ERNEST J. FRANCESCHI, JR., Plaintiff and Appellant, v. FRANCHISE TAX BOARD et al., Defendants and Respondents.
No. B267719
Second Dist., Div. One.
July 8, 2016.
247 Cal.App.4th 247
Ernest J. Franceschi, Jr., in pro. per., for Plaintiff and Appellant.
Kamala D. Harris, Attorney General, Diane S. Shaw, Assistant Attorney General, Stephen Lew and Matthew C. Heyn, Deputy Attorneys General, for Defendants and Respondents.
OPINION
JOHNSON, J.—Ernest J. Franceschi, Jr. (Franceschi), petitioned the superior court for a writ directing the then-serving members of the Franchise Tax Board (FTB)—Betty Yee, Jerome E. Horton and Michael Cohen, sued in their official capacities only—to cease publishing his name on the FTB‘s list of the state‘s “Top 500” income tax debtors (the List). In his petition, Franceschi argued that publication of his name on the List violates his right to privacy. The FTB‘s members demurred to the petition, arguing in the main that (1)
On appeal, Franceschi challenges both the dismissal of his petition and the sanctions award. As discussed in more detail below, we hold that the petition was barred by the doctrine of res judicata. As that issue is determinative, we need not and do not reach the issue of whether Franceschi‘s petition stated a claim (or could be amended to state a claim) for violation of his privacy rights. We also hold that the trial court did not abuse its discretion in sanctioning Franceschi. Accordingly, we affirm the order.
BACKGROUND
Section 19195 of the Revenue and Taxation Code requires the FTB to publish the List at least twice each year. (
I. Franceschi‘s first action regarding the List
In February 2014, Franceschi received a “notice of public disclosure of tax delinquency” from the FTB, advising him that he owed over $242,000 in taxes and, that unless he corrected this delinquency by March 17, 2014, the FTB might add his name, his address, his occupational and professional licenses, and the amount owed to the FTB‘s public website—that is, put his name on the List. The FTB‘s notice further advised Franceschi that the inclusion of his name on the List might result in the denial or suspension of various licenses pursuant to
A. Franceschi‘s complaint
On March 14, 2014, Franceschi filed a complaint in federal district court seeking declaratory and injunctive relief (the First Action). The First Action was brought against the then-serving members of the FTB and the Director of the Department of Motor Vehicles. The gravamen of the complaint was that Franceschi‘s name should not have been put on the List and, by so doing, defendants violated certain of his civil rights. More specifically, Franceschi asserted four claims for relief under
B. The dismissal of Franceschi‘s complaint
On August 4, 2014, after briefing and oral argument, the federal district court granted defendants’ motion to dismiss for failure to state a claim, finding that Franceschi‘s complaint was defective on substantive legal grounds, not narrow procedural grounds. In a tentative order distributed to the parties in advance of the hearing, the district court indicated its willingness to grant Franceschi leave to amend his complaint. At the hearing, however, Franceschi declined this invitation, stating that “he did not believe he could amend his complaint to plead additional facts that would correct what the district court found to be legal deficiencies in his claims.” As a result, the district court dismissed the complaint with prejudice and entered judgment in favor of defendants.
II. Franceschi‘s second action regarding the List
A. Franceschi‘s petition
On March 18, 2015, Franceschi petitioned the superior court for a writ of mandamus (the Second Action). As with the First Action, Franceschi sued the then-current members of the FTB. As with the First Action, Franceschi premised the petition on the fact that, pursuant to Revenue and Taxation Code
B. The dismissal of Franceschi‘s petition
Respondents demurred to the petition, arguing, inter alia, that the doctrine of res judicata barred the petition. In response, Franceschi did not dispute that the Second Action involved the same parties as in the First Action, rested on the same basic facts as the First Action, was based on the same primary right—to be free from having his name placed on the List—and sought the same relief. Instead, Franceschi argued that had he brought his mandamus/privacy claim in the First Action, the federal district court would not have exercised supplemental jurisdiction because the claim was based on complex issues of state law.
In an order dated August 24, 2015, the trial court, inter alia, rejected Franceschi‘s arguments against the application of the res judicata doctrine and did so for two reasons. “First, a litigant cannot avoid the impact of the rule against splitting causes of action by choosing to file the first action in a tribunal of limited jurisdiction, such as the federal district court. [Citation.] There is no reason [Franceschi] could not have brought his . . .
