Interlink Prods. Int'l, Inc. v. Crowfoot

678 F.Supp.3d 1216

INTERLINK PRODUCTS INTERNATIONAL, INC., Plaintiff, v. Wade CROWFOOT, et al., Defendants.

No. 2:20-cv-02277-DAD-CKD

United States District Court, E.D. California

Filed June 26, 2023

Signed June 23, 2023

Michael Allen Tenenbaum, The Office of Michael Tenenbaum, Esq., Santa Monica, CA, for Plaintiff.

Courtney Covington, Daniel M. Fuchs, Russell B. Hildreth, California Department of Justice Office of the Attorney General, Sacramento, CA, for Defendant Drew Bohan.

Courtney Covington, California Department of Justice Office of the Attorney General, Sacramento, CA, for Defendant Maunee Berenstein.

ORDER GRANTING DEFENDANTS' MOTION TO DISMISS

Dale A. Drozd, UNITED STATES DISTRICT JUDGE

This matter is before the court on a motion to dismiss brought pursuant to Federal Rule of Civil Procedure 12(b)(6) filed on behalf of defendants. (Doc. No. 65.) On November 7, 2022, the pending motion was taken under submission on the papers. (Doc. No. 66.) For the reasons explained below, defendants' motion to dismiss will be granted.

BACKGROUND

A. Factual and Procedural Background

In this consolidated action, plaintiff Interlink Products International, Inc., a New Jersey-based manufacturer of showerheads, challenges the constitutionality of state regulations adopted by the California Energy Commission ("CEC") that regulate the flow rate of showerheads "sold or offered for sale in California." (Doc. Nos. 1, 63.)¹ In the operative second amended consolidated complaint ("SAC"), filed on October 7, 2022, plaintiff names two defendants, both in their official capacities: defendant Drew Bohan, the executive director of the CEC, and defendant Maunee Berenstein, the assistant executive director for compliance assistance and enforcement at the CEC.² (Doc. No. 63 at 1, ¶¶ 6-7.) Plaintiff alleges as follows in the SAC.

Plaintiff is a New Jersey corporation with its principal place of business in Linden, New Jersey. (Id. at ¶ 5.) Plaintiff specializes in the development, production, and marketing of innovative shower and bath products. (Id.) All of plaintiff's offices and business operations are located in New Jersey. (Id.) Plaintiff sells showerheads directly to consumers from its New Jersey location, including through orders accepted on its website from anywhere in the United States. (Id. at ¶¶ 22-23.) Once a showerhead order is ready for shipping, it is picked up at plaintiff's New Jersey warehouse and shipped to the purchaser's designated recipient by common carrier. (Id. at ¶ 24.)

On or about February 26, 2020, the CEC sent plaintiff a cease-and-desist letter notifying it of purported violations of California Code of Regulations, Title 20, §§ 1601-1609 ("California's appliance efficiency regulations") regarding the sale of two of plaintiff's showerheads. (Id. at ¶¶ 2, 27; Doc. No. 1-1 at 2-4.) The letter asserted that plaintiff's showerheads were in violation of the maximum flow rate that the CEC had set for showerheads—2.5 gallons per minute before July 1, 2016; 2.0 gallons per minute after July 1, 2016; and 1.8 gallons per minute after July 1, 2018—and demanded that plaintiff cease from selling the two showerheads in California. (Doc. Nos. 1-1 at 3; 63 at ¶¶ 17, 27.)

Plaintiff also alleges that, according to the CEC's representatives, plaintiff's sales of its showerheads are subject to California's appliance efficiency regulations even though: the showerheads are located in and sold from New Jersey at the time of sale, the showerheads are shipped by common carrier from outside California to recipients in California, and title passes outside California from the seller to the purchaser. (Doc. No. 63 at ¶ 28.) The CEC's representatives contend that such sales were "into California," and thus California's appliance efficiency regulations did apply to those sales. (Id.) In addition, the CEC's representatives "made clear" that it intended to demand payment of civil penalties from plaintiff for the alleged violations of California's appliance efficiency regulations. (Id. at ¶ 29.)

In its SAC, plaintiff asserts a single claim under 42 U.S.C. § 1983 for violation of the Commerce Clause, specifically, that the CEC's application of California's appliance efficiency regulations to sales of plaintiff's showerheads constitutes an extraterritorial regulation of commerce beyond California's borders. (Doc. No. 63 at ¶¶ 30-36.) Plaintiff seeks a declaratory judgment that application of California Code of Regulations, Title 20, §§ 1601-1609 to its sale of showerheads "shipped to recipients in California" violates the Commerce Clause and a permanent injunction prohibiting defendants from enforcing the regulations against plaintiff. (Doc. No. 63 at 9.)

