Valley Bail Bonds et al v. Budeski et al

Filing 12

IT IS HEREBY ORDERED that Defendant's 3 Motion to Dismiss for Failure to State a Claim is GRANTED; Counts 1,2,3, and 4 are DISMISSED WITH PREJUDICE, Count 5 is DISMISSED WITHOUT PREJUDICE. Judge Ostby's Findings and Recommendations 9 are ADOPTED. Signed by Judge Susan P. Watters on 9/5/2014. (EMH, )

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MONTANA
BILLINGS DIVISION

FILED
SEP - 5 2014
Clerk, U S District Court
District Of Montana
Billings

VALLEY BAIL BONDS, a Montana
Partnership; SCOTT RESTVEDT; and
DAVID CROW,

CV 14-24-BLG-SPW

ORDER

Plaintiffs,
vs.
LINDA BUDESKl, individually and as
Justice of the Peace of PARK
COUNTY, MONTANA; and PARK
COUNTY, MONTANA, a Political
Subdivision of the State of Montana,
Defendants.

Before the Court are the Findings and Recommendations by United States
Magistrate Judge Carolyn Ostby issued on July 25, 2014. In the Findings and
Recommendations, Judge Ostby recommends that this Court grant Defendants
Justice of the Peace Linda Budeski ("Budeski") and Park County's Motion to
Dismiss. Plaintiffs Valley Bail Bonds, Scott Restvedt, and David Crow
(collectively "Plaintiffs") timely objected. After conducting a de nova review, this
Court adopts the Findings and Recommendations in full.

