Nat'l Ass'n of Wheat Growers v. Zeise, 309 F. Supp. 3d 842 (2018)

Feb. 26, 2018 · United States District Court for the Eastern District of California · Civ. No. 2:17–2401 WBS EFB
309 F. Supp. 3d 842

NATIONAL ASSOCIATION OF WHEAT GROWERS; National Corn Growers Association; United States Durum Growers Association ; Western Plant Health Association; Iowa Soybean Association; South Dakota Agri-Business Association ; North Dakota Grain Growers Association; Missouri Chamber of Commerce and Industry; Monsanto Company; Associated Industries of Missouri; Agribusiness Association of Iowa; CropLife America; and Agricultural Retailers Association, Plaintiffs,
v.
Lauren ZEISE, in her official capacity as Director of the Office of Environmental Health Hazard Assessment; and Xavier Becerra, in his official capacity as Attorney General of the State of California, Defendants.

Civ. No. 2:17-2401 WBS EFB

United States District Court, E.D. California.

Signed February 26, 2018

*845Catherine L. Hanaway, Pro Hac Vice, Matthew P. Diehr, Pro Hac Vice, Matthew T. Schelp, Pro Hac Vice, Natalie R. Holden, Husch Blackwell LLP, St. Louis, MO, Christopher Claiborne Miles, Husch Blackwell LLP, Kansas City, MO, Travis Lillie, Missouri Attorney General, Springfield, MO, Ann Marguerite Grottveit, Kahn, Soares & Conway, LLP, Sacramento, CA, Joshua M. Divine, Pro Hac Vice, Missouri Attorney Generals Office, Jefferson City, MO, Andrew Prins, Pro Hac Vice, Richard P. Bress, Pro Hac Vice, Alexandra P. Shechtel, Philip J. Perry, Latham and Watkins LLP, Elliot Belilos, Pro Hac Vice, Law Firm of Olsson Frank Weeda Terman Matz PC, Gary H. Baise, Pro Hac Vice, OFW Law, Washington, DC, Ryan S. Baasch, Pro Hac Vice, Latham & Watkins LLP, New York, NY, Trenton H. Norris, Arnold & Porter Kaye Scholer LLP, San Francisco, CA, for Plaintiffs.

Laura Zuckerman, State of California Department of Justice Attorney General's Office, Susan Sabina Fiering, California Attorney General's Office, Oakland, CA, Heather Colleen Leslie, Office of the Attorney General, Sacramento, CA, for Defendants.

MEMORANDUM AND ORDER RE: MOTION FOR PRELIMINARY INJUNCTION

WILLIAM B. SHUBB, UNITED STATES DISTRICT JUDGE

Before the court is plaintiffs' Motion for Preliminary Injunction. (Docket No. 29.) The court held a hearing on the motion on February 20, 2018.

I. Factual and Procedural History

This case concerns a challenge to California's listing of glyphosate1 as a chemical known to the State of California to cause cancer, as well as a challenge to California's warning requirements that accompany that listing. Plaintiffs claim, *846among other things, that the listing and warning requirements violate the First Amendment by compelling them to make false, misleading, and highly controversial statements about their products, and they seek a preliminary injunction on this basis.2

Under Proposition 65, the Safe Drinking Water and Toxic Enforcement Act of 1986, Cal. Health & Safety Code §§ 25249.5 - 25249.14 ("Proposition 65"), the Governor of California is required to publish a list of chemicals known to the State to cause cancer, as determined by, inter alia, certain outside entities, including the United States Environmental Protection Agency ("EPA"), the United States Food and Drug Administration ("FDA"), and the International Agency for Research on Cancer ("IARC").3 AFL-CIO v. Deukmejian, 212 Cal. App. 3d 425, 431-34, 260 Cal.Rptr. 479 (3d Dist. 1989) (citing, inter alia, Cal. Labor Code 6382(b)(1) ); see also Cal. Code Regs. tit. 27 §§ 25306(m), 25904(b)4 ("A chemical or substance shall be included on the list [of chemicals known to the state to cause cancer ] if it is classified by the International Agency for Research on Cancer" as "carcinogenic to humans" or "[p]robably carcinogenic to humans" and there is "sufficient evidence of carcinogenicity in experimental animals.").5

