Court Opinion

ID: 4099126
Source: CourtListenerOpinion
Date Created: 2016-11-17 18:01:24.330804+00
Date Added: 2024-06-11T07:46:01.499797
License: Public Domain

FOR PUBLICATION

  UNITED STATES COURT OF APPEALS
       FOR THE NINTH CIRCUIT

STATE OF MISSOURI EX REL. CHRIS         No. 14-17111
KOSTER, Attorney General; STATE
OF NEBRASKA EX REL. JON BRUNING,           D.C. No.
Attorney General; STATE OF              2:14-cv-00341-
OKLAHOMA EX REL. E. SCOTT                 KJM-KJN
PRUITT, Attorney General; STATE OF
ALABAMA EX REL. LUTHER
STRANGE, Attorney General;                OPINION
COMMONWEALTH OF KENTUCKY EX
REL. JACK CONWAY, Attorney
General; TERRY E. BRANSTAD,
Governor of State of Iowa,
               Plaintiffs-Appellants,

                 v.

KAMALA D. HARRIS, in her official
capacity as Attorney General of the
State of California; KAREN ROSS, in
her official capacity as Secretary of
the California Department of Food
and Agriculture,
                Defendants-Appellees,

                and

HUMANE SOCIETY OF THE UNITED
STATES; ASSOCIATION OF
CALIFORNIA EGG FARMERS,
   Intervenor-Defendants-Appellees.
2        STATE OF MISSOURI EX REL.KOSTER V. HARRIS

         Appeal from the United States District Court
            for the Eastern District of California
         Kimberly J. Mueller, District Judge, Presiding

            Argued and Submitted October 19, 2016
                  San Francisco, California

                     Filed November 17, 2016

    Before: Susan P. Graber and Mary H. Murguia, Circuit
     Judges, and Raner C. Collins,* Chief District Judge.

                     Opinion by Judge Graber

                            SUMMARY**

                             Civil Rights

    The panel affirmed the district court’s dismissal of an
action for lack of parens patriae standing but remanded with
instructions to dismiss without prejudice.

    Plaintiffs are six states seeking to block enforcement of
California laws and regulations prescribing standards for the
conditions under which chickens must be kept in order for
their eggs to be sold in the state. Plaintiffs sought to block
the laws before they took effect. The panel held that the

     *
      The Honorable Raner C. Collins, Chief United States District Judge
for the District of Arizona, 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.
       STATE OF MISSOURI EX REL.KOSTER V. HARRIS                3

plaintiffs failed to establish parens patriae standing because:
(1) they failed to articulate an interest apart from the interests
of private egg producers, who could have filed an action on
their own behalf; (2) the allegations about potential economic
effects of the challenged laws, after implementation, were
necessarily speculative; and (3) the allegations of
discrimination were misplaced because the laws do not
distinguish among eggs based on their state of origin. The
panel further held that the district court did not err by denying
leave to amend because plaintiffs would be unable to assert
parens patriae standing in an amended complaint.

    The panel held that because in theory, plaintiffs could
allege post-effective-date facts that might support standing,
the complaint should have been dismissed without prejudice.

                          COUNSEL

J. Andrew Hirth (argued), Deputy General Counsel, Office of
the Missouri Attorney General, Jefferson City, Missouri, for
Plaintiffs-Appellants.

Paul Stein (argued) and Stephanie F. Zook, Deputy Attorneys
General; Constance L. LeLouis, Supervising Deputy Attorney
General; Douglas J. Woods, Senior Assistant Attorney
General; Kamala D. Harris, Attorney General; Office of the
Attorney General, San Francisco, California; for Defendants-
Appellees.

Bruce Wagman (argued), Schiff Hardin LLP, San Francisco,
California; Rebecca Cary and Peter A. Brandt, Humane
Society of the United States, Washington, D.C.; Jonathan Y.
Ellis and J. Scott Ballenger, Latham & Watkins LLP,
4     STATE OF MISSOURI EX REL.KOSTER V. HARRIS

Washington, D.C.; for Intervenor-Defendant-Appellee
Humane Society of the United States.

