Court Opinion

ID: 3204230
Source: CourtListenerOpinion
Date Created: 2016-05-17 20:01:14.092235+00
Date Added: 2024-06-11T12:21:46.539964
License: Public Domain

FILED
                           NOT FOR PUBLICATION
                                                                           MAY 17 2016
                    UNITED STATES COURT OF APPEALS                      MOLLY C. DWYER, CLERK
                                                                         U.S. COURT OF APPEALS

                            FOR THE NINTH CIRCUIT

MONSTER BEVERAGE                                 No. 13-57128
CORPORATION, a Delaware corporation
and MONSTER ENERGY COMPANY, a                    D.C. No. 5:13-cv-00786-VAP-OP
Delaware corporation,

              Plaintiffs - Appellants,           MEMORANDUM*

 v.

DENNIS HERRERA, in his official
capacity as City Attorney of San
Francisco,

              Defendant - Appellee.

                   Appeal from the United States District Court
                       for the Central District of California
                   Virginia A. Phillips, District Judge, Presiding

                        Argued and Submitted April 7, 2016
                               Pasadena, California

Before: FARRIS, SENTELLE,** and M. SMITH, Circuit Judges.

        *
             This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
       **
            The Honorable David Bryan Sentelle, Senior Circuit Judge for the
U.S. Court of Appeals for the District of Columbia Circuit, sitting by designation.
      Monster Beverage Corporation and Monster Energy Company (collectively,

Monster) appeal the district court’s judgment dismissing their suit against the City

Attorney of San Francisco, Dennis Herrera, in his official capacity. Because this suit

implicates a concurrent state court proceeding against Monster, we resolve this appeal

under the abstention doctrine from Younger v. Harris, 401 U.S. 37 (1971), as well as

the Anti-Injunction Act (AIA), 28 U.S.C. § 2283.

      Monster filed its complaint against the City Attorney in the Central District of

California on April 29, 2013, months after the City Attorney sent Monster a letter

announcing that he had begun an investigation into some of Monster’s energy drinks.

After Monster filed its federal complaint, the People of California, by and through the

City Attorney, filed a complaint against Monster Beverage Company in San Francisco

Superior Court. The complaint alleged a single cause of action that Monster’s energy

drinks and marketing constitute unlawful, deceptive, and misleading business

practices and acts under California’s Unfair Competition Law. Monster, relying on

preemption, subsequently removed the state court proceeding. The district court held

that removal was improper because the state court claims were not completely

preempted and remanded the matter to the state court on September 18, 2013.

      Meanwhile, in its federal suit, Monster sought to enjoin the City Attorney from

enforcing, or directing the enforcement of, the provisions of Cal. Bus. & Prof’l Code

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§§ 17200 and 17500 with respect to Monster’s energy drinks. Monster also sought

a declaratory judgment that the City Attorney’s investigation and pre-litigation

demand letter were impermissible and preempted by the Food, Drug, and Cosmetic

Act (FDCA), subject to the doctrine of primary jurisdiction, and violated, among other

constitutional provisions, the First and Fourteenth Amendments. In granting the City

Attorney’s motion to dismiss, the district court ruled that the Younger abstention

doctrine properly applied to this case. See Younger v. Harris, 401 U.S. 37 (1971). The

district court also held that the requested relief was barred by the AIA.

      We review de novo whether Younger abstention and the AIA apply. ReadyLink

Healthcare, Inc. v. State Comp. Ins. Fund, 754 F.3d 754, 758 (9th Cir. 2014);

California v. Randtron, 284 F.3d 969, 974 (9th Cir. 2001). Where the AIA permits an

injunction, we review for an abuse of discretion the district court’s decision whether

or not to grant it. Randtron, 284 F.3d at 974. We have jurisdiction pursuant to 28

U.S.C. § 1291 and we affirm.

      1. Younger abstention requires federal courts to refrain from exercising

jurisdiction and applies to only three classes of state proceedings: (1) state criminal

prosecutions; (2) certain civil enforcement actions; and (3) civil proceedings in

furtherance of a state court’s ability to perform its judicial functions.       Sprint

Commc’ns, Inc. v. Jacobs, 134 S. Ct. 584, 588 (2013). As germane to this proceeding,

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Younger abstention requires an (1) ongoing state judicial proceeding that

(2) implicates important state interests and (3) provides an adequate opportunity to

raise federal claims, which (4) the federal court action would enjoin.

