EDEN ENVIRONMENTAL CITIZEN’S No. 2:19-cv-01936-TLN-KJN GROUP, LLC, Plaintiff, v. CALIFORNIA CASCADE BUILDING MATERIALS, INC.; AMAR S. DOMAN; and JAMES CODE, Defendants.
This matter is before the Court on the following: Defendant California Cascade Building Materials, Inc.’s (“California Cascade”) Motion to Dismiss (ECF No. 20); Defendants Amar S. Doman (“Doman”) and James Code’s (“Code”) Motion to Dismiss1 (ECF No. 22); California Cascade’s Motion for Summary Judgment (ECF No. 45); and Plaintiff Eden Environmental Citizen’s Group, LLC’s (“Plaintiff”) Motion for Reconsideration of the magistrate judge’s order granting California Cascade’s motion to stay discovery. (ECF Nos. 55 and 53). All pending motions are fully briefed. For the reasons set forth below, the Court hereby DENIES California Cascade’s Motion to Dismiss (ECF No. 20), GRANTS Doman and Code’s Motion to Dismiss 1 The Court will refer to Defendants California Cascade, Doman, and Code collectively as “Defendants.” (ECF No. 22), DENIES California Cascade’s Motion for Summary Judgment (ECF No. 45), and DENIES Plaintiff’s Motion for Reconsideration as moot (ECF No. 55). This case arises from California Cascade’s allegedly unlawful failure to obtain a permit for the discharge of pollutants from its facility into the Sacramento River. (See ECF No. 7.) Plaintiff is an environmental membership group with a mission to enforce the provisions of the Clean Water Act (“CWA”) and the requirements of California’s Industrial General Permit Order 2014-0057 DWQ, National Pollutant Discharge Elimination System (“NPDES”) Order No. CAS000001 (the “General Permit”). (Id. at 3–4.) Some of Plaintiff’s members reside and work near Morrison Creek and the Sacramento River and use those waters and their watersheds for various recreational activities and scientific study. (Id. at 4.) Plaintiff alleges its members’ “use and enjoyment of these natural resources have been and continue to be adversely impaired by Defendants’ failure to comply with the procedural and substantive requirements of the General Permit and the CWA.” (Id.) California Cascade’s facility in Sacramento, California (the “Facility”), is a 20-acre wood products manufacturing and distribution plant. (Id. at 2, 16.) Using on-site equipment, the Facility saws, cuts, trims, planes, molds, and treats the raw wood and timber into various end products it sells to retail lumber companies and businesses. (Id. at 16.) End products include: pressure-treated lumber and plywood; decking; fence panels, pickets, posts, and rails; siding; finishing and landscaping products; and wooden stakes. (Id.) California Cascade also operates an interstate trucking operation for the transport of logs, poles, beams, lumber, and building materials. (Id. at 17.) It is licensed under the U.S. Department of Transportation and provides on-site maintenance and repair for its trucks. (Id.) Pursuant to the CWA, the Administrator of the U.S. Environmental Protection Agency (“EPA”) has authorized the California State Water Resources Control Board (the “State Water Board”) to issue NPDES permits for industrial storm water discharges. (Id. at 7.) Facilities that either discharge or have the potential to discharge storm water associated with industrial activity and have not obtained a NPDES permit must apply for coverage under the General Permit. (Id. at 8.) Based on the Fact Sheet accompanying the General Permit that discusses how to classify a facility with multiple activities, Plaintiff alleges California Cascade conducts distinct and separate economic activities at the Facility to which different Standard Industrial Classification (“SIC”) Codes2 apply. (Id. at 18–21.) California Cascade previously believed SIC Code 2499 (wood products, not elsewhere classified) applied to the Facility and had therefore obtained coverage under the General Permit on July 7, 2015. (Id. at 17, 21.) However, California Cascade filed paperwork with the State Water Board on August 1, 2019 to terminate its General Permit coverage, taking the position that SIC Code 5031 (warehousing and wholesale distribution of lumber) applies, which does not require coverage. (Id. at 21.) California Cascade terminated its General Permit coverage on September 17, 2019. (Id. at 22.) Plaintiff alleges the Facility engages in “at least three distinct and separate economic activities,” two of which require Defendants to maintain NPDES coverage under the General Permit. (Id.) Specifically, Plaintiff alleges the Facility’s operations include: “(a) warehousing and wholesale distribution of lumber and construction building materials, which fall under SIC Code 5031; (b) wood products manufacturing, which fall under SIC Codes 2421, 2431, 2491, and 2499; and (c) local trucking operations with on-site maintenance and fueling, which fall under SIC Codes 4213 and 7538.” (Id.) Plaintiff alleges Defendants are currently discharging storm water into Morrison Creek and the Sacramento River from the Facility without a General Permit — thereby in violation of the CWA. (Id.) Plaintiff filed the instant action on September 23, 2019. (ECF No. 1.) Plaintiff’s operative First Amended Complaint (“FAC”) alleges seven claims for violations of the CWA. (See ECF No. 7.) The first six claims allege violations of the terms of the General Permit and the seventh claim alleges a violation of the CWA by failing to have coverage under the General Permit. (See id. at 30–39.) On January 21, 2020, Defendants filed the instant motions to dismiss.
