consists of ... the misapplication

of a properly stated rule of law.” Sup. Ct. R. 10. Whether

the Ninth Circuit properly dismissed the City’s appeal is

solely a question of whether there was a “misapplication of

a properly stated rule of law.” The City never claims that

the Ninth Circuit applied the wrong principles of law or

that incorrect statements of law were presented to that

court. Instead, all the City does is repeat the arguments

about jurisdiction that it made to the Ninth Circuit, the

same arguments that were_rejected by that court when it

dismissed the City’s appeal for lack of jurisdiction.

Further, the Ninth Circuit’s September 13, 2002 order,

from which the City petitions for review, decided only one

issue: whether the Ninth Circuit had jurisdiction for

review of the district court’s May 3, 2002 order. The Ninth

Circuit never reached the merits of the question presented

by the City.

oe = — —

1. The Ninth Circuit’s Order Does Not Deter-

mine Any Question of Federal Law

The City claims that review of the order is necessary

and appropriate because “The Ninth Circuit’s dismissal of

the People’s appeal decides an important question of

federal law in a way that conflicts with other appellate

court decisions.” (Cert. Pet., at 5 (emphasis added).)

However, the City never identifies an important question

a Se

6

of federal law “decided by” the Ninth Circuit’s one-

sentence order.

2. The Ninth Circuit’s Order Does Not Conflict

with the Precedents of Any Other Circuit |

Although claiming there is some split among the

circuit courts justifying review of this undefined federal

issue, the City never cites a single case from any circuit

court, including the Ninth Circuit, that conflicts with the

law presented to the Ninth Circuit to support dismissal of

ca the appeal for lack of jurisdiction. |

In fact, the Ninth Circuit’s one-sentence order dis-

missing the case for lack of jurisdiction never addressed or |

stated the law governing federal appellate court jurisdic-

tion and was not published. It is hard to imagine that any |

federal appellate court, including the Ninth Circuit,* would |

ever cite to, reference, or rely upon the Ninth Circuit's |

order. |

3. The Collateral Order Doctrine Did Not Con-

fer Jurisdiction Upon the Ninth Circuit Be-

cause the Appealed Order Determined an |

Issue Central to the Determination of Equi-

table Relief, i.e., the Identity of the Plaintiff |

Seeking Relief |

The collateral order doctrine is a limited exception \

to the final judgment rule. This doctrine is narrowly

* “Unpublished ... orders of [the Ninth Circuit Court of Appeals]

may not be cited to or by the courts of this circuit. ...” Ninth Cir. R. 36-

3(b).

7

interpreted, so that the exception “never be allowed to

swallow the general rule” requiring a final decision of a

district court as a prerequisite to jurisdiction in an inter-

mediate appellate court. Digital Equip. Corp. v. Desktop

Direct, Inc., 511 U.S. 863, 867 (1994).

The collateral order doctrine applies to “that small

class [of decisions] which finally determine claims of right

separable from, and collateral to, rights asserted in the

action, too important to be denied review and too inde-

pendent of the cause itself to require that appellate con-

sideration be deferred until the whole case is adjudicated.”

Cohen v. Beneficial Indus. Loan Corp., 337 U.S. 541, 546

(1949) (emphasis added). Thus, an order is collateral only

if it conclusively determines a disputed question, resolves

an important issue, which is completely separate from the

merits of the case, and is effectively unreviewable upon

appeal from a final judgment. Jd. The district court’s May

3, 2002 order does not meet this test.

a. The Issue Resolved in the District Court’s

May 3, 2002 Order Is Inseparable from the

Merits of Injunctive Relief

An order is separable under the collateral order

doctrine when it is “too independent of the cause itself to

require that appellate consideration be deferred until the

whole case is adjudicated.” Cohen, 337 U.S. at 546. An

order generally is not separable if review would require

appellate courts to become “enmeshed in the factual and

legal issues comprising the plaintiff’s cause of action.”

Coopers & Lybrand v. Livesay, 437 U.S. 463, 469 (1981)

(quoting Mercantile Nat'l Bank v. Langdeau, 371 U.S. 555,

558 (1963)).

