Diana G. SCHLEGEL; and Central Pacific Freight Lines, an Oregon Corporation, Plaintiffs-Appellees, v. William BEBOUT; and Bob Russell, Defendants-Appellants.
No. 86-3551.
United States Court of Appeals, Ninth Circuit.
Argued and Submitted May 7, 1987. Decided Nov. 3, 1987.
831 F.2d 881
While we do not deny that conflict is possible between state malicious prosecution laws and federal patent laws, the policies underlying each are not inherently antithetical. Patents do not create an exemption from state malicious prosecution laws. Indeed, the balance we reached in Handgards between the rights of suing patentees and their defendants presupposed the continued existence of state law remedies for bad faith suits: “nothing appears to preclude a successful defendant in an infringement action from bringing a common law malicious prosecution claim” Id. at 998 n. 17.
Finally, we must recognize that one of the reasons that we found it necessary in Handgards to protect patentees from antitrust actions was that they posed the threat of treble damages. Id. at 993. The chilling effect of that potential remedy upon the good faith actions of patentees is far greater than that posed by the enforcement of state malicious prosecution laws.
For all of these reasons, we decline to extend the rule of Handgards to this California malicious prosecution action. Aluminum’s burden in this action is to establish malice by a preponderance of the evidence. Consequently, Aluminum is not collaterally estopped by its failure to establish, in the previous litigation, bad faith by clear and convincing evidence.
B. Identity of the Issues and Opportunity for Discovery
Aluminum contends that collateral estoppel is inappropriate for two additional reasons. First, the element of “exceptional circumstances” in the previous patent action is not identical to the element of malice in the malicious prosecution action. Collateral estoppel requires that the estopped issue be identical to an issue litigated in a previous action. Second, the previous patent action did not provide an opportunity for appellant to conduct full discovery on the question of appellee’s malice in bringing that action. Differences in discovery procedures may justify “not allowing a prior judgment to have estoppel effect in a subsequent action, even between the same parties.” Parklane Hosiery Co. v. Shore, 439 U.S. 322, 331 n. 15, 99 S.Ct. 645, 651 n. 15, 58 L.Ed.2d 552 (1979). Alumax contends that this latter claim fails because Aluminum did not raise the issue in the district court below and because in the previous action Aluminum did not request (1) a bifurcated trial, (2) additional discovery relevant to section 285, and (3) information from the appellee directly. We need not reach any of these issues in view of our ruling that the burdens of proof are different.
REVERSED AND REMANDED.
Michael D. Reynolds, Salem, Or., for defendants-appellants.
Before ANDERSON, TANG and NOONAN, Circuit Judges.
J. BLAINE ANDERSON, Circuit Judge:
William Bebout and Bob Russell (appellants) appeal the district court’s denial of their motion to dismiss Schlegel’s complaint, pursuant to
FACTS
A. BACKGROUND
The basis of Schlegel’s claim is that appellants initiated and participated in irregular and discriminatory actions during the time period in which an administrative hearing on intrastate trucking applications was in progress. Appellee Dana Schlegel owns and operates Central Pacific Freight Lines, an intrastate trucking corporation. She alleges that appellants interfered in the evidence-producing process, had repeated ex parte contacts with the hearing officer for the purpose of influencing the outcome of the hearing, and continued the irregular and discriminatory actions after the hearing was over in an attempt to harass appellees.
In October, 1983, miscellaneous applications for regular route intrastate trucking authority within Oregon were consolidated for a hearing. This hearing ran until June, 1984. When such a hearing is convened, the Oregon Administrative Rules (OAR) provide that the hearing shall be conducted by a presiding officer.
After the hearing, the presiding officer issues a proposed order. If parties, or the Commissioner’s staff, disagree with the proposed order, they may take exceptions. The Commissioner himself may then modify, reject, or adopt the proposed order as his own.
In short, hearings to determine the granting or denial of applications for intraroute authorities envision an independent presiding officer accepting evidence. The PUC Commissioner may act only after this hearing. However, the Commissioner may
B. THE COMPLAINT
It is the actions by appellants which occurred during and after this hearing that form the basis for Schlegel’s complaint. According to appellees, as alleged in their complaint:
In November, 1983, with the intention of influencing the outcome of the hearing, appellants circulated false financial information regarding Schlegel and her trucking company. This conduct was not the type of conduct usually performed by the PUC and was done for the sole purpose of damaging appellees. (Complaint ¶ 10).
