Pioneers Memorial Healthcare District v. Imperial Valley Healthcare District

• Court: District Court, S.D. California
• Decided: August 19, 2024
• Docket: 3:24-cv-00861
• Status: Unknown

Opinion

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA 10 11 PIONEERS MEMORIAL Case No.: 24-CV-861 JLS (LR) HEALTHCARE DISTRICT, a California 12 municipal corporation, ORDER: 13 Petitioner, (1) GRANTING IN PART AND 14 v. DENYING IN PART MOTIONS TO 15 DISMISS (ECF Nos. 24, 25, 26); IMPERIAL VALLEY HEALTHCARE

16 DISTRICT, a California municipal (2) VACATING HEARING ON corporation, et al. 17 PETITIONER’S MOTION FOR Respondents. PRELIMINARY INJUNCTION AND 18 DENYING THE SAME AS MOOT

19 (ECF No. 28); ROB BONTA, in his official capacity as

20 California Attorney General, (3) REMANDING ACTION TO 21 Intervenor-Respondent. CALIFORNIA SUPERIOR COURT, IMPERIAL COUNTY; AND 22

23 (4) ORDERING FURTHER BRIEFING ON PETITIONER’S 24 REQUEST FOR ATTORNEYS’ FEES 25 26 Presently before the Court are three Motions to Dismiss the Amended Verified 27 Petition and Complaint (“Am. Pet.,” ECF No. 8-2). These were filed by (1) Intervenor- 28 Respondent California Attorney General Rob Bonta (“AG’s Mot.,” ECF No. 24); 1 (2) Respondent Imperial Valley Healthcare District (“IVHD’s Mot.,” ECF No. 25); and 2 (3) Respondent Imperial Local Agency Formation Commission (“LAFCO’s Mot.,” ECF 3 No. 26).2,3 The Attorney General also submitted a Memorandum of Points and Authorities 4 in support of his Motion (“AG’s Mem.,” ECF No. 24-1), as did LAFCO (“LAFCO’s 5 Mem.,” ECF No. 26-1). As permitted by the Court, ECF No. 27, Petitioner Pioneers 6 Memorial Healthcare District (“Petitioner” or “PMHD”) filed a single Opposition to the 7 Motions (“Opp’n,” ECF No. 29). The Attorney General, IVHD, and LAFCO filed separate 8 Replies.4 Also before the Court is Petitioner’s Motion for Preliminary Injunction (“Pet.’s 9 Inj. Mot.,” ECF No. 28), which is currently set for a hearing on September 26, 2024.5 10 Having carefully considered the Amended Petition, the Parties’ submissions, and the 11 law, the Court GRANTS IN PART AND DENIES IN PART the Motions to Dismiss; 12 VACATES the hearing on Petitioner’s Injunction Motion and DENIES the same AS 13 MOOT; REMANDS this case to California Superior Court, Imperial County; and retains 14 jurisdiction over and ORDERS further briefing on Petitioner’s request for attorneys’ fees. 15

16 1 IVHD’s Motion was also filed on behalf of the individuals named as respondents in this action in their 17 capacities as members of the Imperial Valley Healthcare District’s (“IVHD”) board of directors. These include Respondents Enola Berker, Katherine Burnworth, James Garcia, Laura Goodsell, Donald W. 18 Medart Jr., Arturo Proctor, and Rodolfo Valdez. See ECF No. 25. In this Order, the Court will refer to IVHD and the foregoing individuals collectively as the “IVHD Respondents” or simply “IVHD.” 19

20 2 LAFCO’s Motion was also filed on behalf of the individuals named as respondents in this action in their capacities as members of Imperial County Local Agency Formation Commission (“LAFCO”). These 21 include Respondents Robert Amparano, Jesus E. Escobar, John Hawk, Michael W. Kelley, Jose Landeros, Javier Moreno, Maria Nava-Froelich, and David Salgado. See ECF No. 26. In this Order, the Court will 22 refer to LAFCO and the foregoing individuals collectively as “LACFO Respondents” or simply “LAFCO.” 23

24 3 The Court previously took the Motions to Dismiss under submission without oral argument pursuant to Civil Local Rule 7.1(d)(1). See ECF No. 37. 25 4 The Court will cite to the Replies as “AG’s Reply” (ECF No. 31); “IVHD’s Reply” (ECF No. 32); and 26 “LAFCO’s Reply” (ECF No. 33).

