Stampfli v. Susanville Sanitary District

Opinion

----oo0oo---- DEBORAH STAMPFLI, an individual, No. 2:20-cv-01566-WBS-DMC Plaintiff, v. MEMORANDUM AND ORDER RE: SUSANVILLE SANITARY DISTRICT, SUSANVILLE SANITARY DISTRICT, a STEVEN J. STUMP, JOHN MURRAY, political subdivision of the ERNIE PETERS, DAVID FRENCH, State of California, STEVE J. KIM ERB, AND MARTY HEATH’S STUMP, in his individual and MOTION TO DISMISS official capacities, ERNIE PETERS, in his individual and official capacities, DAVID FRENCH, in his individual and official capacities, KIM ERB, in his individual and official capacities, MARTY HEATH, in his individual and official capacities, DOES I-V, inclusive, BLACK & WHITE CORPORATIONS I-V, and ABLE & BAKER COMPANIES, inclusive, Defendants.

----oo0oo---- Plaintiff Deborah Stampfli (“plaintiff”) brought this action against the Susanville Sanitary District (“District”), Steve J. Stump, John Murray, Ernie Peters, David French, Kim Erb, Marty Heath, Black & White Corporations I-V, Able and Baker Companies, and Does 1-5 inclusive, for breach of express contract, breach of implied in fact contract, promissory estoppel, deprivation of procedural due process rights, deprivation of substantive due process, conspiracy to deprive plaintiff of procedural and substantive due process rights, interference with contractual rights, infliction of emotional distress, and failure to produce public records. Before the court is the Susanville Sanitary District, Steve Stump, John Murray, Ernie Peters, David French, Kim Erb, and Marty Heath’s Motion to Dismiss plaintiff’s First Amended Complaint. (“Mot. to Dismiss” (Docket No. 22).) I. Factual and Procedural Background Plaintiff alleges that she was hired as treasurer by the Susanville Sanitary District in 2005. (See First. Am. Compl. (“FAC”) at ¶ 61 (Docket No. 20.) At the time of her hiring, plaintiff was allegedly informed that she would be a member of Operating Engineers Local Union No. 3 and that she would be entitled to the benefits and protections of the agreements between the union and the District, including the right to continued employment and termination only for good cause and after the satisfaction of procedural requirements. (See id.) From 2005 to 2013, plaintiff alleges she performed her assigned duties and a host of additional duties typically performed by supervisory personnel, and consistently received high performance evaluations. (See id. at ¶ 62.) By October 2013, plaintiff was performing many management and administrative functions but, because she was a union member, she could not participate in confidential meetings of the District’s Board of Directors. (See id. at ¶ 65.) Her inability to participate in these meetings was inconvenient because the board frequently had to stop meetings or delay them to obtain information possessed only by plaintiff. (See id.) Because of these difficulties, the board proposed the creation of a new management level position with the District entitled “Office Administrator” which would allow plaintiff to participate in confidential board meetings but would require her to relinquish her union membership. (See id.) When plaintiff was offered this new position, she declined it because she did not wish to lose the job security offered by her union affiliation. (See id. at ¶ 67.) In response to her concerns, plaintiff was allegedly advised by the General Manager and the District’s general counsel that although she could not remain a union member, she would not be an at-will employee and would be afforded all the job security rights and benefits available to union members. (See id. at ¶ 69.) Plaintiff states she was promised that her employment with the District would only be terminated for cause and in accordance with established Skelly procedures.1 (See id.) Because of these alleged representations, plaintiff relinquished her position as 1 The term Skelly procedures refers to the California Supreme Court case Skelly v. State Personnel Board, 15 Cal.3d 194 (1975). In Skelly, the California Supreme Court held that a permanent public employee’s property rights (i.e. their vested right to continued employment) cannot be taken away by an employer without first being afforded certain procedural safeguards. See id. at 215. treasurer and accepted the new position of Office Administrator. (See id. at ¶ 70.) During 2016, plaintiff performed many duties typically performed by the General Manager. (See id. at ¶ 75.) By October 2017, the General Manager recommended to the board that plaintiff be provided a 20% salary increase to account for the additional duties she performed and that she receive the additional title of Assistant General Manager. (See id. at ¶ 80.) During an October 2017 board meeting, the board stated that plaintiff’s additional duties would likely be temporary until such time as a new general manager had obtained sufficient experience. (See id. at ¶ 82.) However, the board approved the recommended change and prepared a new job description which stated that the plaintiff would work in conjunction with the District General Manager. (See