8

In order to obtain injunctive relief, the plaintiff must

demonstrate that it is likely to prevail on the merits of its

claims, i.e., that it has a clear chance of demonstrating its

right to relief. “The plaintiff’s burden of showing a likeli-

hood of success on the merits includes the burden of

showing a likelihood that it would prevail against any

affirmative defenses raised by the defendant.” Dr. Seuss

Enter, L.P. v. Penguin Books, 924 F. Supp. 1559, 1562

(S.D. Cal. 1996), aff’d, 109 F.3d 1394 (9th Cir. 1997); see

also Falls City Indus., Inc. v. Vanco Beverage, Inc., 460

U.S. 428, 435 (1983) (recognizing affirmative defenses may

affect plaintiff’s showing of likelihood of success on the

merits).° This is an inherent requirement of the plaintiff’s

burden to demonstrate likelihood of success on the merits,

for the plaintiff is not likely to succeed on the merits if the

defendant’s affirmative defenses would prevent the court

from granting equitable relief.

==

The district court’s May 3, 2002 order held that the

City of Lodi is the real party in interest seeking injunctive

relief in the name of the People of the State of California.

(Pet. App. 26a-27a.) Guild’s answer to the plaintiff’s |

complaint contains 35 affirmative defenses, including

* See also Division 580, Amalgamated Transit Union v. Central

N.Y. Reg’l Transit Auth., 556 F.2d 659, 663-64 (2d Cir. 1977)}(upholding

district court’s denial of injunctive relief due to application of defense of

waiver); Feliciano v. Gaztambide, 836 F.2d 1, 2 (1st Cir. 1987) (recogniz-

ing role of affirmative defenses in showing for preliminary injunctive

relief); H.H. Robertson, Co. v. United Steel Deck, Inc., 820 F.2d 384, 388

(Fed. Cir. 1987) (“[T]he burden is always on the movant to demonstrate

entitlement to preliminary relief. Such entitlement, however, is \

determined ir the context of the presumptions and burdens that would

inhere at trial on the merits.”), overruled on other grounds, Markman v.

Westview Instruments, Inc., 52 F.3d 967 (Fed. Cir. 1995).

|

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sinensis iia)

9

several equitable affirmative defenses directly affecting

the merits of the City’s claims for injunctive relief, such as

unclean hands, and, most notably, the impropriety of the

City’s attempts to avail itself of the sovereign authority of

the State of California.

Guild’s unclean hands defense and its counterclaims

are based on the City’s negligent maintenance of its sewer

system, chemical dumping by City employees, and instal-

lation of a monitoring well and operation of a water supply

system in a manner exacerbating existing contamination.

Because no one has accused the State of California of

contributing to the contamination in the City of Lodi, by

purporting to represent the State (or some other nebulous,

never-before-recognized “virtual” party it calls “the Peo-

ple”), the City effectively shielded itself from any equitable

defense.

These defenses demonstrate how the issues addressed

in the May 3 order are inseparable from the merits of the

City’s claims. The May 3 order determined that the City

could not cloak itself in the sovereignty of the State of

California, that in fact the City was the party seeking

injunctive relief. In effect, the district court determined

that Guild’s affirmative defenses had merit and should be

considered in assessing equitable relief.

The susceptibility of a party seeking a preliminary

injunction to equitable defenses that preclude a grant of

injunctive relief directly impacts the adjudication of the

underlying claims for equitable relief. Even the City

recognizes that the determination of the identity of the

party seeking equitable relief is inseparable from the

merits of the determination of injunctive relief: “As an

equitably innocent party against whom no counterclaims

a 10

have been asserted, the People’s ability to obtain injunc-

tive relief and to impose joint and several liability was

unquestioned. That is not necessarily so for the City of

Lodi however.” (Cert. Pet., at 6 n.1.)

The determination of the identity of a party seeking

equitable relief is in no way, in the language of Cohen, 337

U.S. at 546, “independent of the cause itself.” Rather, to

review this determination, the Ninth Circuit necessarily

would have become “enmeshed in the factual and legal

issues” surrounding the City’s claims for injunctive relief.

Coopers & Lybrand, 437 U.S. at~469. Thus, the district

court’s May 3, 2002 order determining the identity of the

party seeking equitable relief is not separable, not collat-

eral, and not immediately appealable.

b. The Collateral Order Doctrine Did Not

Confer Jurisdiction on the Ninth Circuit

Because the District Court’s Order Was

Effectively Reviewable Absent Immediate

Appeal

An order is effectively unreviewable absent immediate

appeal only if lack of immediate appeal would destroy the

legal and practical value of an asserted right, “where

denial of immediate review would render impossible any

review whatsoever.” Firestone Tire & Rubber Co. v. Ris-

Jord, 449 U.S. 368, 377 (1981) (quoting United States v.