27 5 Requests for Judicial Notice were also filed by the Attorney General (ECF No. 24-2); IVHD (ECF 28 No. 25-1); and Petitioner (ECF No. 29-1). These Requests for Judicial Notice are DENIED, as the 1 BACKGROUND 2 I. Factual Background 3 Petitioner PMHD is a “municipal corporation and local health care district” that was 4 originally “formed under California law” in the 1950s. Am. Pet. ¶ 5. Petitioner was created 5 to provide health services “in the geographical center of Imperial County,” where it owns 6 and operates Pioneers Memorial Hospital. Id. Members of Petitioner’s governing board 7 are elected by those residing within PMHD’s boundaries. Id. 8 As Petitioner tells it, two laws principally regulate the modification of healthcare 9 districts like PMHD: (1) the Cortese-Knox-Hertzberg Local Government Reorganization 10 Act of 2000 (“CKH Act”) (Cal. Gov. Code. § 56000 et seq.); and (2) the Local Health Care 11 District Law (“LHCD Law”) (Cal. Health & Safety Code §§ 32000–32492). Id. ¶ 1. The 12 CKH Act created local agency formation commissions, like Respondent LAFCO, to 13 “oversee the formation, dissolution, . . . and reorganization of all special districts, 14 including healthcare districts.” Id. ¶ 29. Meanwhile, the LHCD Law contains provisions 15 specific to healthcare districts. Id. ¶ 31. So, wherever the LHCD Law speaks to 16 administrative procedures and healthcare districts, it supersedes the CKH Act. Id. But 17 whenever the LHCD Law is silent, the CKH Act fills the void. Id. Per Petitioner, under 18 these laws, voters must generally approve the dissolution of local healthcare districts and 19 the divestiture of said districts’ assets.6 See id. ¶¶ 40, 43. Voters also have a role to play 20 in the formation of healthcare districts. See id. ¶ 32. 21 In late 2023, another California statute pertaining to healthcare districts came on the 22 scene: Assembly Bill 918 (“AB 918”) (Cal. Health & Safety Code §§ 32499.5–32499.95). 23 See id. ¶¶ 1, 45. Among other things, AB 918 purports to (1) dissolve PMHD and another 24 healthcare district in Imperial County; (2) create a new healthcare district (IVHD) covering 25 all of Imperial County; and (3) transfer all of PMHD’s “assets, rights, and responsibilities” 26 27 28 6 The Amended Petition discusses the combined impact of these statutes at length. See generally Am. Pet. 1 to IVHD on the day of PMHD’s dissolution. Id. ¶¶ 45, 47, 50. PMHD will not be dissolved 2 until LAFCO receives and considers IVHD’s recommendations regarding financial matters 3 and other administrative issues. See id. ¶¶ 48–49. However, Petitioner explains, AB 918 4 requires LAFCO to dissolve PMHD by no later than January 1, 2025. Id. ¶ 49. 5 II. Procedural Background 6 A. In State Court 7 On April 10, 2024, PMHD sought to interdict AB 918 by filing its Verified Petition 8 for Writ of Mandate and Complaint for Declaratory and Injunctive Relief (“Pet.,” ECF 9 No. 1-2) in California Superior Court, Imperial County. The Petition included three causes 10 of action. See Pet. at 21–30. On May 14, the Amended Petition—adding three more causes 11 of action—followed. As relevant here, Petitioner alleges AB 918 is harming voters, 12 patients, and PMHD itself. Specifically, Petitioner claims, inter alia, that (1) the “specter 13 of the dissolution of PMHD is creating an unstable environment,” which impacts its staff 14 and patients; and (2) AB 918 deprives “PMHD’s voters . . . of their fundamental right to 15 vote” on the dissolution of a healthcare district. Am. Pet. ¶ 107. 16 Counts I and II of the Amended Petition are based in part on federal law. 17 Specifically, Petitioner claims AB 918 violates the equal protection clause of the United 18 States Constitution’s Fourteenth Amendment because it constitutes “impermissible special 19 legislation” and disparately impacts PMHD’s “almost exclusively Hispanic patient and 20 voting population.” Id. at 24, 30 (capitalization altered and emphasis omitted). In the same 21 Counts—and for the same reasons—Petitioner also contends AB 918 violates the 22 California Constitution. 23 The Amended Petition’s remaining causes of action arise purely out of state law. 24 These include claims for: (1) equal protection violations specific to the California 25 Constitution (Counts III and IV), see id. at 33–34; and (2) violations of California 26 Government Code §§ 56021, 56375, 56881, 57102, and 57103, along with California 27 Health and Safety Code § 32121 (Counts V and VI), id. at 35, 38. 28 / / / 1 B. In Federal Court 2 On May 15, 2024, the IVHD Respondents removed the instant action to federal court 3 pursuant to 28 U.S.C. §§ 1331 and 1441. See generally Notice of Removal (“NOR”), ECF 4 No. 1. IVHD asserted federal question jurisdiction based on the original Petition’s federal 5 equal protection claim (having not yet been served with the Amended Petition). Id. ¶¶ 4–7. 6 IVHD also argued the Court had supplemental jurisdiction over the Petition’s state-law 7 claims under 28 U.S.C. § 1367 because “they are a part of the same case or controversy” 8 as Petitioner’s federal cause of action. Id. ¶ 8–9. Three days later, IVHD filed an Amended 9 Notice of Removal (“Am. NOR,” ECF No. 8), which included a copy of the Amended 10 Petition but otherwise differed little from the original Notice of Removal. 11 On June 6, Petitioner filed a Notice of Constitutional Challenge of State Statute 12 (“Const. Notice,” ECF No. 20), informing the Court that PMHD had notified the Attorney 13 General about the pendency of this case pursuant to Federal Rule of Civil 14 Procedure 5.1(a)(2). See Fed. R. Civ. P. 5.1(a)(2) (requiring party filing a pleading that 15 “draw[s] into question the constitutionality” of a “state statute” to notify the state attorney 16 general). Four days later, in compliance with Rule 5.1(b) and 28 U.S.C. § 2403(b), the 17 Court issued an Order certifying to the Attorney General that a California statute had been 18 questioned. See generally ECF No. 21. The Court also noted that, pursuant to Rule 5.1(c), 19 the Attorney General would be allowed to intervene in this matter if he did so on or before 20 August 5, 2024. Id. at 3. The Attorney General promptly joined the fray. See ECF No. 22. 21 The Motions to Dismiss were filed on June 26, 2024. The Attorney General and 22 IVHD each moved for dismissal pursuant to Federal Rules of Civil Procedure 12(b)(1) and 23 12(b)(6). AG’s Mot. at 1; IVHD’s Mot. at 17–18. LAFCO cited only the latter. LAFCO’s 24 Mem. at 9–10. While the Parties also made merits-based arguments, the jurisdictional issue 25 of standing steals the show. The Court will thus apply Rule 12(b)(1).7 26

27 7 In the Ninth Circuit, “constitutional standing is evaluated under Rule 12(b)(1),” while “prudential 28 standing is evaluated under Rule 12(b)(6).” Elizabeth Retail Props. LLC v. KeyBank Nat. Ass’n, 1 LEGAL STANDARD 2 Federal courts are courts of limited jurisdiction and thus have an obligation to 3 dismiss claims for which they lack subject-matter jurisdiction. Demarest v. United States, 4 718 F.2d 964, 965–66 (9th Cir. 1983). The burden of establishing subject-matter 5 jurisdiction is on the party asserting it. Kokkonen v. Guardian Life Ins. Co. of Am., 6 511 U.S. 375, 377 (1994). 7 Under Rule 12(b)(1), a party may raise by motion the defense that the complaint 8 lacks subject matter jurisdiction via a facial or factual attack. See White v. Lee, 9 227 F.3d 1214, 1242 (9th Cir. 2000). “In a facial attack, the challenger asserts that the 10 allegations contained in a complaint are insufficient on their face to invoke federal 11 jurisdiction.” Safe Air for Everyone v. Meyer, 373 F.3d 1035, 1039 (9th Cir. 2004). A 12 court resolves a facial attack as it would under Rule 12(b)(6) motion: “Accepting the 13 plaintiff’s allegations as true and drawing all reasonable inferences in the plaintiff’s favor, 14 the court determines whether the allegations are sufficient . . . to invoke the court’s 15 jurisdiction.” Leite, 749 F.3d at 1121. 16 In a factual attack, on the other hand, “the challenger disputes the truth of the 17 allegations that, by themselves, would otherwise invoke federal jurisdiction.” Safe Air, 18 373 F.3d at 1039. In such challenges, courts (1) “may review evidence beyond the 19 complaint without converting the motion to dismiss into a motion for summary judgment,” 20 and (2) “need not presume the truthfulness of the plaintiff’s allegations.” Id. After the 21 moving party evidences the lack of subject matter jurisdiction, the party opposing the 22 motion must “present affidavits or any other evidence necessary to satisfy its burden of 23 establishing that the court, in fact, possesses subject matter jurisdiction.” St. Clair v. City 24

