Opinion
Case No. 22-cv-03257-JST
2022-12-06
COUNTY OF SAN MATEO, et al., Plaintiffs, v. MONSANTO COMPANY, et al., Defendants.
Matthew Kendall Edling, Timothy Robin Sloane, Yumehiko Hoshijima, Sher Edling LLP, San Francisco, CA, for Plaintiff County of San Mateo. Kevin Anthony Flautt, Mona Golshan Ebrahimi, Kronick Moskovitz Tiedemann & Girard, Sacramento, CA, Matthew Kendall Edling, Yumehiko Hoshijima, Sher Edling LLP, San Francisco, CA, for Plaintiff Town of Atherton. Matthew Kendall Edling, Yumehiko Hoshijima, Sher Edling LLP, San Francisco, CA, Valerie Josephine Armento, East Palo Alto City Attorney's Office, Palo Alto, CA, for Plaintiff City of East Palo Alto. Benjamin Louis Stock, Oakland, CA, Denise Sequeira Bazzano, City Attorney, Litigation, Oakland, CA, Matthew Kendall Edling, Yumehiko Hoshijima, Sher Edling LLP, San Francisco, CA, for Plaintiff City of Foster City. Matthew Kendall Edling, Yumehiko Hoshijima, Sher Edling LLP, San Francisco, CA, Nira Doherty, City Attorney, San Rafael, CA, for Plaintiff City of Menlo Park. Cara Ellen Silver, City Attorney, Menlo Park, CA, Matthew Kendall Edling, Yumehiko Hoshijima, Sher Edling LLP, San Francisco, CA, for Plaintiff Town of Portola Valley. Mary Eleanor Diaz Ignacio, The City of Redwood City, Redwood City, CA, Matthew Kendall Edling, Yumehiko Hoshijima, Sher Edling LLP, San Francisco, CA, for Plaintiff City of Redwood City. Gregory J. Rubens, San Carlos, CA, Matthew Kendall Edling, Yumehiko Hoshijima, Sher Edling LLP, San Francisco, CA, for Plaintiff City of San Carlos. David Abraham Silberman, San Mateo County Counsel's Office, Redwood City, CA, Matthew Kendall Edling, Yumehiko Hoshijima, Sher Edling LLP, San Francisco, CA, for Plaintiff City of San Mateo. Jean B. Savaree, Aaronson Dickerson & Cohn, San Carlos, CA, Matthew Kendall Edling, Yumehiko Hoshijima, Sher Edling LLP, San Francisco, CA, for Plaintiff Town of Woodside, both individually and on behalf of the People of the State of California. Brent Dwerlkotte, David Brenton Dwerlkotte, Kathryn A. Larkins, Mark D. Anstoetter, Shook, Hardy & Bacon LLP, Kansas City, MO, Jad Terrell Davis, Shook, Hardy Bacon LLP, Irvine, CA, for Defendant Monsanto Company. David Brenton Dwerlkotte, Kathryn A. Larkins, Mark D. Anstoetter, Shook, Hardy and Bacon LLP, Kansas City, MO, Jad Terrell Davis, Shook, Hardy Bacon LLP, Irvine, CA, for Defendants Solutia Inc., Pharmacia LLC.
