Evangers Dog and Cat Food Co., Inc. v. Environmental Democracy Project

Opinion

Case 2:21-cv-08489-RSWL-AS Document 55 Filed 05/18/22 Page 1 of 21 Page ID #:541 'O' 1 2 3 4 5 6 7 10 CV 21-08489-RSWL-ASx COMPANY, INC., an Illinois ORDER re: Defendant’s 12 corporation, Motion for Judgment on the 13 Plaintiff, Pleadings [32] and Plaintiff’s Motion for 14 v. Reconsideration [46] 15 ENVIRONMENTAL DEMOCRACY 16 PROJECT, a California not- for-profit corporation; 17 and DOES 1-10, 18 Defendants. 19 20 Plaintiff Evanger’s Dog and Cat Food Company, Inc. 21 (“Plaintiff”) brings this Action against Defendant 22 Environmental Democracy Project (“Defendant”), asserting 23 two claims for declaratory relief. Currently before the 24 Court is Defendant’s Motion for Judgment on the 25 Pleadings [32]. Also before the Court is Plaintiff’s 26 Motion for Reconsideration [46] of the Court’s previous 27 order dismissing with prejudice Counts 3-6 of 28 Plaintiff’s First Amended Complaint (“FAC”). Having 1 Case 2:21-cv-08489-RSWL-AS Document 55 Filed 05/18/22 Page 2 of 21 Page ID #:542

1 reviewed all papers submitted pertaining to these

2 Motions, the Court NOW FINDS AND RULES AS FOLLOWS: the

3 Court DENIES Plaintiff’s Motion for Reconsideration and 4 GRANTS in part Defendant’s Motion for Judgment on the 5 Pleadings. 7 A. Factual Background 8 Plaintiff is a corporation that sells a line of pet 9 food products under the brand name “OrgaNOMics” (the 10 “Products”). First Am. Compl. (“FAC”) ¶¶ 1, 6, ECF No. 11 13. On April 22, 2021, Plaintiff received a letter from 12 a law firm that purported to represent Defendant. Id. 13 ¶ 10. The letter stated that Plaintiff’s marketing and 14 sale of the Products violated California’s Organic Food 15 and Farming Act (“COFFA”)1 because the Products are 16 “prominently labeled as organic on their principal 17 display panels, and are represented as being 18 ‘Organically Sourced’ and ‘Made with Organic Produce’” 19 but do not contain the required 95% of certified organic 20 ingredients. Id.; FAC Ex. 1, ECF No. 13-1. The letter 21 also stated that Defendant intended to file a lawsuit in 22

23 1 COFFA regulates products that are “sold as organic.” Cal. Health & Safety Code § 110820. A product is “sold as organic” if 24 the product label or advertisement uses the term “organic” or any 25 grammatical variation of “organic.” Id. § 110815. COFFA requires products that are sold as organic to consist “of 26 products manufactured only from raw or processed agricultural products.” Id. § 110820. Ingredients other than raw or 27 processed agricultural products may be added to the product only if they do not represent more than 5% of the weight of the total 28 finished product. Id. 2 Case 2:21-cv-08489-RSWL-AS Document 55 Filed 05/18/22 Page 3 of 21 Page ID #:543

1 California to rectify the violations shortly, and it

2 invited Plaintiff to contact Defendant to “discuss a

3 potential settlement . . . short of litigation.” FAC 4 Ex. 1. 5 On September 8, 2021, Defendant sent a letter to 6 Chewy.com (“Chewy”) stating that Chewy was selling 7 Plaintiff’s Products in violation of COFFA. FAC ¶ 11; 8 FAC Ex. 2, ECF No. 13-2. The letter demanded that Chewy 9 cease selling the Products immediately and that 10 Defendant intended to file a lawsuit if Chewy failed to 11 comply. FAC ¶ 11; FAC Ex. 2. Chewy then notified 12 Plaintiff that it would no longer sell the Products and 13 would refuse to do so until Defendant’s objections were 14 resolved. FAC ¶ 12. 15 After receiving this notice from Chewy, Plaintiff 16 sent an email to Defendant requesting that Defendant 17 contact Chewy and withdraw its threat of litigation. 18 Id. ¶ 28; FAC Ex. 3, ECF No. 13-3. Defendant failed to 19 comply with Plaintiff’s request, and Plaintiff filed the 20 instant suit on October 26, 2021, seeking two forms of 21 declaratory relief: (1) declaratory judgment that the 22 Products do not violate COFFA; and (2) to the extent the 23 Products violate COFFA, declaratory judgment that this 24 application of COFFA violates the First Amendment. FAC 25 ¶¶ 14-22, Prayer for Relief ¶¶ 1-2. 26 On November 1, 2021, Defendant filed a lawsuit 27 against Plaintiff in the Superior Court of California, 28 County of Alameda, alleging a single cause of action to 3 Case 2:21-cv-08489-RSWL-AS Document 55 Filed 05/18/22 Page 4 of 21 Page ID #:544