25 “standing” to sue its parent state for constitutional violations, a topic the Ninth Circuit has never explicitly 26 categorized as either constitutional or prudential. As the Court concludes the Circuit’s treatment of this issue suggests the constitutional label would be more appropriate, see infra Section I.B.1, the Court will 27 apply Rule 12(b)(1). In any event, as the Court need not look outside the pleadings in deciding the 28 Motions, there is no meaningful difference between review under Rule 12(b)(1) and Rule 12(b)(6). See 1 of Chico, 880 F.2d 199, 201 (9th Cir. 1989). 2 Dismissal under Rule 12(b)(1) is warranted “where the alleged claim under the 3 Constitution or federal statutes clearly appears to be immaterial and made solely for the 4 purpose of obtaining federal jurisdiction or where such claim is wholly insubstantial and 5 frivolous.” Safe Air, 373 F.3d at 1039 (quoting Bell v. Hood, 327 U.S. 678, 682–83 6 (1946)). But dismissal under 12(b)(1) is not appropriate when “the jurisdictional issue and 7 substantive issues are so intertwined that the question of jurisdiction is dependent on the 8 resolution of factual issues going to the merits of the action.” Sun Valley Gasoline, Inc. v. 9 Ernst Enter., Inc., 711 F.2d 138, 139 (9th Cir. 1983) (internal quotation marks omitted) 10 (quoting Augustine v. United States, 704 F.2d 1074, 1077 (9th Cir. 1983)). 11 ANALYSIS 12 Though the Motions to Dismiss comprehensively address the Amended Petition, the 13 question of Petitioner’s standing to bring its federal claims proves dispositive. The Court 14 thus starts with standing, before considering (1) whether this case should be remanded or 15 dismissed; and (2) whether Petitioner is due attorneys’ fees. 16 I. Standing 17 In City of South Lake Tahoe v. California Tahoe Regional Planning Agency, and 18 under the heading “The City’s Standing,” the Ninth Circuit held that “[p]olitical 19 subdivisions of a state may not challenge the validity of a state statute under the Fourteenth 20 Amendment.” 625 F.2d 231, 233 (9th Cir. 1980) (alteration in original) (quoting City of 21 New York v. Richardson, 473 F.2d 923, 929 (2d Cir. 1973)). The Parties thus agree 22 Petitioner cannot challenge AB 918 “in its own capacity” on federal equal protection 23 grounds. Opp’n at 18 n.5. But, per Petitioner, it may wield third-party standing to borrow 24 its patients and voters’ constitutional rights. For this gambit to work, Petitioner must 25 maneuver around South Lake Tahoe, navigate through Article III’s requirements, and 26 negotiate prudential standing considerations. The task is unenviable. No case has charted 27 a map of this particular doctrinal intersection; in fact, the interplay between political- 28 subdivision and third-party standing is all but a question of first impression in the Ninth 1 Circuit. Ultimately, Petitioner fails to find its way through this murky terrain. 2 A. Legal Framework 3 Before diving into the deeper end of some muddy legal waters, a review of the basics 4 is in order. 5 1. Constitutional, Prudential, and Third-Party Standing9 6 Standing doctrine, which “asks whether a litigant is entitled to have a federal court 7 resolve his grievance,” Kowalski v. Tesmer, 543 U.S. 125, 128 (2004), involves two sets 8 of considerations: “constitutional limitations on federal-court jurisdiction” and “prudential 9 limitations on its exercise,” id. (quoting Warth v. Seldin, 422 U.S. 490, 498 (1975)). 10 Built on the separation-of-powers principles baked into Article III, constitutional 11 standing doctrine requires plaintiffs to establish a “personal stake in the 12 lawsuit . . . sufficient to make out a concrete ‘case’ or ‘controversy’ to which the federal 13 judicial power may extend.” Pershing Park Villas Homeowners Ass’n v. United Pac. Ins. 14 Co., 219 F.3d 895, 899 (9th Cir. 2000). To satisfy this standard, “a plaintiff must show 15 (i) that he suffered an injury in fact that is concrete, particularized, and actual or imminent; 16 (ii) that the injury was likely caused by the defendant; and (iii) that the injury would likely 17 be redressed by judicial relief.” TransUnion LLC v. Ramirez, 594 U.S. 413, 423 (2021) 18 (citing Lujan v. Defs. of Wildlife, 504 U.S. 555, 560–561 (1992)). 19 Meanwhile, prudential standing represents a body of judicially self-imposed rules 20 that are “designed to protect the courts from ‘decid[ing] abstract questions of wide public 21 significance even [when] other governmental institutions may be more competent to 22 address the questions and even though judicial intervention may be unnecessary to protect 23

24 8 The court in Nevada Irrigation District v. Sobeck encountered the issue. See No. 2:21-CV-00851-DJC- 25 CKD, 2023 WL 8452121, at *6 (E.D. Cal. Dec. 6, 2023). But there, unlike here, the plaintiff’s “briefing fail[ed] to assess the third-party standing requirements,” so the court “decline[d] to find that [the plaintiff 26 was] asserting . . . the rights of its constituents.” Id.

27 9 Some Respondents assume Petitioner seeks to assert associational—rather than third-party—standing. 28 See, e.g., IVHD’s Mot. at 24. As this is not correct, see Opp’n at 18 n.5, the Court does not address 1 individual rights.’” United States v. Windsor, 570 U.S. 744, 757 (2013) (alterations in 2 original) (quoting Warth, 422 U.S. at 500). One such rule limits plaintiffs to “assert[ing] 3 [their] own legal rights and interests” rather than those of “third parties.” Tingley v. 4 Ferguson, 47 F.4th 1055, 1069 (9th Cir. 2022) (quoting Warth, 422 U.S. at 499). 5 So-called third-party standing, on which Petitioner relies, represents an exception to 6 this prudential rule and allows a litigant to assert the rights of others. Said exception applies 7 where “(1) ‘the party asserting the right has a close relationship with the person who 8 possesses the right’ and (2) ‘there is a hindrance to the possessor’s ability to protect his 9 own interests.’” E. Bay Sanctuary Covenant v. Trump, 932 F.3d 742, 764 (9th Cir. 2018) 10 (quoting Sessions v. Morales-Santana, 582 U.S. 47, 57 (2017)). But because Article III 11 standing is a “jurisdictional prerequisite to the consideration of any federal claim,” 12 Gerlinger v. Amazon.com Inc., 526 F.3d 1253, 1255 (9th Cir. 2008), any arguments about 13 third-party standing are moot here if Petitioner cannot satisfy Article III, see, e.g., Food & 14 Drug Admin. v. All. for Hippocratic Med., 602 U.S. 367, 393 n.5 (2024) (“[E]ven when we 15 have allowed litigants to assert the interests of others, the litigants themselves still must 16 have suffered an injury in fact . . . .” (quoting Hollingsworth v. Perry, 570 U.S. 693, 708 17 (2013)). In other words, prudential rules and their exceptions cannot salvage a case where 18 constitutional standing is lacking. See Fleck & Assocs., Inc. v. City of Phoenix, 19 471 F.3d 1100, 1105 (9th Cir. 2006) (“[E]xceptions to the prudential rule presuppose a 20 litigant who has already met the constitutional requirements.”). 21 2. Standing and Political Subdivisions 22 Since South Lake Tahoe, the Ninth Circuit has “consistently held that political 23 subdivisions lack standing to challenge state laws on constitutional grounds in federal 24 court.” City of San Juan Capistrano v. Cal. Pub. Utilities Comm’n, 937 F.3d 1278, 1280 25 (9th Cir. 2019). 26 Indeed, later cases clarified that South Lake Tahoe’s standing bar is a “broad, per se 27 rule.” Burbank-Glendale-Pasadena Airport Auth. v. City of Burbank, 136 F.3d 1360, 1362 28 (9th Cir. 1998). It applies to a wide swath of entities, whether they are suing “the state 1 itself or another of the state’s political subdivisions.” S. Lake Tahoe, 625 F.2d at 233; see 2 also San Juan Capistrano, 937 F.3d at 1280 n.1 (“We have held that a city, an airport 3 authority, a health district, and a school district all lack standing to sue a planning authority, 4 a city, and various state agency officials.”). The rule does not discriminate between 5 Fourteenth Amendment claims and Supremacy Clause challenges. See Burbank, 136 F.3d 6 at 1364–65. Nor does its application vary based on “the procedural context in which those 7 claims are raised.” San Juan Capistrano, 937 F.3d at 1281. 8 To date, the Ninth Circuit’s political-subdivision inquiry has focused “only on the 9 identity of the parties” and the claims involved. Id. Essentially, South Lake Tahoe’s rule 10 applies whenever the litigant (1) is a political subdivision (2) bringing constitutional claims 11 (3) effectively against the state. See Palomar Pomerado Health Sys. v. Belshe, 12 180 F.3d 1104, 1107 (9th Cir. 1999). 13 B. Discussion 14 The Parties agree South Lake Tahoe and its descendants prevent PMHD from 15 asserting an equal protection claim of its own.10 They see eye to eye on little else. The 16 remaining disputes boil down to three questions: (1) does South Lake Tahoe preclude 17 Petitioner from even attempting to establish Article III standing; (2) presuming Petitioner 18 can get around South Lake Tahoe, does the Amended Petition allege a constitutionally 19 adequate injury in fact; and (3) if Petitioner can—and has—satisfied Article III, does 20 Petitioner successfully plead the elements of third-party standing? This case ends at the 21 first question, which the Court answers in Respondents’ favor. And even were that not so, 22 Petitioner would stumble at each remaining step. 23 1. South Lake Tahoe and Article III Standing 24 The Parties paint different pictures of South Lake Tahoe’s relationship to Article III, 25 particularly as to the injury-in-fact requirement. The Attorney General believes South Lake 26

