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Jonna Corp. v. City of Sunnyvale, CA

United States District Court, N.D. California, San Jose Division

June 16, 2017

JONNA CORPORATION, Plaintiff,
v.
CITY OF SUNNYVALE, CA, Defendant.

          ORDER GRANTING CITY OF SUNNYVALE'S MOTION TO DISMISS Re: Dkt. No. 16

          LUCY H. KOH United States District Judge

         Plaintiff Jonna Corporation (“Plaintiff”) sues Defendant City of Sunnyvale (“Defendant” or “the City”) because the City refused to provide Plaintiff a license to collect construction and demolition debris in the City. Before the Court is the City's Motion to Dismiss. ECF No. 16 (“Mot.”). Having considered the parties' briefing, the relevant law, and the record in this case, the Court GRANTS the City's Motion to Dismiss.

         I. BACKGROUND

         A. Factual Background

         In 1990, the City entered into an exclusive franchise agreement for the collection of solid waste in the City (“Exclusive Franchise Agreement”) with Bay Counties Waste Services, Inc. (“Bay Counties”), formerly Specialty Solid Waste & Recycling, Inc., for a term of ten years. ECF No. 1 (“Compl.”) ¶ 21; see also ECF No. 17-1 at 39, Sunnyvale Ordinance No. 2771-04.[1] That Exclusive Franchise Agreement has been amended and extended a number of times, and now extends through at least June 30, 2018. ECF No. 17-3 at 13, Sunnyvale Ordinance No. 2949-11. Under the Exclusive Franchise Agreement, Bay Counties is the sole collector of solid waste, including recyclable materials and construction debris, in the City. ECF No. 17-2 (“Franchise Agmt.”) at 18 (“City hereby extends its previous grant to Contractor of the exclusive franchise, right and privilege to engage in the business of collecting and transporting Solid Waste generated within the City”), 16 (“‘[S]olid waste' means . . . Garbage, Rubbish, Construction Debris, Yardwaste, and Recyclable Materials.”). The Sunnyvale Municipal Code forbids any party to collect solid waste for a fee without a franchise or license. Sunnyvale Mun. Code § 8.16.150 (“It is unlawful for any person to engage in the business of collecting solid waste within the city, or to haul the same through any street or public right-of-way in the city, unless such person has been granted a franchise or license to do so by the city.”).[2] Bay Counties is the only entity that has been awarded such a franchise or license. Franchise Agmt. at 18.

         Plaintiff is a California corporation based in Santa Clara County that “is in the business of collecting discarded wood, metal, asphalt, concrete, and drywall from commercial construction and demolition sites” (“construction and demolition debris”). Compl. ¶ 5. On October 19, 2016, Plaintiff applied to the City for a franchise or license to collect construction and demolition debris under Sunnyvale Municipal Code § 8.16.090. Id. ¶ 17; see also Sunnyvale Mun. Code § 8.16.090 (“The city council shall provide for the collection and disposal of solid waste and recyclable materials generated from residences within the city by the issuance of a franchise or license, or franchises and licenses, to disposal service operators.”). On November 7, 2016, the City denied Plaintiff's application for a franchise or license. Compl. ¶ 18. The City's denial letter stated that “[w]hile the Sunnyvale Municipal Code does allow for the possibility of the City issuing multiple license holders/franchisees, the City's current policy is to issue an exclusive franchise to a single disposal service operator. This franchise extends to collection of all solid waste, including [construction and demolition] material, as described in more detail in Chapter 8.16 of the Code.” Id.

         B. Procedural History

         On February 24, 2017, Plaintiff filed the instant suit. See Compl. Plaintiff asserts two causes of action: declaratory relief and mandamus. However, the declaratory relief cause of action is based on the following theories of relief: (1) violation of the Takings Clause of the United States Constitution, (2) violation of the Substantive Due Process clause in the Fifth and Fourteenth Amendments to the United States Constitution, (3) violation of the Equal Protection clause in the Fourteenth Amendment of the United States Constitution and Article I, Section 7 of the California Constitution, (4) violation of the Commerce Clause of the United States Constitution, (5) the City's use of the wrong definition of “solid waste” under California law, and (6) violation of California Public Resources Code § 40059. Id. ¶¶ 26-31. Plaintiff's mandamus cause of action merely states that the City had a mandatory duty to issue a franchise or license to Plaintiff under Sunnyvale Municipal Code § 8.16.090, and thus the Court should compel the issuance of such a license. Id. ¶¶ 32-34.