1 enjoin Plaintiff from selling the Products in violation

2 of COFFA (the “State Case”). See Req. for Judicial

3 Notice in Supp. of Mot. to Dismiss Ex. 1, ECF No. 19-1 4 (“State Court Compl.”). Plaintiff then removed that 5 suit to the United States District Court for the 6 Northern District of California on November 24, 2021. 7 Id. On January 21, 2022, the Northern District of 8 California remanded the State Case back to Alameda 9 County Superior Court for lack of Article III standing. 10 Env’t Democracy Project v. Evanger’s Dog & Cat Food Co., 11 Inc., No. 4:21-cv-09139, ECF No. 22 (“Remand Order”). 12 B. Procedural Background 13 Plaintiff initiated this Action [1] against 14 Defendant on October 26, 2021, alleging two claims for 15 declaratory relief. On November 23, 2021, Plaintiff 16 filed its FAC [13], which added four tort causes of 17 action against Defendant. On January 20, 2022, the 18 Court issued an Order [28] dismissing those four new 19 causes of action as barred under the Noerr-Pennington 20 doctrine. 21 Defendant filed its Motion for Judgment on the 22 Pleadings [32] on February 8, 2022. Plaintiff filed its 23 Opposition [37] on March 1, 2022. Defendant replied 24 [41] on March 22, 2022. 25 Plaintiff filed its Motion for Reconsideration [46] 26 on April 8, 2022. Defendant filed its Opposition [49] 27 on April 19, 2022. Plaintiff replied [52] on April 26, 28 2022. 4 Case 2:21-cv-08489-RSWL-AS Document 55 Filed 05/18/22 Page 5 of 21 Page ID #:545

2 A. Legal Standard

3 1. Motion for Reconsideration 4 Rule 60(b) of the Federal Rules of Civil Procedure 5 permits courts to relieve a party from an order where, 6 as relevant here, new evidence is discovered that could 7 not have been discovered earlier with reasonable 8 diligence. Relief from judgment due to newly discovered 9 evidence is warranted only if the new evidence “would 10 have been likely to change the disposition of the case.” 11 Feature Realty, Inc. v. City of Spokane, 331 F.3d 1082, 12 1093 (9th Cir. 2003) (quoting Coastal Transfer Co. v. 13 Toyota Motor Sales, U.S.A., Inc., 833 F.2d 208, 211 (9th 14 Cir. 1987)). Such a motion must not “in any manner 15 repeat any oral or written argument made in support of, 16 or in opposition to, the original motion.” C.D. Cal. 17 L.R. 7-18. 18 A motion under Rule 60(b) must be made within a 19 reasonable time. Fed. R. Civ. P. 60(c)(1). Under Local 20 Rule 7-18, however, a motion for reconsideration must be 21 filed no later than fourteen days after entry of the 22 relevant order, absent a showing of good cause. C.D. 23 Cal. L.R. 7-18. 24 2. Motion for Judgment on the Pleadings 25 Rule 12(c) of the Federal Rules of Civil Procedure 26 states that “[a]fter the pleadings are closed — but 27 early enough not to delay trial — a party may move for 28 judgment on the pleadings.” A motion for judgment on 5 Case 2:21-cv-08489-RSWL-AS Document 55 Filed 05/18/22 Page 6 of 21 Page ID #:546

