Chemical Producers and Distributors Association v. Helliker

Full title: CHEMICAL PRODUCERS AND DISTRIBUTORS ASSOCIATION, Plaintiff, v. PAUL E…

Court: United States District Court, C.D. California

Date published: Jun 28, 2004

Case No. CV 02-9781 AHM (PLAx) (C.D. Cal. Jun. 28, 2004)

Opinion

Case No. CV 02-9781 AHM (PLAx).

June 28, 2004

ORDER DENYING PLAINTIFF'S MOTION TO VACATE JUDGMENT.

A. MATZ, District Judge

This matter is before the Court on Plaintiff's Motion to Vacate Judgment, pursuant to Fed.R.Civ.P. 59(e). For the reasons that follow, the Court DENIES Plaintiff's motion.

INTRODUCTION

The parties are familiar with the facts and procedural history of this case. On November 3, 2003, Plaintiff filed a motion for summary judgment on the sole issue in this case: whether the Federal Insecticide, Fungicide and Rodenticide Act ("FIFRA") pre-empts Cal. Food Agric. Code § 12811.5. On November 17, 2004, the Intervenors filed an opposition and also requested that the Court grant summary judgment in their favor, sua sponte. (The Intervenors did not file a cross-motion for summary judgment.) On May 12, 2004, the Court denied Plaintiff's motion for summary judgment and granted summary judgment to the Intervenors, sua sponte.

Plaintiff now moves, pursuant to Fed.R.Civ.P. 59(e), to vacate the judgment entered against it on the ground that the Court erred in granting summary judgment sua sponte in favor of the Intervenors.

ANALYSIS

A. The Legal Standard for a Motion to Vacate a Judgment.

Fed.R.Civ.P. 59(e) permits a party against whom judgment has been entered to petition the court to alter or amend that judgment.¹ There are four grounds upon which a court may grant a Rule 59(e) motion: (1) to correct clear errors of law or fact; (2) to consider newly discovered evidence; (3) to prevent manifest injustice; or (4) to address an intervening change in controlling law. See Turner v. Burlington Northern Santa Fe Railroad Co., 338 F.3d 1058, 1063 (9^th Cir. 2003). The district court has "considerable discretion" in ruling on a Rule 59(e) motion. See McDowell v. Calderon, 197 F.3d 1253, 1255 n. 1 (9^th Cir. 1999).² B. Plaintiff Has Not Established That the Court Committed Clear Error or That its Order Granting Summary Judgment Sua Sponte in Favor of the Intervenors Was Manifestly Unjust.

1 Rule 59(e) provides: "Any motion to alter or amend a judgment shall be filed no later than 10 days after entry of the judgment."

2 Plaintiff argues that in the context of summary judgment, the correct legal standard for granting a Rule 59(e) motion is not that the court committed "clear legal error," but merely that there was "legal error." Plaintiff is misguided. See Sch. Dist. No. 1J, Multnomah County v. ACandS, Inc., 5 F.3d 1255 (9^th Cir. 1993) (reiterating, in the context of a Rule 59(e) motion to vacate summary judgment, that the correct legal standard is "clear error.")

Plaintiff argues that the Court, in granting summary judgment sua sponte in favor of the Intervenors, committed legal error, and as a result, the judgment in favor of the Intervenors is manifestly unjust. Plaintiff contends that the Court erred both by: (1) granting summary judgment sua sponte when Plaintiff lacked notice that the Court might do so; and (2) deciding a genuine issue of material fact regarding whether California's Letter of Authorization ("LOA") requirement has, in actual fact, significantly delayed the entry of generic pesticides into the marketplace. The Court will address each of these contentions separately.

1. Plaintiff Had Reasonable Notice That the Court Might Enter Summary Judgment Sua Sponte in Favor of the Intervenors.

Plaintiff first contends that because the Intervenors did not formally move for summary judgment, it "had no reason to believe that the Court might grant summary judgment sua sponte in [their] favor." See Mot., at 5. Plaintiff contends that had it known, it would have proffered additional evidence to controvert facts claimed by the Intervenors to be uncontroverted.

