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Bullseye Glass Co. v. Brown

United States District Court, D. Oregon

January 2, 2019

BULLSEYE GLASS CO., Plaintiff,
v.
GOVERNOR KATE BROWN, et al., Defendants.

          Allan M. Garten, Kent S. Robinson, and Carrie Menikoff, GRM Law Group Of Attorneys for Plaintiff.

          Ellen F. Rosenblum, Oregon Attorney General, Scott J. Kaplan and Carla Scott, Senior Assistant Attorneys General, Oregon Department of Justice, Of Attorneys for Defendants Kate Brown, Richard Whitman, and Patrick Allen.

          Jenny M. Madkour, Multnomah County Attorney, and James G. Rice and Jacqueline Sadker Kamins, Senior Assistant County Attorneys, Office of the Multnomah County Attorney, Of Attorneys for Defendant Multnomah County Health Department.

          OPINION AND ORDER

          Michael H. Simon, United States District Judge.

         Plaintiff Bullseye Glass Co. (“Bullseye”) brings this lawsuit against Defendants Governor Kate Brown (“Brown”), Director of the Oregon Department of Environmental Quality (“DEQ”) Richard Whitman (“Whitman”), Director of the Oregon Health Authority (“OHA”) Patrick Allen (“Allen”), [1] and the Multnomah County Health Department (“Multnomah County”). Bullseye asserts two claims. As Claim One, Bullseye alleges that all Defendants have denied Bullseye “substantive due process” in violation of 42 U.S.C. § 1983.[2] As a remedy for Claim One, Bullseye seeks declaratory and injunctive relief against all Defendants and money damages only against Multnomah County.

         As Claim Two, Bullseye seeks only declaratory and injunctive relief against the State Defendants. Specifically, Bullseye seeks a declaration that a specific federal air quality regulation, 40 C.F.R. Part 63, Subpart SSSSSS, § 63.11448, (“Regulation 6S”), does not apply to Bullseye or its operations. Under the Clean Air Act, the United States Environmental Protection Agency (“EPA”) is responsible for regulating emissions of hazardous air pollutants. Pursuant to that authority, EPA has issued National Emission Standards for Hazardous Air Pollutants (“NESHAPS”), including Regulation 6S. As a further remedy for Claim Two, Bullseye requests injunctive relief, enjoining the State Defendants from enforcing either Regulation 6S-or its state equivalent-against Bullseye.

         All Defendants have moved to dismiss Bullseye's first claim. The State Defendants also have moved to dismiss Bullseye's second claim. In his Findings and Recommendation (“F&R”), United States Magistrate Judge Paul Papak recommended dismissing both claims with prejudice.[3] For the reasons that follow, the Court adopts the F&R in part and declines to adopt it in part. Because Bullseye has not stated a claim under § 1983, the Court grants Defendants' motion to dismiss Plaintiff's first claim without prejudice. Regarding Plaintiff's second claim, because the Court has subject matter jurisdiction to address that claim and neither Eleventh Amendment immunity nor the doctrine of claim preclusion bars that claim, the Court denies the State Defendants' motion to dismiss Plaintiff's second claim.

         STANDARDS

         A. Magistrate Judge's Findings and Recommendation

         Under the Federal Magistrates Act, a court may “accept, reject, or modify, in whole or in part, the findings or recommendations made by the magistrate.” 28 U.S.C. § 636(b)(1). If a party files an objection to a magistrate judge's findings and recommendations, “the court shall make a de novo determination of those portions of the report or specified proposed findings or recommendations to which objection is made.” Id.; Fed.R.Civ.P. 72(b)(3). Plaintiff and the State Defendants have objected to portions of the F&R, and the Court has reviewed those portions de novo.

