Rocky Mountain Farmers Union v. Corey

          MEMORANDUM DECISION AND ORDER RE PLAINTIFFS’ MOTIONS TO AMEND (DOCS. 355, 358)

          Lawrence J. O’Neill UNITED STATES CHIEF DISTRICT JUDGE

         I. INTRODUCTION

         Currently before the Court are Plaintiffs’^[1] motions to amend their respective complaints under Federal Rule of Civil Procedure 15(a) (“Rule 15(a)”) in order to challenge the November 2015 amendments to California’s Low Carbon Fuel Standard (“LCFS”), 17 Cal. Code Regs. §§ 95480 et seq, which took effect on January 1, 2016. See Doc. 356 at 2; Doc. 358-1 at 3. Defendants^[2] largely do not oppose the motions.

         The Court vacated the hearing on the motions and took the matter under submission pursuant to Local Rule 230(g). See Doc. 364. For the following reasons, the Court GRANTS IN PART and DENIES IN PART the motions.

         II. FACTUAL AND PROCEDURAL BACKGROUND

         This case concerns Plaintiffs’ years-long and complex challenge to the LCFS. After the Ninth Circuit remanded the case to this Court in 2014, see Rocky Mountain Farmers Union v. Corey, 730 F.3d 1070 (9th Cir. 2013) (“RMFU”), cert denied, 134 S.Ct. 2875 (2014), the Court granted in part and denied in part the AFPM Plaintiffs’ motion to amend the complaint. Rocky Mountain Farmers Union v. Goldstene, No. 1:09-cv-2234-LJO-BAM, 2014 WL 7004725, at *1 (E.D. Cal. Dec.11, 2014) (“RMFU Amendment”). In August 2015, the Court granted in part and denied in part Defendants’ motion to dismiss certain of the AFPM Plaintiffs’ claims. See Am. Fuels & Petrochemicals Mfrs. Ass’n v. Corey, No. 1:09-cv-2234-LJO-BAM, 2015 WL 5096279, at *1 (E.D. Cal. Aug. 28, 2015) (“MTD Order”). The Court incorporates by reference the summary of the extensive procedural history of this consolidated action contained in RMFU Amendment, 2014 WL 7004725, at *1-8, and the MTD Order, 2015 WL 5096279, at *1-5. Only a brief recitation of the factual and procedural background necessary to resolve Plaintiffs’ motions to amend follows.

         The RMFU Plaintiffs filed this consolidated action in December 2009 (Doc. 1), a first amended complaint on January 11, 2010 (Doc. 7), and a second amended complaint (“SAC”)-currently their operative complaint-on January 28, 2010 (Doc. 11). The AFPM Plaintiffs filed their complaint on February 2, 2010. See 1:10-cv-163-LJO-BAM, Doc. 1. The Court then consolidated the cases. See 1:10-cv-163-LJO-BAM, Doc. 99. In December 2014, the AFPM Plaintiffs filed a first amended complaint (“FAC”), which is currently their operative complaint. RMFU Amendment, 2014 WL 7004725, at *1.

         Plaintiffs’ complaints challenged the LCFS as originally promulgated in October 2007, and as amended in 2012 (collectively, “the Original LCFS”). Plaintiffs now seek leave to file further amended complaints in order to add challenges to the currently operative version of the LCFS (“the 2015 LCFS”), which was amended in November 2015 in response to the California Court of Appeal’s decision in POET LLC v. California Air Resources Board, 218 Cal.App.4th 681 (2013). See California Air Resources Board (“CARB”), Staff Report: Initial Statement of Reasons for Proposed Rulemaking: Proposed Re-Adoption of the Low Carbon Fuel Standard (Jan. 2015) (“2015 ISOR”), at I-5, available at http://www.arb.ca.gov/regact/2015/lcfs2015/ lcfs15isor.pdf. On January 1, 2016, the Original LCFS was repealed and replaced by the 2015 LCFS, which went into effect on the same day. See Doc. 361, Exs. DE.

         Plaintiffs now move to amend their respective complaints to challenge the constitutionality of the 2015 LCFS. Docs. 355, 358, 358-2, Proposed Third Amended Complaint (“PTAC”), at 18, 21. Defendants explicitly state that they do not oppose any aspect of the AFPM Plaintiffs’ motion. See Doc. 359 at 3; Doc. 363 at 2. Defendants also do not oppose the RMFU Plaintiffs’ motion to the extent they seek to add facial constitutional challenges to the 2015 LCFS.^[3] See Doc. 360. Defendants do, however, oppose the RMFU Plaintiffs’ motion to the extent it seeks to add two “as-applied” constitutional challenges to the 2015 LCFS.^[4] See Id . at 5, 8.

         III. STANDARD OF DECISION

         Under Fed.R.Civ.P. 15(a)(2), the Court “should freely give leave [to amend] when justice so requires.” This Rule is “to be applied with extreme liberality.” Morongo Band of Mission Indians v. Rose, 893 F.2d 1074, 1079 (9th Cir. 1990). All inferences are drawn “in favor of granting the motion.” Griggs v. Pace Am. Group, Inc., 170 F.3d 877, 880 (9th Cir. 1999). “[T]he nonmoving party bears the burden of demonstrating why leave to amend should not be granted.” Genentech, Inc. v. Abbott Labs., 127 F.R.D. 529, 530-31 (N.D. Cal. 1989).

         To determine whether to grant leave to amend, the Court considers five factors: “(1) bad faith; (2) undue delay; (3) prejudice to the opposing party; (4) futility of amendment; and (5) whether the plaintiff has previously amended his complaint.” Nunes v. Ashcroft, 375 F.3d 805, 808 (9th Cir. 2003) (citations omitted). “Futility alone can justify the denial of a motion for leave to amend, ” id., and prejudice to the opposing party “carries the greatest weight.” Eminence Capital LLC v. Aspeon, Inc., 316 F.3d 1048, 1052 (9th Cir. 2003). Delay alone, however, will not justify denying leave to amend. DCD Progs., Ltd. v. Leighton, 833 F.2d 183, 186 (9th Cir. 1987). Absent prejudice, or a strong showing of the remaining four factors considered, “there exists a presumption under Rule 15(a) in favor of granting leave to amend.” Eminence Capital, 316 F.3d at 1052 (emphasis in original).

         IV. DISCUSSION

         A. Unopposed aspects of Plaintiffs’ motions.

         Rule 15(a)(2) permits a plaintiff to amend its complaint “with the opposing party’s written consent or the court’s leave.” Given that Defendants explicitly stated in writing that they do not oppose the AFPM Plaintiffs’ motion to amend, see Doc. 359 at 3, the Court GRANTS the motion. Similarly, Defendants do not oppose the RMFU Plaintiffs’ motion to amend to the extent they seek to add facial challenges against the 2015 LCFS. The Court therefore GRANTS the RMFU Plaintiffs’ unopposed motion to amend in order to add their facial claims against the 2015 LCFS.

         B. Plaintiffs’^[5]as ...