Francisco Jose Rivero Pacific Internment Services, a California Corporation v. City and County of San Francisco, and Joseph Surdyka Boyd Stephens
Docket: 00-17113
Court: Court of Appeals for the Ninth Circuit; December 20, 2002; Federal Appellate Court
In the case of Francisco Jose Rivero and Pacific Internment Services versus the City and County of San Francisco, the Ninth Circuit Court dealt with multiple motions regarding qualified immunity for defendants Joseph Surdyka and Boyd Stephens. Initially, a magistrate judge denied their pre-trial motion for summary judgment based on qualified immunity, leading to a jury verdict against them. The magistrate later denied their post-trial motion for judgment based on the same immunity claim but ordered a new trial due to an inconsistent verdict. Before the new trial, a district judge granted summary judgment in favor of Surdyka and Stephens, stating they did not cause injury to the plaintiffs, explicitly avoiding the qualified immunity issue.
Upon a previous appeal from the plaintiffs regarding this summary judgment, Surdyka and Stephens did not cross-appeal but claimed qualified immunity as an alternative for affirming the decision. The appellate court reversed and remanded the case without addressing qualified immunity. On remand, Surdyka and Stephens again sought judgment based on qualified immunity, which was denied by the district court. They appealed this denial, while the plaintiffs argued that the defendants could not appeal due to their failure to cross-appeal in the previous case. The court disagreed with the plaintiffs on this procedural point but ultimately affirmed the district court's decision regarding the merits.
Additionally, the background involves a contract signed in 1992 between Rivero and the City for providing funeral services for indigent individuals, which was administered by the San Francisco Medical Examiner's Office. The contract included a clause allowing termination without cause with thirty days' notice. In 1993, in response to budgetary concerns, the Mayor's office, following suggestions from Surdyka and Stephens, recommended terminating Pacific's contract, which the City executed on May 21, 1993.
Rivero and Pacific filed a lawsuit against the City, Surdyka, Stephens, and Deputy Coroner Herbert Hawley, claiming breach of contract by the City, inducement of breach of contract by the individuals, racial discrimination in violation of 42 U.S.C. § 1981, and retaliation against Rivero's First Amendment rights under 42 U.S.C. § 1983. Rivero reported illegal activities by the individual defendants, including false billings and illegal bribes, to the media and law enforcement, leading to a critical grand jury report. Following Rivero's whistleblowing, control of the indigent dead contract shifted to the MEO, and the individual defendants allegedly retaliated by canceling Pacific's 1992 contract.
The individual defendants sought summary judgment based on qualified immunity, which was denied, and the case proceeded to trial. In 1995, the jury found no breach of contract but determined that Surdyka and Stephens retaliated against Rivero, awarding damages. Surdyka and Stephens then moved for judgment as a matter of law or a new trial, which the magistrate judge denied but ordered a new trial. Before the retrial, the defendants again sought summary judgment, which was granted by a district judge on the basis of lack of causation, without addressing qualified immunity.
On appeal, Surdyka and Stephens did not cross-appeal but argued that the magistrate judge's ordering of a new trial was justified. The appellate court reversed the new trial order, stating that the verdict was consistent and that Surdyka and Stephens could still be liable under § 1983 despite the City not being liable for breach of contract. The court disagreed with the district judge's summary judgment ruling on causation but did not address the qualified immunity argument. The case was reversed and remanded for further proceedings.
Surdyka and Stephens filed a renewed motion for judgment as a matter of law based on qualified immunity, which the district court denied before entering judgment on the verdict. They subsequently appealed. The plaintiffs-appellees argue that Surdyka and Stephens needed to raise the qualified immunity issue in a prior cross-appeal, citing El Paso Natural Gas Co. v. Neztsosie. However, the court disagrees, clarifying that El Paso does not restrict an appellee's ability to present alternative grounds for affirming a judgment without a cross-appeal, provided that such arguments do not seek to expand their rights or diminish the rights of the appellant. The court notes that a prevailing party can defend a judgment on any grounds raised below, as long as they do not aim to change the judgment. Therefore, if a district court's judgment denies relief to a plaintiff and the plaintiff appeals, the defendant-appellee can uphold that judgment without needing to cross-appeal, as affirming the judgment does not alter the parties' rights. An appellate court can affirm on any ground supported by the record, even if not cited by the district court, maintaining the status quo established by the lower court's judgment.
Rivero and Pacific previously appealed a district court's summary judgment against them, with Surdyka and Stephens as the defendants. If Surdyka and Stephens had won on appeal, the district court's judgment would have been upheld, negating the need for a cross appeal to argue for qualified immunity. Plaintiffs argued that Surdyka and Stephens should have taken interlocutory appeals regarding qualified immunity following the magistrate's denial of their motions. However, the court clarified that while such appeals are permissible, they are not mandatory, thus rejecting the plaintiffs' argument as it would impose an unnecessary requirement contradicting judicial efficiency principles.