AmerisourceBergen Corp. v. Roden, 495 F.3d 1143, 1148-49 (9th Cir. 2007).

      The Younger abstention doctrine applies in this case. There was an ongoing

state proceeding when the district court considered the motion to dismiss at issue.

Although Monster argued otherwise, “Younger abstention is required . . . when state

court proceedings are initiated before any proceedings of substance on the merits have

taken place in the federal court.” M&A Gabaee v. Cmty. Redevelopment Agency, 419

F.3d 1036, 1040 (9th Cir. 2005) (quoting Haw. Hous. Auth. v. Midkiff, 467 U.S. 229,

238 (1984)) (emphasis omitted). Moreover, for purposes of Younger abstention, a

state proceeding is “‘initiated’ no later than when it is filed.” Id. Monster argues that

this Court should determine that the state proceeding became “ongoing” only as of the

date of remand. We disagree. Adopting Monster’s position would encourage

gamesmanship. We further note that although the state court proceeding initially

included only Monster Beverage Company, Younger abstention applies as Monster

Energy’s interests are “so intertwined” with those of Monster Beverage Company that

direct interference with the state court proceeding was inevitable. See Green v. City

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of Tucson, 255 F.3d 1086, 1100 (9th Cir. 2001) (en banc), overruled on other grounds

by Gilbertson v. Albright, 381 F.3d 965 (9th Cir. 2004) (en banc).

      Furthermore, Younger abstention is appropriate as the People of California have

a strong interest in ensuring that a company providing consumer products is doing so

in a manner consistent with the state’s unfair business practices laws. See Commc’ns

Telesystems Int’l v. Cal. Pub. Util. Comm’n, 196 F.3d 1011, 1017 (9th Cir. 1999)

(noting that states have an important interest in protecting consumers from unfair and

deceptive business practices); see also Meredith v. Oregon, 321 F.3d 807, 818 (9th

Cir. 2003) (noting that protecting residents’ safety is a vital state interest). Moreover,

Monster’s attempt to invoke express preemption and primary jurisdiction is exactly

what the “adequate opportunity” requirement is intended to obviate. State court

litigation generally provides adequate opportunity for a party like Monster to raise

federal questions. In short, Younger abstention properly applies here.

      2. The Anti-Injunction Act “prohibits the federal courts from interfering with

proceedings in the state courts.” Chick Kam Choo v. Exxon Corp., 486 U.S. 140, 145

(1988). The Act provides:

      A court of the United States may not grant an injunction to stay
      proceedings in a State court except as expressly authorized by Act of
      Congress, or where necessary in aid of its jurisdiction, or to protect or
      effectuate its judgments.

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28 U.S.C. § 2283. Likewise, the Act prohibits courts from issuing declaratory

judgments that interfere with state court proceedings. See Randtron, 284 F.3d at 975.

      The proposed injunction at issue falls within the language of the Anti-Injunction

Act. See 28 U.S.C. §2283; see also, e.g., Denny’s, Inc. v. Cake, 364 F.3d 521, 530 (4th

Cir. 2004) (“[N]othing in the Act confines its bar to situations in which the federal

plaintiff requests injunctive relief after the state suit has been filed.” (emphasis

omitted)). This injunction, along with the requested declaratory judgment, effectively

would stay the proceedings in the state court action that the City Attorney brought on

behalf of the People of California. Although Monster argued otherwise, the exceptions

to the Anti-Injunction Act are inapplicable in this case. With respect to the district

court ruling, the court based its decision to apply the Anti-Injunction Act on the

grounds of “comity, equity, and federalism.” Monster Beverage Corp. v. Herrera, No.

EDCV 13–00786–VAP (Opx) (C.D. Cal. Dec. 16, 2013) (order granting motion to

dismiss), slip op. at 21. Considering these principles in applying the Anti-Injunction

Act was not an abuse of discretion. Cf. Brother Records, Inc. v. Jardine, 432 F.3d 939,

944 (9th Cir. 2005). Accordingly, we will not reverse the district court.

      As a final matter, the parties both request that we take judicial notice of certain

documents in the state court proceeding brought by the City Attorney on behalf of the

                                           6
People of California. Because those documents are not required for the disposition of

this case, we deny the parties’ respective motions.

      For the foregoing reasons, we affirm the district court.

AFFIRMED.

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