1 the pleadings is “functionally identical” to a Rule

2 12(b)(6) motion to dismiss for failure to state a claim,

3 meaning the same pleading standards apply. Dworkin v. 4 Hustler Magazine, Inc., 867 F.2d 1188, 1192 (9th Cir. 5 1989). Rule 12(c) motions are the proper vehicle for 6 seeking dismissal based on abstention principles. See, 7 e.g., Curry v. Baca, No. CV 04-09992 FMC, 2005 WL 8 8157004, at *1 (C.D. Cal. Feb. 10, 2005). 9 B. Analysis 10 1. Motion for Reconsideration [46] 11 Plaintiff seeks reconsideration of this Court’s 12 prior Order dismissing its tort claims with prejudice 13 pursuant to the Noerr-Pennington doctrine. See 14 generally Pl.’s Mot. for Reconsideration, ECF No. 46. 15 Plaintiff asserts that reconsideration is warranted 16 because it discovered new evidence supporting its theory 17 that the sham litigation exception to the Noerr- 18 Pennington doctrine should apply. Id. at 3:12-17. 19 Plaintiff therefore asks the Court to grant it leave to 20 amend its tort claims, even though Plaintiff currently 21 has no plans of pleading any tort claims against 22 Defendant. Pl.’s Reply in Supp. of Mot. for 23 Reconsideration at 6:20-7:4, ECF No. 52. The Court 24 finds that Plaintiff’s Motion is untimely, and good 25 cause for the delay is lacking. The Court additionally 26 finds that Plaintiff’s Motion fails on the merits. The 27 Motion is therefore DENIED. 28 /// 6 Case 2:21-cv-08489-RSWL-AS Document 55 Filed 05/18/22 Page 7 of 21 Page ID #:547

1 a. Timeliness

2 Local Rule 7-18 requires a party moving for

3 reconsideration to file the motion no later than 4 fourteen days after entry of the relevant order. C.D. 5 Cal. L.R. 7-18. A party who files a motion beyond this 6 deadline must establish good cause for the delay. Id. 7 The good cause standard focuses primarily on the 8 diligence of the party in filing the untimely motion. 9 Orgain, Inc. v. Northern Innovations Holding Corp., No. 10 8:18-cv-01253-JLS-ADS, 2021 WL 6103528, at *3 (C.D. Cal. 11 Sept. 29, 2021). 12 This Court entered its Order dismissing Plaintiff’s 13 tort claims on January 20, 2022. See Order re: Def.’s 14 Mot. to Dismiss, ECF No. 28. Plaintiff filed the 15 instant Motion on April 8, 2022, well outside of the 16 fourteen-day deadline. Plaintiff argues that this 17 deadline should not apply here because Plaintiff did not 18 discover the grounds for its motion until Defendant 19 tendered its responses to Plaintiff’s discovery requests 20 on February 23, 2022. Reply 3:4-14. Even so, Plaintiff 21 fails to account for its over five-week delay in filing 22 this Motion once it discovered the evidence that serves 23 as the grounds for this Motion. This delay is 24 particularly troublesome given that Plaintiff’s Motion 25 makes largely the same legal argument as made in 26 Plaintiff’s opposition to Defendant’s Motion to Dismiss. 27 See Pl.’s Opp’n to Def.’s Mot. to Dismiss 12:16-17:3, 28 ECF No. 22; see also Holmes v. Harris, No. CV 18-3739 7 Case 2:21-cv-08489-RSWL-AS Document 55 Filed 05/18/22 Page 8 of 21 Page ID #:548

1 PSG (Ex), 2021 WL 2272395, at *4 (C.D. Cal. May 19,

2 2021) (denying a motion to reconsider as untimely where

3 moving party failed “to explain why it took over a month 4 to submit a motion rehashing their previous arguments”). 5 In sum, Plaintiff failed to file its Motion within 6 the time frame provided under Local Rule 7-18 and has 7 failed to establish good cause for its delay. The 8 Motion is therefore DENIED on this basis. 9 b. Merits of Newly Discovered Evidence 10 To establish that threatened litigation is a “sham” 11 such that it is not entitled to First Amendment 12 protections provided by the Noerr-Pennington doctrine, a 13 party must show that: (1) the threatened lawsuit is 14 objectively baseless; and (2) the petitioning party’s 15 motive was unlawful. Sosa v. DIRECTV, Inc., 437 F.3d 16 923, 938 (9th Cir. 2006). A party seeking to establish 17 this sham litigation exception faces a heightened 18 pleading standard and must specify “exactly what 19 representations [the petitioning party] made, [and] to 20 whom; with whom [it] conspired; [and] what exactly its 21 ‘improper and/or unlawful’ methods of advocacy were.” 22 Kottle v. Nw. Kidney Ctrs., 146 F.3d 1056, 1063 (9th 23 Cir. 1998). 24 Plaintiff argues that Defendant’s discovery 25 responses in the State Case prove that Defendant 26 conducted no investigation of Plaintiff’s Products prior 27 to threatening Plaintiff with litigation, and therefore 28 Defendant’s threatened litigation was objectively 8 Case 2:21-cv-08489-RSWL-AS Document 55 Filed 05/18/22 Page 9 of 21 Page ID #:549

