Spitzer et al v. Aljoe et al

Filing 96

ORDER by Judge Maria-Elena James granting in part and denying in part 72 Motion for Leave to File Third Amended Complaint (mejlc2, COURT STAFF) (Filed on 4/6/2015)

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1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 7 THOMAS A. SPITZER, et al., Case No. 13-cv-05442-MEJ Plaintiffs, 8 v. 9 10 TRISHA A. ALJOE, et al., Defendants. ORDER GRANTING IN PART AND DENYING IN PART PLAINTIFFS’ MOTION FOR LEAVE TO FILE AMENDED COMPLAINT Re: Dkt. No. 72 United States District Court Northern District of California 11 12 13 INTRODUCTION 14 Plaintiffs Thomas “Leroy” Spitzer and Craig J. Spitzer (“Plaintiffs”) bring this action 15 under 42 U.S.C. § 1983 and related state law claims, seeking damages stemming from the towing 16 of Leroy‟s truck and an abatement order for Plaintiffs‟ property in Pleasanton, California. Pending 17 before the Court is Plaintiffs‟ Motion for Leave to File a Third Amended Complaint pursuant to 18 Federal Rule of Civil Procedure 15(a). Dkt. No. 72. Former-Defendant Benjamin McGrew and 19 the City Defendants filed separate oppositions. Dkt. No. 75 (“McGrew‟s Opp‟n”) & Dkt. No. 76 20 (“City‟s Opp‟n”). Plaintiffs filed two separate Replies. Dkt. No. 79 (“Reply to City‟s Opp‟n”) & 21 Dkt. No. 80 (“Reply to McGrew‟s Opp‟n”). The Court found this matter suitable for disposition 22 without oral argument and vacated the March 12, 2015 hearing. Dkt. No. 83; see Fed. R. Civ. P. 23 78(b); Civil L.R. 7-1(b). Subsequently, the Court ordered supplemental briefing from the City 24 Defendants and Plaintiffs addressing whether the statute of limitations barred claims against two 25 of the police officers sought to be named as defendants. Dkt. No. 85. The parties both timely 26 responded. See Dkt. No. 94 (“Pls.‟ Suppl. Br.”); Dkt. No. 95 (“City‟s Suppl. Br.”). Having 27 considered the parties‟ positions, relevant legal authority, and the record in this case, the Court 28 GRANTS IN PART and DENIES IN PART Plaintiffs‟ Motion for the reasons set forth below. 1 BACKGROUND 2 Plaintiffs request leave to file an amended complaint for two primary reasons. See 3 Proposed Third Am. Compl. (“TAC”), Dkt. No. 72-1. First, Plaintiffs seek to name the “Doe” 4 Defendant police officers from their earlier complaints as Officer Sergio Martinez, Sergeant 5 Robert Leong, and Officer Ryan Tujague. See id. Second, Plaintiffs seek to re-assert claims 6 against Benjamin McGrew, the court-appointed receiver over Plaintiffs‟ real and personal property 7 at issue in this litigation. See id.; see also Second Am. Compl. (“SAC”) ¶ 13, Dkt. No. 27. Except where noted, the following factual background is taken from Plaintiffs‟ SAC, filed 8 9 April 20, 2014. Because Plaintiffs‟ TAC focuses on McGrew and the newly named Police Officers, the Court discusses the facts most relevant to claims against those potential defendants. 11 United States District Court Northern District of California 10 A. Claims Regarding Plaintiffs’ Residence/Property Plaintiffs are co-owners of a single-family residence located at 4719 Orangewood Court in 12 13 Pleasanton, California (the “Property”). SAC ¶ 5. On October 21, 2011, City agents executed an 14 inspection warrant to enter the Property. Id. ¶ 22. The City subsequently issued a Notice and 15 Order to Repair and Abate the Property on December 1, 2011. Id. ¶ 36. The Order provided that 16 Plaintiffs must “Vacate Immediately” and “Repair or Demolish and Abate.” Id. The Order 17 included notice that “occupying or entering the building, or any portion thereof will result in the 18 arrest of the occupants for a misdemeanor violation of the Pleasanton Municipal Code and the 19 State Building Standards Code.” Id. (emphasis in original). As a result of the Order, Plaintiffs 20 allege that Leroy lost use of and access to his personal property, and they were denied the right to 21 abate the violations themselves by the prohibition of their entry to the Property. Id. ¶ 38. 22 After the time specified for abatement and repair had expired, Plaintiffs allege that the City 23 failed to call for a hearing required by the Pleasanton Municipal Code. Id. ¶ 39. Instead, Plaintiffs 24 were sent a “Final Notice” and “Demand to Abate” on February 3, 2012, stating that legal action 25 would be commenced upon failure to comply with the noticed demands by February 15, 2012. Id. 26 ¶ 40. 27 28 On August 3, 2012, the City filed an Ex-Parte Petition to Appoint a Receiver. Id. ¶ 41. The Alameda County Superior Court appointed McGrew as Receiver on September 18, 2012. Id. 2 1 ¶ 113; Req. for Jud. Not., Ex. 1, Dkt. No. 32-1.1 McGrew took possession of the Property on 2 September 25, 2012. SAC ¶ 113. Plaintiffs allege that McGrew falsely stated he had filed his 3 required receiver‟s bond with his receiver‟s oath in his Initial Report filed on Nov. 24, 2012, but 4 his bond was not submitted to the court until Feb. 28, 2014. Id. 5 After taking possession, McGrew allowed Plaintiffs to work at the Property to remove 6 Leroy‟s personal possessions and do remediation work. Id. ¶ 114. Plaintiffs worked through 7 December 2012 to clean the Property, during which time Plaintiffs allege McGrew admitted 8 personal problems that prevented him from obtaining financing to complete remediation work. Id. 9 ¶¶ 115-17. However, after a break in Plaintiffs‟ work between December and February, Plaintiffs allege that the City threatened to have McGrew removed for allowing Plaintiffs to do the 11 United States District Court Northern District of California 10 remediation work, at which point McGrew barred Plaintiffs and their friends from working and 12 ceased all communication with them. Id. ¶¶ 118, 122. Plaintiffs allege that McGrew continued 13 communication with the City, in violation of his duty of neutrality. Id. 14 During the months following his appointment, McGrew did not produce the monthly 15 reports or inventory required by the Superior Court, and he did not pay property taxes on the 16 Property. Id. ¶ 119. On July 17, 2013, McGrew executed a clean-up contract with a business entity called 17 18 Decon. Id. ¶ 120. Plaintiffs lost the cost of the Decon contract, through its charge by the receiver 19 to the estate, and Leroy lost about an equal value of his personal property stored in his garage, 20 which was given to charities, recycled for over $5,000 in cash, and converted by Decon personnel 21 without credit to the estate. Id. ¶ 121. After McGrew filed untimely reports for May through July, 22 Plaintiffs allege that it became evident that the City and its agents not only had knowledge of 23 McGrew‟s execution of the Decon contract, but they also aided and abetted its unlawful execution 24 by assisting and advising McGrew in its execution. Id. ¶ 123. 25 Based on these allegations, Plaintiffs contend that McGrew, in concert with the other 26 named Defendants, jointly acted, participated in or directed, aided and abetted, and agreed and had 27 28 1 The Court previously took judicial notice of this document. See Dkt. No. 44 at 2 n.1. 3 1 a meeting of the minds to seize and finally deprive Leroy of his personal property by barring him 2 from entering and working to abate the conditions at the Property, and by aiding and abetting 3 execution of an unnecessary and unreasonably costly clean-up contract by Decon without required 4 prior approval of the court. Id. ¶ 124. In their SAC, Plaintiffs asserted the following causes of action under 42 U.S.C. § 1983 5 against McGrew: (1) Defendants‟ seizure of Leroy‟s personal property was unreasonable and in 7 violation of the Fourth Amendment of the United States Constitution (id. ¶ 125); (2) Defendants‟ 8 seizure of Leroy‟s personal property without notice or hearing violated Plaintiffs‟ procedural due 9 process rights under the Fourteenth Amendment (id. ¶ 127); (3) Defendants‟ unlawful execution of 10 the Receiver‟s contract violated Plaintiffs‟ First Amendment rights of free speech and access to the 11 United States District Court Northern District of California 6 courts, because Plaintiffs did not have the opportunity to object before it was executed (id. ¶ 129); 12 and (4) Defendants acted in furtherance of an overall conspiracy to unreasonably seize and deprive 13 Plaintiffs of the Property and personal property without due process of law (id. ¶ 130). McGrew moved to dismiss Plaintiffs‟ claims against him on May 26, 2014, which the 14 15 Court granted after finding that it lacked jurisdiction because Plaintiffs failed to satisfy a necessary 16 precondition to the initiation of suit against him; namely, the securing of permission to do so from 17 the Superior Court. Dkt. No. 44. On July 23, 2014, Plaintiffs brought a motion to alter the 18 Court‟s order dismissing McGrew. Dkt. No. 55. The Court denied that motion, finding that 19 Plaintiffs had failed to comply with the Local Rules and had failed to present any newly 20 discovered evidence or to otherwise elucidate an error of law. Dkt. No. 59. Plaintiffs‟ TAC seeks to re-assert those claims on the grounds that they are outside of 21 22 McGrew‟s duties as receiver. See TAC ¶ 129. Plaintiffs also seek to assert new claims against 23 McGrew for the seizure of Leroy‟s personal property, as well as claims related to McGrew‟s grant 24 of a Deed of Trust on the Property. Id. 25 B. 26 Claims Regarding Leroy’s Mazda On November 7, 2011, a California Highway Patrol officer ordered Leroy‟s red Mazda 27 pickup truck towed pursuant to California Vehicle Code § 22669(b) (removal of abandoned 28 vehicles) while it was parked in front of Leroy‟s house where he normally parked it. SAC ¶ 23. 4 1 Plaintiffs seek to name this officer as Officer Martinez. TAC ¶¶ 23-25. Leroy was not present 2 when it was towed. SAC ¶ 23. Plaintiffs allege that the Mazda was not a hazard to traffic or 3 public safety or a target of vandalism or theft. Id. It was registered, operable, and regularly driven. 