27 10 The Ninth Circuit has made clear that California health care districts (like PMHD and IVHD), as public 28 corporations whose “powers are limited to those granted [them] by the state,” are considered “political 1 Tahoe and company make it impossible for PMHD to establish a qualifying injury because 2 PMHD has “no constitutional rights as against the State.” AG’s Mem. at 10. Petitioner 3 counters that South Lake Tahoe precludes PMHD only from asserting injury to its own 4 equal protection rights, not from borrowing the constitutional rights of others after showing 5 an injury to some other cognizable interest. See Opp’n at 19–21. 6 Underlying the Parties’ arguments lurks a thorny question: how does the political- 7 subdivision rule operate within the wider web of standing? Neither South Lake Tahoe nor 8 any of its descendants elaborate much on this topic. See San Juan Capistrano, 937 F.3d 9 at 1280 (“South Lake Tahoe offered no independent reasoning for its per se standing 10 rule.”). This vagueness has not gone unnoticed. Id. at 1282–84 (Nelson, J., concurring) 11 (noting lack of clear connection between South Lake Tahoe’s rule and constitutional 12 standing); Palomar, 180 F.3d at 1109 (Hawkins, J., concurring) (“We have . . . never 13 satisfactorily stated our rationale for including all constitutional challenges within the 14 ban.”); Indian Oasis–Baboquivari Unified Sch. Dist. v. Kirk, 91 F.3d 1240, 1246–47 15 (9th Cir. 1996) (Reinhardt, J., dissenting) (“South Lake Tahoe did not explain whether 16 concerns about the standing of political subdivisions or concerns about the constitutional 17 rights they possess underlay its holding.”), reh’g en banc granted, 102 F.3d 999 (9th Cir. 18 1996), appeal dismissed, 109 F.3d 634 (9th Cir. 1997) (en banc). 19 The few hints available in the case law support the Attorney General’s argument— 20 at least, to the extent he grounds the South Lake Tahoe Rule on the idea that political 21 subdivisions lack constitutional rights vis-à-vis their parent states. South Lake Tahoe relied 22 in part on Williams v. Mayor and City Council of Baltimore, where the Supreme Court 23 explained that “[a] municipal corporation . . . has no privileges or immunities under the 24 Federal Constitution which it may invoke in opposition to the will of its creator.” 25 289 U.S. 36, 40 (1933). And when the Ninth Circuit does broach South Lake Tahoe’s 26 origins, it tends to note the connection to Williams. See San Juan Capistrano, 937 F.3d 27 at 1280; Palomar, 180 F.3d at 1107 (“[P]olitical subdivisions . . . ‘have generally been 28 denied standing in the federal courts to attack state legislation as violative of the federal 1 Constitution, on the ground that they have no rights against the state of which they are a 2 creature.’” (quoting Richard H. Fallon, Jr., et al., Hart and Wechsler’s The Federal Courts 3 and The Federal System 180 (4th ed. 1996))). 4 The problem? If a conspicuous link between South Lake Tahoe’s focus on rights 5 and contemporary Article III standing doctrine (let alone its injury-in-fact requirement) 6 exists, it eludes the Court. It is beyond question that political subdivisions can, generally 7 speaking, suffer a concrete and particularized injury worthy of Article III attention. 8 See, e.g., City of Sausalito v. O’Neill, 386 F.3d 1186, 1197–98 (9th Cir. 2004). It is equally 9 clear that an individual’s constitutional rights can be violated by a state’s actions against a 10 subdivision. See Gomillion v. Lightfoot, 364 U.S. 339, 344–45 (1960) (“Legislative control 11 of municipalities, no less than other state power, lies within the scope of relevant 12 limitations imposed by the United States Constitution.”). And the very premise of third- 13 party standing is that a plaintiff—having suffered his own injury in fact—can sometimes 14 “rest” his claims on legal rights he does not possess. E.g., Powers v. Ohio, 499 U.S. 400, 15 410–11 (1991). So, assuming Petitioner can demonstrate a cognizable injury, there is no 16 obvious reason why Williams’s—and, by extension, South Lake Tahoe’s—rights-based 17 reasoning prevents Petitioner from leaning on the interests of others. 18 Indeed, viewed through Williams, South Lake Tahoe reads more like a cause-of- 19 action case, not a standing one. In Williams’s day, the “standing” inquiry asked if a party 20 “was correct in its claim on the merits that the statutory or constitutional provision in 21 question protected its interests.” Kerr v. Polis, 20 F.4th 686, 695 (10th Cir. 2021) (quoting 22 Rogers v. Brockette, 588 F.2d 1057, 1070 (5th Cir. 1979)). But courts no longer talk about 23 standing that way. Rather, Williams’s inquiry more closely resembles the zone-of-interests 24 test, which in statutory cases looks at whether a plaintiff’s “interests ‘fall within the zone 25 of interests protected by the law invoked.’” Lexmark Int’l, Inc. v. Static Control 26 Components, Inc., 572 U.S. 118, 129 (2014) (quoting Allen v. Wright, 468 U.S. 737, 751 27 (1984)). And the zone-of-interests test bears on whether a plaintiff “has a cause of action,” 28 not standing. Id. at 127–28.; see also Sierra Club v. Trump, 929 F.3d 670, 700 n.24 1 (9th Cir. 2019) (“[T]he zone of interests test does not go to a plaintiff’s standing but rather 2 to whether the plaintiff has a cause of action.”). Perhaps not surprisingly, some circuits no 3 longer analyze political-subdivision-versus-state constitutional claims under Article III.11 4 Similarly, cases applying South Lake Tahoe regularly draw concurring and dissenting 5 opinions questioning the political-subdivision rule, some of which take aim directly at the 6 rule’s uncertain connection to standing.12 7 Nevertheless, the Court concludes it must consider South Lake Tahoe’s rule as a bar 8 to standing. The language of standing may have moved on elsewhere in the law, but the 9 Ninth Circuit has steadfastly maintained its original formulation of South Lake Tahoe as a 10 standing case. See, e.g., San Juan Capistrano, 937 F.3d at 1280 (referring to South Lake 11 Tahoe’s “per se standing rule” in a post-Lexmark and Lujan opinion). More to the point, 12 the Ninth Circuit has implied that the political-subdivision rule is based on something 13 beyond whether political subdivisions have certain constitutional rights. See id. at 1280 n.2 14 (explaining “[o]ther circuits have applied the Supreme Court’s decisions in Williams [and 15 related cases] differently” and noting “the Sixth, Seventh, and Eleventh Circuits have 16 interpreted [those cases] to hold that political subdivisions have no Fourteenth Amendment 17