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I. Background
For context, this Court will summarize the Plaintiffs' factual allegations. As
this matter appears before the Court on a Motion to Dismiss, these factual
allegations are presumed true. Maya v. Centex Corp., 658 F.3d 1060, 1068 (9th
Cir. 2011).
Park County criminal defendant Michael Shane Ransom appeared before the
Park County Justice Court on July 22, 2013, and the Justice Court set bail at
$75,000. (Doc. 1 at 3). After discussions, the Plaintiffs agreed to provide a
$75,000 surety bond in exchange for a fee of$7,500. (Id.). However, before the
Plaintiffs closed the transaction, Ransom's attorney filed a motion before Budeski
to allow Ransom to instead post 10% of his bail with the Court as opposed to
paying that l 0% to a bail bondsman. (Id.). Budeski granted the motion and
allowed Ransom's release after posting $7,500. (Id.). Without providing specific
examples, the Plaintiffs allege that sometime prior to July 22, 2013, Budeski began
allowing defendants' release after posting 1Oo/o of their bond amount instead of
requiring full payment. (Id. at 2-3).
Based on these allegations, the Plaintiffs filed this action and assert the
following five counts:
(1) Count One -that under 42 U.S.C. § 1983, Budeski, acting in her
individual capacity, deprived them of their property interest in writing
bail bonds without providing due process and in violation of MCA§
46-9-401;
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(2) Count Two - that under 42 U.S.C. § 1983, Park County violated
their property and liberty interests by failing to train and supervise
Budeski in connection with her bail bonds practices just described;
(3) Count Three - that under 42 U.S.C. § 1983, Plaintiffs are entitled
to a permanent injunction prohibiting Budeski and other Park County
judges from allowing forms of bail not specifically authorized by
MCA§ 46-9-401;
(4) Count Four - that Budeski and Park County have wrongfully
interfered with Plaintiffs' business operations by acting as a surety
and by competing with Plaintiffs' business; and
(5) Count Five - that Plaintiffs are entitled to a declaratory judgment
that Budeski' s and Park County's "practice of accepting 10% of bail
amounts is contrary [to] the forms of bail allowed by [MCA] § 46-9401 (2013)[ ]".
Budeski and Park County appeared and filed a motion to dismiss under Fed. R.
Civ. P. 12(b)(6).
II. Judge Ostby's Findings and Recommendations
Judge Ostby recommends that Counts One through Four be dismissed with
prejudice, and Count Five should be dismissed without prejudice for refiling in
state court. As to Count One, Judge Ostby determined that Budeski is entitled to
judicial immunity. Judicial officers cannot be held liable in civil actions, "even
when such acts are in excess of their jurisdiction, and are alleged to have been
done maliciously or corruptly." Stump v. Sparkman, 435 U.S. 349, 356 (1978)
(quoting Bradley v. Fisher, 80 U.S. 335, 351 (1871)). Judicial immunity has only
two recognized exceptions: (1) actions not taken in a judicial capacity, and (2)
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actions taken in the complete absence of all jurisdiction. Mireles v. Waco, 502
U.S. 9, 11 (1991).
Judge Ostby found that pursuant to MCA§ 46-9-201, Budeski had
jurisdiction to not only set bail, but to "increase, reduce, or substitute" previouslyset bail. Therefore, Judge Ostby concluded that Budeski acted within her
jurisdiction. Judge Ostby further concluded that Budeski acted in a judicial
capacity when she agreed to accept only $7,500 of the $75,000 bail. Even
assuming the Plaintiffs' alleged facts as true, Judge Ostby found that neither of the
exceptions to judicial immunity applies.
As for Count Two, Judge Ostby concluded that Park County could not be
found liable for violating the Plaintiffs' property and liberty interests. The alleged
violation did not constitute the deprivation of a constitutional right. Alternatively,
Judge Ostby found that the Plaintiffs have not alleged the requisite "policy or
custom" for Park County to be found liable under 42 U.S.C. § 1983.
On Count Three, Judge Ostby noted that judicial immunity does not apply to
prospective relief. However, under 42 U.S.C. § 1983, injunctive relief cannot be
granted against a judicial officer "unless a declaratory decree was violated or
declaratory relief was unavailable." Judge Ostby found that the Plaintiffs did not
allege that Budeski has violated a declaratory decree nor that declaratory relief was
unavailable.
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On Count Four, Judge Ostby determined that Montana and federal law
provide the same judicial immunity analysis. Therefore, she concluded that Count
Four as to Budeski should be dismissed for the same reasons as Count One. As to
the claim against Park County, Montana law immunizes governmental units for
judicial acts. Accordingly, Judge Ostby determined that Park County cannot be
held liable for Budeski's acts.
Finally, on Count Five, Judge Ostby recommended that this Court decline to
address this issue of state law and allow the Plaintiffs to refile their declaratory
judgment claim in state court.

III. The Plaintiffs' Objections
The Plaintiffs formally raised seven objections to the Findings and
Recommendations. Since the Plaintiffs timely objected, the Findings and
Recommendations are reviewed de novo. 28 U.S.C. § 636(b)(l). Each objection
will be addressed separately.

A. Claim that Judge Ostby made erroneous factual findings.
While not titled as an objection, the Plaintiffs argue that Judge Ostby made
erroneous findings and failed accept their factual allegations as true. This
argument is meritless. A review of Judge Ostby's factual findings show that she
simply restated the factual allegations in the Complaint. For example, the
Plaintiffs claim that "First, and perhaps most importantly, the Findings err in
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concluding that Michael Shane Ransom hade [sic] been charged with a crime 'in
the Justice Court of Park County."' (Doc. 10 at 4 (quoting Doc. 9 at 3)). This
claimed error is peculiar, considering that Judge Ostby quoted directly from
paragraph 9 of the Complaint. See Doc. 1 at 3 ("On or about July 22, 2013,
Plaintiffs received a call from a party willing to post $7,500 cash in conjunction
with a $75,000 bond for one Michael Shane Ransom who had been charged with a
crime in the Justice Court of Park County, Montana in Cause No. TK-13-18027"
(emphasis added)).
Next, the Plaintiffs allege facts that were revealed upon a "[s]ubsequent
examination of the District Court record" that include information "not known at
the time the original complaint in this matter was filed." Doc. 10 at 4-5. The
Plaintiffs acknowledge that this information is contained in the public record, and
all additional facts occurred in the summer of2013. A district court has discretion
"to consider evidence presented for the first time in a party's objection to a
magistrate judge's recommendation." U.S. v. Howell, 231 F .3d 615, 621 (9th Cir.
2000). The court does not abuse its discretion by not considering newly supplied
evidence if the information was available to the proposing party before the
proceeding began. Id. at 623. Here, this Court exercises its discretion and declines
to consider the new factual allegations. The Plaintiffs should have been aware of
this evidence before the proceedings began, as it occurred at least six months
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before the filing of the Complaint. Finally, the newly supplied evidence has no
bearing on the outcome. As discussed below, the fact that Ransom was charged
with a felony in the Park County District Court is irrelevant to the judicial
immunity analysis.