4 Id. At the time it was towed, it was Leroy‟s only transportation. Id. The same day as the towing, Leroy went to the City of Pleasanton Police Department to 5 6 pay the required fees to release his towed vehicle. Id. ¶ 25. The Police Department staff told 7 Leroy that his Mazda could not be released and to come back later to talk to a police officer named 8 “Lt. Leone,” who was not then available. Id. ¶ 26. When Leroy later met with that officer, he 9 alleges he saw that name on a tag on the officer‟s uniform. Id. However, Plaintiffs allege that they could not find an officer by that name in Police Department‟s public records. Plaintiffs‟ SAC 11 United States District Court Northern District of California 10 named that officer as “defendant police officer Doe 1.” Id. Plaintiffs seek to name this officer as 12 Officer Martinez. TAC ¶¶ 23-25. For a week, Leroy went back to the Police Department and called multiple times asking for 13 14 Police Officer Doe 1, but he was always either not in or unavailable. SAC ¶ 27. When Leroy 15 eventually spoke with Police Officer Doe 1, the Officer said he could not release Leroy‟s Mazda 16 because it had been “abated.” Id. Police Officer Doe 1 told Leroy that “we sent you a letter,” but 17 Leroy never received a notice or order from the City that his Mazda was subject to abatement, nor 18 did he receive notice of a hearing on its abatement. Id. ¶¶ 28-29. Leroy lost possession of his 19 Mazda permanently on December 15 2011, by its sale by the company that had towed and stored 20 it. Id. 21 C. 22 Plaintiffs’ Search and Seizure Claims On September 17, 2012, Plaintiffs were seized and arrested for allegedly manufacturing of 23 a controlled substance. Id. ¶ 99. At the time of their arrest, Plaintiffs allege they were lawfully 24 removing household chemicals from their Property. Id. They allege that “police officer Doe 5” 25 entered their fenced backyard through the gate without a warrant and without asking for 26 permission to enter. Id. ¶ 101. Officer Doe 5 handcuffed Craig to the fence, and several other 27 officers also entered Plaintiffs‟ backyard. Id. Plaintiffs assert they were arrested and seized 28 without a warrant or probable cause. Id. ¶ 99. They allege they were imprisoned under 5 1 constructive arrest in the back of a police car and handcuffed for about four hours. Id. ¶ 102. Shortly after Plaintiffs were booked in jail, the charges were dropped. Id. ¶ 105. They 2 3 were released on the same day they were arrested. Id. When they returned to their Property, they 4 found a warrant posted. Id. The warrant was issued on September 17, 2012 at 2:10 p.m. Id. 5 Plaintiffs allege that the time the warrant was issued was after they were arrested and closer to the 6 time when they were released from jail. Id. The declaration of probable cause was not attached to 7 the warrant. Id. 8 D. 9 Plaintiffs’ Amended Complaints & Proposed Amended Complaint Plaintiffs‟ filed their initial Complaint on November 22, 2013 (Dkt. No. 1) and their First Amended Complaint on February 13, 2014. Dkt. No. 19 (“FAC”). Plaintiffs later filed their SAC 11 United States District Court Northern District of California 10 on April 20, 2014. Plaintiffs filed their present Motion, along with their proposed TAC, on 12 February 2, 2015, the deadline to file amended pleadings. In their TAC, Plaintiffs seek to allege: 13 1. One claim against Officer Martinez: Fourth Amendment unlawful seizure of the Mazda 14 15 (Claim 1); 2. Two claims against Sergeant Leong: Fourth Amendment unlawful seizure of the Mazda 16 (Claim 1); Fourteenth Amendment procedural due process from the Mazda‟s seizure (Claim 2); 17 3. Two claims against Officer Tujague: Fourth Amendment unlawful arrest (Claim 14); 18 19 Fourth Amendment warrantless entry and search (Claim 15); and 4. Five claims against McGrew: unreasonable seizure and final deprivation of Leroy‟s 20 personal property (Claim 18); denial of procedural due process on execution of contract and 21 seizure of Leroy‟s personal property (Claim 19); First Amendment retaliation and denial of 22 meaningful access to the courts (Claim 20); unlawful seizure of Plaintiffs‟ real and personal 23 property (Claim 21); and conspiracy to seize Plaintiffs‟ real and personal property (Claim 22). 24 25 LEGAL STANDARD Federal Rule of Civil Procedure 15 provides that a party may amend its pleading once as a 26 matter of course within (1) 21 days after serving the pleading or (2) 21 days after the earlier of 27 service of a responsive pleading or service of a Rule 12(b) motion. Fed. R. Civ. P. 15(a)(1). 28 Outside of this timeframe, “a party may amend its pleading only with the opposing party‟s written 6 1 consent or the court‟s leave,” though the court “should freely give leave when justice so requires.” 2 Fed. R. Civ. P. 15(a)(2). “Although the rule should be interpreted with „extreme liberality,‟ leave 3 to amend is not to be granted automatically.” Jackson v. Bank of Hawaii, 902 F.2d 1385, 1387 4 (9th Cir. 1990) (citation omitted). 5 A court considers five factors in determining whether to grant leave to amend: “(1) bad 6 faith, (2) undue delay, (3) prejudice to the opposing party, (4) futility of amendment; and (5) 7 whether plaintiff has previously amended his complaint.” In re Western States Wholesale Nat. 8 Gas Antitrust Litig., 715 F.3d 716, 738 (9th Cir. 2013) (quoting Allen v. City of Beverly Hills, 911 9 F.2d 367, 373 (9th Cir. 1990)). “Prejudice to the opposing party is the most important factor.” Jackson, 902 F.2d at 1387. And the party opposing amendment bears the burden of showing 11 United States District Court Northern District of California 10 prejudice. DCD Programs, Ltd. v. Leighton, 833 F.2d 183, 187 (9th Cir. 1987). Generally, a 12 court must make the determination of whether to grant leave “with all inferences in favor of 13 granting the motion.” Griggs v. Pace Am. Grp., Inc., 170 F.3d 877, 880 (9th Cir. 1999). 14 15 INITIAL PROCEDURAL ISSUES As an initial matter, the parties have raised a few procedural issues related to the briefing 16 in this case. First, the City Defendants contend that Plaintiffs‟ Motion suffers a number of 17 procedural defects under the Northern District‟s Civil Local Rules, including the omission of (1) a 18 statement of issues to be decided, and (2) a succinct statement of the relevant facts. See City‟s 19 Opp‟n at 3 (citing Civ. L.R. 7-4(a)(3) & (4), respectively). The City Defendants urge the Court to 20 deny Plaintiffs‟ Motion for failing to comply with the Local Rules. Id. (citing Tri-Valley CARES 21 v. U.S. Dep’t of Energy, 671 F.3d 1113, 1131 (9th Cir. 2012)). The City Defendants argue that 22 Plaintiffs‟ failure to comply with the Local Rules has left Plaintiffs‟ Motion without important 23 foundational information, leaving them to “guess at the particular relief Plaintiffs are seek (and the 24 factual basis for it).” Id. The City Defendants contend that this impacts their ability to “accurately 25 or coherently respond to Plaintiffs‟ motion.” Id. 26 While the Court agrees that Plaintiffs‟ Motion does not comply with the Local Rules, the 27 Court finds that the City Defendants have nonetheless coherently responded to Plaintiffs‟ Motion 28 despite their perceived difficulties. Likewise, although Plaintiffs‟ Motion is no model of clarity, 7 1 the Court has been able to address the substance of Plaintiffs‟ Motion without substantial issue. 2 Thus, the Court will not deny Plaintiffs‟ Motion on this ground. Second, Plaintiffs raised their own procedural challenges to the City Defendants‟ 3 4 Opposition, including that it did not have a statement of issues to be decided nor a declaration 5 supporting their statement of facts. Reply to City‟s Opp‟n at 2, 9. Given the Court‟s 6 determination above about Plaintiffs‟ lack of statement of issues to be decided, the Court will not 7 hold the City Defendants to a higher standard, especially since, as with Plaintiffs‟ Motion, the 8 Court finds that it has been able to address the substance of the City Defendants‟ Opposition. As 9 to the second challenge, the Court does not find much merit. Defendants‟ Opposition included the declaration of their counsel, which attached various exhibits relating to Defendants‟ factual 11 United States District Court Northern District of California 10 assertions. See Allen Decl., Dkt. No. 77. In sum, the Court is satisfied that both Plaintiffs‟ Motion and the City Defendants‟ 12 13 Opposition are proper for review. Nonetheless, all parties are admonished to comply with the 14 Local Rules in the future. DISCUSSION 15 Plaintiffs seek to amend their Complaint to (1) name as Defendants the police officers 16 17 whom Plaintiffs previously referred to as “Doe police officers” and (2) re-assert claims against 18 McGrew. Additionally, Plaintiffs state that their proposed TAC “refines and clarifies” their 19 claims, although they do not provide a list or other summary of their proposed amendments. The 20 City Defendants and McGrew oppose Plaintiffs‟ Motion on separate grounds. 21 A. Claims Against the City Police Officers 22 The City Defendants challenge Plaintiffs‟ motion on several grounds. First, the City 23 Defendants argue that the claims against the police officers are barred by the statute of limitations. 24 Second, they assert that Plaintiffs unduly delayed in naming the officers, and third, they argue that 25 the claims against these officers fail on their merits. Finally, the City Defendants argue that even 26 if Plaintiffs may otherwise assert claims against these officers, those claims nevertheless fail as a 27 procedural matter under Federal Rule of Procedure 4(m) because Plaintiffs failed to serve the 28 officers within 120 days of the filing of their SAC. The Court considers the City Defendants‟ 8 1 arguments as they apply to each of the officers below. 2 1. 3 The City Defendants contend that even if Plaintiffs could relate back their claims to the 4 time of filing of their initial complaint, the Section 1983 unlawful seizure claim against Officer 5 Martinez is still time-barred as the claim accrued over two years prior to when Plaintiffs filed their 6 initial Complaint. City‟s Opp‟n at 8. 7 Claims Against Officer Martinez “A motion for leave to amend may be denied if it appears to be futile or legally insufficient.” Miller v. Rykoff-Sexton, Inc., 845 F.2d 209, 214 (9th Cir. 1988) (citations omitted). 9 Claims barred by the statute of limitations are futile. Platt Elec. Supply, Inc. v. EOFF Elec., Inc., 10 522 F.3d 1049, 1060 (9th Cir. 2008) (citing Steckman v. Hart Brewing, Inc., 143 F.3d 1293, 1298 11 United States District Court Northern District of California 8 (9th Cir. 1998) (the “general rule that parties are allowed to amend their pleadings, [] does not 12 extend to cases in which any amendment would be an exercise in futility, or where the amended 13 complaint would also be subject to dismissal . . .”)). 14 Section 1983 does not contain its own statute of limitations, thus federal courts apply the 15 forum state‟s statute of limitations for personal injury actions, except to the extent inconsistent 16 with federal law. See Butler v. Nat’l Cmty. Renaissance of Cal., 766 F.3d 1191, 1198 (9th Cir. 17 2014). California‟s statute of limitations for personal injury actions is two years. Cal. Civ. Proc. 18 Code § 335.1. “A statute of limitations begins to run on the date on which the plaintiff‟s claim 19 „accrues.