In November, 1983, at appellants’ direction, auditors performed, for the second time that year, a compliance audit at appellees’ headquarters. This audit was irregular and discriminatory, not in the ordinary course of business for the PUC, was done to harass appellees, and resulted in information leaking to certain participants in the hearing and to the hearing officer that appellees were guilty of twelve violations of state transportation laws. A cease and desist letter was issued by appellants although they knew appellees were not guilty of any such violations. (Id. ¶ 11).
In January, 1984, appellant Bebout, in an informal conversation with Schlegel, detailed proposed results of the pending hearing and threatened Schlegel that if she did not cooperate in his proposed resolution of all pending route authority issues, he would make sure she would be denied route authorities critical to her business. She refused and the hearing continued. (Id. ¶ 12).
In February, 1984, again at appellants’ direction, a third compliance audit was performed. This audit was illegal and discriminatory in that it, too, was designed to influence the outcome of the hearing. After reviewing 14,000 freight bills, one violation was found. (This involved a $23 pick-up and delivery). A formal complaint was issued. This was the first time in PUC history that a formal complaint was issued based on a finding of one freight movement violation. This complaint was issued to harass and discriminate against appellees and to influence the outcome of the hearing. (Id. ¶ 13).
In February, 1984, appellants threatened to put Schlegel out of business unless she changed her corporate attorney and went along with proposed settlement as outlined by Bebout in January. She refused. (Id. ¶ 14).
The hearing results were announced in June, 1984. The results were substantially similar to the proposed settlement Bebout had presented in January. (Id. ¶ 15).
In August, 1984, appellants caused a complaint to be filed against appellees, alleging that the company violated PUC regulations due to a particular interline connection it had entered into with an interstate carrier. Appellants caused a press release to be distributed which claimed that the alleged violation was “probably the most serious violation in the history of Oregon trucking.” This statement was not true and was released as part of the continuing harassment and singling out of appellees for the purpose of causing economic injury. Appellant Bebout also threatened legal action against any shipper utilizing Schlegel’s trucking company’s services. (Id. ¶ 16).
As directed by appellants, PUC inspectors appeared and inspected the Portland yards of Central Pacific Freight Lines. The chief inspector told appellants that the company passed with excellent results. With the intention of harass, intimidate, single out, and cause economic harm to appellees, appellants ordered an unannounced, re-inspection at the Portland and Eugene yards. (Id. ¶ 17).
On this foundation, Schlegel strives to build a federal civil rights (
C. DISTRICT COURT PROCEEDINGS
Appellants, who claim they are entitled to absolute immunity, moved for dismissal pursuant to
On July 9, 1986, a two-judge motions panel of this court denied Schlegel’s motion to dismiss the appeal for lack of jurisdiction. It found that denial of a motion to dismiss based on absolute immunity is an appealable interlocutory order.
JURISDICTION
While we give deference to motions panel decisions made in the course of the same appeal, this court has an independent duty to decide whether we have jurisdiction. See United States v. Houser, 804 F.2d 565, 568 (9th Cir.1986). However, we agree with the motions panel and find that a denial of a motion to dismiss based on a claim of absolute immunity is an appealable interlocutory order. Mitchell v. Forsyth, 472 U.S. 511, 105 S.Ct. 2806, 86 L.Ed.2d 411 (1985); Nixon v. Fitzgerald, 457 U.S. 731, 102 S.Ct. 2690, 73 L.Ed.2d 349 (1982).
STANDARD OF REVIEW
A ruling on a motion to dismiss for failure to state a claim is a ruling on a question of law and is reviewed de novo. See Fort Vancouver Plywood Co. v. United States, 747 F.2d 547, 552 (9th Cir.1984).
DISCUSSION
In this interlocutory appeal, the issue we must decide is whether appellants’ claim of absolute immunity was properly denied. We find that it was.