Carl Nichols (argued), Thomas G. Sprankling, Adam I. Klein,
and Francesco Valenti, Wilmer Cutler Pickering Hale and
Dorr LLP, Washington, D.C.; Randall R. Lee, Wilmer Cutler
Pickering Hale and Dorr LLP, Los Angeles, California; for
Intervenor-Defendant-Appellee Association of California Egg
Farmers.

Sean D. Reyes, Utah Attorney General; Parker Douglas, Utah
Federal Solicitor; Utah Attorney General’s Office, Salt Lake
City, Utah; for Amicus Curiae State of Utah.

Timothy S. Bishop, Michael B. Kimberly, and James F.
Tierney, Mayer Brown LLP, Washington, D.C.; Ellen B.
Steen and Danielle Hallcom Quist, America Farm Bureau
Federation, Washington, D.C.; for Amicus Curiae American
Farm Bureau Federation.

Diane L. McGimsey, Edward E. Johnson, Janet Y. Galeria,
and Jonathon D. Townsend, Sullivan & Cromwell LLP, Los
Angeles, California, for Amici Curiae Animal Legal Defense
Fund; Compassion Over Killing, Inc.; and Farm Sanctuary,
Inc.
       STATE OF MISSOURI EX REL.KOSTER V. HARRIS               5

                          OPINION

GRABER, Circuit Judge:

     California enacted laws and regulations prescribing
standards for the conditions under which chickens must be
kept in order for their eggs to be sold in the state. Plaintiffs
are six states, which sued to block enforcement of those laws
and regulations before they took effect. We agree with the
district court that Plaintiffs lacked standing to bring this case
as parens patriae. We also hold that the district court did not
err in denying Plaintiffs leave to amend their complaint. But
because the action should have been dismissed without
prejudice, we affirm but remand with instructions to dismiss
the action without prejudice.

    In the 2008 general election, California voters adopted
Proposition 2, which enacted new standards beginning on
January 1, 2015, for housing farm animals within California
including, as relevant here, egg-laying hens. Cal. Health &
Safety Code §§ 25990–94. Under Proposition 2, hens may
not be confined for the majority of any day “in a manner that
prevents [them] from: (a) Lying down, standing up, and fully
extending [their] limbs; and (b) Turning around freely.” Id.
§ 25990. A violation of these standards is punishable by a
$1,000 fine or imprisonment of 180 days in county jail, or
both. Id. § 25993.

    In 2010, California’s legislature adopted Assembly Bill
1437 (“AB1437”), which mandated, also beginning on
January 1, 2015, that “a shelled egg shall not be sold or
contracted for sale for human consumption in California if the
seller knows or should have known that the egg is the product
of an egg-laying hen that was confined on a farm or place that
is not in compliance with animal care standards set forth in
6     STATE OF MISSOURI EX REL.KOSTER V. HARRIS

[Proposition 2].” Cal. Health & Safety Code § 25996.
Therefore, all eggs sold in California must comply with
Proposition 2. In 2013, the California Department of Food
and Agriculture promulgated egg-related regulations,
including salmonella prevention measures and minimum cage
sizes for egg-laying hens, all of which also carried an
effective date of January 1, 2015. Cal. Code Regs. tit. 3,
§ 1350(d)(1).

    On February 3, 2014, the State of Missouri filed a
complaint in the Eastern District of California, asking the
court to declare AB1437 and California Code § 1350(d)(1)
(collectively the “Shell Egg Laws”) invalid, as violating the
Commerce Clause or as preempted by federal statute, and to
enjoin California from enforcing the laws. Plaintiffs then
filed their First Amended Complaint (the “complaint”),
joining the States of Nebraska, Oklahoma, Alabama, and
Kentucky and the Governor of Iowa as additional plaintiffs.
The Humane Society of the United States and the Association
of California Egg Farmers (“Intervenors”) moved to intervene
as defendants, which the court allowed. Defendants filed a
motion to dismiss for lack of subject matter jurisdiction;
Intervenors filed their own, similar motions. The district
court granted the motions to dismiss, with prejudice. The
court concluded that Plaintiffs lacked standing as parens
patriae, held that their claim was not justiciable, and denied
leave to amend as futile. Plaintiffs timely appeal.

