Court Opinion

ID: 4673245
Source: CourtListenerOpinion
Date Created: 2021-03-31 17:00:41.627912+00
Date Added: 2024-06-11T08:03:12.420293
License: Public Domain

FOR PUBLICATION

  UNITED STATES COURT OF APPEALS
       FOR THE NINTH CIRCUIT

FRIENDS OF THE EARTH, a                   No. 19-16696
Washington, D.C. non-profit
corporation, on behalf of the general        D.C. No.
public; CENTER FOR FOOD SAFETY, a         3:17-cv-03592-
California non-profit corporation, on           RS
behalf of the general public,
                Plaintiffs-Appellants,
                                            OPINION
                 and

ORGANIC CONSUMERS ASSOCIATION,
a Minnesota non-profit corporation,
on behalf of the general public,
                             Plaintiff,

                  v.

SANDERSON FARMS, INC., a
Mississippi corporation,
                Defendant-Appellee.

      Appeal from the United States District Court
         for the Northern District of California
       Richard Seeborg, District Judge, Presiding

        Argued and Submitted October 13, 2020
              San Francisco, California

                  Filed March 31, 2021
2         FRIENDS OF THE EARTH V. SANDERSON FARMS

        Before: M. Margaret McKeown and Jacqueline H.
         Nguyen, Circuit Judges, and Robert H. Whaley, *
                         District Judge.

                  Opinion by Judge McKeown

                          SUMMARY **

                   Organizational Standing

    The panel affirmed the district court’s dismissal for lack
of organizational standing of an action brought by two public
interest groups (“Advocacy Groups”) against Sanderson
Farms, Inc., a major poultry producer, alleging false
advertising related to the use of antibiotics.

    To establish organizational standing, the Advocacy
Groups needed to show that the challenged conduct
frustrated their organization missions and that they diverted
resources to combat that conduct. The panel held that the
Advocacy Groups failed to establish standing when they
failed to show a diversion of their resources to combat
Sanderson’s advertising. Once Sanderson’s misleading
advertisements were brought to the attention of the
Advocacy Groups, they simply continued doing what they
were already doing – publishing reports on and informing

    *
      The Honorable Robert H. Whaley, United States District Judge for
the Eastern District of Washington, sitting by designation.
    **
       This summary constitutes no part of the opinion of the court. It
has been prepared by court staff for the convenience of the reader.
       FRIENDS OF THE EARTH V. SANDERSON FARMS            3

the public of various companies’ antibiotic practices. There
was no evidence of any diversion of resources.

    The panel rejected the Advocacy Groups’ argument that
their California Unfair Competition Law claims should
nevertheless move forward because they challenged
Sanderson’s husbandry practices, not just its advertising.
The panel held that the Unfair Competition Law claim failed
because it was tethered to Sanderson’s advertisements.

                       COUNSEL

Paige Tomaselli (argued), Greenfire Law PC, Berkeley,
California; Gretchen Elsner, Elsner Law & Policy LLC,
Santa Fe, New Mexico; for Plaintiffs-Appellants.

Michael A. Glick (argued), Gregg F. LoCascio, Paul J.
Weeks, and Erin E. Cady, Kirkland & Ellis LLP,
Washington, D.C., for Defendant-Appellee.
4      FRIENDS OF THE EARTH V. SANDERSON FARMS

                        OPINION

McKEOWN, Circuit Judge:

     Resolution of this appeal rests on whether two public
interest groups, Friends of the Earth and Center for Food
Safety (collectively, “the Advocacy Groups”), established
organizational standing in their suit against Sanderson
Farms, Inc., a major poultry producer, for false advertising
related to the use of antibiotics. After nearly two years of
litigation and nine months of fact discovery, Sanderson
challenged whether the Advocacy Groups achieved standing
by diverting resources to combat the allegedly misleading
representations.     In a thorough evaluation of the
jurisdictional evidence, the district court dismissed the
Advocacy Groups’ claims for lack of organizational
standing. We affirm.

                     BACKGROUND

    The missions of the Advocacy Groups relate to the
protection of human health, animal health, and the
environment, including reduction of the routine use of
antibiotics in animal agriculture. The Advocacy Groups
advance their missions through myriad activities, including
by informing consumers about the downsides of routine
antibiotic use and by pressuring restaurants to stop sourcing
meat from producers that routinely use antibiotics.