2 Plaintiff does not provide this background information, but certain SIC Codes are listed by the State Water Board as potentially regulated by the General Permit. See Potentially regulated Standard Industrial Classification (SIC) Codes, California State Water Resources Control Board, https://www.waterboards.ca.gov/water_issues/programs/stormwater/sic.html (last accessed Sept. 9, 2021). (ECF Nos. 20, 22.) On February 6, 2020, Plaintiff filed oppositions. (ECF Nos. 24, 27.) On February 13, 2020, Defendants filed replies. (ECF Nos. 30, 32.) On October 15, 2020, California Cascade filed the instant motion for summary judgment. (ECF No. 45.) This matter is fully briefed. (ECF Nos. 46, 47.) On December 23, 2020, Plaintiff filed the instant motion for reconsideration. (ECF No. 55.) This matter is also fully briefed. (ECF Nos. 57, 59.) The Court will first consider Defendants’ motions to dismiss,3 then California Cascade’s motion for summary judgment, and finally Plaintiff’s motion for reconsideration. A. Legal Standard A motion to dismiss for failure to state a claim upon which relief can be granted under Federal Rule of Civil Procedure (“Rule”) 12(b)(6) tests the legal sufficiency of a complaint. Navarro v. Block, 250 F.3d 729, 732 (9th Cir. 2001). Rule 8(a) requires that a pleading contain “a short and plain statement of the claim showing that the pleader is entitled to relief.” See Ashcroft v. Iqbal, 556 U.S. 662, 678–79 (2009). Under notice pleading in federal court, the complaint must “give the defendant fair notice of what the claim . . . is and the grounds upon which it rests.” Bell Atlantic v. Twombly, 550 U.S. 544, 555 (2007) (internal quotations omitted). “This simplified notice pleading standard relies on liberal discovery rules and summary judgment motions to define disputed facts and issues and to dispose of unmeritorious claims.” Swierkiewicz v. Sorema N.A., 534 U.S. 506, 512 (2002). On a motion to dismiss, the factual allegations of the complaint must be accepted as true. Cruz v. Beto, 405 U.S. 319, 322 (1972). A court is bound to give the plaintiff the benefit of every reasonable inference to be drawn from the “well-pleaded” allegations of the complaint. Retail Clerks Int’l Ass’n v. Schermerhorn, 373 U.S. 746, 753 n.6 (1963). A plaintiff need not allege “‘specific facts’ beyond those necessary to state his claim and the grounds showing entitlement to relief.” Twombly, 550 U.S. at 570. Nevertheless, a court “need not assume the truth of legal conclusions cast in the form of 3 The Court will also consider California Cascade’s Request for Judicial Notice (ECF No. 21) with its motion to dismiss. factual allegations.” U.S. ex rel. Chunie v. Ringrose, 788 F.2d 638, 643 n.2 (9th Cir. 1986). While Rule 8(a) does not require detailed factual allegations, “it demands more than an unadorned, the defendant-unlawfully-harmed-me accusation.” Iqbal, 556 U.S. at 678. A pleading is insufficient if it offers mere “labels and conclusions” or “a formulaic recitation of the elements of a cause of action.” Twombly, 550 U.S. at 555; see also Iqbal, 556 U.S. at 678 (“Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.”). Moreover, it is inappropriate to assume the plaintiff “can prove facts that it has not alleged or that the defendants have violated the . . . laws in ways that have not been alleged.” Associated Gen. Contractors of Cal., Inc. v. Cal. State Council of Carpenters, 459 U.S. 519, 526 (1983). Ultimately, a court may not dismiss a complaint in which the plaintiff has alleged “enough facts to state a claim to relief that is plausible on its face.” Iqbal, 556 U.S. at 697 (quoting Twombly, 550 U.S. at 570). “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.” Id. at 680. While the plausibility requirement is not akin to a probability requirement, it demands more than “a sheer possibility that a defendant has acted unlawfully.” Id. at 678. This plausibility inquiry is “a context-specific task that requires the reviewing court to draw on its judicial experience and common sense.” Id. at 679. In ruling on a motion to dismiss, a court may only consider the complaint, any exhibits thereto, and matters which may be judicially noticed pursuant to Federal Rule of Evidence 201. See Mir v. Little Co. of Mary Hosp., 844 F.2d 646, 649 (9th Cir. 1988); Isuzu Motors Ltd. v. Consumers Union of U.S., Inc., 12 F. Supp. 2d 1035, 1042 (C.D. Cal. 1998). If a complaint fails to state a plausible 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.’” Lopez v. Smith, 203 F.3d 1122, 1130 (9th Cir. 2000) (en banc) (quoting Doe v. United States, 58 F.3d 494, 497 (9th Cir. 1995)). /// /// B. Request for Judicial Notice California Cascade requests the Court take judicial notice of Exhibits A through E.4 (See ECF No. 21.) California Cascade asserts Exhibits A and B are a document issued by the Office of Management and Budget and an order of a state agency, respectively, and therefore proper for judicial notice. (Id. at 2–3.) California Cascade maintains Exhibits C through E are publicly available documents through the State Water Board’s online database and therefore their authenticity can be verified. (Id. at 3.) California Cascade seeks judicial notice of the information discernible from the face of the documents — specifically, “that the NOT exists, that it was filed with the . . . State Water Board on August 6, 2019, and that it was