1 baseless because it was based on “nothing more than

2 [Defendant’s] guess.” Pl.’s Mot. for Reconsideration

3 6:15-16, ECF No. 46. But Defendant’s failure to test 4 the contents of the Products itself does not mean that 5 Defendant had no reasonable basis for its belief about 6 Plaintiff’s noncompliance with COFFA. As Plaintiff 7 itself acknowledges, Defendant’s discovery responses 8 indicate that it relied on the Product’s ingredient 9 statements and the order of ingredients listed to 10 determine that the Products more likely than not 11 contained less than the required percentages of organic 12 ingredients. See Mot. for Reconsideration 6:2-15. 13 Plaintiff fails to explain why this rationale is 14 unreasonable. See EcoDisc Tech. AG v. DVD Format/Logo 15 Licensing Corp., 711 F. Supp. 2d 1074, 1084 (C.D. Cal. 16 2010) (declining to apply the sham litigation exception 17 where there was no reason to believe that threatened 18 claims were unreasonable). 19 In any event, leave to amend would be inappropriate 20 here because Plaintiff cannot establish that Defendant 21 had an unlawful motive for its petitioning activity. 22 Plaintiff has itself admitted that Defendant’s purpose 23 for its petitioning activity was ostensibly to “rectify 24 violations of certain governmental regulations.” See 25 FAC ¶ 10. Plaintiff points to no additional facts it 26 could plead to establish Defendant’s unlawful motive. 27 Rather, Plaintiff states that the lack of such facts is 28 irrelevant because Plaintiff only seeks the opportunity 9 Case 2:21-cv-08489-RSWL-AS Document 55 Filed 05/18/22 Page 10 of 21 Page ID #:550

1 to amend its complaint in case it one day discovers

2 facts to support its sham litigation theory. Reply

3 6:16-19; Mot. 8:12-15. Leave to amend is not warranted 4 on such a basis. See Nat’l Funding, Inc. v. Com. Credit 5 Counseling Servs., Inc., 817 F. App’x 380, 385 (9th Cir. 6 2020) (affirming district court’s denial of leave to 7 amend where plaintiff “failed to delineate any 8 additional facts it would add in support of [its] claim 9 to cure [the] deficiencies”). Plaintiff has therefore 10 failed to show that it could meet the heightened 11 pleading standard required for the sham litigation 12 exception, and amendment of this claim would be futile. 13 Plaintiff fails to present any newly discovered 14 evidence that would have changed the Court’s conclusion 15 as to the application of the Noerr-Pennington doctrine 16 to Plaintiff’s tort claims. Relief from the Court’s 17 prior Order under Rule 60(b) is therefore inappropriate. 18 Feature Realty, 331 F.3d at 1093. Plaintiff’s Motion is 20 2. Motion for Judgment on the Pleadings [32] 21 Defendant moves for judgment on the pleadings, 22 arguing that the Court should either dismiss or stay 23 this Action under the Declaratory Judgment Act, the 24 Anti-Injunction Act, the Younger abstention doctrine, or 25 the Pullman abstention doctrine. See generally Def.’s 26 Mot. for J. on the Pleadings, ECF No. 32. The Court 27 will exercise its discretion to stay this Action under 28 the Declaratory Judgment Act. Because this conclusion 10 Case 2:21-cv-08489-RSWL-AS Document 55 Filed 05/18/22 Page 11 of 21 Page ID #:551