Matthew Kendall Edling, Timothy Robin Sloane, Yumehiko Hoshijima, Sher Edling LLP, San Francisco, CA, for Plaintiff County of San Mateo. Kevin Anthony Flautt, Mona Golshan Ebrahimi, Kronick Moskovitz Tiedemann & Girard, Sacramento, CA, Matthew Kendall Edling, Yumehiko Hoshijima, Sher Edling LLP, San Francisco, CA, for Plaintiff Town of Atherton. Matthew Kendall Edling, Yumehiko Hoshijima, Sher Edling LLP, San Francisco, CA, Valerie Josephine Armento, East Palo Alto City Attorney's Office, Palo Alto, CA, for Plaintiff City of East Palo Alto. Benjamin Louis Stock, Oakland, CA, Denise Sequeira Bazzano, City Attorney, Litigation, Oakland, CA, Matthew Kendall Edling, Yumehiko Hoshijima, Sher Edling LLP, San Francisco, CA, for Plaintiff City of Foster City. Matthew Kendall Edling, Yumehiko Hoshijima, Sher Edling LLP, San Francisco, CA, Nira Doherty, City Attorney, San Rafael, CA, for Plaintiff City of Menlo Park. Cara Ellen Silver, City Attorney, Menlo Park, CA, Matthew Kendall Edling, Yumehiko Hoshijima, Sher Edling LLP, San Francisco, CA, for Plaintiff Town of Portola Valley. Mary Eleanor Diaz Ignacio, The City of Redwood City, Redwood City, CA, Matthew Kendall Edling, Yumehiko Hoshijima, Sher Edling LLP, San Francisco, CA, for Plaintiff City of Redwood City. Gregory J. Rubens, San Carlos, CA, Matthew Kendall Edling, Yumehiko Hoshijima, Sher Edling LLP, San Francisco, CA, for Plaintiff City of San Carlos. David Abraham Silberman, San Mateo County Counsel's Office, Redwood City, CA, Matthew Kendall Edling, Yumehiko Hoshijima, Sher Edling LLP, San Francisco, CA, for Plaintiff City of San Mateo. Jean B. Savaree, Aaronson Dickerson & Cohn, San Carlos, CA, Matthew Kendall Edling, Yumehiko Hoshijima, Sher Edling LLP, San Francisco, CA, for Plaintiff Town of Woodside, both individually and on behalf of the People of the State of California. Brent Dwerlkotte, David Brenton Dwerlkotte, Kathryn A. Larkins, Mark D. Anstoetter, Shook, Hardy & Bacon LLP, Kansas City, MO, Jad Terrell Davis, Shook, Hardy Bacon LLP, Irvine, CA, for Defendant Monsanto Company. David Brenton Dwerlkotte, Kathryn A. Larkins, Mark D. Anstoetter, Shook, Hardy and Bacon LLP, Kansas City, MO, Jad Terrell Davis, Shook, Hardy Bacon LLP, Irvine, CA, for Defendants Solutia Inc., Pharmacia LLC.
ORDER GRANTING MOTION TO REMAND TO STATE COURT
Re: ECF No. 20 JON S. TIGAR, United States District Judge
Before the Court is Plaintiffs' motion to remand this action to state court for lack of subject matter jurisdiction. ECF No. 20. The Court will grant the motion.
I. BACKGROUND
This action concerns Monsanto's pollution of the San Francisco Bay with polychlorinated biphenyls ("PCBs"), a type of toxic chemical. ECF No. 20-1. Plaintiffs are The People of the State of California, San Mateo County ("the County"), and fourteen cities and towns within the County. Plaintiffs filed suit in state court, asserting state-law tort claims against three Defendants subject to the liabilities of the original Monsanto Company ("Monsanto"): (1) the current Monsanto Company, (2) Solutia, Inc., and (3) Pharmacia, LLC. Defendants removed the action to federal court on the basis of diversity jurisdiction because they are not citizens of California and the amount in controversy exceeds $75,000. ECF No. 1.
The cities and towns are the Town of Atherton, City of Brisbane, Town of Colma, City of East Palo Alto, City of Foster City, Town of Hillsborough, City of Menlo Park, City of Pacifica, Town of Portola Valley, City of Redwood City, City of San Bruno, City of San Carlos, City of San Mateo, and Town of Woodside ("the Municipalities").
As alleged in Plaintiffs' first amended complaint ("FAC"), PCBs are toxic, carcinogenic, resistant to degradation, and persistent in the environment. ECF No. 20-1. ¶¶ 30, 42-48. Monsanto started producing PCBs in the 1920s and ultimately manufactured 1.4 billion pounds of them - approximately 99% of all PCBs ever used in the United States. Id. ¶ 5. Monsanto learned of PCB toxicity by the early 1930s, id. ¶¶ 57-58, and knew that PCBs were causing widespread pollution by the 1960s, id. ¶¶ 69-77. Despite its knowledge of the risks to public health and the environment, Monsanto continued to promote PCBs for agricultural, commercial, household, and industrial applications until PCBs were banned by Congress in 1976. Id. ¶¶ 66-67.