accepted by the . . . State Water Board, as evidenced by the [F]acility’s ‘Terminated’ status listed on [the Stormwater Multiple Application and Report Tracking System].” (Id.; see also ECF No. 31.) In opposition, Plaintiff notes California Cascade does not request judicial notice of the contents of Exhibits C and D and asks the Court to decline to consider the factual contents of these documents. (ECF No. 26 at 3–4.) Plaintiff also argues California Cascade’s request for the Court to take judicial notice of the fact the NOT was accepted by the State Water Board, as evidenced by the Facility’s “Terminated” status, is improper because the question of whether a specific document was “accepted” by an agency is not “generally known” or “accurately and readily determined from sources whose accuracy cannot be questioned.” (Id. at 2.) Further, Plaintiff contends the factual contents of government records are not subject to judicial notice. (Id.) The Court may take judicial notice of facts that can be “accurately and readily determined from sources whose accuracy cannot reasonably be questioned.” Fed. R. Evid. 201(b)(2). Courts have taken judicial notice of public records, which includes government documents and orders. 4 Exhibit A is the 1987 SIC Manual, issued by the Executive Office of the President, Office of Management and Budget. (ECF No. 21 at 4–697.) Exhibit B is the Statewide General Permit for Storm Water Discharges Associated with Industrial Activities, Order 2014-0057-DWQ, effective July 1, 2015. (Id. at 698–906.) Exhibit C is Support of Notice of Termination (“NOT”) filed by California Cascade on August 6, 2019. (Id. at 907–08.) Exhibit D is the Response to Request for Additional Information of NOT filed by California Cascade on September 10, 2019. (Id. at 909–11.) Exhibit E is the screenshot reflecting termination of coverage. (Id. at 912–13.) Lee v. City of Los Angeles, 250 F.3d 668, 689–90 (9th Cir. 2001); In re W. States Wholesale Nat’l Gas Antitrust Litig., 633 F. Supp. 2d 1151, 1169 (D. Nev. 2007) (taking judicial notice of Federal Energy Regulatory Commission orders). “However, when a court takes judicial notice of a matter of public record, such as another court’s opinion, it may not do so for the truth of the facts recited therein, but for the existence of the opinion, which is not subject to reasonable dispute over its authenticity.” Id. at 1168–69 (D. Nev. 2007) (internal quotations and citations omitted). Exhibits A through E are all publicly available government documents and orders. Subject to the aforementioned caveat, California Cascade’s request for judicial notice of Exhibits A through E is GRANTED. C. Motion to Dismiss California Cascade argues all of Plaintiffs’ claims fail to the extent they are premised on violations of the General Permit because it is not required to have coverage under the General Permit. (ECF No. 20 at 10.) Specifically, California Cascade contends the FAC should be dismissed because it fails to allege (1) the primary industrial activity engaged at the Facility has a SIC Code that requires General Permit coverage or (2) the Facility has activities sufficiently economically separate and distinct to be considered separate “establishments” thereby requiring the application of multiple SIC Codes. (Id. at 10–12; see also ECF No. 30 at 6–9.) In opposition, Plaintiff asserts the FAC alleges multiple distinct and separate economic activities occur at the Facility that fall within specific SIC Codes requiring General Permit coverage. (ECF No. 24 at 7–9.) Specifically, Plaintiff maintains the FAC pleads sufficient facts regarding California Cascade’s wood products manufacturing activities and interstate trucking operations, both of which constitute “distinct and separate economic activit[ies]” at the Facility. (Id. at 10–14, 18–19.) Section 301(a) of the CWA prohibits the discharge of any pollutant into the waters of the United States without authorization from specific provisions of the CWA. See 33 U.S.C. § 1311(a). One of these provisions includes § 402 of the CWA, which “provides for the issuance of a permit under the NPDES.” Ctr. for Cmty. Action & Env’t Justice v. Friends of Riverside Airport, LLC, No. EDCV 17-1091 JGB (KKx), 2017 WL 10511577, at *2 (C.D. Cal. Sept. 28, 2017) (citing 33 U.S.C. § 1342(a)). The NPDES is a permitting system that enforces “the effluent and water-quality standards established by the EPA and state governments” and also “sets out the conditions under which the EPA or a state with an approved water quality control program can issue permits for the discharge of pollutants in wastewater.” Id. (citing Nat’l Res. Def. Council, Inc. v. Cnty. of L.A., 636 F.3d 1235, 1245 (9th Cir. 2011); 33 U.S.C. §§ 1342(a), (b)). A permit is required if the discharge is associated with industrial activity. Id. (citing 33 U.S.C. § 1342(p)(2); 40 C.F.R. § 122.26(b)(14) (“Storm water discharge associated with industrial activity means the discharge from any conveyance that is used for collecting and conveying storm water and that is directly related to manufacturing, processing or raw materials storage areas at an industrial plant.”)). The EPA has used its authority under § 1342(b) to authorize the State of California “to develop water quality standards and issue NPDES permits.” Id. The California Water Code designates the State Water Board and nine regional boards “as the