On November 1, 2022, defendants filed the pending motion to dismiss the SAC. (Doc. No. 65.) On November 22, 2022, plaintiff filed its opposition to the motion dismiss, and defendants filed their reply thereto on December 6, 2022. (Doc. Nos. 67, 68.)

B. Regulatory Background

California's Warren-Alquist State Energy Resources Conservation and Development Act authorizes the CEC to establish energy and water efficiency regulations. See Cal. Pub. Res. Code §§ 25000, et seq. In particular, California Public Resources Code § 25402 provides that the CEC shall "[p]rescribe, by regulation, standards for minimum levels of operating efficiency . . . to promote the use of energy- and water-efficient appliances whose use, as determined by the [CEC], requires a significant amount of energy or water on a statewide basis." Cal. Pub. Res. Code § 25402(c)(1)(A)(i). The statute provides that after the CEC has adopted a standard for the minimum level of operating efficiency for an appliance, "[a] new appliance manufactured on or after the effective date of the standard[ ] . . . shall not be sold or offered for sale in the state, unless it is certified by the manufacturer of the appliance to be in compliance with the standard[ ] . . . ."³ Id.

The CEC has promulgated regulations consistent with § 25402(c)(1)(A)(i), including regulatory authority over "[p]lumbing fittings, which are showerheads . . . ." Cal. Code Regs. tit. 20, § 1601(h). These regulations provide that a manufacturer must test its appliance using an allowable test method before certifying that it complies with California's appliance efficiency standards. See id. §§ 1603, 1606. After the CEC has approved a manufacturer's certification, the appliance will appear on the CEC's Modernized Appliance Efficiency Database System. Id. § 1606(b)-(c). An appliance must appear on the CEC's database before it can be "sold or offered for sale in California . . . ." Id. § 1608(a). The current showerhead efficiency standard is a maximum flow rate of 1.8 gallons per minute for showerheads manufactured on or after July 1, 2018. Id. § 1605.3(h)(5). For showerheads manufactured before July 1, 2018 and on or after July 1, 2016, the maximum flow rate is 2.0 gallons per minute. Id. As such, since July 1, 2018, it has been unlawful to sell, or offer to sell, in California a showerhead that has not been certified and listed in the CEC's database as compliant with the 1.8 gallons per minute efficiency standard. See id. § 1608(a).

LEGAL STANDARD

The purpose of a motion to dismiss pursuant to Rule 12(b)(6) is to test the legal sufficiency of the complaint. N. Star Int'l v. Ariz. Corp. Comm'n, 720 F.2d 578, 581 (9th Cir. 1983). "Dismissal can be based on the lack of a cognizable legal theory or the absence of sufficient facts alleged under a cognizable legal theory." Balistreri v. Pacifica Police Dep't, 901 F.2d 696, 699 (9th Cir. 1990). A plaintiff is required to allege "enough facts to state a claim to relief that is plausible on its face." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). "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." Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009).

In determining whether a complaint states a claim on which relief may be granted, the court accepts as true the allegations in the complaint and construes the allegations in the light most favorable to the plaintiff. Hishon v. King & Spalding, 467 U.S. 69, 73, 104 S.Ct. 2229, 81 L.Ed.2d 59 (1984). However, the court need not assume the truth of legal conclusions cast in the form of factual allegations. U.S. ex rel. Chunie v. Ringrose, 788 F.2d 638, 643 n.2 (9th Cir. 1986). While Rule 8(a) does not require detailed factual allegations, "it demands more than an unadorned, the-defendant-unlawfully-harmed-me accusation." Iqbal, 556 U.S. at 678, 129 S.Ct. 1937. A pleading is insufficient if it offers mere "labels and conclusions" or "a formulaic recitation of the elements of a cause of action." Twombly, 550 U.S. at 555, 127 S.Ct. 1955; see also Iqbal, 556 U.S. at 676, 129 S.Ct. 1937 ("Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice."). Moreover, it is inappropriate to assume that the plaintiff "can prove facts that it has not alleged or that the defendants have violated the . . . laws in ways that have not been alleged." Associated Gen. Contractors of Cal., Inc. v. Cal. State Council of Carpenters, 459 U.S. 519, 526, 103 S.Ct. 897, 74 L.Ed.2d 723 (1983). Lastly, "Rule 12(b)(6) authorizes a court to dismiss a claim on the basis of a dispositive issue of law." Seismic Reservoir 2020, Inc. v. Paulsson, 785 F.3d 330, 335 (9th Cir. 2015) (quoting Neitzke v. Williams, 490 U.S. 319, 326, 109 S.Ct. 1827, 104 L.Ed.2d 338 (1989)).

ANALYSIS

A. Dormant Commerce Clause

The Constitution grants Congress the power "[t]o regulate Commerce . . . among the several States . . . ." U.S. Const., Art. I, § 8, cl. 3. "[T]he Commerce Clause not only vests Congress with the power to regulate interstate trade; the Clause also 'contain[s] a further, negative command,'...