FOR PUBLICATION



### UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT

C ITY OF S AN J UAN C APISTRANO , a California municipal corporation, Plaintiff

- Appellant

,

v.

C ALIFORNIA P UBLIC U TILITIES C OMMISSION , a California state
agency, Defendant

- Appellee. No. 17

- 56693

D.C. No. 8:17

- cv

- 01096

- AG

- E

OPINION

Appeal from the United States District Court for the Central District of California Andrew J. Guilford, District Judge, Presiding

Argued and Submitted March 8, 2019 Pasadena, California

Filed September 11, 2019

Before: Andrew J. Kleinfeld, Jacqueline H. Nguyen, and Ryan D. Nelson, Circuit Judges.

Opinion by Judge R. Nelson ; Concurrence by Judge R. Nelson2 C ITY OF S AN J UAN C APIST RANO V

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SUMMARY *

Civil Rights

The panel affirmed the district court’s dismissal of claims for lack of standing in an action brought by the City of San Juan Capistrano asserting that the California Public Utility Commission’s ap proval of an electrical grid project violated the City’s due process rights.

Citing City of South Lake Tahoe v. California Tahoe Regional Planning Agency , 625 F.2d 231, 233 (9th Cir. 1980), and its progeny, the panel noted that this Circuit has consistently held that political subdivisions lack standing to challenge state law on constitutional grounds in federal court. Accordingly, the panel held that in t his case, the City could not challenge the Commission’s decision on due process grounds in federal court. The panel rejected the proposition that South Lake Tahoe bars only facial challenges to a statute or regulation. The panel held that South Lake Tah oe and this Circuit’s later cases relied only on the identity of the parties, not the procedural context in which those claims were raised.

The panel separately held that sovereign immunity barred the City’s claims because the Commission is an arm of the State of California. The panel held that the City waived its right to amend the complaint to add a commissioner because the City never asked the district court for such relief and nothing in the City’s district court filings

* This summary constitutes no part of the opinion of the court. It has been prepared by court staff for the convenience of the reader.C ITY OF S AN J UAN C APISTRANO V

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could be construed as a de finite request for leave to add a new party.

Concurring, Judge R. Nelson wrote separately to highlight the potential, in the appropriate case, to revisit the court’s per se rule that a political subdivision lacks standing to challenge state law on consti tutional grounds in federal
court.

COUNSEL

Michael J. Aguirre (argued) and Maria C. Severson

, Aguirre & Severson LLP, San Diego, California, for Plaintiff

Appellant.

Christofer Charles Nolan (argued), Arocles Aguilar, Jonathan C. Koltz, and Marcelo Po irier, California Public Utilities Commission, San Francisco, California, for Defendant

- Appellee.

Peder K

. Batalden (argued), Mitchell C. Tilner, and Bradley S. Pauley, Horvitz & Levy LLP, Burbank, California ; Michael J. Perez and Jeffrey A. Feasby, Perez Vaughn & Feasby Inc., San Diego, California; for Amicus Curiae San Diego Gas & Electric Company.4 C ITY OF S AN J UAN C APIST RANO V

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OPINION

R. NELSON, Circuit Judge:

The City of San Juan Capistrano contends the California Public Utility Commission’s approval of an electrical grid project violates the City’s due process rights. Following City of South Lake Tahoe v. California Tahoe Regional Planning Agency and its progeny, we hold the City cannot challenge the Commission’s decision on due process grounds in federal court. 625 F.2d 231, 233 (9th Cir. 1980). Moreover, the City’s claims are barred by Eleventh Amendment sovereign immunity. We therefore affir m.

I

The City of San Juan Capistrano (“the City”) alleges the California Public Utility Commission (“the Commission”) violated due process when it approved San Diego Gas & Electric’s (“the Utility”) project to replace a transmission line and upgrade a subs tation on property the Utility owns within the City. The City opposed the project “as a duly admitted party” in a Commission hearing. After the hearing, the Commission administrative law judge recommended approving an alternate project with less environm ental impact. But the assigned commissioner

— after ex parte meetings with the Utility

— recommended approval of the original project. The Commission agreed.

