Triumvirate, LLC v. Zinke

          ORDER

          H. RUSSEL HOLLAND UNITED STATES DISTRICT JUDGE

         Motion for Leave to File Amended Complaint

         Plaintiff moves for leave to file an amended complaint.^[1] This motion is opposed.^[2]Oral argument was requested but is not deemed necessary.

         Background

         Plaintiff is Triumvirate, LLC, d/b/a as Tordrillo Mountain Lodge. Defendants are Ryan Zinke, in his capacity as the Secretary of the Interior; the U.S. Department of Interior; the U.S. Bureau of Land Management, an agency of the U.S. Department of Interior; and Brian Steed, Deputy Director of the U.S. Bureau of Land Management, exercising authority as the Director.

         In 2014, the BLM issued plaintiff a special recreation permit that allows plaintiff to conduct commercial heli-skiing on lands managed by the BLM in the Tordrillo and Neacola Mountains. Plaintiff's permit was later extended for ten years.

         In February 2017, the BLM issued a special recreation permit to Silverton Mountain Guides for heli-skiing in the Tordrillo and Neacola Mountains, and in January 2018, the BLM issued a special recreation permit to the Alaska Snowboard Guides (ASG) for heli-skiing in the Tordrillo and Neacola Mountains.

         On March 5, 2018, plaintiff commenced this action to challenge the BLM's issuance of a special recreation permit to ASG. In its complaint, plaintiff asserted violations of the National Environmental Policy Act (NEPA), the Federal Land Policy and Management Act (FLPMA), and the Administrative Procedures Act (APA). Defendants moved to dismiss plaintiff's NEPA and APA claims, and on May 1, 2018, the court granted the motion in part and denied it in part.^[3] The court denied the motion as to the issue of constitutional standing, finding that although plaintiff did not have any recreational interest that could be injured, plaintiff had adequately alleged injury to its health and safety and procedural interests.^[4] The court granted the motion to dismiss, however, as to the issue of whether plaintiff had prudential standing to bring its NEPA claims, finding that plaintiff's interest in human health and safety did not fall within NEPA's zone of interests, which also meant that its procedural interest did not fall within NEPA's zone of interests.^[5] “Given the nature of plaintiff's permitted activity, and the human health and safety basis for plaintiff's NEPA claims, the court conclude[d] that any attempt at amendment of plaintiff's complaint would be futile.”^[6]As a result, plaintiff's NEPA claims were dismissed with prejudice.^[7] The motion to dismiss was also granted as to plaintiff's stand-alone APA claim and this claim was dismissed with prejudice.^[8]

         On May 9, 2018, plaintiff filed the instant motion. Plaintiff seeks leave to amend its complaint to add two individual plaintiffs, Michael Overcast and Steven Hall. Overcast is “an owner and the General Manager of” plaintiff, and Hall is a helicopter ski guide who works for plaintiff.^[9] Overcast and Hall seek to assert NEPA and FLMPA claims against defendants.

         Discussion

         Plaintiff moves to amend pursuant to Rule 15(a)(2) of the Federal Rules of Civil Procedure. “Rule 15(a) is very liberal and leave to amend ‘shall be freely given when justice so requires.'” AmerisourceBergen Corp. v. Dialysist West, Inc., 465 F.3d 946, 951 (9th Cir. 2006) (quoting Bowles v. Reade, 198 F.3d 752, 757 (9th Cir. 1999)). The “court considers the following five factors to assess whether to grant leave to amend: ‘(1) bad faith, (2) undue delay, (3) prejudice to the opposing party, (4) futility of amendment; and (5) whether plaintiff has previously amended [its] complaint.'” In re Western States Wholesale Natural Gas Antitrust Litig., 715 F.3d 716, 738 (9th Cir. 2013) (quoting Allen v. City of Beverly Hills, 911 F.2d 367, 373 (9th Cir. 1990)). Of these factors, “prejudice to the opposing party . . . carries the greatest weight.” Eminence Capital, LLC v. Aspeon, Inc., 316 F.3d 1048, 1052 (9th Cir. 2003). “Absent prejudice, or a strong showing of any of the remaining . . . factors, there exists a presumption under Rule 15(a) in favor of granting leave to amend.” Id.

         Defendants do not contend that plaintiff is acting in bad faith in seeking to amend, and this is plaintiff's first request to amend its complaint. There has also not been any undue delay here. Plaintiff filed its original complaint six days after it first learned that the BLM had issued a permit to ASG and moved for leave to amend less than two weeks after the court issued its order on defendants' motion to dismiss. Although, as defendants point out, Overcast and Hall could have been plaintiffs in this action from the outset, any delay by plaintiff in attempting to add them as plaintiffs has been slight, and not undue.

         As for prejudice, defendants “‘bear[] the burden of showing prejudice[.]'” Eminence Capital, 316 F.3d at 1052 (quoting DCD Programs, Ltd. v. Leighton, 833 F.2d 183, 186-87 (9th Cir. 1987)). Defendants argue that they will suffer prejudice if plaintiff is allowed to file its proposed amended complaint because adding Overcast, Hall and the NEPA claims “would greatly change the parties' positions in the action, and require the assertion of new defenses.” Phoenix Solutions, Inc. v. Sony Electronics, Inc., 637 F.Supp.2d 683, 690 (N.D. Cal. 2009). Defendants also argue that allowing plaintiff to amend to add Overcast, Hall, and the NEPA claims means that they will have to relitigate claims that have already been dismissed with prejudice.