Today, regulators consider the entire San Francisco Bay "impaired" by PCBs under Section 303(d) of the Clean Water Act, 33 U.S.C. § 1313(d). Id. ¶ 100. The ongoing presence of PCBs, which accumulate in living tissue over time, threatens wildlife and human health. Id. ¶¶ 36-41, 44. For non-human organisms, research suggests that PCBs are toxic, cause cancer, and create various other health problems. Id. ¶ 37. Studies of the Bay's ecosystems have found that PCBs are particularly harmful to birds, causing eggshell thinning, infertility, and other issues. Id. ¶ 40. Similarly, PCBs pose health risks for humans including but not limited to numerous cancers and cardiovascular, hepatic, and reproductive harm. Id. ¶¶ 47-48. As such, public health authorities have issued consumption advisories for fish caught in the Bay. Id. ¶¶ 102-03.
To combat PCB contamination, the San Francisco Bay Regional Water Quality Control Board ("Regional Board") issued a Municipal Regional Stormwater Permit ("MPR Permit") that regulates PCB discharges in both stormwater and dry-weather runoff within the County and the Municipalities. Id. ¶¶ 106-108. The MPR Permit requires the County and the Municipalities to take a wide range of actions to limit the flow of such contaminated stormwater and runoff into the Bay, including testing and monitoring; installing, operating, and maintaining "green infrastructure" to capture PCBs in contaminated runoff; implementing measures to control PCB discharges when structures containing PCBs are demolished; and identifying PCB-contaminated sites and abating the contamination at those sites. Id. ¶ 107-108. Plaintiffs have incurred "substantial costs" in complying with these requirements and "will continue incurring such costs for decades into the future." Id. ¶ 110.
The Regional Board is one of nine regional water quality control boards in California. These regional boards and the State Water Resources Control Board ("State Board") "have 'primary responsibility for the coordination and control of water quality' in California." Cent. Sierra Env't. Res. Ctr. v. Stanislaus Nat'l Forest, 30 F.4th 929, 933 (9th Cir. 2022) (quoting Cal. Water Code § 13001). "The State Board formulates and adopts state water quality control policies that are binding on regional boards," while "each regional board must 'formulate and adopt water quality control plans' for its respective region" that are "[s]ubject to the approval of the State Board." Id. (quoting Cal. Water Code § 13240). These boards were established by the Porter-Cologne Water Quality Control Act. See id.; see also Cal. Water Code §§ 13100, 13200, 13201.
Plaintiffs assert four claims based on these allegations. On behalf of the People of the State of California, Plaintiffs assert a public nuisance claim under California Code of Civil Procedure § 731. ECF No. 20-1 ¶ 114. On their own behalf, the County and the Municipalities also assert (1) a public nuisance claim as specially injured private persons; (2) a private nuisance claim concerning contamination of public property controlled by the County and the Municipalities; and (3) a trespass claim relating to said property contamination. Id. ¶ 124-64. Plaintiffs seek compensatory damages for the County and the Municipalities, natural resource damages, punitive damages, establishment of an abatement fund, an order enjoining further trespass, attorney's fees, costs of suit, and any other and further relief that the Court deems just, proper, and appropriate. Id. at 39-40.
II. LEGAL STANDARD
"A defendant may remove an action to federal court based on federal question jurisdiction or diversity jurisdiction." Hunter v. Philip Morris USA, 582 F.3d 1039, 1042 (9th Cir. 2009) (citing 28 U.S.C. § 1441). The removing party "bears the burden of overcoming the strong presumption against removal jurisdiction," Hansen v. Grp. Health Coop., 902 F.3d 1051, 1057 (9th Cir. 2018) (internal quotation marks and citation omitted), and "any doubt about the right of removal requires resolution in favor of remand," Moore-Thomas v. Alaska Airlines, Inc., 553 F.3d 1241, 1244 (9th Cir. 2009).