‟” Pouncil v. Tilton, 704 F.3d 568, 573 (9th Cir. 2012) (citation omitted). 20 The accrual date of a Section 1983 claim is a question of federal law. Wallace v. Kato, 549 21 U.S. 384, 388 (2007). Accrual occurs “when the plaintiff has „a complete and present cause of 22 action,‟ . . . that is, when „the plaintiff can file suit and obtain relief[.]‟” Id. (citations omitted). 23 “Courts adjudicating the issue of when a § 1983 claim for unlawful search and seizure accrues 24 post-Wallace have generally applied the reasoning in Wallace and held that the accrual date is the 25 date that the wrongful act occurred.” Pierson v. Storey Cnty., 2013 WL 6210336, at *4 (D. Nev. 26 Nov. 27, 2013) (collecting cases); see also Canatella v. Van De Kamp, 486 F.3d 1128, 1133 (9th 27 Cir. 2007) (statute of limitations begins to run when plaintiff knew or had reason to know of the 28 injury that forms the basis of the action). “[A] § 1983 action is commenced in federal district 9 1 court for purposes of the statute of limitations when the complaint is filed.” Sain v. City of Bend, 2 309 F.3d 1134, 1138 (9th Cir. 2002). According to Plaintiffs‟ proposed TAC, “Leroy‟s Mazda truck was unlawfully seized by 3 Pleasanton police officer Sergio Martinez on Nov. 7, 2011.” TAC ¶ 31; see also SAC ¶ 30. “The 5 impoundment of an automobile is a seizure within the meaning of the Fourth Amendment.” 6 Miranda v. City of Cornelius, 429 F.3d 858, 862 (9th Cir. 2005). In similar cases, courts have 7 held that the statute of limitations period began to run when a plaintiff knew or had reason to 8 know of the seizure of his car. See Wagner v. Peppler, 2009 WL 292199, at *3 (C.D. Cal. Jan. 16, 9 2009), report & recommendation adopted, 2009 WL 311857 (C.D. Cal. Feb. 4, 2009) (“The Court 10 finds that Plaintiff was aware or should have been aware of the existence and source of his injury 11 United States District Court Northern District of California 4 at the time of his arrest, when his car was towed and impounded.”);2 Peterec v. Hilliard, 2013 WL 12 5178328, at *5 & n.11 (S.D.N.Y. Sept. 16, 2013) (plaintiff‟s unlawful seizure claim accrued, and 13 the statute of limitations began to run, when his property, including his vehicle, was seized); 14 Lynch v. Suffolk Cnty. Police Dep’t, Inc., 348 F. App‟x 672, 675 (2d Cir. 2009) (regarding the 15 seizure of his car and other effects, “Plaintiff was aware that his property was seized—and thus 16 knew „of the injury which is the basis of his action‟—on February 1, 1997, and the statute of 17 limitations began to run on plaintiff‟s claim at that time.” (citation omitted)). The Court is inclined to agree with these cases. “Generally, an action accrues when the 18 19 wrongful act or omission occurs and the party has sustained damages, even when the full extent of 20 his injury is unknown.” Smith v. Kohlweiss, Inc., 2012 WL 1156338, at *4 (N.D. Cal. Mar. 30, 21 2012) (citing Wallace, 549 U.S. at 391). A seizure of property occurs when “there is some 22 meaningful interference with an individual‟s possessory interests in that property.” United States 23 v. Jacobsen, 466 U.S. 109, 113 (1984). 24 2 25 26 27 28 Plaintiffs attempt to distinguish Wagner, but their argument is unavailing. While Plaintiffs note that the Wagner court found that the plaintiff‟s claims were not time-barred related to the sale of his vehicle, the court‟s analysis in that instance related to the plaintiff‟s due process and unlawful taking claims, not his seizure claim. Wagner, 2009 WL 292199, at *3. For the seizure claim, the court found that the plaintiff knew his car was seized at the same time he was arrested, and thus “any and all of Plaintiff‟s claims related to the initial seizure of his car at the time of his arrest are barred by the statute of limitations.” Id. 10 1 The meaningful interference with Leroy‟s property occurred when he knew of the seizure 2 of his Mazda—which, as Plaintiffs recognize, occurred on November 7, 2011. TAC ¶ 31; SAC ¶ 3 30; FAC ¶¶ 22-23; City‟s Opp‟n at 4. Leroy‟s seizure claim accrued at that time, and the statute of 4 limitations began to run, ending two years later on November 7, 2013. Plaintiffs filed their initial 5 Complaint weeks later on November 22, 2013. See Dkt. No. 1. Accordingly, when Plaintiffs filed 6 their initial Complaint, it was more than two years after they knew or had reason to know of the 7 alleged seizure. While Plaintiffs may not have known Officer Martinez‟s name, this does not 8 excuse the fact that their claim against the Doe officer was not asserted within the appropriate time 9 period. Even if Plaintiffs could relate back the unlawful seizure claim against Officer Martinez to 10 when they filed their initial Complaint, the statute of limitations had already passed by that time. United States District Court Northern District of California 11 In caution, the Court permitted Plaintiffs an opportunity for supplemental briefing to 12 explain why their seizure claim against Officer Martinez is timely, or otherwise excepted, such as 13 through statutory tolling, equitable tolling, waiver, or estoppel. Plaintiffs‟ Supplemental Response 14 was unhelpful, focusing on the statute of limitations for a conspiracy claim, but seemingly 15 forgetting that Plaintiffs‟ TAC asserts only an unlawful seizure claim against Officer Martinez 16 under the Fourth Amendment. See TAC ¶¶ 31-32. Nor did Plaintiffs‟ response suggest that 17 statutory tolling, equitable tolling, waiver, or estoppel is applicable here. Plaintiffs indicate that 18 the “delayed discovery” of the purported conspiracy tolled the accrual of that claim, but again, the 19 proposed claim against Officer Martinez is only for unlawful seizure, not conspiracy. 20 Plaintiffs otherwise argue that “[t]he subject Claims are tolled because they are part of a 21 custom and policy or pattern and practice and continuing violations.” Pls.‟ Suppl. Br. at 4-5. 22 They cite Green v. Los Angeles County Superintendent of Schools, which held that “a plaintiff 23 who shows that a[n allegedly unlawful] policy and practice operated at least in part within the 24 limitation period satisfies the filing requirements.” 883 F.2d 1472, 1480 (9th Cir. 1989). Since 25 Green, however, the United States Supreme Court has held that discrete “acts are not actionable if 26 time barred, even when they are related to acts alleged in timely filed charges.” Nat’l R.R. 27 Passenger Corp. v. Morgan, 536 U.S. 101, 113 (2002); see also Carpinteria Valley Farms, Ltd. v. 28 Cnty. of Santa Barbara, 344 F.3d 822, 829 (9th Cir. 2003) (applying Morgan to hold that time11 1 barred acts could not be used to support Section 1983 free speech retaliation claims). 2 “Morgan instructs that a court must determine whether a claim is based on an 3 independently wrongful, discrete act, and if it is, then the claim accrues, and the statute of 4 limitations begins to run, from the date of that discrete act . . .” Pouncil, 704 F.3d at 578-79. The 5 Supreme Court provided examples: a discrete act consists of an unlawful practice that “occurred” 6 on the day it “happened,” which includes, for example, “termination, failure to promote, denial of 7 transfer, or refusal to hire.” Morgan, 536 U.S. at 111. In comparison, hostile work environment 8 claims are “different in kind from discrete acts,” because they “are based on the cumulative effect 9 of individual acts,” “occur[ ] over a series of days or perhaps years and, in direct contrast to discrete acts, a single act of harassment may not be actionable on its own.” Id. (citing Harris v. 11 United States District Court Northern District of California 10 Forklift Sys., Inc., 510 U.S. 17, 21 (1993)). 12 The Court finds that the towing and seizure of Leroy‟s vehicle should be considered a 13 discrete act such that the continuing violations doctrine is not applicable against Officer Martinez. 14 First, the Ninth Circuit has indicated that a seizure is a discrete act that starts the clock for filing 15 charges alleging that act. Specifically, the Court held that “where . . . illegal search and seizure is 16 alleged, the conduct and asserted injury are discrete and complete upon occurrence, and the cause 17 of action can reasonably be deemed to have accrued when the wrongful act occurs.” Venegas v. 18 Wagner, 704 F.2d 1144, 1146 (9th Cir.1983); Pearce v. Romeo, 299 Fed. App‟x. 653, 655 (9th 19 Cir. 2008) (“An injury from an illegal search and seizure accrues when the act occurs.”). Second, 20 the Court is persuaded by the reasoning of the district court in Rankin v. Smithburger, which found 21 that seizures of property and entries into the home are sufficiently “discrete” as “[e]ach act would 22 have constituted an independent tort, complete when the property had been unlawfully seized or 23 when the home had been unlawfully searched.” 2013 WL 3550894, at *6 (W.D. Pa. July 11, 24 2013). The Rankin court noted that these acts “do not constitute the type of non-discrete acts, like 25 a hostile work environment, for which a plaintiff may take advantage of the continuing violations 26 doctrine.” Id. 27 28 Plaintiffs‟ only claim against Officer Martinez is the unlawful seizure claim, and although Plaintiffs assert that they have pleaded custom and policy to deprive Plaintiffs of their property 12 1 (see Pls.‟ Suppl. Br. at 4), they have not shown that liability attaches to Officer Martinez on this 2 basis. In other words, Plaintiffs‟ unlawful seizure claim accrued against Officer Martinez when 3 Leroy knew of the seizure of the vehicle, not at some later date simply because there may be a 4 custom or policy claim against another Defendant or Defendants. As Plaintiffs suggest in a 5 footnote, the fact that a particular claim is barred does not mean that the information about that 6 claim cannot be used as background evidence to support another timely claim. Morgan, 536 U.S. 7 at 102 (“Nor does the statute bar an employee from using the prior acts as background evidence to 8 support a timely claim.” (citation omitted)); see also Lyons v. England, 307 F.3d 1092, 1111-12 9 (9th Cir. 2002). 10 Plaintiffs cite Branch v. Guilderland Central School District for the proposition that “§ United States District Court Northern District of California 11 1983 allegations referring to a „policy or custom‟ are analogous to Title VII allegations referring 12 to a „pattern or practice,‟ are not controlled by the Morgan holding, and can form the basis of a 13 continuing violation.” 