-DLB Stanislaus Towing & Recovery Services, INC., et al v City of Modesto, et al, No. 1:2011cv01344 - Document 14 (E.D. Cal. 2011)

Court Description: MEMORANDUM DECISION AND ORDER signed by District Judge Lawrence J. O'Neill on 11/4/2011 re Defendants 7 , 8 Motion to Dismiss. (Lundstrom, T)

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1 UNITED STATES DISTRICT COURT 2 FOR THE EASTERN DISTRICT OF CALIFORNIA 3 4 5 6 STANISLAUS TOWING & RECOVERY 1:11-cv-01344 LJO DLB SERVICES, INC., (a California Corporation), RON HANNINK and STEPHANIE HANNINK, MEMORANDUM DECISION AND ORDER RE DEFENDANTS MOTION Plaintiffs, TO DISMISS (DOCS. 7 & 8) 7 v. 8 9 10 CITY OF MODESTO, KAREN ROBERTSON, and DOES 1-50, inclusive, Defendants. 11 I. INTRODUCTION 12 13 This case arises out of a towing service contract between Plaintiffs, Stanislaus Towing & 14 Recovery Services Inc., Ron Hannink, and Stephanie Hannink, and Defendant, the City of 15 Modesto (the City ), through its Police Department. Plaintiffs bring a federal civil rights claim 16 pursuant to 42 U.S.C. § 1983, as well as state law breach of contract and declaratory relief claims, 17 18 in connection with various disciplinary actions the City took against Plaintiffs from 2009 through 2011, including the termination of the towing contract in February 2011. 19 20 21 Defendants, the City and City employee, Karen Robertson, move to dismiss the entire Complaint pursuant to Federal Rule of Civil Procedure 12(b)(6), arguing: 22 (1) Plaintiffs Section 1983 claim should be dismissed because Plaintiffs failed to exhaust 23 administrative remedies described in the towing contract; 24 (2) Plaintiffs state law breach of contract and declaratory relief claims should be 25 dismissed for failure to exhaust administrative remedies; 26 (3) Plaintiffs state law declaratory relief claim should be dismissed for failure to exhaust 27 28 judicial remedies; and 1 1 (4) Plaintiffs declaratory relief claim should be dismissed for failure to comply with the 2 pre-filing notice requirements of the California Government Claims Act, Cal. Gov. Code. 3 § 945.4. 4 Doc. 8-1 at 5-12. Alternatively, invoking Federal Rule of Civil Procedure 12(e), Defendants 5 6 7 8 demand a more definite statement of the First Amendment allegations in the § 1983 claim. Id. at 12-13. Plaintiffs oppose the motion. Doc. 9. Defendants replied. Doc. 11. The motion was 9 originally set for hearing on November 3, 2011, but the hearing was vacated and the matter 10 submitted for decision on the papers. See Doc. 13. 11 II. BACKGROUND 12 13 Plaintiffs and the City first entered into a Tow Service Agreement on August 2, 2006, 14 which was later superseded by a Franchise Tow Agreement ( Agreement ), executed April 13, 15 2009, a copy of which is attached to the Complaint as Exhibit A. The Agreement provides that 16 when a Franchisee receives three violations for failure to provide adequate service within a 17 twelve-month period, the Franchisee will be suspended from providing Tow Services for 30 days. 18 19 20 21 Doc. 1, Compl. at ¶ 11. Following reinstatement after the 30-day suspension, the violation count resets. Id. Paragraph 23(A) of the Agreement sets forth a process by which a Franchisee may request 22 a written review of a violation by the Modesto Police Department s Administrative Services 23 Sergeant. Id. at ¶ 12. The Franchisee may then file a written appeal with the Chief of Police. Id. 24 at ¶ 13. No hearing or further avenues for appeal are provided. 25 26 27 28 On or around December 2009, plaintiffs were suspended from providing tow services based on the Modesto Police Department s issuance of three violations under the Agreement. Plaintiffs allege that [d]espite the fact the violations in question were without merit, and the 2 1 underlying charges were often dismissed, plaintiffs attempts to appeal the violations and the 2 suspension were rejected without proper, effective, and Constitutionally sufficient administrative 3 review and Due Process. Id. at ¶ 15. 