         This case was assigned to Magistrate Judge Howard Lloyd on February 27, 2017. ECF No. 4. On March 8, 2017, Plaintiff declined Magistrate Judge jurisdiction, ECF No. 7, and on March 9, 2017, the instant case was reassigned to the undersigned judge, ECF No. 9. On March 20, 2017, the City filed a motion to dismiss the instant suit that was noticed for hearing before Magistrate Judge Howard Lloyd. ECF No. 13.

         On April 4, 2017, the City filed an amended motion to dismiss that was identical to the original motion to dismiss except that it was noticed for hearing before the undersigned judge. ECF No. 16 (“Mot.”).[3] On April 18, 2017, Plaintiff filed an opposition to the City's amended motion, ECF No. 18 (“Opp'n”), and an “Appendix” of defined terms, ECF No. 18-1. On April 25, 2017, the City filed a reply, ECF No. 19 (“Reply”), and an objection to Plaintiff's Appendix of defined terms, ECF No. 20.[4]

         II. LEGAL STANDARD

         A. Motion to Dismiss Under Rule 12(b)(6)

         Rule 8(a)(2) of the Federal Rules of Civil Procedure requires a complaint to include “a short and plain statement of the claim showing that the pleader is entitled to relief.” A complaint that fails to meet this standard may be dismissed pursuant to Federal Rule of Civil Procedure 12(b)(6). The U.S. Supreme Court has held that Rule 8(a) requires a plaintiff to plead “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. (internal quotation marks omitted). For purposes of ruling on a Rule 12(b)(6) motion, a court “accept[s] factual allegations in the complaint as true and construe[s] the pleadings in the light most favorable to the nonmoving party.” Manzarek v. St. Paul Fire & Marine Ins. Co., 519 F.3d 1025, 1031 (9th Cir. 2008).

         However, a court need not accept as true allegations contradicted by judicially noticeable facts, Shwarz v. United States, 234 F.3d 428, 435 (9th Cir. 2000), and the “[C]ourt may look beyond the plaintiffs complaint to matters of public record” without converting the Rule 12(b)(6) motion into one for summary judgment, Shaw v. Hahn, 56 F.3d 1128, 1129 n.1 (9th Cir. 1995). Nor is the court required to “‘assume the truth of legal conclusions merely because they are cast in the form of factual allegations.'” Fayer v. Vaughn, 649 F.3d 1061, 1064 (9th Cir. 2011) (per curiam) (quoting W. Mining Council v. Watt, 643 F.2d 618, 624 (9th Cir. 1981)). Mere “conclusory allegations of law and unwarranted inferences are insufficient to defeat a motion to dismiss.” Adams v. Johnson, 355 F.3d 1179, 1183 (9th Cir. 2004); accord Iqbal, 556 U.S. at 678. Furthermore, “a plaintiff may plead herself out of court” if she “plead[s] facts which establish that [s]he cannot prevail on h[er] . . . claim.” Weisbuch v. Cty. of L.A., 119 F.3d 778, 783 n.1 (9th Cir. 1997).

         B. Leave to Amend

         If the Court determines that the complaint should be dismissed, it must then decide whether to grant leave to amend. Under Rule 15(a) of the Federal Rules of Civil Procedure, leave to amend “should be freely granted when justice so requires, ” bearing in mind that “the underlying purpose of Rule 15 . . . [is] to facilitate decision on the merits, rather than on the pleadings or technicalities.” Lopez v. Smith, 203 F.3d 1122, 1127 (9th Cir. 2000) (en banc). When dismissing a complaint for failure to state a claim, “a district court should grant leave to amend even if no request to amend the pleading was made, unless it determines that the pleading could not possibly be cured by the allegation of other facts.” Id. at 1130 (quoting Doe v. United States, 58 F.3d 494, 497 (9th Cir. 1995)). Nonetheless, a court “may exercise its discretion to deny leave to amend due to ‘undue delay, bad faith or dilatory motive on part of the movant, repeated failure to cure deficiencies by amendments previously allowed, undue prejudice to the opposing party. . ., [and] futility of amendment.'” Carvalho v. Equifax Info. Servs., LLC, 629 F.3d 876, 892-93 (9th Cir. 2010) (alterations in original) (quoting Foman v. Davis, 371 U.S. 178, 182 (1962)).

