United States District Court, E.D. California
MEMORANDUM DECISION AND ORDER RE PLAINTIFF'S
MOTION FOR A PRELIMINARY INJUNCTION (Doc. 11) AND
DEFENDANTS' MOTION TO DISMISS (Doc. 12)
LAWRENCE J. O'NEILL UNITED STATES CHIEF DISTRICT JUDGE
Daniels Sharpsmart, Inc. (“Daniels”) brings this
case under 42 U.S.C. § 1983 and 28 U.S.C. §§
2201, 2202, alleging, among other things, that
Defendants violated the Commerce Clause of the United
States Constitution, art. I, § 8, clause 3, through
their extraterritorial enforcement of California's
Medical Waste Management Act (“the MWMA”), Cal.
Health & Safety Code §§ 117600 et seq. Daniels
now seeks a preliminary injunction to enjoin Defendants'
allegedly unlawful enforcement of the MWMA. Doc. 11.
Defendants move to dismiss on a number of grounds. Doc. 12.
following reasons, Defendants' motion to dismiss is
DENIED, and Daniels's motion for a preliminary injunction
FACTUAL AND PROCEDURAL HISTORY
facts of this case are few, straightforward, and undisputed.
Daniels provides services for the transport and treatment of
biohazardous medical waste. Doc. 1, Complaint
(“Compl.”), ¶ 8. The MWMA requires, among
other things, that medical waste generated in California must
be treated by either incineration at a permitted facility or
by another means approved by the California Department of
Public Health (“the Department”). Id.
¶ 9. Because there were no facilities in California that
complied with the MWMA, “Daniels transported its
biohazardous medical wastes for treatment at facilities
outside of California, ” including at facilities in
Kentucky and Indiana. Id. ¶¶ 10-14.
“Nothing in the MWMA indicates that its incineration
requirement was intended to apply to waste treated outside of
California.” Id. ¶ 9.
November 2014, the Department inspected Daniels's Fresno
facility and, shortly afterward, Hilton sent a letter,
copying Dabney, stating that Daniels had violated the MWMA
(specifically, Cal. Health and Safety Code §§
118215(a) and 118222) by treating its waste in Indiana and
Kentucky facilities that used disposal methods that the MWMA
did not authorize, that is, by means other than incineration.
Id. ¶ 11; Doc. 11-2, Declaration of Daniel
Kennedy (“Kennedy Decl.”), ¶¶ 27-28.
The letter further stated that Daniels was in
“noncompliance” with California law. Id.
¶ 19. “Daniels responded that the Department could
not dictate the method of waste treatment outside of
California. Defendant Dabney stated her disagreement in an
email to Daniels copied to Defendant Hilton.” Compl.
¶ 12; Kennedy Decl. ¶ 18.
April 2015, the Department performed another inspection of
Daniels's Fresno facility. Id. ¶ 13.
Shortly afterward, Hilton sent another letter, copying
Dabney, stating that Daniels use of facilities in Indiana and
Kentucky that disposed its waste by means other than
incineration violated the MWMA. Id. ¶ 13;
Kennedy Decl. ¶ 20; Doc. 11-6 at 5 (Hilton letter
stating “[n]one of [Daniels's] waste shipped to
Indiana was treated in compliance with California
law”); id. (Hilton letter stating waste
transported to other states “cannot be treated by steam
sterilization or microwave technology” under Cal.
Health & Safety Code § 118222).
August 2015, the Department issued a “Notice of
Violation” (“NOV”) to Daniels, signed by
Pilorin. Compl. ¶ 14; Kennedy Decl. ¶ 21.
“The NOV imposed a $567, 000 penalty against Daniels
for using methods other than incineration to treat
biohazardous medical wastes outside of California.”
Compl. ¶ 14; Kennedy Decl. ¶ 21; see also
Doc. 11-7 at 11-12 (NOV stating fine was imposed, in part,
because Daniels used facilities in Kentucky and Indiana
without “incineration treatment units” in
violation of the MWMA on 567 occasions). Daniels appealed the
penalty with the Department's Office of Administrative
Hearings and Appeals (“OAHA”). Compl. ¶ 19;
see also Doc. 19 at 13 n.4. To avoid further
penalties, however, Daniels now transports its medical wastes
to incinerators at other states, “at a significantly
higher cost.” Compl. ¶ 15.
response to Defendants' actions, Daniels brought this
case. Daniels asserts two causes of action against
Defendants. The first claim, brought under § 1983,
asserts that Defendants violated the Commerce Clause.