The Commission denied the City’s application for rehearing. See Cal. Pub. Util. Code § 1733 (denial by inaction). The City did not challenge the Commission’s decision in state court. Id. § 1756 (judicial review of Commission decisions).C ITY OF S AN J UAN C APISTRANO V

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Instead, the City sued the Commission in federal court alleging the ex parte meetings led the Commission to reject
t he administrative law judge’s recommendation. The City argued that by not giving “due consideration” to alternative projects as required by California environmental law, the Commission deprived the City of liberty and property interests over its environme ntal integrity, cultural integrity, and development, along with its procedural right to a fair hearing. The City sought to enjoin the Commission from mandating the project, a declaration that the Commission’s approval order is not enforceable against the City, and attorneys’ fees. The district court dismissed the suit with prejudice, holding that the City, as a political subdivision, lacked standing to sue the Commission and amendment would be futile. See South Lake Tahoe

, 625 F.2d at 233.

Plaintiff’s st anding and Defendant’s sovereign immunity are questions of law, which we review de novo. Daniel v. Nat’l Park Serv. , 891 F.3d 762, 765

– 66 (9th Cir. 2018).

II

Starting with South Lake Tahoe , 625 F.2d at 233, we have consistently held that political subdivi sions lack standing to challenge state law on constitutional grounds in federal court. 1 South Lake Tahoe offered no independent

1 We have held that a city, an airport authority, a health district, and a school district all lack standing to sue a pla nning authority, a city, and various state agency officials. See Okanogan Sch. Dist. #105 v. Superintendent of Pub. Instruction for Wash. , 291 F.3d 1161, 1165

– 66 (9th Cir. 2002); Palomar Pomerado Health Sys. v. Belshe , 180 F.3d 1104, 1106

– 09 (9th Cir. 199 9); Burbank

- Glendale

- Pasadena Airport Auth. v. City of Burbank , 136 F.3d 1360, 1362

– 64 (9th Cir. 1998); South Lake Tahoe , 625 F.2d at 233. Some of the failed claims were premised on allegations that state statutes, regulations, or procedures violated the6 C ITY OF S AN J UAN C APIST RANO V

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reasoning for its per se standing rule. But it cited Supreme Court and Second Circuit decisions that rejected cities’ constitu tional challenges to state law, characterizing political subdivisions as “creature[s]” and states as their “creators.” South Lake Tahoe , 625 F.2d at 233

– 34 (citing Williams v. Mayor & City Council of Baltimore , 289 U.S. 36, 40 (1933); City of Trenton v. N ew Jersey , 262 U.S. 182, 188 (1923); City of Newark v. New Jersey , 262 U.S. 192, 196 (1923); City of New York v. Richardson , 473 F.2d 923, 929 (2d Cir. 1973); Aguayo v. Richardson , 473 F.2d 1090, 1100

– 01 (2d Cir. 1973)). 2 Here, South Lake Tahoe , and the

suing subdivision’s due process rights. Palomar , 180 F.3d at 1106

– 09; Burbank , 136 F.3d at 1362

– 64. Other failed claims were based on allegations that a state statute or regulation conflicted with a federal statute, thereby violating the Supremacy Clause

. Okanogan , 291 F.3d
at 1165

– 66; Palomar , 180 F.3d at 1107; Burbank , 136 F.3d at 1363

– 64.

2 Other circuits have applied the Supreme Court’s decisions in Williams

, Trenton , and Newark differently, rejecting the proposition that these precedents announced a per se rule of standing and instead holding that cities and other political subdivisions, as a substantive matter, lack certain constitutional rights. The Fifth Circuit held that Williams and Trenton did not bar a school district from claiming a state po licy conflicted with a federal school meal program. It concluded that the Constitution alone does not interfere with the state

- subdivision relationship, but that, under the Supremacy Clause, a federal statute might give a political subdivision a cause of action. Rogers v. Brockette

