Appeal Number: 01-57096
Case Number: 00-02291 CAS (SHx)
IN THE UNITED STATES COURT OF APPEALS
THE NINTH CIRCUIT
PHILLIP S. MOLINA, an individual
Plaintiff and Appellant,
vs.
CITY OF OXNARD; EDMUND SOTELO; and DOES 1-20,
Defendants and Appellee.
__________________________________________________________________
Appeal from the United States District Court, Central District of California
Honorable Christina A. Snyder, Judge
_________________________________________________________________
APPELLANT’S OPENING BRIEF
__________________________________________________________________
INTRODUCTION
Appellant Phillip S. Molina was the Chief Financial Officer for the City of
Oxnard when he reported in the summer of 1998 that the city's golf course contract
every year lost over $350,000, a deficit paid for by the city treasury.
Mr. Molina, in meetings with Oxnard’s city manager and its elected officials,
and in a press interview directed to Oxnard’s citizens, publicized the golf course
deficit, advised the existing contract with the private operator was a sweetheart deal,
and offered an alternative to cure the deficit while the city was considering building
another golf course by the same operator in the same vicinity. Mr. Molina's public
disclosure of the golf course's financial condition, and his recommendations for an
alternative contract, displeased those city councilmen and their allies, who wanted
to build the new golf course and maintain the existing contracts. He then aggravated
these officials further when he refused to change the report to hide the debt and
make the golf course appear profitable. As a result, Mr. Molina-because of his
honesty in keeping the citizens of Oxnard and their elected officials accurately
informed on this matter of public concern-was rewarded with a pink slip.
On October 22, 1999, the City Manager fired Mr. Molina.
To summarize, in the instant case defendants "shot the messenger" to avoid
facing up to the messenger's truthful but difficult message about financial losses
incurred at the existing city golf course. Mr. Molina did not anticipate, no doubt,
the displeasure with which his "the-king-has-no-clothes" message would be greeted.
And the District Court shows no awareness of the chilling effect bound to
follow its ruling permitting the firing of a public servant who tells the financial truth
about the "pet project" of a developer and his or her political allies. The defendants'
"shoot-the-messenger" plan cannot be allowed to succeed because the plan violates
a basic constitutional provision-the First Amendment's guarantee of freedom of
speech.
In Mr. Molina's suit against the City of Oxnard and its city manager, Edmund
Sotelo, the District Court gutted Molina's case by granting defendants’ partial
summary judgment on Molina's claims arising from unconstitutional restrictions on
his right to freedom of speech. Although the District Court acknowledged some
authority that a public employer may not discharge an employee in retaliation for the
employee's exercise of First Amendment rights, the District Court failed to
recognize that the instant case presented genuine issues of material fact. Instead,
the District Court erroneously resolved disputed fact issues, a responsibility
allocated under our judicial system to a jury (or judge sitting as the finder of fact).
The District Court erred in granting partial summary judgment by resolving
disputed fact questions. Hence, the summary judgment entered on the First
Amendment causes of action must be reversed for retrial.
STATEMENT OF SUBJECT MATTER JURISDICTION AND
APPELLATE JURISDICTION
The District Court originally had subject matter jurisdiction over the parties
pursuant to 28 U.S.C. §? 1331 in that the complaint concerned federal questions
arising from the first and fourteenth amendments.
The District Court had pendent jurisdiction over the state claims.
This Court has jurisdiction over the appeal pursuant to 28 U.S.C. §? 1291,
namely that the District Court has entered a final judgment, as follows: the District
Court entered partial summary judgment, dismissing all of the counts on Mr.
Molina’s complaint, but for defamation against Sotelo, all immunities and pre-
emptions, and the claim for punitive damages on May 9, 2001. On September 9,
2001, the jury entered a verdict in favor of the defendants on the defamation count.
After denying Plaintiff’s Motion for New Trial on October 15, 2001, the Court
entered Final Judgment for the defendants on November 2, 2001. The within
Appeal, filed on November 14, 2001, is timely under Rule 4 of the Federal Rules of
Appellate Procedure.
STATEMENT OF ISSUES PRESENTED FOR REVIEW
I. There Are Genuine Issues Of Material Fact As to Whether Oxnard And
Sotelo Terminated Mr. Molina In Retaliation For Protected Speech.
A. The District Court Erred As Matter Of Law When It Concluded That Mr.
Molina’s Statements To Oxnard’s City Council, And To The Media, On Matters
Concerning The Finances Of Oxnard’s Existing, And Soon To Be Built, Public Golf
Courses Were Not Entitled To Constitutional Protection.
1. The District Court erred as a matter of law when it concluded that these
statements were not of sufficient public interest to trigger the test for
protected speech for public employees.
2. The District Court erred as a matter of law when it concluded that
Oxnard’s interests in efficiency outweighed Molina’s interest in free
speech;Oxnard and Sotelo failed to show Molina’s statements were
disruptive.
B. There Are Genuine Issues Of Material Fact Whether Mr. Molina’s
Statements To Oxnard’s City Council, And To The Media, On Matters Concerning
The Finances Of River Ridge I And II, Were Substantial Factors In His
Termination.
C. There Are Sufficient Material Issues Of Fact For A Jury To Determine
That Oxnard And Sotelo Would Not Have Terminated Mr. Molina In The Absence
Of His Protected Conduct
II Sotelo Is Not Protected By Any Immunity Privilege: Sotelo Knew When He
Issued Molina A Gag Order, And then Terminated Molina for Speaking Out, That
Such Was Clearly And Constitutionally Prohibited; Nor Is He Protected By
Ca.Gov.Code 820.2
III This Court Should Reinstate Mr. Molina’s Federal And State Causes Of Action
Arising From The Defendants’ Violations Of His Right To Free Speech, Including
Infliction Of Emotional Distress And All Claims For Damages Including Punitive.
A. Mr. Molina’s Causes Of Action For Intentional And Negligent Infliction Of
Emotional Distress Are Not Preempted By The Worker’s Compensation Act
B. Punitive Damages can be recovered on a civil rights claim
REVIEWABLITY AND STANDARD OF REVIEW
Appellate Courts review de novo a District Court’s Orders on Motions for
Summary Judgment, its rulings implicating the first amendment, and orders granting
immunity defenses.
STATEMENT OF FACTS
From 1997 through 1999, Mr. Molina was Oxnard’s Chief Financial
Officer responsible for analyzing the City’s finances
The City of Oxnard hired Mr. Molina on December 1, 1997 as Oxnard’s
Chief Financial Officer, responsible for all financial reports as required by law, and
as requested by the City Manager and the City Council. (MSJ Order, p.2, ER,175;
P’s SGI 3, ER, 59.) Mr. Molina’s credentials include over twenty three (23) years
as a certified public accountant, a masters in business administration and finance,
and multiple government accounting and municipal finance courses. (P’s SGI, 60,
ER, 59.) As Oxnard’s Chief Financial Officer, Molina was part of the City’s budget
team. (P’s SGI 9, ER, 62.) As Oxnard’s Chief Financial Officer Mr. Molina’s job
included coordinating his team to provide accountings of the City’s finances and
financial advice. (SGI 61, ER, 91.)
Two months after Mr. Molina’s hiring, Oxnard hired a new city manager,
Edmund Sotelo. (MSJ, p. 2, 7, ER, 175,179.) Soon after Sotelo’s hiring, on
September 15, 1998, Sotelo asked Mr. Molina to analyze the finances for the City’s
owned golf course, River Ridge I, in anticipation of the City’s consideration of plans
for a second course, to be operated by the same operator, dubbed River Ridge II.
