Rocky Mountain Farmers Union et al v. Goldstene

Filing 277

AMENDED ORDER on Motion to Stay Preliminary Injunction and Judgments Pending Appeal 273 and 274 , signed by District Judge Lawrence J. O'Neill on 1/23/2012. (Kusamura, W)

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1 2 3 4 IN THE UNITED STATES DISTRICT COURT 5 FOR THE EASTERN DISTRICT OF CALIFORNIA 6 7 8 9 10 ROCKY MOUNTAIN FARMERS UNION, REDWOOD COUNTY MINNESOTA CORN AND SOYBEAN GROWERS, PENNY NEWMAN GRAIN, INC., GROWTH ENERGY, RENEWABLE FUELS ASSOCIATION, REX NEDEREND, FRESNO COUNTY FARM BUREAU, NISEI FARMERS LEAGUE, and CALIFORNIA DAIRY CAMPAIGN, CASE NO. CV-F-09-2234 LJO DLB consolidated with CASE NO. CV-F-10-163 LJO DLB AMENDED ORDER ON MOTION TO STAY PRELIMINARY INJUNCTION AND JUDGMENTS PENDING APPEAL (Docs. 273 and 274) 11 Plaintiffs, 12 13 vs. JAMES N. GOLDSTENE, Executive Officer of the California Air Resources Board, 14 Defendants. 15 16 and related intervenor and consolidated actions. / 17 18 BACKGROUND 19 In these consolidated actions, Plaintiffs challenge California’s Low Carbon Fuel Standard 20 (“LCFS”). Plaintiffs argued that the LCFS was unconstitutional both because it violated the dormant 21 Commerce Clause of the United States Constitutional and was preempted by Section 211(o) of the Clean 22 Air Act, in violation of the Supremacy Clause. Defendants argued that the LCFS is an even-handed and 23 authorized fuel regulation that is permitted by the Clean Air Act and exempt from Commerce Clause 24 scrutiny. 25 On December 29, 2011, this Court issued three orders addressing the parties’ summary judgment 26 and adjudication motions. In the first, this Court, inter alia, rejected the defendants’ arguments that 27 Section 211(c)(4)(B) of the Clean Air Act authorized the LCFS to remove it from both preemption and 28 Commerce Clause scrutiny. In the second order, this Court, inter alia, found that the LCFS violated the 1 1 dormant Commerce Clause in its treatment of ethanol. In addition, and based on this Court’s conclusion 2 that the LCFS violated the dormant Commerce Clause, this Court granted an injunction requested by the 3 Rocky Mountain Plaintiffs, enjoining defendants from further enforcing the LCFS. In the third order, 4 this Court, inter alia, found that the LCFS violates the dormant Commerce Clause in its treatment of 5 crude oils. In the latter orders, the Court directed the clerk of court to enter judgment in favor of the 6 plaintiffs and against defendants on their Commerce Clause claims. The Court further certified the 7 judgments for appeal, pursuant to Fed. R. Civ. P. 54(b). 8 9 On January 5, 2012, defendants filed a notice of appeal, appealing from this Court’s grant of an injunction and from the judgments entered. 10 Over two weeks after filing the appeal, on January 20, 2012, defendants moved to stay the 11 judgments entered against them and to suspend the preliminary injunction pending appeal. Defendants 12 separately moved to shorten time to hear these motions on an expedited schedule. Having considered 13 defendants’ moving papers, and applicable jurisdictional authorities, this Court issues the following 14 order. 15 DISCUSSION 16 “Once a notice of appeal is filed, the district court is divested of jurisdiction over matters being 17 appealed.” Natural Res. Def. Counsel v. Southwest Marine, Inc., 242 F.3d 1163, 1166 (9th Cir. 2001) 18 (citing Griggs v. Provident Consumer Discount Co., 459 US 56, 58 (1982)). This exclusive jurisdiction 19 rule is not absolute. Pursuant to Fed. R. Civ. P. 62(c), this Court retains jurisdiction during the pendency 20 of an appeal to “suspend, modify, restore, or grant an injunction during the pendency of an appeal upon 21 such terms for bond or other terms that secure the opposing party’s rights.” Id.; see also, Fed. R. App. 22 P. 8(a)(1)(C). 23 The limited grant of jurisdiction pursuant to Fed. R. Civ. P. 62(c) “does not restore jurisdiction 24 to the district court to adjudicate anew the merits of the case.” McClatchy Newspapers v. Central Valley 25 Typographical Union No. 46, 686 F.2d 731, 734 (9th Cir. 1982). This Court retains jurisdiction under 26 this rule only to preserve the status quo pending appeal. Natural Res. Def. Counsel, 242 F.3d at 1166; 27 Small v. Operative Plasterers’ & Cement Masons’ Int’l Ass’n Local 200, AFL-CIO, 611 F.3d 483, 495 28 (9th Cir. 2010); see also, Prudential Real Estate Affiliates, Inc. v. PPR Realty, Inc., 204 F.3d 867, 880 2 1 (9th Cir. 2000) (“A district court lacks jurisdiction to modify an injunction once it has been appealed 2 except to maintain the status quo among the parties.”). Once the appeal has been filed, this Court has 3 no jurisdiction to act on the merits of the case or to alter the status of the appeal. A&M Records Inc. v. 4 Napster, Inc., 284 F.3d 1091 (9th Cir. 2002). 