Monster Beverage Corporation, a Delaware corporation v. Dennis Herrera, in his official capacity as City Attorney of San Francisco

NOT FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
MONSTER BEVERAGE
CORPORATION, a Delaware corporation
and MONSTER ENERGY COMPANY, a
Delaware corporation,
Plaintiffs - Appellants,
v.
DENNIS HERRERA, in his official
capacity as City Attorney of San
Francisco,
Defendant - Appellee.
No. 13-57128
D.C. No. 5:13-cv-00786-VAP-OP
MEMORANDUM*
Appeal from the United States District Court
for the Central District of California
Virginia A. Phillips, District Judge, Presiding
Argued and Submitted April 7, 2016
Pasadena, California
Before: FARRIS, SENTELLE,** and M. SMITH, Circuit Judges.
FILED
MAY 17 2016
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
* This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
** The Honorable David Bryan Sentelle, Senior Circuit Judge for the
U.S. Court of Appeals for the District of Columbia Circuit, sitting by designation.

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Monster Beverage Corporation and Monster Energy Company (collectively,
Monster) appeal the district court’s judgment dismissing their suit against the City
Attorney of San Francisco, Dennis Herrera, in his official capacity. Because this suit
implicates a concurrent state court proceeding against Monster, we resolve this appeal
under the abstention doctrine from Younger v. Harris, 401 U.S. 37 (1971), as well as
the Anti-Injunction Act (AIA), 28 U.S.C. § 2283.
Monster filed its complaint against the City Attorney in the Central District of
California on April 29, 2013, months after the City Attorney sent Monster a letter
announcing that he had begun an investigation into some of Monster’s energy drinks.
After Monster filed its federal complaint, the People of California, by and through the
City Attorney, filed a complaint against Monster Beverage Company in San Francisco
Superior Court. The complaint alleged a single cause of action that Monster’s energy
drinks and marketing constitute unlawful, deceptive, and misleading business
practices and acts under California’s Unfair Competition Law. Monster, relying on
preemption, subsequently removed the state court proceeding. The district court held
that removal was improper because the state court claims were not completely
preempted and remanded the matter to the state court on September 18, 2013.
Meanwhile, in its federal suit, Monster sought to enjoin the City Attorney from
enforcing, or directing the enforcement of, the provisions of Cal. Bus. & Prof’l Code
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§§ 17200 and 17500 with respect to Monster’s energy drinks. Monster also sought
a declaratory judgment that the City Attorney’s investigation and pre-litigation
demand letter were impermissible and preempted by the Food, Drug, and Cosmetic
Act (FDCA), subject to the doctrine of primary jurisdiction, and violated, among other
constitutional provisions, the First and Fourteenth Amendments. In granting the City
Attorney’s motion to dismiss, the district court ruled that the Younger abstention
doctrine properly applied to this case. See Younger v. Harris, 401 U.S. 37 (1971). The
district court also held that the requested relief was barred by the AIA.
We review de novo whether Younger abstention and the AIA apply. ReadyLink
Healthcare, Inc. v. State Comp. Ins. Fund, 754 F.3d 754, 758 (9th Cir. 2014);
California v. Randtron, 284 F.3d 969, 974 (9th Cir. 2001). Where the AIA permits an
injunction, we review for an abuse of discretion the district court’s decision whether
or not to grant it. Randtron, 284 F.3d at 974. We have jurisdiction pursuant to 28
U.S.C. § 1291 and we affirm.
1. Younger abstention requires federal courts to refrain from exercising
jurisdiction and applies to only three classes of state proceedings: (1) state criminal
prosecutions; (2) certain civil enforcement actions; and (3) civil proceedings in
furtherance of a state court’s ability to perform its judicial functions. Sprint
Commc’ns, Inc. v. Jacobs, 134 S. Ct. 584, 588 (2013). As germane to this proceeding,
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Younger abstention requires an (1) ongoing state judicial proceeding that
(2) implicates important state interests and (3) provides an adequate opportunity to
raise federal claims, which (4) the federal court action would enjoin.
AmerisourceBergen Corp. v. Roden, 495 F.3d 1143, 1148-49 (9th Cir. 2007).