(MSJ Order, p.5-7, ER, 178-180; D’s SR 28-31.)
Oxnard's existing golf course was losing over $350,000/year.
River Ridge I, was losing money for the City. The private golf course
operator, High Tides and Green Grass, (principal Otto Kanny) who by contract
shared profits with the City after a certain level of net income was accrued, was not.
(MSJ Order, p. 6, ER,179, P’s SGI 28; 70, ER, 75, 93.) This contract with Green
Grass, which was up for renewal when Mr. Molina began his employment,
guaranteed Green Grass a profit, and placed all risk of loss on Oxnard. (P’s SGI
28, 70, ER, 75, 93.) Sotelo directed Molina, to examine the golf course's existing
operating contract with Green Grass and compare it to other golf course operations
in other cities.(MSJ Order, 6, ER, 178(b).)
According to the city’s own audited figures, as Mr. Molina later explained to
a newspaper reporter, who printed an article in the Oxnard Star on August 18, 1999,
the City was losing money on the course. Mr. Molina’s report showed that in 1998
the course had generated $2.7 million in revenue, $3 million in expenditures,
including $947,000 in interest on the construction bonds, resulting in a yearly
municipal subsidy of $360,597. (MSJ Order, 8; ER, 180; P’s SGI 93-94.)
When Molina reported to city officials that the golf course lost money,
they threatened him with loss of his job. Molina was stepping on
powerful toes.
Mr. Molina reported the losses in a study he prepared with an independent
consultant, Mike Harrison. (MSJ Order, p.6, ER, 178(b).) Oxnard hired Harrison to
also review alternative golf course contracts (P’s SGI 75, ER, 94.) The study
showed that Ridge I was losing money for the City because the operating contract
guaranteed the private operators a profit while it placed all of the risk of loss on the
City. (P’s SGI 74, ER, 94.) Harrison stated that he had “never seen such a
sweetheart contract before which guaranteed the operators a profit and put the City
entirely at risk.” (P’s SGI 77, ER, 95.)
To avoid such losses on the existing contract and that for the proposed golf
course, Ridge II, Molina and Harrison recommended an alternative operating
contract, going to a flat fee method of charging Green Grass, (P’s SGI 78, ER,
95), and assessments of up to $15,000 against each lot in the subdivision next to
River Ridge II. After Molina advised Sotelo of his study, Sotelo in November 1998
called a meeting between Sotelo, councilman Holden, and Mr. Molina. Mr. Molina
discussed the golf course's losses that the city treasury was paying for, and
presented his alternative proposal which would result in significantly increased
revenues for the City. (MSJ Order, p.6, ER, 178(b); P’s SGI 78-79, ER, 95.)
Although Molina’s team had been working on the proposal to maximize the city’s
revenue stream from River Ridge I for months, Holden and Sotelo let Molina know
“in no uncertain terms” that the City would stay with the existing contract, and that
he was not to bring up the proposal at the next council meeting. (MSJ Order, p.6,
ER, 178(b); P’s SGI 80, 82-3, ER, 96-7; Declaration Molina, ER, 123-124, Molina
depo.236-8; 237:8-11, 479:16-20.)
Later, at a surprise meeting called by Sotelo, ostensibly to discuss another
issue, Councilman Holden “walked in, and down the exact table and turned around
and looked at Ed and me (Molina). And he told me that, ‘You need to understand
that this city works with certain consultants and certain contractors. And if you
(Molina) don’t understand or if you don’t like that, you’d better get another job’."
(MSJ Order, p.6, ER, 178(b); P’s SGI 81, 82, ER, 95-96; Molina
depo.245:25,246:1-9, 11-23.) What Molina understood Holden to mean was that
since “We were in the midst of talking about the High Tides and Green Grass
contract, &ldots;we were working on the Oxnard Town Center project with Paul Keller.
We were working on the BLT contract to go to the Republic, and I was asking
questions in all three situations about ways that we could improve the contracts
financially to the benefit of the City. And given the subsequent instructions not to
talk or bring these items up at the subsequent closed sessions to the Council, it
became clear to me that he wanted me to understand that he wants to continue the
relationship, at least in those three contracts that the City had.” (P’s SGI 81, 82,
ER, 95-96; Molina depo.245:25,246:1-9, 11-23.) Councilmen Holden and
Maulhardt had special interests and personal agendas with respect to the above
projects and Sotelo needed Molina to understand this. Coincidentally, Sotelo in later
justifying his termination of Molina, relied upon “complaints” from these same
developer/vendors as examples of Molina’s purported alienation of contractors.
Infra. (P’s SGI 16-21,39, ER,67-71,80.)
However, in the December 1998 closed session of the City Council, in which
the council was discussing the renewal of the existing contract, Mayor Lopez, asked
Molina, in his capacity as City Finance Director, “whether the contract that had
been presented was the best for the city”. (MSJ Order, p.7, ER, 179, P’s SGI 84,
Molina depo.241:8-10, 18-21, ER, 97.) When Mr. Molina attempted to offer his
opinion that there were other contracts that would provide more money to the City’s
general fund than the one at issue, Councilman “Tom Holden jumped out of his seat,
said that (I, Molina) did not know what (I) was talking about, (Molina’s) numbers
were suspect, that (Molina) shouldn’t be saying anything more &ldots;very strongly, very
loud, very forcefully. And as I recall, I was sitting exactly opposite him, and as he
stood up, it was as if he was going to pounce on me to get me to shut up&ldots;Then I
shut up.” (MSJ Order, p.7, ER, 179, P’s SGI 85, ER, 97, Molina depo.243:3-25.)
As requested by the Mayor pro tem, Molina told the local paper about
the golf course's finances.
Because the financing of River Ridge I had led to shortfalls, the media had
been covering Oxnard’s possible construction of Ridge II. (D’s SR33.) During
Molina's work on finances for the proposed golf course, River Ridge II, Mayor Pro
Tem John Zaragoza asked Molina to give the Oxnard newspaper financial
information about both golf courses. (MSJ Order, p.7, ER, 179.)
Molina using data from Oxnard’s audited financial statements told the
reporter from Oxnard Star that River Ridge I was operating in the red due to the
debt on the course's construction bond. The article, published on August 18, 1999,
quoted Molina in reporting that the golf course earned $2.7 million in the past fiscal
year, but annual construction bond payments of $947,000 yearly came to about $3
million, resulting in a $360,597 city subsidy. Molina said that without the debt, the
golf course would have a profit of $587,000. (MSJ Order, p.7-8, ER, 180.)
After the article, city councilmen went "gunning" for Molina, causing
Sotelo to fire him.
After the Oxnard Star printed the article, Sotelo reprimanded Mr. Molina and
“told me (Molina) that I was not to talk to the press anymore, and if the press called
about anything, I was to direct that to him or his office.” (MSJ Order, p. 8, ER,
180; P’s SGI 95, ER, 101, Molina depo 260:2-9, 21-25; 485:22-25.)
In a memorandum sent to Mr. Molina on the day the newspaper article
appeared, Sotelo, apparently sensitive to “suppressing speech” wrote:
Any contacts with the press are to be directed to the City
Manager’s Office for response. This is not to be considered
a “gag order”; rather this is a coordinated approach to the dissemination of
information. Thank you. (MSJ Order, p. 8, ER, 180.)
Molina considered this to be a gag order because it barred him from speaking
to the public about financial issues of concern to the public. (MSJ Order, p. 8, ER,
180.)
After the news article appeared, Molina learned that some city officials
wanted to force Molina from his post. On several occasions Sotelo told Molina that
two councilmembers were "gunning for" him and were "after [him] with big guns."
