Agardi v. City and County of San Francisco

Filing 24

ORDER DENYING JUDGMENT ON THE PLEADINGS AND GRANTING MOTION TO DISMISS. Signed by Judge Richard Seeborg on 11/20/12. (Attachments: # 1 Appendix Certificate of Service)(cl, COURT STAFF) (Filed on 11/20/2012)

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IN THE UNITED STATES DISTRICT COURT

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FOR THE NORTHERN DISTRICT OF CALIFORNIA

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SAN FRANCISCO DIVISION

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For the Northern District of California

United States District Court

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Plaintiff,

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No. CV 12-03475 RS

JULIANNA AGARDI,

ORDER DENYING JUDGMENT ON
THE PLEADINGS AND GRANTING
MOTION TO DISMISS

v.
CITY & COUNTY OF SAN FRANCISCO,

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Defendant.
____________________________________/

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I.

INTRODUCTION

Plaintiff Agardi brings this action against the City and County of San Francisco, alleging

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that the City’s 2002 “Care Not Cash” initiative is unlawful and that she has been injured by its

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enactment. Specifically, she claims defendant violated Federal RICO laws under 18 U.S.C.

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§1965, deprived her of her rights in violation of 42 U.S.C. §1983, and deprived her of due

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process. Plaintiff previously brought suit in California Superior Court alleging the Care Not

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Cash initiative violated both state and federal laws. Judgment was entered in favor of defendant.

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Plaintiff appealed the decision, and on March 27, 2012, the California Court of Appeal affirmed

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the Superior Court’s judgment in favor of defendant. Plaintiff has moved for judgment on the

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NO. 12- CV -03475 RS
ORDER

pleadings. Defendant has moved to dismiss, arguing plaintiff’s claims are barred by res judicata.

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Pursuant to Civil Local Rule 7-1(b), this matter has been taken under submission and decided

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without oral argument. For the reasons set forth below, plaintiff’s motion for judgment on the

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pleadings is denied, and defendant’s motion to dismiss is granted, without leave to amend.
II.

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BACKGROUND

San Francisco’s General Assistance (G.A.) program was modified in 2002 when voters

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approved Proposition N, known as the “Care Not Cash” initiative. This proposition required

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that, for G.A. recipients who declared themselves homeless, aid would be provided primarily in

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the form of “in-kind benefits for housing utilities and meals,” rather than in cash. (S.F. Admin.

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Code §20.59.3). As a result, monthly cash stipends were reduced to $59 per recipient. Agardi

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For the Northern District of California

United States District Court

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receives G.A. assistance. She alleges that, as a result of this change, she has lost $340 a month in

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cash, a reduction in food stamps, a loss of lunch money, and has overpaid for her rent. She seeks

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compensatory and punitive damages for the alleged violations of RICO in the amount of $15

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million, and of §1983 in an amount exceeding $5 million.
III.

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LEGAL STANDARD

A complaint must contain “a short and plain statement of the claim showing that the

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pleader is entitled to relief.” Fed. R. Civ. P. 8(a)(2). “Pleadings must be so construed so as to do

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justice.” Fed. R. Civ. P. 8(e). While “detailed factual allegations are not required,” a complaint

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must have sufficient factual allegations to “state a claim to relief that is plausible on its face.”

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Ashcroft v. Iqbal, 566 U.S. 652, 678 (2009) (citing Bell Atlantic v. Twombly, 550 U.S. 544, 570

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(2007)). A claim is facially plausible “when the pleaded factual content allows the court to draw

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the reasonable inference that the defendant is liable for the misconduct alleged.” Id. This

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standard asks for “more than a sheer possibility that a defendant acted unlawfully.” Id. This

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determination is a context-specific task requiring the court “to draw in its judicial experience and

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common sense.” Id. at 1950.

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A motion to dismiss a complaint under Rule 12(b)(6) of the Federal Rules of Civil
Procedure tests the legal sufficiency of the claims alleged in the complaint. See Parks Sch. of

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NO. 12-CV-03475 RS
ORDER

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Bus., Inc. v. Symington, 51 F.3d 1480, 1484 (9th Cir. 1995). Dismissal under Rule 12(b)(6) may

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be based on either the “lack of a cognizable legal theory” or on “the absence of sufficient facts

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alleged under a cognizable legal theory.” Balistreri v. Pacifica Police Dep’t, 901 F.2d 696, 699

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(9th Cir. 1990). When evaluating such a motion, the court must accept all material allegations in

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the complaint as true, even if doubtful, and construe them in the light most favorable to the non-

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moving party. Twombly, 550 U.S. at 570. “[C]onclusory allegations of law and unwarranted

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inferences,” however, “are insufficient to defeat a motion to dismiss for failure to state a claim.”

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Epstein v. Wash. Energy Co., 83 F.3d 1136, 1140 (9th Cir. 1996); see also Twombly, 550 U.S. at

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555 (“threadbare recitals of the elements of the claim for relief, supported by mere conclusory

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statements,” are not taken as true).
In dismissing a complaint, leave to amend must be granted unless it is clear that the

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complaint’s deficiencies cannot be cured by amendment. Lucas v. Dep’t of Corporations, 66

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F.3d 245, 248 (9th Cir. 1995). When amendment would be futile, however, dismissal may be

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ordered with prejudice. Dumas v. Kipp, 90 F.3d 386, 393 (9th Cir. 1996).
IV.

