Friends of the Earth et al v. Sanderson Farms, Inc., No. 3:2017cv03592 - Document 221 (N.D. Cal. 2019)

Court Description: ORDER GRANTING MOTION TO DISMISS WITHOUT PREJUDICE. Signed by Judge Richard Seeborg on 07/31/2019. (jmdS, COURT STAFF) (Filed on 7/31/2019)

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1 2 3 4 5 6 7 UNITED STATES DISTRICT COURT 8 NORTHERN DISTRICT OF CALIFORNIA 9 10 FRIENDS OF THE EARTH, et al., Case No. 17-cv-03592-RS Plaintiffs, 11 United States District Court Northern District of California v. ORDER GRANTING MOTION TO DISMISS WITHOUT PREJUDICE 12 13 SANDERSON FARMS, INC., Defendant. 14 15 16 I. INTRODUCTION Defendant Sanderson Farms, Inc. (“Sanderson”) brings this motion under Federal Rule of 17 Civil Procedure 12(h)(3) asserting Friends of the Earth (“FoE”) and Center for Food Safety 18 (“CFS”) (collectively “Plaintiffs”) have not produced evidence in discovery to establish their 19 standing under Article III. For the reasons discussed below, Sanderson’s motion is granted. 20 21 II. BACKGROUND The full facts of this case were set forth in the prior order denying Sanderson’s motion to 22 dismiss the First Amended Complaint (“FAC”) and need not be repeated here. In this latest 23 motion practice, Sanderson contends neither plaintiff can establish organizational standing to 24 satisfy Article III’s injury-in-fact requirement. Sanderson first made this argument in its initial 25 motion to dismiss, which was denied based on the Plaintiffs’ pleadings in the FAC. Now that non- 26 expert discovery has concluded, Sanderson contends the evidence gathered during discovery 27 shows that Plaintiffs cannot establish organizational standing and they can no longer rely upon the 28 allegations in their complaint (now the Third Amended Complaint (“TAC”)) to allege an injury 1 United States District Court Northern District of California 2 from Sanderson’s advertisements. In its supplemental response to Sanderson’s first set of interrogatories, FoE declared it 3 suffered injury from Sanderson’s ads by: (1) publishing the “Chain Reaction” reports (a ranking of 4 top U.S. restaurant chains on their antibiotic policies and practices); (2) drafting press releases; (3) 5 publishing blogs; (4) issuing Tweets and Facebook posts; (5) emailing Action Alerts; (6) 6 producing a digital and print News Magazine; (7) contacting Sanderson customers, including 7 Darden Restaurants (the owner of Olive Garden), with letters imploring them to change their 8 antibiotic policies and practices and delivering a petition of 130,000 signatures; (8) approximately 9 $5,500 in consultant costs; and (9) employee costs associated with the above. CFS’s supplemental 10 responses to Sanderson’s interrogatories are similar, including: (1) publishing the “Chain 11 Reaction” reports; (2) drafting press releases; (3) publishing blogs; (4) speaking at conferences 12 and on panels; and (5) employee costs associated with the above. 13 III. LEGAL STANDARD 14 “If the court determines at any time that it lacks subject-matter jurisdiction, the court must 15 dismiss the action.” Fed. R. Civ. P. 12(h)(3); see also Arbaugh v. Y&H Corp., 546 U.S. 500, 506 16 (2000) (“The objection that a federal court lacks subject-matter jurisdiction . . . may be raised by a 17 party, or by a court on its own initiative, at any stage in the litigation[.]”). This includes 18 evaluating the threshold issue of a plaintiff’s standing to sue. Bernhardt v. City of Los Angeles, 19 279 F.3d 862, 868 (9th Cir. 2002). Rule 12(h)(3) effectively prolongs the time for a Rule 12(b)(1) 20 motion to dismiss for lack of subject matter jurisdiction. See Wood v. City of San Diego, 678 F.3d 21 1075, 1082 (9th Cir. 2012). 22 A motion to dismiss a complaint under Rule 12(b)(1) of the Federal Rules of Civil 23 Procedure challenges the court’s subject matter jurisdiction over the asserted claims. It is the 24 plaintiff’s burden to prove jurisdiction at the time the action is commenced. Tosco Corp. v. 25 Cmtys. for a Better Env’t, 236 F.3d 495, 499 (9th Cir. 2001), overruled on other grounds by Hertz 26 Corp. v. Friend, 559 U.S. 77 (2010); Morongo Band of Mission Indians v. Cal. State Bd. of 27 Equalization, 858 F.2d 1376, 1380 (9th Cir. 1988). “A Rule 12(b)(1) jurisdictional attack may be ORDER GRANTING MOTION TO DISMISS CASE NO. 17-cv-03592-RS 28 2 United States District Court Northern District of California 1 facial or factual.” Safe Air for Everyone v. Meyer, 373 F.3d 1035, 1039 (9th Cir. 2004). “In a 2 facial attack, the challenger asserts that the allegations contained in the complaint are insufficient 3 on their face to invoke federal jurisdiction.” Id. Accordingly, when considering this type