id. at ¶ 83.) While the aforementioned events were unfolding, a nearby local utility district discovered that its General Manager had embezzled money from the district. (See id. at ¶ 85.) The members of the District’s board wished to ensure that the District not be victimized in the same fashion. (See id.) Plaintiff was specifically instructed to keep the board apprised of any changes which might impair the security of the District’s financial accounting services. (See id.) In March 2018, the District hired defendant Steve Stump to the position of probationary General Manager, and he relied heavily on plaintiff for matters pertaining to administrative operations. (See id. at ¶ 87.) Following the completion of Stump’s probationary period, he became increasingly hesitant to work in conjunction with the plaintiff. (See id. at ¶ 91.) Plaintiff alleges that as part of his efforts to strip plaintiff of any perceived co-equal authority she may have had with him, Stump unilaterally amended plaintiff’s job description to eliminate the requirements that she work “in conjunction with” the General Manager. (See id. at ¶ 92.) In April 2019, Stump wanted plaintiff to shift funds from various accounts to allow for the purchase of a portable generator. (See id. at ¶¶ 94–95.) Given plaintiff’s instructions from several board members regarding the financial affairs of the District, she requested that Stump delay this purchase until after a new budget for 2020 was created or seek approval from the board for the purchase. (See id.) This allegedly infuriated Stump because he believed plaintiff was refusing to acknowledge his authority over her. (See id.) According to the FAC, Stump realized that plaintiff was in control of the District’s finances because certain computer programs which controlled the District’s finances were only on the accounting department’s computers. (See id. at ¶ 99.) On or about January 8, 2020, Stump directed plaintiff to have these computer programs placed on his personal office computer. (See id.) By placing these programs on Stump’s computer, it is alleged, he would be able to transfer funds between accounts, make payments out of accounts, adjust customer accounts, or manipulate billings. (See id. at ¶ 100.) Because of the instructions she had received from board members, plaintiff told Stump that she wished to meet with certain board members to determine whether it was necessary for such highly sensitive programs to be placed on Stump’s computer. (See id. at ¶ 101.) Stump responded to this by telling plaintiff to “get out” and informing her that she was on unpaid administrative leave. (See id. at ¶ 102.) Plaintiff alleges that prior to this action, Stump had never informed plaintiff that her refusal to comply with his request would result in disciplinary action. (See id.) On January 14, 2020, plaintiff was informed that her administrative leave would be paid, but not why she was placed on leave in the first place. (See id. at ¶ 104.) On March 6, 2020, Stump informed plaintiff that her “at-will” employment as Office Administrator/Assistant General Manager was no longer needed and would end as of March 6, 2020. (See id. at ¶ 105.) On March 30, 2020, plaintiff’s counsel wrote to defendants’ counsel to demand that she be afforded all rights of review and appeal of the decision to terminate her employment. (See id. at ¶ 116.) On or about April 6, 2020, defendants’ counsel wrote to plaintiff’s counsel and informed him that because plaintiff was an “at-will” employee, she had no such rights to appeal or review. (See id. at ¶ 117.) II. Discussion Federal Rule of Civil Procedure 12(b)(6) allows for dismissal when the plaintiff’s complaint fails to state a claim upon which relief can be granted. See Fed. R. Civ. P. 12(b)(6). The inquiry before the court is whether, accepting the allegations in the complaint as true and drawing all reasonable inferences in the plaintiff’s favor, the complaint has stated “a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). “The plausibility standard is not akin to a ‘probability requirement,’ but it asks for more than a sheer possibility that a defendant has acted unlawfully.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). “Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.” Id. Although legal conclusions “can provide the framework of a complaint, they must be supported by factual allegations.” Id. at 679. A. Federal Claims The only federal claims in the FAC are plaintiff’s fourth and fifth claims for violation of procedural and substantive due process and her sixth claim for conspiracy in connection with the termination her employment. Although it does not expressly say so in the FAC, plaintiff’s counsel acknowledged at the hearing that these claims are asserted under 42 U.S.C. § 1983. 1. Procedural Due Process Plaintiff contends in her fourth claim that she had a constitutionally protected property interest in continued employment which was violated when she was terminated and denied the pre-and post-termination procedures duly enacted and adopted by the District. (See FAC at ¶¶ 160–64.)

