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Atay v. County of Maui

United States Court of Appeals, Ninth Circuit

November 18, 2016

Alika Atay; Lorrin Pang; Mark Sheehan; Bonnie Marsh; Lei'ohu Ryder; Shaka Movement, (Sustainable Hawaiian Agriculture for the Keiki and the 'Aina) Movement, Plaintiffs-Appellants,
v.
County of Maui; Monsanto Company; Robert Ito Farm, Inc.; Hawaii Farm Bureau Federation, Maui County; Molokai Chamber of Commerce; Agrigenetics, Inc.;Concerned Citizens of Molokai and Maui; Friendly Isle Auto Parts & Supplies, Inc.; New Horizon Enterprises, Inc., DBA Makoa Trucking and Services; Hikiola Cooperative; Dow Agrosciences Llc; John Does 1-10; Jane Does 1-10; Doe Partnerships 1-10; Doe Corporations 1-10; Doe Government Entities 1-10, Defendants-Appellees. ROBERT ITO FARM, INC.; HAWAII FARM BUREAU FEDERATION, MAUI COUNTY, “Maui Farm Bureau”; MOLOKAI CHAMBER OF COMMERCE; AGRIGENETICS, INC., DBA Mycogen Seeds; MONSANTO COMPANY; CONCERNED CITIZENS OF MOLOKAI AND MAUI; FRIENDLY ISLE AUTO PARTS & SUPPLIES, INC.; NEW HORIZON ENTERPRISES, INC., DBA Makoa Trucking and Services; HIKIOLA COOPERATIVE, Plaintiffs-Appellees,
v.
COUNTY OF MAUI, Defendant-Appellee, ALIKA ATAY; LORRIN PANG; MARK SHEEHAN; BONNIE MARSH; LEI'OHU RYDER; SHAKA MOVEMENT, Intervenor-Defendants-Appellants.

          Argued and Submitted June 15, 2016 Honolulu, Hawaii

         Appeal from the United States District Court for the District of Hawaii, Nos. 1:14-cv-00582-SOM-BMK, 1:14-cv-00511-SOM-BMK Susan Oki Mollway, Chief Judge, Presiding

          A. Bernard Bays (argued), Leinaala L. Ley, Michael C. Carroll, and Karin L. Holma, Bays Lung Rose & Holma, Honolulu, Hawaii, for Appellants.

          Richard P. Bress (argued), Matthew J. Glover, Jonathan Y. Ellis, Andrew D. Prins, and Philip J. Perry, Latham & Watkins LLP, Washington, D.C.; Margery S. Bronster (argued) and Rex Y. Fujichaku, Bronster Fujichaku Robbins, Honolulu, Hawaii; Christopher Landau, Kirkland & Ellis LLP, Washington, D.C.; Nickolas A. Kacprowski and Paul D. Alston, Alston Hunt Floyd & Ing, Honolulu, Hawaii; for Appellees.

          Sylvia Shih-Yau Wu and George A. Kimbrell, Center for Food Safety, San Francisco, California; Summer Kupau-Odo and Paul H. Achitoff, Earthjustice, Honolulu, Hawaii; for Amici Curiae Center for Food Safety, Moms on a Mission (MOM) Hui, Moloka'I Mahi'ai, and Gerry Ross.

          Stanley H. Abramson, Karen Ellis Carr, and Kathleen R. Heilman, Arent Fox LLP, Washington, D.C., for Amicus Curiae Biotechnology Innovation Organization.

          Before: Sidney R. Thomas, Chief Judge, and Consuelo M. Callahan and Mary H. Murguia, Circuit Judges.

         SUMMARY[*]

         Preemption

         The panel affirmed the district court's summary judgment and its dismissal in two related actions pertaining to an ordinance voted into law by Maui citizens which banned the cultivation and testing of genetically engineered plants.

         The panel first held that the proponents of the Maui ballot initiative and other appellants had established Article III standing based on the allegations of five individual residents who alleged that genetically engineered farming operations threatened economic harm to their farms. The panel further held that the district court did not err by denying the proponents' motion to remand their action to state court and did not err by denying the proponents' request for Rule 56(d) discovery.