of 4 challenge, the court is required to “accept as true the allegations of the complaint.” U.S. ex rel. 5 Lujan v. Hughes Aircraft Co., 243 F.3d 1181, 1189 (9th Cir. 2001). By contrast, in a factual 6 attack, “the challenger disputes the truth of the allegations that, by themselves, would otherwise 7 invoke federal jurisdiction.” Safe Air, 373 F.3d at 1039. In resolving a factual attack on 8 jurisdiction, the court need not presume the truthfulness of the plaintiff’s allegations and it may 9 review evidence beyond the complaint without converting the motion to dismiss into a motion for 10 summary judgment. Id. Once a factual challenge has been raised to the court’s subject matter 11 jurisdiction, the party opposing dismissal must “furnish affidavits or other evidence necessary to 12 satisfy its burden of establishing subject matter jurisdiction.” Id. (quotations omitted). 13 Article III of the U.S. Constitution authorizes the judiciary to adjudicate only “cases” and 14 “controversies.” The doctrine of standing is “an essential and unchanging part of the case-or- 15 controversy requirement of Article III.” Lujan v. Defs. of Wildlife, 504 U.S. 555, 560 (1992). The 16 three well-known “irreducible constitutional minim[a] of standing” are injury-in-fact, causation, 17 and redressability. Id. at 560-61. A plaintiff bears the burden of demonstrating that her injury-in- 18 fact is “concrete, particularized, and actual or imminent; fairly traceable to the challenged action; 19 and redressable by a favorable ruling.” Monsanto Co. v. Geertson Seed Farms, 561 U.S. 139, 149 20 (2010). Organizations establish injury-in-fact if they can demonstrate both (1) frustration of its 21 organizational mission and (2) diversion of its resources to combat the particular conduct in 22 question. Smith v. Pac. Props. & Dev. Corp., 358 F.3d 1097, 1105 (9th Cir. 2004). An 23 organization cannot “manufacture” an injury by sustaining litigation costs or by choosing to use 24 resources to fix problems that otherwise would not have affected it. La Asociacion de 25 Trabajadores de Lake Forest v. City of Lake Forest, 624 F.3d 1083, 1088 (9th Cir. 2010). 26 27 ORDER GRANTING MOTION TO DISMISS CASE NO. 17-cv-03592-RS 28 3 IV. DISCUSSION 1 United States District Court Northern District of California 2 Sanderson’s motion is centered on Plaintiffs’ supplemental responses to Sanderson’s 3 Interrogatory No. 7, asking them to identify all bases for their contention that they lost money or 4 property as a result of Sanderson’s advertising identified in the complaint. Sanderson asserts three 5 arguments for why the evidence cannot support Plaintiffs’ interrogatory responses for standing: 6 (1) any activities Plaintiffs undertook before August 1, 2016 (the date they swore they began 7 diverting resources to address Sanderson’s advertisements) cannot logically constitute diversions 8 in response to those ads; (2) with regards to Plaintiffs’ activities after August 1, 2016, but before 9 filing this lawsuit (June 22, 2017), there is no evidence that Plaintiffs undertook any action in 10 response to the advertising because (a) most of Plaintiffs’ cited activities neither referenced 11 Sanderson nor its advertising, (b) activities tangentially related to Sanderson were not a response 12 to the challenged advertising and were merely continuations of preexisting initiatives, (c) activities 13 not required by Sanderson’s advertising cannot establish standing; and (3) Plaintiffs’ actions after 14 filing this lawsuit are litigation-related expenses that cannot be used to manufacture standing. 15 Additionally, Sanderson challenges the materials Plaintiffs filed in support of their Opposition as 16 improper and self-serving. 17 A. Plaintiffs’ Actions Prior to August 1, 2016 18 There is little to undercut Sanderson’s contentions regarding Plaintiffs’ activities prior to 19 August 1, 2016. In their initial responses to Interrogatory No. 5, Plaintiffs represented they 20 became aware of the Sanderson ads identified in the complaint on August 1, 2016. Moreover, 21 both FoE and CFS represented in either depositions or post-deposition declarations that they did 22 not divert resources to counteract Sanderson advertising before that date. Plaintiffs do not offer a 23 persuasive counterargument in their Opposition, attempting to limit their admission to Sanderson’s 24 television ads and relying on the prior order denying the first motion to dismiss. None of the 25 above admissions, however, distinguished between the Sanderson ads to which they referred, and 26 the prior order was confined to the FAC, which had to be accepted as true. Finally, Plaintiffs 27 conceded at oral argument that