Athletics Investment Group, LLC v. Schnitzer Steel Industries, Inc.

Background

Athletics Investment Group, LLC filed a petition in California state court seeking a writ of mandate and declaratory relief against the Bay Area Air Quality Management District and Alexander Crockett. Schnitzer Steel Industries, Inc. was identified as the real party in interest. Athletics alleged that Schnitzer operated a metal-shredding operation in Oakland, California, under a permit issued and renewed by the District.

Athletics alleged five reasons why the District should revoke Schnitzer’s permit and deny a new one: emissions allegedly exceeded permit limits; Schnitzer’s equipment allegedly did not satisfy required best-available-control standards; the operation allegedly created an excessive cancer risk; the shredder allegedly required a major-facility permit; and two other sources allegedly operated without required permits.

The District removed the case to federal court under 28 U.S.C. § 1331, which gives federal district courts jurisdiction over civil actions arising under federal law. Athletics moved to remand, meaning to return the case to state court.

Analysis

The court explained that a case generally arises under federal law when federal law creates the cause of action or when the plaintiff’s right to relief necessarily depends on resolving a substantial federal question. The court concluded that neither circumstance was present.

The duties Athletics claimed the District had failed to perform came from California Health and Safety Code § 42301 and identified District rules. Although some District rules incorporated federal standards and the petition referred to the federal Clean Air Act, those references did not convert the state-law causes of action into federal causes of action.

The court also considered the limited category of state-law cases that may belong in federal court because they turn on a substantial federal question. It found that Athletics’ claims concerned the fact-specific application of federal and state standards to Schnitzer’s operations, rather than interpretation of a federal statute, a constitutional challenge to federal law, or a legal issue controlling numerous other cases.

The District argued that a federal ruling about temporary emissions exceedances and Title V permitting could significantly increase the Environmental Protection Agency’s workload. The court found that asserted effect speculative and noted that Athletics alleged repeated exceedances over several years, not merely a temporary condition.

Disposition

The court held that the District had not shown that Athletics’ claims arose under federal law. Judge Maxine Chesney granted Athletics’ motion to remand and remanded the action to the Superior Court of California, in and for the County of Alameda.