United States District Court, D. Oregon
James D. Huffman, St. Helens, OR, Attorney for Plaintiff.
Peter R. Mersereau, Barrett C. Mersereau, Blake H. Fry, Mersereau Shannon LLP, Portland, OR, Attorneys for Defendant.
MARCO A. HERNANDEZ, District Judge.
Magistrate Judge Acosta issued a Findings and Recommendation (F & R)  on September 9, 2014, in which he recommends that this Court: (1) grant the Unserved Defendants' motion to dismiss the First Amended Complaint (FAC) in its entirety; (2) dismiss with prejudice Plaintiff's 42 U.S.C. § 1983 First Amendment retaliation claim and claims for civil conspiracy; (3) decline to exercise jurisdiction over Plaintiff's claims for intentional infliction of emotional distress (IIED) and malicious prosecution of a civil suit; and (4) dismiss with prejudice Plaintiff's motion for leave to amend since her civil Racketeer Influenced and Corrupt Organizations Act (RICO) claims are futile and this Court has no original jurisdiction over her remaining claims. Plaintiff timely filed objections to the F & R. The matter is now before this Court pursuant to 28 U.S.C. § 636(b)(1) and Federal Rule of Civil Procedure 72(b).
When any party objects to any portion of the Magistrate Judge's Findings and Recommendation, the district court must make a de novo determination of that portion of the Magistrate Judge's report. 28 U.S.C. § 636(b)(1); Dawson v. Marshall, 561 F.3d 930, 932 (9th Cir. 2009); United States v. Reyna-Tapia, 328 F.3d 1114, 1121 (9th Cir. 2003) (en banc).
Plaintiff objects to all of Judge Acosta's F & R except his recommendation regarding the Unserved Defendants. This Court has carefully considered Plaintiff's objections and adopts all of the F & R's conclusions. However, as explained herein, while this Court adopts Judge Acosta's conclusion that the First Amendment retaliation claim should be dismissed, this Court does not adopt his reasoning. This Court also clarifies that while it agrees with Judge Acosta that the civil RICO claims as currently pled in the Proposed Second Amended Complaint (PSAC) fail to state a claim, they are not dismissed-as Judge Acosta stated at page 19 of the F & R- because they are not yet part of the case. Rather, Plaintiff's motion for leave to amend to add those claims is denied as Judge Acosta properly stated in the F & R's conclusion at page 20.
The facts of this case are set out succinctly in the F & R. See F & R, 2-3. Only a brief introduction is provided here. Plaintiff, Patricia Holloway, is a former publicly elected commissioner on the Board of Commissioners of Clackamas River Water (CRW), a municipal corporation which oversees and regulates water distribution for the Clackamas Water District. This case is the most recent episode in a long series of disputes between Plaintiff and Defendants (CRW along with past and present commissioners, employees, and service providers). In her FAC, which is the operative pleading, Plaintiff alleges claims of First Amendment retaliation, malicious prosecution of a civil suit, IIED, and civil conspiracy. FAC, 45-49. Defendants moved to dismiss Plaintiff's claims. Plaintiff responded to that motion, but also filed a separate motion for leave to amend. Plaintiff attached a 111-page PSAC to her motion to amend including claims for malicious prosecution of a civil suit, IIED, civil conspiracy, and civil claims under RICO in addition to the claims already set forth in the FAC. PSAC, 101-110.
This opinion will first address Plaintiff's First Amendment retaliation claim and civil RICO claims as they are the only claims over which this Court has original jurisdiction. This Court finds Plaintiff failed to adequately allege either a First Amendment retaliation claim or a civil RICO claim in her FAC or PSAC. As there are no remaining claims over which this Court has original jurisdiction, this Court declines to exercise supplemental jurisdiction over Plaintiff's remaining state law claims to the degree that Plaintiff is able to state a cognizable claim. 28 U.S.C. § 1367(c)(3). This Court will first address Defendants' motion to dismiss before addressing Plaintiff's motion for leave to amend.
I. Motion to Dismiss First Amended Complaint
A. First Amendment Retaliation Claim
1. Judge Acosta's Analysis
Judge Acosta recommends this Court dismiss Plaintiff's First Amendment retaliation claim. F & R, 7. However, his recommendation is based on the assumption that Plaintiff was a public employee. Id. at 8. To state a claim for First Amendment retaliation under this standard, a court looks to:
(1) whether the plaintiff spoke on a matter of public concern; (2) whether the plaintiff spoke as a private citizen or public employee; (3) whether the plaintiff's protected speech was a substantial or motivating factor in the adverse employment action; (4) whether the state had an adequate justification for treating the employee differently from other members of the general public; and (5) whether the state would have taken the adverse employment action even absent the protected speech.
Anthoine v. N. Cent. Counties Consortium, 605 F.3d 740, 748 (9th Cir. 2010) (citing Eng v. Cooley, 552 F.3d 1062, 1070 (9th Cir. 2009)). In addition to the allegations in the FAC, Judge Acosta noted that Plaintiff's attorney "unequivocally stated at oral argument that the speech relevant to this case all occurred in her official capacity." F & R, 8-9. Judge Acosta ruled that this prevented Plaintiff from pleading that she spoke in her capacity as a private citizen, an essential element of her First Amendment retaliation claim. Id. at 9-10. As Judge Acosta found that Plaintiff failed to allege that her statements were made in her capacity as a private citizen, he recommended this Court dismiss Plaintiff's First Amendment retaliation claim in the FAC. Id. at 8. Next, as Judge Acosta found that Plaintiff was foreclosed from pleading an essential element, he denied Plaintiff's motion for leave to amend her First Amendment retaliation claim in the PSAC as futile. Id. at 9-10.
2. The Applicability of Garcetti v. Ceballos
In Anthoine, the Ninth Circuit considered the application of Garcetti v. Ceballos in which "the Supreme Court held that public employees do not have First Amendment protection for statements made pursuant to their official duties." Anthoine, 605 F.3d at 747-48. Specifically, the Supreme Court held "that when public employees make statements pursuant to their official duties, the employees are not speaking as citizens for First Amendment purposes, and the ...