         The panel held that the Maui ordinance is expressly preempted by the Plant Protection Act, 7 U.S.C. § 7756(b), to the extent that it bans genetically engineered plants that the U.S. Animal and Plant Health Inspection Service regulates as plant pests. The panel held that the ban is not impliedly preempted by the Plant Protection Act in its application to genetically engineered crops that the Animal and Plant Health Inspection Service has deregulated, but is impliedly preempted in this application by Hawaii's comprehensive state statutory scheme for the regulation of potentially harmful plants.

          OPINION

          CALLAHAN, Circuit Judge

         The citizens of Maui County voted into law an ordinance banning the cultivation and testing of genetically engineered (GE) plants. We must decide whether the ban is preempted by federal and state law, as the district court held below. We hold that the ordinance is expressly preempted by the Plant Protection Act, 7 U.S.C. § 7756(b), to the extent that it bans GE plants that the U.S. Animal and Plant Health Inspection Service (APHIS) regulates as plant pests. We hold that the ban is not impliedly preempted by the Plant Protection Act in its application to GE crops that APHIS has deregulated, but is impliedly preempted in this application by Hawaii's comprehensive state statutory scheme for the regulation of potentially harmful plants. We therefore affirm.

         I.

         A. Background regarding GE crops and their cultivation on Maui

         Appellees include farmers and other agricultural workers, a farmer's cooperative, local businesses, Maui citizens, and several companies-including Monsanto Company and Agrigenetics, Inc.-that supply seed for GE plants. Monsanto and Agrigenetics own or lease thousands of acres of farmland in Maui County, where they farm GE seed to be used by farmers around the world and conduct field tests of GE plants regulated by APHIS, which is an agency in the U.S. Department of Agriculture. Hawaii's temperate climate and year-round growing season provide excellent conditions for farming and testing GE seeds and crops, which Appellants-citizens and an organization concerned about the effects of GE crops and pesticides-say have made Maui "'ground zero' for the testing and development of GE crops." See Biotechnology Regulatory Services, APHIS, USDA Regulation of Biotechnology Field Tests in Hawaii, 1 (Feb. 2006), http://www.co.maui.hi.us/DocumentCenter/ View/94680 (explaining that "[b]ecause of Hawaii's tropical climate . . . the State has become an attractive location for field tests of a variety of biotech crops").

         GE crops are genetically modified to enhance desirable traits, including resistance to diseases, pests, and pesticides, nutritional value, shelf life, and the production of high yields in a variety of environmental conditions. Some GE plants are genetically modified to produce useful goods such as biofuel or pharmaceuticals. See Ctr. For Food Safety v. Johanns, 451 F.Supp.2d 1165, 1170, 1183, 1186 (D. Haw. 2006). GE crops play a major role in the world's food supply. For example, the U.S. Department of Agriculture reports that over 90% of all corn, soybean, and cotton grown in the United States are now GE varieties.[1] In Hawaii, a GE variety of papaya that is resistant to aphid-transmitted ringspot virus is credited with saving the State's papaya industry.[2]

         Scientific studies have not shown that food produced from GE crops poses any inherent risk to human health. See, e.g., 66 Fed. Reg. 4839, 4840 (Jan. 18, 2001) ("We have concluded that the use, or absence of use, of bioengineering in the production of a food is not a fact that is material either with respect to consequences resulting from the use of the food."). However, the cultivation and testing of GE plants raise several well-documented concerns. For example, "[b]iological contamination [of conventional crops and wild plants] can occur through pollination of non-[GE] plants by [GE] plants or by the mixing of [GE] seed with natural, or non-[GE] seed." Geertson Seed Farms v. Johanns, No. C 06-01075 CRB, 2007 WL 518624, at *4 (N.D. Cal. Feb. 13, 2007) (discussing "[g]ene transmission to non-[GE] alfalfa"). This unintended gene flow is frequently referred to as "transgenic contamination." Ctr. for Food Safety v. Vilsack, 718 F.3d 829, 832, 841 (9th Cir. 2013).