(MSJ Order, p. 8-9, ER, 180-181.)
Molina responded to Sotelo's statements by sending Sotelo a memorandum on
September 24, 1999, reciting Sotelo's statement in a meeting of city employees that
"two Council members are gunning for me with big guns." Molina asked why this
would be so, in light of Molina's efforts to "keep you and the City Council informed
to the best of my ability on the financial condition of the City, the general fund and
all the funds of the City." (MSJ Order, p. 2-3, 9, ER, 175-176, 181.)
Molina further asked Sotelo these specific questions: "Why are two Council
members `after me'?" What is causing this reaction from the two Council members?
Should I obtain the services of a lawyer to defend myself?"
Sotelo never responded to this memo. (MSJ Order, p. 4, 9, ER, 177, 181.)
At an October 12, 1999 meeting with Councilman Dean Maulhardt and
Sotelo and others, Molina reported that River Ridge I had been operating in the red
for three to four years. Maulhardt then asked Molina to exclude the debt and
service payments (interest and principal) from the report so that the golf course
operations would appear to be making a profit. (MSJ Order, p. 9, ER, 181.)
But Molina refused to make the changes because the changes would (1)
violate proper accounting procedures, (2) materially misrepresent the golf course's
true financial picture, and (3) mislead the public. (MSJ Order, p. 9, ER, 181.)
After that meeting Sotelo told Molina that "none of what [Molina] said was
what the Councilmember wanted to hear." (MSJ Order, p. 9, ER, 181.)
Within 10 days, Sotelo fired Molina (October 22), ordered him to leave
immediately, without returning to his office to gather his belongings. (MSJ Order, p.
9, ER, 181.)
Sotelo’s reasons for firing Mr. Molina are pretextual
Sotelo told Molina he was fired because, he, Molina: (1) provided
untrustworthy financial numbers; (2) alienated City consultants and contractors; (3)
intimidated employees and co-workers; and (4) “fractionalized” the City Council.
(MSJ Order, p. 10, 29, ER, 182, 201.)
But other officials and evidence contradicted these stated reasons. Orlando
Capulong, Mayor Lopez, and Councilmember Zaragoza testified that they believed
Molina’s numbers to be accurate. Orlando Capulong had worked for the city’s
finance department since 1988, has a bachelor’s degree in accounting, and worked
closely with Mr. Molina in preparing the City’s monthly financial statements. Mr.
Capulong testified that Mr. Molina’s report was reliable and accurate. In fact, he
had provided the raw data to Molina which he retrieved from Oxnard’s accounting
system audited by an outside firm. (P’s SGI 110-111, ER, 104-05; Capulong Depo
16:1-8, 16:14-16, 17:7-20.) Mayor Lopez and Zaragoza stated that they had never
heard from other councilmembers that Molina’s figures were inaccurate. (MSJ
Order, p. 29, ER, 201.) Nor had Lopez and Zaragoza ever witnessed Mr. Molina
make any misleading or inaccurate statements concerning the City’s finances. (P’s
SGI 112-114, ER, 105.)
The defendants conceded that the numbers showing the shortfalls in Molina’s
report on River Ridge I were taken from the city’s own audit which included River
Ridge I (D’s SR33, ER,164.) Molina’s report was corroborated by an independent
consultant. (P’s SGI30, ER,76.) In fact, Sotelo never disputed Molina’s figures on
River Ridge I, but simply stated that he wanted the public to know that: “&ldots; when
the transaction was struck to develop River Ridge I, that there were expectations of
a revenue being generated by the project. Those revenues never materialized,
through no fault of the City.” (MSJ Order, p. 26, ER, 198.) Whether the City was at
fault for its failure to adjust the contract with the operator, as recommended by
Molina and Harrision, is for the Oxnard taxpayer to consider, but Sotelo’s self-
serving statement does not contradict Molina’s interview.
The only other issues concerning numbers arose over the classification of
$600.00 and a reported conflict on a budget adjustment that Mr. Capulong and other
witnesses disputed. (P’s SGI10, ER,62; P’s SGI 115, ER,105; Capulong Depo
21:8-11, 21:13-18, 22:5-8; Molina Decl 29, ER,126.)
Although Sotelo felt Mr. Molina fractionalized the City Council with certain
meetings, Molina advised Sotelo of these meetings, the meetings were set up at the
request of the councilmembers, and Councilmember Zaragoza and Mayor Lopez
challenged Sotelo’s statement that Molina’s actions fractionalized the City Council.
In fact, Zaragoza testified that “ ‘as far as [he was] concerned,’ Mr. Molina did not
fractionalize the Council, Zaragoza Depo., 23:4-6; and Lopez testified that it was
‘[his] opinion’ that Mr.Molina did not fractionalize the Council. Lopez Depo., 18:3-
8.” (MSJ Order, p. 30-31, ER, 202-203.) Even Holden and Maulhardt conceded that
Molina did not fractionalize the City Council.
Although Sotelo claimed that Molina intimidated employees and co-workers,
and alienated City consultants and contractors, members of Molinas’ Finance
Department, former employees and two Oxnard councilmembers disputed such, and
Molina testified that he had never been so advised. (P’s SGI 23, ER, 73,
Deposition excerpts and Declarations of witnesses attached to the Declaration of
Marisol Ocampo, CR29.) Molina’s witnesses included Orlando Capulong, Oxnard’s
accounting manager and Molina’s co-worker, Mayor Manuel Lopez, James Fabian,
a co-worker in the finance department, Lynn Harrington, Cheri Adams, Mickie Luna
and Jody Dauth, all former co-workers from different cities including Hollister,
Dublin and Paso Robles. Further, Sotelo admitted that he never conducted an
investigation of the charges of intimidation allegedly made by two employees. (P’s
SGI 24, ER, 74, P’s SGI 117-131, ER,106-109.)
Although Otto Kanney, the operator of High Tides and Green Grass testified
that negotiations with Molina were difficult, he conceded that Molina was always
professional. (MSJ Order, p. 31-32, ER, 203-204.) It would be expected that
Kanney, Paul Keller and other contractors/vendors would be unhappy with Mr.
Molina since he was challenging their relationships, and recommending changes,
with the goal of maximizing the revenue stream to Oxnard, and not to them. (P’s
SGI 15-19, ER,67-69.)
Further, Sotelo conceded that the complaints of one consultant, Grant
Brimhall, was “sour grapes on Brimhall’s part.” (P’s SGI 20, ER, 69.)
Although Sotelo now alleges that Mr. Molina was performing his job poorly,
Mr. Molina received two performance based raises while Sotelo was City Manager.
On March 25, 1999, Mr. Molina approached Sotelo and requested a performance
evaluation. Sotelo informed Mr. Molina that he was doing a fine job and that he
would let Mr. Molina know if and when he thought Mr. Molina was not doing a
good job. (P’s SGI 138-139, ER,110-111.) He never did so until the day he fired
Molina. In fact, from the time that Sotelo began working for the City in 1998 up
through the time that he terminated Mr. Molina in October 1999, Sotelo never
criticized Mr. Molina’s work performance, never had a “counseling session” with
Mr. Molina, and never once wrote any memos or write-ups to Mr. Molina’s
personnel file. (P’s SGI 140-144, ER,111-112.) Mayor Lopez and Councilman
John Zaragoza testified that Sotelo never complained about Mr. Molina’s alleged
poor job performance prior to the termination. (P’s SGI 145-146, ER,112-113.)