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DISCUSSION

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A. Motion for Judgment on the Pleadings

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Plaintiff filed her motion for judgment the pleadings on October 4, 2012, shortly after

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filing her complaint, before defendant had an opportunity to answer or move to dismiss

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plaintiff’s claims. Under Federal Rule of Procedure 12(c), either party may bring a motion for

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judgment on the pleadings “[a]fter the pleadings are closed.” Fed. R. Civ. Proc. 12(c).

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Defendant filed its motion to dismiss on October 15, 2012. A motion to dismiss is not a pleading

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under Rule 7(a). Because defendant has not yet filed an answer, a motion for judgment on the

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pleadings is premature. It follows that plaintiff’s motion is denied.

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B. Motion to Dismiss

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Federal courts must give full faith and credit to state court judgments under 28 U.S.C.

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§1738. Res judicata, or claim preclusion, prohibits lawsuits on “any claims that were raised or

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could have been raised” in a prior action. Owens v. Kaiser Found. Health Plan, Inc., 244 F.3d

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708, 713 (9th Cir.2001) (quoting W. Radio Servs. Co. v. Glickman, 123 F.3d 1189, 1192 (9th

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Cir.1997)). Res judicata applies when there is: “(1) an identity of claims; (2) a final judgment on

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the merits; and (3) identity or privity between parties.” Id.

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While there is identity of the parties and a prior judgment on the merits in state court,

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plaintiff has asserted differently labeled claims for relief in her federal action. The question is,

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therefore, whether the federal claims are barred by the state court’s ruling. Four factors are used

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to determine whether two suits involve the same claim or cause of action. First, whether the two

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suits arise out of the same transactional nucleus of facts; second, whether rights or interests

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established in the prior judgment would be impaired by the prosecution of the second action;

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third, whether the two suits involve infringement of the same right; and fourth, whether

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substantially the same evidence is presented in the two actions. Mpoyo v. Litton Electro-Optical

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Sys., 430 F.3d 985, 987 (9th Cir. 2005).

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The Ninth Circuit uses a “transaction test” to determine whether two suits share a

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common nucleus of operative fact. Int'l Union v. Karr, 994 F.2d 1426, 1429-30 (9th Cir.1993).

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“Whether two events are part of the same transaction or series depends on whether they are

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related to the same set of facts and whether they could conveniently be tried together.” Western

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Sys., Inc. v. Ulloa, 958 F.2d 864, 871 (9th Cir.1992) (citing Restatement (Second) Judgments §

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24(2) (1982)). The Ninth Circuit held in Turtle Island Restoration Network v. U.S. Dep’t. of

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State, 673 F.3d 914 (9th Cir. 2012), that when two claims arise from the same transactional

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nucleus of facts, they not only may, but must be brought together. That court concluded that,

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while the “two actions may be procedurally different” both arose from the same government

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action, and thus res judicata barred the second action from going forward. In Owens, the Ninth

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Circuit similarly held that plaintiffs’ allegations of racial discrimination in violation of Title VII

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related to the same set of facts as those underlying their previous claim for wrongful discharge.

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244 F.3d at 714. Plaintiffs’ federal claims for relief were therefore barred by a prior judgment on

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the merits of their state law cause of action. Id. at 714-15.

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In the present case, plaintiff previously brought several claims in state court, alleging the

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Care Not Cash initiative to be unlawful. The court granted defendant’s motion for judgment on

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the pleadings, finding the “entirety of Agardi’s complaint depends on her argument that the City

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is obligated to provide [G.A.] benefits in the form of cash.” Ex. D. See also Ex. E at 7. The

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court went on to explain that this argument is foreclosed by settled appellate precedent, to which

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the California Court of Appeal subsequently agreed. Ex. E. Plaintiff has now brought three

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newly cast claims for relief: violation of RICO, §1983 civil rights violations, and deprivation of

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due process. Like those brought in state court, these claims are entirely premised on the

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argument that the City’s General Assistance program acted unlawfully by choosing to distribute

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in-kind benefits rather than cash. There is no question that the issues raised arise from the same

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nucleus of fact and could have been brought in state court. It follows that plaintiff’s claims are

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barred by res judicata.

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This Court must give the same preclusive effect as a state court would give to a state

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court judgment. Feminist Women's Health Ctr. v. Codispoti, 63 F.3d 863, 867 (9th Cir. 1995).

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The California Supreme Court has held that “a judgment for the defendant is a bar to a

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subsequent action by the plaintiff based on the same injury to the same right, even though he

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presents a different legal ground for relief.” Boeken v. Philip Morris USA, Inc., 48 Cal. 4th 788,

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798 (2010) (emphasis in original). In Boeken, the California court determined that plaintiff’s

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claim for wrongful death was precluded by her earlier claim for loss of consortium. Id. at 814-

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15. It reasoned that both claims arose from the same harm suffered, and thus the difference in

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legal theories presented was immaterial to the question of res judicata. Id.

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Similarly, in this case, while plaintiff asserts three theories for relief, the underlying

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harm, substitution of in-kind benefits for cash, is the same as the injury underlying the claims

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previously brought in state court. It follows that these new claims are barred by res judicata

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under California law, as well as Ninth Circuit precedent. Accordingly, defendant’s motion to

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dismiss is granted. As leave to amend would be futile in this instance, the action is dismissed

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with prejudice.

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CONCLUSION

For the foregoing reasons, plaintiff’s motion for judgment on the pleadings is denied.
Defendant’s motion to dismiss is granted without leave to amend.

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IT IS SO ORDERED.

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Dated: 11/20/12
RICHARD SEEBORG
UNITED STATES DISTRICT JUDGE

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For the Northern District of California

United States District Court

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