Diversity jurisdiction "requires complete diversity of citizenship; each of the plaintiffs must be a citizen of a different state than each of the defendants." Morris v. Princess Cruises, Inc., 236 F.3d 1061, 1067 (9th Cir. 2001). "[A] State is not a 'citizen' for purposes of the diversity jurisdiction." Moor v. Alameda Cnty., 411 U.S. 693, 717, 93 S.Ct. 1785, 36 L.Ed.2d 596 (1973). However, "the mere presence on the record of the state as a party plaintiff will not defeat the jurisdiction of the Federal court when it appears that the state has no real interest in the controversy." Ex parte Nebraska, 209 U.S. 436, 444, 28 S.Ct. 581, 52 L.Ed. 876 (1908). Rather, diversity jurisdiction is lacking only if the state is a real-party-in-interest to the suit. Dep't of Fair Emp. & Hous. v. Lucent Techs., Inc., 642 F.3d 728, 737 (9th Cir. 2011); Nevada v. Bank of Am. Corp., 672 F.3d 661, 670 (9th Cir. 2012).
To determine whether the state is a real-party-in-interest, the Court looks to "the essential nature and effect of the proceeding as it appears from the entire record." Nevada, 672 F.3d at 670 (quoting Lucent, 642 F.3d at 740). In conducting this inquiry, the Court considers whether the state has a "specific, concrete interest" in the litigation. Nevada, 672 F.3d at 670. Indicia of a specific, concrete interest include the nature of the "substantive state law" at issue, Lucent, 642 F.3d at 738, the extent to which the challenged conduct injures the state "as a whole," Nevada, 672 F.3d at 670, and the extent to which the complaint seeks "substantial relief that is available to [the state] alone," id. at 672; see also Lucent, 642 F.3d at 739. Standing alone, a state's general, governmental interests - including protecting the welfare of all its citizens, compelling obedience to the legal orders of all its officials, and securing compliance with all its laws - are insufficient. Lucent, 642 F.3d at 737 (citing Mo., Kan. and Tex. Ry. Co. v. Mo. R.R. & Warehouse Comm'rs, 183 U.S. 53, 60, 22 S.Ct. 18, 46 L.Ed. 78 (1901) ("Missouri Railway")). But the fact that plaintiffs other than the state itself may also benefit from the relief sought does not undermine the state's substantial interest in the litigation. Nevada, 672 F.3d at 671-72.
III. DISCUSSION
The question now before the Court is whether the People of the State of California are a real-party-in-interest to the instant suit. If so, the Court must grant the motion to remand because "the People of the State of California" and "the State of California" describe the same party, People v. Love, 19 Cal. 676, 681 (1862), and the State of California is not a citizen for the purposes of diversity jurisdiction, Moor, 411 U.S. at 717, 93 S.Ct. 1785 (1973). Here, the State of California has a specific, concrete interest in this action and is a real-party-in-interest for four reasons.
First, the applicable substantive law indicates that California is a real-party-in interest. To combat a public nuisance, California Code of Civil Procedure § 731 authorizes "the district attorney or county counsel of any county in which the nuisance exists, or . . . the city attorney of any town or city in which the nuisance exists" to bring a suit "in the name of the people of the State of California." Public nuisances are "offenses against, or interferences with, the exercise of rights common to the public," People ex rel. Gallo v. Acuna, 14 Cal. 4th 1090, 1103, 60 Cal. Rptr.2d 277, 929 P.2d 596 (1997), and, therefore, "[p]ublic nuisance actions . . . are brought on the People's behalf," California v. Purdue Pharma L.P., No. SACV 14-1080-JLS DFM, 2014 WL 6065907, at *3 (C.D. Cal. Nov. 12, 2014).
As the Ninth Circuit explained in Lucent, statutory authorization to bring a suit on behalf of the people of a state is relevant to the Court's diversity analysis. 642 F.3d at 739 n.7.