there was no diversion of resources by their organizations before ORDER GRANTING MOTION TO DISMISS CASE NO. 17-cv-03592-RS 28 4 United States District Court Northern District of California 1 August 1, 2016. Accordingly, Plaintiffs cannot rely on evidence prior to August 1, 2016 to 2 support their standing to sue. 3 B. Plaintiffs’ Actions Between August 1, 2016 and Filing This Lawsuit 4 Discovery has shown that Plaintiffs’ activities after August 1, 2016 and prior to filing the 5 complaint were not a reaction to Sanderson’s advertising. Instead, they were continuations of non- 6 Sanderson-specific initiatives Plaintiffs were undertaking in furtherance of their missions to 7 address antibiotic use generally. Moreover, many of Plaintiffs’ cited activities neither referenced 8 Sanderson nor its advertising. Finally, activities not required by Sanderson’s advertising cannot 9 establish standing. 10 Through Plaintiffs’ testimony and other produced documents, the record shows that: (1) 11 Plaintiffs did not publish Action Alerts or send emails to their members addressing Sanderson’s 12 advertising; (2) Plaintiffs did not address Sanderson’s advertising as part of its ongoing campaign 13 to persuade Darden Restaurants to stop purchasing meats from routine antibiotic administrators, 14 such as Sanderson; (3) Plaintiffs did not write letters to Sanderson or any of its customers 15 complaining about Sanderson’s advertising; (4) Plaintiffs produced no press release, blog post, or 16 News Magazine article pertaining to or referencing Sanderson’s advertising prior to the lawsuit; 17 (5) Plaintiffs did not reference Sanderson or its advertising in the Chain Reaction reports until 18 after litigation commenced; (6) Plaintiffs did not petition Sanderson (or anyone else) regarding 19 Sanderson’s advertising; and (7) Plaintiffs never engaged in protests at Sanderson (or anywhere 20 else) regarding Sanderson’s advertising. 21 Perhaps most damaging to Plaintiffs’ cause are their own depositions where they admit 22 they did not divert resources because of Sanderson’s advertising and state they would have 23 undertaken the same advocacy activities—including advocating against the use of antibiotics in 24 animal agriculture and discouraging consumers from purchasing meat raised with routine 25 antibiotics—even if Sanderson had never aired the challenged advertisements. The evidence in 26 the record corroborates this testimony, indicating that Plaintiffs planned on targeting Sanderson’s 27 customers without reliance on its ads. Moreover, Plaintiffs stated in their depositions that they ORDER GRANTING MOTION TO DISMISS CASE NO. 17-cv-03592-RS 28 5 1 would have encouraged Sanderson’s customers to avoid Sanderson and other products that used 2 routine antibiotics regardless of the existence of the advertisements. This is a false advertising 3 case, and Plaintiffs must establish that their alleged injury is traceable to the challenged ads at 4 issue. Instead, the record confirms they were incurring ordinary program costs regardless of 5 Sanderson’s advertising, and such expenses cannot be transformed into an injury-in-fact under 6 Article III. Furthermore, Plaintiffs do not offer a serious argument as to why documents that do 7 not mention Sanderson or involve Sanderson customers, let alone Sanderson advertisements, can 8 support their standing. They further stated in their depositions that they were not forced to do 9 anything in light of Sanderson’s advertisements, providing further justification to dismiss their 10 claims for lack of standing. La Asociacion de Trabajadores, 624 F.3d at 1088 n.4. Plaintiffs’ arguments in opposition are difficult to follow. Rather than responding directly United States District Court Northern District of California 11 12 to Sanderson’s cited evidence, Plaintiffs invoke their own and use generalized arguments 13 repeating their allegation that they have suffered an injury-in-fact by adjusting their preexisting 14 initiatives to counteract Sanderson’s ads. What evidence they do rely upon that mention 15 Sanderson either: (1) discuss Sanderson’s rejection of the science behind antibiotic-resistance, but 16 not its advertisements or how they are misleading; (2) date from after the litigation commenced 17 (which fails for the reasons discussed in the next section); or (3) are post-deposition declarations 18 whose credibility are subject to question given the incentive to repaint prior testimony in a more 19 flattering light, see Halo Mgmt., LLC v. Interland, Inc., No. C-03-1106-MHP, 2004 WL 1781013, 20 at *6 n.15 (N.D. Cal. Aug. 10, 2004). Moreover, where the post-deposition declarations directly 21 contradict the prior