4 On or around August 18, 2010, Plaintiffs were again informed they would be suspended 5 6 for one month due to the issuance of three more violations. Id. at ¶ 16. Plaintiffs were also 7 informed that after the suspension, they would be terminated, as it was their second suspension 8 within a three-year period. Id. Plaintiffs filed a complaint in Stanislaus County Superior Court 9 requesting injunctive relief to prevent their termination. Id. at ¶ 16. However, the parties agreed 10 that the suspension and termination should be set aside, and the City Attorney agreed plaintiffs 11 12 13 14 had not been provided adequate Due Process and Administrative review and promised to change the procedure for review of violations under the Agreement. Id. at ¶ 17. On or about February 22, 2011, Plaintiffs were informed that they would be unilaterally 15 terminated from providing tow services due to the filing of criminal charges against them. Id. at ¶ 16 18. Plaintiffs allege they were provided no opportunity for administrative review of the February 17 2011 termination decision. Id. 18 19 On or about April 11, 2011, in accordance with California Government Code § 911.2, Plaintiffs submitted a Claim for Money Damages against the City in connection with the 20 21 termination. Id. at ¶ 19. 22 Plaintiffs filed the instant lawsuit on August 11, 2011. Plaintiffs first cause of action 23 arises under 42 U.S.C. § 1983 and alleges Defendants engaged in unconstitutional conduct by: 24 (1) Intentionally and deliberately issuing violations under the Agreement to Plaintiffs 25 with the intent to force a loss of business and eventually cause the termination of the 26 27 Agreement ; (2) Intentionally targeting the Hanninks for making complaints about the conduct of the 28 3 1 Modesto Police Department, as well as other Tow Service companies that were in favor of 2 [Defendant Robertson]...., thereby intentionally limiting the free speech of said plaintiffs ; 3 (3) Intentionally singling out the Hanninks for criminal prosecution on or about 4 February 22, 2011 in order to remove them from the tow rotation list ; and 5 (4) Intentionally denying plaintiffs procedural and substantive Due Process by failing to 6 7 provide adequate administrative review of the issuance of violations, suspensions, and 8 terminations under the Agreement, in order to deliberately force plaintiffs from the Tow 9 Service business. 10 Id. at ¶ 22. 11 12 13 14 The second cause of action alleges breach of contract against all defendants and asserts Defendants intentionally and wrongfully breached the Agreement when it [sic] unilaterally and unjustifiably terminated said Agreement on or about February 22, 2011, in addition to its previous 15 breaches of the Agreement by the wrongful conduct of its employees in suspending plaintiffs 16 from the tow rotation list and in issuing violation[s] without cause. Id. at ¶ 29. 17 18 19 The third cause of action is for declaratory relief against the City and demands various declarations regarding the City s obligations under the Agreement. Although it is not clear from the face of the complaint whether Plaintiff seeks declaratory relief under state or federal law, 20 21 Plaintiffs reply brief indicates that the request is made pursuant to California law. Doc. 9 at 4-5. 22 23 III. ANALYSIS A. Motion to Dismiss 24 1. 25 This motion to dismiss invokes only Federal Rule of Civil Procedure 12(b)(6). A 12(b)(6) 26 27 Motion to Dismiss For Failure to State a Claim Fed. R. Civ. Pro. 12(b)(6). motion tests the legal sufficiency of a claim. Navarro v. Block, 250 F.3d 729, 732 (9th Cir. 2001). In deciding whether to grant a motion to dismiss, the court accept[s] all factual 28 4 1 allegations of the complaint as true and draw[s] all reasonable inferences in the light most 2 favorable to the nonmoving party. TwoRivers v. Lewis, 174 F.3d 987, 991 (9th Cir. 1999). To 3 survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, 4 to state a claim to relief that is plausible on its face. Ashcroft v. Iqbal, 556 U.S. 662, 129 S.Ct. 5 6 1937, 1949 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). 10 A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged. The plausibility standard is not akin to a probability requirement, but it asks for more than a sheer possibility that defendant has acted unlawfully. Where a complaint pleads facts that are merely consistent with a defendant's liability, it stops short of the line between possibility and plausibility of entitlement to relief. 11 Id. (citing Twombly, 550 U.S. at 556 57). Dismissal also can be based on the lack of a cognizable 12 legal theory. Balistreri v. Pacifica Police Dep't, 901 F.2d 696, 699 (9th Cir. 1988). 7 8 9 13 2. 