The language of
Despite the broad statutory language of
If found, immunity may be either absolute or qualified. The common-law absolute immunity of judges for “acts committed within their judicial jurisdiction was preserved under § 1983.” Pierson v. Ray, 386 U.S. 547, 554-55, 87 S.Ct. 1213, 1217-18, 18 L.Ed.2d 288 (1967). This immunity is upheld even when the judge is accused of acting maliciously and corruptly because imposing a burden on judges would contribute not to principled and fearless decision-making, but to intimidation. Id. at 554, 87 S.Ct. at 1217. The Supreme Court has extended absolute immunity to certain others who perform functions closely related
We now turn to the issue we must address today which is whether appellants should have been granted absolute prosecutorial immunity. In answering this question, we are guided by the Supreme Court’s analysis of the nature of prosecutorial immunity in Imbler, and its more recent decision on the doctrine of official immunity in Butz.
In Imbler, a
“We have no occasion to consider whether like or similar reasons require immunity for those aspects of the prosecutor’s responsibility that cast him in the role of an administrator or investigative officer rather than that of advocate. We hold only that in initiating a prosecution and in presenting the State’s case, the prosecutor is immune from a civil suit for damages under § 1983.”
Id., 424 U.S. at 430-31, 96 S.Ct. at 994-95, 47 L.Ed.2d at 143-44.
It is true, as appellants argue, that agency officials who perform functions analogous to a prosecutor enjoy prosecutorial immunity. Butz, 438 U.S. at 515, 98 S.Ct. at 2913. Prosecutorial immunity also applies to state administrative officials who perform functions analogous to those of a prosecutor. Sellars, supra. Absolute prosecutorial immunity exists if the prosecutor acts within the scope of his or her authority and in a quasi-judicial capacity. Ybarra, 723 F.2d at 678. “The focus of the analysis ... is on the nature or function of the prosecutor’s authority.” Id.
Absolute immunity is warranted if the prosecutor acts as advocate in initiating a prosecution and in presenting the state’s case. Imbler, 424 U.S. at 430-31, 96 S.Ct. at 994-95, 47 L.Ed.2d at 143-44. Whether absolute immunity attaches to acts that are functionally administrative or investigative, however, is an open question.
Our inquiry, therefore, must center on the nature of the official conduct challenged, and not the status or title of the officer. As a result, we must examine the particular prosecutorial conduct of which Schlegel complains. If we determine that the conduct is within the scope of appellants’ authority and is quasi-judicial in nature, our inquiry ceases since the conduct would fall within the sphere of Imbler immunity.
To determine whether conduct of a state official is within his or her authority, the proper test is not whether the act performed was manifestly or palpably beyond his or her authority, but rather whether it is more or less connected with the general
The particular activities of which Schlegel complains include interference with the evidence producing process, ex parte contacts, performing audits and inspections, issuing cease and desist letters and complaints based on those audits and inspections, making press statements, and advising shippers that if they engage the services of Schlegel, they may face legal action. None of these activities fall within the scope of activity for which prosecutors were given immunity in Imbler.
We find that the consolidated hearing for route authorities was not an adversarial or disciplinary proceeding, but rather was regulatory in nature. Although appellants may function at times in a “prosecutorial-like” manner, it appears that under the circumstances of this case, appellants functioned more as regulators of a utility, investigating companies and ensuring compliance. We find that this is not an “exceptional situation where it is demonstrated that absolute immunity is essential for the conduct of the public business.” Butz, 438 U.S. at 507, 98 S.Ct. at 2911. We, therefore, find that even though they were acting within the scope of their authority, these PUC officers were not acting in a quasi-judicial capacity, and are not entitled to the absolute immunity afforded to judges, persons performing judge-like roles within federal agencies, or prosecutors.
Since this interlocutory appeal under
“For executive officials in general, our cases make plain that qualified immunity represents the norm.” Id. See Scheuer v. Rhodes, 416 U.S. 232, 94 S.Ct. 1683, 40 L.Ed.2d 90 (1974) (state governor and his aides); Harlow v. Fitzgerald, 457 U.S. 800, 807, 102 S.Ct. 2727, 2732, 73 L.Ed.2d 396 (1982) (presidential aides); Butz, supra (cabinet member, acknowledging, however, that there are “those exceptional situations where it is demonstrated that absolute immunity is essential for the conduct of the public business,” 438 U.S. at 507, 98 S.Ct. at 2911); Procunier v. Navarette, 434 U.S. 555, 98 S.Ct. 855, 55 L.Ed.2d 24 (1978) (state prison officials); Wood v. Strickland, 420 U.S. 308, 95 S.Ct. 992, 43 L.Ed.2d 214 (1975) (school board members); Pierson, supra (police officers).