principal state agencies charged with enforcing federal and state water pollution laws and issuing NPDES permits.” Id. (citing Cal. Water Code §§ 1300–1324). The State Water Board adopted a statewide General Permit for industrial discharges on September 2, 2009, pursuant to § 402(p) of the CWA. Id. It became effective on July 1, 2010, and it has been amended twice. Id. A violation of any NPDES permit terms is a violation of the CWA. See 40 C.F.R. § 122.41(a). The Fact Sheet accompanying California’s Industrial General Permit Order 2014-0057 DWQ states: 40 Code of Federal Regulations [§] 122.26(b)(14) defines “storm water discharge associated with industrial activity” and describes the types of facilities subject to permitting (primarily by Standard Industrial Classification (SIC) code). This General Permit provides regulatory coverage for all facilities with industrial activities described in Attachment A where the covered industrial activity is the Discharger’s primary industrial activity. In some instances, a Discharger may have more than one primary industrial activity occurring at a facility. The 1987 SIC manual uses the term “establishment” to determine the primary economic activity of a facility. The manual instructs that where distinct and separate economic activities are performed at a single location, each activity should be treated as a separate establishment (and, therefore, separate primary activity). National Pollutant Discharge Elimination System (NPDES) General Permit Fact Sheet for Storm Water Discharges Associated with Industrial Activities, NPDES No. CAS000001, Order 2014- 0057-DWQ, Industrial General Permit, California State Water Resources Control Board, https://www.waterboards.ca.gov/water_issues/programs/stormwater/docs/industrial/2014indgenpe rmit/factsheet.pdf (last accessed Sept. 13, 2021) (hereinafter NPDES Fact Sheet). Relevant here, Attachment A provides that facilities covered by the General Permit include: “manufacturing facilities,” defined as “[f]acilities with [SICs] 20XX through 39XX, 4221 through 4225”; and “transportation facilities,” defined as “[f]acilities with SICs 40XX through 45XX (except 4221 – 25) and 5171 with vehicle maintenance shops, equipment cleaning operations, or airport deicing operations.”5 Attachment A, Facilities Covered by National Pollutant Discharge Elimination System (NPDES) General Permit for Storm Water Discharges Associated with Industrial Activities (General Permit), Order 2014-0057-DWQ Industrial General Permit, California State Water Resources Control Board, https://www.waterboards.ca.gov/water_issues/programs/stormwater/docs/industrial/2014indgenpe rmit/atta.pdf (last accessed Sept. 13, 2021). Here, as previously mentioned, Plaintiff alleges in its FAC the Facility’s operations include: “(a) warehousing and wholesale distribution of lumber and construction building materials, which fall under SIC Code 5031; (b) wood products manufacturing, which fall under SIC Codes 2421, 2431, 2491, and 2499; and (c) local trucking operations with on-site maintenance and fueling, which fall under SIC Codes 4213 and 7538.” (ECF No. 7 at 22.) Plaintiff explicitly alleges SIC Codes 2421, 2431, 2491, 2499, and 4213 are among the SIC Codes that require General Permit coverage. (Id. at 18.) With respect to wood products manufacturing, Plaintiff alleges the Facility “is a twenty (20) acre wood products manufacturing and distribution plant with on-site equipment utilized for re-sawing, planing, treating, molding and kiln drying of the logs, poles, beams, and raw lumber 5 With respect to transportation facilities, Attachment A further provides: “Only those portions of the facility involved in vehicle maintenance (including vehicle rehabilitation, mechanical repairs, painting, fueling, and lubrication) or other operations identified under this Permit as associated with industrial activity.” delivered to the Facility.” (Id. at 16.) Plaintiff also alleges the Facility “saws, cuts, trims, planes, molds and treats the raw wood and timber into wood products it sells to retail companies and businesses such as Home Depot.” (Id.) Plaintiff finally alleges that according to the Stormwater Pollution Prevention Plan (“SWPPP”) previously filed by California Cascade, the Facility’s activities “include lumber receiving, processing, storage, and shipping. Sawn lumber is received by truck or train, processed (resawn, manufactured into various wood products, inventoried, labeled, and/or repackaged), stored in sheds or on open, asphalt, concrete, or gravel surfaced lots, and reshipped by truck or train.” (Id.) Plaintiff notes that “[b]ecause the Facility causes the mechanical transformation of materials into new products, it meets the definition of a ‘manufacturing’ facility under the SIC manual.” (Id. at 17.) With respect to local trucking operations, Plaintiff alleges California Cascade “operates an interstate trucking operation (with numerous trucks and drivers) which transports logs, poles, beams, lumber and building materials, and is licensed under U.S. Department of Transportation (“USDOT”), Federal Motor Carrier Safety Administration Carrier No. 2786835, and provides on- site maintenance and repair for its trucks.” (Id.) Plaintiff further alleges that according to forms submitted by California Cascade to the USDOT, its “trucking operation involves the use of sixteen (16) truck drivers, it