STATEMENT OF THE CASE
Mr. Molina filed suit in the federal district court against the City of Oxnard
and Sotelo for federal and state claims arising out of his termination. (CR (1), ER,
1). Mr. Molina contends that Oxnard and Sotelo terminated him in retaliation for the
statements he made to the City Council and to the media on the finances of River
Ridge I and II in violation of federal and state law. Defendants filed a Joint Motion
for Summary Judgment, alleging, inter alia, that: Sotelo was qualifiedly immune, the
City was not liable for the actions of its elected officials, and that Mr. Molina’s
claims fell outside the protection of the First Amendment. (CR, 19-25.)
The District Court found the following facts true for purposes of its order :
(MSJ Order, p. 5-10, ER, 178-182.)
? Mr. Molina’s dispute with Oxnard and Sotelo arose from Oxnard’s
contract with Green Grass for the operation of the city’s public golf
course.
? Sotelo directed Molina to study the contract and compare it to other
golf course operation contracts employed by other cities.
? The contract was up for renewal.
? Molina and Mike Harrison, an independent consultant, developed an
alternative golf course operating contract that “would have been more
financially advantageous for the City, because the golf course was
costing the treasury over $300,000 annually under the existing
operator.
? In November 1998, Sotelo, Mr. Molina and Councilman Tom Holden
discussed Molina’s proposed contract and recommendation.
? At the meeting, Councilman Holden threatened Mr. Molina by telling
him that Oxnard “dealt with certain contractors and certain
consultants” and that if Molina didn’t understand that or like that,
“[he’d] better go find another job.”
? Sotelo and Holden “let Molina know” that they planned to continue
with the current operating contract and they intended to completely
ignore Molina’s proposal. Sotelo “advised” Molina that he was not to
propose his recommendation at the next City Council meeting, but was
to remain silent on the issue.
? But at the December 1998 session of the City Council, when the entire
city council was discussing the renewal of the contract, Molina was
asked his opinion about the contract in his capacity as the City’s Chief
Financial Officer.
? When he began to express his opinion that there were other contracts
that would provide more money to the City’s general fund than the one
at issue, Councilman Holden stood up and verbally attacked Molina,
effectively intimidating him into silence.
? The local media was doing a story on the existing (River Ridge I) and
soon to be built second golf course (River Ridge II).
? Mr. Molina gave an interview with the newspaper, the Oxnard Star
in which he stated that River Ridge I was operating in the red due to
operating costs and debt on the course construction bond, resulting in
an annual $360,597 municipal subsidy, but that, without the debt, the
golf course would be posting a profit.
? After publication of Molina’s comments in the Oxnard Star newspaper
Sotelo reprimanded Mr. Molina for his statement to the press.
? Sotelo issued an oral and written gag order to Mr. Molina.
? Sotelo on several occasions following the interview informed Mr.
Molina that two council members were “gunning for [him]” and that
they were “after [him] with big guns.”
? Finally, on October 12, 1999, at a meeting with Councilman Dean
Maulhardt, Sotelo and others, Molina stated that River Ridge I had
been operating in the red for three to four years.
? Maulhardt asked Molina to exclude debt and service payments (interest
and principal) from the golf course operations so that it would appear
that the golf course was actually making a profit.
? Molina refused to change the numbers
? After the meeting, Sotelo told Molina that “none of what you said was
what the Councilmember wanted to hear.”
? Sotelo fired Molina ten days of this meeting.
The District Court found the following facts also true, for purposes of the
motion. (MSJ Order, p. 10, ER, 182; p.29-33, ER,201-205.)
? Sotelo told Molina he was fired because, he, Molina: (1) provided
untrustworthy financial numbers; (2) alienated City consultants and
contractors; (3) intimidated employees and co-workers; and (4)
“fractionalized” the City Council.
? Other witnesses contradict the above: (1) Capulong, Mayor Lopez, and
Councilmember Zaragoza believed plaintiff’s numbers to be accurate;
Lopez and Zaragoza never heard from other councilmembers that the
figures were inaccurate; (2) Molina, “a subordinate”, and several
councilmen testified that Molina was always professional; (3) several
employees and former employees testified that Molina did not
intimidate them; (4) Councilmembers requested the meetings and
Molina advised Sotelo of the meetings; Mayor Lopez and
Councilmember Zaragoza testified that Molina did not fractionalize the
council, and Sotelo did not complain to them about Molina.
Notwithstanding the above findings of the Court , the District Court granted
summary judgment on all of the counts but defamation, on the defenses of
immunities and pre-emptions, and on punitive damages.
The District Court ruled that:
1. Oxnard is immune from liability for the acts of its councilmen, pursuant to Ca.
Gov. Code § 815.3(a) (MSJ Order, p.11, ER, 183.)
2. Sotelo is qualifiedly immune from Molina’s federal claim. (MSJ Order, p.12,
ER, 184.)
3. Mr. Molina’s statements to the City Council and to the Oxnard Star are not
protected speech in that:
? Molina’s statements in a closed session of the City Council do not
rise to the level of a matter of public concern because these
statements about economic benefits to the city resulting from a
different contract are not allegations of criminal conduct or other
impropriety. (MSJ Order, p.25, ER, 197.)
? Oxnard’s professed interests in controlling all publicity on the golf
courses outweighed Molina’s interest in speaking out on the budget
shortfalls since Sotelo reasonably perceived plaintiff’s statement
to the press to be incomplete and disruptive. (MSJ Order, p.25,
ER, 197.)
4. There are no genuine issues of material fact whether Oxnard and Sotelo fired
Molina in retaliation for protected speech because:
Sotelo’s stated reasons for terminating Molinas’ employment, to wit,
“(1)Sotelo lacked confidence in plaintiff’s financial reporting; (2) Sotelo
felt that plaintiff fractionalized the City Council; (3) plaintiff alienated City
developers and contractors; and (4) plaintiff intimidated employees”—
Were not contradicted by Molina’s evidence, to wit, “(1) Capulong,
Mayor Lopez, and Councilmember Zaragoza believed plaintiff’s numbers
to be accurate; Lopez and Zaragoza never heard from other
councilmembers that the figures were inaccurate; (2) Molina, “a
subordinate”, and several councilmen testified that Molina was always
professional; (3) several employees and former employees testified that
Molina did not intimidate them; (4) Councilmembers requested the
meetings and Molina advised Sotelo of the meetings; Mayor Lopez and
Councilmember Zaragoza testified that Molina did not fractionalize the
council, and Sotelo did not complain to them about Molina.”
(MSJ Order, p. 10, 29, ER, 182, 201; 30-33, ER,202-205.)
SUMMARY OF ARGUMENT
Mr. Molina is appealing the dismissal of all state and federal claims arising
from, or relating to, Oxnard’s and Sotelo’s retaliatory dismissal in violation of the
First Amendment, including Counts 1, 3, 6 and 7, the Court’s conclusions sustaining
certain immunities and pre-emptions, and the Courts’ dismissal of the claim for
punitive damages. Mr. Molina contends that although the District Court
acknowledged some authority that a public employer may not discharge an
employee in retaliation for the employee's exercise of First Amendment rights, the
District Court failed to recognize that the instant case presented genuine issues of
material fact. Instead, the District Court erroneously resolved disputed fact issues, a
responsibility allocated under our judicial system to the trier of fact.
ARGUMENT
I. In Evaluating Civil Rights Cases, Particularly Here On A Motion For
Summary Judgment, The Applicable Standard Of Review Is De Novo
The Appellate Court reviews a summary judgment de novo, applying the
same standard the district court uses. T.W. Elec. Serv., Inc. v. Pacific Elec.