Generally, government officials performing discretionary functions are provided with qualified immunity, shielding them from civil damages liability so long as their actions could reasonably have been thought consistent with the rights they are alleged to have violated. See, e.g., Anderson v. Creighton, 483 U.S. 635, 107 S.Ct. 3034, 97 L.Ed.2d 523 (1987). Whether an official may be held personally liable for an allegedly unlawful official action mainly turns on the “objective legal reasonableness” of the action assessed in light of the legal rules that were “clearly established” at the time it was taken. Id., 107 S.Ct. at 3038, 97 L.Ed.2d at 530 (quoting Harlow, 457 U.S. at 819, 102 S.Ct. at 2738, 73 L.Ed.2d at 411).
The Supreme Court recently examined the level of generality at which the rele-
Based upon these principles, appellants are entitled to immunity if they can prove that a reasonable PUC official could have believed that the action taken was lawful, in light of clearly established law. The existence of a reasonable belief that their conduct was lawful, viewed in the light of clearly established law, is a question for the trier of fact. See Bilbrey by Bilbrey v. Brown, 738 F.2d 1462, 1467 (9th Cir.1984). We cannot, therefore, decide this issue.
The district court judgment denying appellants’ motion to dismiss on the grounds of absolute immunity is AFFIRMED, and the case is REMANDED for further proceedings consistent with this opinion.
NOONAN, Circuit Judge, dissenting:
The line between absolute and qualified immunity “often is not an easy one to perceive and structure.” Cleavinger v. Saxner, 474 U.S. 193, 206, 106 S.Ct. 496, 503, 88 L.Ed.2d 507 (1985). In determining where the line must fall, federal judges, being human, are wonderfully perceptive in perceiving that they could not function without absolute immunity, less clearsighted when they look at some other parts of government. The court here has, I believe, misperceived this difficult line. The question, simply put, is, “Is a state Public Utilities Commission more like a school board than a prosecutor?” The court answers, “School board” and applies the qualified immunity of Wood v. Strickland, 420 U.S. 308, 95 S.Ct. 992, 43 L.Ed.2d 214 (1975). “Prosecutor” seems to me the better answer, bearing in mind that public utilities commissions like the Oregon one are charged with prosecutorial duties which in an earlier age, with fewer administrative agencies, would have had to have been discharged by the attorney general. The several audits complained of were in discharge of prosecutorial duty, as was, obviously, the cease and desist letter. The attempts to induce settlement were prosecutorial in nature. Nothing else is relied on by the court except an alleged libel: surely one cannot turn a libel into a civil rights action by saying it deprived one of equal protection!
Now it is true, of course, that the plaintiffs allege that the audits were discriminatory, the attempts to induce settlement were harassment, and the cease and desist letter was baseless; and it is not within the scope of the PUC’s duty to discriminate or harass or issue baseless complaints. But neither is it within a prosecutor’s duty to offer perjured testimony or suppress evidence, and a prosecutor is immune when charged with such misconduct. Imbler v. Pachtman, 424 U.S. 409, 96 S.Ct. 984, 47 L.Ed.2d 128 (1976). The prosecutor is immune because the merits of his actions cannot be examined without shaking public confidence in his office and his own confidence in his work. Id. at 424-25, 96 S.Ct. at 992. So here, to subject officers of the
A decent regard for our federal system points to the same conclusion. Public utility commissions are important adjuncts of the state prosecutorial system. If any disgruntled litigant before such a body is free to make a federal civil rights case out of her disappointment, state autonomy is curtailed sharply. In the case at bench the plaintiffs—losers in an application for trucking routes—have put together allegations of libel (a state tort), added allegations of prosecutorial misconduct, and wrapped around these claims a conclusory assertion that they have been denied equal protection of the law. The damages that the plaintiffs say have flowed from the miscellaneous acts charged are $2 million. Although no clear connection appears between this substantial sum and the three audits, the cease and desist letter, and the state tort, I assume that counsel made reasonable inquiry before stating that such damages were suffered.
J. BLAINE ANDERSON
UNITED STATES CIRCUIT JUDGE