MacDonald, 435 U.S. 850, 860 (1978)); United States v.

Ryan, 402 U.S. 530, 533 (1971)).

Considering, however, that the issue of the real party

in interest on the “People’s” injunctive claims is currently

pending before the Ninth Circuit Court of Appeals, any

ee

11

claim that the May 3, 2002 order was effectively unre-

viewable absent immediate appeal is demonstrably false.

4. The May 3, 2002 Order Did Not Send a Party

Out of Court: “The People’s” Motion for In-

junctive Relief Has Since Been Granted by

the District Court

The City argues that the “Plaintiff People of the State

of California” was effectively “sent out of court” by the May

3 order. The City seems to be referring to a practical

interpretation sometimes given to the final judgment rule

of 28 U.S.C. section 1291. But a “final decision” is one that

“ends the litigation on its merits and leaves nothing for

the court to do but execute the judgment.” Catlin v. United

States, 324 U.S. 229, 233 (1945).

The cases cited by the City fit squarely within this

definition. See Wakefield v. Thompson, 177 F.3d 1160,

1162-63 (9th Cir. 1999); Ramirez v. Fox Television Station,

Inc., 998 F.2d 743, 746-47 (9th Cir. 1993); United States v.

Lee, 786 F.2d 951, 956 (9th Cir. 1986); Herrington v.

County of Sonoma, 706 F.2d 938, 939 (9th Cir. 1983). In

each of those cases, an order of dismissal effectively

removed both a party and all of that party’s claims from

federal court without possibility of pursuing the claims or

challenging an order absent immediate appeal. That is not

the situation before this Court.

After the City conceded below that it did not represent

the State, the district court made a determination that the

party who had pursued injunctive relief was in fact the

City of Lodi rather than an amorphous “all of the People of

the State of California,” an entity, which, according to the

City, is neither the City of Lodi nor the State of California.

a a

12

(Pet. App. 18a.) But the district court did not dismiss any

claim in the action based on its determination of the real

party in interest, nor did it even require the City to for-

mally substitute itself as the party pursuing injunctive

relief. The court merely corrected its earlier misapprehen-

sion that the party identified in the case caption, “the

People of the State of California,” was the State of Califor-

nia. In fact, on December 31, 2002, with full knowledge

that the moving party on preliminary injunctive relief,

captioned as “the People of the State of California,” was

the City of Lodi, the district court granted the preliminary

injunctive relief sought by the City.°

And while the City claims that the Ninth Circuit’s

dismissal effectively sent “the People” out of court, the

City ignores that there are other public prosecutors who

can intervene in this action or who can take independent

action to vindicate the rights of California’s public at large,

any of whom also can prosecute the action in the name of

“the People of the State of California.” In fact, as demon-

strated by the California agencies’ communication to the

parties,’ the State of California, including California’s

Attorney General, are well aware of the proceedings in

* It is surprising that the City continues to assert that a party has

been sent out of court, for that effectively concedes that no party before

the district court can enforce the injunctive relief so recently awarded to

“the Pearis *

" See supra note 2 and accompanying text. Following issuance of

the district court’s May 3, 2002 order, the Regional Board again

communicated with the district court, assuring the court that that

agency was actively monitoring the progress of cleanup efforts in Lodi

and could and would issue cleanup orders if any potentially responsible

party, including the City, was not appropriately and voluntarily

participating in cleanup efforts.

13

this matter and, if any agent of California determines that

urgent action is necessary, he or she can, and will, repre-

sent “the People,” either in the district court, through

intervention, or in another forum.

The City is currently and actively pursuing perma-

nent injunctive and monetary relief in the district court,

on the same claims and allegations upon which it initiated

this litigation. The May 3 order was issued as an integral

but preliminary part of the on-going proceedings. Thus,

the City’s claim that the final judgment rule or any of its

interpretations conferred jurisdiction upon the Ninth

Circuit is facially absurd.

B. This Court Should Deny the City’s Petition for a

Writ of Certiorari Because the Order Appealed

from Is Interlocutory

“(T]his court should not issue a writ of certiorari to

review a decree of the circuit court of appeals on appeal

from an interlocutory order, unless it is necessary to

prevent extraordinary inconvenience and embarrassment

in the conduct of the cause.” Amer. Constr. Co. v. Jackson-

ville, T:&K.W. Ry. Co., 148 U.S. 372, 384 (1893). “[E]xcept

in extraordinary cases, the writ is not issued until final

decree.” Harnilton-Brown Shoe Co. v. Wolf Bros. & Co., 240

U.S. 251, 258 (1918). The lack of a final judgment is alone

“sufficient ground for the denial of the application” for

certiorari review. Id.; see also Bhd. of Locomotive Firemen

v. Bangor & Aroostock R. Co., 389 U.S. 327, 328 (1967)

(finding a case remanded by the circuit court was not ripe

for review by the U.S. Supreme Court).