It is well established that a court may grant summary judgment sua sponte in favor of a non-moving party so long as the party that had moved for summary judgment had reasonable notice that the Court might do so and so long as the party against whom summary judgment was rendered had "a full and fair opportunity to ventilate the issues involved in the motion." Cool Fuel, Inc. v. Connett, 685 F.2d 309, 312 (9^th Cir. 1982); Portsmouth Square, Inc. v. Shareholders Protective Comm., 770 F.2d 866 (9^th Cir. 1985). In determining whether the moving party had reasonable notice that the court might grant summary judgment against it sua sponte, courts examine the case record. See Cool Fuel, 685 F.2d at 312.

The record in this case indicates that Plaintiff reasonably must have known that the Court might grant summary judgment sua sponte in favor of the Intervenors. First and foremost, the Intervenors requested several times their opposition that the Court grant summary judgment sua sponte in their favor. See Opp., at 6: 11-13, 7: 18-19, 25: 23-24. Second, Plaintiff argued in its motion for summary judgment that "[s]ummary judgment is appropriate where, as here, there are no genuine issues of material fact." See Mot. for Summary Judgment, at 12: 17-19 (emphasis added).³ Having admitted that no genuine issues existed, Plaintiff's experienced counsel must have known that the case was ripe for disposition on summary judgment, even if not in Plaintiff's favor. Third, at the scheduling conference in this case, which occurred on June 16, 2003, the Court indicated that if it denied Plaintiff's motion for summary judgment, the case would be dismissed, and the Intervenors might not be required to file a cross-motion for summary judgment.⁴ In light of these events, Plaintiff cannot genuinely argue that it lacked notice that the Court might grant summary judgment in favor of the Intervenors, despite the fact that the Intervenors did not file their own motion for summary judgment. Moreover, although Plaintiff argues that if it had such notice, it would have presented additional evidence to controvert facts claimed by the Intervenors to be uncontroverted, Plaintiff does not identify what new evidence it would have proffered or which facts that evidence would have controverted. Fourth, Plaintiffs complaint sought a declaratory judgment that provisions of California law were null and void. Compl. ¶ 1 on p. 13. (It also sought an injunction to be granted only if and only upon a finding that the California law was null and void.) The Court denied all of the relief Plaintiff sought. There was nothing left to Plaintiff's case. Implicit in Plaintiff's very complaint and prayer for relief was the necessary corollary that if Plaintiff did not obtain the judgment it sought, the Intervenors would be entitled to a judgment, so the case could be conclusively resolved. Finally, because Plaintiff's motion for summary judgment addressed the same issue as the Intervenors' motion would have addressed (had the Intervenors filed their own motion), Plaintiff had a full and fair opportunity to litigate the matter.

3 Plaintiff repeated this assertion in the joint Rule 26(f) report, which was filed before Plaintiff moved for summary judgment. See Rule 26(f) Report, at 9: 13-15 ("CPDA and DPR do not believe discovery is necessary since, in their view, this matter may be adjudicated on a motion for summary judgment because there is no factual dispute and the issues to be determined are matters of law); 13: 10-11 ("The parties presently contemplate that this matter can be resolved on summary judgment motions.")

4 Specifically, the Court said to counsel for the Intervenors, "Okay. So you're representing that if I grant — if I deny [Plaintiff's] motion for summary judgment and just — we'll talk about the format of the papers, and in [e]ffect grant your motion, even though I'm not sure I need one — uphold your opposition to their summary judgment motion, this case is going away; am I right? . . . All parts of the case." See Sch. Conf. Transcript, at 6: 7-17. Counsel for the Intervenors answered affirmatively.

2. The Court Did Not Determine a Genuine Issue of Material Fact When it Granted Summary Judgment in Favor of the Intervenors.

Plaintiff next contends that the Court committed legal error when granting summary judgment in favor of the Intervenors because it decided a genuine issue of material fact. Specifically, Plaintiff contends that in support of its motion for summary judgment, it provided "substantial evidence that the LOA requirement has resulted in significant additional delays and costs . . . for the entry of generic products in California," including examples of 20 pesticides for which generic competition was denied, delayed or burdened with extra costs. See Mot., at 7-8. In response to that evidence, the Intervenors filed the Declaration of Oleta Melnicoe, which stated that between 1993 and 2003, original applicants provided permission to generic applicants to rely on their test data 13,290 times. See Melnicoe Decl., ¶¶ 3-17 and Exh. A. The purpose of the Melnicoe declaration was presumably to establish that California's LOA requirement was not, in fact, unduly burdening competition. In response to Ms. Melnicoe's declaration, Plaintiff filed the Supplemental Declaration of Janelle Kay. Ms. Kay's declaration stated that Ms. Melnicoe's 13,290 figure was misleading because in calculating the number of LOAs granted, Ms. Melnicoe did not distinguish between LOAs granted to the original applicant's "true customers" ( i.e., those who would not use the test data to compete with the original applicant) and LOAs granted to generic applicants who would use the test data to compete. See Supp'l Kay Decl. ¶¶ 9-10. Thus, Ms. Kay's declaration presumably was intended to establish that Ms. Melnicoe's 13,290 figure was not accurately measuring the presence or absence of barriers to generic competition.