B. Objection #1.
The Plaintiffs' first objection is that Judge Ostby erred in interpreting MCA

§ 46-9-201 as giving the Justice Court jurisdiction to accept and hold 10% of a
felony defendant's $75,000 bail.
In criminal cases brought in the Montana state court system, Justice courts
have jurisdiction only over misdemeanor crimes, while district courts have
concurrent jurisdiction over some misdemeanors and exclusive jurisdiction over
felonies. MCA§§ 46-2-201, 46-2-202, 3-10-303. Upon arrest, an individual must
be brought before a judge for an initial appearance. MCA§ 46-7-101(1). A justice
of the peace may conduct initial appearances for both misdemeanors and felonies.
See MCA § 46-1-202(10) (defining "judge" as "person who is vested by law with
the power to perform judicial functions"). At the initial appearance, the justice of
the peace must, among other things, admit the defendant to bail. MCA § 46-7102(2). For felonies, the prosecution must then either obtain an indictment or
move the district court for leave to file an information against the defendant. MCA

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§§ 46-11-102, 46-11-201. The defendant must then appear for arraignment before
the district court. MCA § 46-12-102.
MCA§ 46-9-201 provides, in part:
A judge may admit to bail any defendant properly appearing before
the judge in a bail proceeding. When bound over to any court or judge
having jurisdiction of the offense charged, bail must be continued
provided that the court or judge having jurisdiction may increase,
reduce, or substitute bail.
Thus, at a felony arraignment, the district court can "increase, reduce, or
substitute" the bail set at the initial appearance.
Budeski set bail at $75,000 at the initial appearance. As the case was a
felony, the Park County District Court had jurisdiction after the State filed its
motion for leave to file an information. Viewing the facts in the very best light
possible for the Plaintiffs, the District Court assumed jurisdiction over this matter
before Budeski accepted $7,500 for Ransom's release.
Assuming all that as true, Budeski may have acted without jurisdiction by
reducing or substituting bail after jurisdiction transferred to the District Court.
Once a defendant appears before a court having jurisdiction over the charge, "the
court or judge having jurisdiction may increase, reduce, or substitute bail." MCA
§ 46-9-201. The Park County Justice Court did not have jurisdiction of the case
after the State proceeded in the District Court. Since the District Court was the

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only court having jurisdiction, a plain reading of MCA§ 46-9-201 suggests that
only the District Court could modify Ransom's bail.
Since the Montana Supreme Court has not ruled on this issue, this Court
declines to explicitly hold that as a matter of Montana law a justice court loses the
ability to modify bail after the defendant is arraigned in district court. MCA § 469-115 certainly contemplates bail set by a court other than the court in which the
defendant is charged. However, for purposes of this Order, this Court will assume
that Budeski acted without jurisdiction by accepting $7,500 for Ransom's release.
Although this differs from Judge Ostby's conclusion, it ultimately does not impact
the judicial immunity analysis.
C. Objection #2.