239 F. Supp. 2d 242, 253 (N.D.N.Y. 2003). Indeed, Morgan noted in a 14 footnote that it had “no occasion here to consider the timely filing question with respect to 15 „pattern-or-practice‟ claims brought by private litigants as none are at issue here.” 536 U.S. at 115 16 n.9. That said, the Ninth Circuit has applied Morgan in Section 1983 actions. See Carpinteria, 17 344 F.3d at 829; RK Ventures, Inc. v. City of Seattle, 307 F.3d 1045, 1058 (9th Cir. 2002). District 18 courts in this Circuit have also applied Morgan‟s discrete act test to Section 1983 claims involving 19 a policy or custom. See, e.g., Douglas v. Noelle, 2010 WL 5313529, at *3 (D. Or. Dec. 20, 2010) 20 (“That the discrete acts of the individual defendants were allegedly undertaken pursuant to a 21 policy or practice does not render them any less discrete and does not toll their accrual or extend 22 the limitations period. . . . [such a] construction of the continuing violations doctrine would render 23 the statute of limitations for any civil rights claim meaningless so long as there was an 24 accompanying Monell claim.” (citations omitted)); Reyna v. City of Portland, 2005 WL 708344, at 25 *5 (D. Or. Mar. 28, 2005) (while events that occurred prior to the statute of limitations “are time- 26 barred for liability purposes,” they still “may be relevant and admissible to establish the required 27 municipal policy, custom, or practice element of plaintiff‟s § 1983 claim.”); 28 Mansourian v. Bd. of Regents of the Univ. of Cal. at Davis, 2011 WL 1897428, at *5 (E.D. Cal. 13 1 May 18, 2011) (holding that, as to plaintiffs‟ Section 1983 claims, “because the alleged discrete 2 acts outside the limitations period are not actionable, plaintiffs may not recover damages traceable 3 only to those acts; rather, plaintiffs are limited to recovery for damages traceable to the alleged 4 discriminatory policy.”). 5 Despite their allegations that the seizure of Leroy‟s vehicle was part of a policy or custom, 6 the issue here is whether Plaintiffs assert a viable claim against Officer Martinez. The claim 7 against Officer Martinez accrued at the time Leroy knew of the seizure; the seizure itself was a 8 discrete, independent act, at which point Leroy had a live cause of action and the statute of 9 limitations began to accrue. That claim is no longer actionable, although evidence of the event 10 United States District Court Northern District of California 11 itself may be relevant and admissible to establish another policy or custom claim. Finally, even though Plaintiffs‟ initial Complaint was filed only a few weeks after the 12 statute of limitations ran, this fact is insufficient to impose equitable tolling. As the United States 13 Supreme Court recognized, statutes of limitations “necessarily operate harshly and arbitrarily with 14 respect to individuals who fall just on the other side of them, but if the concept of a filing deadline 15 is to have any content, the deadline must be enforced.” United States v. Locke, 471 U.S. 84, 101 16 (1985); see also Lookingbill v. Cockrell, 293 F.3d 256, 264-65 (5th Cir. 2002) (statute of 17 limitation barred petition filed four days late), cert. denied, 537 U.S. 1116 (2003); United States v. 18 Marcello, 212 F.3d 1005, 1010 (7th Cir. 2000) (“Foreclosing litigants from bringing their claim 19 because they missed the filing deadline by one day may seem harsh, but courts have to draw the 20 lines somewhere [and] statutes of limitations protect important societal interests . . . . The deadline 21 simply was missed. That is not grounds for equitable tolling.”), cert. denied, 531 U.S. 878 (2000). 22 In light of the above, Plaintiffs‟ Motion for Leave to File their Third Amended Complaint 23 to name Officer Martinez is DENIED as to Plaintiffs‟ unlawful seizure claim. 24 2. Claims Against Sergeant Leong 25 As with Officer Martinez, Plaintiffs‟ claim against Sergeant Leong under Claim 1 for 26 unlawful seizure is likewise barred by the statute of limitations, which ran two years after Leroy 27 knew of the seizure of his vehicle. 28 Plaintiffs also seek to bring a claim against Sergeant Leong for “denial of procedural due 14 1 process on unreasonable seizure and abatement of Leroy‟s vehicle.” TAC ¶¶ 33-34. The issue is 2 whether that claim is futile as barred by the statute of limitations, or whether leave to amend 3 should be denied on some other ground. The City Defendants challenge both the accrual date of 4 Plaintiffs‟ claim and whether they can relate it back to the filing of the initial Complaint. 5 Alternatively, the City Defendants argue that Plaintiffs‟ procedural due process claim fails on its 6 merits or because Plaintiffs unduly delayed in naming Sergeant Leong in their Complaint. a. 7 Plaintiffs assert that Sergeant Leong violated the Fourteenth Amendment when “Defendant 8 9 Accrual Date of Procedural Due Process Claim Leong refused [to] release [the Mazda] to Leroy upon his offer to pay the fees in violation of [California Vehicle Code] § 22850.3, which required its release.” TAC ¶ 34. None of Plaintiffs‟ 11 United States District Court Northern District of California 10 past complaints or the TAC allege the date on which Leroy and Sergeant Leong met, but 12 presumably it was sometime after November 7, 2011, when Leroy went to the station to pay the 13 required fees but was unable to meet with Sergeant Leong, and before December 15, 2011, when 14 Leroy‟s vehicle was sold by the company that towed and stored the vehicle. See TAC ¶¶ 23-29. 15 The timeliness of Plaintiffs‟ claim against Sergeant Leong depends on when Plaintiff knew or had 16 reason to know of the injury that forms the basis of his action. See Canatella, 486 F.3d at 1133. “A procedural due process claim accrues when a plaintiff is given final notice that he 17 18 would not receive further process.” Knox v. Davis, 260 F.3d 1009, 1015 (9th Cir. 2001) (citing 19 Hoesterey v. City of Cathedral City, 945 F.2d 317, 320 (9th Cir. 1991)). The problem is that the 20 TAC does not establish when Leroy received such notice. There are at least three dates on which 21 the Plaintiffs‟ claim could have accrued. First, the City Defendants argue that the “notice” 22 occurred on October 27, 2011 with the certified abatement letter, which told Plaintiffs that “if not 23 [sic] appeal was received, the Chief of Police has the authority to remove and dispose of the 24 vehicle, without a hearing.” City‟s Suppl. Br. at 5. The Court is not persuaded by this argument, 25 as Plaintiffs‟ SAC and TAC have consistently indicated that Plaintiffs‟ never received such notice. 26 TAC ¶¶ 24, 30; SAC ¶ 29. The City Defendants have not shown otherwise.3 27 3 28 The City Defendants attached a copy of the letter as well as the Certified Mail Receipt slips. See Allen Decl., Ex. B., Dkt. No. 77-2. Even if the Court could properly consider this evidence, the 15 1 Second, the City Defendants alternatively argue that “[a]t the very latest, Leroy Spitzer‟s 2 procedural due process claim accrued no later than when Leroy Spitzer came into the police 3 station and spoke with Sgt. Leong, who told him the vehicle had been abated.” Id. at 5 n.4. The 4 TAC does assert that at some point after November 7, 2011, when Leroy first visited the Police 5 Department about his vehicle, Leroy “finally” met with Sergeant Leong, who told Leroy that “he 6 wouldn‟t release Leroy‟s Mazda because it had been „abated‟” and “waved” a paper at Leroy 7 saying “we sent you a letter[.]” TAC ¶ 29. But absent from the allegations are a date on which 8 this discussion took place, and the City Defendants are quick to point out that “Plaintiffs‟ 9 Supplemental Brief does not contend this conversation occurred on or after November 22, 2011[,]” 10 United States District Court Northern District of California 11 i.e., two years before the filing of Plaintiffs‟ Complaint. City‟s Suppl. Br. at 5 n.4. Third, although Plaintiffs confuse the issue with their discussion about the accrual of a 12 conspiracy cause of action, they nevertheless indicate that the Court should consider the accrual 13 date as December 15, 2011, the date Leroy was permanently deprived of his Mazda when it was 14 sold by the company that had towed and stored it. Pls.‟ Suppl. Br. at 5; see also TAC ¶ 30. 15 The parties provided no case law on point suggesting which of the above dates should 16 indicate to Plaintiffs that they would receive no further process, but the Court finds the Ninth 17 Circuit‟s decision in Hoesterey most on point. As described above, Hoesterey considered the 18 constructive termination of a city employee, who alleged that the City‟s failure to provide him 19 with a pretermination hearing violated both the United States and the California constitutions. 20 Hoesterey, 945 F.2d at 318. The issue before the Court of Appeals was whether the statute of 21 limitations of his due process claim ran from the date he received notice of the decision to 22 terminate his employment or from his last date of his employment. Id. at 317-18. 23 The court held that “to trigger the statute of limitations, [the plaintiff] needed to have 24 received notice, not only of the termination decision, but also that the decision was final and that it 25 would be followed by no further process.” Id. at 320. Critical to the determination of that case, 26 the court noted that “[n]othing in the complaint suggests that [the plaintiff] was informed or 27 28 Certified Mail Receipt does not indicate that it was ever received as it is not signed, by Plaintiffs or otherwise. See id. 16 1 should otherwise have known that he would receive neither such notification nor a pretermination 2 hearing” prior to his actual termination. Id. Although the plaintiff had arguably received notice of 3 the decision to terminate before his last day of work, the court held that “[t]o alert [the plaintiff] to 4 the accrual of his claims, this notice would need to be unequivocal, and communicated in a 5 manner such that no reasonable person could think there might be a retreat or change in position 6 prior to the termination of the employment decision.” Id. “In the absence of such unequivocal 7 notice, it would only be on the last day of employment that [the plaintiff] could become aware that 8 the decision was final and that no further process could be forthcoming prior to termination.” Id. 9 In other words, it was “[o]nly when [the plaintiff]‟s employment was actually terminated, on his last day of work, . . . that he [knew he] would receive no written notice or pretermination hearing.” 