Case Number: SC126350 Hearing Date: July 16, 2020 Dept: O
Case Name: Golden State Practice Management, LLC, et al. v. County of Los Angeles, et al.
Case No.: SC126530 Complaint Filed: 10-7-16
Hearing Date: 7-16-20 Discovery C/O: None
Calendar No.: 11 Discover Motion C/O: None
POS: OK Trial Date: None
SUBJECT: DEMURRER TO SECOND AMENDED COMPLAINT
MOVING PARTY: Defendants County of Los Angeles, et al.
RESP. PARTY: (1) Plaintiffs Golden State Practice Management, LLC, Orange Grove Surgery Center, LLC, San Diego Ambulatory Surgery Center, LLC, Cindy Omidi, Julian Omidi, Michael Omidi, Bakersfield Surgery Center, LLC, Beverly Hills Surgery Center, LLC, East Bay Ambulatory Surgery Center, LLC, Independent Medical Services, Inc., Palmdale Ambulatory Surgery Center, LLC, San Joaquin Valley Surgery Center, LLC and Valencia Ambulatory Surgery Center, LLC
(2) Plaintiff Golden State Practice Management, LLC.
Defendants’ Demurrer to Plaintiffs’ SAC is OVERRULED as to the 1st cause of action for violation of 42 USC §1983 and SUSTAINED WITHOUT LEAVE TO AMEND as to the 2nd cause of action for violation of 42 USC §1986, 3rd cause of action for violation of California Constitution and 4th cause of action for violation of CC §52.1. Defendants to answer in 10 days. Defendant’s RJN is GRANTED.
Issue preclusion—Whether a judgment in a federal action has preclusive effect in a state court action should be determined under federal law. See Guerrero v. Department of Corrections & Rehabilitation (2018) 28 Cal.App.5th 1091, 1102 (citing Taylor v. Sturgell (2008) 553 U.S. 880, 892); Hardy v. America's Best Home Loans (2014) 232 Cal.App.4th 795, 805 (quoting Semtek Int'l Inc. v. Lockheed Martin Corp. (2001) 531 U.S. 497, 503, 507); Louie v. BFS Retail & Commercial Operations, LLC (2009) 178 Cal.App.4th 1544, 1553 (where a prior federal judgment was based on federal question jurisdiction, the preclusive effect of the prior judgment of a federal court is determined by federal common law); cf. See Franceschi v. Franchise Tax Bd. (2016) 1 Cal.App.5th 247, 257 (citing Agarwal v. Johnson (1979) 25 Cal.3d 932, 954–955 (disapproved of on other grounds)(California’s primary rights test should be used to determine whether a prior federal action is res judicata on a subsequent state action, regardless of whether the prior federal action involved diversity or federal question jurisdiction); Acuna v. Regents of University of California (1997) 56 Cal.App.4th 639, 648; Guerrero, supra, 28 Cal.App.5th at 1101, fn 8 (collecting cases applying California primary rights test to determine whether final federal judgment was res judicata in subsequent California action).
Under Guerrero, courts should apply the federal “transactional” test to determine if a prior federal judgment based on federal question jurisdiction has res judicata effect in a subsequent state court action. See Guerrero, supra, 28 Cal.App.5th at 1109 (noting differences between California primary rights test and federal “transactional” test to determine whether res judicata applies). California’s primary rights test is only applied where res judicata is based on a prior federal case involving diversity jurisdiction. See Louie, supra, 178 Cal.App.4th at 1553–1554; Guerrero, supra, 28 Cal.App.5th at 1100; Hardy, supra, 232 Cal.App.4th at 805–806 (quoting Semtek, supra, 531 U.S. at 507).
“Issue preclusion, or collateral estoppel, bars successive litigation of an issue of fact or law actually litigated and resolved in a valid court determination essential to the prior judgment, even if the issue recurs in the context of a different claim.” Garity v. APWU National Labor Organization (9th Cir. 2016) 828 F.3d 848, 858, fn 8 (claim preclusion did not apply where “rights and interests” and “same right” factors weighed against claim preclusion and plaintiff never had a full and fair opportunity in first action to litigate claims alleged in second action). Issue preclusion arises in a second action on the basis of a prior decision when the same issue is involved in both actions, the issue was actually litigated in the first action, after a full and fair opportunity for litigation, the issue was actually decided in the first action, by a disposition that is sufficiently final, on the merits,” and “valid” and it was necessary to decide the issue in disposing of the first action. See 18 C. Wright, A. Miller & E. Cooper, Federal Practice and Procedure §4416 (3rd ed. 2002).