18 11 See Kerr, 20 F.4th at 698 (“We believe the ‘standing’ in ‘political subdivision standing’ is a misnomer. 19 ‘In speaking of “standing,” cases [related to Williams] meant only that, on the merits, the municipality had 20 no rights under the particular constitutional provisions it invoked.’ This is not a jurisdictional inquiry. Rather, . . . this inquiry is a way of discerning whether political subdivisions have alleged a cause of action 21 against their parent state in a given case.” (citations omitted) (quoting Rogers, 588 F.2d at 1068)); Tweed- New Haven Airport Auth. v. Tong, 930 F.3d 65, 70–73 (2d Cir. 2019) (concluding political subdivision 22 had Article III standing before separately addressing whether its suit was barred by Williams and related cases); cf. Amato v. Wilentz, 952 F.2d 742, 755 (3d Cir. 1991) (“[W]e agree with the County that these 23 cases may not be standing cases (in the modern sense of the term) but instead holdings on the merits.”). 24 12 See Indian Oasis, 91 F.3d at 1246 (Reinhardt, J., dissenting) (“[South Lake Tahoe] made no reference 25 to the usual standing criteria, and its reasoning, although elliptic, appears to be addressed to whether the city possessed a cause of action.”); Palomar, 180 F.3d at 1109 (Hawkins, J., concurring) (“I believe our 26 en banc court should take another look at South Lake Tahoe and its progeny.”); Burbank, 136 F.3d at 1364 (Kozinski, J., concurring) (“[T]he fact that three other circuits seem to have recognized an exception to 27 the per se rule . . . might be a reason to reconsider the matter en banc.”); San Juan Capistrano, 937 F.3d 28 at 1282 (Nelson, J., concurring) (recommending the Circuit “revisit the court’s per se rule in light of 1 rights”). 2 Additionally, the Court finds itself unable to ignore a more practical point made by 3 the Attorney General. He contends that if Petitioner could assert third-party standing, 4 “there would be nothing left” of South Lake Tahoe’s “longstanding rule.” AG’s Mem. 5 at 10. Though not the most doctrinally satisfying explanation—as it leaves unresolved 6 South Lake Tahoe’s exact place in the machinery of standing—the argument has merit.13 7 The Ninth Circuit has repeatedly emphasized South Lake Tahoe’s stringency.14 In fact, the 8 Circuit has refused every invitation to limit South Lake Tahoe.15 This consistency is all the 9 more noteworthy because it sets the Ninth Circuit apart from its sister courts. See, e.g., 10 San Juan Capistrano, 937 F.3d at 1280 n.2 (noting the Second, Fifth, and Tenth Circuits 11 (unlike the Ninth) allow subdivisions to bring Supremacy Clause claims against their 12 parent states).16 Creating a third-party standing end-run around South Lake Tahoe’s 13 indelibly bright line strikes the Court as contrary to the thrust of this body of binding 14

15 13 The Attorney General could be accused of being overly dramatic. The limitations placed on third-party 16 standing are “generally strict.” Ollier v. Sweetwater Union High Sch. Dist., 768 F.3d 843, 865 (9th Cir. 2014); see also Kowalski, 543 U.S. at 130 (noting that, outside of a few specific kinds of cases, “we have 17 not looked favorably upon third-party standing”). So, even if subdivisions could avoid South Lake Tahoe by asserting third-party standing, succeeding in that endeavor would remain difficult. Nevertheless, the 18 Court agrees with the Attorney General that Petitioner’s position runs counter to Ninth Circuit case law.

19 14 See, e.g., Burbank, 136 F.3d at 1364 (“This court . . . has not recognized any exception to the per se 20 rule, and the broad language of South Lake Tahoe appears to foreclose the possibility of our doing so.”); Palomar, 180 F.3d at 1109 (Hawkins, J., concurring) (joining the majority, despite misgivings, “[b]ecause 21 the current law in this circuit calls for a ban on any constitutional challenge by a political subdivision against its ‘parent state’”). 22 15 See Burbank, 136 F.3d at 1364; Palomar, 180 F.3d at 1108 (declining to distinguish cases brought 23 against state officials rather than state entities for purposes of South Lake Tahoe’s analysis); Okanogan, 24 291 F.3d at 1165 (holding South Lake Tahoe applied in case where school district sought to recover federally allocated funds that the state was withholding, even though “Congress ha[d] specifically named 25 [the district] as one of the beneficiaries” of the funds); San Juan Capistrano, 937 F.3d at 1281 (finding no grounds to limit South Lake Tahoe to “bar[ring] only facial challenges to a statute or regulation,” as 26 opposed to “conduct in an administrative hearings”).

27 16 Two years after San Juan Capistrano, the Third Circuit joined those courts “permitt[ing] subdivisions 28 to sue their creating states under the Supremacy Clause.” Ocean Cnty. Bd. of Comm’rs v. Att’y Gen. of 1 authority. 2 Moreover, the Court feels compelled to treat the South Lake Tahoe Rule as a matter 3 of Article III—rather than prudential—standing. Though the Ninth Circuit has yet to 4 explicitly label South Lake Tahoe’s rule, the court has arguably treated it as constitutional 5 at least twice.17 Besides, there is no obvious place for South Lake Tahoe in the prudential- 6 standing firmament. The Supreme Court previously identified “at least three broad 7 [prudential] principles: [1] ‘the general prohibition on a litigant’s raising another person’s 8 legal rights, [2] the rule barring adjudication of generalized grievances . . . , and [3] the 9 [zone-of-interests] requirement.’” Lexmark, 572 U.S. at 126 (quoting Elk Grove, 542 U.S. 10 at 12). The second item, however, has since been upgraded to constitutional status, while 11 the third became a merits issue. See id. at 127 n.3. Only the rule against asserting third 12 parties’ rights remains standing (prudentially speaking), and the Court is not aware of any 13 Ninth Circuit case law tying said rule to South Lake Tahoe. Plus, classifying South Lake 14 Tahoe as prudential would create space for Petitioner’s voters-and-patients argument, as 15 third-party standing represents an exception to the surviving prudential rule. And for the 16 reasons stated above, the Court is not empowered to leave that door open. 17 In sum, the Court holds that Petitioner lacks Article III standing—and thus cannot 18 rely on a third-party standing theory—to bring its federal constitutional claims. To the 19 extent it believes South Lake Tahoe should not apply, Petitioner addresses its arguments to 20 the wrong court. Though it has difficulty connecting the dots between South Lake Tahoe 21 and contemporary standing doctrine, the Court must follow the Ninth Circuit’s lead. See 22 In re Zermeno-Gomez, 868 F.3d 1048, 1052 (9th Cir. 2017) (“[A] published decision of 23