11 United States District Court Northern District of California 10 Id. Given that lack of notice, the court held that it would only be on the employee‟s final date of 12 work that the statute of limitations period would begin to run. Id. 13 This case is similar to Hoesterey as “[n]othing in the complaint suggests that [Leroy] was 14 informed or should otherwise have known” that the towing and abatement of his vehicle would be 15 “accompanied by no further process.” Id. Accepting the factual allegations in Plaintiffs‟ proposed 16 TAC as true, Plaintiffs‟ never received the abatement letter and thus had no notice that no further 17 process was available after the vehicle was towed. Cf. RK Ventures, 307 F.3d at 1058 18 (“Appellants knew of the abatement action when they received notice of it”). The towing itself 19 could be taken as a form of “notice,” but Hoesterey requires more—“[t]o alert [the plaintiff] to the 20 accrual of his claims, this notice would need to be unequivocal, and communicated in a manner 21 such that no reasonable person could think there might be a retreat or change in position prior to 22 the termination of the employment decision.” Hoesterey, 945 F.2d at 320. Plaintiffs‟ prior 23 complaints and proposed TAC demonstrate that Leroy believed that there might be change in 24 position about the seizure of his vehicle, as he alleges that he went to the Police Station to attempt 25 to pay a fee so he could re-take possession of the vehicle. SAC ¶ 25; TAC ¶ 27. As in Hoesterey, 26 Leroy alleges that he was unaware at this time that there would be no further process related to the 27 towing of his vehicle. Similarly, nothing in the proposed TAC establishes that the conversation 28 with Sergeant Leong gave Leroy “unequivocal notice” that there would be no retreat or change in 17 1 2 position on the seizure of the Mazda. Generally, defendants bear the burden of proving an affirmative statute of limitations 3 defense, see Kingman Reef Atoll Investments, L.L.C. v. United States, 541 F.3d 1189, 1197 (9th 4 Cir. 2008), but the City Defendants have not done so in opposing this Motion. Given Plaintiffs‟ 5 allegations and the absence of contrary evidence, the Court cannot find that Plaintiffs had 6 unequivocal notice that there would be no further process prior to the vehicle‟s final sale on 7 December 15, 2011. Thus, Plaintiffs‟ procedural due process claim accrued on that date. 8 9 b. Relation Back Taking their allegations as true, the Court finds that Plaintiffs‟ procedural due process claim falls within the two year period prior to filing their initial Complaint. However, the City 11 United States District Court Northern District of California 10 Defendants have also challenged whether Plaintiffs can relate back this claim. In determining 12 whether a claim relates back to the filing of a prior complaint, the Court “consider[s] both federal 13 and state law and employ whichever affords the „more permissive‟ relation back standard.” 14 Butler, 766 F.3d at 1201. California Code of Civil Procedure section 473(a)(1) governs 15 amendment of pleadings, but does not expressly allow relation back amendments. California 16 courts have held that section 473(a)(1) “does not authorize the addition of a party for the first time 17 whom the plaintiff failed to name in the first instance.” KerrMcGee Chem. Corp. v. Superior Ct., 18 160 Cal. App. 3d 594, 598-99 (1984). However, “where an amendment does not add a „new‟ 19 defendant, but simply corrects a misnomer by which an „old‟ defendant was sued, case law 20 recognizes an exception to the general rule of no relation back.” Hawkins v. Pac. Coast Bldg. 21 Prods., Inc., 124 Cal. App. 4th 1497, 1503 (2004) (citations omitted). “Thus, section 474 of the 22 California Code of Civil Procedure allows plaintiffs to substitute a fictional „Doe‟ defendant in a 23 lawsuit with a named defendant, so long as the plaintiff was unaware of the defendant‟s true 24 identity at the time the prior complaint was filed.” Felarca v. Birgeneau, 2014 WL 7140262, at *3 25 (N.D. Cal. Dec. 12, 2014). For section 474 to apply, however, “the plaintiff must be „genuinely 26 ignorant‟ of the defendant‟s identity at the time the original complaint is filed.” Butler, 766 F.3d 27 at 1202 (quoting Woo v. Superior Court, 75 Cal. App. 4th 169, 177 (1999)). Section 474‟s 28 relation-back doctrine applies even if the plaintiff‟s ignorance is the result of his or her own 18 1 2 negligence. Woo, 75 Cal. App. 4th at 177. Under California law, Plaintiffs‟ amendment as to Sergeant Leong may be related back to the filing of the original complaint. Plaintiffs have consistently alleged that they did not know 4 Sergeant Leong‟s true identity, indicating that they believed his name to be “Lt. Leone.” See 5 Initial Compl. ¶ 21. They also alleged that they searched the public records in the Pleasanton 6 Police Department and could not find this person. Id. This suggests that Plaintiffs were 7 “genuinely ignorant” of Sergeant Leong‟s identity when they filed the original complaint. 8 Furthermore, Plaintiffs have maintained their ignorance of Sergeant Leong‟s identity throughout 9 the various iterations of their Complaint. See FAC ¶ 24; SAC ¶ 26. Plaintiffs‟ allegations that 10 they were ignorant of Sergeant Leong‟s identity are plausible, and as such, section 474 applies, 11 United States District Court Northern District of California 3 permitting Plaintiffs to name Sergeant Leong. Plaintiffs‟ claims are thus timely and properly 12 related back. 13 c. Merits of the Claim: Integral Participation 14 The City Defendants also contend that Plaintiffs‟ procedural due process claim fails on its 15 merits for lack of integral participation by Sergeant Leong. City‟s Opp‟n at 7-9. They argue that 16 “[b]ecause Sergeant Leong did not seize the vehicle, he is not liable for whether or not related 17 procedures and/or due process were followed.” City‟s Opp‟n at 9. Defendants provide no case 18 law or other authority for this theory. As in their earlier Motion to Dismiss, they cite generally to 19 Blankenhorn v. City of Orange for the broad proposition that “[a]n officer‟s liability under section 20 1983 is predicated on his integral participation in the alleged violation.” 485 F.3d 463, 481 n.12 21 (9th Cir. 2007) (citing Chuman v. Wright, 76 F.3d 292, 294-95 (9th Cir. 1996)). But Blankenhorn 22 does not limit liability to the officer that actually seizes the vehicle; rather, it provides that 23 “„integral participation . . . require[s] some fundamental involvement in the conduct that allegedly 24 caused the violation.‟” Id. (quoting Boyd v. Benton Cnty., 374 F.3d 773, 780 (9th Cir. 2004)). 25 Plaintiffs‟ TAC suggests that Sergeant Leong was integrally involved with denial of procedural 26 protections following the Mazda‟s abatement as Leroy was told he would have to speak with 27 Sergeant Leong to inquire about his towed vehicle, he was unable to meet with Sergeant Leong on 28 multiple occasions, and Sergeant Leong told Leroy that he would not release the Mazda. TAC ¶¶ 19 1 28-29. Taking these facts as true, it is possible that Sergeant Leong could be liable if his acts 2 contributed to a violation of Leroy‟s procedural due process rights. See Order re: Mot. to Dismiss, 3 Dkt. No. 26 at 8-9. 4 5 d. Undue Delay Finally, the City Defendants assert that Plaintiffs delayed in amending their Complaint 6 because they discovered Sergeant Leong‟s name by at least December 2014, when discovery was 7 exchanged, but they did not seek leave to file their TAC until February 2015. In support, 8 Defendants cite Barrows v. American Motors Corp., 144 Cal. App. 3d 1, 8 (1983) for the 9 proposition that “substantial authority supports [the] argument that unreasonable delay in filing an amendment after actually acquiring such knowledge can bar a plaintiff‟s resort to the fictitious 11 United States District Court Northern District of California 10 name procedure.” City‟s Opp‟n at 7. Barrows, however, ultimately found that the defendants in 12 that case “did not show that plaintiffs should be barred from amending on grounds of unreasonable 13 delay in filing the amendment” even where a year had passed from the time they acquired the 14 knowledge of the missing defendant‟s identity. Barrows, 144 Cal. App. 3d at 9. Rather, the 15 Barrows court found that “[i[n order to prevail on the kind of motion involved here, however, a 16 defendant must show specific prejudice” and “cannot rely simply on the general policy of the 17 applicable statute of limitations.” Id. The Barrows court found no specific prejudice to the 18 defendants as a result of the delay and also noted that there was no evidence that Plaintiffs had 19 actual knowledge of the identity of the missing defendant. Id. The Court of Appeal held that 20 under California law “[i]n determining the propriety of a plaintiff‟s Doe allegations in the original 21 complaint, the courts look only to the plaintiff‟s actual knowledge at that time. The plaintiff is not 22 charged with knowledge of the defendant‟s true identity which could have been acquired by 23 reasonable diligence.” Id. at 10 n.4 (citations omitted). 24 As in Barrows, there is no indication that Plaintiffs had actual knowledge of Sergeant 25 Leong‟s identity at the time of filing their initial Complaint, nor have Defendants made any 26 showing of prejudice other than the general statute of limitations. Cf. Jackson, 902 F.2d at 1387- 27 89 (holding that prejudice and undue delay are sufficient to deny leave to amend). Thus, the Court 28 finds no grounds for finding Plaintiffs‟ proposed amended complaint futile or for finding that 20 1 Defendants would be prejudiced by permitted claims against Sergeant Leong. Even though 2 Plaintiffs may have delayed somewhat between their discovery of Sergeant Leong‟s identity and 3 the filing of the instant Motion, this delay is negligible where there is no showing of prejudice nor 4 any indication that Plaintiffs‟ delay was the result of bad faith. 5 In sum, the Court finds no cause to prohibit Plaintiffs from amending their Complaint to 6 name Sergeant Leong as to the procedural due process claim. Accordingly, Plaintiffs‟ Motion for 7 Leave to File their Third Amended Complaint to name Sergeant Leong is DENIED as to the 8 unlawful seizure claim and GRANTED as to the procedural due process claim. 9 10 3. Claims Against Officer Tujague The City Defendants also challenge Plaintiffs‟ attempt to name Officer Tujague, arguing United States District Court Northern District of California 11 that (1) claims against him are barred by the statute of limitations, (2) Plaintiffs unduly delayed in 12 seeking to amend their Complaint, and (3) that claims again him fail on their merits. 