depositions, the conflict must be resolved in favor of the latter.1 22 23 24 25 26 27 1 The Ninth Circuit has noted in the summary judgment context that, as a general rule, an affidavit submitted in response to a motion which contradicts earlier sworn testimony without explanation of the difference does not automatically create a genuine issue of material fact. Scamihorn v. Gen. Truck Drivers, 282 F.3d 1078, 1085 n.7 (9th Cir. 2002). A district court, however, must make a factual determination that the contradiction was actually a sham. Id. Although a party may not create his own issue of fact by an affidavit contradicting his prior deposition testimony, the nonmoving party is not precluded from elaborating upon, explaining, or clarifying prior testimony elicited by opposing counsel on deposition; minor inconsistencies that result from an honest discrepancy, a mistake, or newly discovered evidence is not a basis to exclude an opposition affidavit. Id. The Keever and Spector Declarations, to the extent they allege Plaintiffs’ diverted ORDER GRANTING MOTION TO DISMISS CASE NO. 17-cv-03592-RS 28 6 United States District Court Northern District of California 1 The best evidence Plaintiffs offer is an email containing a link to a National Resources 2 Defense Council article referring generally to Sanderson’s ads being deceptive; an article Plaintiffs 3 neither published nor discussed in the email chain. FoE also points to its supplemental 4 interrogatory response that it spent thousands of dollars on consultant fees, which alone is wholly 5 conclusory and inadequate as evidence of actual injury. Finally, while CFS represents in its post- 6 deposition Spector Declaration that at least one of its staffers spent 25% more time on educating 7 the public on why Sanderson’s advertising was misleading, the declaration is suspect for the 8 reasons just discussed and the figure is uncorroborated in the record. CFS had numerous 9 opportunities prior to this declaration to showcase this expenditure, including the initial and 10 supplemental interrogatory responses, document production, and the deposition itself. Its failure 11 to do so is telling. Ultimately, Plaintiffs counterarguments only provide further support for the 12 notion that Plaintiffs were advocating generally for reducing routine antibiotic use in meat 13 production and disapproval of Sanderson’s farming practices, but not that they had to divert 14 resources away from such advocacy to address Sanderson’s advertisements prior to this lawsuit. 15 Plaintiffs rely on Ninth Circuit precedent, namely National Council of La Raza v. 16 Cegavske, 800 F.3d 1032 (9th Cir. 2015) and Fair Housing Council of San Fernando Valley v. 17 Roommate.com, LLC, 666 F.3d 1216 (9th Cir. 2012), to argue an organization may establish 18 standing where it diverted resources to fund activities they were already undertaking. In essence, 19 Plaintiffs interpret Ninth Circuit law to suggest an organization need not change its behavior in 20 response to a defendant’s culpable conduct in order to satisfy standing under Article III. These 21 cases, however, are readily distinguishable. In La Raza, the Ninth Circuit overturned a district 22 court’s conclusion that plaintiffs regularly engaged in voter registration drives, and so did not 23 24 25 26 27 resources to address Sanderson’s advertisements, are wholly inconsistent with Plaintiffs’ deposition testimony, and their apparent explanation for this discrepancy (namely, to clarify their prior deposition testimony) is untenable. Nothing in either the Keever or Spector Declarations legitimately elaborates upon, explains, or clarifies prior testimony elicited by opposing counsel on deposition. Scamihorn, 282 F.3d at 1085 n.7. Instead, they attempt to put an entirely different and inconsistent gloss on the same set of facts, attempting to showcase their prior testimony in a more favorable light. See Halo Mgmt., 2004 WL 1781013, at *6 n.15. ORDER GRANTING MOTION TO DISMISS CASE NO. 17-cv-03592-RS 28 7 United States District Court Northern District of California 1 change their behavior to deal with Nevada’s failure to comply with federal law to offer voter 2 registration through public assistance offices. La Raza, 800 F.3d at 1039-41. The Ninth Circuit 3 emphasized that the key issue was not whether plaintiffs were engaging in activities they 4 performed on a regular basis independent of the state’s conduct, but that plaintiffs had alleged they 5 were committing resources toward registering individuals who would likely have been registered 6 by the state, had it complied with the law. Id. at 1040. Effectively, plaintiffs were expending 7 additional resources to make-up for the void left by the state’s noncompliance that would have 8 been spent on some other aspect of their organizational purpose, such as registering voters the 9 statute-at-issue did not reach. Id. That is not the case here, where Plaintiffs have failed to 10 produce evidence demonstrating they expended additional resources to address Sanderson’s 11 advertisements, as opposed to its practices. 