14 Motion to Dismiss Federal Claims. a. 15 Exhaustion of Administrative Remedies. Defendants argue that the First Cause of Action for Civil Rights Violations under 42 16 17 U.S.C. § 1983 are jurisdictionally barred for failure to exhaust administrative remedies. Doc. 18 8-1 at 5.1 This argument is entirely misguided as, ordinarily, plaintiffs pursuing civil rights 19 claims under 42 U.S.C. § 1983 need not exhaust administrative remedies before filing suit in 20 federal court. See Patsy v. Board of Regents of Fla., 457 U.S. 496, 516 (1982) (Section 1983 was 21 intended to throw open the doors of the United States courts to individuals who were threatened 22 with, or who had suffered, the deprivation of constitutional rights... and to provide these 23 24 25 26 27 28 individuals immediate access to the federal courts notwithstanding any provision of state law to 1 Defendants argument that the Section 1983 claim is jurisdictionally barred is curious in the context of a Rule 12(b)(6) motion. Jurisdictional issues are usually raised by way of a Rule 12(b)(1) challenge to a court s subject matter jurisdiction. The general rule is that, absent clear Congressional intent to make exhaustion jurisdictional, it is not. See Ace Prop. & Cas Ins Co. v. Fed. Crop Ins. Corp., 440 F.3d 992, 996 (8th Cir. 2006) (citing Weinberger v. Salfi, 422 U.S. 749 (1975)); see also Avocados Plus Inc. v. Veneman, 370 F.3d 1243, 1248 (D.C. Cir. 2004).. Here, given that Section 1983 contains no such explicit exhaustion requirement, exhaustion is not jurisdictional, making 12(b)(6) the more an appropriate basis for Defendants challenge. 5 1 the contrary. ). Exceptions to this general rule are extremely limited. For example, exhaustion is 2 statutorily required for civil rights suits brought by prisoners under the Prisoner Litigation Reform 3 Act, and is a prerequisite in Fifth Amendment regulatory takings cases, where exhaustion is 4 considered a matter of ripeness. See Outdoor Media Grp., Inc. v. City of Beaumont, 506 F.3d 5 6 895, 900 (9th Cir. 2007) (discussing exceptions). Neither exception applies here. See id. 899-900 7 (refusing to apply an exhaustion requirement in the context of a 1983 suit brought by a 8 corporation alleging First Amendment and Fourteenth Amendment procedural due process rights 9 violations). 10 11 The cases cited by Defendants are inapposite, as they concern claims brought under statutes with specific exhaustion requirements, e.g. Blanchard v. Morton Sch. Dist., 420 F.3d 918, 12 13 14 920-21 (Individuals with Disabilities in Education Act), overruled on other grounds by Payne v. Peninsula Sch. Dist., 653 F.3d 863 (9th Cir. 2011), or discuss situations where Congress has not 15 clearly required exhaustion and in which sound judicial discretion governs imposition of an 16 exhaustion requirement, see McCarthy v. Madigan, 503 U.S. 140, 144-49 (finding in Bivens 17 action against federal Bureau of Prisons that exhaustion was not required), superseded by statute 18 as stated in Booth v. Churner, 532 U.S. 731, 732 (2001).2 Equally puzzling is Plaintiffs failure 19 to cite the relevant rule from Patsy in response to the motion to dismiss. This Court, the busiest 20 21 22 in the nation, cannot function efficiently without concise, accurate, and complete briefing from the parties. Defendants motion to dismiss the Section 1983 claims for failure to exhaust is DENIED. 23 24 25 26 27 28 2 Not only do Defendants cite irrelevant cases, they failed to disclose in their opening brief that both of the cases cited in this sentence have been overruled or superseded. Citation to these cases should have included appropriate notations to that effect. The Bluebook: A Uniform System of Citation R.10-7.1(c)(i), at 102 (Columbia Law Review Ass n et al. eds., 19th ed. 2010). Defendants acknowledge that McCarthy has been superseded in their Reply brief. See Doc. 11 at 5. 6 1 2 3 4 3. State Claims. a. Exhaustion of Administrative Remedies. (1) Breach of Contract Claim. Defendants argue that Plaintiffs Breach of Contract claim should be dismissed for failure 5 to exhaust state administrative remedies. Under California s exhaustion of administrative 6 remedies doctrine, where an administrative remedy is provided by statute, relief must be sought 7 from the administrative body and this remedy exhausted before the courts will act. Cal. 8 9 Correctional Peace Officers Assn. v. State Personnel Bd., 10 Cal. 4th 1133, 1148 (1995). The 10 same rule has been extended to the public employment context where internal grievance 11 procedures exist. See Edgren v. Regents of Univ. of Cal., 158 Cal. App. 3d 515, 519-21 (1984) 12 Here, the Agreement provides for a process of administrative review to challenge 13 14 violations and/or suspensions: 23. REVIEW/APPEAL OF VIOLATION 15 16 17 18 19 20 21 22 23 24 25 26 27 28 A. FRANCHISEE may request a review of a violation within