Because Franceschi‘s attempt to split his claims between his federal and state actions rendered the Second Action “frivolous and groundless,” the trial court sanctioned Franceschi in the amount of $5,000. As an “experienced
DISCUSSION
I. Standards of review
A. De novo review for a demurrer
A petition for a writ is subject to a demurrer. (
We independently review the ruling on a demurrer and determine de novo whether the pleading alleges facts sufficient to state a cause of action. (McCall v. PacifiCare of Cal., Inc. (2001) 25 Cal.4th 412, 415 [106 Cal.Rptr.2d 271, 21 P.3d 1189].) We assume the truth of the properly pleaded factual allegations, facts that reasonably can be inferred from those expressly pleaded, and facts of which judicial notice can be taken. (Schifando v. City of Los Angeles (2003) 31 Cal.4th 1074, 1081 [6 Cal.Rptr.3d 457, 79 P.3d 569].) “It is not the ordinary function of a demurrer to test the truth of the plaintiff‘s allegations or the accuracy with which he describes the defendant‘s conduct. A demurrer tests only the legal sufficiency of the pleading.” (Committee on Children‘s Television, Inc. v. General Foods Corp. (1983) 35 Cal.3d 197, 213 [197 Cal.Rptr. 783, 673 P.2d 660].) Accordingly, in considering the merits of a demurrer, “the facts alleged in the pleading are deemed to be true, however improbable they may be.” (Del E. Webb Corp. v. Structural Materials Co. (1981) 123 Cal.App.3d 593, 604 [176 Cal.Rptr. 824].)
B. Abuse of discretion for imposition of monetary sanctions
Traditionally, we review a trial court‘s order imposing sanctions for abuse of discretion. (20th Century Ins. Co. v. Choong (2000) 79 Cal.App.4th 1274, 1277 [94 Cal.Rptr.2d 753].) “Where . . . a discretionary power is inherently or by express statute vested in the trial judge, his or her exercise of that wide discretion must not be disturbed on appeal except on a showing that the court exercised its discretion in an arbitrary, capricious or patently absurd manner
II. The Second Action is barred by the doctrine of res judicata
Where an action is filed in a California state court and the defendant claims the suit is barred by a final federal judgment, California law will determine the res judicata effect of the prior federal court judgment on the basis of whether the federal and state actions involve the same primary right. (Agarwal v. Johnson (1979) 25 Cal.3d 932, 954–955 [160 Cal.Rptr. 141, 603 P.2d 58], disapproved on other grounds in White v. Ultramar, Inc. (1999) 21 Cal.4th 563, 574, fn. 4 [88 Cal.Rptr.2d 19, 981 P.2d 944].)
Under California law, “‘[t]he doctrine of res judicata gives certain conclusive effect to a former judgment in subsequent litigation involving the same controversy.‘” (Boeken v. Philip Morris USA, Inc. (2010) 48 Cal.4th 788, 797 [108 Cal.Rptr.3d 806, 230 P.3d 342].) “Res judicata precludes the relitigation of a cause of action only if (1) the decision in the prior proceeding is final and on the merits; (2) the present action is on the same cause of action as the prior proceeding; and (3) the parties in the present action or parties in privity with them were parties to the prior proceeding.” (Zevnik v. Superior Court (2008) 159 Cal.App.4th 76, 82 [70 Cal.Rptr.3d 817].) Res judicata bars the litigation not only of issues that were actually litigated in the prior proceeding, but also issues that could have been litigated in that proceeding. (Busick v. Workmen‘s Comp. Appeals Bd. (1972) 7 Cal.3d 967, 975 [104 Cal.Rptr. 42, 500 P.2d 1386].) “A predictable doctrine of res judicata benefits both the parties and the courts because it ‘seeks to curtail multiple litigation causing vexation and expense to the parties and wasted effort and expense in judicial administration.‘” (Mycogen Corp. v. Monsanto Co. (2002) 28 Cal.4th 888, 897 [123 Cal.Rptr.2d 432, 51 P.3d 297].)
For purposes of applying the doctrine of res judicata, the phrase “cause of action” has a precise and particular meaning: the cause of action is the right to obtain redress for a harm suffered, regardless of the specific remedy sought or the legal theory (common law or statutory) advanced. (See Bay Cities Paving & Grading, Inc. v. Lawyers’ Mutual Ins. Co. (1993) 5 Cal.4th 854, 860 [21 Cal.Rptr.2d 691, 855 P.2d 1263].)