1 is dispositive of Defendant’s Motion, the Court need not

2 address the parties’ arguments as to other abstention

3 principles. 4 The Declaratory Judgment Act provides that federal 5 courts “may declare the rights and other legal relations 6 of any interested party seeking such [a] declaration.” 7 28 U.S.C. § 2201(a) (emphasis added). In Brillhart v. 8 Excess Ins. Co. of America, 316 U.S. 491 (1942), the 9 Supreme Court has held that the permissive language of 10 the Act gives district courts discretion to stay a 11 federal declaratory judgment action when “the questions 12 in controversy . . . can better be settled in” a pending 13 state proceeding. Id. at 495. Thus, while federal 14 courts ordinarily have a “virtually unflagging 15 obligation” to exercise jurisdiction where it exists, 16 see Colorado River Water Conservation Dist. v. United 17 States, 424 U.S. 800, 813, 817 (1976), this principle 18 “yields to considerations of practicality and wise 19 judicial administration” in the declaratory judgment 20 context, see Wilton v. Seven Falls Co., 515 U.S. 277, 21 288 (1995). 22 Brillhart established three factors that courts 23 should consider when determining whether to entertain a 24 declaratory judgment action: (1) avoiding “needless 25 determination of state law issues”; (2) discouraging 26 “forum shopping”; and (3) avoiding “duplicative 27 litigation.”2 Gov’t Emps. Ins. Co. v. Dizol, 133 F.3d 28 2 Additional considerations include “whether the declaratory 11 Case 2:21-cv-08489-RSWL-AS Document 55 Filed 05/18/22 Page 12 of 21 Page ID #:552

1 1220, 1225 (9th Cir. 1998).

2 a. Brillhart Factors

3 Here, all three Brillhart factors weigh in favor of 4 staying this Action. Staying this Action will allow 5 California state courts to address novel issues of 6 California law presented by the parties and will avoid 7 duplicative litigation of those issues. The Court will 8 address each factor in turn. 9 i. Needless Interpretation of State Law 10 Abstention under Brillhart is appropriate when the 11 Court is asked to adjudicate a “purely state law issue.” 12 Huth v. Hartford Ins. Co. of the Midwest, 298 F.3d 800, 13 804 (9th Cir. 2002). As discussed below, Plaintiff’s 14 two remaining counts are premised on COFFA and require 15 the Court to interpret that California law. See FAC 16 ¶¶ 15, 22. This factor therefore weighs in favor of 17 staying this Action. 18 Count I seeks a declaration that Plaintiff’s use of 19 its “OrgaNOMics” trademark does not violate COFFA. FAC 20 ¶¶ 14-16, Prayer for Relief ¶ 1. Adjudicating this 21 claim would first require this Court to determine 22 whether the Products are “sold as organic” under COFFA,

23 action will settle all aspects of the controversy; whether the 24 declaratory action will serve a useful purpose in clarifying the legal relations at issue; whether the declaratory action is being 25 sought merely for the purposes of procedural fencing or to obtain a ‘res judicata’ advantage; or whether the use of a declaratory 26 action will result in entanglement between the federal and state court systems.” Gov’t Emps. Ins. Co. v. Dizol, 133 F.3d 1220, 27 1225 n.5 (9th Cir. 1998). 28 12 Case 2:21-cv-08489-RSWL-AS Document 55 Filed 05/18/22 Page 13 of 21 Page ID #:553

1 meaning the Court must determine whether the term

2 “OrgaNOMics” is a grammatical variation of the word

3 “organic.” If so, the Court would next have to 4 determine whether the Products comply with COFFA’s 5 requirements. These are clearly issues of state law. 6 Moreover, this Court could find no California case law 7 applying COFFA’s “grammatical variation” language to 8 determine whether a product is “sold as organic.” 9 Notably, the parties disagree on what constitutes a 10 “grammatical variation.” Compare Pl.’s Opp’n to Mot. 11 for J. on Pleadings 19:14-17, ECF No. 37, with Def.’s 12 Reply in Supp. of Mot. for J. on Pleadings 10:21-26, ECF 13 No. 41. The Court concludes that staying this Action is 14 appropriate so that California state courts can 15 determine whether Plaintiff’s Products fall within 16 COFFA’s scope and comply with its terms. See Keown v. 17 Tudor Ins. Co., 621 F. Supp. 2d 1025, 1032 (D. Haw. 18 2008) (declining jurisdiction over declaratory judgment 19 claim so that state court could determine unsettled area 20 of state law); Gen. Star Indem. Co. v. JRK Prop. 21 Holdings, Inc., No. CV 21-5287-DMG (SKx), 2021 WL 22 6618475, at *2 (C.D. Cal. Dec. 28, 2021) (same). 23 Count II asks the Court to declare that COFFA 24 violates the First Amendment to the extent that it 25 prohibits Plaintiff from accurately representing that 26 the Products contain organic ingredients and accurately 27 specifying those ingredients. Id. ¶ 22, Prayer for 28 Relief ¶ 2. While Count II is a First Amendment claim, 13 Case 2:21-cv-08489-RSWL-AS Document 55 Filed 05/18/22 Page 14 of 21 Page ID #:554