seven (7) calendar days of receipt of the notice of violation by submitting a request in writing to the Administrative Services Sergeant. If a review is requested by FRANCHISEE, it shall be done as soon as practicable by the Administrative Services Sergeant or his/her designee. FRANCHISEE shall be notified in writing of the Administrative Services Sergeant s decisions(s) within ten (10) business days of the date of completion of the review. B. Following a review, FRANCHISEE may appeal the Administrative Services Sergeant[ ]s decision(s) by submitting a request in writing to the Chief of Police within seven (7) calendar days of receipt of the decision. If an appeal is requested, it shall be done as soon as practicable. The appeal shall be conducted by the Chief of Police or his/her designee. FRANCHISEE shall be notified in writing of the decision(s) of the Chief of Police within ten (10) business days of the date of the completion of the appeal. The decision of the Chief of Police is final. C. A suspension of termination resulting from a violation shall not be imposed until the review and/or appeal process for that violation has been exhausted, except where this Agreement permits an immediate suspension or termination or where a FRANCHISEE s conduct is deemed to be a danger to the motoring public or who has engaged in conduct constituting a gross violation of the 7 1 Agreement. Failure to request a review or appeal in writing within the time specified or failure of FRANCHISEE to appear at a scheduled review or appeal hearing shall constitute a waiver of his or her right to a review or appeal and adjudication of the violation and/or disciplinary action and the violation and/or disciplinary action shall become final. 2 3 4 Doc. 1, Ex. A at ¶ 23 (pages 33-34 of 37) (emphasis in original). Defendants maintain that 5 6 dismissal of Plaintiffs entire breach of contract claim is warranted because Plaintiffs failed to 7 follow these procedures with regard to at least two violations and both suspensions. See Doc. 11 8 at 8. 9 The breach of contract claim alleges that Defendants intentionally and wrongfully 10 breached the Agreement when it [sic] unilaterally and unjustifiably terminated said Agreement on 11 or about February 22, 2011, in addition to its previous breaches of the Agreement by the wrongful 12 13 14 15 16 17 18 19 conduct of its employees in suspending plaintiffs from the tow rotation list and in issuing violation[s] without cause. Compl., Doc. 1. at ¶ 29. Unpacking this allegation reveals that Plaintiffs are describing three distinct sets of events: (1) On or about December 2009, Plaintiffs were suspended for one month after receiving three violations. Compl. at ¶ 15. Plaintiffs allege they lost significant income due to the suspension. Id. (2) On or about August 2010, Plaintiffs were informed they would be suspended for an 20 21 additional month due to the issuance of three additional violations. Id. at ¶ 16. Plaintiffs were 22 also informed that they would be terminated following the suspension, as it was their second 23 suspension in a three-year period. Id. Plaintiffs filed suit for injunctive relief in Stanislaus 24 County Superior Court. Id. at ¶ 17. By agreement of the parties, the suspension and termination 25 were to be set aside. The Complaint alleges that the City agreed that plaintiffs had not been 26 provided adequate Due Process and Administrative review and promised to change the procedure 27 for review of violations issued under the Agreement. Id. 28 8 1 2 3 (3) Approximately seven months later, in February 2011, Plaintiffs were terminated due to the filing of criminal charges against them. Id. at ¶18. The focus of the Breach of Contract claim is Plaintiffs February 20, 2011 termination 4 following the filing of criminal charges against Plaintiffs. It is undisputed that the Agreement 5 6 provides no administrative process for challenging a termination of this nature, nor have 7 Defendants pointed to any other avenue for administrative review of this termination. Plaintiffs 8 are not required to exhaust administrative remedies that do not exist. Defendants motion to 9 dismiss the breach of contract claim is DENIED as to any claim based on the termination. 