The Younger abstention doctrine applies in this case. There was an ongoing
state proceeding when the district court considered the motion to dismiss at issue.
Although Monster argued otherwise, “Younger abstention is required . . . when state
court proceedings are initiated before any proceedings of substance on the merits have
taken place in the federal court.” M&A Gabaee v. Cmty. Redevelopment Agency, 419
F.3d 1036, 1040 (9th Cir. 2005) (quoting Haw. Hous. Auth. v. Midkiff, 467 U.S. 229,
238 (1984)) (emphasis omitted). Moreover, for purposes of Younger abstention, a
state proceeding is “‘initiated’ no later than when it is filed.” Id. Monster argues that
this Court should determine that the state proceeding became “ongoing” only as of the
date of remand. We disagree. Adopting Monster’s position would encourage
gamesmanship. We further note that although the state court proceeding initially
included only Monster Beverage Company, Younger abstention applies as Monster
Energy’s interests are “so intertwined” with those of Monster Beverage Company that
direct interference with the state court proceeding was inevitable. See Green v. City
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of Tucson, 255 F.3d 1086, 1100 (9th Cir. 2001) (en banc), overruled on other grounds
by Gilbertson v. Albright, 381 F.3d 965 (9th Cir. 2004) (en banc).
Furthermore, Younger abstention is appropriate as the People of California have
a strong interest in ensuring that a company providing consumer products is doing so
in a manner consistent with the state’s unfair business practices laws. See Commc’ns
Telesystems Int’l v. Cal. Pub. Util. Comm’n, 196 F.3d 1011, 1017 (9th Cir. 1999)
(noting that states have an important interest in protecting consumers from unfair and
deceptive business practices); see also Meredith v. Oregon, 321 F.3d 807, 818 (9th
Cir. 2003) (noting that protecting residents’ safety is a vital state interest). Moreover,
Monster’s attempt to invoke express preemption and primary jurisdiction is exactly
what the “adequate opportunity” requirement is intended to obviate. State court
litigation generally provides adequate opportunity for a party like Monster to raise
federal questions. In short, Younger abstention properly applies here.
2. The Anti-Injunction Act “prohibits the federal courts from interfering with
proceedings in the state courts.” Chick Kam Choo v. Exxon Corp., 486 U.S. 140, 145
(1988). The Act provides:
A court of the United States may not grant an injunction to stay
proceedings in a State court except as expressly authorized by Act of
Congress, or where necessary in aid of its jurisdiction, or to protect or
effectuate its judgments.
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28 U.S.C. § 2283. Likewise, the Act prohibits courts from issuing declaratory
judgments that interfere with state court proceedings. See Randtron, 284 F.3d at 975.
The proposed injunction at issue falls within the language of the Anti-Injunction
Act. See 28 U.S.C. §2283; see also, e.g., Denny’s, Inc. v. Cake, 364 F.3d 521, 530 (4th
Cir. 2004) (“[N]othing in the Act confines its bar to situations in which the federal
plaintiff requests injunctive relief after the state suit has been filed.” (emphasis
omitted)). This injunction, along with the requested declaratory judgment, effectively
would stay the proceedings in the state court action that the City Attorney brought on
behalf of the People of California. Although Monster argued otherwise, the exceptions
to the Anti-Injunction Act are inapplicable in this case. With respect to the district
court ruling, the court based its decision to apply the Anti-Injunction Act on the
grounds of “comity, equity, and federalism.” Monster Beverage Corp. v. Herrera, No.
EDCV 13–00786–VAP (Opx) (C.D. Cal. Dec. 16, 2013) (order granting motion to
dismiss), slip op. at 21. Considering these principles in applying the Anti-Injunction
Act was not an abuse of discretion. Cf. Brother Records, Inc. v. Jardine, 432 F.3d 939,
944 (9th Cir. 2005). Accordingly, we will not reverse the district court.
As a final matter, the parties both request that we take judicial notice of certain
documents in the state court proceeding brought by the City Attorney on behalf of the
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People of California. Because those documents are not required for the disposition of
this case, we deny the parties’ respective motions.
For the foregoing reasons, we affirm the district court.
AFFIRMED.
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