Stephen Schmid v. Sonoma Clean Power, a public agency

NOT FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
STEPHEN SCHMID,
Plaintiff-Appellant,
v.
SONOMA CLEAN POWER,
a public agency,
Defendant-Appellee.
No. 14-17288
D.C. No. 4:14-cv-02949-JSW
MEMORANDUM*
Appeal from the United States District Court
for the Northern District of California
Jeffrey S. White, District Judge, Presiding
Argued and Submitted January 11, 2017
San Francisco, California
Before: CLIFTON and M. SMITH, Circuit Judges, and ERICKSON,** District
Judge.
Stephen Schmid appeals the district court’s order dismissing without leave
to amend his complaint brought pursuant to 42 U.S.C. § 1983 challenging the
FILED
JAN 23 2017
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
* This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
** The Honorable Ralph R. Erickson, United States District Judge for the
District of North Dakota, sitting by designation.

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procedure used by Sonoma Clean Power Authority for automatically enrolling
electricity customers. We affirm.
Schmid’s First Amendment claims for compelled contribution to speech and
compelled association or disassociation fail because he has not been compelled to
do anything. When SCPA became a second electricity seller in Sonoma County to
supplement the monopoly previously held by Pacific Gas & Electric, the default
policy was to enroll consumers in SCPA’s service instead of PG&E’s service. See
Cal. Pub. Util. Code § 366.2(c)(2). SCPA’s customers are permitted to switch to
PG&E’s service at any time by calling a toll-free telephone number or by visiting a
website, although they may be charged an administrative fee if they switch after
having been enrolled in SCPA’s service for more than sixty days. Cal. Pub. Util.
Code § 366.2(c)(13). Customers were informed of their choices twice in the two
months preceding and twice in the two months following the automatic enrollment.
Cal. Pub. Util. Code § 366.2(c)(15)(A).
Unlike the labor union political contribution arrangement the Supreme Court
disapproved in Knox v. Service Employees International Union, 132 S. Ct. 2277,
2296 (2012), SCPA’s enrollment system does not require Schmid to opt out
multiple times in a single year to avoid paying for SCPA’s services. He need not
even opt out on an annual basis. Cf. id. at 2296 n.9. Rather, if he opts out once, he
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will be enrolled in PG&E’s service, and he will remain enrolled in that service,
even if he moves elsewhere in Sonoma County. Cal. Pub. Util. Code § 366.2(c)(2).
Accordingly, Schmid has not been compelled to give any money to SCPA, and he
has therefore not been compelled to subsidize SCPA’s speech. For the same
reason, he has not been compelled to associate with SCPA or disassociate from
PG&E. Cf. Morrow v. State Bar of California, 188 F.3d 1174, 1177 (9th Cir.
1999).
Schmid’s Fourteenth Amendment economic substantive due process claim
also fails. “[T]he venerable maxim de minimis non curat lex” instructs that “the
law cares not for trifles.” Wis. Dep’t of Revenue v. William Wrigley, Jr., Co., 505
U.S. 214, 231 (1992). Even if the automatic enrollment provision were a real
deprivation of Schmid’s liberty interest in contracting with PG&E, the provision
“must only pass rational basis review: the statute must be based on ‘a legitimate
legislative purpose furthered by rational means.’” Campanelli v. Allstate Life Ins.
Co., 322 F.3d 1086, 1100 (9th Cir. 2003) (quoting Gen. Motors Corp. v. Romein,
503 U.S. 181, 191 (1992)). The government’s goals in establishing the framework
within which SCPA operates—reducing greenhouse gas emissions, providing
electricity at a competitive cost, reducing energy consumption, and promoting rate
stability, energy security, and energy reliability through local control—are
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legitimate legislative purposes. See Jensen Family Farms, Inc. v. Monterey Bay
Unified Air Pollution Control Dist., 644 F.3d 934, 943 (9th Cir. 2011); Mountain
Water Co. v. Mont. Dep’t of Pub. Serv. Regulation, 919 F.2d 593, 598 (9th Cir.
1990). For SCPA to accomplish its purposes, customers must purchase their
electricity from SCPA. Automatically enrolling customers in SCPA is a rational
means to create an adequate customer base for SCPA and thereby advance the
government’s legitimate purposes. See Campanelli, 322 F.3d at 1100.
The district court did not abuse its discretion in denying leave to amend on
the grounds that it would have been futile for Schmid to amend his compliant. See
Leadsinger, Inc. v. BMG Music Publ’g, 512 F.3d 522, 532 (9th Cir. 2008).
AFFIRMED.
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