Venoco, LLC v. Plains Pipeline, L.P. ( 2020 )

FILED
NOT FOR PUBLICATION
JUL 31 2020
UNITED STATES COURT OF APPEALS MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
VENOCO, LLC, FKA Venoco, Inc., a No. 19-55600
Delaware limited liability company,
D.C. No.
Plaintiff-Appellant, 2:16-cv-02988-PSG-JEM
v.
MEMORANDUM*
PLAINS PIPELINE, L.P., a Texas limited
partnership; PLAINS ALL AMERICAN
PIPELINE, L.P., a Delaware limited
partnership; PLAINS GP HOLDINGS,
L.P., a Delaware limited partnership;
PLAINS AAP, L.P., a Delaware limited
partnership; PLAINS ALL AMERICAN
GP, LLC, a Delaware limited liability
company; PAA GP, LLC, a Delaware
limited liability company,
Defendants-Appellees.
Appeal from the United States District Court
for the Central District of California
Philip S. Gutierrez, Chief District Judge, Presiding
*
This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
Submitted July 7, 2020**
Seattle, Washington
Before: FERNANDEZ and NGUYEN, Circuit Judges, and BOULWARE,***
District Judge.
Venoco, LLC appeals from several orders of the district court dismissing its
claims against Plains Pipeline, L.P. and its affiliated companies (collectively
Plains) arising from a rupture of and oil spill from Plains’ pipeline. Venoco
operated an offshore oil platform that relied on the pipeline to transport its oil and
had to shut the platform down when the pipeline was closed for repairs. Venoco
sued for lost profits pursuant to the federal Oil Pollution Act1 (OPA), California’s
Oil Spill Prevention and Response Act2 (OSPRA), and state common law tort
claims. Venoco argues that the district court erred by dismissing3 its claims for lost
profits under the OPA and OSPRA, by retaining supplemental jurisdiction over the
**
The panel unanimously concludes this case is suitable for decision
without oral argument. See Fed. R. App. P. 34(a)(2).
***
The Honorable Richard F. Boulware II, United States District Judge
for the District of Nevada, sitting by designation.
1
33 U.S.C. §§ 2701–2762.
2
Cal. Gov’t Code §§ 8574.1–8574.15, 8670.1–8670.95; Cal. Pub. Res. Code
§§ 8750–8760.
3
Fed. R. Civ. P. 12(b)(6).
2
state law claims,4 and by ultimately dismissing those claims.5 We affirm.
(1.) The district court did not err6 when it dismissed the OPA and OSPRA
claims. Under the OPA, a party responsible for an oil spill is liable for the
damages resulting from the oil spill. 33 U.S.C. § 2702(a). As relevant to Venoco’s
complaint, subsection (b) allows a plaintiff to recover “[d]amages equal to the loss
of profits or impairment of earning capacity due to the injury, destruction, or loss
of real property, personal property, or natural resources.” Id. § 2702(b)(2)(E).
California’s OSPRA is almost identically worded.7 Given the similarity between
the two statutes and the lack of California case law interpreting the OSPRA, the
parties agree that the same interpretation should govern both statutes.
When interpreting statutory text, we begin with “the plain language of the
statute, construing the provisions of the entire law, including its object and policy,
to ascertain the intent of Congress.” Carson Harbor Vill., Ltd. v. Unocal Corp.,
4
28 U.S.C. § 1367.
5
Fed. R. Civ. P. 12(c).
6
See Interpipe Contracting, Inc. v. Becerra, 898 F.3d 879, 886 (9th Cir.
2018), cert. denied, 139 S. Ct. 2744, 204 L. Ed. 2d 1147, and cert. denied, 139 S.
Ct. 2767, 204 L. Ed. 2d 1133 (2019).
7
See Cal. Gov’t Code § 8670.56.5(a), (h)(6). The OSPRA does contain a
requirement that the plaintiff derive “at least 25 percent of his or her earnings from
the activities that utilize the property or natural resources.” Id. § 8670.56.5(h)(6).
Venoco properly alleged this fact; thus, it is not at issue.