    Though many chicken producers have stopped routine
antibiotic practices, Sanderson has continued to use and
defend its use of antibiotics. Sanderson supplies its chicken
to, among others, Darden Restaurants, which owns Olive
Garden. Because it purchased chickens raised by Sanderson,
Olive Garden received an F grade in the Advocacy Groups’
Chain Reaction reports, which rank “restaurant chains on
       FRIENDS OF THE EARTH V. SANDERSON FARMS               5

their antibiotic policies” and practices. On August 1, 2016,
the Advocacy Groups became aware that Sanderson
marketed and advertised its chicken products as “100%
Natural” and ran advertisements stating that there were “[n]o
antibiotics to worry about here.” As part of its work to
combat routine antibiotic use, Center for Food Safety linked
on Facebook to an August 1, 2016 New York Times article
about Sanderson’s defense of its antibiotic use and wrote that
Sanderson “lag[ged] behind many in the industry” on
protecting human health and animal well-being.

    The next year, the Advocacy Groups sued Sanderson
under California’s Unfair Competition Law (“UCL”), Cal.
Bus. & Prof. Code § 17200 et seq., and False Advertising
Law, id. § 17500 et seq., for false advertising about
Sanderson’s chicken products being “100% Natural.” After
the first amendment to the complaint, Sanderson moved to
dismiss, raising a facial challenge to the Advocacy Groups’
organizational standing. The district court denied the motion
because Friends of the Earth alleged that it had devoted
additional time and resources to counteract Sanderson’s
misrepresentations and Center for Food Safety alleged that
it had diverted resources away from its government
watchdog work to respond to Sanderson’s advertising.

    Significant discovery followed. The Advocacy Groups
produced the Chain Reaction reports, press releases, social
media posts, action alerts emails, petitions, and the purported
costs associated with these activities. At the close of fact
discovery, Sanderson again moved to dismiss, this time
raising a factual challenge to the Advocacy Groups’
organizational standing.

    After review of the record, the district court dismissed
the case for lack of subject matter jurisdiction, finding that
the Advocacy Groups had not diverted resources to combat
6      FRIENDS OF THE EARTH V. SANDERSON FARMS

the advertisements; rather, the activities were continuations
of their ongoing work to discourage routine antibiotic use.

                        ANALYSIS

I. THE ADVOCACY GROUPS FAILED TO ESTABLISH
   STANDING THROUGH A DIVERSION OF RESOURCES TO
   COMBAT SANDERSON’S ADVERTISING

    To establish organizational standing, the Advocacy
Groups needed to show that the challenged conduct
frustrated their organizational missions and that they
diverted resources to combat that conduct. Am. Diabetes
Ass’n v. U.S. Dep’t of the Army, 938 F.3d 1147, 1154
(9th Cir. 2019). Only the diversion of resources component
is at issue on appeal. Organizations divert resources when
they “alter[] their resource allocation to combat the
challenged practices,” but not when they go about their
“‘business as usual.’” Id. (quoting Nat’l Council of La Raza
v. Cegavske, 800 F.3d 1032, 1040–41 (9th Cir. 2015)).

     Diversion of resources has been found when
organizations “expended additional resources that they
would not otherwise have expended, and in ways that they
would not have expended them.” Nat’l Council of La Raza,
800 F.3d at 1040. This requirement was satisfied, for
example, when an organization designed and disseminated
literature to redress the effects of the challenged
discrimination, Fair Hous. of Marin v. Combs, 285 F.3d 899,
905 (9th Cir. 2002), and when an organization started new
campaigns targeting discriminatory roommate preference
practices, Fair Hous. Council of San Fernando Valley v.
Roommate.com, LLC, 666 F.3d 1216, 1219 (9th Cir. 2012).
In contrast, courts have found that merely continuing
ongoing activities does not satisfy this requirement. See
NAACP v. City of Kyle, 626 F.3d 233, 238–39 (5th Cir.
       FRIENDS OF THE EARTH V. SANDERSON FARMS               7

2010) (holding that there was no injury sufficient for
organizational standing where the resource expenditures
were litigation-related or were no different than the
organizations’ ongoing lobbying activities); Fair Hous.
Council of Suburban Phila. v. Montgomery Newspapers,
141 F.3d 71, 78 (3d Cir. 1998) (holding that organizational
standing was not satisfied where the activities were “part of
the [organization]’s normal day-to-day operations”).