Defendants’ demurrer on grounds of issue preclusion fails for several reasons:
• Defendants acknowledge the 10-29-19 Federal MSJ is currently subject to a motion for reconsideration. Due to the motion for reconsideration, Defendants fail to establish that the 10-29-19 Federal MSJ is “sufficiently final” to have collateral estoppel effect in this action. Defendants indicate the motion for reconsideration has not yet been heard.
• The 10-29-19 Federal MSJ determined that based on the record, “no trier of fact could conclude that” “defendants violated plaintiff’s constitutional rights by making a false homicide determination and by shutting down Plaintiff’s business.” See Demurrer, Ex. B, 9:26-28 to 10:1-3. The 10-29-19 Federal MSJ determined that there was no evidence that “Defendants ever explicitly concluded that Rojeski’s death was a homicide.” Id. at 6:21-24. The 10-29-19 Federal MSJ also determined that there was no “shutdown” of Valley Surgical’s business. Id. at 8:21-28. The 10-29-19 Federal MSJ determined Valley Surgical could not demonstrate Defendants “shut down” its business with a “false homicide determination,” because there was no evidence that any such determination had ever been made or that Valley Surgical lost business due to the investigation itself. Id. at 9:5-24.
• Even accepting these determinations as final and applying collateral estoppel, Defendants fail to establish that these determinations negate an essential element or allegation of Plaintiffs’ current claims. First, Plaintiffs’ causes of action are not based solely on the issuance of an explicit, false conclusion or report of homicide. That is only one of the acts alleged against Defendants. Plaintiffs also allege that Defendants entered into an agreement to “shut down” Plaintiffs and in furtherance of that agreement, Defendants (1) falsified facts in the Rojeski Autopsy; (2) falsely stated that her death was an “extreme departure from the standard of care,” which is the medico-legal determination of homicide; (3) reported the homicide conclusion to numerous official entities and news outlets causing Plaintiffs’ injury and damages; and (4) instigated LAPD to instigate a homicide investigation into Plaintiffs based on false evidence and a false homicide determination. See Defendants’ Demurrer to SAC, Ex. A, SAC, ¶¶2, 41 and 93.
• Thus, the federal court’s actual determination of the very specific issue of whether Defendants’ ever made a formal, express determination of homicide in the Rojeski case would not resolve this action. The federal court never determined any of the other alleged bases for liability alleged against Defendants in this action. In addition, the federal court only determined that Defendants’ had not shut down Valley Surgical’s business by issuing an express homicide determination. None of these determinations ever pertained to Plaintiffs.
Standing—“Standing derives from the principle that ‘[e]very action must be prosecuted in the name of the real party in interest....’ (Code Civ. Proc, § 367.) A party lacks standing if it does not have an actual and substantial interest in, or would not be benefited or harmed by, the ultimate outcome of an action.” City of Santa Monica v. Stewart (2005) 126 Cal.App.4th 43, 59. “[A] person who invokes the judicial process lacks standing if he...does not have a real interest in the ultimate adjudication because the actor has neither suffered nor is about to suffer any injury of sufficient magnitude reasonably to [en]sure that all of the relevant facts and issues will be adequately presented.” Id. at p. 60.
Defendants argue Plaintiffs lack standing, because Valley Surgical raised the exact same issues in the federal action. Based on Valley Surgical’s federal case, the same facts alleged here violated its 1st Amendment rights. Defendants contend Plaintiffs cannot have standing based on the same facts asserted by Valley Surgical.
Defendants’ argument is baseless. A single transaction or set of facts can injure more than one person or entity. Plaintiffs allege they suffered injury as a result of Defendants’ conduct. Plaintiffs allege Defendants’ “shut down” agreement was as to entities owned and run by the Omidis, which would include Plaintiffs. Id. at ¶¶27-28. Plaintiffs allege they were “forced to be closed” due to Defendants’ false autopsy report, instigation of a false homicide investigation and reporting their false autopsy findings to other government entities. See SAC, ¶94. Such allegations must be accepted as true on demurrer. See Hacker v. Homeward Residential, Inc. (2018) 26 Cal.App.5th 270, 276. Plaintiffs’ ability to “prove these allegations, or the possible difficulty in making such proof does not concern the reviewing court.” Knickerbocker v. City of Stockton (1988) 199 Cal.App.3d 235, 245. Plaintiffs sufficiently allege standing.
