Environmental Research Center, Inc. v. Premier Health, LLC

Background

Environmental Research Center, Inc. sued Premier Health, LLC under California’s Safe Drinking Water and Toxic Enforcement Act of 1986, commonly called Proposition 65. Premier Health removed the action from state court to federal court. Environmental Research Center moved to remand, arguing that the federal court lacked jurisdiction because it lacked Article III standing and because the amount in controversy did not exceed $75,000. It also requested attorneys’ fees and costs related to the removal.

Standing and Remand

The court explained that the party invoking federal jurisdiction—in this case, Premier Health—had to show that Environmental Research Center suffered an injury in fact: a concrete, particularized, actual, or imminent invasion of a legally protected interest caused by Premier Health and likely to be remedied by a favorable decision.

The court found that Premier Health did not meet that burden. Environmental Research Center described itself as a nonprofit corporation dedicated to helping safeguard the public from health hazards. It brought the Proposition 65 claims solely as a private attorney general enforcer and in the public interest. The complaint did not allege that Environmental Research Center had ingested, been exposed to, or been harmed by Premier Health’s products. The court therefore concluded that Environmental Research Center lacked Article III standing and that the federal court lacked subject-matter jurisdiction over the action.

The court stated that a removed case in which the plaintiff lacks Article III standing must be remanded to state court. Because it resolved the case on standing, the court did not address Environmental Research Center’s separate argument about the amount in controversy.

Attorneys’ Fees and Costs

Under 28 U.S.C. § 1447(c), a remand order may require payment of costs and actual expenses, including attorneys’ fees, caused by removal. The court explained that fees generally are appropriate only when the removing party lacked an objectively reasonable basis for removal. A removal is not objectively unreasonable merely because the removing party’s arguments ultimately fail.

Environmental Research Center argued that Premier Health lacked a reasonable basis because the complaint clearly alleged no injury and because its counsel had warned Premier Health’s counsel about the standing problem and supplied supporting case law. Premier Health responded that the standing issue in similar Proposition 65 removal cases had not been fully decided. The court found Premier Health’s standing arguments unpersuasive but not objectively unreasonable. It therefore denied Environmental Research Center’s motion for attorneys’ fees and costs.

Disposition

Judge Chesney granted Environmental Research Center’s motion to remand, denied its motion for attorneys’ fees and costs, remanded the action to the Superior Court of California in and for the County of Alameda, and vacated the scheduled hearing.