, 588 F.2d 1057, 1068

– 69 (5th Cir. 1979); see also Branson Sch. Dist. RE

82 v. Romer , 161 F.3d 619, 628 (10th Cir. 1998) (“ Williams and Trenton stand only for the limited proposition that a municipality may not bring a constitut ional challenge against its creating state when the constitutional provision that supplies the basis for the complaint was written to protect individual rights, as opposed to collective or structural rights.”). The Second Circuit, citing “unique federalis m concerns,” recently adopted the reasoning of Rogers to allow political subdivision challenges to state law under the Supremacy Clause. Tweed

- New Haven Airport Auth. v. Tong , 930 F.3d 65, 72

– 73 (2d Cir. 2019). It distinguished its holdings in Aguayo , 47 3 F.2d at 1100, and Richardson

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d ecisions in Burbank

, Palomar , and Okanogan applying it, control as law of the circuit. Hart v. Massanari , 266 F.3d 1155, 1171 (9th Cir. 2001) (“Once a panel resolves an issue in a precedential opinion, the matter is deemed resolved, unless overruled by th e court itself sitting en banc, or by the Supreme Court.”).

Perhaps recognizing its uphill battle, the City characterizes South Lake Tahoe as a limited rule that bars challenges to the validity of statutes or regulations but does not bar the City’s challen ge to the Commission’s “conduct in an administrative proceeding.” It notes that “facial” challenges to statutes are generally disfavored and asserts that Trenton

, Williams

, South Lake Tahoe

, Burbank , and Palomar were all facial challenges to a statute or regulation

— barred because such challenges interfere with states’ internal political organization.

We reject the proposition that South Lake Tahoe bars only facial challenges to a statute or regulation. South Lake Tahoe and our later cases do not suggest that the standing analysis was dependent on a facial challenge to a statute or regulation rather than an administrative decision. Instead, our cases have relied only on the identity of the parties, not the procedural context in which those claims are rais ed. See,
e.g. , Palomar

, 180 F.3d at 1107 (“We must determine

473 F.2d at 929

— both cited by South Lake Tahoe

— as specific to Fourteenth Amendment claims, which present “different” considerations. Tong , 930 F.3d at 73 n.7. The Sixth, Seventh, and Eleventh Circuits have interpreted Williams

, Trenton , and Newark to hold that political subdivisions have no Fourteenth Amendment rights. S. Macomb Disposal Auth. v. Township of Washington , 790 F.2d 500, 504

– 05 (6th Cir . 1986); United States v. Alabama , 791 F.2d 1450, 1455 (11th Cir. 1986); Vill. of Arlington Heights v. Reg’l Transp. Auth. , 653 F.2d 1149, 1152

– 53 (7th Cir. 1981).8 C ITY OF S AN J UAN C APIST RANO V

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(1) whether [plaintiff] is a ‘political subdivision’ of the State of California, and if so, (2) whether, by suing the defendants named in this action, [plaintiff] brings this action against the state.”).

We therefore conclude that the City lacks standing to challenge the Commission’s decision on due process grounds in federal court.

III

We separately hold that sovereign immunity bars the City’s claims because the Commission is an arm of the State of California. Pennhurst State Sch. & Hosp. v. Halderman

, 465 U.S. 89, 100 (1984); see Air Transp. Ass’n of Am. v. Pub. Utils. Comm’n of Cal. , 833 F.2d 200, 203

– 04 (9th Cir. 1987) (holding the Commission, specifically, is entitled to sovereig n immunity). The Eleventh Amendment bars claims against a state

— including its agencies

— in federal
court. Pennhurst , 465 U.S. at 97

– 100.

The City concedes on appeal the Commission is entitled to sovereign immunity. But it argues for leave to amend its

co mplaint to add claims against a commissioner under Ex parte Young , 209 U.S. 123 (1908), which allows suits seeking “prospective relief” against a state official who has a fairly direct connection to an “ongoing violation of federal law.” Ariz. Students’ A ss’n v. Ariz. Bd. of Regents , 824 F.3d 858, 865 (9th Cir. 2016) (citing Ex parte Young

, 209 U.S. at 155

– 56)

. Arizona Students’ Association suggests the City should generally be allowed leave to amend its complaint to add an individual official as a party, assuming claims otherwise satisfy Ex parte Young ’s requirements. Id. at 871.

