Quality Towing, Inc. et al v. California Highway Patrol et al
Filing
64
ORDER GRANTING MOTION TO DISMISS THIRD AMENDED COMPLAINT by Magistrate Judge Paul Singh Grewal granting 58 Motion to Dismiss (psglc2, COURT STAFF) (Filed on 5/26/2016)
1
2
3
4
UNITED STATES DISTRICT COURT
5
NORTHERN DISTRICT OF CALIFORNIA
6
7
QUALITY TOWING, INC., et al.,
Plaintiffs,
8
v.
9
10
VALESKA N. JACKSON, et al.,
United States District Court
Northern District of California
12
14
15
16
17
18
19
ORDER GRANTING MOTION TO
DISMISS THIRD AMENDED
COMPLAINT
(Re: Docket No. 58)
Defendants.
11
13
Case No. 15-cv-01756-PSG
Each year starting in 2012, Plaintiff Victor Vargas, on behalf of his towing company,
Plaintiff Quality Towing, Inc., applied for a towing services agreement with the California
Highway Patrol in Monterey County.1 And each year, Defendant William Perlstein, a CHP
captain in Monterey, rejected Vargas’ applications, held hearings on his initial appeals and denied
those as well.2 The first two denials, in 2012 and 2013, cited Vargas’ already-dismissed felony
convictions.3 In 2014, Vargas successfully petitioned to amend the Highway Patrol Manual to
remove a clause requiring CHP officers to consider such dismissed convictions when deciding on
a TSA application.4 But even after that clause had been removed, Perlstein denied Plaintiffs’
20
21
1
22
2
23
24
25
See Docket No. 55 at ¶¶ 29, 62, 89, 114.
See id. at ¶¶ 43, 48-50, 63, 69, 71-72, 90, 92-94, 114, 116-118. Technically, in 2013, Vargas
applied under the name “Victor Vargas d/b/a Central Coast Towing & Transport,” and Quality
Towing applied separately. Id. at ¶ 62. Perlstein denied Vargas’ application as Central Coast,
while the complaint does not allege what happened with Quality Towing’s application in
Monterey County. See id. at ¶¶ 63-64.
3
See id. at ¶¶ 44, 50, 63, 72.
4
See id. at ¶¶ 82-84.
26
27
28
1
Case No. 15-cv-01756-PSG
ORDER GRANTING MOTION TO DISMISS THIRD AMENDED COMPLAINT
1
applications in 2014 and 2015—now, Plaintiffs allege, in retaliation for Plaintiffs’ previous First
2
Amendment activity.5
Defendants Perlstein and Valeska Jackson, Perlstein’s fellow CHP officer, move to dismiss
3
4
on a number of grounds.6 The court need not reach beyond the first: Plaintiffs’ claims are barred
5
by issue preclusion. Specifically, the TSA application process satisfied the fairness test the
6
Supreme Court set out in United States v. Utah Construction & Mining Co.7 Therefore, under the
7
Ninth Circuit’s decision in Miller v. County of Santa Cruz, CHP’s findings have preclusive effect
8
on this court.8 By affirming Perlstein’s decisions to deny Plaintiffs’ applications, CHP implicitly
9
found that those decisions were justifiable. That, in turn, precludes Plaintiffs from claiming that
CHP would have accepted their applications but for Defendants’ alleged retaliation. The motion is
11
United States District Court
Northern District of California
10
GRANTED, but with leave to amend.
12
I.
13
This court has subject matter jurisdiction pursuant to 28 U.S.C. §§ 1343 and 1367. The
14
parties further consented to the jurisdiction of the undersigned magistrate judge under 28 U.S.C.
15
§ 636(c) and Fed. R. Civ. P. 72(a).9
16
II.
17
Federal courts must accord state court judgments the same preclusive effect that those
18
judgments would have in state court.10 In California, the Ninth Circuit has extended that principle
19
to “state administrative adjudications of legal as well as factual issues, even if unreviewed, so long
20
5
See id. at ¶¶ 125-139.
22
6
See Docket No. 58.
23
7
384 U.S. 394, 422 (1966).
24
8
39 F.3d 1030, 1032-33 (9th Cir. 1994).
25
9
See Docket Nos. 14, 16.
26
10
21
27
28
See 28 U.S.C. § 1738; Exxon Mobil Corp. v. Saudi Basic Indus. Corp., 544 U.S. 280, 293
(2005).