24 17 In Okanogan, for example, the Ninth Circuit summarized a school district’s Article III standing 25 argument before rejecting it on the ground that “South Lake Tahoe control[led].” 291 F.3d at 1165–66. Further, in San Juan Capistrano, the Circuit affirmed a district court’s decision to dismiss a case pursuant 26 to Rule 12(b)(1) for lack of standing under South Lake Tahoe. See generally City of San Juan Capistrano v. Cal. Pub. Utils. Comm’n, No. SACV 17-01096 AG (Ex), 2017 WL 6820027 (C.D. Cal. Oct. 16, 2017). 27 And “district courts in this circuit consider challenges to prudential standing in the context of motions to 28 dismiss under Rule 12(b)(6), not under Rule 12(b)(1).” SurvJustice Inc. v. DeVos, No. 18-CV-00535- 1 this court constitutes binding authority ‘which must be followed unless and until overruled 2 by a body competent to do so.’” (internal quotation marks omitted) (quoting Gonzalez v. 3 Arizona, 677 F.3d 383, 389 n.4 (9th Cir. 2012) (en banc))). 4 2. Other Standing Deficiencies 5 Even if third-party standing did provide Petitioner a path around South Lake Tahoe, 6 Petitioner’s federal claims would still fail for two reasons: its failure to plead allegations 7 sufficient to establish (1) an injury in fact and (2) that the elements of third-party standing 8 are met. The Court addresses these issues briefly below. 9 a. Injury in Fact 10 As a political subdivision, Petitioner “may sue to protect its own ‘proprietary 11 interests’ that might be ‘congruent’ with those of its citizens.” City of Sausalito, 386 F.3d 12 at 1197 (quoting Colo. River Indian Tribes v. Town of Parker, 776 F.2d 846, 848 (9th Cir. 13 1985)). Here, Petitioner claims it has suffered a qualifying injury because AB 918 14 “mandates that PMHD be dissolved,” and “[c]easing to exist is the harshest injury 15 possible.” Opp’n at 20–21. 16 Were Petitioner alleging a traditional harm to interests arising from its 17 “responsibilities, powers, and assets,” Petitioner would be on the right track. City of 18 Sausalito, 386 F.3d at 1199. Indeed, classic “economic injur[ies],” like “the loss of tax 19 revenues,” can satisfy Article III. Mono Cnty. v. Walker River Irrigation Dist., 20 735 F. App’x 271, 273 (9th Cir. 2018). 21 But Petitioner’s argument is far from conventional, as nothing in the Amended 22 Petition suggests anything is being “lost.” PMHD alleges its “assets, rights, and 23 responsibilities” will be “transferred” to IVHD. Am. Pet. ¶ 50 (emphasis added). PMHD 24 thus appears to contend (1) it has an interest in existing as a political subdivision that 25 (2) would be harmed if it were replaced, even though (3) no net loss of local government 26 assets or responsibilities would result from the process. As it cites no case law to support 27 this novel theory, Petitioner has not carried its burden of establishing an injury in fact. 28 / / / 1 b. Third-Party Standing 2 Even if it had cleared Article III’s hurdles, Petitioner would still fail at the finish 3 line. Petitioner relies almost entirely on Sanchez v. City of Modesto, 51 Cal. Rptr. 3d 821 4 (Ct. App. 2006), in asserting third-party standing. See Am. Pet. ¶ 5; Opp’n at 18–21. State 5 court standing decisions do not, however, bear directly on the federal standing inquiry.18 6 Perhaps recognizing this, Petitioner disingenuously frames Sanchez as a case concerned 7 with interpreting federal standing precedents. See Opp’n at 19 (contending Sanchez “relied 8 heavily on the [U.S.] Supreme Court’s adoption of third-party standing”). In reality, 9 Sanchez’s thoughtful discussion of standing in state court—which the Court in no way 10 impugns—mostly recounts other state court decisions that, at times, referenced federal case 11 law. See 51 Cal. Rptr. 3d at 832–35. Indeed, Sanchez itself highlights the tenuous-at-best 12 connection between that case and this one. See 51 Cal. Rptr. 3d at 834 (“[W]e deal here 13 neither with the standing of plaintiffs nor with federal court.”). 14 Setting California standing requirements aside,19 the Amended Petition does not 15 contain allegations sufficient to satisfy federal law. Third-party standing is available when: 16 “(1) ‘the party asserting the right has a close relationship with the person who possesses 17 the right’ and (2) ‘there is a hindrance to the possessor’s ability to protect his own 18 interests.’” E. Bay Sanctuary, 932 F.3d at 764 (quoting Sessions, 582 U.S. at 57). The first 19 element is met where “the enjoyment of the right is inextricably bound up with the activity 20 the litigant wishes to pursue,” Viceroy Gold Corp. v. Aubry, 75 F.3d 482, 488 (9th Cir. 21 22 18 See Phillips Petrol. Co. v. Shutts, 472 U.S. 797, 804 (1985) (“Standing to sue in any Article III court is, of course, a federal question which does not depend on the party’s prior standing in state court.”); Cantrell 23 v. City of Long Beach, 241 F.3d 674, 683 (9th Cir. 2001) (“[A]lthough the birdwatchers may well have 24 standing under California law to bring their suit in state court, that does not help them here.”).

25 19 Petitioner is not the only Party guilty of focusing overly much on California standing case law. Yes, both IVHD and LAFCO make South-Lake-Tahoe-based arguments. See IVHD’s Mot. at 18–19; 26 LAFCO’s Mem. at 11–12. But as to the more critical question of South Lake Tahoe’s connection to third- party standing, IVHD and LAFCO seem more interested in debating Petitioner’s hypothetical standing to 27 sue in state court than in a federal forum. See IVHD’s Reply. at 6–7; LAFCO’s Mem. at 12–14. Again, 28 this focus on California case law is misguided. See Hollingsworth, 570 U.S. at 715 (“[S]tanding in federal 1 1996) (quoting Singleton v. Wulff, 428 U.S. 106, 113–14 (1976)), which the Ninth Circuit 2 has interpreted to require an alignment of interests between the litigant and the person 3 whose interest she seeks to assert, id. at 488–89. 4 Petitioner claims, without further explanation, that its constituents’ voting rights are 5 “inextricably bound up” with PMHD’s interest in continuing to exist. But assuming this 6 contention could suffice if borne out, Petitioner presents no allegations nor evidence to 7 suggest its patients and voters are against AB 918, let alone whether they care about the 8 looming transition from PMHD to IVHD. See Home Care Ass’n of Am. v. Bonta, No. 21- 9 15617, 2022 WL 445522, at *3 (9th Cir. Feb. 14, 2022) (finding evidence “of consistent 10 alignment of interests” lacking where, based on the record, “some employees may [have] 11 agree[d]” with the litigants seeking to assert their rights, “but other employees may [have 12 disagreed], and still others may not [have] care[d] at all”). 13 Petitioner’s feeble efforts fall especially short given the nature of its claims. Third- 14 party standing is “disfavored,” Fleck & Assocs., Inc. v. City of Phoenix, 471 F.3d 1100, 15 1105 n.3 (9th Cir. 2006), particularly in cases that “present[] . . . difficult constitutional 16 question[s] regarding the validity of . . . local ordinance[s],” HomeAway Inc. v. City & 17 Cnty. of San Francisco, No. 14-CV-04859-JCS, 2015 WL 367121, at *12 (N.D. Cal. 18 Jan. 27, 2015). 19 c. Leave to Amend 20 Under different circumstances, the Court might be inclined to grant Petitioner leave 21 to amend and address deficiencies in the injury-in-fact and third-party-standing 22 departments. See Abels v. JBC Legal Grp., P.C., 229 F.R.D. 152, 155 (N.D. Cal. 2005) 23 (“The Ninth Circuit has instructed that the policy favoring amendments ‘is to be applied 24 with extreme liberality.’” (quoting Morongo Band of Mission Indians v. Rose, 25 893 F.2d 1074, 1079 (9th Cir. 1990))). But in light of the Court’s holding that Petitioner 26 lacks Article III standing to raise its federal claims, amendment would be futile. See, e.g., 27 Cervantes v. Countrywide Home Loans, Inc., 656 F.3d 1034, 1041 (9th Cir. 2011) 28 (explaining dismissal without leave to amend is proper when amendment would be futile). 1 II. Next Steps 2 Petitioner’s lack of standing to bring its federal claims confirmed, the Court turns to 3 next steps. Two issues require consideration: (1) remand and (2) costs and fees. 4 A. Remand 5 The Parties have divergent views on what should happen next. Both Petitioner and 6 the Attorney General ask the Court to remand this action. Opp’n at 22; AG’s Mem. 7 at 11–12. For his part, however, the Attorney General seems to assume Petitioner’s federal 8 claims will end here and not be remanded. See id. at 12. Disclaiming both positions, IVHD 9 makes arguments that conflict to some degree. First, in its Motion, IVHD asks the Court 10 to decline to exercise supplemental jurisdiction over two of Petitioner’s state law claims 11 pursuant to 28 U.S.C. § 1367(c)(1). IVHD Mot. at 31–32. But in its Reply, IVHD 12 contends the Court can and should exercise its discretion to resolve all of the Amended 13 Petition’s state-law claims because “remand . . . would be futile.” IVHD’s Reply at 7 14 (citing Bell v. City of Kellogg, 922 F.2d 1418, 1424–25 (9th Cir. 1991)). Meanwhile, 15 LAFCO appears not to take a stance at all. 16 As an initial matter, and contrary to IVHD’s first argument, the Court could not 17 exercise supplemental jurisdiction over Petitioner’s state-law claims even if it wanted to. 18 Presuming the other requirements of 28 U.S.C. § 1367(a) are met,20 district courts may 19 invoke supplemental jurisdiction only when there is “a hook of original jurisdiction on 20 which to hang it.” Herman Fam. Revocable Tr. v. Teddy Bear, 254 F.3d 802, 805 (9th Cir. 21 2001). And here, because the Court lacks subject matter jurisdiction over Petitioner’s 22 federal claims (i.e., the only potential jurisdictional hooks available in this case), the Court 23 “has no discretion” to “exercise its supplemental jurisdiction under § 1367(a).” Id. at 806; 24