To date, the City of Lodi has initiated four interlocu-

tory appeals to the Ninth Circuit Court of Appeals. Trial in

14

this matter is not slated to begin until September 22,

2003. All the Ninth Circuit was asked to do was reverse

the district court’s determination that the City of Lodi was

the real party in interest and “reinstate” preliminary

injunctive relief’ that the City contended had been

granted by the district court. Under any outcome at the

Ninth Circuit, dismissal for lack of jurisdiction, or consid-

eration upon the merits and affirmance or reversal of the

district court’s order, the underlying action would have

continued to trial on the merits and ultimate determina-

tion of the rights of the parties. There is no better example

of an interlocutory order than the order the City asks this

Court to review.

C. Reviewing the District Court’s Order Would

Require this Court to Review a Fact-Specific

Order Interpreting State Law, Although the

Same Order Has Not Been Previously Reviewed

in Any State or Federal Court and the Same Is-

sues Are Currently Before the Ninth Circuit

Court of Appeals for Review on the Merits

The only conceivable federal question presented by

the City is whether “the People,” as defined by the City,

is a real party in interest under Federal Rule of Civil

* At the Ninth Circuit, the City cited 28 U.S.C. section 1291(a\1)

as the basis for the Ninth Circuit’s jurisdiction. Guild moved for

dismissal citing the only order entered after hearing on the City’s

motion for preliminary injunction, which reflected that the district

court had taken the matter under submission, but had not ruled on the

motion. The City has apparently abandoned its argument that the May

3, 2002 order conferred jurisdiction upon the Ninth Circuit under 28

U.S.C. section 1291(a)(1).

15

Procedure 17(a). However, as the City concedes, that

determination is made under the “relevant substantive

law,” federal or state, that gives rise to the cause of action.

(Cert. Pet., at 5.) The City seeks injunctive relief only

under state nuisance law. Thus, the resolution of the

issues involved in the City’s petition for review requires

interpretation of state law. A brief review of the City’s

Table of Authorities, which cites 68 sections of California

law, but only three sections of federal law and one federal

rule, demonstrates the state-law nature of the determina-

tions at issue.

1. The District Court’s Order Relied Upon Fact-

Specific Determinations of the Actions and

Motivations of the City of Lodi in Presenting

Itself as the State of California

“A petition for writ of certiorari is rarely granted when

the asserted error consists of erroneous factual find-

ings.... ” Sup. Ct. R. 10. The issue determined by the

district court’s May 3, 2002 order was whether the plain-

tiff “People of the State of California” was an entity sepa-

rate and distinct from the City of Lodi, based upon a

review of both state law and the facts before the district

court. The City conceded that it did not represent the

State of California and proposed instead that it repre-

sented “all of the People of the State of California.” The

district court framed the issue:

(WJhen suit is brought under [California Code of

Civil Procedure section] 731 “in the name of the

people of the State of California,” there are only

two possible conclusions: (1) the plaintiff is the

city which the city attorney represents or (2) the

plaintiff is the State of California (a position no

16

one urges herein). Nevertheless, the Plaintiff

People assert a third option — that the plaintiff is

simply “all of the people” in the State (separate

and apart from the State and the City of Lodi).

(Order, Pet. App. 25a.)

In determining that the City’s position was without

merit, the district court relied on the following factual

findings:

¢ The City Council of Lodi, not the people of

California, directed the filing of the action.

¢ The City, not the people of California, financed

the litigation.

¢ The City, not the people of California, directed

the litigation.

* Any counterclaims asserted against the “Peo-

ple” would in fact be claims against the City,

particularly since service would be effected

upon the City.

* Any award of damages, costs or sanctions

against “the People” would be paid by the City.

¢ Any award of injunctive relief would bind the

City and not the “people of California.”

These findings were predicated upon voluminous

evidence presented to the district court and oral testimony

of the City’s attorneys during hearing on the matter. Any

review by this Court would necessarily enmesh the Court

* See Petitioner’s Appendix at 25a-26a for the district court’s

findings.