13 14 a. Undue Delay and Statute of Limitations The second and third arguments are related as the City Defendants assert that Plaintiffs 15 have known of Officer Tujague since they filed their initial Complaint. They argue that Plaintiffs 16 knew the name and role of Officer Tujague by September 17, 2012, because, in addition to being 17 their arresting officer, his name and I.D. number were on the warrant to their home. City‟s Opp‟n 18 at 3. But Plaintiffs have alleged that the warrant they received only said that Officer Tujague was 19 the affiant, but did not describe his role in the earlier events, and most importantly, did not attach 20 the declaration of probable cause. TAC ¶ 104; SAC ¶ 105. Nor is there any indication that 21 Plaintiffs learned Officer Tujague‟s name through his interaction with Plaintiffs during their arrest, 22 such as facts indicating that he had told Plaintiffs his name. Finally, Plaintiffs have pleaded that 23 24 25 26 Defendant City of Pleasanton‟s Police Department refused plaintiffs‟ repeated requests that they provide them a copy of their arrest reports. The number and identities of police officers and other persons who were involved in the unlawful seizure of Plaintiffs‟ persons, and the unlawful entry and search of their property are, therefore unknown. 27 SAC ¶¶ 14, 100. Accordingly, the Court finds that Plaintiffs have alleged plausible facts that they 28 did not know the identity of Officer Tujague on September 17, 2012. 21 1 Alternatively, Defendants assert that Plaintiffs knew of Officer Tujague by at least 2 November 2014, when the City Defendants mailed their Rule 26 initial disclosures to Plaintiffs 3 naming Officer Tujague. City‟s Opp‟n at 2 (citing Allen Decl., Ex. F, Dkt. No. 77-6). It is not 4 clear from the cited exhibit that Officer Tujague was named in these disclosures as the exhibit 5 attaches only a photocopy of a CD, rather than the internal document showing the disclosed name; 6 the City Defendants did not produce the actual CD. In any case, the City Defendants contend that 7 even if Plaintiffs did not know Officer Tujague‟s identity until December 2014 when the City 8 Defendants submitted their discovery responses, by waiting to file this motion for leave to amend 9 their complaint until February 2015, Plaintiffs unduly delayed. 10 As discussed above, the City Defendants have provided no indication that they were United States District Court Northern District of California 11 prejudiced by this delay in naming Officer Tujague, and thus this minor delay will not weigh 12 against Plaintiffs‟ Motion. Furthermore, as Plaintiffs have alleged facts indicating that they were 13 genuinely ignorant of Officer Tujague‟s identity at the time of filing their initial Complaint (as 14 well as their SAC, the operative Complaint), the Court finds that section 474 of the California 15 Code of Civil Procedure allows Plaintiffs to name “police officer Doe 5” as Officer Tujague. See 16 Cal. Civ. Proc. Code § 474; Butler, 766 F.3d at 1202. As such, claims against Officer Tujague are 17 not barred by the two year statute of limitations. 18 19 b. Merits of Claims Against Officer Tujague The City Defendants also contend that the two claims proposed against Officer Tujague 20 fail on their merits and are therefore futile. City‟s Opp‟n at 10. Plaintiffs seek to allege two 21 causes of action against Officer Tujague: one for Fourth Amendment unlawful seizure for their 22 arrest; another for Fourth Amendment warrantless entry and search of the home. TAC ¶¶ 108-11. 23 The City Defendants assert that the unlawful arrest claim “fails because probable cause existed to 24 believe Plaintiffs had violated Health & Safety Code § 11379.6” and the “warrantless entry claim 25 fails because Officer Tujague only entered the backyard attempting to find Leroy” and “[n]o 26 warrant is required under such circumstances.” City‟s Opp‟n at 10. Finally, they maintain that 27 “the warrantless search claim fails because police possessed a warrant to search.” Id. 28 As to Plaintiffs‟ unlawful arrest claim, “[t]he Fourth Amendment requires police officers to 22 1 have probable cause before making a warrantless arrest.” Ramirez v. City of Buena Park, 560 F.3d 2 1012, 1023 (9th Cir. 2009) (citations omitted). “Probable cause to arrest exists when officers have 3 knowledge or reasonably trustworthy information sufficient to lead a person of reasonable caution 4 to believe that an offense has been or is being committed by the person being arrested.” Id. 5 (citations omitted). “Mere suspicion, common rumor, or even strong reason to suspect are not 6 enough.” Id. (citations and internal marks omitted). 7 Plaintiffs have alleged that “[t]here was no probable cause for either the arrest or the 8 warrant because there were no chemicals and no manufacturing apparatus at the property for the 9 production of controlled substances, and no reasonable basis for believing there was.” TAC ¶ 105; SAC ¶ 106. They also allege that when Officer Tujague seized them they were “lawfully 11 United States District Court Northern District of California 10 removing household chemicals from their property that they had properly gathered together for 12 purposes of sorting and disposal.” TAC ¶ 99; see also SAC ¶ 99. The allege that “[t]he chemicals 13 had been a subject of the show cause hearing on Sept. 12, 2012” just days before the seizure, and 14 that “[t]he house and chemicals had previously been thoroughly inspected.” TAC ¶ 105. 15 Plaintiffs contend that after the inspection it was “generally known that no drug manufacturing 16 chemicals or drug lab [were] present on defendants‟ property.” Id. Plaintiffs‟ allegations that they 17 were disposing of household chemicals from the home, and those chemicals had been inspected 18 only days before, support their claim that probable cause did not exist. 19 The City Defendants, however, provided Officer Tujague‟s affidavit of probable cause, 20 seemingly to show that Plaintiffs‟ allegations are futile. In determining whether a proposed 21 amendment is futile the Court applies the same standards as that on a motion to dismiss for failure 22 to state a claim under Rule 12(b)(6). Miller, 845 F.2d at 214 (citations omitted). “When ruling on 23 a Rule 12(b)(6) motion to dismiss, if a district court considers evidence outside the pleadings, it 24 must normally convert the 12(b)(6) motion into a Rule 56 motion for summary judgment, and it 25 must give the nonmoving party an opportunity to respond.” United States v. Ritchie, 342 F.3d 26 903, 907 (9th Cir. 2003) (citing Fed. R. Civ. P. 12(b); Parrino v. FHP, Inc., 146 F.3d 699, 706 n.4 27 (9th Cir. 1998)). Plaintiffs did not specifically object to this evidence, nor did they include any 28 evidence controverting the City Defendants‟ affidavit. 23 1 Nonetheless, the Court finds that such evidence is inappropriate for consideration at this 2 time. The Court will not convert Plaintiffs‟ Motion for Leave to Amend into a summary judgment 3 motion where the claims against Officer Tujague are not yet properly before the Court. While “[a] 4 court may . . . consider certain materials—documents attached to the complaint, documents 5 incorporated by reference in the complaint, or matters of judicial notice—without converting the 6 motion to dismiss into a motion for summary judgment[,]” Ritchie, 343 F.3d at 908 (citations 7 omitted), the City Defendants did not request that the Court take judicial notice of this document, 8 nor have they shown that the document is incorporated by reference into the complaint. Cf. 9 Knievel v. ESPN, 393 F.3d 1068, 1076 (9th Cir. 2005) (the court may consider documents “whose contents are alleged in a complaint and whose authenticity no party questions, but which are not 11 United States District Court Northern District of California 10 physically attached to the [plaintiff‟s] pleading.”). Given the procedural posture of this case, the 12 Court will not consider the contents of this document in ruling on Plaintiffs‟ Motion for Leave to 13 Amend. Accordingly, at this time, Plaintiffs may assert a claim against Officer Tujague as they 14 have alleged plausible facts that he did not have probable cause to arrest them. 15 Plaintiffs‟ second proposed claim against Officer Tujague for unlawful entry and search of 16 their home is similarly viable. While the City Defendants assert that they had a warrant to enter 17 and search the home, Plaintiffs have alleged that they were never shown a warrant before the 18 Police began their search, and furthermore that the time-stamp on the warrant they later found 19 posted to their home was for hours after the search took place. TAC ¶¶ 102-04. The City 20 Defendants also argue that the unlawful search and entry claim is futile because a back yard is a 21 public place and as such, Officer Tujague was permitted to be on Plaintiffs‟ yard without a 22 warrant. City‟s Opp‟n at 10. Even assuming, without deciding, that Officer Tujague was 23 permitted to be on Plaintiffs‟ yard without a warrant, that does not make the claim against him 24 futile, as Plaintiffs have also alleged that Officer Tujague entered and searched Plaintiffs‟ house 25 without a warrant. TAC ¶¶ 110-11. “[S]earches and seizures inside a home without a warrant are 26 presumptively unreasonable.” United States v. Perea-Rey, 680 F.3d 1179, 1184 (9th Cir. 2012) 27 (quoting Payton v. New York, 445 U.S. 573, 586 (1980)). Given Plaintiffs‟ allegations, the City 28 Defendants have not shown that Plaintiffs‟ claim is necessarily futile. 24 1 In view of the above, the City Defendants have not shown that Plaintiffs‟ claims against 2 Officer Tujague are futile. Nor have they established that they would suffer any prejudice if 3 Plaintiffs amended their Complaint at this time. While they contend that Plaintiffs acted in bad 4 faith in not naming Officer Tujague until now, as discussed above, the Court finds these delay 5 negligible and there is no evidence suggesting that Plaintiffs‟ purposefully delayed or acted in bad 6 faith by amending their Complaint to name Officer Tujague at this time. Accordingly, the Court 7 finds no cause for prohibiting Plaintiffs to amend at this time, and therefore GRANTS Plaintiffs‟ 8 Motion for Leave to Amend to add claims against Officer Tujague for violation of their Fourth 9 Amendment rights. 4. 11 United States District Court Northern District of California 10 Delayed Service Under Rule 4(m) Finally, the City Defendants raise the issue of service under Federal Rule of Civil 12 Procedure 4(m). Service must be made upon defendant within 120 days of filing of the complaint, 13 otherwise the court has authority to dismiss the action as to that defendant. Fed. R. Civ. P. 4(m). 