Second, Monsanto's alleged conduct injured California as a whole. As in Nevada, where Nevada had a "sovereign interest in protecting its citizens and economy from deceptive mortgage practices," California has a sovereign interest in protecting its citizens and economy from further pollution of the San Francisco Bay. See 672 F.3d at 670-671. Contrary to Defendants' argument, this is not merely a "general governmental interest." ECF No. 22 at 16. Rather, California is directly harmed by ongoing pollution of one of its inland, navigable waterways, which it holds in trust for the benefit of the people. United States v. California, 432 U.S. 40, 41, 97 S.Ct. 2915, 53 L.Ed.2d 94 (1977) (defining the San Francisco Bay as an inland waterway); Colberg, Inc. v. State ex rel. Dep't of Pub. Works, 67 Cal. 2d 408, 416, 62 Cal. Rptr. 401, 432 P.2d 3 (1967), cert. denied, 390 U.S. 949, 88 S.Ct. 1037, 19 L.Ed.2d 1139 (1968) ("The State of California holds all of its navigable waterways and the lands lying beneath them as trustee of a public trust for the benefit of the people." (internal quotation marks and citation omitted)). The public trust includes not only recreational activities such as fishing, but also environmental preservation and wildlife protection. Nat'l Audubon Soc'y v. Superior Ct., 33 Cal. 3d 419, 434-35, 189 Cal.Rptr. 346, 658 P.2d 709 (1983) (noting that the public trust doctrine includes interests such as "preservation of [public lands] in their natural state, so that they may serve as ecological units for scientific study, as open space, and as environments which provide food and habitat for birds and marine life, and which favorably affect the scenery and climate of the area"); Ctr. for Biological Diversity, Inc. v. FPL Grp., Inc., 166 Cal. App. 4th 1349, 1361, 83 Cal. Rptr.3d 588 (2008), as modified on denial of reh'g (Oct. 9, 2008) ("[W]ildlife are protected by the public trust doctrine.") As alleged in the FAC, fishing, wildlife, and the environment are all harmed by ongoing PCB pollution. ECF No. 20-1 ¶¶ 37, 40, 102-03.
In the same vein, PCBs pose additional and substantial risks to human health. As alleged in the FAC, this lawsuit seeks to redress specific health hazards, caused by a specific pollutant, produced by a specific entity. Id. ¶¶ 5, 46-48. The resulting public health risk is widespread because numerous communities throughout California rely on the San Francisco Bay as a food source or for recreation. Courts have found state interests in analogous circumstances to be sufficiently specific and concrete to render a state the real-party-in-interest. See, e.g., Purdue Pharma, 2014 WL 6065907, at *3 (finding that, in a Section 731 public nuisance action, the State of California had a specific and concrete interest in combatting the widespread effects of the opioid epidemic, including danger to public health and safety).
The FAC alleges that the most common avenue of PCB exposure in humans is through the ingestion of contaminated fish or shellfish. ECF No. 20-1 ¶ 43. Humans can also be exposed through dermal contact. Id. ¶ 42.
Third, abatement in the County and Municipalities will benefit people throughout California. See California v. Exide Techs. Inc., No. CV141169ABCMANX, 2014 WL 12607708, at *2 (C.D. Cal. Apr. 9, 2014) (recognizing that harms like pollution "know no borders" and finding the State of California was a real-party-in-interest in environmental suit). Plaintiffs seek abatement of the alleged nuisance, including through the establishment of an abatement fund to cover the costs of "monitoring, investigation, planning, [and] compliance" to mitigate further PCB contamination of the Bay via stormwater and dry-weather runoff systems. ¶¶ 12-14. Although California would not receive these funds, it would receive the benefits of abatement itself because regardless of whether relief under Section 731 is geographically limited, PCBs are not. ECF No. 20-1 ¶¶ 7, 70, 74.
Fourth, and related to each of the preceding considerations, Plaintiffs have incurred and will continue to incur substantial costs in order to comply with the numerous requirements of the MPR Permit issued by the Regional Board. FAC ¶¶ 106-110. That a state agency created pursuant to state statute imposed a set of regulations requiring Plaintiffs to remediate the problems created by PCBs in the San Francisco Bay demonstrates that California's interest in this litigation is both specific and concrete. In other words, the interests of Plaintiffs and California are intertwined under the circumstances of this case. Consequently, any relief secured by Plaintiffs in this lawsuit that aids Plaintiffs' compliance with, satisfies Plaintiffs' obligations under, or furthers the purposes of that set of regulations will necessarily vindicate California's interest. For these and the foregoing reasons, the nature and effect of the proceeding as it appears from the entire record demonstrates that California has a "specific, concrete interest" and therefore "is the real party in interest to this controversy." Nevada, 672 F.3d at 670. Indeed, a district court in the Ninth Circuit recently reached the same conclusion in a substantially similar lawsuit against Monsanto. See California ex rel. Los Angeles City Attorney v. Monsanto Co., No. 2:22-cv-02399-ODW (SKx), 2022 WL 2355195, at *5 (C.D. Cal. Jun. 30, 2022).