2
Case No. 15-cv-01756-PSG
ORDER GRANTING MOTION TO DISMISS THIRD AMENDED COMPLAINT
1
as the state proceeding satisfies the requirements of fairness outlined in [Utah Construction].”11
2
Those Utah Construction fairness requirements are the following: “(1) that the administrative
3
agency act in a judicial capacity, (2) that the agency resolve disputed issues of fact properly before
4
it, and (3) that the parties have an adequate opportunity to litigate.”12
Both sides focus on whether the CHP procedures satisfied the Utah Construction test. On
5
6
the first two prongs, Plaintiffs’ arguments are not persuasive. Whether the agency acts in a
7
judicial capacity depends on the character of the proceedings. “Indicia of proceedings undertaken
8
in a judicial capacity include a hearing before an impartial decision maker; testimony given under
9
oath or affirmation; a party’s ability to subpoena, call, examine, and cross-examine witnesses, to
introduce documentary evidence, and to make oral and written argument; the taking of a record of
11
United States District Court
Northern District of California
10
the proceeding; and a written statement of reasons for the decision.”13 Plaintiffs were afforded
12
hearings at which they presented evidence and testimony; afterwards, they received written
13
statements of the reasons for the decisions against them.14 In ruling on Plaintiffs’ applications and
14
hearing their appeals, CHP was acting in a judicial capacity. Furthermore, the issues that CHP
15
resolved were properly before it. As the Ninth Circuit has explained, “[a]n issue is properly before
16
an administrative tribunal if that body has jurisdiction to decide it” under state law.15 Plaintiffs do
17
not contest CHP’s jurisdiction under California law to rule on TSA applications.
18
11
19
20
21
Miller, 39 F.3d at 1032-33 (quoting Guild Wineries & Distilleries v. Whitehall Co., 853 F.2d
755, 758 (9th Cir. 1988)). The California Supreme Court has adopted the Utah Construction
factors in deciding whether to grant an administrative decision preclusive effect. See Murray v.
Alaska Airlines, Inc., 50 Cal. 4th 860, 869 (2010) (citing People v. Sims, 32 Cal. 3d 468, 479
(1982)).
22
12
23
13
24
Id. at 1033 (citing Utah Construction, 384 U.S. at 422).
Pac. Lumber Co. v. State Water Res. Control Bd., 37 Cal. 4th 921, 944 (2006) (citing Sims, 32
Cal. 3d at 480).
14
25
26
See Docket No. 55 at ¶¶ 92-95, 97-107, 119. The exception was their initial hearing before
Perlstein in 2015, where Plaintiffs allege that Perlstein refused to allow them to present certain
evidence or to provide them with a written decision. See id. at ¶ 117.
27
15
28
3
Case No. 15-cv-01756-PSG
ORDER GRANTING MOTION TO DISMISS THIRD AMENDED COMPLAINT
Misischia v. Pirie, 60 F.3d 626, 630 (9th Cir. 1995) (quoting Guild Wineries, 853 F.2d at 759).
The closest question, however, is whether Plaintiffs had an adequate opportunity to litigate.
1
2
For two reasons, Defendants have the better of the argument. First, the Ninth Circuit has said that
3
“the availability of judicial review is a crucial factor in determining preclusive effect.”16 Under
4
California law, a party aggrieved by an administrative decision may petition a state court for a writ
5
of mandate.17 The reviewing court can inquire as to whether the agency has exceeded its
6
jurisdiction, whether the petitioner had a fair trial, whether the agency’s decision is not supported
7
by its findings and whether the agency’s findings are not supported by the evidence before it.18
8
And although “[t]he general rule is that a hearing on a writ of administrative mandamus is
9
conducted solely on the record of the proceeding before the administrative agency,”19 the
reviewing court may admit evidence that the agency improperly excluded or that the petitioner did
11
United States District Court
Northern District of California
10
not have the opportunity to produce before the agency.20 This procedure “provide[s] an adequate
12
opportunity to challenge a procedurally flawed administrative hearing.”21 Plaintiffs here “had an
13
opportunity, which [they] chose not to take, for judicial review, and even for the presentation of
14
evidence in the reviewing court to demonstrate procedural irregularities by” CHP.22
In addition, and perhaps more importantly, Plaintiffs appealed Perlstein’s decisions in both
15
16
2014 and 2015 to a higher-ranking CHP officer. And although Plaintiffs believe these officers
17
were incorrect to affirm Perlstein’s denials, Plaintiffs do not allege any procedural irregularities in
18
19
16
Wehrli v. County of Orange, 175 F.3d 692, 694 (9th Cir. 1999).
17
See Cal. Civ. Proc. Code § 1094.5.
22
18
See id. § 1094.5(b).
23
19
20
21
24
Embury v. King, 191 F. Supp. 2d 1071, 1083 (N.D. Cal. 2001) (quoting Pomona Valley Hosp.
Med. Ctr. v. Superior Court, 55 Cal. App. 4th 93, 101 (1997)).
20
See Cal. Civ. Proc. Code § 1094.5(e).
21
Embury, 191 F. Supp. 2d at 1084.
22
Misischia, 60 F.3d at 630.