The Plaintiffs' second objection is that Judge Ostby erred in finding that
Budeski is entitled to judicial immunity when Budeski acted outside her
jurisdiction to effectively lower Ransom's bail. As discussed above, one exception
to judicial immunity is when the actions were "taken in the complete absence of all
jurisdiction." Mireles, 502 U.S. at 11. When analyzing whether a judge acted in
complete absence of all jurisdiction, the scope of jurisdiction must be construed
broadly. Stump, 435 U.S. at 356. "A judge will not be deprived of immunity
because the action he took was in error, was done maliciously, or was in excess of

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his authority; rather, he will be subject to liability only when he has acted in the
'clear absence of all jurisdiction."' Id. at 356-57 (citation omitted).
"A clear absence of all jurisdiction means a clear lack of all subject matter
jurisdiction." Mullis v. US. Bankr. Ct.for Dist. ofNevada, 828 F.2d 1385, 1389
(9th Cir. 1987). In Stump, the Supreme Court illustrated this concept with
examples:
if a probate judge, with jurisdiction over only wills and estates, should
try a criminal case, he would be acting in the clear absence of
jurisdiction and would not be immune from liability for his action; on
the other hand, if a judge of a criminal court should convict a
defendant of a nonexistent crime, he would merely be acting in excess
of his jurisdiction and would be immune.
435 U.S. at 357 n. 7. Even "[g]rave procedural errors or acts in excess of judicial
authority do not deprive a judge of this immunity." Schucker v. Rockwood, 846
F.2d 1202, 1204 (9th Cir. 1988).
At worst, Budeski committed a procedural error when she agreed to release
Ransom. She did not act in clear absence of all jurisdiction. Budeski had subject
matter jurisdiction over several aspects of criminal prosecutions, including the
initial setting of bail in felony proceedings. MCA§ 46-7-102(2). Assuming
Budeski violated MCA § 46-9-201, it was the sort of error "that does not pierce the
cloak of immunity." O'Neil v. City ofLake Oswego, 642 F.2d 367, 369 (9th Cir.
1981). The error is similar to Stump's example of the criminal court judge
convicting a defendant of a nonexistent crime. While Budeski may have erred, she
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did not act in the complete absence of all jurisdiction; she merely acted in excess of
her jurisdiction. This exception to judicial immunity does not apply.

D. Objection #3.
For their third objection, the Plaintiffs state:
Magistrate Ostby erred in dismissing Plaintiffs' Complaint in it's [sic]
entirety, where the Complaint is sufficient to put Defendants' [sic] on
notice of the conduct complained of and it cannot be said that
Plaintiffs' [sic] "can prove no set of facts" in support of their claims
for relief[.]
(Doc. 10 at 2). The Plaintiffs contend that Judge Ostby relied on facts not before
her or that could not be properly inferred from the Complaint. (Id. at 10).
However, the Plaintiffs do not to identify any specific facts that Judge Ostby
improperly considered. L.R. 72.3(a) provides: "An objection filed pursuant to 28
U.S.C. § 636(b)(l) must itemize: (1) each factual finding of the Magistrate Judge
to which objection is made, identifying the evidence in the record the party relies
on to contradict that finding; and (2) each recommendation of the Magistrate Judge
to which objection is made, setting forth the authority the party relies on to
contradict that recommendation." The Court rejects the Plaintiffs' argument,
because the Plaintiffs fail to point to any specific facts to support their contention
that Judge Ostby relied on facts not before her.
The Plaintiffs' claim that their Complaint contains sufficient facts to put the
Defendants on notice of their claims misses the point. Judge Ostby assumed each
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factual allegation as true. Even with this assumption, the Complaint still fails to
state a legally viable claim.
E. Objection #4.

The Plaintiffs' fourth objection pertains to Judge Ostby's conclusion that
Budeski's actions were taken in a judicial capacity. The Plaintiffs contend that
since MCA§ 46-9-201 did not give Budeski jurisdiction to lower or allow
substitute bail, she acted in an administrative capacity, and thus does not possess
judicial immunity.
Judicial immunity does not extend to "nonjudicial actions, i.e., actions not
taken in the judge's judicial capacity." Mireles, 502 U.S. at 11. The issue is not
whether Bude ski violated MCA § 46-9-20 I; the issue is whether Budeski
performed "a function normally performed by a judge." Stump, 435 U.S. at 362.
The following factors are used to determine whether a particular act is judicial in
nature:
(1) the precise act is a normal judicial function; (2) the events
occurred in the judge's chambers; (3) the controversy centered around
a case then pending before the judge; and (4) the events at issue arose
directly and immediately out of a confrontation with the judge in his
or her official capacity.