         B. Subject Matter Jurisdiction

         Federal courts are courts of limited jurisdiction. Gunn v. Minton, 568 U.S. 251, 256 (2013). A federal court must presume “that a cause lies outside this limited jurisdiction, and the burden of establishing the contrary rests upon the party asserting jurisdiction.” Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994) (citations omitted); see also Robinson v. United States, 586 F.3d 683, 685 (9th Cir. 2009); Safe Air for Everyone v. Meyer, 373 F.3d 1035, 1039 (9th Cir. 2004). A motion to dismiss under Rule 12(b)(1) of the Federal Rules of Civil Procedure for lack of subject matter jurisdiction, because it involves a court's power to hear a case, “can never be forfeited or waived.” United States v. Cotton, 535 U.S. 625, 630 (2002). The Court must dismiss any case over which it lacks subject matter jurisdiction. Fed.R.Civ.P. 12(h)(3). A Rule 12(b)(1) motion to dismiss for lack of subject matter jurisdiction may be either “facial” or “factual.” See Safe Air for Everyone, 373 F.3d at 1039. A facial attack on subject matter jurisdiction is based on the assertion that the allegations contained in the complaint are insufficient to invoke federal jurisdiction. Id.

         C. Failure to State a Claim

         A motion to dismiss for failure to state a claim may be granted only when there is no cognizable legal theory to support the claim or when the complaint lacks sufficient factual allegations to state a facially plausible claim for relief. Shroyer v. New Cingular Wireless Servs., Inc., 622 F.3d 1035, 1041 (9th Cir. 2010). In evaluating the sufficiency of a complaint's factual allegations, the court must accept as true all well-pleaded material facts alleged in the complaint and construe them in the light most favorable to the non-moving party. Wilson v. Hewlett-Packard Co., 668 F.3d 1136, 1140 (9th Cir. 2012). To be entitled to a presumption of truth, allegations in a complaint “may not simply recite the elements of a cause of action but must contain sufficient allegations of underlying facts to give fair notice and to enable the opposing party to defend itself effectively.” Starr v. Baca, 652 F.3d 1202, 1216 (9th Cir. 2011). All reasonable inferences from the factual allegations must be drawn in favor of the plaintiff. Newcal Indus. v. Ikon Office Solution, 513 F.3d 1038, 1043 n.2 (9th Cir. 2008). The Court need not, however, credit the plaintiff's legal conclusions that are couched as factual allegations. Ashcroft v. Iqbal, 556 U.S. 662, 678-79 (2009).

         A complaint must contain factual allegations sufficient to “plausibly suggest an entitlement to relief, such that it is not unfair to require the opposing party to be subjected to the expense of discovery and continued litigation.” Starr, 652 F.3d at 1216. “A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Iqbal, 556 U.S. at 678 (citing Bell Atl. Corp. v. Twombly, 550 U.S. 544, 556 (2007)). “The plausibility standard is not akin to a probability requirement, but it asks for more than a sheer possibility that a defendant has acted unlawfully.” Mashiri v. Epstein Grinnell & Howell, 845 F.3d 984, 988 (9th Cir. 2017) (quotation marks omitted).

         BACKGROUND[4]

         Bullseye is an Oregon corporation that manufacturers colored glass for use in both art and architecture. Both its headquarters and its manufacturing facility are in Portland, Oregon. In 2015 and early 2016, the DEQ concluded that airborne emissions from Bullseye's glass-making operations might contain pollutants presenting serious public health concerns. This discovery originated in part from a study that DEQ conducted with the United States Forest Service beginning in 2013. The study investigated the presence of heavy metals in moss found on trees in Portland (“Moss Study”). The final Forest Service report on the Moss Study was released on June 9, 2016. The report indicated that the sample with the highest readings for cadmium and arsenic was located only several blocks north of Bullseye's colored glass manufacturing facility.

         Based on the preliminary results of the Moss Study and before the release of the final Forest Service report, a DEQ official contacted Bullseye. The official explained that DEQ would be conducting emissions testing by placing an air quality monitor close to Bullseye's facility. DEQ then measured the air quality during 18 days of testing in October and early November 2015. On January 19, 2016, DEQ received the test results. The results showed maximum daily concentrations of arsenic and cadmium above typical urban concentrations, as defined by the federal Agency for Toxic Substances and Disease Registry, which is part of the United States Department of Health and Human Services. Neither DEQ nor the Forest Service informed Bullseye of these results at the time they were received.

         During the same period when DEQ was monitoring the air quality near Bullseye's facility, the Forest Service collected soil samples from directly below the moss-bearing trees. The results of this soil sampling indicated that the average arsenic and cadmium levels in the soil around Bullseye were below “background levels.” The background level of a metal is the concentration at which it is expected to occur in an area due to natural sources and general urban contamination.

