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Swanson group MFG. LLC v. Jewell

United States District Court, District of Columbia

June 28, 2016

SWANSON GROUP MFG. LLC, et al, Plaintiffs
S.M.R. JEWELL, Secretary of Interior, et al, Defendants.


          RICHARD LEON United State District Judge

         This is the most recent iteration of cases before this Court involving timber sales in the Pacific Northwest and habitat for the northern spotted owl. Plaintiffs here seek declaratory and injunctive relief from injuries resulting from alleged violations of the Oregon and California Railroad and Coos Way Wagon Road Grant Lands Act of 1937 ("O&C Act"), 43 U.S.C § 1181a, and the Administrative Procedure Act, 5 U.S.C. §§551-706, by the Bureau of Land Management ("BLM"), the U.S. Fish and Wildlife Services ("FWS"), and the U.S. Forest Service concerning resource management and wildlife conservation. Corrected Compl. ("Corr. Compl.") ¶¶ 1, 97-119 [Dkt. #5]. On September 22, 2015, plaintiffs filed a Motion for Preliminary Injunction "to maintain the status quo that has existed since entry of the judgment in Swanson I, on June 26, 2013." Mot. for Prelim. Inj. 1 [Dkt. #11]. Defendants subsequently filed a Motion to Dismiss, asserting the case should be dismissed because it is barred by issue preclusion and, in the alternative, because plaintiffs lack standing. See generally Mot. to Dismiss Corr. Compl. ("Mot. to Dismiss") [Dkt. #16]. Upon due consideration of the parties' pleadings, the relevant law, and the entire record herein, I find that (1) plaintiffs American Forest Resource Council, Douglas Timber Operations, Swanson Group Manufacturing, Hull-Oaks Lumber Company, Seneca Jones Timber Company, Seneca Sawmill Company, and Freres Lumber Company are precluded from relitigating their standing in the instant case; (2) plaintiffs C&D Lumber Company, Starfire Lumber Company, Boise Cascade Wood Products, South Coast Lumber, Robert Ragon, Robert Freres, and Scott Keep fail to sufficiently allege standing; and (3) Rough & Ready is not barred by issue preclusion and sufficiently establishes standing for purposes of the motion to dismiss, [1] but does not meet the high burden required for a preliminary injunction. Accordingly, defendants' Motion to Dismiss is GRANTED in part and DENIED in part, and plaintiffs' Motion for Preliminary Injunction is DENIED.


         The slate upon which I write is far from clean. By plaintiffs' own admission, this action seeks to restate plaintiffs' claims from Swanson Group Mfg. LLC v. Jewell, No. 10cvl843 (filed on Oct. 29, 2010) ("Swanson F) and related claims from Swanson Group Mfg. LLC v. Director, No. 14-211 ("Swanson IF) with new evidence regarding standing "to fill the gaps" identified by our Circuit Court in Swanson I. Mot. for Prelim. Inj. 1. In Swanson I, I granted summary judgment in favor of the plaintiffs and found two federal agency actions to be unlawful: (1) the failure to offer for sale a declared amount of timber from two western Oregon districts, and (2) the development and use of an Owl Estimation Methodology. See Order and Mem. Op., No. 10-1843 [Dkts. ##58, 59]. That decision was appealed to our Circuit Court, which vacated the grant of summary judgment on the grounds that the plaintiffs in that case lacked Article III standing. See Swanson Group Mfg. LLC, et al. v. Jewell, et al, No. 13-5268, 790 F.3d 235, 2015 WL 3634645, at *3 (D.C. Cir. June 12, 2015). Plaintiffs in Swanson II, No. 14-211, brought suit against the BLM making essentially the same allegations at issue in Swanson I, i.e. that defendant had failed to offer for sale the timber that it was required to offer for sale under the O&C Act. The Swanson //plaintiffs requested that this Court extend the reasoning of the vacated Swanson /summary judgment opinion to other Oregon districts that were not at issue in Swanson I. See Compl. 21, No. 14-211 [Dkt. #1].[2] On September 28, 2015, 1 dismissed Swanson II-along with two other related actions involving many of the same plaintiffs[3]-for lack of standing, in accord at ¶ance with our Circuit Court's opinion in Swanson I.

         Currently before the Court are plaintiffs' Motion for Preliminary Injunction, and defendants' Motion to Dismiss, in which defendants argue that issue preclusion bars plaintiffs from relitigating standing and, regardless, plaintiffs lack standing. Given the overlapping and potentially dispositive issues, I address both motions herein.


         The Court may dismiss a complaint for failure to state a claim upon which relief may be granted. See Fed. R. Civ. P. 12(b)(6). In considering a motion to dismiss under Rule 12(b)(6), the court must "liberally" construe the complaint "in favor of the plaintiff, who must be granted the benefit of all inferences that can be derived from the facts alleged." Schuler v. United States, 617 F.2d 605, 608 (D.C. Cir. 1979) (internal citation and quotation marks omitted). However, in considering the pleadings, the Court is not required to "accept legal conclusions cast in the form of factual allegations, " or to rely on inferences "unsupported by the facts set out in the complaint." Kowal v. MCI Commc 'ns Corp., 16 F.3d 1271, 1276 (D.C. Cir. 1994). Thus, to withstand dismissal, the allegations, when read in a light most favorable to the plaintiff, must "raise a right to relief above the speculative level." BellAtl. Corp. v. Twombly, 550 U.S. 544, 555 (2007).