3
270 F.3d 863, 877 (9th Cir. 2001) (en banc) (internal quotation marks omitted).
Venoco’s claimed lost profits were not “due to the injury, destruction, or loss of
real property, personal property, or natural resources.” 33 U.S.C. §
2702(b)(2)(E). The only loss was the decreased value of Venoco’s oil due to
Venoco’s current inability to take the oil to market; that is not a loss of real
property, personal property, or natural resources beyond the lost profits
themselves.
(2.) The district court did not abuse its discretion8 by retaining supplemental
jurisdiction over Venoco’s state law claims after dismissing its OPA claim. A
district court with jurisdiction over a federal claim has supplemental jurisdiction
over state law claims that form part of the same case and can choose to decline
supplemental jurisdiction if the federal claim is dismissed. 28 U.S.C. § 1367(a),
(c)(3). In deciding whether to retain supplemental jurisdiction after all federal
claims have been dismissed before trial, a district court should consider “judicial
economy, convenience, fairness, and comity.” Carnegie-Mellon Univ. v. Cohill,
484 U.S. 343, 350 n.7, 108 S. Ct. 614, 619 n.7, 98 L. Ed. 2d 720 (1988); see also
Coomes v. Edmonds Sch. Dist. No. 15, 816 F.3d 1255, 1265 (9th Cir. 2016); Satey,
8
See Satey v. JPMorgan Chase & Co., 521 F.3d 1087, 1090–91 (9th Cir.
2008).
4
521 F.3d at 1091; Schneider v. TRW, Inc., 938 F.2d 986, 994 (9th Cir. 1991). In
this case, the district court was “in the best position to judge the extent of resources
invested” and that discretion “ought not be lightly disturbed.” Schneider, 938 F.2d
at 993–94. We will not do so.
(3.) Finally, we conclude that the district court correctly dismissed
Venoco’s state law claims based on the public utility duty exception under
California law. Venoco argues that Plains was not acting as a public utility and,
even if it were, this exception would not apply. We disagree on both accounts.
(a.) California law defines a public utility as including pipeline
corporations. See Cal. Pub. Util. Code §§ 216(a)(1), 227–228. For a private
corporation to operate as a public utility, the corporation must clearly dedicate its
facilities to public use. Indep. Energy Producers Ass’n, Inc. v. State Bd. of
Equalization, 22 Cal. Rptr. 3d 562, 574 (Ct. App. 2004); see also Richfield Oil
Corp. v. Pub. Utils. Comm’n, 354 P.2d 4, 11 (Cal. 1960). A corporation does so
when it supplies its services to the public or some portion of the public “‘as a
class’” instead of to particular individuals. Indep. Energy Producers Ass’n, 22 Cal.
Rptr. 3d at 574–75. This requirement is met even though the corporation “may
serve only one or a few customers.” Richfield Oil Corp., 354 P.2d at 11. That
5
perfectly describes Plains. See Unocal Cal. Pipeline Co. v. Conway, 28 Cal. Rptr.
2d 429, 431 (Ct. App. 1994).
(b.) California law imposes a duty of care upon all individuals, including
public utilities, “to exercise reasonable care in the management of [their] personal
and real property.” White v. S. Cal. Edison Co., 30 Cal. Rptr. 2d 431, 435 (Ct.
App. 1994); see also Cal. Civ. Code § 1714(a). But “[i]n the absence of a contract
between the utility and the consumer expressly providing for the furnishing of a
service for a specific purpose,” a public utility has no duty to prevent injuries to its
customers that are the “result of an interruption of service or a failure to provide
service.” White, 30 Cal. Rptr. 2d at 435–36; see Niehaus Bros. Co. v. Contra
Costa Water Co., 113 P. 375, 379–81, 383 (Cal. 1911).9
Plains was operating its pipeline as a public utility and Venoco was one of
its customers using that pipeline to transport oil. Venoco’s damages were caused
by the interruption of that service. As a customer harmed by the interruption of a
9
Venoco’s complaint explicitly disclaimed the existence of any contract
between it and Plains that might otherwise allow for contractual liability.
6
service, Venoco could not recover damages caused by the interruption.10
AFFIRMED.
10
We reject Venoco’s argument that the district court erred by failing to
apply White. See White, 30 Cal. Rptr. 2d at 437. White did not involve a customer
of a utility injured by the interruption of service. See id. 435–36; cf. Langley v.
Pac. Gas & Elec. Co., 262 P.2d 846, 847–50 (Cal. 1953).
7