14 “The Court may dismiss „Doe‟ defendants who are not identified and served within 120 days after 15 the case is filed pursuant to FRCP 4(m).” Sedaghatpour v. California, 2007 WL 2947422, at *2 16 (N.D. Cal. Oct. 9, 2007). The Ninth Circuit has held that the time to serve defendants runs from 17 the filing of the new complaint. See McGuckin v. United States, 918 F.2d 811, 812-13 (9th Cir. 18 1990). This approach comports with the policies underlying the rule. See Fimbres v. United 19 States, 833 F.2d 138, 139 (9th Cir. 1987) (“Rule 4(j) [Rule 4(m)‟s predecessor] is intended to 20 force parties and their attorneys to be diligent in prosecuting their cause of action.”) (citing Wei v. 21 State of Hawaii, 763 F.2d 370, 372 (9th Cir. 1985)). 22 Nonetheless, “if the plaintiff shows good cause for the failure, the court must extend the 23 time for service for an appropriate period.” Fed. R. Civ. P. 4(m). In the Ninth Circuit, “[a]t a 24 minimum, „good cause‟ means excusable neglect.” In re Sheehan, 253 F.3d 507, 512 (9th Cir. 25 2001). “[G]ood cause generally means „that service has been attempted but not completed, that 26 plaintiff was confused about the requirements of service, or that plaintiff was prevented from 27 serving defendants by factors beyond his control.” Chemehuevi Indian Tribe v. Wilson, 181 28 F.R.D. 438, 440 (N.D. Cal. 1998). Evasion of service can also constitute good cause. Wei, 763 25 1 F.2d at 371. Mere attorney inadvertence, however, does not qualify as good cause. Id. at 372. The City Defendants argue that Plaintiffs lack good cause because they failed to take 2 3 reasonable steps to identify the Doe Defendants within the 120-day period after filing their SAC. 4 City‟s Opp‟n at 7-8. The Court agrees. Nothing prevented Plaintiff from pursuing the Rule 26(f) 5 conference earlier in order to speed discovery, seeking the Court‟s permission to serve discovery 6 before the Rule 26(f) conference, filing a motion to extend the 120-day service deadline, or 7 serving these Defendants immediately after discovering their names. Plaintiffs‟ Reply did not 8 address Rule 4(m), nor did they provide any support to show good cause for their delay. Nonetheless, the Ninth Circuit has held that district courts have broad discretion under 9 Rule 4(m) to extend time for service even without a showing of good cause. See United States v. 11 United States District Court Northern District of California 10 2,164 Watches, 366 F.3d 767, 772 (9th Cir. 2004) (citing In re Sheehan, 253 F.3d at 513). This 12 holding is also consistent with the Advisory Committee Notes to Rule 4(m), which state that the 13 rule “explicitly provides that the court shall allow additional time if there is good cause for the 14 plaintiff‟s failure to effect service in the prescribed 120 days, and authorizes the court to relieve a 15 plaintiff of the consequences of an application of [Rule 4(m)] even if there is no good cause 16 shown.” Fed. R. Civ. P. 4 advisory committee‟s note. 17 Although the Court finds a lack of good cause for Plaintiffs‟ failure to effect service within 18 120 days, the Court will exercise its discretion to extend the period for service. The Court chooses 19 to exercise its discretion here because the City Defendants are all represented by the same counsel 20 and they have known that Plaintiffs intended to sue a higher ranking member of the City of 21 Pleasanton Police force whose name resembled Leong in connection with the abatement of 22 Leroy‟s vehicle. Additionally, the City Defendants knew that Plaintiffs intended to sue the Officer 23 who arrested them and handcuffed them to the fence. The City Defendants assert no prejudice that 24 could befall them if Plaintiffs serve Sergeant Leong and Officer Tujague at this time. 25 As such, Plaintiffs‟ Motion for Leave to Amend their Complaint to name Officer Tujague, 26 as well as Sergeant Leong for the procedural due process claim, is GRANTED. All service must 27 be completed by April 27, 2015. 28 // 26 1 2 B. Claims Against McGrew McGrew opposes Plaintiffs‟ motion on the ground that Plaintiffs have failed to show that 3 their proposed amendment overcomes the basis for this Court‟s prior dismissal of Plaintiffs‟ 4 claims against McGrew and is therefore futile. The Court previously dismissed McGrew in June 5 2014 for lack of jurisdiction. Dkt. No. 44 (Order re: Mot. to Dismiss). Specifically, because the 6 Alameda County Superior Court appointed McGrew as the receiver for Plaintiffs‟ real and 7 personal property at issue in this case, the Court found that Plaintiffs failed to satisfy a necessary 8 precondition to the initiation of suit against McGrew; namely, the securing of permission to do so 9 from the Superior Court that appointed him. Id. at 6-7. Despite Plaintiffs‟ claims that they sought to bring claims against McGrew in his personal capacity, arguing that McGrew was not acting 11 United States District Court Northern District of California 10 within his statutory powers, the Court found otherwise, noting that “Plaintiffs‟ allegations fail to 12 establish that any of McGrew‟s alleged acts or omissions came outside the scope of his statutory 13 powers and the orders of the appointing court.” Id. at 7. 14 Now Plaintiffs seek to amend their Complaint to re-assert claims against McGrew, again 15 contending that his allegedly unlawful actions were outside the scope of his receivership powers 16 and duties. Plaintiffs reincorporated virtually all of the same facts and claims previously 17 dismissed by the Court. Compare SAC ¶¶ 113-130 and TAC ¶¶ 116-139. The new TAC ¶¶ 117- 18 24, 126-28 implicate this Court‟s earlier order finding that the Court lacks jurisdiction to hear 19 claims against McGrew that arise out of his duties as the court-appointed receiver where Plaintiffs 20 have not received leave to sue from the appointing court. See Med. Dev. Int’l v. Cal. Dep’t of 21 Corr. & Rehab., 585 F.3d 1211, 1216 (9th Cir. 2009) (“The rule was first announced 128 years 22 ago in Barton v. Barbour. The Supreme Court held that when a plaintiff sues a receiver outside of 23 and without the permission of the appointing court, the non-appointing court is without 24 jurisdiction to entertain the suit.” (citing Barton v. Barbour, 104 U.S. 126, 131 (1881)); see also 25 Curry v. Castillo (In re Castillo), 297 F.3d 940, 945 (9th Cir. 2002). 26 Plaintiffs attempt to evade this well-settled rule by stating in a conclusory fashion that 27 McGrew acted “outside the scope of his authority as a receiver.” FAC ¶¶ 129; 130-32; 134-37. 28 Bare assertions and conclusory allegations are insufficient to state a claim. See Ashcroft v. Iqbal, 27 1 556 U.S. 662, 681 (2009); see also Satterfield v. Malloy, 700 F.3d 1231, 1236 (10th Cir. 2012) 2 (“Regardless of the manner in which a plaintiff denominates his claim, courts applying the Barton 3 doctrine must look to the substantive allegation to determine whether a claim is related to the 4 [receiver‟s] duties.”). The Court has already found that the allegations asserted in the SAC fail to 5 establish that McGrew‟s alleged acts or omissions came outside the scope of his statutory powers 6 and the orders of the appointing court. Order at 7. The question then, is whether anything in the 7 TAC demonstrates that McGrew‟s acts were taken outside of his statutory authority. 8 9 A suit does not require leave of the court when the trustee acts in excess of his authority or in an unofficial capacity. Leonard v. Vrooman, 383 F.2d 556, 560 (9th Cir. 1967), cert. denied, 390 U.S. 925 (1968). In Vrooman, the Ninth Circuit permitted a third party to sue a receiver 11 United States District Court Northern District of California 10 without leave of his appointing court for “wrongfully possessing property which [wa]s not an asset 12 of the estate.” Id. There, the trustee in bankruptcy, by “forcible entry” and without court order, 13 took possession of real property belonging to a third party. See id. at 560-61. The Court noted 14 that the Vrooman receiver made two mistakes: (1) breaking into and seizing possession of the real 15 property when the property was not listed as an asset of the bankrupt‟s estate; and (2) not 16 relinquishing possession of the real property when he discovered that title was claimed by and 17 recorded by a third party. Id. at 560. The court noted that the trustee could have and should have 18 obtained a turnover order directing delivery to the trustee of the property that was an asset of the 19 bankrupt estate. Id. at 560-61. But “[i]n neither case would it have been necessary for the 20 receiver-trustee to have taken possession of the real property here involved without first having 21 obtained an order of the Court specifically directing him to do so.” Id. at 561. Under those 22 circumstances, the Ninth Circuit permitted the third party to pursue his action in state court against 23 the trustee without obtaining prior approval of the bankruptcy court. Id. 24 The Vrooman Court found that the receiver had no authority to act as he did. This case is 25 different. While McGrew‟s activities may not have been authorized by the appointing court, 26 taking the facts in the proposed TAC as true, his actions were taken pursuant to his receivership 27 duties. Courts have been reluctant to find that court-appointed receivers are acting outside the 28 scope of their duties merely because they performed those duties inadequately. See In re Bay Area 28 Material Handling, Inc., 1995 WL 747954, at *4 (N.D. Cal. Dec. 6, 1995) (plaintiffs‟ “claims 2 were not authorized by leave of the bankruptcy court, yet were based on activities by [receiver 3 defendants] that were within their official capacities”), aff’d , 111 F.3d 137 (9th Cir. 1997); 4 Satterfield, 700 F.3d at 1236 (refusing to recognize a generalized tort exception for the Barton 5 doctrine for claims asserted against the receiver in his individual capacity even if receiver took 6 acts with improper motives); In re Davis, 312 B.R. 681, 687 (Bankr. D. Nev. 2004) (“[A]ll of the 7 conduct about which the Debtors complain was within the scope of the Counterdefendants‟ duties. 8 The Debtors simply contend that Counterdefendants performed those duties (or failed to perform 9 them) negligently or based on an improper bias against them.”). As the Davis court explained: “A 10 trustee‟s immunity from suit without leave of the appointing court would serve no purpose if suit 11 United States District Court Northern District of California 1 could be brought without leave of court simply by alleging that the trustee had performed his or 12 her duties negligently.” 312 B.R. at 687. 13 Plaintiffs assert that McGrew acted outside the scope of his authority on numerous 14 occasions—some occasions, though, are simply allegations that McGrew performed his duties 15 negligently. For instance, Plaintiffs‟ claims that McGrew failed to file required monthly reports, 16 failed to appear at hearings, failed to be neutral, failed to seek advice from the court when needed, 17 failed to obtain and file the receiver‟s bond, failed to file the required inventory, and failed to 18 conform to the requirement to pay property taxes. TAC ¶ 129(a). These are all allegations about 19 performing or failing to perform duties that were within the scope of McGrew‟s official authority. 