A. Parens Patriae Standing

    States asserting parens patriae standing must meet both
the basic requirements of Article III standing and the unique
requirements of that doctrine. Table Bluff Reservation (Wiyot
Tribe) v. Philip Morris, Inc., 256 F.3d 879, 885 (9th Cir.
2001). “To establish Article III standing, an injury must be
        STATE OF MISSOURI EX REL.KOSTER V. HARRIS                          7

concrete, particularized, and actual or imminent; fairly
traceable to the challenged action; and redressable by a
favorable ruling.” Clapper v. Amnesty Int’l USA, 133 S. Ct.
1138, 1147 (2013) (internal quotation marks omitted). In a
parens patriae case, there are two additional requirements.
First, “the State must articulate an interest apart from the
interests of particular private parties, i.e., the State must be
more than a nominal party.” Alfred L. Snapp & Son, Inc. v.
Puerto Rico ex rel. Barez (“Snapp”), 458 U.S. 592, 607
(1982). Second, “[t]he State must express a quasi-sovereign
interest.” Id. On de novo review, Habeas Corpus Res. Ctr.
v. U.S. Dep’t of Justice, 816 F.3d 1241, 1247 (9th Cir. 2016),
we conclude that Plaintiffs have not met the first requirement.
We therefore need not, and do not, reach the second part of
the test, nor do we reach the issue of ripeness.

    There are no “definitive limits on the proportion of the
population of the State that must be adversely affected.”
Snapp, 458 U.S. at 607. But “more must be alleged than
injury to an identifiable group of individual residents.” Id.
“[T]he indirect effects of the injury must be considered as
well in determining whether the State has alleged injury to a
sufficiently substantial segment of its population.” Id.1

    1
      It is unclear whether “substantial segment of the population” and
“interest apart from the interest of particular private parties” are separate
elements of standing. See, e.g., Washington v. Chimei Innolux Corp.,
659 F.3d 842, 847 (9th Cir. 2011) (describing these as separate
requirements). Snapp itself suggests that “substantial segment” may be
merely an additional explanation of the need for the State to be “more than
a nominal party.” 458 U.S. at 607. The district court likewise combined
these concepts into one element. Given the close similarity of the parties’
arguments under these headings, we discuss the two formulations as a
single element, but we would reach the same conclusion even if we treated
them separately.
8     STATE OF MISSOURI EX REL.KOSTER V. HARRIS

    Concerning the parties, the complaint alleges: “Missouri
farmers produced nearly two billion eggs in 2012 and
generated approximately $171 million in revenue for the
state”; “Nebraska is one of the top ten largest egg producers
in the United States”; “Alabama is one of the top fifteen
largest egg producers in the United States”; “Kentucky
farmers produced approximately 1.037 billion eggs in 2012
and generated approximately $116 million in revenue for the
state”; “Oklahoma farmers produced more than 700 million
eggs in 2012 and generated approximately $90 million in
revenue for the state”; and “Iowa is the number one state in
egg production[,] Iowa farmers produce over 14.4 billion
eggs per year,” and “[t]he cost to Iowa farmers to retrofit
existing housing or build new housing that complies with
AB1437 would be substantial.”

