Loyd’s Aviation, Inc. v. Center for Environmental Health, 2011 U.S. Dist. LEXIS 121134 (E.D. Cal. Oct. 19, 2011):

Plaintiffs are a group of small businesses that distribute lead-containing aviation fuel ("Avgas") to air carriers and other aircraft operators at airports across California and the rest of the United States. On June 30, 2011, Plaintiffs filed a motion for preliminary injunction to enjoin Defendants Center for Environmental Health ("CEH") and Kamala Harris, Attorney General of the State of California ("Attorney General Harris") from enforcing or threatening to enforce the Safe Drinking Water and Toxic Enforcement Act of 1986 ("Proposition 65") against Plaintiffs. In conjunction with their motion for preliminary injunction, on August 26, 2011, Plaintiffs filed a First Amended Complaint ("FAC") for Declaratory and Injunctive Relief against CEH, Attorney General Harris, and Dr. George Alexeeff ("Dr. Alexeeff"), Acting Director of the California Office of Environmental Health Hazard Assessment ("OEHHA"). In the FAC, Plaintiffs seek (1) a declaratory judgment that Proposition 65 violates the Supremacy Clause of the United States Constitution because it is preempted by federal law; (2) a declaratory judgment that Proposition 65 violates the Commerce Clause of the United States Constitution; and (3) an injunction that enjoins Defendants from enforcing or threatening to enforce Proposition 65 against Plaintiffs.

Proposition 65 includes two distinct provisions: (1) the warning provision of California Health & Safety Code § 25249.6, which requires the provision of warnings to individuals exposed to carcinogens and reproductive toxins by those causing the exposure; and (2) the discharge prohibition of California Health & Safety Code § 25249.5, which prohibits entities operating in California from discharging carcinogens and reproductive toxins into sources of drinking water. 2 Under Proposition 65, any person may file suit in the public interest so long as the private enforcement action is (1) commenced more than sixty days from the notice of alleged violation; and (2) neither the Attorney General nor any other qualified public prosecutor has commenced and is diligently prosecuting an action against the violation. See Cal. Health & Safety Code § 25249.7(d). ***

Rule 12(b)(1) of the Federal Rules of Civil Procedure allows a motion to dismiss for lack of subject matter jurisdiction. "It is a fundamental precept that federal courts are courts of limited jurisdiction. The limits upon federal jurisdiction, whether imposed by the Constitution or by Congress, must not be disregarded nor evaded." Owen Equip. & Erection Co. v. Kroger, 437 U.S. 365, 374 (1978). A challenge to jurisdiction "can be either facial, confining the inquiry to allegations in the complaint, or factual, permitting the court to look beyond the complaint." Savage v. Glendale Union High Sch., Dist. No. 205, Maricopa Cnty., 343 F.3d 1036, 1039 n.2 (9th Cir. 2003). Thus, the Court is not restricted to the face of the pleadings and "may review any evidence, such as affidavits and testimony, to resolve factual disputes concerning the existence of jurisdiction." McCarthy v. United States, 850 F.2d 558, 560 (9th Cir. 1988) (citation omitted). Furthermore, when subject matter jurisdiction is challenged under Rule 12(b)(1), the plaintiff has the burden of proving jurisdiction in order to survive the motion. Stock West, Inc. v. Confederated Tribes, 873 F.2d 1221, 1225 (9th Cir. 1989). ***

Since the Court has concluded that Plaintiffs' claims against State Defendants are not ripe, Plaintiffs must establish that subject matter jurisdiction exists over its claims against CEH.

In their supplemental brief, Plaintiffs argue that even if the Court concludes that Plaintiffs' claims against State Defendants are not ripe, the Court has subject matter jurisdiction over their claims against CEH under Shaw v. Delta Airlines, Inc., 463 U.S. 85 (1983). *** In Shaw, the Supreme Court held that "federal courts have jurisdiction over suits to enjoin state officials from interfering with federal rights." Shaw, 463 U.S. at 96 n.14. Therefore, the Supreme Court stated that a "plaintiff who seeks injunctive relief from state regulation, on the ground that such regulation is pre-empted by a federal statute which, by virtue of the Supremacy Clause of the Constitution, must prevail, thus presents a federal question which the federal courts have jurisdiction under 28 U.S.C. § 1331 to resolve." Id. (citations omitted).

CEH cites to California Shock Trauma Air Rescue v. State Compensation Insurance Fund, 636 F.3d 538 (9th Cir. 2011), which dealt with whether the Shaw doctrine applies to private parties. In California Shock Trauma, the Ninth Circuit discussed the Supreme Court's rationale in Shaw:

In Shaw, the Supreme Court predicated its jurisdictional holding on the fact that a state official was the defendant. Relying on Ex parte Young, the Court held that there was arising under jurisdiction over an action against a state attorney general, acting in his official capacity, who allegedly violated federal law. A Supremacy Clause-related claim against a state official was the logical extension of the jurisdictional rule set forth in Ex Parte Young. The structure of the Shaw syllogism confirms its conclusion. In footnote 14, Shaw reiterates its major premise: Jurisdiction exists over federal actions to enjoin state officials. When confronted with the Shaw plaintiff's Supremacy Clause claim against a state official, the Court explained that such a claim "thus presents a federal question."

Id. at 543 (internal citations omitted).

The Ninth Circuit in California Shock Trauma held that "because the presence of a state official is crucial to the reasoning in Shaw, its holding is irrelevant" to an action against private parties. Id. In coming to this conclusion, the Ninth Circuit emphasized that "[f]ederal subject matter jurisdiction jurisprudence is not an area of the law that lends itself to the application of broad principles. It is a precise analysis. The line is clearly drawn . . . between controversies that are basic and those that are collateral, between disputes that are necessary and those that are merely possible." Id. at 544 (format altered). The Ninth Circuit explained that actions against state officials are "basic" and "necessary" whereas "[d]eclaratory judgments against private parties, regardless of whether the Supremacy Clause has been invoked, are not." Id. (citations omitted). ***

Plaintiffs concede that this is an issue of first impression within the federal courts and thus have been unable to cite to any case in which there exists federal subject matter jurisdiction over a declaratory judgment claim brought by a private party against another private party that "stands in the shoes of public officials." The Court is not persuaded by Plaintiffs' argument. As stated above, the Ninth Circuit made clear in California Shock Trauma that subject matter jurisdiction is "a precise analysis" and that "the line is clearly drawn" between actions against state officials and against private parties under the Shaw doctrine. California Shock Trauma, 636 F.3d at 544. Furthermore, the Ninth Circuit "bolstered" their conclusion in California Shock Trauma by citing to other circuits that have similarly held that Shaw does not apply to private parties. Id. (citing to Colonial Penn Grp., Inc. v. Colonial Deposit Co., 834 F.2d 229, 237 (1st Cir. 1987) ("Jurisdiction over actions for declarations of pre-emption can logically only be asserted where a state official is the defendant"); Albradco, Inc. v. Bevona, 982 F.2d 82, 87 (2d Cir. 1992) ("Because [plaintiffs] have not sued state officials to enjoin them from enforcing an unconstitutional state law, this case is distinguishable from Shaw"); New Orleans & Gulf Coast Ry. Co. v. Barrois, 533 F.3d 321, 330 (5th Cir. 2008) (Shaw "does not apply in a suit exclusively between private parties").

Accordingly, Plaintiffs have failed to establish that this Court has jurisdiction over their claims against CEH.