As explained by our Supreme Court, California‘s res judicata doctrine and its definition of “cause of action” are based upon the primary right theory:
“The primary right theory is a theory of code pleading that has long been followed in California. It provides that a ‘cause of action’ is comprised of a
“As far as its content is concerned, the primary right is simply the plaintiff‘s right to be free from the particular injury suffered. [Citation.] It must therefore be distinguished from the legal theory on which liability for that injury is premised: ‘Even where there are multiple legal theories upon which recovery might be predicated, one injury gives rise to only one claim for relief.’ [Citation.] The primary right must also be distinguished from the remedy sought: ‘The violation of one primary right constitutes a single cause of action, though it may entitle the injured party to many forms of relief, and the relief is not to be confounded with the cause of action, one not being determinative of the other.’ [Citation.]
“The primary right theory . . . is invoked . . . when a plaintiff attempts to divide a primary right and enforce it in two suits. The theory prevents this result by either of two means: (1) if the first suit is still pending when the second is filed, the defendant in the second suit may plead that fact in abatement [citations]; or (2) if the first suit has terminated in a judgment on the merits adverse to the plaintiff, the defendant in the second suit may set up that judgment as a bar under the principles of res judicata.” (Crowley v. Katleman (1994) 8 Cal.4th 666, 681–682 [34 Cal.Rptr.2d 386, 881 P.2d 1083].)1 In short, under California law, the significant factor guiding the application of the doctrine is whether the “cause of action” is for invasion of a single primary right; whether the same facts are involved in both suits is not conclusive. (Agarwal v. Johnson, supra, 25 Cal.3d at p. 954.)
The doctrine not only precludes relitigation of claims resolved in a prior action, but it also precludes litigation of claims that could have been brought in the prior action but were not. As our Supreme Court has stated, “The law abhors a multiplicity of actions. . . . [A] party cannot by negligence or design withhold issues and litigate them in successive actions; he may not split his demands or defenses; he may not submit his case in piecemeal fashion.” (Flickinger v. Swedlow Engineering Co. (1955) 45 Cal.2d 388, 393 [289 P.2d 214].) “This principle is fundamental and has been consistently applied by
our courts.” (Panakosta, Partners, LP v. Hammer Lane Management, LLC (2011) 199 Cal.App.4th 612, 634 [131 Cal.Rptr.3d 835].)
In other words, the doctrine of res judicata goes beyond the four corners of the operative pleading in the prior action: ” ‘If the matter was within the scope of the action, related to the subject-matter and relevant to the issues, so that it could have been raised, the judgment is conclusive on it despite the fact that it was not in fact expressly pleaded or otherwise urged. The reason for this is manifest. A party cannot by negligence or design withhold issues and litigate them in consecutive actions. Hence the rule is that the prior judgment is res judicata on matters which were raised or could have been raised, on matters litigated or litigable.” (Warga v. Cooper (1996) 44 Cal.App.4th 371, 377–378 [51 Cal.Rptr.2d 684].)
A. The decision in the First Action was final and on the merits
“Full faith and credit must be given to a final order or judgment of a federal court.” (Levy v. Cohen (1977) 19 Cal.3d 165, 172 [137 Cal.Rptr. 162, 561 P.2d 252]; see
B. The First and Second Actions involved the same parties
In both the First Action and the Second Action, Franceschi sued the then-serving members of the FTB. In other words, in both actions, Franceschi sued the FTB. As a result, the parties in both actions are the same.
C. The First and Second Actions involved the same primary right
Although the First and Second Actions involve different legal theories, they were based on the same primary right—that is, Franceschi‘s (alleged) right not to have his name and other personal information placed on the List.
On appeal, Franceschi effectively concedes that he asserted the same primary right against the same parties in both the First and Second Actions. Instead, he argues that the primary right analysis is largely irrelevant in this instance: “the question of whether a federal judgment will be res judicata on a state law claim turns not on whether the [state] claim flows from [the]
The rule in California is that ” ‘[i]f . . . the court in the first action would clearly not have had jurisdiction to entertain the omitted theory or ground (or, having jurisdiction, would clearly have declined to exercise it as a matter of discretion), then a second action in a competent court presenting the omitted theory or ground should be held not precluded.’ ” (Koch v. Hankins (1990) 223 Cal.App.3d 1599, 1605 [273 Cal.Rptr. 442], italics added, quoting § 25, com. e of Rest.2d Judgments; see Merry v. Coast Community College Dist. (1979) 97 Cal.App.3d 214, 229 [158 Cal.Rptr. 603] [same].) Franceschi, however, failed to ask the federal district court to exercise supplemental jurisdiction over his mandamus/privacy claim; he simply assumed that it would decline to do so. As a result, we must now consider whether Franceschi‘s assumption was justified, whether it was “clear” that the federal district court would decline to exercise supplemental jurisdiction. As discussed below, we hold that it was by no means clear that the federal court would have refused to consider the mandamus/privacy claim; in fact, it is likely that the district court would have exercised supplemental jurisdiction.