5 Pursuant to this authority, this Court lacks jurisdiction to grant defendants’ motion to stay the 6 injunction and judgments pending appeal. Defendants’ motion to suspend the preliminary injunction 7 is based on defendants’ arguments that they are likely to succeed on the merits of their claims on appeal 8 and that they–and not plaintiffs–will experience irreparable harm pending appeal if the preliminary 9 injunction is not stayed. Defendants’ arguments are based on issues that this Court resolved in its orders, 10 and are the issues that are currently pending appeal. Thus, Defendants’ motion improperly seeks to re- 11 litigate issues this Court resolved in its order granting the preliminary injunction and orders on the 12 summary judgment motions. As set forth above, however, this Court lacks jurisdiction to act on the 13 merits of the case or alter the status of the appeal. A&M Records, 284 F.3d at 1099. Defendants’ 14 motion, if granted, would alter the status of the appeal, as it would require this Court to reconsider and 15 reverse the core issues of the appeal. This Court lacks jurisdiction to grant this relief. Id.; c.f., Natural 16 Resources Def. Council, 242 F.3d at 1099 (injunction modifications that “left unchanged” core questions 17 before appellate court were permissible). 18 Defendants cite Fed. R. Civ. P. 62 for their position that this Court may suspend the preliminary 19 injunction pending appeal; however, defendants ignore the narrow limitations of this rule. Fed. R. Civ. 20 P. 62(c) allows this Court to grant only such relief as may be necessary to preserve the status quo 21 pending the appeal. Small, 611 F.3d at 495. For example, this Court may renew an injunction that 22 expires during the pendency of an appeal. Mayweathers v. Newland, 258 F.3d 930, 935 (9th Cir. 2001) 23 (during pendency of appeal, district court properly issued “new” injunction to replace expired one). The 24 current status quo pending appeal is the preliminary injunction which enjoins defendants from enforcing 25 the LCFS. Defendants’ motion does not seek to preserve the status quo. Rather, defendants seek to alter 26 the status quo by suspending the preliminary injunction to allow California to enforce the LCFS. This 27 request goes even farther than requesting the current status quo to roll back to the pre-injunction status 28 quo. At the time of the injunction, California enforced the LCFS under the 2011 regulations. Pursuant 3 1 to the LCFS, the regulated parties’ required reductions increased significantly in 2012. It appears that 2 defendants are requesting an order that would not only change the status quo by allowing California to 3 enforce the LCFS, but to allow enforcement that imposes higher restrictions than had been imposed 4 previously. Defendants cite no authority, and this Court finds none, to support the proposition that this 5 Court has jurisdiction to grant this type of relief. See Small, 611 F.3d at 495 (district court lacked 6 jurisdiction to modify judgment that modified aspects of the case involved in the appeal and changed 7 status quo). 8 Finally, defendants have failed to establish that this Court has jurisdiction to suspend or stay the 9 preliminary injunction pursuant to letter of the rule. Fed. R. Civ. P. 62(c) allows this Court to suspend 10 an injunction during the pendency of an appeal “on terms for bond or other terms that secure the 11 opposing party’s rights.” Defendants propose no such terms that would secure the plaintiffs’ rights. 12 Because this Court found that the LCFS violates the dormant Commerce Clause, this Court cannot 13 conceive of terms which would preserve plaintiffs’ rights while allowing enforcement of an 14 unconstitutional law. Indeed, in this Court’s opinion, an order to suspend the preliminary injunction and 15 to allow continued enforcement of an unconstitutional law would itself violate–and not secure–the 16 plaintiffs’ rights. Because there are no terms that would secure the plaintiffs’ rights which allowing the 17 preliminary injunction to be suspended, this Court must deny defendants’ motion. 18 CONCLUSION AND ORDER 19 For the foregoing reasons, this Court: 20 1. 21 GRANTS defendants’ motion to hear the motions on an expedited schedule (Doc. 273); but 22 2. 23 DENIES defendants’ motion to stay enforcement of the preliminary injunction and judgments of this Court (Doc. 274). 24 IT IS SO ORDERED. 25 Dated: b9ed48 January 23, 2012 /s/ Lawrence J. O'Neill UNITED STATES DISTRICT JUDGE 26 27 28 4

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