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There is a lawyer we worked with at another firm who had a standard move, kind of the way that Jerry Seinfeld had a standard “move” – and, come to think of it, with a similar intention. (“The Move” shows up in “Fusilli Jerry,” the 107th episode of Seinfeld.)   In the face or fear of a hostile action against our client, this lawyer would file a declaratory judgment action in a friendly federal court.  The concept, of course, was to seize the initiative and do some forum-shopping.  Sometimes the action would be preemptive and sometimes it would be reactive. One would think that the timing would make a difference.  But as today’s case, Monster Beverage Corp., v. Herrera, 2016 U.S. App. LEXIS 9012 (9th Cir. May 17, 2016), demonstrates, that ain’t necessarily so.  We discussed the Monster case a couple of days after Labor Day in 2013, when Monster survived an attack on its preemptive preemption position.  Here it is just a couple of days after Memorial Day in 2016, and the Ninth Circuit has ended the case on grounds of Younger abstention and the Anti-Injunction Act.  That’s a long passage of time.  The judicial process, especially the appellate phase (doubly so in the Ninth Circuit), can take a while. What happened in the interim?

First, please enjoy this reminder of what the Monster case was about.   The San Francisco City Attorney wrote a letter to Monster informing it of an investigation into whether Monster’s marketing of its energy drinks was deceptive and bad in various other ways.  Needless to say, the City Attorney’s beef was really with the federal regulatory regime that already governed what Monster could and could not say about its products.  But San Francisco has been known to try to conduct its own foreign policy, so why should federal regulations stand in the way of its persistent effort to impose a nanny-state on its benighted citizens?   Monster filed a preemptive declaratory judgment action in C.D. Cal. (good idea to drag the San Francisco City Attorney down to SoCal), seeking to shut down the investigation because it was preempted by federal law.  Then the San Francisco City Attorney filed a complaint in San Francisco Superior Court, which Monster removed to federal court on grounds of federal question (preemption again), which the federal court remanded after rejecting the preemption argument. For those of you keeping score at home, that means there was a federal case in Dodger-land and a state case in Giant-land.

The San Francisco (honestly, by this point we are tired of writing the city name out in full, but Boranian warned us that we’d be jeered if we abbreviated the city’s name in any way) City Attorney, as is the case with all Bay Area denizens forced to contemplate anything south of Big Sur, must have seen the C.D. Cal. case as a vast annoyance.  That was certainly the idea behind Monster’s maneuver.  Not surprisingly, then, the City Attorney filed a motion to dismiss the declaratory judgment action in C.D. Cal., arguing that the preemption argument stood no chance. The federal court denied that motion to dismiss.  That is the ruling we applauded back in September 2013.

As happens on those rare occasions when we attend a Philadelphia Orchestra performance, we applauded a bit too soon.

The San Francisco City Attorney filed another motion to dismiss, this time based on Younger abstention and the Anti-Injunction Act. So here is the second reminder for you to enjoy, this time bringing you back to your third-year class in Federal Jurisdiction. Younger abstention (the name comes from the seminal case – it is not a reference to a newer, cuter form of abstention) requires federal courts to refrain from exercising jurisdiction that would interfere with an ongoing state judicial proceeding that implicates important state interests and that also provides an adequate opportunity to raise federal defenses.  The Anti-Injunction Act (22 U.S.C. section 2283) forbids a court from staying proceedings in a state court except as authorized by Congress or where necessary in aid of its jurisdiction or to effectuate its judgments.   The district court agreed with the San Francisco City Attorney that Monster’s action ran afoul of Younger abstention and the Anti-Injunction Act, and therefore dismissed the case.  The Ninth Circuit agreed with the district court and affirmed.  Monster’s preemptive master stroke ultimately comes to naught, and now Monster must face a silly enforcement action (that really does look preempted to our admittedly biased eyes) in what might be the ultimate pro-plaintiff jurisdiction.

The Ninth Circuit’s ruling arrived in the form of a Memorandum Disposition, which judges and clerks fondly call a “memo dispo.”  Per 9th Cir. R. 36-3, a memo dispo has limited precedential effect. The use of nonprecedential dispositions is not without controversy (that is probably even truer with California state court decisions than federal decisions).  If a disposition comes in the form of a nonprecedential memo because the issue is so simple and clear-cut based on existing precedent, and the idea is not to fill the Federal Reporters with a lot of repetitive mush, maybe the practice is okay.  But when iffy rulings are being buried, then it is pernicious. When we clerked on the Ninth Circuit, our Judge tried to be conscientious about resorting to memo dispos.  But not all judges viewed them the same way.  One in particular (who happens to be on the panel for the Monster case), was such a fan of memo dispos that he liked to circulate them, rather than bench memos, prior to oral argument. The memo dispo would then be issued very shortly after argument, perhaps before the litigants had clapped their briefbags shut.  That memo dispo-loving judge had one of the shortest backlogs on the court.  The losing party would probably file a petition for rehearing, but good luck with that.  [Except we remember one time when a loser in a memo dispo did manage to get the attention of then-Ninth Circuit Judge Kennedy.  Judge Kennedy called our chambers and said he thought we got it wrong.  After some case- and record- and soul-searching, the outcome was changed.  Maybe you could criticize the court for mucking up the original result, but the process showed the court at its best – honest, diligent, and not too proud to admit a mistake.  So whenever anyone complains to us regarding Justice Kennedy and his seeming determination always to be the swing-vote, or his interest in foreign law, or his new-agey prose about defining one’s self against the “mystery of human life,” our rejoinder is that he is a smart, humble, hard-working judge who is actually trying to get it right.]

Here’s our take on the Monster memo dispo;  we’re not sure it is so clear cut.  Younger abstention applies when state court proceedings were initiated before anything of substance took place in federal court.  Here, Monster won the race.  Shouldn’t that count for something?  Naturally we get from the court the usual stuff about California’s “strong interest” in ensuring that consumer products comply with the state’s crazily broad and vague unfair practice laws.  The court also assures us that Monster’s preemption and primary jurisdiction arguments can get a fair hearing in the San Francisco state court proceeding.  Mmmmm.  Has the Ninth Circuit read Conte?

The Ninth Circuit’s analysis of the Anti-Injunction Act issue is even more cursory.  The exceptions are “inapplicable.”   Why?  Never you mind.  It’s all about comity, equity, and federalism, and for you even to ask the question puts you on the wrong side of those values – as well as Mom, apple-pie, and streamlined dockets.  In any event, here’s hoping that the San Fran City Attorney’s case meets its own “dispo” reasonably soon.   It is inevitable that the City Attorney’s case reminds us of Nietzsche’s aphorism: “When you go forth to fight monsters, take care that you do not yourself become a monster.  And when you look into the abyss, the abyss looks into you.”