Although federal court jurisdiction is generally limited to claims presenting a federal case or controversy or disputes between diverse parties, federal courts may exercise supplemental jurisdiction over related state law claims that “form part of the same case or controversy.” (
We believe that the federal district court in the First Action would have exercised supplemental jurisdiction over Franceschi‘s mandamus/privacy claim for several reasons.
First, the Second Action grew out of the same set of operative facts that gave rise to the First Action—the placement of Franceschi‘s name and other personal information on the List.
Second, given the number and weight of the section 1983 claims asserted in the First Action—procedural due process, substantive due process, equal protection, violation of the privileges and immunities clause, and violation of the prohibition against bills of attainder—it is unlikely that the lone state law claim in the Second Action would have predominated over the federal claims, let alone have substantially predominated over them.
Third, the mandamus/privacy claim does not present a particularly novel or complex issue of state law, either substantively or procedurally. With regard to the substance of Franceschi‘s privacy claim, federal district courts routinely exercise their discretion so as to resolve both federal civil rights claims brought under section 1983 and state law claims brought pursuant to the right to privacy under the California Constitution. (See, e.g., Doe v. Beard (C.D.Cal. 2014) 63 F.Supp.3d 1159 [disclosure of content‘s of prisoner‘s medical file]; Olivera v. Vizzusi (E.D.Cal., Nov. 15, 2010, No. CIV. 2:10-1747 WBS GGH) 2010 WL 4723712 [disclosure of police officer‘s personnel records]; Blanco v. County of Kings (E.D.Cal. 2015) 142 F.Supp.3d 986 [improper strip search at county jail].) Indeed, the right to privacy claim would have dovetailed nicely with Franceschi‘s other Fourteenth Amendment claims. (See In re Crawford (9th Cir. 1999) 194 F.3d 954, 958 [14th Amend. protects “‘individual interest in avoiding disclosure of personal matters‘“].) In other words, if Franceschi had brought all his claims at once in the First Action—both the section 1983 claims and the right to privacy claim—the complaint in the First Action would have been entirely consistent with accepted practice.
As for the procedural fact that Franceschi brought the Second Action as a mandamus claim, it would not have been an “idle act” for Franceschi to bring such a claim in the First Action. While federal courts are properly cautious about exercising supplemental jurisdiction over a state law mandamus claim, there is no iron rule prohibiting the exercise of such jurisdiction. Indeed, the opposite is true—Congress has given federal courts the discretion to hear mandamus claims. As the United States Supreme Court has stated, “There is nothing in the text of [
Given this legislative license, federal courts, including the Ninth Circuit, have consistently recognized that a district court may exercise supplemental jurisdiction over mandamus claims. (See Clark v. Yosemite Community College Dist. (9th Cir. 1986) 785 F.2d 781, 786, fn. 5 [“claim involving federal constitutional rights may be joined to a California mandamus action“]; Manufactured Home Communities, Inc. v. City of San Jose (9th Cir. 2005) 420 F.3d 1022, 1027, fn. 6 [same].) And, in fact, federal courts have regularly applied California mandamus law. (See, e.g., Academy of Our Lady of Peace v. City of San Diego (S.D.Cal. 2011) 835 F.Supp.2d 895, 902 [denying dispositive motion on petition pursuant to
In short, we reject Franceschi‘s argument that although the First and Second Actions are similar, they are fundamentally different because one of those actions happens to be a state law mandamus claim. We reject Franceschi‘s argument because the First and Second Actions arise out of a shared set of facts, they involve the same parties, and, perhaps most critically, the same primary right. Moreover, Franceschi has argued in a wholly conclusory manner that the federal district court would have been “required” to dismiss his mandamus/privacy claim had he brought it in the First Action solely because a “mandamus claim is inherently different from garden variety state law contract or tort claims.” As discussed above, it is far from clear that the district court would have declined to exercise jurisdiction over Franceschi‘s mandamus/privacy claim.