Contractors Ass'n, 809 F.2d 626, 629-30 (9th Cir.1987). The Appellate Court
reviews de novo a district court's conclusions that a public employee’s statements
are not constitutionally protected, because that issue is one of law. Connick v.
Myers, 461 U.S. 138, 148 n. 7, 103 S.Ct. 1684, 1690 n. 7, 75 L.Ed.2d 708 (1983);
Allen v. Scribner, 812 F.2d 426, 433 (9th Cir.1987), amended on other grounds,
828 F.2d 1445 (9th Cir.1987).
There are genuine issues of material fact whether Mr. Molina’s termination
arose over his financial analysis of the debt attached to River Ridge I, his public
statements on such, and Mr. Molina’s refusal to hide the debt. There are genuine
issues of material fact whether Mr. Molina’s reporting this to the Oxnard press and
to the City Council constituted protected speech, and whether such were substantial
reasons for his termination.
This Court reviews de novo whether Mr. Molina’s statements fall within the
protection of the First Amendment, and if so, whether there are genuine material
issues of fact whether Oxnard would have terminated Mr. Molina in the absence of
his protected statements.
II. There Are Genuine Issues Of Material Fact As to Whether Oxnard And
Sotelo Terminated Mr. Molina In Retaliation For Protected Speech.
The District Court erred in dismissing as a matter of law, Mr. Molina’s
wrongful termination causes of action arising from the first amendment. (MSJ
Order, p.17, 19, 23-28.) On count one of his complaint Mr. Molina alleged a state
claim for tortious termination in violation of public policy (ER 1-7). Under
California law, retaliatory termination in violation of the First Amendment is
actionable under this tort. So. California Rapid Transit District v. Sup. Ct., 30
Cal.App.4th 713, 729 (1994). Mr. Molina also alleged in count three, a federal
claim for retaliatory termination in violation of the First Amendment in violation of
42 U.S.C.A. § 1983.
In Mount Healthy School Dist. Bd.of Educ. v. Doyle, 429 U.S. 274, 287, 97
S.Ct. 568, 50 L.Ed.2d 471 (1977) the U. S. Supreme Court established a three-step
inquiry for evaluating retaliation claims implicating the first amendment rights of
public employees.
First, the plaintiff must establish that his conduct was entitled to
constitutional protection. Connick, 461 U.S. at 146, 103 S.Ct. at 1689-91;
Pickering, 391 U.S. 563, 569-72, 88 S.Ct. 1731, 1735-37, 20 L.Ed.2d 811 (1968).
Second, the plaintiff must demonstrate that his conduct, if protected, was a
"substantial" or "motivating" factor in the defendants' firing decision. Mt. Healthy,
429 U.S. at 285-87, 97 S.Ct. at 575-76.
Once the plaintiff has met this burden, the burden shifts to the
defendants to show by a preponderance of the evidence that they would have
reached the same decision even in the absence of the protected conduct. Mt.
Healthy, 429 U.S. at 287, 97 S.Ct. at 576; Allen v. Scribner, 812 F.2d 426, 433 (9th
Cir.1987), amended, 828 F.2d 1445 (9th Cir.1987).
The District Court in applying the above test erred as a matter of law when it
concluded: Mr. Molina’s statements to the media and to the City Council did not
deserve constitutional protection; that Mr. Molina failed to raise a triable issue
whether these statements were a substantial factor in his termination; and that Mr.
Molina failed to raise a triable issue on whether Oxnard and Sotelo would not have
terminated him, in the absence of protected conduct.
Applying the Mt. Healthy test in the present case:
A. The District Court Erred As Matter Of Law When It Concluded That Mr.
Molina’s Statements To Oxnard’s City Council, And To The Media, On
Matters Concerning The Finances Of Oxnard’s Built, And Soon To Be Built,
Public Golf Courses Was Not Entitled To Constitutional Protection
1. The district court erred when it concluded that Mr. Molina’s above
statements were not of sufficient public interest to trigger the test for protected
speech for public employees.
In evaluating the first amendment rights of a public employee, the threshold
requirement is whether the statements at issue address a matter of public concern.
Allen v. Scribner, 812 F.2d at 430. Whether an employee’s speech deals with such
an issue is to be made in reference to the “content, form and context of the speech.”
Because the U.S. Supreme Court has not articulated “a precise definition”, this
Court of Appeals has synthesized the multiple holdings of the High Court to provide
the following criterion the District Court ignored:
“Speech by public employees may be characterized as ‘not of public
concern’ when it is clear that such speech deals with individual personnel
disputes and grievances and that the information would be of no relevance to
the public’s evaluation of the performance of government agencies. See
Connick. On the other hand, speech that concerns issues about which
information is needed to make informed decisions about the operation of their
government merits the highest degree of first amended protection. Thornhill v
Alabama, 310 U.S. 88, 102 (1940).” Allen v. Scribner, 812 F.2d at 431.
It is undisputed that Mr. Molina’s statements to the press and Oxnard’s city
council concerning the financial status of River Ridge I, a public golf course,
triggered Sotelo’s gag order to Mr. Molina. It is also undisputed that Mr. Molina’s
termination came soon after this gag order and his refusal to hide the debt on River
Ridge I. It is also undisputed that Ridge River I’s debt payments and its financial
health had been a matter of public concern prior to, and during Molina’s hiring.
It is disputed whether the original contract provided the private operators who
shared the revenue with the City a sweetheart deal, and whether Molina’s report
would have negatively impacted Oxnard’s construction of a second golf course. But
it is undisputed that at the end of the period of analysis, the City Council would have
to conclude that one method of revenue sharing was preferable to another, approve
of such and determine whether a second golf course was feasible—and justify such
to its taxpayers. It is undisputed that because the financing of River Ridge I had led
to shortfalls the media had been covering Oxnard’s possible construction of Ridge
II. (D’s SDF 33.) Given the above, and the judicial standard, it is incomprehensible
that the District Court found the matter utterly lacking in any public concern. (MSJ
Order, p.25-26, ER, 197-198.)
The District Court ruling’s that Molina’s statements were not of public
concern because “the speech did not concern criminal matters or improprieties” is
simply not the proper test. Supra. Further, one could certainly conclude that, inter
alia, Oxnard’s oral and written gag orders to its Chief Financial Officer on his
analysis of the financing shortfalls of River Ridge I, and its attempts to persuade Mr.
Molina to disguise the shortfalls, constituted at best improprieties, if not fraudulent
behavior. Certainly Oxnard’s taxpayers would have found it relevant that its Chief
Financial Officer heartily disagreed with the proposed debt-free “analysis”
supported by River Ridge I’s operators and allies. As stated (ironically) by
Councilman Holden “It’s a policy concern and a responsibility to how we manage
and spend taxpayer’s money. So I would hope that anybody who holds office, their
philosophical position is they don’t waste taxpayers’ money on projects that lose
money without their approval.” (P’s SGI 155.)
The fact that Mr. Molina’s report to the City Council was not directed to the
public at large, to inform it of the perceived problems, is not critical to the inquiry of
whether his speech involves a matter of public concern. Givhan v Western Line
Consolidated School District 439 U.S. 410, 99 S. Ct 693, 694 (1979). “Pickering,
Perry, and Mt. Healthy do not support the conclusion that a public employee forfeits
his protection against governmental abridgment of freedom of speech if he decides
to express his views privately rather than publicly.” Givhan, at 696. Gillette v.
Delmore, 886 F.2d 1194, 1198 (9th Cir.1989.)
The District Court ignored the well honored protection a public employee
deserves when he is reporting to the public data on which he has special insight as
the result of his unique position in the government. As set forth by our Supreme
Court, government employees are often in the best position to know what ails the
agencies for which they work; public debate may gain much from their informed
opinions. Waters v. Churchill (1994) 114 S.Ct. 1878, 1887 (1994).