1 granting Plaintiff’s requested relief would require a

2 determination that COFFA both applies to and bars

3 Plaintiff’s representations and advertisements. Because 4 this claim requires application of state law, it does 5 not weigh in favor of exercising jurisdiction. SeeVXI 6 Global Sol’ns, LLC v. Onni Times Square, LP, No. CV 16- 7 8562 DMG (GJSx), 2017 WL 3579877, at *4-5 (C.D. Cal. 8 June 16, 2017) (holding that first Brillhart factor 9 favored abstention where federal civil rights claim 10 involved questions of state law); Reed v. East End 11 Props., Inc., No. ED CV 17-955-DMG (KKx), 2018 WL 12 6131211, at *11 (C.D. Cal. Mar. 15, 2018) (same); see 13 also United States v. Oregon, 503 F. App’x 525, 527-28 14 (9th Cir. 2013) (affirming district court’s decision to 15 abstain from hearing a constitutional challenge to state 16 tax law because state court was better positioned to 17 fashion remedy if tax law was found unconstitutional). 18 In sum, the first Brillhart factor weighs in favor 19 of abstention. Plaintiff’s claims require 20 interpretation of a novel issue of California law that, 21 as discussed below, is also at issue in the ongoing 22 parallel state court proceedings. This factor alone 23 provides sufficient support for the Court to abstain. 24 See R.R. St., 656 F.3d at 975 (citing Huth, 298 F.3d at 25 802-04). Nevertheless, the Court finds that the other 26 Brillhart factors weigh in favor of abstention as well. 27 ii. Forum Shopping 28 “Federal courts should generally decline to 14 Case 2:21-cv-08489-RSWL-AS Document 55 Filed 05/18/22 Page 15 of 21 Page ID #:555

1 entertain reactive declaratory actions.” Dizol, 133

2 F.3d at 1225. A declaratory action is reactive where a

3 defendant sued in state court then files a declaratory 4 relief action in federal court in hopes of having the 5 state law claims brought against it heard in a 6 potentially more favorable federal forum. Id. However, 7 “[t]iming is only one consideration” in determining 8 whether a federal plaintiff is forum shopping. R.R. 9 St., 656 F.3d at 976. An action may also be deemed 10 reactive when the federal plaintiff “anticipates that 11 [the federal defendant] intends to file a non-removable 12 state court action, and rush[es] to file a federal 13 action before [the federal defendant] does so” in state 14 court. Cont’l Cas. Co. v. Robsac Indus., 947 F.2d 1367, 15 1372 (9th Cir. 1991). “Courts look to the ‘sequence of 16 events’ leading to a federal action to determine if a 17 party has engaged in forum shopping.” Travelers Indem. 18 Co. v. Newlin, No. 20cv765-GPC(DEB), 2020 WL 5517591, at 19 *10 (S.D. Cal. Sept. 14, 2020) (citing Int’l Ass’n of 20 Entrepreneurs v. Angoff, 58 F.3d 1266, 1270 (8th Cir. 21 1995)). 22 Here, the sequence of events surrounding this 23 Action suggest that Plaintiff engaged in forum shopping 24 by filing a reactive lawsuit. The sequence of events is 25 as follows: Defendant sent letters to Plaintiff and 26 Chewy on April 19, 2021 and September 8, 2021, 27 respectively, threatening to “file a lawsuit in 28 California to rectify . . . COFFA violations shortly.” 15 Case 2:21-cv-08489-RSWL-AS Document 55 Filed 05/18/22 Page 16 of 21 Page ID #:556