25 20 In full, 28 U.S.C. § 1367(a) states: “Except as provided in subsections (b) and (c) or as expressly 26 provided otherwise by Federal statute, in any civil action of which the district courts have original jurisdiction, the district courts shall have supplemental jurisdiction over all other claims that are so related 27 to claims in the action within such original jurisdiction that they form part of the same case or controversy 28 under Article III of the United States Constitution. Such supplemental jurisdiction shall include claims 1 see also Skysign Int’l, Inc. v. City & Cnty. of Honolulu, 276 F.3d 1109, 1118 n.7 (9th Cir. 2 2002) (“[H]ad Skysign lacked standing to bring its federal claim, the district court would 3 have lacked subject matter jurisdiction over that claim and accordingly would have had no 4 discretion to hear the state law claims.”). 5 Consequently, the Court agrees with Petitioner and the Attorney General that remand 6 is appropriate, if not mandatory. Under 28 U.S.C. § 1447(c), a case removed to federal 7 court must be remanded “[i]f at any time before final judgment it appears that the district 8 court lacks subject matter jurisdiction.” And, as explained above, the Court lacks 9 jurisdiction over all of the Amended Petition’s claims—both federal and state. Plus, while 10 there is a futility exception to § 1447(c), it applies “only when the eventual outcome of a 11 case after remand is so clear as to be foreordained.” Polo v. Innoventions Int’l, LLC, 12 833 F.3d 1193, 1198 (9th Cir. 2016). Here, the Court is not “absolutely certain[]” that each 13 of Petitioner’s various constitutional and statutory claims are doomed in state court, id. 14 (emphasis added), so IVHD’s futility argument is not convincing. 15 The Court must disappoint the Attorney General, however, by remanding this case 16 in its entirety—federal claims and all. As Petitioner “lack[s] standing” to raise its federal 17 claims, the Court “cannot reach the[ir] merits.” Carrico v. City & Cnty. of San Francisco, 18 656 F.3d 1002, 1004 (9th Cir. 2011). But “state courts are not bound to adhere to federal 19 standing requirements,” ASARCO Inc. v. Kadish, 490 U.S. 605, 617 (1989), so Petitioner 20 may yet be able pursue its Fourteenth Amendment claims in state court, see Littel v. 21 Bridgestone/Firestone, Inc., 259 F. Supp. 2d 1016, 1028 n.19 (C.D. Cal. 2003) (“[S]tate 22 courts have concurrent jurisdiction to hear claims based on violations of the 23 U.S. Constitution.”). The federal claims will thus be remanded, not dismissed. See, e.g., 24 Davidson v. Kimberly-Clark Corp., 889 F.3d 956, 970 n.6 (9th Cir. 2018) (“As a general 25 rule, if the district court is confronted with an Article III standing problem in a removed 26 case—whether the claims at issue are state or federal—the proper course is to remand for 27 adjudication in state court.” (emphasis added)); Page v. Tri-City Healthcare Dist., 28 860 F. Supp. 2d 1154, 1171 (S.D. Cal. 2012) (similar). 1 Finally, the Court notes that remand would be called for even if South Lake Tahoe’s 2 rule were not a matter of standing. If said rule were reframed as a cause-of-action question, 3 and presuming Petitioner could establish Article III standing, the bright-line language of 4 South Lake Tahoe would doubtlessly still require the Court to dismiss the Amended 5 Petition’s Fourteenth Amendment claims. The only difference? Said dismissal would not 6 be built on jurisdictional grounds. See Ray Charles Found. v. Robinson, 795 F.3d 1109, 7 1121 (9th Cir. 2015) (“[T]he absence of a valid (as opposed to arguable) cause of action 8 does not implicate subject-matter jurisdiction . . . .” (quoting Lexmark, 572 U.S. at 128 9 n.4)). True, the Court would have discretion to exercise supplemental jurisdiction under 10 such circumstances. See Herman Family, 254 F.3d at 806; 28 U.S.C. § 1367(c). But the 11 Court would decline to do so pursuant to § 1367(c) given the combined lack of surviving 12 federal claims and presence of complex state-law issues.21 So, Respondents would not 13 secure the dismissal of this entire action even if South Lake Tahoe wore a different label.22 14 B. Costs and Fees 15 Lastly, Petitioner seeks an order requiring IVHD Respondents to pay “just costs and 16 any actual fees, including attorney fees, incurred as a result of removal,” again pursuant to 17