    The laws “forc[e] Plaintiffs’ farmers either to forgo
California’s markets altogether or accept significantly
increased production costs just to comply.” That is,
“Plaintiffs’ egg farmers must choose either to bring their
entire operations into compliance . . . or else simply leave the
California marketplace.”        “[T]he necessary capital
improvements [would] cost Plaintiffs’ farmers hundreds of
millions of dollars,” and, without access to the California
market, “supply would outpace demand by half a billion eggs,
causing the price of eggs—as well as egg farmers’
margins—to fall throughout the Midwest and potentially
forc[e] some Missouri producers out of business. The same
goes for egg producers in Nebraska, Alabama, Oklahoma,
Kentucky, and Iowa.”

    In short, the complaint alleges the importance of the
California market to egg farmers in the Plaintiff States and
the difficult choice that egg farmers face in deciding whether
to comply with the Shell Egg Laws. The complaint contains
        STATE OF MISSOURI EX REL.KOSTER V. HARRIS                     9

no specific allegations about the statewide magnitude of these
difficulties2 or the extent to which they affect more than just
an “identifiable group of individual” egg farmers. Snapp,
458 U.S. at 607.

    Plaintiffs advance several theories to demonstrate “an
interest apart from the interests of particular private parties”
and an effect on “a sufficiently substantial segment of [the]
population.” Id. First, Plaintiffs allege harm to their egg
farmers. Second, Plaintiffs argue that the Shell Egg Laws
will cause harmful fluctuations in the price of eggs. Finally,
Plaintiffs allege that they will suffer discrimination from the
Shell Egg Laws. For the reasons that follow, none of these
theories establishes standing.

    1. Alleged Harm to Egg Farmers

    Alleging harm to the egg farmers in Plaintiffs’ States is
insufficient to satisfy the first prong of parens patriae
standing. Other courts have recognized that parens patriae
standing is inappropriate where an aggrieved party could seek
private relief. The Second Circuit, for example, held that
“[p]arens patriae standing . . . requires a finding that
individuals could not obtain complete relief through a private
suit.” N.Y. ex rel. Abrams v. 11 Cornwell Co., 695 F.2d 34,
40 (2d Cir. 1982), vacated in part on other grounds, 718 F.2d
22 (2d Cir. 1983) (en banc); see also Connecticut v.
Physicians Health Servs. of Conn., Inc., 103 F. Supp. 2d 495,

    2
      At a hearing, the district court asked Plaintiffs where in their
complaint they alleged harm to more than just egg producers. Plaintiffs’
lawyer pointed to paragraphs 7 and 13. Paragraph 7 describes harm to egg
farmers. Paragraph 13 includes no specific facts, stating only, in
conclusory fashion, that “Missouri’s economy and status within the
federal system will be irreparably injured.”
10     STATE OF MISSOURI EX REL.KOSTER V. HARRIS

504 (D. Conn. 2000) (noting that “the Second Circuit has
interpreted Snapp to require a finding that the State act on
behalf of individuals who could not obtain complete relief
through a private suit”). Here, complete relief would be
available to the egg farmers themselves, were they to file a
complaint on their own behalf.

    Supreme Court cases in which private relief was held to
be unlikely or unrealistic illustrate why parens patriae
standing does not lie here. In Missouri v. Illinois, 180 U.S.
208 (1901), though never explicitly calling it a parens patriae
case, the Supreme Court heard a sewage dispute between two
states. The Court observed that “the nature of the injury
complained of is such that an adequate remedy can only be
found in this court at the suit of the state of Missouri.” Id. at
241. The Court emphasized that the “health and comfort of
the large communities inhabiting those parts of the state
situated on the Mississippi River are not alone concerned, but
contagious and typhoidal diseases introduced in the river
communities may spread themselves throughout the territory
of the state.” Id.; see also Snapp, 458 U.S. at 603 (describing
“a line of cases . . . in which States successfully sought to
represent the interests of their citizens in enjoining public
nuisances”). In other words, Missouri alleged that a public
health hazard affected its entire population. By contrast, the
Shell Egg Laws are not alleged to threaten the health of the
entire population (or, indeed of anyone), and those directly
affected—egg farmers—are capable of pursuing their own
interests.