17

in a determination of whether the factual findings made

by the district court were accurate and were sufficient to

support a determination that the City of Lodi — not some

fictional, innocent party — sought injunctive relief.

2. The City Has Requested Review of a State

Law Determination Before the Ninth Circuit

Court of Appeals Has Considered this Issue

on Its Merits

Ordinarily, this Court “accepts” and therefore does not

review “save in exceptional cases, the considered determi-

nation of questions of state law by the intermediate

federal appellate courts.” Huddleston v. Dwyer, 322 U.S.

232, 237 (1944). Although this Court clearly has the

authority to review state-law determinations by lower

federal courts, in the vast majority of cases this Court

declines to do so because: “The federal judges who deal

regularly with questions of state law in their respective

districts and circuits are in a better position than we [this

Court] to determine how local courts would dispose of

comparable issues.” Butner v. United States, 440 U.S. 48,

57-58 (1979); see also The Wharf (Holdings) Ltd. v. United

Int'l Holdings, Inc., 532 U.S. 588, 596 (2001) (“[Wle ordi-

narily will not consider such a state-law issue, and ' we

decline to do so here.”).

The May 3, 2002 order of the district court represents

an analysis of California law in a situation of first impres-

sion — the attempt by a municipal corporation to use

California Code of Civil Procedure section 731 to avoid

equitable defenses by claiming to represent “the state

sovereign,” an entity that the City concedes is not the

State of California but contends is not the City of Lodi.

18

The Ninth Circuit’s only comment on the appeal did

not reach the merits — instead it properly dismissed the

appeal as a premature attempt to invoke appellate juris-

diction. However, in the period following the Ninth Cir-

cuit’s dismissal-ef the City’s appeal of the May 3, 2002

order, the district court issued two orders on the City’s two

separate motions for preliminary injunctive relief. One

motion was granted, the other denied. The City has

appealed the denial of one of its motions and has raised as

an issue to the Ninth Circuit: “Who is the ‘real party in

interest’ pursuant to Federal Rule of Civil Procedure 17(a)

for the People of the State of California’s public nuisance

abatement claims?”

Thus, the City requests review by this Court of a

question that has never been addressed by any intermedi-

ate federal appellate court and is currently before the only

federal appellate court likely to consider this question of

interpretation of California law — the Ninth Circuit Court

of Appeals. Review by this Court prior to analysis by the

Ninth Circuit would deprive this Court of the benefit of

additional analysis that might aid the determination of

the merits.

3. No Lower Court Has Acted in Any Fashion

Requiring this Court to Invoke Its Supervi-

sory Powers

The City claims that the district court’s May 3, 2002

order represents “such a departure from the accepted and

usual course of judicial proceedings ... as to call for an

19

exercise of this Court’s supervisory power.””’ (Cert. Pet., at

8.) The City then proceeds to analyze the issue as a matter

of erroneous interpretation of state law. The City does not

dispute the district court’s jurisdiction over the parties.

The City does not dispute the authority of the district

court to analyze and interpret a state-law issue properly

before it, particularly in the absence of any on-point

opinion from any California court. The City does not claim

that the-district court deprived it of notice and an oppor-

tunity to be heard on the issues. The City does not claim

any error on the part of the district court, except that the

City disagrees with the conclusions reached by that court’s

May 3, 2002 opinion. How any of this rises to the level of a

departure from “the accepted and usual course of judicial

proceedings” that is so significant as to require interven-

tion by the highest Court in the United States is unclear.

Generally, invocation of this Court’s supervisory power

is indicated when a lower federal court acts outside of its

power or jurisdiction or misconstrues federal procedural

rules. See, e.g., Grupo Mexicano de DeSarrollo S.A. v.

Alliance Bond Fund, Inc., 527 U.S. 308 (1999) (power to

issue preliminary injunction-te—prevent- asset transfer

where plaintiff did not claim lien or equitable interest);

Thermtron Products v. Hermansdorfer, 423 U.S. 336

(1976) (district courts’ authority to remand diversity cases

for reasons other than those expressed by statute); Bruner

v. United States, 343 U.S. 112 (1952) (jurisdiction of lower

federal courts over specific statutory claims). Here, the

district court’s May 3, 2002 order was a sub-part of the

° Sup. Ct. R. 10(a).

a

20

court’s consideration of a routine motion for injunctive

relief.