10 11 It is not clear how Plaintiffs could assert a breach of contract claim based upon the August 2010 violations and threatened suspension and termination, as the suspension and termination 12 13 14 were set aside. Application of the exhaustion requirement to the December 2009 violations and 15 suspension requires further analysis. The December 2009 suspension was implemented, so it is 16 plausible that that the suspension and related violations could form the basis of a breach of 17 contract action. The Agreement provided an administrative procedure to appeal the violations that 18 19 triggered the suspension. The complaint fails to address whether Plaintiffs availed themselves of these procedures. 20 21 Plaintiffs suggest that they should not be required to exhaust the remedies provided in the 22 Agreement because the remedies are inadequate. As proof of this inadequacy, Plaintiffs point 23 out that, in the context of their judicial challenge to the August 2010 violations and threatened 24 suspension and termination, the City Attorney agreed that the procedures did not provide 25 adequate Due Process and Administrative review and promised to change the procedure for 26 review of violations issued under the Agreement. Compl. at ¶ 17. Accepting this allegation as 27 true, which is required on a motion to dismiss, does not excuse Plaintiffs from exhausting the 28 9 1 Agreement s procedures in connection with the December 2009 violations, which occurred many 2 months before any agreement by the City as to the inadequacy of the procedures. A plaintiff s 3 4 belief that a grievance procedure is procedurally inadequate does not excuse that plaintiff from exhausting the procedure. See Edgren, 158 Cal. App. 3d at 522 ( The doctrine of exhaustion of 5 6 administrative remedies applies despite plaintiffs asserted denial of procedural due process. ). 7 Plaintiffs further protest that although the Agreement allows for review of each 8 violation as well as terminations or suspensions based upon the accumulation of violations, there 9 is no contractual requirement that each and every violation be contested. Doc. 9 at 3. This is 10 irrelevant. The same exhaustion rule, that is, if an administrative remedy is made available it 11 12 13 14 15 must be exhausted, applies [even] to what appear to be permissive internal administrative remedies. Williams v. Housing Auth. of City of Los Angeles, 121 Cal. App. 4th 708, 733-34 (rejecting argument that employee did not have to exhaust regulatory remedy providing employee may appeal discharge) (emphasis added). 16 Defendants present the declaration of Karen Robertson, an employee of the City of 17 Modesto, to detail the history of Plaintiffs engagement in the administrative review process. See 18 19 Doc. 12. Defendants maintain that this evidence demonstrates Plaintiffs failed to adequately pursue their administrative remedies in connection with the violations leading up to the December 20 21 2009 suspension. Plaintiffs object to consideration of this extrinsic evidence. The instant motion 22 is brought under Federal Rule of Civil Procedure 12(b)(6).3 As a general rule, a district court may 23 not consider any material outside the pleadings in deciding a 12(b)(6) motion without converting 24 the motion to one for summary judgment after giving notice to the parties. Lee v. City of Los 25 Angeles, 250 F.3d 668, 688 (9th Cir. 2001). There are two exceptions to this rule: 26 First, a court may consider material which is properly submitted as part of the complaint on a motion to dismiss without converting the motion to dismiss into a 27 28 3 Extrinsic evidence is treated differently in a Rule 12(b)(1) motion, but no such motion has been made here. 10 1 2 3 motion for summary judgment. If the documents are not physically attached to the complaint, they may be considered if the documents' authenticity is not contested and the plaintiff's complaint necessarily relies on them. Second, under Fed. R. Evid. 201, a court may take judicial notice of matters of public record. 4 Id. at 688-89 (internal citations and quotations omitted). Defendants incorrectly assert that 5 Branch v. Tunnel, 14 F.3d 449 (9th Cir. 1994), stands for the proposition that if Plaintiffs fail to 6 attach documents which are essential to their claims, then Defendants may attach those 7 documents to their 12(b)(6) motion. Doc. 11 at 2. In fact, Branch held more narrowly that 8 documents whose contents are alleged in a complaint and whose authenticity no party questions, 9 10 but which are not physically attached to the pleading, may be considered in ruling on a Rule 11 12(b)(6) motion to dismiss. 14 F.3d at 454, overruled on other grounds by Galbraith v. County 12 of Santa Clara, 307 F.3d 1119 (9th Cir. 2002). The Complaint in this case does not allege the 13 content of any document pertaining to Plaintiffs administrative appeals (or lack thereof) from the 14 December 2009 violations. Therefore, Defendants evidence of the same cannot be considered. 