Below, however, the City argued that the Eleventh Amendment did not apply to its claims against theC ITY OF S AN J UAN C APISTRANO V

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Commission, only briefly suggesting the City could amend its complaint consis tent with Ex parte Young if it were wrong. The City never asked for leave to add a commissioner as a party, only to “add facts developed in [its] analysis and investigation” related to the ex parte meetings. Nothing in the City’s district court filings c an be construed as a definite request for leave to add a new party. Indeed, at argument before us, the City conceded it never asked the district court for such relief, and only requested such relief in its Reply Brief.

The City has therefore waived its ri ght to amend. See Okwu v. McKim , 682 F.3d 841, 846 n.4 (9th Cir. 2012) (“[Plaintiff] has waived the argument that she should be allowed to amend her complaint to re

- style some of her § 1983 claims .

. . under the Ex Parte Young exception .

. . . She did not make that argument to the district court or in either of her briefs on appeal.”); Walsh v. Nev. Dep’t of Human Res. , 471 F.3d 1033, 1037 (9th Cir. 2006) (finding sovereign immunity issue forfeited on appeal where defendant failed to re

- assert a claim f or injunctive relief already in her complaint in response to the state’s motion to dismiss).

IV

The district court properly dismissed the City’s claims because the City lacks standing and the claims are barred by the Eleventh Amendment.

AFFIRMED

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R. NELSON , Circuit Judge, concurring:

Today, the panel reaffirms the court’s established per se rule that a political subdivision lacks standing to challenge state law on constitutional grounds in federal court. I write separately to highlight the potential, in the appropriate case, to revisit the court’s per se rule in light of intervening caselaw from other circuit courts and the Supreme Court.

Nearly 40 years ago, we adopted a per se “standing” bar on a political subdivision challenging state law in federa l
court. City of South Lake Tahoe v. Cal. Tahoe Reg’l Planning Agency

, 625 F.2d 231, 233 (9th Cir. 1980) (analyzing “whether the City

. . . ha[s] standing to bring this case”). We have not deviated from that per se bar since. See
supra at 5 n.1. When South Lake Tahoe was decided, this standing terminology made some sense. Indeed, one of the first cases to address this issue held that a city’s officials were “without standi ng to invoke the protection of the Federal Constitution.” Williams v. Mayor and City Council of Balt. , 289 U.S. 36, 47 (1933). Then, in Coleman v. Miller

, the Supreme Court branded the result of Williams and related cases as a matter of “standing.” See 307 U.S. 433, 441 (1939).

Since these cases, however, the meaning of “standing” has changed. When Williams and Coleman were decided, “standing was not seen as a preliminary or threshold question” as it is today. Rogers v. Brockette , 588 F.2d 1057, 1070 ( 5th Cir. 1979). Instead, “[a] party had standing or a ‘right to sue’ if it was correct in its claim on the merits that the statutory or constitutional provision in question protected its interests[.]” Id. That is why the Williams line of cases do
not me ntion the elements we now associate with Article III standing, like injury

- in

- fact, causation, and redressability. Lujan v. Defenders of Wildlife , 504 U.S. 555, 560 (1992);C ITY OF S AN J UAN C APISTRANO V

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see also Indian Oasis

– Baboquivari Unified Sch. Dist. v. Kirk ( Indian Oasis I ) , 91 F.3d 1240, 1246, 1250 (9th Cir. 1996) (Reinhardt, J., dissenting) ( “[A] per se bar on standing can[not] be reconciled with Lujan or literally dozens of other modern standing cases.”), vacated for reh’g en banc and dismissed on other grounds , 109 F.3d 634 ( 9th Cir. 1997) (en banc).

Despite this history, we have imported “standing” from Williams and Coleman and consistently used the term in a string of cases as if it holds our modern understanding of the word

— that of a jurisdictional prerequisite that must be satisfied prior to reviewing a claim on the merits. In South Lake Tahoe , for example, we held that the question of political subdivision standing went to our subject

- matter jurisdiction. 625 F.2d at 233. Then, in Palomar Pomerado Health System v. Belshe

— decided after Lujan

— we reiterated the doctrine as a “jurisdictional issue.” 180 F.3d 1104, 1107 (9 th Cir. 1999).