No one has contended that the district court lacked

the power or jurisdiction to clarify the identity of the party

seeking injunctive relief. And while the district court cited

Federal Rule of Civil Procedure 17(a), that court properly

identified the real party in interest by analyzing the state

law governing the substantive right to relief. The applica-

tion of state law to the identification of parties does not

justify the exercise of this Court’s supervisory power.

D. The District Court’s May 3, 2002 Order Was a

Valid Interpretation of State Law

The City’s petition for a writ of certiorari focuses on

the perceived errors in the district court’s analysis. Al-

though citing a great deal of California case law in support

of its position, the City misses two crucial points.

First, the City fails to acknowledge that it conceded

that it did not represent the State, but argued that as “the

People,” it did not represent the City, either. None of the

cases cited by the City support the proposition that there

is a third, amorphous entity, neither City nor State, that

can be represented by a public prosecutor under California

Code of Civil Procedure section 731.

Second, there is no precedent, cited or otherwise, for

use by a public prosecutor of California nuisance law to

shield his or her municipality from potential liability for

contributing to the very nuisance it asks the court to abate

by taking on the equitably innocent mantle of “the People.

This was a case of first impression, not surprisingly, and

the district court used pertinent California precedent to

21

determine what California courts would decide in the

same circumstances.

Faced with an issue of first impression under Califor-

nia law, the district court thoughtfully and appropriately

analyzed the precedent presented and the arguments of

the parties and amicus curiae, and reached a decision on

the merits that was consistent with all published decisions

of California courts. If a novel interpretation of state law is

what the City seeks, its arguments should be squarely

presented to state courts.

E. The City’s Petition for a Writ of Certiorari

Contains Legal and Factual Misstatements Bear-

ing on the Issues Properly Before the Court if

Certiorari Is Granted

Under Supreme Court Rule 15, an opposition to a

petition for writ of certiorari “should address any per-

ceived misstatement of fact or law in the petition that

bears on what issues properly would be before the Court if

certiorari were granted.” Sup. Ct. R. 15.2. Honoring that

rule, Guild identifies the following list of factual mis-

statements in the petition. Guild notes that the common

feature of the listed misstatements is that, although they

are presented in the Petition as conclusions of fact, they

actually represent hotly contested and unresolved issues

that will not be decided before the September 2003 trial. If

this Court accepts review, it will necessarily be enmeshed

in the considerable quantity of evidence and argument

regarding these points.

* There is a significant dispute over whether

the City has resolved its liability for contribu-

tion to the contamination at issue by entering

22

a settlement agreement with only one state

agency and whether, in any event, settlement

of liability equates to equitable innocence.

* The City states, as if it has been proven, that

Defendant Guild Cleaners, Inc. is “at the cen-

ter of and primarily responsible for the con-

tamination.” Guild in fact strongly contests its

alleged liability. Further, there are many other

parties, including the City, whose contribu-

tions to the contamination are at issue and

much of the contamination in the City of Lodi

is found in locations distant from the Guild fa-

cility.

* The “hot spot”” of contamination referenced

by the City is not, in fact, “next to” the Guild

facility. The “hot spot” is located approxi-

mately 80 feet to the west of Guild Cleaners,

Inc., directly south of a property formerly used

as a newspaper printing facility that used and

disposed of the contaminants at issue. Follow-

ing extensive discovery among the more than

100 parties, the relative liability of Guild, the

City, the newspaper and others will be the

subject of trial.

¢ Although the City claims that the City Coun-

cil directed the City Attorney to bring public

nuisance claims against the defendants below,

“ “Hot spot” is a term coined by the City. Its exact meaning is

unclear, and so the existence of a “hot spot” is also an issue of conten-

tion below. :

23

nothing in the record has ever demonstrated

any such direction by the City Council.

¢

CONCLUSION

The City of Lodi has attempted to invoke the jurisdic-

tion of this Court over an interlocutory order analyzing a

combination of facts and state law that has never been

ruled upon by any California or federal court other than

the district court below. Further, the issue is wholly one of

California law that will impact only parties in California.

For these reasons, and because the issue is currently

pending before the Ninth Circuit, the City’s petition for a

writ of certiorari should be denied.

Respectfully submitted,

RHONDA CATE CANBY,

Counsel of Record

STEPHEN J. MEYER

STEVEN H. GOLDBERG

JEAN M. HOBLER

DOWNEY BRAND SEYMOUR

& ROHWER

LORI J. GUALCO

LAW OFFICES OF LORI J. GUALCO