JONNA CORPORATION DBA v. CITY OF SUNNYVALE (2019)

MEMORANDUM ***

Jonna Corporation, dba Premier Recycling Company (“Premier”), appeals the dismissal of its First Amended Complaint (“FAC”) on November 9, 2017. We have jurisdiction under 8 U.S.C. § 1291, and we affirm.

We review de novo a dismissal of a complaint, and we review for abuse of discretion a denial of leave to amend a complaint. United States ex rel. Anita Silingo v. WellPoint, Inc., 904 F.3d 667, 676 (9th Cir. 2018); (citing United States v. Corinthian Colleges, 655 F.3d 984, 991, 995 (9th Cir. 2011) ).

The City of Sunnyvale (“the City”) has an exclusive franchise arrangement for the collection of waste and recycling materials with Bay Counties Waste Services. The California Supreme Court held in 1994 that cities were authorized to grant exclusive franchises of this sort for “solid waste.” Waste Mgmt. of the Desert, Inc. v. Palm Springs Recycling Ctr., Inc., 7 Cal.4th 478, 28 Cal.Rptr.2d 461, 869 P.2d 440, 442 (1994) (in bank). In its FAC, Premier challenged the City’s exclusive franchise, alleging a declaratory relief action premised on the Takings Clause of the United States Constitution and the Fourteenth Amendment’s guarantee of substantive due process. In its opposition to the City’s motion to dismiss, it abandoned its Takings Clause claim, and clarified that its due process claim was based not on any actions by the City, but on the California Supreme Court’s definition of “waste,” which includes within its ambit the construction and demolition debris that Premier collects. Waste Mgmt. of the Desert, Inc., 28 Cal.Rptr.2d 461, 869 P.2d at 445. To the extent that Premier now asserts a substantive due process violation by the City, those claims have been waived. Solis v. Matheson, 563 F.3d 425, 437 (9th Cir. 2009).

As Premier concedes, we must apply rational basis review to its claims. Witt v. Dep’t of Air Force, 527 F.3d 806, 817 (9th Cir. 2008). Under this standard, “only egregious official conduct can be said to be arbitrary in the constitutional sense: it must amount to an abuse of power lacking any reasonable justification in the service of a legitimate governmental objective.” Shanks v. Dressel, 540 F.3d 1082, 1088 (9th Cir. 2008) (quoting Cty. of Sacramento v. Lewis, 523 U.S. 833, 846, 118 S.Ct. 1708, 140 L.Ed.2d 1043 (1998) ) (internal quotation marks omitted). Even assuming, as the district court did, that Premier’s substantive due process claim based on a state court’s interpretation of state law is sustainable in a federal court, Premier does not satisfy this “exceedingly high burden.” Id. (quoting Matsuda v. City & County of Honolulu, 512 F.3d 1148, 1156 (9th Cir. 2008) ). It expressed disagreement with the California Supreme Court’s definition of “waste,” Waste Mgmt. of the Desert, Inc., 28 Cal.Rptr.2d 461, 869 P.2d at 444, but it pleaded no facts to support its allegations that the decision was “constitutionally arbitrary.” Shanks, 540 F.3d at 1089. The district court did not err in dismissing the FAC. Nor did it abuse its discretion in denying leave to amend. See Carvalho v. Equifax Info. Servs., LLC, 629 F.3d 876, 892-93 (9th Cir. 2010).

AFFIRMED.