    A rationale similar to that in Missouri v. Illinois supported
parens patriae standing in Maryland v. Louisiana, 451 U.S.
725 (1981). There, Louisiana imposed a “First-Use Tax” on
natural gas piped into the state from federal offshore drilling
areas. A group of states, later joined by the federal
      STATE OF MISSOURI EX REL.KOSTER V. HARRIS              11

government and several pipeline companies, filed an original
jurisdiction suit in the Supreme Court challenging the tax
under, among other sources, the Commerce Clause. The
Court found jurisdiction on several theories, including the
States’ interest as parens patriae. Id. at 737. The Court
observed that

       the incidence of the Tax [does not] fall on a
       small group of citizens who are likely to
       challenge the Tax directly. Rather, a great
       many citizens in each of the plaintiff States
       are themselves consumers of natural gas and
       are faced with increased costs aggregating
       millions of dollars per year. As the Special
       Master observed, individual consumers cannot
       be expected to litigate the validity of the First-
       Use Tax given that the amounts paid by each
       consumer are likely to be relatively small.

Id. at 739. Maryland v. Louisiana’s logic counsels the
opposite result here: Whereas millions of consumers
probably cannot challenge another state’s tax on their
commodities, large egg producers certainly could file an
action like this one on their own.

   2. Alleged Fluctuation in the Price of Eggs

    Plaintiffs argue that fluctuations in the price of eggs will
harm consumers, thereby affecting a substantial segment of
their populations and establishing parens patriae standing.
Plaintiffs filed their complaint before the Shell Egg Laws
took effect. As a result, their allegations about the potential
economic effects of those laws, after implementation, were
necessarily speculative. Indeed, Plaintiffs’ allegations are
inconsistent; the complaint alleges that prices will go either
12     STATE OF MISSOURI EX REL.KOSTER V. HARRIS

up or down. On the one hand, Plaintiffs allege that farmers
must bring all egg facilities into compliance with the Shell
Egg Laws, regardless of the proportion of their product
actually bound for California, because the demand across
markets fluctuates. The cost of “compliant” eggs will thus
increase across the board. On the other hand, Plaintiffs allege
that, if farmers decline to comply and they exit the California
market, “the price of eggs . . . [would] fall throughout the
Midwest.” Neither of these alleged results is sufficient to
support parens patriae standing.

     At the outset, the unavoidable uncertainty of the alleged
future changes in price makes the alleged injury insufficient
for Article III standing. In Lujan v. Defenders of Wildlife,
504 U.S. 555, 562 (1992), the Supreme Court explained that
it is “substantially more difficult” for a plaintiff to establish
standing when the plaintiff “is not himself the object of the
government action or inaction he challenges”:

        [C]ausation and redressability ordinarily
        hinge on the response of the regulated (or
        regulable) third party to the government
        action or inaction—and perhaps on the
        response of others as well. The existence of
        one or more of the essential elements of
        standing depends on the unfettered choices
        made by independent actors not before the
        courts and whose exercise of broad and
        legitimate discretion the courts cannot
        presume either to control or to predict, and it
        becomes the burden of the plaintiff to adduce
        facts showing that those choices have been or
        will be made in such manner as to produce
        causation and permit redressability of injury.
      STATE OF MISSOURI EX REL.KOSTER V. HARRIS             13