     Two temporal bookends put into perspective the timing
of the advocacy here. Because the Advocacy Groups did not
learn of Sanderson’s alleged misrepresentations until August
1, 2016, resources expended before that date are not
pertinent. And activities undertaken after suit was filed in
June 2017, such as expending resources on the litigation and
litigation publicity, do not confer standing. See La
Asociacion de Trabajadores de Lake Forest v. City of Lake
Forest, 624 F.3d 1083, 1088 (9th Cir. 2010) (noting that a
plaintiff “cannot manufacture the injury by incurring
litigation costs”). Nor does the theory of ongoing injury hold
water if the Advocacy Groups have not established injury in
the first place.

     The question, then, is whether the Advocacy Groups’
activities were “business as usual” and a continuation of
existing advocacy, or whether they were an affirmative
diversion of resources to combat Sanderson’s
representations. Well before August 2016, the Advocacy
Groups undertook various initiatives to further their goal of
reducing routine antibiotic use in animal agriculture. Since
at least 2014, the mission of Friends of the Earth has entailed
“encouraging buyers not to purchase meat that was raised at
some point in the supply chain with routine antibiotics,” and
in 2015, the organization endeavored to convince Sanderson
buyers to source from other suppliers. Similarly, one of the
8       FRIENDS OF THE EARTH V. SANDERSON FARMS

core missions of Center for Food Safety is “limiting use of
antibiotics in animal agriculture.”

    In examining the extensive discovery, it turns out that
during the relevant period—August 2016 to June 2017—the
Advocacy Groups did not publish action alerts or other
advice to their members targeting the advertising; did not
address Sanderson’s advertising in any campaign, press
release, blog post, or other communication; did not petition
Sanderson; and did not protest Sanderson’s advertising.
This notable absence of evidence led the district court to
conclude that the Advocacy Groups “failed to produce
evidence demonstrating they expended additional resources
to address Sanderson’s advertisements, as opposed to its
practices.” 1 Once Sanderson’s misleading advertisements
were brought to the attention of the Advocacy Groups, they
simply continued doing what they were already doing—
publishing reports on and informing the public of various
companies’ antibiotic practices. This evidentiary void
cannot be filled by emails in which the Advocacy Groups’
employees shared articles about Sanderson’s practices and
deceptive advertisements, querying internally whether
something should be done; evidence of any diversion of
resources remains missing.

    The Advocacy Groups attempted to distinguish
Sanderson-related expenditures from ongoing activities by
pointing to post-discovery information offered by their
designated representatives, Marcelin Keever and Rebecca

    1
      Although the Advocacy Groups make much of this statement, we
do not read the district court to have required the Advocacy Groups to
mention Sanderson’s advertisements. Rather, the lack of any such
reference supported the district court’s finding regarding the absence of
evidence of diverted resources.
       FRIENDS OF THE EARTH V. SANDERSON FARMS              9

Spector. Keever stated that “because of [Sanderson’s] . . .
advertising . . . , Friends of the Earth used its Facebook
account to publicize the truth about antibiotics and chicken
. . . .”  Spector offered that because of Sanderson’s
advertising, Center for Food Safety had to provide greater
detail in its publications and changed its tone in one of its
blog posts. She asserted that Sanderson’s advertising led to
a Center for Food Safety employee spending “at least
25 percent more time educating the public about why
[Sanderson]’s advertising, specifically its messaging on
antibiotics, was misleading and 25 percent less time on
federal policy work.”

    The earlier depositions of these representatives told a
different story. Keever admitted that Friends of the Earth’s
advocacy activities were not “because of” Sanderson’s
advertising, and Spector admitted that the advertising did not
“require [Center for Food Safety] to do anything at all.” And
more damning was the admission by Friends of the Earth
that, even without the advertising, the organization would
have continued its pressure campaign to get restaurants to
switch from Sanderson as a supplier. The district court laid
out the previous “damaging” testimony where the Advocacy
Groups admitted that “they did not divert resources because
of Sanderson’s advertising and state[d] they would have
undertaken the same advocacy activities—including
advocating against the use of antibiotics in animal
agriculture and discouraging consumers from purchasing
meat raised with routine antibiotics—even if Sanderson had
never aired the challenged advertisements.”

    The court homed in on the two declarations because of
the conflict with the depositions and the other discovery, and
because none of the other evidence supported a traceable
link between the challenged advertisements and the
10     FRIENDS OF THE EARTH V. SANDERSON FARMS

advocacy activities. The district court found “suspect” the
claim about a staff member spending 25% more time
because of Sanderson’s advertising and found the figure
“uncorroborated in the record.” The district court referenced
the sham affidavit rule in passing and concluded that “[t]he
Keever and Spector Declarations, to the extent they allege
Plaintiffs[] diverted 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.”