The simple fact of the matter is that Franceschi gambled and lost—he believed that it was “reasonably clear that [his] mandamus claim could not have been litigated in federal court concurrently with [his] federal constitutional claims.” In other words, at the time he filed the First Action, he knew
III. The trial court did not abuse its discretion in sanctioning Franceschi
After sustaining respondents’ demurrer without leave to amend, the trial court sanctioned Franceschi in the amount of $5,000 pursuant to
An action “should be held to be frivolous only when it is prosecuted for an improper motive—to harass the respondent or delay the effect of an adverse judgment—or when it indisputably has no merit—when any reasonable attorney would agree that the [action] is totally and completely without merit.” (In re Marriage of Flaherty (1982) 31 Cal.3d 637, 650 [183 Cal.Rptr. 508, 646 P.2d 179], italics added.) There is nothing in the record below to suggest that the Second Action was brought to harass the FTB. As a result, our focus is on whether Franceschi‘s gamble—his decision to assume that the federal district court would necessarily decline to exercise supplemental jurisdiction—was a reasonable one. We do not believe that it was.
A litigant with both federal and state law claims that are related may hedge his or her bets in any number of ways, but not by splitting his or her claim between two different actions. As the court in Mattson v. City of Costa Mesa (1980) 106 Cal.App.3d 441, 454–455 [164 Cal.Rptr. 913], explained: “The initial choice by the plaintiff to file suit in federal court will not necessarily result in splitting his cause of action, because the federal court may well exercise pendent jurisdiction over the nonfederal claim. However, when the federal court has been requested to and has declined to exercise pendent jurisdiction over the nonfederal claim, the plaintiff is presented with a new choice. He may proceed to trial on the federal claim or, usually, he may elect to dismiss the federal claim without prejudice [citation] and litigate both claims in the state court [fn. omitted] [citations]. . . . [O]nce the federal court has declined to exercise pendent jurisdiction over the state claim, if the plaintiff then elects to proceed to trial and judgment in the federal court, his entire cause of action is either merged in or barred by the
Franceschi‘s conduct here raises more questions than it answers. First, why did he not ask the federal district court to exercise supplemental jurisdiction? He had much to lose by not doing so. California courts have held that where a plaintiff makes no attempt to have a federal court exercise supplemental jurisdiction over a related state law claim, and then later files that state law claim in state court, such claims are barred by res judicata and the related prohibition against claim splitting. (See Mattson v. City of Costa Mesa, supra, 106 Cal.App.3d at pp. 449, 454–455 [discussing City of Los Angeles v. Superior Court (1978) 85 Cal.App.3d 143 [149 Cal.Rptr. 320] and Ford Motor Co. v. Superior Court (1973) 35 Cal.App.3d 676 [110 Cal.Rptr. 59]].)
Second, why did Franceschi bring the First Action in a court of limited jurisdiction when he could have brought both his section 1983 claims and his mandamus/privacy claim in a state court action? It is well established that “[a] section 1983 claim may be brought in California state courts.” (Clark v. Yosemite Community College Dist., supra, 785 F.2d at p. 786.) Indeed, California courts have long held that a writ of mandate is an appropriate remedy for the enforcement of a civil right. (See Hardy v. Stumpf (1974) 37 Cal.App.3d 958, 961 [112 Cal.Rptr. 739], Wrather-Alvarez, etc., Inc. v. Hewicker (1957) 147 Cal.App.2d 509, 511 [305 P.2d 236].) Such questions are more than a little troubling given that Franceschi is an experienced litigator, one who has been practicing continuously since 1984.
The trial court‘s decision to sanction Franceschi for his gamble was not an abuse of discretion because a reasonable attorney looking at the applicable law and the shared facts in the First and Second Actions would not have instituted the Second Action after the First Action was dismissed. As explained by one court, “a litigant cannot avoid the impact of the rule against splitting causes of action by choosing for his first foray a tribunal of limited jurisdiction.” (City of Los Angeles v. Superior Court, supra, 85 Cal.App.3d at p. 151.) In other words, the trial court‘s finding that the Second Action was a “premeditated effort on [Franceschi‘s] part to reserve a second bite at the apple in the event his Federal Court case was unsuccessful,” was both reasoned and reasonable. Because the trial court did not exercise its discretion in an arbitrary, capricious or patently absurd manner that resulted in a manifest miscarriage of justice, we affirm the award of sanctions.
DISPOSITION
The order is affirmed. Respondents are to recover their costs on appeal.
Chaney, Acting P. J., and Lui, J., concurred.
Appellant‘s petition for review by the Supreme Court was denied September 21, 2016, S236633.