a. Claims Against Individual Board Members and General Manager To prevail on her claim that her termination constituted a denial of property without due process of law, plaintiff must first demonstrate that she had a protected interest in continued employment. Dorr v. Butte County, 795 F.2d 875, 876 (9th Cir. 1986). State law defines what is and what is not property. Id. Under California law, a permanent employee, dismissible only for cause, has a property interest in his continued employment which is protected by due process. See Skelly, 15 Cal.3d at 207–08 (internal quotations omitted). However, plaintiff seems to acknowledge that her position had been converted to a position terminable at will. (See FAC at ¶ 84.) It is therefore not clear from the FAC that plaintiff had a property interest in continued employment that was violated when she was terminated. Moreover, looking to the alleged conduct of the individual board members and General Manager Stump, plaintiff alleges that they violated her procedural due process rights when they terminated her without cause and without following pre-and post-termination procedures duly enacted and adopted by the District. (See FAC at ¶ 6.) She alleges in conclusory terms that all the board members had a duty to intervene and protect her from unconstitutional acts, but that they refused to do so. (See id. at ¶ 170.) However, outside of the law enforcement context, neither plaintiff, defendants, nor this court have found any California, the Ninth Circuit, or in Supreme Court precedent supporting such a duty to intercede. (See Pl.’s Opp’n to Mot. to Dismiss at 61.); Defs.’ Reply in Supp. of Mot. to Dismiss at 26 (Docket No. 29).) Plaintiff’s FAC does not even seem to clearly allege facts that identify who was responsible for her termination. Plaintiff first states that it was the board who voted to terminate her without just cause. (See FAC at ¶ 6.) She then goes on to state that it was actually General Manager Stump who placed her on unpaid administrative leave and ultimately fired her. (See FAC at ¶¶ 102–106.) The FAC does not even specify a vote by the board. To the contrary, the FAC actually alleges that there were instances where Stump acted unilaterally and without board approval. (See FAC at ¶¶ 92–93.) In short, plaintiff does not sufficiently allege who caused the injuries of which she complains. Accordingly, plaintiff’s procedural due process claims against the individual defendants will be dismissed. b. Claim Against the District Because 42 U.S.C. § 1983 does not provide for vicarious liability, local governments “may not be sued under § 1983 for an injury inflicted solely by its employees or agents.” Monell v. Department of Social Services of the City of New York, 436 U.S. 658, 694 (1978). “Instead, it is when execution of a government’s policy or custom, whether made by its lawmakers or by those whose edicts or acts may be fairly said to represent official policy, inflicts the injury that the government as an entity is responsible under § 1983.” Id. To survive a motion to dismiss, a plaintiff must do more than simply allege that a Monell defendant “maintained or permitted an official policy, custom, or practice of knowingly permitting the occurrence of the type of wrongs” alleged in the complaint. See AE ex. rel. Hernandez v. County of Tulare, 666 F.3d 631, 637 (9th Cir. 2012). Facts regarding the specific nature of the alleged policy, custom, or practice are required; merely stating the subject to which the policy relates (e.g., excessive force) is insufficient. See id. To establish Monell liability based upon governmental policy custom, plaintiffs must show that (1) they were deprived of a constitutional right, (2) the municipality had a policy; (3) the policy amounted to a deliberate indifference to their constitutional right; and (4) the policy was the “moving force behind the constitutional violation.” See Mabe v. San Bernardino County, 237 F.3d 1101, 1110–11 (9th Cir. 2001)(citing Van Ort v. Estate of Stanewich, 93 F.3d 831, 835 (9th Cir. 1996)). For an unwritten policy or custom to form the basis of a Monell claim, it must be so “persistent and widespread” that it constitutes a “permanent and well settled” practice. See Monell, 436 U.S. at 691. In pleading such a claim, the complaint must “put forth additional facts regarding the specific nature of [the] alleged policy, custom, or practice.” See AE ex. rel. Hernandez, 666 F.3d at 637. “Liability for improper custom may not be predicated on isolated or sporadic incidents; it must be founded upon practices of sufficient duration, frequency and consistency that the conduct has become a traditional method of carrying out policy.” See Trevino v. Gates, 99 F.3d 911, 918 (9th Cir. 1996). Here, the thrust of the allegations against the District is that it “adopted a de facto and unconstitutional policy by failing to enforce its own adopted policies and procedures when it was clearly obvious that said policies were being ignored by its management employees.” (See FAC at ¶ 173.) However, plaintiff has not alleged facts to support that this “unconstitutional custom or policy” was anything more than an isolated or sporadic incident. Indeed, she contends that she is the only employee to have been terminated without cause and without complying with the mandates created by Resolution 04.06 and Skelly. (See id. at ¶ 63.) Liability for improper custom or policy must be predicated on practices of sufficient duration, frequency and consistency such that the conduct has become a traditional method of carrying out policy. See Trevino, 99 F.3d at 918. Plaintiff’s allegations are therefore insufficient to state a plausible, not merely possible, claim for relief based upon procedural due process violations against the District. See AE ex rel. Hernandez, 666 F.3d at 637. 