Proposition 65 also prohibits any person in the course of doing business from knowingly and intentionally exposing anyone to the listed chemicals without a prior "clear and reasonable" warning, with this prohibition taking effect 12 months after the chemical has been listed. Cal. Health & Safety Code § 25249.6 ; Deukmejian, 212 Cal. App. 3d at 431-34, 260 Cal.Rptr. 479. Failure to comply may result in penalties up to $2,500 per day for each failure to provide an adequate warning, and enforcement actions may be brought by the California Attorney General, district attorneys, certain city attorneys and city prosecutors, and private citizens who may recover attorney's fees. Cal. Health & Safety Code § 25249.7(b), Cal. Code Regs. tit. 11 § 3201.

In 2015, the IARC classified glyphosate as "probably carcinogenic" to humans based on evidence that it caused cancer in experimental animals and limited evidence that it could cause cancer in humans. (Zuckerman Decl. (Docket No. 49), Ex. H, Preamble (Docket No. 49-8), and *847Ex. O, IARC Glyphosate, from Monograph 112 (Docket No. 49-15).) However, several other organizations, including the EPA and other agencies within the World Health Organization, have concluded that there is no evidence that glyphosate causes cancer. (Prins Decl., Exs. E-L (Docket Nos. 29-8 through 29-15).)6 As a result of the IARC's classification of glyphosate as probably carcinogenic, the OEHHA issued a Notice of Intent to List Glyphosate in November 2015. (Zuckerman Decl., Ex. Q (Docket No. 49-17).)

The OEHHA listed glyphosate as a chemical known to the state of California to cause cancer on July 7, 2017, and thus the attendant warning requirement takes effect on July 7, 2018. (Zuckerman Decl., Ex. T, OEHHA Chemicals Known to the State to Cause Cancer or Reproductive Toxicity List (December 28, 2017) (Docket No. 49-20).)

II. Discussion

Injunctive relief is "an extraordinary and drastic remedy, one that should not be granted unless the movant, by a clear showing, carries the burden of persuasion." Mazurek v. Armstrong, 520 U.S. 968, 972, 117 S.Ct. 1865, 138 L.Ed.2d 162 (1997) (citation omitted). In order to obtain a preliminary injunction, the moving party must establish (1) it is likely to succeed on the merits, (2) it is likely to suffer irreparable harm in the absence of preliminary relief, (3) the balance of equities tips in its favor, and (4) an injunction is in the public interest. Winter v. Nat. Res. Def. Council, Inc., 555 U.S. 7, 20, 129 S.Ct. 365, 172 L.Ed.2d 249 (2008).

A. Ripeness

Before the court examines the merits of plaintiffs' First Amendment claim, the court will consider whether this claim is ripe. "Ripeness is peculiarly a question of timing, designed to prevent the courts, through avoidance of premature adjudication, from entangling themselves in abstract disagreements." Thomas v. Anchorage Equal Rights Comm'n, 220 F.3d 1134, 1138 (9th Cir. 2000) (citations and internal punctuation omitted). Courts must examine whether a case is ripe because their role "is neither to issue advisory opinions nor to declare rights in hypothetical cases, but to adjudicate live cases or controversies consistent with the powers granted the judiciary in Article III of the Constitution." Id.

The ripeness inquiry includes both "constitutional" and "prudential" components. Id. Under the constitutional component of standing, courts consider "whether the plaintiffs face a realistic danger of sustaining direct injury as a result of the statute's operation or enforcement, or whether the alleged injury is too imaginary or speculative to support jurisdiction." Id. (citations and internal quotations omitted). Under the prudential component, courts consider (1) the fitness of the issues for judicial decision and (2) the hardship to the parties of withholding court consideration. Id. at 1142. For the reasons discussed below, the court finds that plaintiffs' First Amendment challenge is ripe under both the constitutional and prudential inquiries.