3rd cause of action for violation of California Constitution (Due Process)—DEMURRER SUSTAINED WITHOUT LEAVE TO AMEND. Plaintiffs are seeking damages for violation of their due process rights under Article I, §7(a) of the California Constitution. There is no private right of action for violation of the due process clause of the California Constitution, Article I, §7(a). “[W]e discern no evidence from which to infer within article I, section 7(a), an intent to afford a right to seek damages to remedy the asserted violation of the due process liberty interest alleged in this case. We also find no basis upon which to recognize a constitutional tort action for such damages.” Katzberg v. Regents of University of California (2002) 29 Cal.4th 300, 329; see also 5 Witkin, Summary (11th ed. 2017), Torts §21.
Plaintiffs claim they can amend the 3rd cause of action to allege a claim for “interference with property.” It is possible for a public entity and its employees to be held liable for slander, intentional interference with prospective economic advantage and trade libel, intentional interference with contractual relationships and trade libel. See City of Costa Mesa v. D'Alessio Investments, LLC (2013) 214 Cal.App.4th 358, 378; H & M Associates v. City of El Centro (1980) 109 Cal.App.3d 399, 405–409 (cause of action for intentional interference with contractual relationships survives demurrer despite assertion of various immunities and privileges); Eco Resources, Inc. v. City of Rio Vista (E.D Cal. July 17, 2006) 2006 WL 2015737 (city can be liable for trade libel based on conduct of employees).
Plaintiffs do not intend to plead a claim for defamation, intentional interference with prospective economic advantage, intentional interference with contract, or trade libel. Plaintiffs claim they will assert a claim for “intentional interference with property.” Plaintiff does not offer any authority for such a cause of action called “intentional interference with property.” The request for leave to amend is denied.
4th cause of action for violation of CC §52.1—DEMURRER SUSTAINED WITHOUT LEAVE TO AMEND. "If a person or persons, whether or not acting under color of law, interferes by threat, intimidation, or coercion, or attempts to interfere by threat, intimidation, or coercion, with the exercise or enjoyment by any individual or individuals of rights secured by the Constitution or laws of the United States, or of the rights secured by the Constitution or laws of this state, the Attorney General, or any district attorney or city attorney may bring a civil action for injunctive and other appropriate equitable relief in the name of the people of the State of California, in order to protect the peaceable exercise or enjoyment of the right or rights secured.” CC §52.1(a). “Any individual whose exercise or enjoyment of rights secured by the Constitution or laws of the United States, or of rights secured by the Constitution or laws of this state, has been interfered with, or attempted to be interfered with, as described in subdivision (a), may institute and prosecute in his or her own name and on his or her own behalf a civil action for damages…” CC §52.1(b).
“Speech alone is not sufficient to support an action brought pursuant to subdivision (a) or (b), except upon a showing that the speech itself threatens violence against a specific person or group of persons; and the person or group of persons against whom the threat is directed reasonably fears that, because of the speech, violence will be committed against them or their property and that the person threatening violence had the apparent ability to carry out the threat.” CC §52.1(k).
Plaintiffs fail to allege anything against Defendants except speech. The alleged speech, falsification and dissemination of false information related to Rojeski’s death, did not itself threaten violence. Moreover, Plaintiffs fail to allege any threats, intimidation or coercion in connection with Defendants’ deprivation of Plaintiffs’ property. Plaintiffs are alleging that its injuries were the result of a secret agreement to shut them down. There are no allegations that Defendants carried out their plan with threats, intimidation or coercion. Defendants allegedly carried out their plan through fraudulent statements. See SAC, ¶¶2, 41 and 94. Plaintiffs themselves admit they had no idea that this agreement existed or that Defendants were acting to deprive them of their property until 10-7-15, after production of documents in a separate lawsuit. Id. at ¶31.
GC §§815.2 and 821.6 and CC §47(h)—The state law immunity provisions under GC §§815.2 and 821.6 and CC §47 do not apply to the only remaining causes of action, which are federal claims under 42 USC 1983 and 42 USC 1986. “It is clear that the California immunity statute does not control this claim [42 USC 1983] even though the federal cause of action is being asserted in the state courts.” Martinez v. State of Cal. (1980) 444 U.S. 277, 284. “The United States Supreme Court has repeatedly held that a state law that immunizes government conduct otherwise subject to suit under § 1983 is preempted even where the federal civil rights litigation takes place in state court, because the application of the state immunity law would thwart the congressional remedy.” Arce v. Childrens Hospital Los Angeles (2012) 211 Cal.App.4th 1455, 1485 (state law immunity for child abuse investigations did not apply to 1983 claim). Based on this same reasoning, the litigation privilege under Ca. Civ. Code §47 does not apply to federal claims. See Kimes v. Stone (9th Cir. 1996) 84 F.3d 1121, 1127.