is an interstate trucking operation, and the trucks travelled a total of 754,156 miles in 2018.” (Id. at 18.) Based on the foregoing, Plaintiff adequately alleges sufficient facts to establish California Cascade’s wood products manufacturing and local trucking operations at the Facility should be treated as separate “establishment[s]” and “distinct and separate economic activities” from warehousing and wholesaling under SIC Code 5031 (what California Cascade contends is the primary activity at the Facility and does not require General Permit Coverage (see ECF No. 20 at 8)). See NPDES Fact Sheet. These aforementioned operations or “establishments” fall under SIC Codes that require General Permit coverage. At the pleadings stage, Plaintiff’s factual allegations must be accepted as true. See Cruz, 405 U.S. at 322. Thus, California Cascade’s motion to dismiss the FAC on the basis that it fails to plead California Cascade is required to have coverage under the General Permit is DENIED. A. Legal Standard Federal Rule of Civil Procedure 12(b)(2) allows a party to file a motion to dismiss for lack of personal jurisdiction. When there is no federal statute authorizing personal jurisdiction, the district court applies the law of the state in which the district court sits. Mavrix Photo, Inc. v. Brand Techs., Inc., 647 F.3d 1218, 1223 (9th Cir. 2011). California’s long-arm statute is coextensive with federal due process requirements. Cal. Civ. Proc. Code § 410.10. Accordingly, the “jurisdictional analyses under state law and federal due process are the same.” Mavrix Photo, 647 F.3d at 1223 (citing Schwarzenegger v. Fred Martin Motor Co., 374 F.3d 797, 800–01 (9th Cir. 2004)). “For a court to exercise personal jurisdiction over a nonresident defendant, that defendant must have sufficient ‘minimum contacts’ with the relevant forum such that the exercise of jurisdiction ‘does not offend traditional notions of fair play and substantial justice.’” Schwarzenegger, 374 F.3d at 801 (quoting Int’l Shoe Co. v. Washington, 326 U.S. 310, 316 (1945)). Under the minimum contacts test, there are two categories of personal jurisdiction: general jurisdiction and specific jurisdiction. Daimler AG v. Bauman, 571 U.S. 117, 126–27 (2014). “If the defendant’s activities in the state are ‘substantial’ or ‘continuous and systematic,’ general jurisdiction may be asserted even if the cause of action is unrelated to those activities.” Doe v. Am. Nat’l Red Cross, 112 F.3d 1048, 1050 (9th Cir. 1997). Specific jurisdiction, on the other hand, is satisfied when the defendant’s activities are directed toward the forum state and the defendant’s liability arises out of or relates to those activities. Schwarzenegger, 374 F.3d at 802. The Ninth Circuit employs a three-part test to determine whether a defendant’s contacts suffice to establish specific jurisdiction: “(1) The non-resident defendant must purposefully direct his activities or consummate some transaction with the forum or resident thereof[,] or perform some act by which he purposefully avails himself of the privilege of conducting activities in the forum, thereby invoking the benefits and protections of its laws; (2) the claim must be one which arises out of or relates to the defendant’s forum-related activities; and (3) the exercise of jurisdiction must comport with fair play and substantial justice, i.e. it must be reasonable.” Id. The burden is on plaintiff to satisfy the first two prongs. Id. In opposing a defendant’s motion to dismiss for lack of personal jurisdiction, the plaintiff bears the burden of establishing the court’s jurisdiction over the defendant. Wash. Shoe Co. v. A– Z Sporting Goods Inc., 704 F.3d 668, 671–72 (9th Cir. 2012), abrogated on other grounds by Hungerstation LLC v. Fast Choice LLC, No. 20-15090, 2021 WL 1697886 (9th Cir. 2021). However, when the defendant’s motion is based on written materials rather than an evidentiary hearing, the plaintiff need only make a “prima facie showing of jurisdictional facts to withstand the motion to dismiss.” Id. (quoting Pebble Beach Co. v. Caddy, 453 F.3d 1151, 1154 (9th Cir. 2006)). The court resolves all disputed facts in favor of the plaintiff. Id. at 672. B. Motion to Dismiss Doman and Code argue they are not subject to personal jurisdiction in California, as their employment affiliation is insufficient to create jurisdiction. (ECF No. 22 at 9–10.) They contend the Ninth Circuit, in applying in the fiduciary shield doctrine, “limit[s] personal jurisdiction to only those instances in which the individual defendant is the alter ego of the corporation or the individual’s own activity in the state constitutes sufficient ‘minimum contacts.’” (Id. at 10 (citing Water Wheel Camp Rec. Area, Inc. v. LaRance, 642 F.3d 802 (9th Cir. 2011).)6 In opposition, Plaintiff asserts the Court has personal jurisdiction over Doman and Code because “the fiduciary shield doctrine does not apply to actions brought to enforce the [CWA] against responsible officers in their individual capacities” and Doman and Code have the “authority to exercise control over California Cascade’s activities that are violating the CWA.” (ECF No. 27 at 13–14.) Plaintiff notes Doman and Code’s inaction is insufficient to shield them from liability or the Court’s jurisdiction. (Id. at 15.) Plaintiff maintains Doman and Code have sufficient minimum contacts to be subject to personal