25
26
27
28
4
Case No. 15-cv-01756-PSG
ORDER GRANTING MOTION TO DISMISS THIRD AMENDED COMPLAINT
1
these appeal hearings.23 Nor do they allege that these hearing officers violated Plaintiffs’
2
constitutional rights.24 As the written denials of these second-level appeals show,25 Vargas and his
3
wife appeared at appeal hearings and argued their case at length.26 Afterwards, the hearing
4
officers—Assistant Chief R.S. McRae in 2014, and Assistant Chief T.S. Sturges in 2015—upheld
5
Perlstein’s denials and explained their reasoning in detail.27 The appeal hearings and the mandate
6
procedure, individually and especially in combination, afforded Plaintiffs an adequate opportunity
7
to litigate the denials of their TSA applications. Those decisions therefore have preclusive effect
8
in this litigation.
The only remaining issue is exactly how issue preclusion affects Plaintiffs’ cause of action.
9
To state a claim for retaliation for First Amendment activity, Plaintiffs are required to show “a
11
United States District Court
Northern District of California
10
substantial causal relationship between the constitutionally protected activity and the adverse
12
action.”28 They must “allege facts ultimately enabling [them] to ‘prove the elements of retaliatory
13
animus as the cause of injury,’ with causation being ‘understood to be but-for causation.’”29
14
15
23
16
24
17
18
See Docket No. 55 at ¶¶ 98-106, 119.
The only exception is a single conclusory allegation that the 2014 decision’s “grounds for denial
were a mere pretext to mask Defendants’ targeted campaign of discrimination and retaliation
against QT, Vargas, and his family.” Id. at ¶ 107. But Plaintiffs do not include any factual
allegations to substantiate this assertion, and they have not named the officer who made that
decision, Assistant Chief R.S. McRae, as a defendant.
19
25
23
Plaintiffs did not include these written denials with their complaint, but Defendants have
submitted them for judicial notice. See Docket No. 62-1. In ruling on a motion to dismiss, the
court may consider documents “whose contents are alleged in a complaint and whose authenticity
no party questions, but which are not physically attached to the [plaintiff’s] pleading.” Parrino v.
FHP, Inc., 146 F.3d 699, 705-06 (9th Cir. 1998) (quoting Branch v. Tunnell, 14 F.3d 449, 454 (9th
Cir. 1994)). Because Plaintiffs’ complaint refers to these letters and includes allegations of their
contents, see Docket No. 55 at ¶¶ 104-107, 119, the court will consider them here.
24
26
See Docket No. 62-1, Exs. D, E.
25
27
See id.
26
28
Blair v. Bethel Sch. Dist., 608 F.3d 540, 543 (9th Cir. 2010).
27
29
20
21
22
28
Lacey v. Maricopa County, 693 F.3d 896, 917 (9th Cir. 2012) (quoting Hartman v. Moore, 547
5
Case No. 15-cv-01756-PSG
ORDER GRANTING MOTION TO DISMISS THIRD AMENDED COMPLAINT
1
“[A]ction colored by some degree of bad motive does not amount to a constitutional tort if that
2
action would have been taken anyway.”30
Plaintiffs argue that they do not seek review of CHP’s decisions denying their applications
3
4
for the TSA in 2014/15 and 2015/16. But, as above, an element of Plaintiffs’ retaliation claim is
5
that CHP would not have taken the action in question if not for a retaliatory motive. In other
6
words, Plaintiffs must prove that CHP would have granted their applications if not for their
7
animus against Plaintiffs. This, in turn, implicitly requires a finding that CHP erred in denying
8
Plaintiffs’ applications.31 The court therefore cannot grant relief on this claim without effectively
9
reversing CHP’s decision—and that is exactly what the Ninth Circuit barred in Miller.
10
III.
Defendants’ motion to dismiss is GRANTED. Dismissal without leave to amend is only
United States District Court
Northern District of California
11
12
appropriate if it is clear that the complaint could not be saved by amendment such as after a
13
plaintiff’s “repeated failure to cure deficiencies by amendments previously allowed.”32 Because
14
Defendants raised their issue preclusion argument for the first time in this motion, the court cannot
15
yet say that further amendment is futile. Leave to amend therefore is GRANTED. Any amended
16
complaint must be filed within 21 days.
17
SO ORDERED.
18
Dated: May 26, 2016
_________________________________
PAUL S. GREWAL
United States Magistrate Judge
19
20
21
22
U.S. 250, 260 (2006)).
23
30
24
Id. (quoting Hartman, 547 U.S. at 260).
31
25
In fact, Plaintiffs allege explicitly that CHP denied Plaintiffs’ applications in both years only
“on pre-textual grounds.” Docket No. 55 at ¶¶ 131, 134.
26
32
27
28
Eminence Capital, LLC v. Aspeon, Inc., 316 F.3d 1048, 1052 (9th Cir. 2003) (quoting Foman v.
Davis, 371 U.S. 178, 182 (1962)).
6
Case No. 15-cv-01756-PSG
ORDER GRANTING MOTION TO DISMISS THIRD AMENDED COMPLAINT
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?