Forces Action Project, LLC v. California

16 F. App'x 774

Opinion

MEMORANDUM

*

Plaintiffs, a class of “consumers of tobacco products,” allege that the states of California and Utah, the city of San Francisco, and several tobacco companies (collectively, Defendants) violated their rights to equal protection and due process when Defendants entered into the Master Settlement Agreement (MSA). The district court dismissed the action, holding that Plaintiffs do not have standing. The court also denied Plaintiffs’ motion to amend their complaint. We affirm in part and reverse in part. Standing

Plaintiffs argue that the M.S.A. § is a taking of their property without due process, because it requires the tobacco companies to “pass through” their monetary penalties in the form of higher prices for their consumer products. Plaintiffs lack standing to bring this claim because they have not alleged an injury in fact. Table Bluff Reservation v. Philip Morris, Inc., 256 F.3d 879, 885-886 (9th Cir.2001) (dismissing a similar claim because the argument that a party must “pay increased tobacco prices does not allege an injury in fact”).

Next, Plaintiffs contend that the M.S.A. § insulates the tobacco companies from claims that Plaintiffs otherwise could bring. Plaintiffs do not, however, refer to any claims that were actually dismissed or to any claims that they plan to file. The assertion of a mere hypothetical future injury is not sufficient to confer standing. Lujan v. Defenders of Wildlife, 504 U.S. 555, 564, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992); Thomas v. Anchorage Equal Rights Comm’n, 220 F.3d 1134, 1140 (9th Cir.2000) (en banc), cert. denied, 531 U.S. 1143, 121 S.Ct. 1078, 148 L.Ed.2d 955 (2001).

Last, Plaintiffs argue that California and Utah violated certain of their own statutes by not providing notice to Plaintiffs of their right to intervene in the underlying actions that were settled by the MSA. Again, Plaintiffs have not established an injury in fact. There is no evidence that either California or Utah instituted an action under any of the cited statutory provisions or that the M.S.A. § is a settlement of such statutory claims. Indeed, California’s and Utah’s complaints prove just the opposite.

Motion to Amend

The district court denied Plaintiffs’ motion to amend their complaint to add an antitrust claim on the ground that the proposed amendment was “clearly futile.” The court noted that, under the “direct purchaser” doctrine, indirect purchasers of products lack standing under the antitrust statutes. Ill. Brick Co. v. Illinois, 431 U.S. 720, 746, 97 S.Ct. 2061, 52 L.Ed.2d 707 (1977).

The district court was correct to the extent that Plaintiffs seek antitrust damages from the tobacco companies. However, this court has distinguished between an antitrust claim that seeks damages and one that seeks injunctive relief, noting that the “direct purchaser” doctrine applies only to the former. Lucas Auto. Eng’g, Inc. v. Bridgestone/Firestone, Inc., 140 F.3d 1228, 1235 (9th Cir.1998) (observing that “indirect purchasers are not barred from bringing an antitrust claim for injunctive relief against manufacturers”).

Because Plaintiffs seek both damages and injunctive relief, the district court erred as a matter of law. Defendants assert that there are other reasons, however, why Plaintiffs should be denied leave to amend to add an antitrust claim seeking injunctive relief. See Ascon Props, v. Mobil Oil Co., 866 F.2d 1149, 1160 (9th Cir. 1989) (“The district court’s discretion to deny leave to amend is particularly broad where plaintiff has previously amended the complaint.”). We remand this determination to the district court.

AFFIRMED in part, REVERSED and REMANDED in part. Each party will bear its own costs on appeal.

This disposition is not appropriate for publication and may not be cited to or by the courts of this circuit except as provided by 9th Cir. R. 36-3.