As Oxnard’s chief financial officer, Mr. Molina had much to offer the public
debate on River Ridge I and II, and the City officials knew that; hence the gag order
and eventually, termination.
2. The district court erred as a matter of law when it concluded that
Oxnard’s interests in efficiency outweighed Molina’s interest in free speech;
Oxnard failed in its burden to show that Molina’s statements were disruptive
The next step in the Court’s analysis as to when an employee’s speech is
protected, is to balance the interest of Molina, in commenting on matters of public
concern against Oxnard’s interest in promoting the efficiency of the public services
it performs through its employees. Pickering, 391 U.S. at 568, 88 S.Ct. at 1734,
cited at Gillette v. Delmore, 886 F.2d at 1198.This balancing focuses on the
effective functioning of the public employer's enterprise. It is true, as Oxnard and
the District Court contend, that Oxnard may restrict Mr. Molina’s speech where it is
shown that the speech “impairs discipline by superiors or harmony among
coworkers, has a detrimental impact on close working relationships for which
personal loyalty and confidence are necessary, or impedes the successful operation
of the department”. Rankin v. McPherson (1987) 483 U.S. 378, 388, 107 S.Ct.
2891, 2899, cited at Gillette, 886 F.2d at 1198. Avoiding such interference can be a
strong state interest. Id. But the Allen Court specifically requires the defendants to
show, and the District Court to demand, if Sotelo judged Molina’s speech to be
disruptive to the operations of Oxnard, he then must be held at least to an assertion
of the basis upon which that judgment rested. Allen test, 812 F.2d at 433.
Namely, it was incumbent upon the defendants, as the moving parties, to show that
Mr. Molina, by discussing his analysis of River Ridge I, based upon the city’s own
audited records, and his recommendation for a revenue plan more favorable to
Oxnard’s taxpayers, was disruptive to the operations of Oxnard. Defendants failed
to do that. The only evidence before the District Court that Molina’s fiscal
disclosures were disruptive was Sotelo’s self-serving statement, to wit, "when the
transaction was struck to develop River Ridge I, . . . there were expectations of a
revenue being generated by the project. Those revenues never materialized, through
no fault of the City. . . [T]hat information was never provided." (MSJ Order, p.26,
ER,198.)
Sotelo's claim of "incompleteness" referred only to the history of the golf
course-that the city had expected greater revenues, an expectation that admittedly
failed to materialize, leaving the golf course in the red. But Sotelo's point-that the
City had originally expected greater revenues-was irrelevant to the conditions facing
the City when Molina was evaluating the likelihood of profit or loss at the new golf
course, River Ridge II, in light of the debt load that would be created for the new
course by the existing proposal for substantial construction bond financing.
Sotelo never claimed that Molina omitted facts that could possibly show that
the new golf course would generate sufficient revenues to be profitable under the
construction bond proposal faulted by Molina. In short, Sotelo did not show that
Molina's disclosures suffered from material omissions. Hence, Molina's firing
cannot be justified on the ground that he forfeited his free speech rights by making
fatally incomplete disclosures.
As the defendants in Allen v Scribner, supra, at 433, and in Pickering, who
did not prevail, the defendants here put forth no explanation of how Mr. Molina’s
statements to the media impeded his ability to perform his job or interfered
with Oxnard’s public responsibilities. In fact, one can argue that Mr. Molina’s
statements to the media and the city council were disruptive only to certain elected
officials, their favorite vendors and selected private developers. One can also argue
that Mr. Molina’s disclosures and recommendations were not disruptive, but
consistent with his job as Chief Financial Officer, and with Oxnard’s public
responsibility to its taxpayers.
Sotelo argues, and the District Court “agreed,” that Sotelo “perceived
Molina's statements to be disruptive to the City’s plan to proceed with River Ridge
II and that such subjective perception was sufficient to outweigh Molina’s interest
under the balancing test. (Tr, p.5, 8; MSJ Order, p. 26-27, ER,198-9.)
But Sotelo’s perception must be judged on a reasonable standard—Waters,
114 S.Ct. at 1889-90; Connick, 1691. Further,“[T]he complained of disruption
must be real and not imagined. The disruption exception cannot serve as a pretext
for stifling legitimate speech or penalizing public employees for expressing
unpopular views.” Allen v. Scribner, 812 F.2d 426, 432 (9th Cir. 1987). Sotelo
never set forth any evidence from which it could be judged that his subjective
perception, that Molina’s statements were disruptive, was reasonable. In fact, Sotelo
never disputed Molina’s figures because, as the defendants conceded, they were
based upon the City’s own audit, prepared prior to Molina’s hiring. (P’s SGI 33,
ER, 77.) And Molina offered ample evidence on which a jury could decide that, if
Mr. Molina’s statements were “disruptive,” they were for only some of the
councilmen, and consultants whose unhappiness with Mr. Molina’s figures, and his
analysis, arose from the threat they posed to the existing contract for River Ridge I,
and plans for II. Certainly, as stated above, there is no evidence at all that Mr.
Molina’s report was inaccurate, much less willfully or flagrantly inaccurate.
Rather, the evidence simply suggest that Mr. Molina’s report lacked the spin that
some insiders would have preferred it had, to make the existing losing revenue
plans palatable. However, even if Mr. Molina’s report was inaccurate, or less than
complete, which it wasn’t, he cannot be silenced. The recourse of Oxnard’s insiders
was to provide their purportedly whole picture to the public. The only way Sotelo,
the City Council and the District Court could conclude that Mr. Molina’s statements
were detrimental and disruptive was to equate Sotelo’s, and the City Council’s
interests with that of the public. But that is not the standard. The standard is
whether Molina’s actions were disruptive to the common good of Oxnard and its
taxpayers. Pickering, at 1736. Based upon the evidence here a jury could conclude,
and the District Court should have concluded, that the interest of Oxnard’s officials
in gagging its chief financial officer’s contributions to the public debate was not
significantly greater than his interest in making that contribution for the benefit of
Oxnard’s taxpayers.
At the very least, Molina raised genuine issues of fact whether his interest in
free speech was outweighed by Oxnard’s interest in a nondisruptive workplace,
Such should be appropriately resolved at trial. See McGee v. South Pemiscot
School Dist., 712 F.2d 339, 342 (8th Cir.1983), cited in Gillette, 886 F.2d at 1198.
Further, Sotelo’s motives and intent are questions of material fact that cannot be
resolved upon summary judgment. Waters, 114 S.Ct. at 1891. Allen v Scribner, 812
F.2d at 436, Vazquez v City of Bell Gardens, 938 F.Supp. at 1495-6.
B. There are sufficient material issues of fact for a jury to determine
that Mr. Molina’s statements to Oxnard’s City Council, and to the media, on
matters concerning the finances of River Ridge I and II, were substantial
factors in his termination
Under the Mt. Healthy test, after the District Court has determined that the
employee’s speech is entitled to protection, the Court must determine whether: (a)
Mr. Molina’s protected statements to the City Council and to the media were a
substantial factor in his termination, and (b) whether Oxnard would have terminated
him anyway.
Once the employee has shown that protected speech was a substantial factor
in his termination, the burden shifts to the defendants to show otherwise. Allen v
Scribner, 812 F.2d at 433. Where the Plaintiff sets forth genuine issues to contradict
the defendants’ explanation for the termination, such disputes should be
appropriately resolved at trial. Waters, 114 S.Ct. at 1891, Allen v Scribner 812
F.2d at 433-34,435.