jurisdiction in California because they run a corporation with its only physical presence in California, both of them come to California for business, and “operating an industrial facility without proper CWA compliance makes it 6 Doman and Code also argue Plaintiff failed to provide Code notice of the alleged violations against him pursuant to the CWA citizen suit provision and therefore the Court lacks subject matter jurisdiction over him. (Id. at 9.) Because the Court finds it lacks personal jurisdiction over Doman and Code, it declines to address this argument. foreseeable that one will be haled into court to answer for these violations of the law.” (Id. at 17.) “Under the fiduciary shield doctrine[,] a person’s mere association with a corporation that causes injury in the forum state is not sufficient in itself to permit that forum to assert jurisdiction over the person.” Wolf Designs, Inc. v. DHR Co., 322 F. Supp. 2d 1065, 1072 (C.D. Cal. 2004) (quoting Davis v. Metro Prods., Inc., 885 F.2d 515, 520 (9th Cir. 1989). The corporate form may be ignored (1) “where the corporation is the agent or alter ego of the individual defendant,” or (2) “by virtue of the individual’s control of, and direct participation in the alleged activities.” Id. (citing Flynt Distrib. Co. v. Harvey, 734 F.2d 1389, 1393 (9th Cir. 1984); Transgo, Inc. v. Ajac Transmission Parts Corp., 768 F.2d 1001, 1021 (9th Cir. 1985)). In order to establish alter ego liability, a plaintiff “must make out a prima facie case (1) that there is such unity of interest and ownership that the separate personalities of the two entities no longer exist and (2) that failure to disregard their separate identities would result in fraud or injustice.” Ranza v. Nike, Inc., 793 F.3d 1059, 1073 (9th Cir. 2015) (internal quotation marks, alterations, and citations omitted). Here, Plaintiff does not argue in its opposition that either Doman or Code acted as agents or alter egos of California Cascade. (See ECF No. 27.) Furthermore, Plaintiff’s only references to Doman and Code in its FAC are that they are “the Chief Executive Officer” and “the Chief Financial Officer,” respectively, of California Cascade. (See ECF No. 7 at 6.) Accordingly, Plaintiff fails to adequately establish Doman and Code are agents or alter egos of California Cascade. In order to establish liability on the basis of the individual’s control of, and direct participation in the alleged activities, the Ninth Circuit has “allow[ed] assertion of personal jurisdiction over officers of a corporation as long as the court finds those officers to have sufficient minimum contacts with [the forum state].” Davis, 885 F.2d at 522. Here, in opposing the motion to dismiss, Plaintiff fails to meet its burden to establish this Court’s jurisdiction over Doman and Code. The Court agrees with Doman and Code that Plaintiff conflates a theory of liability (the corporate responsible officer doctrine) and the constitutional requirement for personal jurisdiction.7 (ECF No. 32 at 8.) The crux of Plaintiff’s argument seems to be that Doman and Code’s “inaction in the face of their duty to take action is enough on its own” because they have the ability as corporate officers to ensure California Cascade complies with the CWA. (Id. at 9.) With respect to minimum contacts, Plaintiff asserts Doman and Code “are officers running a corporation with its only physical presence in California.” (Id. at 17.) Plaintiff notes Doman and Code “admit that they have come to California repeatedly for business purposes,”8 and California Cascade has operated at their direction for years, “including contractual relationships with staff members, clients, and other individuals and entities.” (Id.) Plaintiff contends the instant claims therefore “are a natural consequence of their activities and those of the corporation they direct.” (Id.) Plaintiff maintains “operating an industrial facility without proper CWA compliance makes it foreseeable that one will be haled into court to answer for these violations of the law.” (Id.) Plaintiff finally asserts personal jurisdiction over Doman and Code comports with fair play and substantial justice because they have employed California residents and taken advantage of opportunities and customers in California. (Id. at 17–18.) Federal courts have found that additional affirmative conduct is required to establish minimum contacts in the forum state. See Davis, 885 F.2d at 522 (finding personal jurisdiction over two corporate directors who were the sole shareholders of a corporation, as they purposefully availed themselves of the forum state by soliciting business from the state and meeting with a citizen of the state to discuss opportunities for other citizens of the state to invest in a fraudulent venture); see also Wolf Designs, Inc., 322 F. Supp. 2d at 1072 (finding personal
7 The Court further agrees Doman and Code are correct that none of the cases Plaintiff cites address personal jurisdiction. (ECF No. 32 at 9.) Accordingly, these cases are not on point. (See ECF No. 27 at 13–15 (citing N. Cal. River Watch v. Oakland Mar. Support Servs., No. C 10- 03912 CW, 2011 WL 566838 (N.D. Cal. Feb. 14, 2011); Eden Env’t Citizen’s Grp. LLC v. Laptalo Enter., Inc., No. 18-cv-05544-YGR, 2019 WL 2423417 (N.D. Cal. June 10, 2019); Humboldt Baykeeper v. Simpson Timber Co., No. C 06-04188CRB, 2006 WL 3545014 (Dec. 8, 2006)).)