Id. at 5. Daniels alleges “nothing in the MWMA
indicates that its incineration requirement was intended to
apply to waste treated outside of California, ” and
asserts that Defendants' applying the requirement to
Daniels's out-of-state impermissibly regulates
“commerce occurring wholly outside the borders of
California.” Id. ¶ 18. The claim seeks
an injunction against Smith, in her official capacity as
Director of the Department, enjoining the Department from
using or threatening to use the MWMA to force Daniels to
incinerate its waste transported to out-of-state facilities,
and requests monetary damages from Hilton, Dabney, and
Pilorin, who are sued in their personal capacities.
Id. ¶¶ 16-26.
second claim, brought under 28 U.S.C. §§ 2201 and
2202 and asserted against Smith only, seeks a judicial
declaration that “Smith may not enforce
California's Medical Waste Management Act (specially
including those provisions requiring incineration of certain
medical waste) with respect to wastes treated outside of
California.” Id. ¶ 31. Plaintiff now
moves for a preliminary injunction that would enjoin
“the Department from compelling Daniels to incinerate
the medical wastes it transports outside of
California.” Doc. 11-1 at 20.
OAHA proceedings remain pending. See Doc. 12-3, Exs.
B and C. On March 17, 2017, three days before filing this
case, Daniels moved for judgment in the OAHA proceedings. In
doing so, Daniels argued that (1) the MWMA does not require
or permit extraterritorial application and (2) even if it
did, Defendants' applying the MWMA to Daniels's waste
that was disposed in other states violates the dormant
Commerce Clause. See Doc. 12-3 at 22. Daniels seeks
only “judgment on the merits in favor of Daniels and
against the Department.” Id. at 31.
move to dismiss on the grounds that (1) the Court lacks
jurisdiction because this case does not present a federal
question; (2) Daniels fails to state a claim; (3) Defendants
have qualified immunity from Daniels's claims; and (4)
the Court should abstain from considering Daniels's
claims under the Younger,
Burford, Pullman, and Colorado
River abstention doctrines. See Doc.
12-2 at 2. Daniels opposes on all grounds.
STANDARDS OF DECISION
motion to dismiss pursuant to Federal Rule of Civil Procedure
12(b)(6) is a challenge to the sufficiency of the allegations
set forth in the complaint. A 12(b)(6) dismissal is proper
where there is either a “lack of a cognizable legal
theory” or “the absence of sufficient facts
alleged under a cognizable legal theory.” Balisteri
v. Pacifica Police Dept., 901 F.2d 696, 699 (9th Cir.
1990). In considering a motion to dismiss for failure to
state a claim, the court generally accepts as true the
allegations in the complaint, construes the pleading in the
light most favorable to the party opposing the motion, and
resolves all doubts in the pleader's favor. Lazy Y.
Ranch LTD v. Behrens, 546 F.3d 580, 588 (9th Cir. 2008).
survive a 12(b)(6) motion to dismiss, the plaintiff must, in
accordance with Rule 8, allege “enough facts to state a
claim to relief that is plausible on its face.”
Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570
(2007). “A claim has facial plausibility when the
Plaintiff pleads factual content that allows the court to
draw the reasonable inference that the defendant is liable
for the misconduct alleged.” Ashcroft v.
Iqbal, 556 U.S. 662, 678 (2009). “The plausibility
standard is not akin to a ‘probability requirement,
' but it asks for more than a sheer possibility that a
defendant has acted unlawfully.” Id. (quoting
Twombly, 550 U.S. at 556). “While a complaint
attacked by a Rule 12(b)(6) motion to dismiss does not need
detailed factual allegations, a Plaintiff's obligation to
provide the ‘grounds' of his ‘entitlement to
relief' requires more than labels and conclusions.”