20 Unlike Vrooman, these claims are related to how McGrew performed the duties assigned to him, 21 rather than whether he took ultra vires actions in excess of his authority. See, e.g., Satterfield, 700 22 F.3d at 1236. The Decon contract is one such example. While McGrew may have acted before 23 seeking prior approval from the appointing court, he nonetheless sought and received approval 24 from the court for retaining Decon. See discussion in Order at 6-7 (taking Judicial Notice of the 25 appointing court‟s order approving the Decon contract). The appointing court‟s order states that it 26 approved the retention of Decon to “abate conditions” at Plaintiffs‟ property. Id. McGrew 27 retained Decon and sought approval from the appointing court all within his receivership duties to 28 “undertake responsibility for [the property‟s] rehabilitation.” See Order after Hearing Confirming 29 1 Appointing of Receiver, Dkt. No. 43-2.4 As this Court previously found, Plaintiffs have not 2 alleged any facts making it plausible that McGrew‟s actions or omissions noted above were 3 outside the scope of his receivership. This is not the end of the inquiry, however, as Plaintiffs have alleged additional facts in 4 5 their TAC. Specifically, for the first time Plaintiffs allege that McGrew acted outside the scope of 6 his authority by seizing and finally depriving Leroy of his personal property. TAC ¶ 129(b). 7 Plaintiffs allege that neither McGrew nor the supervising court had jurisdiction over Leroy‟s 8 personal property, and in any case, McGrew did not seek advice or approval from the court 9 regarding the personal property‟s disposition and seizure. Id. Plaintiffs allege that Leroy lost valuable personal property in his garage, as well as the furniture and personal items stored in the 11 United States District Court Northern District of California 10 spare bedroom, which was given to charities, recycled for over $5,000, and converted by Decon 12 personnel without credit to the estate. Id. ¶ 124. According to the TAC, McGrew knew that 13 Leroy‟s most valuable personal property was being converted by the Decon contractor. Id. Plaintiffs‟ allegations again do not show that McGrew‟s actions were in excess of his court 14 15 appointed duties. The order appointing McGrew as receiver authorizes and orders him to remove 16 “interior debris, trash, rubbish, and other materials currently blocking inspections” and to 17 otherwise abate the conditions giving rise to the notice and order against Plaintiffs‟ property. See 18 Order Appointing Receiver at 3. Plaintiffs‟ allegations do not show how McGrew‟s actions went 19 outside of that Order by, for instance, plausibly alleging that the personal property was valuable. 20 Plaintiffs do not describe in any degree of specificity the personal property that was lost, and even 21 when they assert that it was recycled for $5,000, this does not show that the property had value 22 other than as recycled material; in other words, they do not show that McGrew was acting outside 23 of his receivership duties by allowing this property to be removed. Plaintiffs also mention that 24 there was furniture, which could have some independent value, but not necessarily. Plaintiffs‟ 25 allegations about the property are based on conclusory statements that the property was “valuable” 26 without facts establishing that to be true. And Plaintiffs‟ contention that McGrew had no authority 27 28 4 The Court also previously took judicial notice of this document. See Dkt. No. 44 at 2 n.1. 30 1 over this property is belied by the order appointing him. While Plaintiffs may believe that 2 McGrew improperly executed his receivership duties, as written, Plaintiffs‟ TAC does not assert 3 plausible facts showing that McGrew acted outside of the scope of his duties as receiver. 4 Finally, Plaintiffs allege that McGrew acted outside the scope of his authority by recording 5 a Deed of Trust on May 28, 2014, as grantor of title to lendors. TAC ¶ 129(d). Plaintiffs contend 6 that McGrew granted title and recorded the deed without statutory authority, without prior 7 approval of the appointing court, and without authority under the order appointing him. Id. 8 9 “California jurisprudence has long recognized that property subject to a court-appointed receivership is in custodia legis, that is, it is in the custody of the court itself.” In re Domum Locis LLC, 521 B.R. 661, 667 (Bankr. C.D. Cal. 2014), as amended (Dec. 5, 2014) (citing Pacific 11 United States District Court Northern District of California 10 Railway Co. v. Wade, 91 Cal. 449, 455 (1891); Tapscott v. Lyon, 103 Cal. 297, 305-06 (1894); 1 12 Ahart, Cal. Practice Guide: Enforcing Judgments and Debts, ¶ 4:937 at 4-170.11 (2014)). 13 Property under the control and supervision of the receivership court under the doctrine of in 14 custodia legis cannot be transferred without the permission of the receivership court. In re 15 Domum Locis, 521 B.R. at 677. California Code of Civil Procedure § 568.5 provides: “A receiver 16 may, pursuant to an order of the court, sell real or personal property in the receiver‟s possession . . 17 . The sale is not final until confirmed by the court.” Thus “California law vests the power to 18 dispose of property subject to a receivership in the receiver alone, and that power is subject to 19 prior authorization from the appointing court.” In re Domum Locis, 521 B.R. at 671. 20 Here, Plaintiffs allege that McGrew sold the Property without the appointing court‟s 21 approval, which they assert means he acted outside the scope of his authority. TAC ¶ 129(d). 22 Plaintiffs‟ allegations concerning the sale of the Property are sparse. It is not clear how or in what 23 context McGrew allegedly executed the Deed of Trust. While the Court must take all plausible 24 facts in the Complaint as true, here Plaintiffs assert that McGrew granted the title without Court 25 approval but they do not say how they know this to be the case. The Order appointing McGrew 26 permits the sale of the Property in certain events, but the Complaint does not make evident 27 whether such events occurred. The Court is thus faced with two options: (1) permit Plaintiffs to 28 proceed on allegations that barely establish that McGrew acted outside of the scope of his 31 1 receivership duties; or (2) dismiss under the Barton rule and require Plaintiffs to seek leave of the 2 appointing court before proceeding on the claims against McGrew. 3 The Court finds that the latter option is more appropriate here. First, in their eagerness to 4 hold McGrew accountable for his alleged wrongs, Plaintiffs have consistently confused McGrew‟s 5 actions or inactions under his receivership duties to be outside of the scope of those duties because 6 those actions were not taken to Plaintiffs‟ liking. While these actions may be unlawful, Plaintiffs 7 have not alleged facts making it plausible that McGrew in fact acted outside of his receivership 8 duties. Cf. Vrooman, 383 F.2d at 560 (trustee possessed property that was not an asset of the 9 estate but rather belonged to a third party, and as such, the trustee‟s action was outside of his receivership duties). Given the sparseness of the facts alleged surrounding the sale of the 11 United States District Court Northern District of California 10 property, the Court cannot find that McGrew‟s actions were outside of his authorized duties. 12 Second, the cases Plaintiffs cite show a propensity to conflate the Barton rule with a more 13 generalized immunity. In yet another attempt to evade the Court‟s initial order dismissing 14 McGrew, Plaintiffs cite Phelan v. Middle States Oil Corp., 154 F.2d 978, 991 (2d Cir. 1946) for 15 the proposition that “a decree confirming [such] a sale does not exculpate the receiver.” Reply at 16 3. Phelan, although over half a century old and arising in another circuit, may well be good law, 17 but it does not address the Court‟s concern or McGrew‟s challenge that, under the Barton rule, the 18 Plaintiffs‟ must have leave of the appointing court before proceeding in claims against McGrew on 19 the allegations Plaintiffs‟ assert in their Complaint and proposed TAC. This is not to say, 20 however, that McGrew will be necessarily exculpated for his allegedly unlawful conduct. 21 Plaintiffs contend that the Court “should not allow official misconduct to escape 22 meaningful review” but that is not the case here. Rather, the Barton rule requires, as a prerequisite 23 to this Court‟s jurisdiction, that the Plaintiffs receive leave of the appointing court before bringing 24 claims against McGrew in his personal capacity. Plaintiffs are not remediless—they may seek 25 leave from the appointing court to bring claims against McGrew or file those claims with the 26 appointing court. See Bennett v. Williams, 892 F.2d 822, 825 (9th Cir. 1989) (“[Plaintiff] is not 27 remediless, for he retains his action against [the receiver] in state court.”). Plaintiffs‟ repeated 28 attempts to assert claims against McGrew related to the performance of his duties as a receiver are 32 1 futile until Plaintiffs have leave of the appointing court. The Court is without jurisdiction to hear 2 these claims unless Plaintiffs satisfy this prerequisite. Plaintiffs‟ efforts would be better spent 3 seeking leave from the appointing court, or a remedy with that court, rather than their repeated 4 efforts to evade the Barton rule here. As the Court would be without jurisdiction to hear Plaintiffs‟ claims against McGrew, they 5 6 are futile, and Plaintiffs‟ motion for leave to amend is DENIED. CONCLUSION 7 In light of the foregoing, the Court hereby GRANTS IN PART and DENIES IN PART 8 9 Plaintiffs‟ Motion for Leave to Amend. Plaintiffs may amend their complaint to assert claims against Officer Tujague, as well as Sergeant Leong for the procedural due process claim. 11 United States District Court Northern District of California 10 However, Plaintiffs may not assert the unlawful seizure claim against Officer Martinez or Sergeant 12 Leong, nor may they assert their proposed claims against McGrew. Plaintiffs must file their 13 amended complaint within seven days of this order and serve all new defendants by April 27, 14 2015. 15 IT IS SO ORDERED. 16 17 18 19 Dated: April 6, 2015 ______________________________________ MARIA-ELENA JAMES United States Magistrate Judge 20 21 22 23 24 25 26 27 28 33

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