889 F.3d 1081
9th Cir.2018Background
- Palm, a long‑time LADWP employee, was promoted on Dec. 31, 2012 to Steam Plant Maintenance Supervisor and began a six‑month probationary period.
- During probation Palm complained to his supervisor (Graden) about alleged violations and alleged altering of time records; after ~5 months he was given a choice of forced resignation or termination from the probationary position and returned to his prior permanent job as Steam Plant Assistant.
- Palm sued in state court alleging whistleblower retaliation; the suit was removed to federal court and amended to assert § 1983 Monell and First Amendment claims, which the district court dismissed for failure to state a claim.
- Palm then sought to amend to assert Fifth and Fourteenth Amendment due process claims based on the threatened termination from the probationary promotion; the district court denied leave to amend and dismissed with prejudice, finding no constitutionally protected property interest in the probationary position.
- Palm moved for reconsideration and appealed; the Ninth Circuit reviewed de novo whether Palm had a Fourteenth Amendment property interest under Los Angeles Charter and Civil Service Rules.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Palm had a constitutionally protected property interest in his probationary promoted position | Palm argued his prior permanent status meant he retained a property interest in the promoted role (or in continued city employment) and thus was entitled to due process before termination | LADWP argued probationary promotions are governed by Charter and Civil Service Rules that permit termination during probation without appeal or for‑cause protections, so no property interest exists | Held: No property interest in the probationary supervisor role; dismissal affirmed |
| Whether Palm could amend to state a Fourteenth Amendment due process claim | Palm sought leave to add the due process theory | LADWP opposed amendment as futile because no protected interest exists under controlling rules and law | Held: Denial of leave to amend was not an abuse of discretion; amendment would be futile |
| Whether Fifth Amendment claim against nonfederal actors is viable | Palm pressed a Fifth Amendment due process theory | LADWP argued Fifth Amendment applies only to federal actors | Held: Fifth Amendment claim rejected (not for federal actors) |
| Whether Palm’s permanent status in a prior position alters the rules applicable to the probationary promotion | Palm contended permanent status in prior job converted or preserved due process protections for the probationary promotion | LADWP pointed to Charter §1011(b) and Civil Service Rules §7.7/§1.26 showing a permanent employee may serve probation in a new role and be returned to prior position if failing probation; probation rules apply | Held: Permanent status in prior position does not create a protected property interest in the separate probationary position; rules govern probationary status |
Key Cases Cited
- Nozzi v. Hous. Auth., 806 F.3d 1178 (9th Cir. 2015) (discussing requirement of a property interest to invoke procedural due process)
- Bd. of Regents of State Colleges v. Roth, 408 U.S. 564 (U.S. 1972) (property interests in employment are defined by state law)
- McGraw v. City of Huntington Beach, 882 F.2d 384 (9th Cir. 1989) (permanent status preserves expectation of continued employment in the pre‑promotion position; probationary position not necessarily protected)
- Dorr v. Cnty. of Butte, 795 F.2d 875 (9th Cir. 1986) (just‑cause limitation on discharge creates a property interest; subjective probationary discharge undermines such an expectation)
- Fleisher v. City of Signal Hill, 829 F.2d 1491 (9th Cir. 1987) (probationary employees lack property interest where rules allow rejection without appeal)
- Cleveland Bd. of Educ. v. Loudermill, 470 U.S. 532 (U.S. 1985) (procedural protections pertain to existing property interests; procedure does not alone create property)