         "[I]njury [from transgenic contamination] has an environmental as well as an economic component." Monsanto Co. v. Geertson Seed Farms, 561 U.S. 139, 155 (2010). Transgenic contamination has previously caused significant economic impacts on farmers of conventional, non-GE crops. For example, "[i]n August of 2006, it was revealed that the United States long-grain rice supply was contaminated with [GE rice], and the price of rice dropped dramatically." In re Genetically Modified Rice Litigation, No. 4:06 MD 1811 CDP, 2007 WL 3027580, *1 (E.D. Mo. Oct. 15, 2007). "The market for American rice suffered significantly, in part because of the European aversion to any genetically modified foods." Id.; see also Vilsack, 718 F.3d at 832, 841 (explaining economic concerns raised by GE alfalfa).

         The cultivation of GE crops also may raise environmental concerns, such as harm to beneficial plants and animals caused by the increased use of pesticides sometimes associated with testing and growing GE crops, the proliferation of "superweeds" and other pests resistant to pesticides, and the reduction of biodiversity. See, e.g., Vilsack, 718 F.3d at 841 (explaining concerns with pesticide-resistant weeds and the increased use of pesticides associated with GE alfalfa). For example, the escape of herbicide-resistant GE plants from test fields or the contamination of wild plants with genes providing for herbicide resistance may have detrimental environmental impacts as these plants out-compete other plants, as reportedly occurred in the case of genetically modified creeping bentgrass.[3] "Biological contamination" might also raise human health concerns where, for example, GE seeds for pharmaceutical crops escape field trials and grow amid commercial crops headed to the market, as reportedly occurred in the case of GE corn designed to produce a protein to be used in pig vaccine. See GAO Report, supra n.3, at 91-92.

         B. Maui County's ban on the cultivation of GE plants

         Concerned with the risks presented by the testing and cultivation of GE plants, on November 4, 2014, the voters of Maui County passed a ballot initiative enacting "A Bill Placing a Moratorium on the Cultivation of Genetically Engineered Organisms" (the Ordinance). Maui's effort to regulate GE crops is not unique. Hawaii County and Kauai County also have passed ordinances regulating GE crops, which are the subjects of two other legal challenges pending before our court. Amici the Center for Food Safety, et al. report that more than 130 statutes, regulations, and ordinances governing GE crops have been passed nationwide.

         The stated purposes of Maui's Ordinance are to protect organic and non-GE farmers and the County's environment from transgenic contamination and pesticides, preserve the right of Maui County residents to reject GE agriculture, and protect the County's vulnerable ecosystems and indigenous cultural heritage. Ordinance § 4.

         The Ordinance enacts a "Temporary Moratorium" making it "unlawful for any person or entity to knowingly propagate, cultivate, raise, grow or test Genetically Engineered Organisms within the County of Maui until" the Ordinance is amended or repealed. Id. § 5(1). On its face, as the parties agree, the Ordinance applies not only to the commercial agricultural operations like Monsanto and Agrigenetics, but also to individuals who have GMO plants in their backyards, such as a ringspot-virus-resistant GE papaya tree. The Ordinance provides exceptions only for "GE Organisms that are in mid-growth cycle, " products prepared for sale that contain GE organisms, licensed health practitioners, and certain academic research. Id. § 5(2).

         The "Temporary Moratorium" imposed by the Ordinance is more accurately characterized as a ban on the cultivation and testing of GE crops, as it will continue in effect absent amendment or repeal. The ban may be amended or repealed only if an Environmental and Public Health Impacts Study is completed, a public hearing held, and two-thirds of the County Council approve the amendment or repeal. Id. § 6. Additionally, the County Council must find that the amendment or repeal will significantly benefit the County while causing no significant harm. Id. § 6.

         The Ordinance imposes civil penalties of $10, 000 for a first violation, $25, 000 for a second violation, and $50, 000 for additional violations. Id. § 9(2). Each day an individual violates the Ordinance is considered a separate violation. Id. The Ordinance creates criminal liability as well, with violations punishable by a $2, 000 fine, imprisonment for no longer than one year, or both for each offense. Id. § 9(3). The Ordinance also authorizes the County's Director of Environmental Management to enter property to remove GE organisms at the violator's expense. Id. § 9(4). There is also a citizen suit provision that allows private suits to enjoin violations of the Ordinance. Id. § 9(5). Finally, the Ordinance contains a severability clause. Id. § 10.