18 21 “[I]n the usual case in which all federal-law claims are eliminated before trial, the balance of factors to 19 be considered under the pendent jurisdiction doctrine . . . will point toward declining to exercise 20 jurisdiction over the remaining state-law claims.” Carnegie-Mellon Univ. v. Cohill, 484 U.S. 343, 350 n.7 (1988)). And where “all federal claims are eliminated” and only “complex questions of state law” 21 remain, the Ninth Circuit has warned that “retaining jurisdiction . . . becomes, in some circumstances, especially inappropriate.” Holly D. v. Cal. Inst. of Tech., 339 F.3d 1158, 1181 n.28 (9th Cir. 2003) 22 (emphasis added). So even if the Court could evict South Lake Tahoe from standing land, the Court would not be inclined to address the merits of Petitioner’s state-law claims—which primarily implicate the laws 23 and policies of the State of California—absent live federal causes of action. See Meyer v. Cal. & Hawaiian 24 Sugar Co., 662 F.2d 637, 640 (9th Cir. 1981) (“Federal courts should not reach out unnecessarily to decide state law claims.”). 25 22 The Court does not mean to suggest that the nature of South Lake Tahoe—and, correspondingly, the 26 § 1367(c)-versus-§ 1447(c) distinction—is inconsequential. For example, “[a]n order remanding a case to the State court from which it was removed” pursuant to § 1447(c) is generally “not reviewable on appeal 27 or otherwise.” 28 U.S.C. § 1447(d). But remands ordered pursuant to § 1367(c) are “not based on a ‘lack 28 of subject matter jurisdiction’ for purposes of the bar to appellate review created by §§ 1447(c) and (d).” 1 § 1447(c). Opp’n at 22. “Absent unusual circumstances, courts may award attorney’s 2 fees under § 1447(c) only where the removing party lacked an objectively reasonable basis 3 for seeking removal.” Martin v. Franklin Cap. Corp., 546 U.S. 132, 141 (2005). Relevant 4 to the objective reasonableness inquiry are “the clarity of the applicable law and whether 5 such law ‘clearly foreclosed’ the arguments in support of removal.” Silverman v. 6 Silverman, No. 15-CV-2108-AJB-BLM, 2016 WL 10894424, at *13 (S.D. Cal. 7 Jan. 14, 2016) (quoting Lussier v. Dollar Tree Stores, Inc., 518 F.3d 1062, 1066–67 8 (9th Cir. 2008)), aff’d, 703 F. App’x 596 (9th Cir. 2017). 9 The Court concludes IVHD Respondents lacked an objectively reasonable basis for 10 removal. As IVHD notes, see IVHD’s Reply at 7–8, its Notice of Removal asserts federal 11 question jurisdiction based on the Petition’s Fourteenth Amendment claims. See NOR 12 ¶¶ 4–7.24 But the presence of a federal question is not dispositive for purposes of § 1447(c). 13 See, e.g., Parrish v. Everi Payments Inc., No. 2:22-CV-00511-GMN-DJA, 14 2023 WL 3276400, at *3 (D. Nev. May 4, 2023) (“Although this case ‘arises under’ federal 15 law, Defendants did not have an objectively reasonable basis for removal.”). Standing is 16 also part of the jurisdictional equation. See, e.g., Tobia v. Burlington Coat Factory of Tex. 17 Inc., No. 2:18-CV-00868-CKD, 2018 WL 5023421, at *3 (E.D. Cal. Oct. 16, 2018) 18 (“Under either federal question or diversity jurisdiction, however, a federal court lacks 19 subject matter jurisdiction if a plaintiff lacks standing to bring his claims.”). 20 Notably, IVHD has done an about-face regarding standing (and, ergo, jurisdiction). 21 Shortly after asserting federal jurisdiction and removing this action, IVHD challenged the 22 Court’s jurisdiction as to the Petitioner’s only federal claims based in part on South Lake 23 Tahoe. See IVHD’s Mot. at 18–19, 23–25. Though South Lake Tahoe’s innerworkings 24

25 23 As far as costs and fees go, § 1447(c) applies only to “removing defendant[s].” See, e.g., Qureshi v. 26 Amway Corp., No. C21-0869JLR, 2021 WL 3732922, at *3 (W.D. Wash. Aug. 24, 2021). This action was removed by the IVHD Respondents. See generally NOR; Am. NOR. 27

28 24 The Amended Notice of Removal makes the same argument as to the Amended Petition. See Am. NOR 1 are somewhat opaque, see supra Section I.B.1, the Ninth Circuit has been exceedingly clear 2 that its political-subdivision rule remains alive and well. See, e.g., San Juan Capistrano, 3 937 F.3d at 1280 (“Here, South Lake Tahoe, and the decisions in Burbank, Palomar, and 4 Okanogan applying it, control as law of the circuit.”). Even IVHD argued as much. See 5 IVHD’s Mot. at 19 (explaining (1) Petitioner has previously been found to lack standing 6 as a political subdivision and (2) “[c]ase law has not changed” (emphasis added)). And it 7 should have been clear to IVHD that if Petitioner lacked standing to raise federal claims, 8 there could be no supplemental jurisdiction over the state-law ones. See, e.g., Herman 9 Family, 254 F.3d at 806; Lopez ex rel. Lopez v. Hay, No. 20-CV-171-GPC-MSB, 10 2021 WL 254204, at *9 (S.D. Cal. Jan. 26, 2021) (“Having decided . . . that the Court lacks 11 jurisdiction to hear Plaintiffs’ Section 1983 claims because Ms. Lopez lacks standing, there 12 is no original jurisdiction that the state law claims can hang to.”). 13 Courts faced with similar circumstances have awarded attorneys’ fees pursuant to 14 § 1447(c). See Parrish, 2023 WL 3276400, at *3 (remanding and awarding fees where 15 (1) “Defendants ‘assert[ed], then immediately disavow[ed] federal jurisdiction, apparently 16 in hopes of achieving outright dismissal’”; and (2) the law clearly indicated jurisdiction 17 was lacking (alterations in original) (quoting Mocek v. Allsaints USA Ltd., 18 220 F. Supp. 3d 910, 914 (N.D. Ill. 2016))); Morgan v. Bank of Am., N.A., No. 2:20-CV- 19 00157-SAB, 2020 WL 3979660, at *3 (E.D. Wash. July 14, 2020) (stating “[t]he Court has 20 no trouble concluding Defendant lacked ‘an objectively reasonable basis for seeking 21 removal’” where the defendant “removed the case . . . only to turn around and seek 22 dismissal . . . on the ground that federal jurisdiction was lacking” (quoting Martin, 23 546 U.S. at 141)). 24 Consequently, the Court is inclined to grant Petitioner attorneys’ fees and costs 25 associated with removal pursuant to 28 U.S.C. § 1447(c).25 However, Petitioner did not 26

27 25 IVHD also argues that it tried in good faith to avoid the necessity of removal by asking Petitioner to 28 withdraw its federal claims. See IVHD’s Reply at 8–10. IVHD does not, however, explain why this ought 1 submit the necessary records pertaining to its expenses. The Court will therefore retain 2 jurisdiction after remand to address Plaintiff’s request. See Moore v. Permanente Med. 3 Grp., Inc., 981 F.2d 443, 448 (9th Cir. 1992) (“[B]ecause the award of attorney’s fees 4 pursuant to 28 U.S.C. § 1447(c) is collateral to the decision to remand, the district court 5 retained jurisdiction after remand to entertain Plaintiffs’ motion for attorney’s fees.”). 6 CONCLUSION 7 In light of the foregoing, the Court ORDERS as follows. 8 1) The Court GRANTS IN PART AND DENIES IN PART the Attorney 9 General’s Motion to Dismiss (ECF No. 24), IVHD’s Motion to Dismiss (ECF No. 25), and 10 LAFCO’s Motion to Dismiss (ECF No. 26). Specifically, these Motions are GRANTED 11 to the extent they seek to establish that Petitioner lacks standing to raise its federal equal 12 protection claims (Counts I and II of the Amended Petition). Additionally, the Attorney 13 General’s Motion is GRANTED to the extent it requests remand to state court. The 14 Motions to Dismiss are otherwise DENIED. 15 2) The Court REMANDS this action to the Superior Court of the State of 16 California, Imperial County. 17 3) The Court VACATES the September 26, 2024 hearing scheduled for 18 Petitioner’s Motion for Preliminary Injunction (ECF No. 28) and DENIES said Motion AS 19 MOOT. 20 4) The Court retains jurisdiction over Petitioner’s request for attorneys’ fees. 21 Petitioner SHALL FILE a statement of its reasonable fees and costs, along with any 22 appropriate supporting documentation, within fourteen (14) days of the date of this Order. 23 The IVHD Respondents MAY FILE a brief challenging the reasonableness of 24 / / / 25 / / / 26 27 28 only demonstrates that IVHD threatened Petitioner with removal if Petitioner pursued its federal claims 1 || Petitioner’s calculations within seven (7) days of the date on which Petitioner files its 2 || statement. 3 IT IS SO ORDERED. 4 ||Dated: August 19, 2024 janie: Lo erwaitee- 5 on. Janis L. Sammartino ‘ United States District Judge

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