Id. (citations and internal quotation marks omitted).
Although Lujan describes facts that must be averred on
summary judgment, the complaint here cannot allege, even
under the more permissive standards at the pleading stage,
that the choices leading to consumer price increases “have
been or will be made.” Id. Instead, the allegations in the
complaint are “too speculative for Article III purposes,” and
Plaintiffs have failed to explain how the injury is “certainly
impending.” Id. at 565 n.2 (quoting Whitmore v. Arkansas,
495 U.S. 149, 158 (1990)); see also Clapper, 133 S. Ct. at
1147 (rejecting the Second Circuit’s “objectively reasonable
likelihood” standard as “inconsistent with our requirement
that threatened injury must be certainly impending to
constitute injury in fact” (internal quotation marks omitted));
Ass’n of Pub. Agency Customers v. Bonneville Power Admin.,
733 F.3d 939, 952 (9th Cir. 2013) (finding concrete,
particularized injury when utility price increases will affect
customer-plaintiffs indirectly due to “‘pass-through’
contracts” that “almost certainly” pass along increases).
Unlike the First-Use Tax in Maryland v. Louisiana or the
threatened withdrawal of West Virginia gas in Pennsylvania
v. West Virginia, 262 U.S. 553 (1923)—both of which
presented state actions with nearly certain price effects for
many or all of the plaintiffs’ citizens—here, the alleged price
effects for consumers are remote, speculative, and contingent
upon the decisions of many independent actors in the causal
chain in response to California laws that have no direct effect
on either price or supply. The Supreme Court has been
“reluctant to endorse standing theories that require guesswork
as to how independent decisionmakers will exercise their
judgment.” Clapper, 133 S. Ct. at 1150. In short, Plaintiffs’
price-related allegations do not support Article III standing.

   Even assuming that the price allegations are not too
speculative, they still do not succeed in establishing parens
14    STATE OF MISSOURI EX REL.KOSTER V. HARRIS

patriae standing. In the first proposed scenario, Plaintiffs’
egg farmers comply with the Shell Egg Laws to continue
selling eggs in California. But, assuming that the farmers do
not find other ways to cut their costs, and assuming further
that they pass their increased costs on to Plaintiffs’
consumers, our caselaw still holds that such allegations fail to
support standing. In Table Bluff, we held that “no
constitutional injury occurs when a manufacturer passes on
higher costs in the form of price increases.” 256 F.3d at 885.
Although the plaintiffs in Table Bluff alleged due process
violations, we have applied the same principle in a Commerce
Clause case. We held that, although a law regulating firearms

       may tend to restrict supply, nothing in the Act
       directs manufacturers or dealers to raise the
       price of regulated weapons. Under Lujan,
       plaintiffs’ injury does not satisfy the
       requirements of Article III because it is “the
       result of the independent action of some third
       party not before the court.”

San Diego Cty. Gun Rights Comm. v. Reno, 98 F.3d 1121,
1130 (9th Cir. 1996) (brackets omitted) (quoting Lujan,
504 U.S. at 560). The “traceability” principle—that plaintiffs
cannot allege standing from a speculative restriction in supply
by predicting an eventual increase in price—applies here as
well; the State of California will not increase egg prices for
Plaintiffs’ consumers.

    The result in Maryland v. Louisiana is not to the contrary.
There, explaining that a state “may act as the representative
of its citizens in original actions where the injury alleged
affects the general population of a State in a substantial way,”
451 U.S. at 737 (emphasis added), the Court found that the
plaintiff states had alleged injury both to their proprietary
       STATE OF MISSOURI EX REL.KOSTER V. HARRIS              15

interests as gas consumers and to their citizens “from
substantial economic injury presented by imposition of the
First-Use Tax,” id. at 739 (emphasis added). Plaintiffs do not
allege a similarly substantial injury here. Natural gas is a
commodity so universally critical to state governments,
businesses, and ordinary consumers that the Supreme Court
has twice granted parens patriae standing to challenge state
actions that directly threaten shortages or price increases. Id.;
Pennsylvania, 262 U.S. at 592 (describing a cut-off in gas as
“a matter of grave public concern”). An ordinary consumer
commodity, such as eggs, lacks the central economic
significance to a state of a utility’s product, such as natural
gas.