2. Substantive Due Process “The substantive component of the Due Process Clause forbids the government from depriving a person of life, liberty, or property in such a way that. . . interferes with rights implicit in the concept of ordered liberty.” See Engquist v. Oregon Dept. of Agric., 478 F.3d 985, 996 (9th Cir. 2007). A threshold requirement to a substantive or procedural due process claim is the plaintiff’s showing of a liberty or property interest protected by the Constitution. See id. “Most courts have rejected the claim that substantive due process protects the right to a particular public employment position and [the Ninth Circuit] has yet to decide the issue.” Id. at 996–97. The Ninth Circuit has recognized that “there is substantive due process protection against government employer actions that foreclose access to a particular profession to the same degree as government regulation.” Id. at 998. However, the Ninth Circuit has limited substantive due process claims for a public employer’s violation of occupational liberty to extreme cases such as a government blacklist, which when circulated or otherwise publicized to prospective employers effectively excludes the blacklisted individual from his occupation. See id. Plaintiff’s fifth claim alleges that she possessed a constitutionally protected property right and/or liberty interest in continued employment and that defendants have violated her substantive due process right to such employment. (See FAC at ¶¶ 176–191.) She also alleges that “the conduct of the defendants has deprived [her] of all ability to obtain employment in her chosen field and is shocking to the conscience.” (See id. at ¶ 180.) These conclusory allegations are insufficient to plausibly allege that she had a constitutionally protected substantive due process right in her continued employment at the Susanville Sanitary District. The Ninth Circuit has not recognized that substantive due process protects the right to a particular public employment position. See Engquist, 478 F.3d at 996–97. Although plaintiff states that she has been “deprived of all ability to obtain employment in her chosen field”, (see FAC at ¶ 180), she has pleaded no facts to support this bald assertion. Nor has plaintiff pleaded facts that would plausibly support an inference that the defendants’ conduct “shocks the conscience.” (See FAC at ¶ 180.) Accordingly, defendants’ motion to dismiss plaintiff’s substantive due process claim will be granted. 3. Conspiracy to Deprive Substantive and Procedural Due Process Rights Plaintiff’s sixth claim alleges conspiracy with the intent of depriving plaintiff of her constitutionally protected substantive and procedural due process rights. (See FAC at ¶¶ 192–198.) Because the court has determined that plaintiff has not sufficiently alleged that she had a substantive due process right under the United States Constitution to continued employment at the District, there can be no conspiracy to deprive plaintiff of non-existent substantive due process rights. With regard to her procedural due process rights, plaintiff merely alleges, without any factual specificity, that the defendants “either expressly, implicitly, or tacitly, agreed, cooperated, or joined in a concerted action to deprive plaintiff of her Constitutionally protected property and/or liberty rights.” (See FAC at ¶ 193.) Such conclusory allegations do not suffice. Accordingly, plaintiff’s sixth cause of action for conspiracy to deprive plaintiff of due process rights will be dismissed. B. State Law Claims Because all of plaintiff’s federal claims must be dismissed, in its discretion under 28 U.S.C. § 1367(c)(3), the court will decline to exercise jurisdiction over plaintiff’s supplemental state law claims at this time. Any further amended complaint filed pursuant to this Order shall be deemed to supersede the first amended complaint, and if plaintiff elects to file a second amended complaint which reasserts her state law claims, defendants may reassert their motion to dismiss the state law claims at that time.2 2 Because defendants’ request for judicial notice pertains solely to the state law claims, the court declines to eee eee IEE III IE IIE III EEE ES PSE IIE ESO

IT IS THEREFORE ORDERED that defendants’ motion to dismiss (Docket No. 22) be, and the same is, hereby GRANTED with respect to the fourth, fifth, and sixth claims of the First Amended Complaint. Plaintiff has twenty days from the date this Order is signed to file an amended complaint, if she can do so consistent with this Order. Dated: March 11, 2021 hhh an~ Ve 2d. bE g WILLIAM B. SHUBB UNITED STATES DISTRICT JUDGE take judicial notice at this time. 14