2nd cause of action for violation of 42 USC 1986—DEMURRER SUSTAINED WITHOUT LEAVE TO AMEND. "Every person who, having knowledge that any of the wrongs conspired to be done, and mentioned in section 1985 of this title, are about to be committed, and having power to prevent or aid in preventing the commission of the same, neglects or refuses so to do, if such wrongful act be committed, shall be liable to the party injured, or his legal representatives, for all damages caused by such wrongful act, which such person by reasonable diligence could have prevented; and such damages may be recovered in an action on the case; and any number of persons guilty of such wrongful neglect or refusal may be joined as defendants in the action…” 42 USC §1986.
“If two or more persons in any State or Territory conspire…for the purpose of depriving, either directly or indirectly, any person or class of persons of the equal protection of the laws, or of equal privileges and immunities under the laws; or for the purpose of preventing or hindering the constituted authorities of any State or Territory from giving or securing to all persons within such State or Territory the equal protection of the laws…in any case of conspiracy set forth in this section, if one or more persons engaged therein do, or cause to be done, any act in furtherance of the object of such conspiracy, whereby another is injured in his person or property, or deprived of having and exercising any right or privilege of a citizen of the United States, the party so injured or deprived may have an action for the recovery of damages occasioned by such injury or deprivation, against any one or more of the conspirators.” 42 USC §1985.
Defendants argue the 42 USC §1986 claim lacks specificity and that no underlying 42 USC 1985 violation has been alleged. “The elements of a claim under the first clause of section 1985(3) are: (1) the existence of a conspiracy to deprive the plaintiff of the equal protection of the laws; (2) an act in furtherance of the conspiracy; and (3) a resulting injury.” See Addisu v. Fred Meyer, Inc., 198 F.3d 1130, 1141 (9th Cir. 2000). A cause of action under section 1985(3) requires a showing of some racial or class-based discrimination, but only the first clause of section 1985(3) requires intent to deprive victims of the equal protections of the laws. See Kush v. Rutledge, 460 U.S. 719, 724–26 (1983); Griffith v. Breckenridge, 403 U.S. 88, 102 (1971).
“In the years since Griffith, courts have struggled to determine whether and when §1985(3) applies in contexts not involving race, and have produced opinions that are all over the map. In the Ninth Circuit, the treatment of section 1985(3) claims is somewhat more consistent. Generally, our rule is that section 1985(3) is extended beyond race only when the class in question can show that there has been a governmental determination that its members ‘require and warrant special federal assistance in protecting their civil rights. More specifically, we require either that the courts have designated the class in question a suspect or quasi-suspect classification requiring more exacting scrutiny or that Congress has indicated through legislation that the class required special protection.” Sever v. Alaska Pulp Corp. (9th Cir. 1992) 978 F.2d 1529, 1536 (plaintiff could not state a 42 USC §1985(3) claim based on his membership in the class of persons defined as “individuals who wish to petition the government,” which have not been judicially designated a suspect or quasi-suspect group).
“Section 1985(3) provides no substantive rights itself; it merely provides a remedy for violation of the rights it designates.” Great Am. Fed. Sav. & Loan Ass'n v. Novotny, 442 U.S. 366, 372 (1979). 42 U.S.C. § 1986 provides a cause of action for damages where a valid claim for relief has been stated under section 1985. See 42 U.S.C. § 1986; Trerice v. Pedersen, 769 F.2d 1398, 1403 (9th Cir. 1985).
Plaintiffs’ allegations of Defendants’ conspiracy to “shut down” Plaintiffs’ businesses are sufficiently specific. Plaintiffs allege in great detail the nature of the agreement to shut them down, the parties to the agreement and the acts in furtherance of the agreement. See SAC, ¶¶22-114. Plaintiffs also allege Defendants LA County and Sathyavagiswaran neglected to prevent Defendants’ violation of Plaintiffs’ rights under 42 USC §1985. Id. at ¶¶111-113. The cause of action is not defective for lack of specificity.
However, a 42 USC §1985(3) claim is based on a conspiracy to deprive a plaintiff of the equal protection of the laws and requires a showing of some racial or class-based discrimination. See Kush, supra, 460 U.S. at 724–26; Griffith, supra, 403 U.S. 88 at 102. Plaintiffs do not claim they were discriminated against based on race or membership in a suspected or quasi-suspect class. As such, Plaintiffs’ 42 USC §1986 claim, which depends upon a 42 USC §1985(3) violation, fails and demurrer is properly sustained w/o leave to amend.