Since we adopted our per se standing rule, however, other circuits have adopted different theories in addressing political subdivision’s right to sue a state in federal court. The Tenth Circuit, for example, has treated it as a standing
que stion, barring due process claims, but not Supremacy Clause claims. See Branson Sch. Dist. RE

- 82 v. Romer

, 161 F.3d 619, 628

– 30 (10th Cir. 1998). The Second and Fifth Circuits, by contrast, have not treated it as a standing issue, but have also barred du e process claims and allowed Supremacy Clause challenges. E.g.

, Tweed

- New Haven Airport Auth. v. Tong , 930 F.3d 65, 72

– 73 (2d Cir. 2019) (allowing a political subdivision to pursue a Supremacy Clause claim); Rogers , 588 F.2d at 1069

– 71 (same); see also St ar

- Kist Foods, Inc. v. County of Los Angeles , 42 Cal.3d 1, 6

– 10 (1986) (rejecting South Lake Tahoe ’s per se “standing”12 C ITY OF S AN J UAN C APIST RANO V

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bar and allowing a claim under the Commerce Clause). And the Second, Fifth, and Tenth Circuit approaches remain faithful to the driving force behind our rule

— the unique relationship between state subdivisions and their creating
states. E.g.

, Rogers , 588 F.2d at 1070.

The Supreme Court has barred due process and contract clause claims by political subdivisions against states in federal cou rt. City of Trenton v. State of New Jersey

, 262 U.S. 182, 188 (1923) (“The power of the State, unrestrained by the contract clause or the Fourteenth Amendment, over the rights and property of cities held and used for ‘governmental purposes’ cannot be ques tioned.”) (citation omitted). But the Supreme Court has not yet addressed a claim under the Supremacy Clause and thus, the split between our court and our sister courts has not been resolved. The Supreme Court recently suggested that all claims by politic al subdivisions are barred, noting that “[p]olitical subdivisions of States

— counties, cities, or whatever

— never were and never have been considered as sovereign entities.” Ysursa v. Pocatello Educ. Ass’n

, 555 U.S. 353, 362 (2009). The Court then compared “political subdivision[s]” to “private corporation[s],” noting that a corporation “enjoys constitutional protections” while a political subdivision “has no privileges or immunities under the federal constitution which it may invoke in opposition to the wi ll of its creator.” Id. at 362

– 63 (internal quotations omitted).

Given the differing theories advanced by other courts and the significant change in the meaning of “standing” since we decided South Lake Tahoe , it is worth this court’s consideration to rev isit our rationale for our per se rule (which would have to occur en banc) to decide whether we remain on the correct path. At least three of our colleaguesC ITY OF S AN J UAN C APISTRANO V

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have previously suggested such a course. See Burbank

Glendale

- Pasadena Airport Auth. v. City of B urbank

, 136 F.3d 1360, 1365 (9th Cir. 1998) (Kozinksi, J., concurring); Palomar , 180 F.3d at 1109, 1111 (Hawkins, J., concurring); Indian Oasis I , 91 F.3d at 1246, 1250 (Reinhardt, J., dissenting). To be clear, this case does not warrant en banc review be cause all circuit courts and the Supreme Court bar due process claims. Trenton , 262 U.S.
at 188; see also supra at 6 n.2.

Consistent with the Supreme Court’s recent direction in Ysursa , it may well be that our per se rule, even as an outlier among the circuit courts, is the correct one. But the underlying rationale still matters. Whether t he rule is properly understood as a per se bar on “standing” may not be just a theoretical discussion but could have different implications based on different constitutional provisions. An inquiry informed by the type of constitutional claim at issue and how that claim affects the state

- po litical subdivision relationship may provide a basis for allowing suits based on certain constitutional provisions while disallowing others. Branson , 161 F.3d at 628

– 29. But our current per se standing rule, while providing the benefit of a clear bright line, does not permit full consideration of important constitutional questions in future cases. Therefore, in the appropriate case, we should revisit en banc whether our per se standing bar is correct.