         Given that defendants have not yet filed an answer, allowing plaintiff to amend would not require the assertion of new defenses. Moreover, the merits of the NEPA claims have not yet been litigated. All the court has decided is that plaintiff did not have prudential standing to bring NEPA claims. This case is in the early stages of development and allowing plaintiff to amend will not prejudice defendants.

         The question then becomes whether allowing plaintiff to amend would be futile. “‘Futility alone can justify the denial of a motion to amend.'” Johnson v. Buckley, 356 F.3d 1067, 1077 (9th Circ. 2004) (quoting Nunes v. Ashcroft, 348 F.3d 815, 818 (9th Cir. 2003)). The parties' arguments as to whether amendment would be futile focus on whether Overcast and Hall would have Article III and prudential standing to bring NEPA claims.

         “The ‘irreducible constitutional minimum of standing' consists of three elements: the plaintiff must have (1) suffered an injury in fact; (2) that was caused by the defendant's challenged conduct; and (3) that would be redressed by the remedy the plaintiff seeks.” Desert Water Agency v. U.S. Dep't of the Interior, 849 F.3d 1250, 1253 (9th Cir. 2017) (quoting Lujan v. Defenders of Wildlife, 504 U.S. 555, 560-61 (1992)). “A plaintiff establishes injury in fact, if he or she suffered ‘an invasion of a legally protected interest' that is ‘concrete and particularized' and ‘actual or imminent, not conjectural or hypothetical.'” Van Patten v. Vertical Fitness Group, LLC, 847 F.3d 1037, 1042 (9th Cir. 2017) (quoting Spokeo, Inc. v. Robins, 136 S.Ct. 1540, 1547 (2016)).

         Plaintiff first argues that Overcast's and Hall's declarations establish that their recreational interests have been injured. A plaintiff can make such a showing by alleging use of the affected area and that “‘the aesthetic and recreational values of the area will be lessened by the challenged activity.'” Ecological Rights Foundation v. Pacific Lumber Co., 230 F.3d 1141, 1149 (9th Cir. 2000) (quoting Friends of the Earth, Inc. v. Laidlaw Environmental Services (TOC), Inc., 528 U.S. 182-183 (2000)). Both Overcast and Hall aver that they use the affected area.^[10] Both aver that they flew and skied in the affected area in 2018 and that they plan to do so again in 2019.^[11] Both also aver that the BLM's decision to issue a special recreation permit to ASG has injured their recreational interests because it has increased the risks involved in using the area and because it has diminished the availability of untracked snow.^[12] More specifically, Overcast avers that twice in the 2018 season that recently ended, he had to leave the area where he was planning to ski because ASG was using it.^[13] Similarly, Hall avers that twice this past season he had to avoid terrain that he was going to ski because ASG was already there.^[14] Plaintiff insists that this is sufficient to show that Overcast and Hall have suffered injury in fact to their recreational interests.

         Defendants, however, argue that the court's finding that plaintiff lacked Article III standing to assert recreational injuries bars plaintiff from seeking to amend its complaint to add Overcast and Hall in order to cure this jurisdictional problem. Defendants cite to Summit Office Park, Inc. v. U.S. Steel Corporation, 639 F.2d 1278 (5th Cir. 1981), in support. There, Summit's antitrust suit, brought on behalf of itself and a putative class, was dismissed on motion for summary judgment because an intervening Supreme Court case held that indirect purchasers, which Summit was, could not bring antitrust claims. Id. at 1280-81. Right before the district court dismissed Summit's complaint, Summit moved to amend its complaint to add two new plaintiffs “who purported to be direct purchasers.” Id. at 1281. The district court denied Summit's motion to amend, and Summit appealed. Id. The Fifth Circuit held that the district court properly denied Summit's motion to amend because “the original plaintiff was left with no cause of action upon which it could recover as the result of an intervening Supreme Court decision. There was no way in which the plaintiff could properly amend the complaint to give it a cause of action.” Id. at 1282. Defendants argue that similarly here, the court has already held that plaintiff does not have any recreational interest that could be injured and thus there is no way plaintiff could properly amend its complaint to add plaintiffs who could assert such an injury. Defendants insists that “Rule 15 . . . do[es] not allow a party to amend to create jurisdiction where none actually existed.” Federal Recovery Services, Inc. v. United States, 72 F.3d 447, 453 (5th Cir. 1995) (citation omitted); see also, Lans v. Gateway 2000, Inc., 84 F.Supp.2d 112, 116 (D.D.C. 1999) (“when a plaintiff never had standing to assert a claim against the defendant, plaintiff may not substitute a new plaintiff, a new defendant, or a new claim for the purpose of creating jurisdiction”); MAO-MSO Recovery II, LLC v. Boehringer Ingelheim Pharmaceuticals, Inc., 281 F.Supp.3d 1309, 1316 (S.D. Fla. 2017) (“the original Plaintiffs have failed to show that they have standing. Accordingly, Plaintiffs lack standing to amend the complaint to add new Plaintiffs who do have standing”); Lopez ...