15 Alternatively, Defendants argue that Plaintiffs made factual concessions that 16 17 18 19 20 21 22 23 24 25 26 demonstrate failure to exhaust. Doc. 11 at 4. The factual concessions to which Defendants refer come from the following paragraph in Plaintiffs Opposition: Defendants claim that the City was to provide a hearing for each suspension or violation. The agreement at issue actually provides that each violation is appealed to the Administrative Sergeant and further appealed to the police chief. Plaintiffs contend that this process failed to provide adequate Due Process. The City of Modesto agreed with plaintiffs and changed the procedure. (Plaintiffs Complaint, ¶ 17). The City further agreed to provide a different hearing mechanism for review of violations. Plaintiffs never tested this new process because they were terminated based on the baseless filing of criminal charges on February 10, 2011. (Plaintiffs Complaint, ¶ 18). (Id). The Agreement does not provide recourse when termination is based on criminal charges. Doc. 9 at 3-4. This paragraph concerns only the August 2010 violations and threatened suspension and termination discussed above. As no suspension or termination was ever imposed 27 based upon the August 2010 violations, it is unclear how any of these circumstances give rise to a 28 11 1 claim for breach of contract. Defendants point to no factual concessions regarding the 2 December 2009 violations and suspension. 3 Nevertheless, Plaintiffs have entirely failed to allege exhaustion in connection with the 4 December 2009 violations and suspension. Exhaustion is a pleading requirement under 5 6 California law. See Shuer v. County of San Diego, 117 Cal. App. 4th 476, 482 ( A demurrer may 7 properly be granted based on the failure to adequately plead [] exhaustion of administrative 8 remedies.... ). The Agreement provided administrative procedures by which Plaintiff could have 9 challenged the December 2009 violations and resulting suspension. The current Complaint 10 contains no allegations regarding exhaustion. Accordingly, to the extent Plaintiffs breach of 11 contract claim is based upon the December 2009 events, the claim must be dismissed with leave 12 13 14 to amend. The motion to dismiss the Breach of Contract clam for failure to exhaust state 15 administrative remedies is GRANTED IN PART AND DENIED IN PART. The motion is 16 DENIED as to Plaintiffs breach of contract claim based upon the February 2011 termination 17 resulting from the filing of criminal charges and GRANTED WITH LEAVE TO AMEND as to 18 19 any breach of contract claim based upon the December 2009 events. If Plaintiffs intend to pursue a breach of contract claim based upon the August 2010 violations and threatened suspension and 20 21 22 23 24 termination, which were later withdrawn, Plaintiffs must clarify this allegation in any amended complaint as well as include relevant exhaustion allegations. (2) Declaratory Relief Claim. Plaintiffs state law declaratory relief claim seeks the following declarations of the rights 25 26 27 28 and duties of the parties: a. That, pursuant to the Agreement, defendant CITY is required to provide a full hearing for any and all reviews and appeals under paragraph 23 of the Agreement; and/or 12 1 2 3 4 5 6 7 8 b. That, pursuant to the Agreement, plaintiff Franchisee is entitled to a hearing before a neutral third party after the decision following an appeal to the Chief of Police; and/or c. That, pursuant to the Agreement, the mere issuance of a citation cannot provide the basis for a violation or a failure to provide adequate service until there has been a judicial determination of any citation; and/or d. That, defendant CITY has breached the Agreement in doing the acts described above and that plaintiffs have not breached the Agreement; and/or e. That defendant CITY may not, pursuant to the Agreement, suspend and/or terminate a Franchise Tow Agreement with plaintiffs; and/or 9 10 11 f. That the Agreement is a contract of adhesion and that the language in the contract providing for termination of a Franchisee based on the provisions of paragraph 23 of said Agreement is unconscionable and unenforceable as a matter of public policy. 12 13 14 g. That defendant CITY may not terminate the Agreement unilaterally based on mere allegations of criminal conduct where the conduct alleged does not constitute fraud in the Towing Services business. 