*848First, defendants argue that plaintiffs' First Amendment challenge is unripe because plaintiffs may not have to provide any warning if their products' glyphosate levels are below the "safe harbor" level that will likely be adopted by the State before the warnings are required. However, regardless of the State's possible enactment of a safe harbor level, plaintiffs still face a significant risk of injury. The court recognizes that (1) Proposition 65 provides that no warning is required for a product where an exposure poses no significant risk assuming lifetime exposure at the level in question, Cal. Health & Safety Code § 25249.10 ; (2) the OEHHA has set specific safe harbor levels for several chemicals, and no warnings are required if the daily exposure caused by a product is below that safe harbor level, Cal. Code Regs. tit. 27 § 25705 ; and (3) the OEHHA has proposed a safe harbor level of 1,100 micrograms per day for glyphosate, and the corresponding regulation setting that level is expected to be completed by July 1, 2018, (Fernandez Decl. ¶ 9 (Docket No. 48) ).

Nevertheless, assuming plaintiffs' products were tested and found to contain concentrations of glyphosate below the safe harbor level as set by Cal. Code. Regs. tit. 27 § 25705, plaintiffs would still have no reasonable assurance that they would not be subject to enforcement action. Plaintiffs have provided evidence that private plaintiffs have brought enforcement actions for various chemicals notwithstanding a defense of compliance with the safe harbor level for those chemicals, including where the California Attorney General said a proposed enforcement suit had no merit.7 Thus, plaintiffs, who have stated they intend to give no warning based on their constitutional right against compelled speech, face a credible threat of enforcement as a result of exercising such right, regardless of the possible enactment of a safe harbor level for glyphosate.8

*849Defendants claim that enforcement actions would be unlikely in the event that a product did not exceed the safe harbor level for glyphosate, citing both the steps required to file suit (which require 60 days' notice and the filing of a certificate of merit) and the fact that the Attorney General will likely inform the private enforcer that (1) there was no violation, (2) an action was not in the public interest, and (3) the action would not warrant civil penalties and fees. Defendants also note that if the private enforcer refused to withdraw its notice of violation, the Attorney General would then post a letter on the Attorney General website stating that there was no merit to the proposed enforcement action. Notwithstanding these purported barriers, one California Court of Appeal has explained that the instigation of Proposition 65 enforcement actions is "easy-and almost absurdly easy at the pleading stage and pretrial stages." See Consumer Def. Grp. v. Rental Hous. Indus. Members, 137 Cal. App. 4th 1185, 1215, 40 Cal.Rptr.3d 832 (4th Dist. 2006).

Further, in order to take advantage of the safe harbor, plaintiffs would be required to test their products to determine whether their products exceeded the safe harbor level, incurring the attendant costs, which in itself is a cognizable injury. See, e.g., Monsanto Co. v. Geertson Seed Farms, 561 U.S. 139, 154-55, 130 S.Ct. 2743, 177 L.Ed.2d 461 (2010) (farmers seeking injunctive relief had standing based on, inter alia, the cost of testing crops that would be required if injunction was not granted).9

Second, defendants argue that plaintiffs' First Amendment challenge is unripe because even if their products exceed the safe harbor level plaintiffs may defend any enforcement action by showing their products do not pose a significant cancer risk. However, that would merely be an affirmative defense which plaintiffs would have to assert once the enforcement action is brought against them,10 and facing enforcement actions, or even the possible risk of enforcement actions, are cognizable injuries. See, e.g., *850Italian Colors Rest. v. Becerra, 878 F.3d 1165, 1173 (9th Cir. 2018) (party had standing because "even if the Attorney General would not enforce the law, [the statute under review] gives private citizens a right of action to sue for damages").

Third, defendants argue that plaintiffs' First Amendment challenge is unripe because it has not been determined what any required warning would have to say. However, as discussed in detail below in the court's discussion of the likelihood of success on the merits, any warning which plaintiffs might be able to devise consistent with defendants' demands under the regulations interpreting Proposition 65 would be inconsistent with plaintiffs' First Amendment rights.

