5:19-cv-00700
N.D. Cal.May 8, 2020Background
- Plaintiff David Meyberg purchased a surf school formerly permitted to operate at Cowell Beach; his reorganized business, New Santa Cruz Surf School, lacked the City permit and could not operate.
- Santa Cruz municipal code caps commercial surf-school permits at four for Cowell Beach; existing operators (including Club Ed) hold permits.
- Meyberg alleges the City and rival permittees retaliated against him for his role in prior 2007 litigation, and that the permit limit unlawfully restrains trade (Sherman Act) and violated his constitutional rights (First and Fourth Amendments).
- Plaintiffs filed a third amended complaint asserting antitrust and constitutional claims against the City, several individual city employees, and Club Ed defendants; defendants moved to dismiss under Rule 12(b)(6).
- The court found pervasive pleading failures as to many individual defendants and private actors, and concluded the City’s ordinance is immune from Sherman Act challenge under state-action immunity.
- The court granted both groups’ motions to dismiss without leave to amend and retained only the defendants’ counterclaims for further jurisdictional briefing.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Sherman Act — state-action immunity | City ordinance limiting permits unlawfully restrains trade; City and Club Ed conspired to exclude Meyberg | City ordinance is a municipal land-use regulation authorized by California law and entitled to state-action immunity | Dismissed: City entitled to immunity; Sherman Act claim against City dismissed without leave to amend |
| Antitrust claim against Club Ed defendants | Club Ed conspired with City to restrain trade and acted as City agents | No factual allegation of an agreement or agency; Club Ed are merely permit holders | Dismissed: claims vs. Club Ed dismissed for failure to plead conspiracy or state action |
| First Amendment retaliation | Meyberg’s prior litigation is protected speech; City and officers retaliated to chill his speech | Defendants lack knowledge that officers/scurich were motivated by Meyberg’s 2007 litigation; causal link not pleaded | Dismissed: failure to plead that protected activity was a substantial/motivating factor |
| Fourth Amendment / Monell liability | Officer Timoteo’s entry onto curtilage violated Fourth Amendment; City liable | Timoteo entitled to qualified immunity; no municipal policy or custom alleged to impose Monell liability on City | Dismissed: Fourth Amendment claim against City and officer dismissed; Monell allegations inadequate |
Key Cases Cited
- Parker v. Brown, 317 U.S. 341 (state-action immunity doctrine originates from state sovereignty principle)
- Cal. Retail Liquor Dealers Ass’n v. Midcal Aluminum, Inc., 445 U.S. 97 (two-part test for state-action immunity)
- FTC v. Phoebe Putney Health Sys., Inc., 568 U.S. 216 (state-action immunity may extend to nonstate actors carrying out state policy)
- Chamber of Commerce of the United States v. City of Seattle, 890 F.3d 769 (9th Cir.) (clarifies application of Midcal and state-action to municipalities)
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (pleading standard for alleging conspiracy)
- Ashcroft v. Iqbal, 556 U.S. 662 (plausibility standard and rejection of mere conclusory allegations)
- Monell v. Dept. of Soc. Servs., 436 U.S. 658 (municipal liability requires policy or custom)
- O’Brien v. Welty, 818 F.3d 920 (9th Cir.) (elements of First Amendment retaliation claim)