Plaintiff now contends that in granting summary judgment to the Intervenors, the Court must have erroneously upheld Ms. Melnicoe's credibility instead of drawing all inferences in the light most favorable to Plaintiff. (Notably, Plaintiff does not argue that the Court erred in denying its motion for summary judgment, but only that the Court should not have granted summary judgment to the Intervenors and instead should have permitted the case to proceed to trial. See Mot., at 3.)

If Plaintiff is not arguing that the court erred in ruling that Plaintiff had failed to prove its contention, but instead is arguing that the Court erred in subsequently granting summary judgment to the Intervenors because the above purported factual dispute should not have been resolved, Plaintiff is mistaken. The only remedies sought by Plaintiff in this case were a declaration that FIFRA pre-empted Cal. Food Agric. Code § 12811.5 and an injunction prohibiting § 12811.5's enforcement. As noted above, the Court's finding that, as a matter of law, Plaintiff was not entitled to a declaration or an injunction necessarily ended the case; the Court neither had to nor did weigh the evidence in the light most favorable to Plaintiff, and no issues remained for trial.

Plaintiff may instead be arguing that the Court should have denied its motion for summary judgment, if at all, because of the existence of the above-mentioned "factual dispute" (rather than due to a failure of proof), and for that very reason, the Court should not have granted summary judgment in favor of the Intervenors. If this is, in fact, Plaintiffs argument, it is also mistaken. First, it is disingenuous of Plaintiff to argue that a factual dispute precluded summary judgment for either side after it has argued emphatically throughout this litigation that there were no factual disputes. Second, although Ms. Kay's declaration did attack the persuasiveness of Ms. Melnicoe's 13,290 figure, Ms. Kay did not provide the Court with a "correct" estimate of the number of times original applicants granted LOAs to generic applicants who would thereafter compete directly with the original applicant. Therefore, although the Court did consider all the evidence before it, including Ms. Kay's declaration, the Court did not have before it any evidence sufficient to establish that Section 12811.5 frustrated the application of FIFRA.⁵ Third, the Court's conclusion that Plaintiff had not established anything "approaching a nationwide conflict between FIFRA and the states" was based in large part on the undisputed fact that California is the only state that has a potentially burdensome LOA requirement, on the undisputed fact that it is not possible to calculate the amount of any additional fee generic applicants have to pay to obtain an LOA, and on the Court's opinion that "from an economic perspective" the payment of an additional fee is "[n]either surprising [n]or problematic." See Order, at 17-19. Because Plaintiff did not provide competing evidence regarding how many (or few) LOAs were granted in the past ten years to generic competitors, and because the Court's decision was based on other undisputed facts, the Court did not clearly err by denying Plaintiff's motion for summary judgment on the basis of a failure of proof, rather than on the basis that a material factual dispute existed. Accordingly, the Court did not commit clear legal error in granting summary judgment sua sponte in favor of the Intervenors.

5 Ms. Kay did break down Ms. Melnicoe's calculation with regard to one chemical, Chlorothalonil, and assert that 21 of the 22 LOAs granted for that chemical were to non-competitors. However, Ms. Kay did not redo Ms. Melnicoe's calculations for any of the other chemicals, represent that the LOA approval rate for Chlorothalonil was representative of all other chemicals, or provide any information about how many times the original manufacturer of Chlorothalonil denied an LOA to a generic competitor. Principles of pre-emption require that the "conflict" that the state statute supposedly creates is more than de minimis.

CONCLUSION

For the foregoing reasons, the Court DENIES Plaintiff's Motion to Vacate Judgment.⁶

6 Docket number 129.

IT IS SO ORDERED.