B. Likelihood of Success on the Merits

As in initial matter, plaintiffs have not shown a likelihood of success on the merits of their claim that the listing of glyphosate violates the First Amendment, because the listing is government speech, not private speech. "The Free Speech Clause restricts government regulation of private speech; it does not regulate government speech." Pleasant Grove City v. Summum, 555 U.S. 460, 467, 129 S.Ct. 1125, 172 L.Ed.2d 853 (2009). California's listing of chemicals it purportedly knows to cause cancer is neither a restriction of private speech nor government-compelled private speech. The fact that the listing triggers Proposition 65's warning requirement does not transform the listing itself into government-compelled speech. Indeed, glyphosate has been listed by California since July 2017, and plaintiffs have not been required to provide any warnings. It is only the upcoming July 2018 deadline for providing the Proposition 65 warning that compels private speech. Thus, plaintiffs have not shown a likelihood of success on the merits of their claim that the listing of glyphosate violates the First Amendment.

Similarly, plaintiffs have not shown a likelihood of irreparable harm should the court fail to enjoin the listing of glyphosate, because any harm that plaintiffs might suffer is caused by the warning requirements of Proposition 65, rather than the listing itself. Notably, plaintiffs do not claim that they have already suffered any injury as a result of the listing, but only allege that they will suffer injury as the warning requirement deadline approaches and takes effect. In other words, any alleged irreparable injury could be prevented directly by enjoining the warning requirement. Accordingly, the court will deny a preliminary injunction based on plaintiffs' claim that the glyphosate listing violates the First Amendment.

A different analysis is required for the warning requirement, as it compels commercial speech. In Zauderer v. Office of Disciplinary Counsel of Supreme Court of Ohio, 471 U.S. 626, 651, 105 S.Ct. 2265, 85 L.Ed.2d 652 (1985), the Supreme Court held that the government may require commercial speakers to disclose "purely factual and uncontroversial information" about commercial products or services, as long as the "disclosure requirements are reasonably related" to a substantial government interest and are neither "unjustified [n]or unduly burdensome." See also CTIA-The Wireless Ass'n v. City of Berkeley, 854 F.3d 1105, 1118 (9th Cir. 2017).

The State has the burden of demonstrating that a disclosure requirement is purely factual and uncontroversial, not unduly burdensome, and reasonably related to a substantial government interest. See Zauderer, 471 U.S. at 658-59, 105 S.Ct. 2265 ; Ibanez v. Fla. Dep't of Bus. & Prof'l Regulation, Bd. of Accountancy, 512 U.S. 136, 146, 114 S.Ct. 2084, 129 L.Ed.2d 118 (1994). The dispute in the present case is over whether the compelled disclosure is *851of purely factual and uncontroversial information. In this context, "uncontroversial" "refers to the factual accuracy of the compelled disclosure, not to its subjective impact on the audience." CTIA, 854 F.3d at 1117-18. Further, "a statement may be literally true but nonetheless misleading and, in that sense, untrue" and therefore unconstitutionally compelled private speech under Zauderer. Id. at 1119 ; see also Am. Meat Inst. v. U.S. Dep't of Agric., 760 F.3d 18, 27 (D.C. Cir. 2014) (recognizing possibility that required factual disclosures "could be so one-sided or incomplete that they would not qualify as 'factual and uncontroversial' ") (citation omitted).

Defendants argue that any warning for glyphosate that incorporates the current safe-harbor warning language "known to the state of California to cause cancer" or ("known to cause cancer") will be truthful and not misleading because Proposition 65 and its implementing regulations state that chemicals are "known" to the State to cause cancer when, inter alia, they are classified by the IARC as "[p]robably carcinogenic to humans" and there is "sufficient evidence of carcinogenicity in experimental animals." See Cal. Code Regs. tit. 27 § 25904(b). Because the IARC classified glyphosate as a probable carcinogen and there was sufficient evidence of carcinogenicity in animals, defendants argue that California does in fact "know" that glyphosate causes cancer under the applicable regulations, and its warning is factually accurate.