Twombly, 550 U.S. at 555 (internal citations
omitted). Thus, “bare assertions . . . amount[ing] to
nothing more than a ‘formulaic recitation of the
elements' . . . are not entitled to be assumed
true.” Iqbal, 556 U.S. at 681. “[T]o be
entitled to the presumption of truth, allegations in a
complaint . . . must contain sufficient allegations of
underlying facts to give fair notice and to enable the
opposing party to defend itself effectively.” Starr
v. Baca, 652 F.3d 1202, 1216 (9th Cir. 2011). In
practice, “a complaint . . . must contain either direct
or inferential allegations respecting all the material
elements necessary to sustain recovery under some viable
legal theory.” Twombly, 550 U.S. at 562.
secure injunctive relief prior to a full adjudication on the
merits, a plaintiff must show “that he is likely to
succeed on the merits, that he is likely to suffer
irreparable harm in the absence of preliminary relief, that
the balance of equities tips in his favor, and that an
injunction is in the public interest.” Winter v.
Natural Res. Def. Council, Inc., 555 U.S. 7, 20 (2008).
Injunctive relief is “an extraordinary remedy that may
only be awarded upon a clear showing that the plaintiff is
entitled to such relief.” Id. at 22. The Ninth
Circuit follows a “sliding scale” approach to
preliminary injunctions. See Alliance for the Wild
Rockies v. Cottrell, 632 F.3d 1127, 1131 (9th Cir.
2011). “Under this approach, the elements of the
preliminary injunction test are balanced, so that a stronger
showing of one element may offset a weaker showing of
another.” Id. at 1131-32. For example, if the
moving party is unable to establish a likelihood of success
on the merits, preliminary injunctive relief may still proper
if the party can show that (1) there are at least
“serious questions” going to the merits; (2) the
balance of the hardships tips “sharply” in its
favor; and (3) the other factors listed in Winter
(i.e., irreparable harm and in the public interest)
are satisfied. Id. at 1135.
Court first addresses Defendants' motion to dismiss
because it challenges the Court's jurisdiction and, if
granted, would moot Daniels's preliminary injunction
The Court has jurisdiction
preliminary matter, Defendants argue Daniels's complaint
does not raise a federal question-the only basis for the
Court's jurisdiction-because it “really seeks a
determination of whether the MWMA incineration requirement
was intended by the legislature to apply to waste treated
outside of California, ” which will require the Court
“to rely exclusively on state law.” Doc. 12-2 at
this argument makes no sense. Daniels's first cause of
action, brought under § 1983, a federal statute, alleges
that Defendants violated the Commerce Clause, and seeks a
judicial determination as to whether Defendants did, in fact,
violate the Clause. Daniels alleges Defendants, who are
California officials, attempted to enforce the MWMA against
Daniels for conduct that occurred entirely outside of
California. It is difficult to conceive how this does not
raise a federal question. The Court has federal question
jurisdiction over this case.
The Court should not abstain from deciding this case
[abstention] is an exception to the usual rule that federal
courts should exercise the jurisdiction conferred on them by
statute.” Gartrell Constr., Inc. v. Aubry, 940
F.2d 437, 441 (9th Cir. 1991). A guiding principle underlying
the doctrine is “comity, that is, a proper respect for
state functions” by the federal courts.
Younger, 401 U.S. at 44. The doctrine thus applies
when “(1) there are ongoing state judicial proceedings,
(2) the proceedings implicate important state interests, and
(3) there is an adequate opportunity in the state proceedings
to raise federal questions.” Id.
challenges only whether the second factor is present here.
See Doc. 18 at 15. Daniels acknowledges that the
OAHA administrative proceedings may implicate
California's exercise of its valid police powers and that
this generally would be sufficient for Younger
abstention, see Doc. 18 at 15, but argues that the
State's interest must yield to the overriding federal
interests inherent in cases, such as this one, alleging a
Commerce Clause violation. See id.
relies heavily on the Fourth Circuit's decision
Harper v. Pub. Serv. Comm'n of W.Va., 396 F.3d
348, 356-57 (4th Cir. 2005), in which the court held that a
state's interests underpinning a state statute, however
valid, can “seldom” outweigh the federal
government's interests if the ...