The court then reviewed the merits of Surdyka and Stephens's appeal de novo, noting that judgment as a matter of law is appropriate only if the evidence supports a conclusion contrary to the jury's verdict. Qualified immunity protects government officials unless their actions violate clearly established rights. The retaliatory actions by Surdyka and Stephens occurred in 1993, and precedent established by the Supreme Court in cases like Pickering and Perry, recognized that public employees have First Amendment rights to speak on public matters and cannot be retaliated against in a manner that denies them valuable governmental benefits, such as public employment. By the time of the actions taken by Surdyka and Stephens, the legal standards were well-established, indicating that retaliating against someone for exercising their First Amendment rights was a violation of their constitutional rights.
In Hyland v. Wonder, 972 F.2d 1129 (9th Cir. 1992), the court addressed the dismissal of Hyland, a volunteer, by the San Francisco Juvenile Probation Department after he submitted a memorandum detailing issues at the Juvenile Hall. The court determined that despite Hyland's unpaid status, his position represented a governmental benefit that could not be revoked in violation of his First Amendment rights, particularly regarding freedom of speech. The court clarified that labeling Hyland as a public employee or volunteer was irrelevant; the key issue was whether he had lost a significant governmental benefit in retaliation for his speech.
Following a remand for further proceedings after reversing the district court's dismissal of Hyland's claim, the district court later granted summary judgment to the defendants based on qualified immunity. The defendants argued that no prior Ninth Circuit case involving a volunteer established that firing Hyland violated the First Amendment. The appellate court disagreed, stating that established law made it clear that government action against individuals for exercising their First Amendment rights was impermissible, regardless of the specificity of prior cases.
The court asserted that, by 1993, it was clearly established that retaliatory actions against state employees or contractors for First Amendment activities were unconstitutional, even without a specific precedent labeling such contracts as 'valuable governmental benefits.' The court rejected the defendants' argument that independent government contractors were excluded from constitutional protections, referencing San Bernardino Physicians' Services Medical Group, Inc. v. County of San Bernardino, 825 F.2d 1404 (9th Cir. 1987). In that case, the court ruled that the contracts in question did not constitute property entitled to due process protections, distinguishing them from tenured employment contracts which do require pre-deprivation hearings.
San Bernardino is deemed irrelevant as the Physicians' Group did not assert a First Amendment rights violation but rather a property rights violation under the due process clause. Plaintiffs argue that Surdyka and Stephens retaliated against Rivero for exercising his First Amendment rights, rather than claiming Pacific's 1992 contract as a property right under due process protections. Surdyka and Stephens maintain that it wasn't established law that a government contract constituted a valuable governmental benefit until the 1996 Supreme Court decision in Board of County Commissioners v. Umbehr, which clarified the law but did not change existing standards in their jurisdiction prior to that ruling.
To overcome Surdyka and Stephens's qualified immunity defense, plaintiffs must demonstrate two clearly established elements at the time of the termination of Rivero’s contract: 1) Rivero's speech involved a matter of public concern; and 2) the public interest in his speech outweighed the state's interest in maintaining workplace efficiency. While the first element is satisfied—evidenced by Rivero's testimony regarding alleged corruption in the medical examiner's office—the defendants argue that the second element was not clearly established in favor of Rivero. This aspect involves factual determinations regarding the defendants' actions and motivations, which are to be resolved by a jury based on the standard civil proof.
The factual determination centers on whether Surdyka and Stephens retaliated against Rivero for whistleblowing. They argued they could have terminated Rivero's contract for other private speech, while Rivero asserted the retaliation was specifically due to his whistleblowing. Evidence presented indicated that Surdyka and Stephens' actions led to the termination of Rivero's contract and suggested a motive linked to Rivero's whistleblowing activities, which had garnered significant negative attention towards them. Testimonies, including that of Investigator Hadley, indicated Surdyka and Stephens were upset about the publicity resulting from Rivero's actions. The legal analysis highlights that whistleblowing is protected speech on matters of public concern, and the state's interest in maintaining workplace efficiency does not outweigh the protection afforded to such speech. The court referenced prior rulings establishing that corrupt officials cannot punish whistleblowers simply due to disruptions caused by their disclosures. Ultimately, while Surdyka and Stephens may claim qualified immunity, the court concluded that a reasonable person in 1993 would have recognized their actions as a violation of established law, denying their claim to immunity and affirming the lower court's ruling.