While it may be literally true that California "knows" that glyphosate causes cancer as the State has defined that term in the statute and regulations, the required warning would nonetheless be misleading to the ordinary consumer. See, e.g., CTIA-The Wireless Ass'n v. City and County of San Francisco, 827 F.Supp.2d 1054, 1062-63 (9th Cir. 2011), aff'd, 494 Fed.Appx. 752 (9th Cir. 2012) (granting preliminary injunction in part because required fact sheet was misleading because it failed "to explain the limited significance of the WHO 'possible carcinogen' classification," which implied that radiofrequency energy from cell phones was "more dangerous than it really is," and explaining that the fact sheet should state that "RF Energy has been classified by the World Health Organization as a possible carcinogen rather than as a known carcinogen or a probable carcinogen and studies continue to assess the potential health effects of cell phones.").

Ordinary consumers do not interpret warnings in accordance with a complex web of statutes, regulations, and court decisions, and the most obvious reading of the Proposition 65 cancer warning is that exposure to glyphosate in fact causes cancer. A reasonable consumer may understand that if the warning says "known to cause cancer," there could be a small minority of studies or experts disputing whether the substance in fact causes cancer. However, a reasonable consumer would not understand that a substance is "known to cause cancer" where only one health organization had found that the substance in question causes cancer and virtually all other government agencies and health organizations that have reviewed studies on the chemical had found there was no evidence that it caused cancer. Under these facts, the message that glyphosate is known to cause cancer is misleading at best.

The court also rejects defendants' arguments that the warning requirement is permissible under Zauderer because (1) Proposition 65 does not require plaintiffs to use the language "known to the state of California to cause cancer," and (2) plaintiffs may not have to provide warnings if their products fall below the safe harbor level that will likely be adopted. Under the *852applicable regulations, in order for a warning to be per se clear and reasonable, the warning must state that the chemical is known to cause cancer. California regulations also discourage, if not outright prohibit, language that calls into doubt California's knowledge that a chemical causes cancer.11 Notably, defendants provide no example of a more detailed warning explaining the debate regarding glyphosate's carcinogenicity that would pass muster under Proposition 65 and the applicable regulations; and at oral argument, defense counsel repeatedly rejected various alternative warnings proposed by the court which would provide more context or use more accurate language. Defendants have the burden of showing that the speech they wish to compel is factually accurate and uncontroversial. See Zauderer, 471 U.S. at 658-59, 105 S.Ct. 2265 ; Ibanez, 512 U.S. at 146, 114 S.Ct. 2084.12

On the evidence before the court, the required warning for glyphosate does not appear to be factually accurate and uncontroversial because it conveys the message that glyphosate's carcinogenicity is an undisputed fact, when almost all other regulators have concluded that there is insufficient evidence that glyphosate causes cancer. For example, the EPA has reviewed studies regarding the carcinogenicity of glyphosate multiple times and has determined each time that there was no or insufficient evidence that glyphosate causes cancer, most recently in September 2016.13 Several international agencies have likewise concluded that there is insufficient evidence that glyphosate causes cancer, including the European Commission's Health and Consumer Protection Directorate-General, multiple divisions of the World Health Organization besides the IARC, and Germany's lead consumer health and safety regulator. (Prins Decl., Exs. I, J, K, L (Docket Nos. 29-12, 29-13, 29-14, 29-15).)14

It is inherently misleading for a warning to state that a chemical is known to the state of California to cause cancer based on the finding of one organization (which as noted above, only found that substance is probably carcinogenic), when apparently all other regulatory and governmental bodies have found the opposite, including the EPA, which is one of the bodies California *853law expressly relies on in determining whether a chemical causes cancer. The court expresses no opinion as to whether a statement that a chemical is known to cause cancer is factually accurate and uncontroversial where there is stronger evidence in support of the chemical's carcinogenicity. However, here, given the heavy weight of evidence in the record that glyphosate is not in fact known to cause cancer, the required warning is factually inaccurate and controversial. See CTIA, 854 F.3d at 1119 ; Am. Meat Inst., 760 F.3d at 27.