    In Plaintiffs’ second proposed scenario, the egg farmers
in Plaintiffs’ states do not bring their farms into compliance
with the Shell Egg Laws. If Plaintiffs’ allegation correctly
predicts that egg prices in the Midwest would drop due to
excess supply, no ill effects for egg consumers would come
to pass. Indeed, such a change would benefit Plaintiffs’
consumers. It would be only egg farmers, not consumers,
who might suffer an injury in that scenario. But, as we have
explained, an injury to egg farmers alone is not sufficient to
sustain parens patriae standing.

    3. Alleged Discrimination

    Finally, Plaintiffs’ reliance on cases granting parens
patriae standing to challenge discrimination against a state’s
citizens is misplaced. The Shell Egg Laws do not distinguish
among eggs based on their state of origin. A statute that
treats “both intrastate and interstate products” alike “is not
discriminatory.” Ass’n des Eleveurs de Canards et d’Oies du
Quebec v. Harris, 729 F.3d 937, 948 (9th Cir. 2013).
16    STATE OF MISSOURI EX REL.KOSTER V. HARRIS

    In Snapp, Puerto Rico, acting as parens patriae, sued on
behalf of its workers who allegedly suffered discrimination
under a federal hiring program. The Court rejected “too
narrow a view of the interests at stake.” Snapp, 458 U.S. at
609. Although only 787 jobs were at issue, the nature of the
discrimination affected all Puerto Ricans, so Puerto Rico
could pursue relief for all residents under a parens patriae
theory. Id. But Snapp does not assist Plaintiffs because there
is no discrimination here, whether to the few or to the many.
As noted, California egg farmers are subject to the same rules
as egg farmers from all other states, including California
itself.

    Georgia v. Pennsylvania R. Co., 324 U.S. 439 (1945), is
no more helpful to Plaintiffs than is Snapp. There, Georgia
sued a collection of southern railroads, alleging
discriminatory price-fixing to the detriment of the entire
economy of Georgia. The Court held that the State was not
a mere nominal plaintiff, with “individual shippers being the
real complainants.” Id. at 452. Instead, the implications of
price discrimination against Georgia-based commerce were
“matters of grave public concern in which Georgia ha[d] an
interest apart from that of particular individuals who may be
affected,” id. at 451, because rail rates “may arrest the
development of a State or put it at a decided disadvantage in
competitive markets,” id. at 450. By contrast, Plaintiffs
allege no trade barriers erected against their broader
economies and, again, the Shell Egg Laws are not
discriminatory. Accordingly, Plaintiffs’ allegations of
discrimination do not establish parens patriae standing.

B. Leave to Amend

    Plaintiffs urge us to reverse the district court’s denial of
leave to amend their complaint. They seek “[a]t the very least
        STATE OF MISSOURI EX REL.KOSTER V. HARRIS                      17

. . . to plead the additional information [that they have]
gathered since the Shell Egg Laws went into effect.”3
“Denial of leave to amend is reviewed for an abuse of
discretion.” Dougherty v. City of Covina, 654 F.3d 892, 897
(9th Cir. 2011). “Dismissal without leave to amend is
improper unless it is clear, upon de novo review, that the
complaint could not be saved by any amendment.” Thinket
Ink Info Res., Inc. v. Sun Microsystems, Inc., 368 F.3d 1053,
1061 (9th Cir. 2004). But a “district court does not err in
denying leave to amend where the amendment would be
futile.” Id. (internal quotation marks omitted). An
amendment is futile when “no set of facts can be proved
under the amendment to the pleadings that would constitute
a valid and sufficient claim or defense.” Miller v. Rykoff-
Sexton, Inc., 845 F.2d 209, 214 (9th Cir. 1988). We find no
abuse of discretion.

    First, Plaintiffs cannot satisfy the requirements of
standing by adding events that have occurred after the Shell
Egg Laws took effect. “[S]tanding is determined as of the
commencement of litigation.” Yamada v. Snipes, 786 F.3d
1182, 1203 (9th Cir.), cert. denied, 136 S. Ct. 569 (2015)
(internal quotation marks omitted); accord D’Lil v. Best W.
Encina Lodge & Suites, 538 F.3d 1031, 1036 (9th Cir. 2008).
Plaintiffs brought this action before the Shell Egg laws took
effect. Accordingly, later developments cannot save the
complaint.