15 Doc. 1 at ¶ 33. The only challenge Defendants bring against this claim is that it should be 16 dismissed for failure to exhaust administrative remedies. However, Defendants have not 17 identified any administrative remedy available under the Agreement or any other regulation or 18 19 statute that would permit Plaintiffs to raise any of these issues before the City. There is no basis for dismissal on exhaustion grounds. The motion is DENIED. 20 21 22 23 24 b. Exhaustion of Judicial Remedies. Defendants argue that Plaintiffs second and third causes of action must be dismissed for failure to exhaust judicial remedies. In support of this argument, Plaintiffs point to the wellestablished California rule that a party to a quasi-judicial proceeding before an administrative 25 26 27 28 body is bound by the findings of that body unless the findings are challenged by means of a mandate action brought before a California Superior Court. See Johnson v. City of Loma Linda, 24 Cal. 4th 61, 69-70 (2000) (citing Westlake Commt y Hosp. v. Superior Court, 17 Cal. 3d 465 13 1 (1976)). 2 This requirement of exhaustion of judicial remedies is to be distinguished from the requirement of exhaustion of administrative remedies. (Knickerbocker v. City of Stockton (1988) 199 Cal.App.3d 235, 241.) Exhaustion of administrative remedies is a jurisdictional prerequisite to resort to the courts. (Abelleira v. District Court of Appeal (1941) 17 Cal.2d 280, 293.) Exhaustion of judicial remedies, on the other hand, is necessary to [give] binding effect to the administrative agency's decision, because that decision has achieved finality due to the aggrieved party's failure to pursue the exclusive judicial remedy for reviewing administrative action. (Briggs v. City of Rolling Hills Estates (1995) 40 Cal.App.4th 637, 646, original italics.) 3 4 5 6 7 8 9 10 Id. at 70. However, not all grievance procedures qualify as quasi-judicial. The California Supreme Court has explained: 11 Indicia of [administrative] proceedings undertaken in a judicial capacity include a hearing before an impartial decision maker; testimony given under oath or affirmation; a party's ability to subpoena, call, examine, and cross-examine witnesses, to introduce documentary evidence, and to make oral and written argument; the taking of a record of the proceeding; and a written statement of reasons for the decision. 12 13 14 15 16 17 Pac. Lumber Co. v. State Water Resources Control Bd., 37 Cal. 4th 921, 944 (2006). The Agreement fails to provide for any hearing at all, let alone a quasi-judicial one. Therefore, the judicial exhaustion doctrine does not apply. Defendants motion to dismiss on this ground is 18 19 20 21 22 DENIED. c. Compliance with the California Government Claims Act. Defendants argue that Plaintiffs third claim, a state law cause of action for Declaratory Relief as to various contractual rights under the Agreement, should be dismissed for failure to 23 24 comply with the California Government Claims Act, which provides that before any claim for 25 money or damages against a public entity can be filed with a court, a claim must first be 26 presented to the public entity in accordance with the Act. Cal. Gov. Code § 945.4. However, the 27 Government Claims Act does not affect the right to obtain relief other than money or damages 28 14 1 against a public entity or public employee. See Cal. Gov. Code § 814. Plaintiffs Declaratory 2 Relief Claim is not barred by the Government Claims Act. Defendants motion to dismiss on this 3 ground is DENIED. 4 5 B. Motion for a More Definite Statement. 6 1. First Amendment Claim. 7 Defendants argue that Plaintiffs should be ordered to amend their complaint to provide a 8 more definite statement of their first amendment claim because it is impermissibly vague, 9 ambiguous and unintelligible. Doc. 8-1 at 12. Federal Rule of Civil Procedure 12(e) provides 10 that [a] party may move for a more definite statement of a pleading ... which is so vague or 11 12 ambiguous that the party cannot reasonably prepare a response. 