Viewed in the light most favorable to the non-moving party, the evidence
demonstrates that Molina’s statements to the media constituted a substantial factor
in his harassment and then termination. The District Court in its order identifies
such, to wit, the earlier threats to Molina to keep quiet on River Ridge I when the
Council discussed its renewal, the meetings set up by Sotelo with councilman
Holden where Holden warned Molina not to interfere with Oxnard’s preferred list of
contractors/vendors, Sotelo’s verbal and written gag orders, Molina’s (9-24-99)
letter to Sotelo documenting threats that Council members are gunning for him, to
which he received no response, Mualhardt’s “suggestion” Molina hide the debt on
the golf course, Sotelo’s comments that Molina’s last ditch effort to advise the
officials of a better revenue plan had made people unhappy, and his termination
within one month of the last threat, October 22, 1999. The District Court
impermissibly weighed the evidence and concluded other wise. A reasonable juror
could conclude that Sotelo fired Molina not because of the purportedly disruptive
things he said or did, but because Molina was upsetting the way business was being
conducted in favor of certain insiders. Waters, 114 S.Ct. at 1891.
C. There are sufficient material issues of fact for a jury to determine
that Oxnard and Sotelo would not have terminated Mr. Molina in the absence
of his protected conduct
In violation of the standard of review on a motion for summary judgment, the
District Court weighed the evidence and concluded that Oxnard and Sotelo did not
fire Mr. Molina for the wrong reasons. But the evidence the Court considered, and
the evidence the Court ignored, was clearly in conflict concerning whether Oxnard
and Sotelo would have terminated Mr. Molina in the absence of his protected
conduct. Accordingly, the issue of whether Oxnard and Sotelo would have
terminated Molina anyway should not have been resolved on a motion for summary
judgment. Allen v Scribner 812 F.2d at 435.
Although Sotelo gave four reasons for firing Molina, the evidence
undercutting those asserted reasons would allow a trier of fact to find that the
defendants' desire to suppress Molina's First Amendment rights was a substantial
factor in his firing, and in their absence the defendants would not have fired Molina,
to wit,
1. Whether Molina's numbers were untrustworthy remains a
genuine issue.
Neither Sotelo nor the district court cited any evidence that Molina's numbers
were untrustworthy. Molina presented evidence showing otherwise. In fact, the
defendants conceded, as Mr. Capulong testified, that Molina’s River Ridge figures
came from Oxnard’s audits. And Capulong as well as other witnesses contradicted
other purported examples of Molina’s fuzzy math. The evidence is overwhelming
that it is was Sotelo and Holden and Mualhardt who were trying to hoodwink the
public with fuzzy math and not Molina. Hence, in the absence of any evidence to
support Sotelo's claim, a trier of fact could reasonably find that Sotelo's asserted
suspicion of Molina's numbers was a pretext, concealing an impermissible motive to
suppress Molina's exercise of free speech.
2. Whether Molina alienated City consultants and contractors,
other than by his exercise of free speech, is a genuine issue.
“Coincidentally”, Sotelo in later justifying his termination of Molina, relied
upon “complaints” from those same contractor/vendors whose contracts were being
challenged by Molina and his staff, as examples of Molina’s purported alienation of
contractors. Supra. (P’s SGI 16-21,39, ER,67-71,80.) It would be expected that
Kanny, Paul Keller and the other contractors/vendors would be unhappy with Mr.
Molina since he was analyzing their relationships, and recommending changes, with
the goal of maximizing the revenue stream to Oxnard, and not to them. (P’s SGI
15-19, ER,67-69.)
When Sotelo and Holden threatened Molina “You need to understand that
this city works with certain consultants and certain contractors. And if you (Molina)
don’t understand or if you don’t like that, you’d better get another job’", Molina
understood that they were referring to the three contracts with the above vendors.
(MSJ Order, p.6, ER, 178(b); P’s SGI 81, 82, ER, 95-96; Molina
depo.245:25,246:1-9, 11-23.)
And even though Otto Kanny, the operator of High Tides and Green Grass
testified that negotiations with Molina were difficult, he conceded that Molina was
always professional. (MSJ Order, p. 31-32, ER, 203-204.) Further, Sotelo
conceded that the complaints of one consultant, Grant Brimhall, was “sour grapes
on Brimhall’s part.” (P’s SGI 20, ER, 69.)
The District Court impermissibly weighed the evidence in concluding that
Molina’s evidence that he did not alienate the vendors, or that the vendors deserved
to be alienated, was not as strong as Sotelo’s.
3. Whether Molina intimidated city employees is a genuine
issue.
Sotelo admitted that he never conducted an investigation of the charges of
intimidation allegedly made by two employees. (P’s SGI 24, ER, 74, P’s SGI
117-131, ER,106-109.) Molina set forth the statements of many witnesses including
that of Orlando Capulong, Oxnard’s accounting manager and Molina’s co-worker,
Councilman Manuel Lopez, James Fabian, a co-worker in the finance department,
Lynn Harrington, Cheri Adams, Mickie Luna and Jody Dauth, all former co-
workers, disputing Sotelo’s remarks.
4. Whether Molina "fractionalized" the City Council, other
than by his exercise of free speech, is a genuine issue.
Although the District Court took Sotelo’s statement that he “felt Mr. Molina
fractionalized the City Council” at face value, Molina offered evidence to either
contradict Sotelo or to show his statement was pretextual. Councilmember Zaragoza
testified that “ ‘as far as [he was] concerned,’ Mr. Molina did not fractionalize the
Council, and Lopez testified that it was ‘[his] opinion’ that Mr. Molina did not
fractionalize the Council. (MSJ Order, p. 30-31, ER, 202-203.) Even Holden and
Maulhardt conceded that Molina did not fractionalize the City Council.
In sum, defendants' asserted justifications for firing Molina do not
eliminate a "genuine issue" whether a substantial motivation for their action
was the suppression of, or retaliation for, Molina's exercise of free speech and
in the absence of such they would have terminated Molina. Defendants'
criticisms of Molina and purported reasons for termination are disputed on
this record, and thus do not allow summary judgment for defendants.
The very essence of free speech is that it may prove disruptive to those whose
mistakes are exposed to the light of day. No case holds that the First Amendment
protects only speech that is not disruptive, and a rule limiting the First Amendment
to non-disruptive speech would gut the First Amendment, rendering the United
States the same as a totalitarian regime in the protection (or lack of protection) of
free speech.
II Sotelo is not protected by any immunity privilege: Sotelo knew when he
issued Molina a gag order that such was clearly and constitutionally
prohibited; nor is he protected by California Gov. Code 820.2
Defendant Sotelo’s contention that he is entitled to qualified immunity as he
was acting in his official capacity must fail, as public officers are not entitled to
qualified immunity when they discharge an employee in retaliation for expressing
protected speech. Although on a motion for summary judgment the Plaintiff must
show whether a reasonable person would have known their conduct violated a
clearly established right, the contours of an employees’s right to free speech are
sufficiently clear that a reasonable official would understand that termination for
exercise of this right would be unlawful. Patrick v. Miller (10th Cir. 1992) 953 F.2d
1240, 1249.
In the instant case Molina raised triable issues whether Sotelo’s motives were
pretextual to permit a trial on Sotelo’s defense. Allen v. Scribner, 812 F.2d at 436.
Clearly, by Sotelo’s own words he knew that he needed to tread gently in restricting
Molina’s speech. Upon issuing the gag order he interposed: “This is not a gag
order”. (MSJ Order, 8, ER, 180.)