Defendants' counterarguments are unpersuasive. First, Defendants argue that California cannot be a real-party-in-interest under Missouri Railway because the relief sought would not inure to it alone. ECF No. 22 at 14-15; see 183 U.S. at 60, 22 S.Ct. 18. But, as numerous courts have explained, Missouri Railway stands for the proposition that a state is a real-party-in-interest when the benefits inure to it alone; the case does not hold that that is the only circumstance in which a state may be a real-party-in-interest. In re Facebook, Inc., Consumer Priv. User Profile Litig., 354 F. Supp. 3d 1122, 1128 (N.D. Cal. 2019) ("[T]he Supreme Court's statement in Missouri Rail[way] - that "the State is such real party when the relief sought is that which [i]nures to it alone" - cannot be understood to mean that this is the only circumstance in which a state can be deemed the real party in interest for diversity purposes."); Purdue Pharma, 2014 WL 6065907, at *4 ("[L]iteral application of [Missouri Railway] would raise serious questions about the Ninth Circuit's decision in Nevada, where restitution was also sought on behalf of individual consumers."); People of California v. Universal Syndications, Inc., No. C 09-1186 JF(PVT), 2009 WL 1689651, at *4 (N.D. Cal. June 16, 2009) ("The implications of a literal application of Missouri Railway have been considered - and rejected - in multiple district court decisions."). As discussed above, the caselaw requires the Court to look to the nature and effect of the proceeding as it appears from the entire record and instructs that the identity of the recipient of the benefits is one of several indicia to be considered. Defendants' proposed rule further conflicts with Nevada, where the Ninth Circuit expressly held that Nevada was a real-party-in-interest even though some relief would inure to individual plaintiffs. 672 F.3d at 671.
Next, Defendants argue that, unlike Nevada, Plaintiffs here do not seek any unique relief for California ECF No. 22 at 12-13; see Nevada, 672 F.3d at 670-671. But Nevada does not require California to seek unique relief in order to be the real-party-in-interest. Rather, the Ninth Circuit wrote that "[t]he state's strong and distinct interest in this litigation is further strengthened by the other forms of relief it seeks." Nevada, 672 F.3d at 671 (emphasis added). Here, several facets of this litigation independently demonstrate the state's interest in this litigation and further strengthen that interest when considered together. Furthermore, Defendants erroneously assume that if the instant action is successful, the relief awarded will be the same regardless of whether California is considered a real party. To the contrary, abatement is an equitable remedy that must be "proper and suitable to the facts of each case." People v. ConAgra Grocery Prod. Co., 17 Cal. App. 5th 51, 132, 227 Cal.Rptr.3d 499 (2017). Thus, a court might consider the identities of the parties before it when crafting a remedy to abate a public nuisance. And while Plaintiffs' prayer for relief does not identify specific unique relief for California, neither does it foreclose it. ECF No. 20-1 at 40.
Finally, Defendants suggest that the present action is a suit on behalf of 15 private plaintiffs for public nuisance, private nuisance, and trespass, with a single public nuisance claim on behalf of California merely "tacked on" as in Nevada. ECF No. 22 at 13. But both Nevada, 672 F.3d at 661, and Lucent, 642 F.3d at 740, explain that the real-party-in-interest inquiry turns on the essential nature and effect of the proceedings, not the numerosity of claims brought by private plaintiffs. And, as discussed above, the relief sought by Plaintiffs on the basis of those claims would nonetheless fulfill the purpose of the MPR Permit and thereby vindicate California's interest that underpins that Permit. California's interest in redressing PCB pollution is thus specific and concrete, not "tangential" as in Lucent. Cf. 642 F.3d at 739. Therefore, the State of California is a real-party-in-interest, the parties are not diverse, and the Court lacks subject matter jurisdiction.
CONCLUSION
For the foregoing reasons, Plaintiffs' motion is granted. This action is remanded to the Superior Court of San Mateo County.
IT IS SO ORDERED.