8 The declarations submitted by Doman and Code both note that to the extent they travelled to California in connection with California Cascade business, none of the visits “were in any way related to the claims asserted in this litigation.” (ECF No. 22-1 at 2; ECF No. 22-2 at 2.) However, since that fact is disputed, the Court resolves the dispute in favor of Plaintiff. Wash. Shoe Co., 704 F.3d at 672. jurisdiction over corporate officer as he owned 50% of the stocks of the defendant corporation, made final business decisions, became “the prime moving force in all policies and decisions” of the defendant corporation, and even admitted he had the “final say” with respect to the defendant corporation’s policies); LeDuc v. Ky. Cent. Life Ins. Co., 814 F. Supp. 820 (N.D. Cal. 1992) (declining to find personal jurisdiction over corporate officers who made sporadic visits to the forum state unconnected to the issues in the dispute, met with agents who solicit business in the forum state, and signed agency contracts to solicit business from the forum state’s residents, but finding personal jurisdiction over the corporate officer who authored a letter to policyholders (including in the forum state) to assure them about the defendant corporation’s financial stability). Here, Plaintiff fails in its opposition to identify affirmative conduct taken by either Doman or Code with respect to the instant matter specifically. Instead, Plaintiff relies on its argument that this Court has personal jurisdiction over Doman and Code because they are “‘responsible corporate officers’ with authority to exercise control over California Cascade’s activities that are violating the CWA.” (ECF No. 27 at 14–15.) Plaintiff also generally contends Doman and Code have “the requisite minimum contacts with California” because they are corporate officers who direct the corporation’s activities and visit the forum state for business purposes. (Id. at 17.) However, unlike Davis or Wolf Designs, Inc., Plaintiff makes no argument that Doman or Code are sole shareholders of California Cascade, purposefully avail themselves of California’s jurisdiction, conduct business travel related to the instant dispute, make final business decisions for California Cascade, or have the “final say” with respect to California Cascade’s policies. 885 F.2d at 522; 322 F. Supp. 2d at 1072. Based on the foregoing, the Court finds that Plaintiff fails to make the requisite “prima facie showing of jurisdictional facts to withstand the motion to dismiss.” Wash. Shoe Co., 704 F.3d at 671–72. Thus, Doman and Code’s motion to dismiss for lack of personal jurisdiction is IV. CALIFORNIA CASCADE’S MOTION FOR SUMMARY JUDGMENT California Cascade moves for summary judgment, making essentially the same argument as it made in its motion to dismiss — that all seven of Plaintiff’s claims fail because it is not required to have coverage under the General Permit. (ECF No. 45 at 11–12, 14–16.) California Cascade notes that its motion was brought pursuant to the voluntary, self-imposed deadline in the parties’ Joint Status Report. (Id. at 7 (citing ECF No. 33 at 8).) Plaintiff makes a number of arguments in opposition, but asks the Court in the alternative to defer its ruling on the motion pursuant to Rule 56(d). (ECF No. 46 at 23.) Plaintiff contends it needs document subpoenas served on the Central Valley Regional Water Quality Board (“CVRWQCB”)9 and responses to discovery served on California Cascade to oppose the motion. (Id. at 24.) In reply, California Cascade argues Plaintiff is not entitled to relief under Rule 56(d) because it has failed to diligently pursue discovery over the course of the last several months. (ECF No. 47 at 5.) California Cascade maintains the additional discovery Plaintiff seeks “would not reveal any additional facts that would defeat the Motion, and which even if otherwise permissible, should have been conducted months ago.” (Id. at 6.) Rule 56(d) provides: “If a nonmovant shows by affidavit or declaration that, for specified reasons, it cannot present facts essential to justify its opposition, the court may . . . defer considering the motion or deny it.” Fed. R. Civ. P. 56(d). “To prevail under this Rule, parties opposing a motion for summary judgment must make ‘(a) a timely application which (b) specifically identifies (c) relevant information, (d) where there is some basis for believing that the information sought actually exists.’” Emp’rs Teamsters Local Nos. 175 and 505 Pension Trust Fund v. Clorox Co., 353 F.3d 1125, 1129–30 (9th Cir. 2004) (quoting VISA Int’l Serv. Ass’n v. Bankcard Holders of Am., 784 F.2d 1472, 1475 (9th Cir. 1986)). “The burden is on the party seeking additional discovery to proffer sufficient facts to show that the evidence sought exists, and that it would prevent summary judgment.” Chance v. Pac– Tel Teletrac Inc., 242 F.3d 1151, 1161 n.6 (9th Cir. 2001). Further, a court may deny “further discovery if the movant has failed diligently to pursue discovery in the past.” Cal. Union Ins. Co. v. Am. Diversified Sav. Bank, 914 F.2d 1271, 1278 (9th Cir. 1990) (citations omitted). However,