         C. Procedural history

         On November 12, 2014, eight days after voters passed the initiative, a group of proponents of the ballot initiative including the Sustainable Hawai`ian Agriculture for the Keiki and the `Aina Movement (collectively SHAKA) filed suit in Hawaii state court, seeking declaratory relief to resolve the Ordinance's legality (the Atay action).

         The following day, opponents of the initiative including Appellees (collectively, the GE Parties) filed suit against Maui County in federal district court, seeking to invalidate the Ordinance (the Robert Ito Farm action). On November 17, 2014, following an agreement between the GE Parties and the County, the magistrate judge enjoined the County from "publishing or certifying the Ordinance, enacting, effecting, implementing, executing, applying, enforcing, or otherwise acting upon the Ordinance" until the court could determine its legality. SHAKA moved to intervene, and the district court granted the motion on December 15, 2014, noting that Maui's mayor and the County Council had publicly opposed the Ordinance prior to its passage.[4]

         On December 30, 2014, the GE Parties removed the Atay action to federal court, where it was assigned to Chief Judge Mollway, the same judge assigned the Robert Ito Farm action. SHAKA filed a motion to remand back to state court, which the district court denied.

         On June 30, 2015, the district court granted the GE Parties' motion for summary judgment filed in the Robert Ito Farm action and granted the County's motion to dismiss filed in the Atay action. Robert Ito Farm, Inc. v. Cty. of Maui, 111 F.Supp.3d 1088 (D. Haw. 2015). The district court found the Ordinance unenforceable because it was expressly and impliedly preempted by federal law, impliedly preempted by state law, and in excess of the County's authority under the Maui County Charter. Id. at 1100-14.

         SHAKA appealed the district court's judgment in both cases. On appeal, SHAKA, the GE Parties, and two groups of amici filed briefs, while Maui County filed a statement of no position.

         II.

         A. The Parties' threshold arguments

         We first address several threshold arguments raised by the Parties. Appellees argue that Appellants lack standing to maintain this appeal. SHAKA contends that the district court erred by refusing to remand the Atay action to state court and denying their request for Rule 56(d) discovery on the scope of regulations affecting GE crops. We reject these arguments.[5]

         1. Appellants have standing.

         The GE Parties have moved to dismiss for lack of appellate jurisdiction, arguing that SHAKA and other Appellants "lack independent standing to defend the constitutionality of the ordinance where the relevant public officials have chosen not to."

         Article III of the U.S. Constitution limits federal courts' power to deciding actual "cases" or "controversies." U.S. Const., Art. III, § 2. One element of the Constitution's case-or-controversy requirement is that a litigant must demonstrate standing to sue. Clapper v. Amnesty Int'l USA, 133 S.Ct. 1138, 1146 (2013). The standing requirement is built on separation-of-powers principles; it "serves to prevent the judicial process from being used to usurp the powers of the political branches." Id. The standing requirement "must be met by persons seeking appellate review, just as it must be met by persons appearing in courts of first instance." Hollingsworth v. Perry, 133 S.Ct. 2652, 2661 (2013) (internal quotation marks omitted). To establish Article III standing, a litigant must demonstrate an injury that is "'concrete, particularized, and actual or imminent; fairly traceable to the challenged action; and redressable by a favorable ruling.'" Clapper, 133 S.Ct. at 1147 (quoting Monsanto, 561 U.S. at 149). "As a general rule, in an injunctive case this court need not address standing of each plaintiff if it concludes that one plaintiff has standing." Nat'l Ass'n of Optometrists & Opticians LensCrafters, Inc. v. Brown, 567 F.3d 521, 523 (9th Cir. 2009).

         The GE Parties' standing challenge relies primarily on Hollingsworth v. Perry, 133 S.Ct. 2652, 2660 (2013), where the Supreme Court held that the proponents of California's Proposition 8 lacked standing to defend the Proposition after state officials refused to do so. The Court reasoned that the intervenors had "no 'direct stake' in the outcome of their appeal, " and "[t]heir only interest . . . was to vindicate the constitutional validity of a generally applicable California law." Id. at 2662. The GE Parties contend that "Hollingsworth establishes a bright-line rule: The only party with a cognizable interest in defending the constitutionality of a generally applicable law is the government, and the only persons permitted to assert that interest in federal court, accordingly, are the government's officials or other agents." The GE Parties argue that Diamond v. ...


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