1 FAC ¶¶ 10-11; FAC Exs. 1, 2. On October 26, 2021,

2 Plaintiff filed this Action, stating that a controversy

3 exists based on the threatened California lawsuits. Id. 4 ¶ 16. When Defendant filed the State Case six days 5 later, Plaintiff attempted to remove that action to 6 federal court. See Remand Order at 1:5. The case was 7 then remanded to state court because Defendant lacked 8 Article III standing to bring its claim in federal 9 court. Id. at 5:11-12. 10 These facts suggest that this Action is a reactive 11 declaratory lawsuit. Plaintiff’s alleged basis for a 12 controversy in the FAC shows that Plaintiff knew 13 Defendant had asserted a claim under COFFA and intended 14 to file suit. FAC ¶¶ 10-11, 16; FAC Ex. 1 (“[Defendant] 15 intends to file a lawsuit in California to rectify [the 16 Products’] COFFA violations shortly.”). This imminent 17 lawsuit plainly would not have been removable to federal 18 court.3 Defendant’s demand letters thus alerted 19 Plaintiff that it was in danger of being named as a 20 defendant in a non-removable state court proceeding, and 21 Plaintiff likely filed this Action to preempt such a 22 proceeding. See Robsac, 947 F.2d at 1372; Newlin, 2020 23 WL 5517591, at *11 (finding federal action reactive when 24 filed after receiving a demand for payment indicating a 25 possibility of non-removable state court litigation); 26 3 Indeed, in granting remand back to state court, the 27 remanding court noted that Plaintiff’s removal efforts there “could have resulted in the award of attorneys’ fees.” Remand 28 Order at 5 n.3. 16 Case 2:21-cv-08489-RSWL-AS Document 55 Filed 05/18/22 Page 17 of 21 Page ID #:557

1 Fin. Indem. Co. v. Brooks, No. 2:15-cv-06318-CAS (AGRx),

2 2016 WL 626736, at *7 (C.D. Cal. Feb. 16, 2016) (finding

3 federal action reactive where potential state action 4 would be non-removable because of a lack of diversity). 5 Thus, declining jurisdiction in this case would further 6 the goal of discouraging forum shopping. 7 While Plaintiff emphasizes the timing of each 8 lawsuit’s filing in arguing that this Action is not 9 reactive, see Opp’n 24:8-26, that single consideration 10 does not outweigh the other factors pointing toward a 11 finding of forum shopping. See Huth, 298 F.3d at 804 12 (concluding that “the fact that [the federal plaintiff] 13 won the race to the courthouse by several days” was not 14 reason enough to retain jurisdiction). Accordingly, the 15 Court finds that this Action is reactive, and that 16 abstention would serve the policy of discouraging forum 17 shopping. 18 iii.Duplicative Litigation 19 “Ordinarily it would be uneconomical as well as 20 vexatious for a federal court to proceed in a 21 declaratory judgment suit where another suit is pending 22 in a state court presenting the same issues, not 23 governed by federal law, between the same parties.” 24 Brillhart, 316 U.S. at 495. Here, this Action and the 25 State Case involve identical issues. Plaintiff’s first 26 count asks the Court to declare that Plaintiff’s use of 27 its “OrgaNOMics” mark and its sale of the Products do 28 not violate COFFA. FAC ¶¶ 14-16, Prayer for Relief ¶ 1. 17 Case 2:21-cv-08489-RSWL-AS Document 55 Filed 05/18/22 Page 18 of 21 Page ID #:558

1 Plaintiff’s second count asks the Court to declare that

2 COFFA violates the First Amendment as applied to

3 Plaintiff’s representations of organic ingredients on 4 the Products’ labels. See id. ¶¶ 17-22, Prayer for 5 Relief ¶ 2. Likewise, Defendant’s complaint in the 6 State Case seeks to enjoin Plaintiff from continuing to 7 violate COFFA by selling the Products. See State Court 8 Complaint ¶¶ 18-23. The core question raised in both 9 actions is how COFFA applies to Plaintiff’s use of its 10 “OrgaNOMics” mark and the word “organic” in both selling 11 the Products and labelling their ingredients. The state 12 court is well equipped to answer this question. Given 13 the broad scope of Defendant’s request for injunctive 14 relief in the State Case, abstention will avoid 15 duplicative litigation of issues that will necessarily 16 arise in state court. See Robsac, 947 F.2d at 1373. 17 Plaintiff argues that this Action and the State 18 Case are not duplicative because Plaintiff’s Complaint 19 raises constitutional issues that Defendant has not 20 raised in its State Case. Opp’n 25:1-9. But abstention 21 is not necessarily improper simply because the federal 22 declaratory action raises a constitutional challenge to 23 a state law. See United States v. Oregon, 503 F. App’x 24 at 527-28; Heat Surge, LLC v. Lee, No. C 09–572 JF 25 (PVT), 2009 WL 1883715, at *5 (N.D. Cal. June 30, 2009) 26 (finding that constitutional challenge to state law did 27 not prevent abstention because state court possessed 28 concurrent jurisdiction and constitutional claim could 18 Case 2:21-cv-08489-RSWL-AS Document 55 Filed 05/18/22 Page 19 of 21 Page ID #:559