9 As California Cascade notes, the CVRWQCB is a division of the State Water Board “charged with implementing and enforcing the General Permit in the area of the state where California Cascade is located.” (ECF No. 45 at 7.) “[c]ourts usually employ a ‘generous approach toward granting [Rule 56(d)] motions.’” City of W. Sacramento, Cal. v. R & L Bus. Mgmt., No. 2:18-cv-00900-WBS-EFB, 2019 WL 5457029, at *1–2 (E.D. Cal. Oct. 24, 2019) (citation omitted); see also Burlington N. Santa Fe R. Co. v. Assiniboine & Sioux Tribes of Fort Peck Reservation, 323 F.3d 767, 773 (9th Cir. 2003). A. Diligence Here, the Court finds it is a very close call on the question of Plaintiff’s diligence. Plaintiff admits it “held off on actively pursuing discovery over the ensuing months,” believing that a ruling on the correct legal standard in its motion to dismiss “would be germane to how discovery was conducted.” (ECF No. 46 at 25.) However, Plaintiff is correct that bringing the instant motion for summary judgment by October 15, 2020 was brought pursuant to a voluntary, self-imposed deadline set by the parties in their Joint Status Report. (See ECF No. 33 at 8.) At that time, the Court had not yet ruled on California Cascade’s pending motion to dismiss, filed approximately ten months prior. The Court further notes that pursuant to the Initial Pretrial Scheduling Order (ECF No. 3) and the parties’ Joint Status Report (ECF No. 33), discovery is still open and ongoing. Plaintiff is not asking for a retroactive reopening of discovery or an extension of the discovery deadline. Accordingly, the Court finds Plaintiff has been sufficiently diligent. B. Relevant Nature of the Evidence Sought The discovery sought by the moving party must be “relevant to critical matters at issue in the summary judgment motion.” See Jacobson v. U.S. Dep’t of Homeland Sec., 882 F.3d 878, 883 (9th Cir. 2018); Fed. R. Civ. P. 56(d). The moving party must explain why those facts would preclude summary judgment. Tatum v. City & Cnty. of S.F., 441 F.3d 1090, 1100 (9th Cir. 2006). Plaintiff submits a declaration from its counsel, Brian Orion (“Orion”)10, who notes that the day after California Cascade filed its motion for summary judgment, he sent an email to Kent
10 California Cascade objects to Orion’s declaration on the basis that he lacks personal knowledge of the facts or circumstances surrounding the documents attached to the declaration. (See ECF No. 47 at 8–9; see also ECF No. 48.) However, the Court does not rely on any of the attached documents in its ruling herein and therefore declines to address California Cascade’s objections. Schmidt (“Schmidt”), counsel for California Cascade, proposing the parties meet and confer to reach a stipulation to provide an extension of the hearing date on the motion or some other stipulation “until the parties have certainty on a schedule for the completion of discovery on the SIC Code issues.” (ECF No. 46-1 at 4.) Schmidt refused to reach a stipulation and stated Plaintiff waived its right to bring its own summary judgment motion due to the Joint Status Report submitted by the parties. (Id. at 4–5.) Orion notes that since receiving the motion for summary judgment, Plaintiff has proceeded with propounding additional discovery, including two sets of requests for production of documents, one set of interrogatories, one set of requests for admission, a deposition notice, and two requests for entry upon designated property. (Id. at 5.) Plaintiff further contends in its opposition that the subpoenas “seek information to ensure there is an adequate record of the facts surrounding [CVRWQCB’s] NOT determination,” which “includes requests for copies of any internal written reports created by [CVRWQCB] on the NOT, internal correspondence concerning the NOT, any guidance materials used by [CVRWQCB] in determining the proper standard for applying SIC Codes to a facility, and the handwritten notes Mr. Henry11 refers to in the Henry [declaration].” (ECF No. 46 at 24 (citing ECF No. 45-3).) Plaintiff asserts the information in still-outstanding discovery is necessary to respond to the motion for summary judgment, as Plaintiff has not yet conducted any depositions under Rule 30(b)(6) and seeks to obtain evidence relevant to the SIC Manual such as California Cascade’s reports on employment, as well as sales and receipts. (Id.) Plaintiff maintains these issues “relate directly to the appropriate SIC Code to apply,” and therefore the responses are needed to enable it to fully respond. (Id. at 25.) Based on the foregoing, the Court finds Plaintiff articulates with enough specificity how the newly discovered facts may preclude summary judgment. See Tatum, 441 F.3d at 1100. ///
11 Along with their motion, California Cascade submits a declaration from Noah Henry, a Scientific Aide for the CVRWQCB who visited the Facility to verify the primary SIC Code California Cascade identified in its NOT. (See ECF No. 45-3.) Henry notes that during his visit to the Facility, he took handwritten notes. (Id. at 2.) Plaintiff asserts these notes are related “to the issue of the validity and thoroughness of the NOT determination.” (ECF No. 46 at 24.) Accordingly, California Cascade’s Motion for Summary Judgment is DENIED. Both parties may refile a motion for summary judgment with respect to the permit coverage issue by the dispositive motion deadline. The parties are further ordered to submit a Joint Status Report with an updated proposed case schedule. Plaintiff seeks reconsideration of the magistrate judge’s December 10, 2020 Order (ECF No. 53) granting California Cascade’s motion to stay discovery. (ECF No. 55.) However, the magistrate judge ordered discovery stayed until this Court rules on the merits of its motion to dismiss or motion for summary judgment, or on Plaintiff's request under Rule 56(d) to conduct and submit further discovery. (ECF No. 53 at 2.) As the Court has now ruled on California Cascade’s motion to dismiss and on Plaintiff's request under Rule 56(d) to conduct and submit further discovery, the Court DENIES Plaintiff's motion for reconsideration as moot. (ECF No. 55.) Based on the foregoing, the Court hereby DENIES California Cascade’s Motion to Dismiss (ECF No. 20), GRANTS Doman and Code’s Motion to Dismiss (ECF No. 22), DENIES California Cascade’s Motion for Summary Judgment (ECF No. 45), and DENIES Plaintiff's Motion for Reconsideration as moot (ECF No. 55). Defendants shall file an answer to the First Amended Complaint not later than thirty (30) days after the electronic filing date of this Order. Dated: September 20, 2021 { J) /) “ ! J Vu Troy L. Nuhlep United States District Judge