    Second, Plaintiffs argue that certain allegations were
available when the complaint was filed and that they should
be allowed to include them now. In particular, Plaintiffs wish

    3
     As construed by the district court and as argued on appeal, Plaintiffs
seek to amend their complaint. They do not seek to supplement the
pleadings pursuant to Federal Rule of Civil Procedure 15(d).
18     STATE OF MISSOURI EX REL.KOSTER V. HARRIS

to allege that eggs are an important, affordable source of
protein with which the Shell Egg Laws threaten to interfere,
and that the threat of increased egg prices affects not just egg
farmers, but also “grocers, bakers, and restaurant owners.”
Those allegations would still fail to establish standing
because, at most, they allege a potential price increase for
consumers indirectly resulting from the Shell Egg Laws. As
noted earlier, our precedents hold that such speculative
allegations are insufficient for parens patriae standing. Table
Bluff, 256 F.3d at 885; San Diego Cty. Gun Rights Comm.,
98 F.3d at 1130. Plaintiffs also allege that the price of eggs
might drop. Again, as discussed above, the contingent and
uncertain nature of the alternatives available to plead when
this complaint was filed are inadequate to support Article III
standing.

    In short, Plaintiffs would be unable to assert parens
patriae standing in an amended complaint. The district court
did not err by denying leave to amend.

C. Dismissal With Prejudice

    Finally, Plaintiffs argue that, because the district court
dismissed the complaint for lack of subject matter
jurisdiction, the dismissal should have been without
prejudice. “We review for abuse of discretion a district
court’s decision to dismiss with prejudice.” Okwu v. McKim,
682 F.3d 841, 844 (9th Cir. 2012).

    In general, dismissal for lack of subject matter jurisdiction
is without prejudice. See City of Oakland v. Hotels.com LP,
572 F.3d 958, 962 (9th Cir. 2009) (“[F]ailure to exhaust
administrative remedies is properly treated as a curable defect
and should generally result in a dismissal without
prejudice.”); Kelly v. Fleetwood Enters., Inc., 377 F.3d 1034,
      STATE OF MISSOURI EX REL.KOSTER V. HARRIS              19

1036 (9th Cir. 2004) (dismissing a complaint without
prejudice when the amount in controversy requirement was
not met); Freeman v. Oakland Unified Sch. Dist., 179 F.3d
846, 847 (9th Cir. 1999) (order) (“Dismissals for lack of
jurisdiction should be without prejudice so that a plaintiff
may reassert his claims in a competent court.” (internal
quotation marks and ellipsis omitted)). Exceptions to the
general rule include dismissals on the ground of sovereign
immunity, Lake Wash. Sch. Dist. No. 414 v. Office of
Superintendent of Pub. Instr., 634 F.3d 1065, 1069 (9th Cir.
2011), and situations in which the plaintiff “could not have
possibly amended his complaint to allege an injury in fact,”
Schmier v. U.S. Court of Appeals for Ninth Circuit, 279 F.3d
817, 824 (9th Cir. 2002).

    The theory undergirding the general rule is that “the
merits have not been considered” before dismissal. Cooper
v. Ramos, 704 F.3d 772, 777 (9th Cir. 2012). No recognized
exception to that general rule applies here. Plaintiffs have not
satisfied the requirements of parens patriae standing. But in
theory, Plaintiffs could allege post-effective-date facts that
might support standing. As a result, the complaint should
have been dismissed without prejudice. See City of Oakland,
572 F.3d at 962 (affirming dismissal but remanding to
dismiss without prejudice); Kelly, 377 F.3d at 1040 (affirming
with instructions to enter order of dismissal without
prejudice).

    The judgment of the district court is AFFIRMED and the
case is REMANDED with instructions to dismiss this action
without prejudice.