1 be raised as a defense in state case). Nothing appears

2 to preclude Plaintiff from raising its constitutional

3 challenge to COFFA as a defense in the State Case. See 4 Brillhart, 316 U.S. at 495 (instructing district courts 5 to consider “the scope of the pending state court 6 proceeding and the nature of defenses open there”); All 7 One God Faith, Inc. v. Sustainable Indus. Standards, 8 Inc., 183 Cal. App. 4th 1186, 1205-10 (2010) (addressing 9 a First Amendment challenge to COFFA’s application to a 10 form of commercial speech). It is Plaintiff’s burden to 11 show that state procedures will not afford an adequate 12 remedy for its constitutional claim. See Pennzoil Co. 13 v. Texaco, Inc., 481 U.S. 1, 14-15 (1987). Plaintiff 14 has not done so. Therefore, the State Case is presumed 15 to provide an adequate forum for Plaintiff to raise its 16 constitutional challenge. Id. 17 In sum, the Court concludes that abstention is 18 proper because all three Brillhart factors weigh in 19 favor of declining jurisdiction over this Action. 20 Abstention will also serve other factors outlined in 21 Dizol, such as avoidance of “entanglement between the 22 federal and state court systems.” 133 F.3d at 1225 n.5. 23 The Court therefore GRANTS Defendant’s Motion. 24 b. Staying this Action Is Proper 25 “[D]istrict courts have substantial latitude in 26 deciding whether to stay or to dismiss a declaratory 27 judgment suit in light of pending state proceedings.” 28 Wilton, 515 U.S. at 286. However, “where the basis for 19 Case 2:21-cv-08489-RSWL-AS Document 55 Filed 05/18/22 Page 20 of 21 Page ID #:560

1 declining to proceed is the pendency of a state

2 proceeding, a stay will often be the preferable course,

3 because it assures that the federal action can proceed 4 without risk of a time bar if the state case, for any 5 reason, fails to resolve the matter in controversy.” 6 Id. at 288 n.2 (citation omitted). The Court finds that 7 a stay, rather than dismissal of this Action, is 8 appropriate here so that this Action may proceed should 9 any of its underlying issues remain after resolution of 10 the State Case.4 See Md. Cas. Co. v. Witherspoon, 993 11 F. Supp. 2d 1178, 1186 (C.D. Cal. 2014). The Court 12 therefore stays this Action pending resolution of the 13 State Case. 14 /// 15 /// 16 /// 17 /// 18 /// 19 /// 20 /// 21 /// 22 /// 23 /// 24 /// 25 4 In particular, a stay will preserve Plaintiff’s First 26 Amendment claim should Plaintiff wish to have that claim heard by this Court. See England v. La. State Bd. of Med. Exam’rs, 375 27 U.S. 411, 421-22 (1964) (holding that a party may reserve federal claims to be heard later by an abstaining district court and need 28 only state as much on the state record). 20 Case 2:21-cv-08489-RSWL-AS Document 55 Filed 05/18/22 Page 21 of 21 Page ID #:561

2 Based on the foregoing, the Court DENIES

3 Plaintiff’s Motion for Reconsideration. The Court 4 GRANTS in part Defendant’s Motion for Judgment on the 5 Pleadings and hereby stays this Action until the State 6 Case is resolved. All dates presently set on the 7 Court’s calendar are VACATED. 8 Additionally, the parties shall file a Joint Status 9 Report advising the Court of the status of the State 10 Case every 90 days from the date of this Order, or 11 within 30 days of the resolution of the State Case, 12 whichever occurs first. The first Joint Status Report 13 shall be filed on August 16, 2022. 15 16 DATED: May 18, 2022 ______/s_/_ R_o_n_a_l_d _S_._W_._ L_e_w______ HONORABLE RONALD S.W. LEW 17 Senior U.S. District Judge 18 19 20 21 22 23 24 25 26 27 28 21