         III. DISCUSSION

         The City argues that Plaintiff has failed to adequately plead its declaratory relief and mandamus causes of action. The City also requests judicial notice of a number of documents.

         The Court first addresses the City's request for judicial notice. The Court then addresses Plaintiffs declaratory relief and mandamus causes of action in turn.

         A. Request for Judicial Notice

         The Court first addresses the City's request for judicial notice. ECF No. 17. The Court may take judicial notice of matters that are either “generally known within the trial court's territorial jurisdiction” or “can be accurately and readily determined from sources whose accuracy cannot reasonably be questioned.” Fed.R.Evid. 201(b). Public records, including judgments and other publicly filed documents, are proper subjects of judicial notice. See, e.g., United States v. Black, 482 F.3d 1035, 1041 (9th Cir. 2007) (“[Courts] may take notice of proceedings in other courts, both within and without the federal judicial system, if those proceedings have a direct relation to matters at issue.”); Rothman v. Gregor, 220 F.3d 81, 92 (2d Cir. 2000) (taking judicial notice of a filed complaint as a public record).

         However, to the extent any facts in documents subject to judicial notice are subject to reasonable dispute, the Court will not take judicial notice of those facts. See Lee v. City of L.A, 250 F.3d 668, 689 (9th Cir. 2001) (“A court may take judicial notice of matters of public record . . . But a court may not take judicial notice of a fact that is subject to reasonable dispute.”) (internal quotation marks omitted), overruled on other grounds by Galbraith v. Cty. of Santa Clara, 307 F.3d 1119 (9th Cir. 2002).

         The City requests judicial notice of the following legislative enactments:

• Sections 400, 1600, 1601, and 1602 of the City of Sunnyvale's Charter;
• Chapter 8.16 of the Sunnyvale Municipal Code;
• City of Sunnyvale Ordinance No. 2771-04, which is titled “An Ordinance of the City Council of the City of Sunnyvale Extending the Term of the Franchise with Bay Counties Waste Services, Inc. for the Collection of Solid Waste, ” as Adopted and Restated by Ordinance 2572-97;
• The January 11, 2005 Extended and Second Restated Agreement Between City of Sunnyvale and Bay Counties Waste Services, Inc. for Solid Waste Collection and Recycling, which is an attachment to City of Sunnyvale Ordinance No. 2771-04;
• City of Sunnyvale Ordinance No. 2949-11, which is titled “An Ordinance of the City Council of the City of Sunnyvale Adopting the First Amendment to Extended and Second Restated Agreement Between the City of Sunnyvale and with Bay Counties Waste Services, Inc. for the Collection of Solid Waste and Recycling”;
• The September 30, 2010 First Amendment to Extended and Second Restated Agreement Between City of Sunnyvale and Bay Counties Waste Services, Inc. for Solid Waste Collection and Recycling, which is an attachment to City of Sunnyvale Ordinance No. 2949-11.

         The above documents are legislative enactments, ordinances, or regulations that are subject to judicial notice. See Long Beach Area Peace Network v. City of Long Beach, 574 F.3d 1011, 1026 (9th Cir. 2009) (taking judicial notice of a local ordinance, a local regulation, and a local municipal code). Accordingly, the Court GRANTS the City's request for judicial notice of these documents.

         The Court also requests judicial notice of the following public record documents:

• A December 14, 2004 City of Sunnyvale Staff Report to the City's Mayor and City Council about the extension of the Exclusive Franchise Agreement with Bay Counties;
• Minutes from the December 14, 2004 Sunnyvale City Council Public Hearings;
• A February 15, 2011 City of Sunnyvale Staff Report to the City's Mayor and City Council about the modification of the Exclusive ...

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