12 Similarly, in Roommate.com, the Ninth Circuit found standing where the plaintiff 13 expended resources investigating defendant’s alleged violations and subsequently began new 14 education and outreach campaigns targeted at discriminatory roommate advertising prior to 15 commencing litigation. Roommate.com, 666 F.3d at 1219. As discussed above, Plaintiffs have 16 failed to produce evidence demonstrating that they expended any resources investigating 17 Sanderson’s advertisements or began new education and outreach campaigns targeted at 18 Sanderson’s ads prior to commencing this litigation. Instead, the evidence confirms Plaintiffs 19 were simply going about their business as usual unaffected by Sanderson’s advertisements. 20 C. Plaintiffs’ Actions Subsequent to Filing 21 Sanderson argues Plaintiffs’ post-filing activities are litigation-related and so cannot serve 22 as a cognizable diversion of resources. Plaintiffs contend otherwise, asserting they are suffering 23 an ongoing injury through their diversion of resources in an attempt to continue to combat public 24 confusion surrounding Sanderson’s ads. Plaintiffs’ argument fails for multiple reasons. First, they 25 rely on litigation press releases and graphics used in the public relations efforts announcing this 26 lawsuit that cannot seriously be contended as other than litigation-related. Second, as discussed 27 above, an organization cannot manufacture an injury by sustaining litigation costs. La Asociacion ORDER GRANTING MOTION TO DISMISS CASE NO. 17-cv-03592-RS 28 8 1 de Trabajadores, 624 F.3d at 1088. Finally, even presuming Plaintiffs suffered an ongoing injury 2 after litigation commenced, they have not established that they suffered an injury prior to the filing 3 of the lawsuit. Standing must be present at the time suit is brought. See Lujan, 504 U.S. at 561. 4 If jurisdiction is defective at the lawsuit’s inception, it cannot be cured thereafter. Trend Micro 5 Incorp. v. RPost Holdings, Inc., No. 13-cv-05227-WHO, 2014 WL 1365491, at *7 (N.D. Cal. Apr. 6 7, 2014); But see In re Schugg, 688 F. App’x 477, 479-80 (9th Cir. 2017) (explaining exceptions 7 to the rule, including where a party files a supplemental pleading under Federal Rule of Civil 8 Procedure 15(d) or other exceptional circumstances, such as avoiding the needless filing of a new 9 case). Thus, Plaintiffs cannot rely on evidence after the filing of their lawsuit to support their United States District Court Northern District of California 10 standing to sue. 11 D. Evidentiary Concerns 12 In its Reply, Sanderson challenges the materials Plaintiffs’ filed in support of their 13 Opposition as improper and self-serving because: (1) Plaintiffs’ declarations contradict the record; 14 (2) Plaintiffs rely on documents and information they stipulated not to use to prove standing; (3) 15 Plaintiffs rely on documents and information they did not identify or produce in discovery; and (4) 16 Plaintiffs rely on documents initially withheld on a claim of First Amendment privilege. Since 17 none of the evidence in the record establishes Plaintiffs’ standing to sue, Sanderson’s evidentiary 18 concerns are moot. 19 20 V. CONCLUSION For the foregoing reasons, Plaintiffs lack organizational standing and their claims are 21 dismissed for lack of subject matter jurisdiction. Since dismissal for lack of standing must be 22 without prejudice, see Fleck & Assocs., Inc. v. Phoenix, 471 F.3d 1100, 1106-07 (9th Cir. 2006), 23 Plaintiffs claims are dismissed without prejudice. Given that Plaintiffs have not sought leave to 24 amend, and since amendment apparently would be futile, prejudice Sanderson, and produce an 25 undue delay in this already prolonged litigation, their claims are dismissed without leave to 26 amend. See AmerisourceBergen Corp. v. Dialysist W., Inc., 465 F.3d 946, 951 (9th Cir. 2006). 27 ORDER GRANTING MOTION TO DISMISS CASE NO. 17-cv-03592-RS 28 9 1 IT IS SO ORDERED. 2 3 4 5 Dated: July 31, 2019 ______________________________________ RICHARD SEEBORG United States District Judge 6 7 8 9 10 United States District Court Northern District of California 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 ORDER GRANTING MOTION TO DISMISS CASE NO. 17-cv-03592-RS 28 10

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