New Alaska Dev. Corp. v. Guetschow, 869 F.2d 1298, 1302 (9th Cir. 1989).
"These factors are to be construed generously in favor of the judge and in light of
the policies underlying judicial immunity." Ashe/man v. Pope, 793 F .2d 1072,
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1076 (9th Cir. 1986). An example of an administrative act, which would not be
considered "judicial," is a judge's decision to fire a subordinate employee. Meek
v. County ofRiverside, 183 F .3d 962, 968 (9th Cir. 1999). An administrative act
does not include a decision that a judge routinely makes in her courtroom.
Here, all the factors show that Budeski acted in a judicial capacity when she
set Ransom's bail and again when she modified it. Setting bail is a judicial
function. Application ofFloyd, 413 F. Supp. 574, 576 (D. Nev. 1976). Budeski
heard counsel's argument on the bail amount either in chambers or in court. Her
conduct was prescribed by statute. This issue arose out of Ransom's appearance in
Budeski's courtroom. Since the setting and reduction of bail is a function normally
performed by a judge, Plaintiffs' argument fails.
F. Objection #5.

The Plaintiffs' fifth objection challenges Judge Ostby's conclusion that the
alleged facts do not give rise to a constitutional violation. The Plaintiffs claim that
if judges are allowed to take Budeski' s approach of accepting 1Oo/o of the bail
amount, the business of writing bail bonds would be eradicated.
"[T]he pursuit of an occupation or profession is a protected liberty interest
that extends across a broad range of lawful occupations." Wedges/Ledges of
California, Inc. v. City of Phoenix, 24 F.3d 56, 65 n.4 (9th Cir. 1994). However,

that liberty interest is not deprived ifthere is only a "brief interruption." Conn v.
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Gabbert, 526 U.S. 286, 292 (1999). Only "a complete prohibition of the right to

engage in a calling might implicate due process." Lowry v. Barnhart, 329 F.3d
1019, 1023 (9th Cir. 2003) (internal citation omitted).
Here, Budeski's actions did not prohibit the Plaintiffs from engaging in their
business pursuits. The Plaintiffs are free to write surety bonds for other
defendants. Simply put, neither Budeski nor Park County have infringed on the
Plaintiffs' property or liberty interest to engage in the business of writing bail
bonds. They remain free to pursue their occupation.
G. Objection #6.

In their sixth objection, the Plaintiffs again challenge Judge Ostby's
conclusion regarding Budeski's judicial immunity. Specifically, the Plaintiffs
assert that accepting lOo/o of Ransom's originally set bail is not a judicial act, but
rather an administrative or ministerial act. This Court already rejected this
argument in responding to the Plaintiffs' fourth objection.
H. Objection # 7.

The Plaintiffs' seventh objection challenges Judge Ostby's recommendation
that Count Five should be dismissed without prejudice for refiling in state court.
The Plaintiffs base their argument on the assumption that the first four counts
should not be dismissed, and that this Court should exercise pendant jurisdiction
over Count Five. This Court agrees with Judge Ostby's recommendation and
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dismisses the first four counts. Accordingly, the Court declines to address this
question of state law and dismisses Count Five without prejudice.

IV. Conclusion
IT IS HEREBY ORDERED that:
1. For reasons discussed herein, Judge Ostby's Findings and
Recommendations (Doc. 9) are ADOPTED.
2. Defendants' Motion to Dismiss (Doc. 3) is GRANTED. Counts One,
Two, Three, and Four are dismissed with prejudice. Count Five is dismissed
without prejudice.
DATED thi<

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SUSANP. WATTERS
United States District Judge

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