The court's First Amendment inquiry here boils down to what the state of California can compel businesses to say. Whether Proposition 65's statutory and regulatory scheme is good policy is not at issue. However, where California seeks to compel businesses to provide cancer warnings, the warnings must be factually accurate and not misleading. As applied to glyphosate, the required warnings are false and misleading. Plaintiffs have thus established a likelihood of success on the merits of their claim that the warning requirement violates their First Amendment rights.15

C. Irreparable Harm

The Ninth Circuit has explained that "[i]rreparable harm is relatively easy to establish in a First Amendment Case." CTIA, 854 F.3d at 1123. "[A] party seeking preliminary injunctive relief in a First Amendment context can establish irreparable injury...by demonstrating the existence of a colorable First Amendment claim." Id. (quoting Sammartano v. First Judicial Dist. Court, 303 F.3d 959, 973 (9th Cir. 2002) ). Moreover, "[t]he loss of First Amendment freedoms, for even minimal periods of time, unquestionably constitutes irreparable injury." Valle Del Sol Inc. v. Whiting, 709 F.3d 808, 828 (9th Cir. 2013) (quoting Elrod v. Burns, 427 U.S. 347, 373, 96 S.Ct. 2673, 49 L.Ed.2d 547 (1976) ). Here, because plaintiffs have established that they are likely to succeed on their First Amendment claim as to Proposition 65's warning requirement, they have also established that they will likely suffer irreparable harm if the warning requirement is not enjoined as to glyphosate.16

D. Balance of Equities and Public Interest

When the government is a party, the balance of equities and public interest factors merge. Drakes Bay Oyster Co. v. Jewell, 747 F.3d 1073, 1092 (9th Cir. 2014) (citing Nken v. Holder, 556 U.S. 418, 435, 129 S.Ct. 1749, 173 L.Ed.2d 550 (2009) ). To determine the balance of equities, the court must "balance the interests of all parties and weigh the damage to each." Stormans, Inc. v. Selecky, 586 F.3d 1109, 1138 (9th Cir. 2009) (citation omitted).

While the court recognizes that the state has a significant interest in protecting its citizens and informing them of possible health risks, the Ninth Circuit has *854consistently "recognized the significant public interest in upholding First Amendment principles." Doe v. Harris, 772 F.3d 563, 583 (9th Cir. 2014) (quoting Sammartano, 303 F.3d at 974 ). Further, California "has no legitimate interest in enforcing an unconstitutional" law. See KH Outdoor, LLC v. City of Trussville, 458 F.3d 1261, 1272 (11th Cir. 2006). Providing misleading or false labels to consumers also undermines California's interest in accurately informing its citizens of health risks at the expense of plaintiffs' First Amendment rights. Accordingly, the balance of equities and public interest weigh in favor of enjoining Proposition 65's warning requirement for glyphosate.

As plaintiffs have shown that they are likely to succeed on the merits of their First Amendment claim, are likely to suffer irreparable harm absent an injunction, and that the balance of equities and public interest favor an injunction, the court will grant plaintiffs' request to enjoin Proposition 65's warning requirement for glyphosate.

IT IS THEREFORE ORDERED that plaintiffs' Motion for a Preliminary Injunction (Docket No. 29) be, and the same hereby is, GRANTED IN PART. Plaintiffs' request for a preliminary injunction enjoining defendants from listing glyphosate as a chemical known to the State of California to cause cancer under California Health & Safety Code § 25249.8 is DENIED. Plaintiffs' request for a preliminary injunction enjoining the warning requirement of California Health & Safety Code § 25249.6 as to glyphosate is GRANTED. Pending final resolution of this action, defendants, their agents and employees, all persons or entities in privity with them, and anyone acting in concert with them are hereby ENJOINED from enforcing as against plaintiffs, plaintiffs' members, and all persons represented by plaintiffs, California Health & Safety Code § 25249.6's requirement that any person in the course of doing business provide a clear and reasonable warning before exposing any individual to glyphosate.