4 Defendants confusingly invoke Federal Rule of Civil Procedure 12(b)(6) s Twombly and 13 14 Iqbal standards within their Rule 12(e) motion, arguing that more than conclusory allegations 15 are needed to give a defendant the requisite notice of the claim, that inferences cannot be 16 accepted if they are unsupported by the alleged facts, nor can the court accept purely legal 17 conclusions masquerading as factual allegations, and that [t]he Complaint therefore fails to 18 state a claim upon which relief can be granted. Doc. 8-1 at 12-13.5 The standards are not 19 20 interchangeable. A motion for a more definite statement is used to attack unintelligibility, not 21 mere lack of detail, and a complaint is sufficient if it is specific enough to apprise the defendant 22 of the substance of the claim asserted against him or her. San Bernardino Pub. Employees Ass'n 23 v. Stout, 946 F. Supp. 790, 804 (C.D. Cal. 1996). A motion for a more definite statement should 24 be denied where the information sought by the moving party is available and/or properly sought 25 through discovery. Famolare, Inc. v. Edison Bros. Stores, Inc., 525 F. Supp. 940, 949 (E.D. Cal. 26 27 4 Defendants cite an outdated version of Rule 12(e). See Doc. 8-1 at 12. To the extent Defendants are attempting to embed a 12(b)(6) challenge to the First Amendment claim within a 12(e) motion, they have failed to give requisite notice of the nature of their challenge to Plaintiffs. 5 28 15 1 1981). Thus, a motion for a more definite statement should not be granted unless the defendant 2 literally cannot frame a responsive pleading. Bureerong v. Uvawas, 922 F. Supp. 1450, 1461 3 (C.D. Cal. 1996). 4 Here, Plaintiffs allege that Defendants violated their First Amendment rights by 5 6 [i]ntentionally targeting RON and STEPHANIE HANNINK for making complaints about the 7 conduct of the Modesto Police Department, as well as other Tow Service companies that were in 8 the favor of KAREN Robertson and Does 1-20. Compl. at ¶ 22. There is nothing vague or 9 ambiguous about this First Amendment retaliation allegation. Details regarding the exact 10 statements made and the form of the retaliatory conduct are properly sought during discovery. 11 Defendants motion for a more definite statement of the First Amendment claim is 12 13 DENIED. 14 2. 15 Defendants argue for the first time in their Reply brief that Plaintiffs equal protection 16 17 Equal Protection Claim. claim is also impermissibly vague. Although Defendants raise some legitimate concerns about the legal sufficiency of Plaintiffs equal protection claim, see Doc. 11 at 10-11, the Court will not 18 19 consider this argument, which was not raised in the moving papers. Zamani v. Carnes, 491 F.3d 20 990, 997 (9th Cir. 2007) (court need not consider arguments raised for the fist time in a reply 21 brief). 22 23 24 25 26 IV. CONCLUSION AND ORDER For the reasons set forth above, (1) Defendants motion to dismiss the Section 1983 claim for failure to exhaust local administrative remedies is DENIED. 27 (2) Defendants motion to dismiss the breach of contract claim for failure to exhaust 28 administrative remedies is GRANTED IN PART AND DENIED IN PART. The motion is 16 1 DENIED as to Plaintiffs breach of contract claim based upon the February 2011 termination 2 resulting from the filing of criminal charges, and GRANTED WITH LEAVE TO AMEND as to 3 any breach of contract claim based upon the December 2009 events. If Plaintiffs intend to pursue 4 a breach of contract claim based upon the August 2010 violations and threatened suspension and 5 6 termination, which were later withdrawn, Plaintiffs must clarify this allegation in any amended 7 complaint as well as include relevant exhaustion allegations. If Plaintiffs elect to amend their 8 complaint, they shall do so within twenty (20) days following electronic service of this 9 memorandum decision and order. If they elect not to amend their complaint, they shall file a 10 notice so indicating, also within twenty (20) days following electronic service of this 11 12 memorandum decision and order. (3) Defendants motion to dismiss the state law declaratory relief claim for failure to 13 14 15 16 17 18 19 exhaust administrative remedies is DENIED. (4) Defendants motion to dismiss the state law declaratory relief claim for failure to exhaust judicial remedies is DENIED. (5) Defendants motion to dismiss the state law declaratory relief claim for failure to comply with the pre-filing notice requirements of the California Government Claims Act is DENIED. 20 21 22 23 (6) Defendants demand for a more definite statement of the Section 1983 First Amendment claim is DENIED. (6) Defendants demand for a more definite statement of the Section 1983 Due Process 24 claim is not addressed, as it was raised for the first time in reply. 25 SO ORDERED Dated: November 4, 2011 26 /s/ Lawrence J. O Neill United States District Judge 27 28 17

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