         Four plaintiffs who were parties in both Swanson I and Swanson II, [4] along with seven other forest product manufacturers, a forest landowner, and three individuals, filed this case to restate their prior claims, this time with new allegations and declarations in an attempt to overcome the standing hurdle. Before reaching standing, however, I must address defendants' threshold argument that litigation of standing is barred by issue preclusion.

         A. Issue Preclusion Bars Seven of the Eight Plaintiffs from Swanson I and Swanson II from Relitigating Standing.

         Issue preclusion, or collateral estoppel, bars "successive litigation of an issue of fact or law [1] actually litigated and [2] resolved in a valid court determination [3] essential to the prior judgment." New Hampshire v. Maine, 532 U.S. 742, 748-49 (2001); see also Taylor v. Sturgell, 553 U.S. 880, 892 & n.5 (2008). The doctrine of issue preclusion serves to "protect against the expense and vexation attending multiple lawsuits, conserv[e] judicial resources, and foste[r] reliance on judicial action by minimizing the possibility of inconsistent decisions." Taylor, 553 U.S. at 892 (alterations in original and internal quotation marks omitted). Our Circuit Court has found that issue preclusion applies to jurisdictional issues such as Article III standing. See, e.g., Nat'l Ass 'n of Home Builders v. EPA, 786 F.3d 34, 41 (D.C. Cir. 2015). "Because a jurisdictional dismissal does not involve an adjudication on the merits, it will not bar relitigation of the cause of action originally asserted, but it may preclude relitigation of the precise issues of jurisdiction adjudicated." Id. (internal quotation marks and alterations omitted).

         A litigant can overcome issue preclusion under the curable defect exception. This narrow exception "allows relitigation of jurisdictional dismissals when 'a precondition requisite to the court's proceeding with the original suit was not alleged or proven, and is supplied in the second suit.'" Id. (quoting Dozier v. Ford Motor Co., 702 F.2d 1189, 1192 (D.C. Cir. 1983)). In other words, jurisdiction can be relitigated ""only if a material change following dismissal cured the original jurisdictional deficiency." Nat 7 Ass 'n of Home Builders, 786F.3d at 41.

         Eight plaintiffs-American Forest Resource Council, Douglas Timber Operations, Swanson Group Manufacturing, Hull-Oaks Lumber Company, Seneca Jones Timber Company, Seneca Sawmill Company, Freres Lumber Company, and Rough & Ready- were parties to either or both of the previously dismissed Swanson I and Swanson II cases, and cannot relitigate their standing here. In National Association of Home Builders, our Circuit Court set forth a two-step framework to determine whether a prior dismissal for lack of standing precludes relitigation of the same jurisdictional issue in a subsequent case. 786 F.3d at 41. First, the defendant has the burden to establish the elements of issue preclusion. Id. Second, the burden shifts to plaintiff to satisfy the curable defect exception. Id. If the defendant carries its burden and the plaintiff does not, the plaintiff is precluded from establishing standing and the plaintiffs case must be dismissed. Id. at 43.

         The defendants have clearly established the elements of issue preclusion as to these eight plaintiffs. To begin, this case involves the same standing issue these companies previously litigated: whether plaintiffs have demonstrated an actual or imminent concrete economic injury as a result of the BLM's level of timber sales. See Swanson II, 2015 WL 5693429, at *4 (dismissing the case because, "just as in Swanson I, plaintiffs cannot show that any of their economic losses are traceable to the failure to offer for sale timber under the O&C Act instead of to an independent source, such as the recession, or that their prediction of future injury is more certain than those [the D.C. Circuit] has concluded are insufficient") (internal quotation marks omitted). This issue was actually litigated and essential to the standing-based dismissals of the previous Swanson cases.[5] Plaintiffs miss the mark in arguing the standing issue here differs materially from that already litigated given the later time period. See Pis.' Mem. in Opp'n to Mot. to Dismiss Corr. Compl. ("Pis.' Opp'n") 14-17 [Dkt. #21]. Issue preclusion bars relitigation "even if the issue recurs in the context of a different claim." Taylor, 553 U.S. at 892. Here, plaintiffs' claims that they will suffer imminent future injury rest on the same allegations of past economic injury that failed to establish Article III standing previously. Defs.' Reply in Supp. of Mot. to Dismiss Corrected Complaint ("Defs.' Reply") at 5 [Dkt. #22].

         Unfortunately for seven of the eight returning plaintiffs, they do not evade dismissal under the curable defect exception. This narrow exception allows relitigation of jurisdiction "only if a material change following dismissal cured the original jurisdictional deficiency." Nat 7 Ass 'n of Home Builders, 786 F.3d at 41. With the exception of Rough & Ready, the returning plaintiffs fail to allege any material change that would establish standing. Plaintiffs argue that an injury that continues to occur after the entry of judgment constitutes a new injury post-dating such judgment, citing the current operating capacities and supply of timber as the new injuries here. Pis.' Opp'n 11-13. As defendants note, however, these "current" situations are not new injuries postdating the Swanson dismissal, but rather are ongoing, pre-existing injuries. See Defs.' Reply 10. Because these injuries are the continuing result of the alleged timber shortage, American Forest ...

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