    The Advocacy Groups dispute the district court’s
approach to resolving the conflicting evidence, arguing that
it erred in not applying the stringent requirements of the
sham affidavit rule or in not holding an evidentiary hearing.
The court’s perspective, however, was consistent with the
rules governing a factual challenge to standing under Rule
12(b)(1). Once Sanderson contested “the truth of the
plaintiff[s’] factual allegations,” the Advocacy Groups had
the burden to “support [their] jurisdictional allegations with
‘competent proof,’” Leite v. Crane Co., 749 F.3d 1117, 1121
(9th Cir. 2014) (quoting Hertz Corp. v. Friend, 559 U.S. 77,
96–97 (2010)), and, of course, had the burden of establishing
subject matter jurisdiction. See Safe Air for Everyone v.
Meyer, 373 F.3d 1035, 1039 (9th Cir. 2004) (“[T]he party
opposing the motion must furnish affidavits or other
evidence necessary to satisfy its burden of establishing
subject matter jurisdiction.”). Importantly, because the
jurisdictional disputes were not intertwined with the merits
of the claim and because “the existence of jurisdiction
turn[ed] on disputed factual issues,” it fell to the district
court to “resolve those factual disputes itself.” Leite,
749 F.3d at 1121–22, 1122 n.3. Indeed, that is exactly what
the district court did, and we review its factual findings for
       FRIENDS OF THE EARTH V. SANDERSON FARMS            11

clear error. Kingman Reef Atoll Invs., LLC v. United States,
541 F.3d 1189, 1195 (9th Cir. 2008).

    The district court’s reference to the sham affidavit rule
does not change our conclusion. On a summary judgment
motion, the sham affidavit rule permits courts to set aside
contradictory testimony, provided certain conditions are
met. Yeager v. Bowlin, 693 F.3d 1076, 1080 (9th Cir. 2012).
The rule is “‘applied with caution’ because it is in tension
with the principle that the court is not to make credibility
determinations when granting or denying summary
judgment.” Id. (quoting Van Asdale v. Int’l Game Tech.,
577 F.3d 989, 998 (9th Cir. 2009)).

    Notably, a factual jurisdictional challenge under Rule
12(b)(1) does not provide the same framework or procedural
protections for plaintiffs as review at summary judgment.
See Kingman Reef, 541 F.3d at 1195; CNA v. United States,
535 F.3d 132, 140 (3d Cir. 2008) (recognizing that review at
summary judgment provides more procedural protections
for plaintiffs than does review under Rule 12(b)(1), because
under Rule 12(b)(1) the district court “may independently
evaluate the evidence regarding disputes over jurisdictional
facts”); Morrison v. Amway Corp., 323 F.3d 920, 924–25
(11th Cir. 2003) (similar). Thus, in resolving factual
disputes going to jurisdiction, the district court was not
required to follow the strictures of the sham affidavit rule.

    After nearly two years and mountains of discovery, the
Advocacy Groups could meaningfully offer only a single
conclusory, contradictory, and uncorroborated statement as
evidence of diverted resources. The district court weighed
the evidence and concluded that the various activities
proffered by the Advocacy Groups “were continuations of
non-Sanderson-specific initiatives [the Advocacy Groups]
were undertaking in furtherance of their missions to address
12     FRIENDS OF THE EARTH V. SANDERSON FARMS

antibiotic use generally.” We discern no error in that
conclusion. See Adler v. Federal Republic of Nigeria,
107 F.3d 720, 728 (9th Cir. 1997) (“A district court has
considerable latitude in devising the procedures it will
follow to ferret out the facts pertinent to jurisdiction.”
(internal quotation marks omitted)).

II. THE UCL CLAIM FAILS BECAUSE IT IS TETHERED TO
    SANDERSON’S ADVERTISEMENTS

    The Advocacy Groups argue that their UCL claim should
nevertheless move forward because they challenged
Sanderson’s husbandry practices—not just its advertising.
This argument fails. Throughout the litigation, and as the
Advocacy Groups acknowledged at oral argument, all parts
of the UCL claim have related to Sanderson’s
representations of its chicken products as “100% Natural.”
Thus, the husbandry practices are not relevant in their own
right, but only as related to the claimed misrepresentations.
For this reason, the UCL claim is entirely tethered to the
representations. Consequently, no claim survives dismissal.

     AFFIRMED.