         On approximately February 1, 2016, the results from DEQ's air quality testing were disclosed to the news media. The results of the soil sampling, however, were not publicly disclosed. On that same day, February 1, 2016, DEQ officials visited the Bullseye facility, provided Bullseye with a copy of the air quality test results, and informed Bullseye that these results had been given to the press. The resulting news accounts included substantial criticism of Bullseye.

         On February 9, 2016, the Multnomah County Health Department released a map, purporting to show estimated cadmium air concentrations in Portland. This map was published in local newspapers and appeared on local television news programs. Bullseye alleges that Defendants “knew or should have known that map was false, because there was no scientific basis for predicting air quality based on metal in moss.” Bullseye bases this assertion on a scientific article published six weeks later by two Forest Service employees, which acknowledged an absence of sufficient data “to convert moss-based maps into atmospheric concentration values.”

         On February 12, 2016, Bullseye met with representatives of DEQ and the Oregon Department of Justice. Bullseye agreed that it would install a pollution control device as soon as possible. According to Bullseye, at that meeting DEQ “conceded” that DEQ's October 2015 air quality testing did not provide sufficient data to evaluate air quality because it measured data for only 18 days. Bullseye and DEQ continued to negotiate an emissions agreement. By March 3, 2016, Bullseye alleges, it believed that it had reached an agreement with DEQ, but DEQ allegedly told Bullseye that the “optics weren't right” to enter into an agreement at that time. On March 8, 2016, DEQ wrote a letter to Bullseye, stating that DEQ would be asking the Oregon Environmental Quality Commission to draft temporary rules applicable to glass manufacturers.

         The following day, March 9, 2016, DEQ wrote a letter to the EPA, asking that agency to reevaluate its interpretation of Regulation 6S. EPA's Regulation 6S is intended to control metal emissions from glass manufacturing facilities. Before the DEQ sent its letter to the EPA, both DEQ and EPA had interpreted Regulation 6S as not applying to Bullseye and other smaller glass manufacturers. On April 12, 2016, the EPA issued a “non-binding regulatory interpretation, ” concluding that DEQ had discretion to determine that Regulation 6S was applicable to Bullseye.

         On April 13, 2016, DEQ wrote to Bullseye, advising that DEQ had determined that Regulation 6S was applicable to Bullseye, and DEQ requested that Bullseye provide DEQ with the information necessary to ensure compliance with Regulation 6S. On April 25, 2016, DEQ sent Bullseye a “Pre-Enforcement Notice, ” stating that “[b]ecause your facility is subject to [Regulation] 6S, your facility was required to apply for a Title V permit.” Under Title V of the federal Clean Air Act, the process relating to Title V air permits may be administered by a state acting pursuant to state regulations. In Oregon, Title V air permits are administered by DEQ. As DEQ stated in its Pre-Enforcement Notice, Bullseye was in violation of Oregon air quality regulations. DEQ proposed that Bullseye and DEQ enter into an agreement that would resolve the violation.

         On May 19, 2016, DEQ and the OHA asked Oregon's Governor to authorize an order pursuant to Or. Rev. Stat. (“ORS”) § 468.115, requiring Bullseye to cease and desist from using certain metals in an uncontrolled furnace for ten days (the “C&DO”). The Governor agreed, and the CD&O was issued. Bullseye did not seek administrative or judicial review of the C&DO, which it could have done under the Oregon Administrative Procedures Act. Eight days later, on May 27, 2016, because Bullseye still had not entered into an agreement with DEQ to cease uncontrolled emissions of hazardous metals, the Governor directed DEQ to renew the C&DO. Bullseye also did not seek administrative or judicial review of the renewed order.

         On June 6, 2016, Bullseye and the DEQ entered into a Mutual Agreement and Final Order (“MAO”). ECF 8-1. The MAO recites, among other things:

3. DEQ and Bullseye each seek regulatory and operational clarity, compliance with law, and certainty with respect to the operations of Bullseye's glass manufacture operations in Portland, Oregon. It is in the best interests of both DEQ and Bullseye to enter into this ...

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