As any “reasonable official” would understand that dismissal based upon
protected speech (such as Mr. Molina’s speech at issue herein) is impermissible,
there are genuine issues for the jury to determine whether Defendant Sotelo is
entitled to qualified immunity. Allen v. Scribner, 812 F.2d at 436. [“If it appeared
clearly unlikely that Allen’s speech would disrupt the Project’s work and the
defendants acted against Allen because of his speech, then the defendants are not
entitled to immunity. As a matter of law, they would have violated Allen’s clear
constitutional right &ldots; A jury must decide the issue of motivation.”]
The state statutory immunity provisions set forth in the California
Government Code, including Section 820.1, do not apply to Federal Civil Rights
Actions. To wit, this circuit has specifically held that Sections 820.2 and 821.2 of
the California Government Code, which grant immunity to public employees for
discretionary acts, do not apply to federal civil rights actions. “To construe a
federal statute to allow a state immunity defense ‘to have controlling effect would
transmute a basic guarantee into an illusory promise,’ which the supremacy clause
does not allow.” Guillory v. Orange County , 731 F.2d 1379, 1382 (9th Cir., 1984)
(citing to Martinez v. California, 444 U.S. 277, 284 n.8, (1980)). Similarly, in
Morisson v. Jones, 607 F.2d 1269, 1273 (9th Cir. 1979), the court held that the state
statutory immunity afforded by California Government Code section 820.2 is
inapplicable in a section 1983 cause of action.
III This Court Should Reinstate Mr. Molina’s Federal And State Causes Of
Action Arising From The Defendants’ Violations Of His Right To Free Speech,
Including Infliction Of Emotional Distress And All Claims For Damages
Including Punitive.
A. Mr. Molina’s causes of action for intentional and negligent infliction of
emotional distress are not preempted by the Worker’s Compensation Act
Emotional distress claims are only barred by the workers compensation laws
when the employer actions at issue constitute a normal part of the employment
relationship. Shoemaker v. Myers, 52 Cal.3d 1, 15 (1990). In the instant case there
is a genuine issue as to whether Sotelo’s actions were a normal part of the
relationship. In Shoemaker, the court held that “the exclusive remedy provisions are
not applicable under certain circumstances, sometimes variously identified as
‘conduct where the employer or insurer stepped out of their proper roles’ or
‘conduct of an employer having a questionable relationship to the employment.” Id.;
Similarly, in Cole v. Fair Oaks Fire Protection Dist. (1987) 43 Cal.3d 148, the
court specifically limited the workers compensation exclusivity provisions for
emotional distress to “misconduct attributed to the employer . . . which are a
normal part of the employment relationship, such as demotions, promotions,
criticism of work practices, and frictions in negotiations as to grievances.” Id. at
159; see, also, Livitsanos v. Superior Court (1992) 2 Cal.4th 744, 755 (“Cole[‘s] . . .
central holding [is] that worker’s compensation provides the exclusive remedy for
torts that comprise a ‘normal part of the employment relationship.’”). Thus, when
the injury at issue is a result of conduct which is not seen as reasonably coming
within the worker’s compensation bargain, a separate civil action may lie. Kovatch
v. California Casualty Management Company, Inc. et al. ,65 Cal.App.4th 1256, 1276
(1998).
Furthermore, a determination whether a cause of action is barred by the
exclusive remedy provisions of the workers’ compensation law must take into
account not only the facts alleged . . . but also their relation to the scope and
purposes of the workers’ compensation scheme. Shoemaker v. Myers (1990) 52
Cal.3d 1, 13. A fundamental basis of workers’ compensation is an injury sustained
in and arising out of the course of employment when the injury is ‘personal physical
injury or death. Conversely, the exclusive remedy provisions apply only in cases of
such industrial personal injury or death. Id. at 25. Here, there was no ‘personal
physical injury or death’ at stake. Rather, Mr. Molina was emotionally damaged as
a result of defendants’ intentional intimidating, harassing and retaliatory tactics
culminating in his termination.
Thus, a claim for emotional and psychological damage, arising out of
employment, is not barred by the Worker’s Compensation Act where the distress is
engendered by an employer’s unlawful employment practices. Accardi v. Superior
Court (1993) 17 Cal.App.4th 341, 351. Such is the case here.
Since defendants’ various acts of intimidation, high pressure tactics, gag
orders, and retaliatory discharge of Mr. Molina in clear violation of his First
Amendment right to free speech, was patently unlawful and cannot be considered “a
normal part of the employment relationship, Mr. Molina’s emotional distress claims
are not preempted by the Workers’ Compensation Act.
B. Punitive Damages Can Be Recovered On a Civil Rights Claim
Punitive damages may be recovered in a section 1983 action against an
individual defendant if the defendant’s conduct displayed a “callous or reckless
indifference” to the plaintiff’s constitutional rights. Smith v. Wade, 461 U.S. 30
(1983). Furthermore, California law has long recognized that discharges in violation
of public policy may be actionable torts for which punitive damages may be
recovered. Commodore Home Systems v. Superior Court, 32 Cal.3d 211, 220
(1982) [citing, e.g., Tameny v. Atlantic Richfield Co. (1980) 27 Cal.3d 167, 164
Cal.Rptr. 839 (discharge for refusal to commit antitrust violation; availability of
punitive damages no bar to recognition of action); Montalvo v. Zamora (1970) 7
Cal.App.3d 69, 86 Cal.Rptr. 401 (discharge for exercise of right too self-
organization); Kouff v. Bethlehem-Alamenda Shipyard (1949) 90 Cal.App.2d 322,
202 P.2d 1059 (discharge for acting as poll watcher; punitive damages available);
cf. Cal. Constitution, Article I, §8 which covers private as well as state action.)] Id.,
p. 220.
Since there are genuine issues whether Sotelo’s motives for firing were
pretextual, and in “callous and reckless indifference” to Mr. Molina’s right to free
speech, this Court should reinstate Mr. Molina’s claim for punitive damages against
Sotelo.
Conclusion
The District Court erred in granting partial summary judgment by resolving
disputed fact questions. Hence, the summary judgment entered on the First
Amendment causes of action, or relating to such, must be reversed for retrial, to wit:
Count I, Wrongful Termination in Violation of Public Policy, Count III, Violation of
First Amendment under 42 USC 1983, Count VI and VII, for Intentional and
Negligent Infliction Of Emotional Distress. The District Court erred in holding that
Sotelo enjoyed immunity for his actions and the Court’s broad conclusion that
Oxnard could not be liable for any of the intentional acts of its officials. The rulings
permitting the immunities must be reversed. The District Court erred in holding that
California’s Worker’s Compensation Act preempted Mr. Molina’s causes of action
for intentional and negligent infliction of emotional distress and this Court should
reinstate these causes of actions, to wit, Counts 6 and 7. Finally, Molina’s claim for
punitive damages should also be reinstated in light of the genuine disputed issues
concerning Sotelos’ motives.
DATED: March 15, 2002
Karen A. Larson
Plaintiff/ Appellant, Philip Molina
STATEMENT OF RELATED CASES IN COMPLANCE WITH CIRCUIT RULE
28-2.6
There are no known pending cases related to this action or to this appeal.
DATED: March 15, 2002
Karen A. Larson
Plaintiff/ Appellant, Philip Molina
E:\01Ed\ D-m\molina appeal\briefs\brief final5.doc
The following abbreviations will be used. If P’s SGI , such will refer to a
specific fact or legal conclusion set forth in Appellants’Statement of Genuine Issue
in Opposition, a copy of which is included in the Excerpts of Record, at pages 57-
117 (CR28). If D’s SUFsuch will refer to a specific fact or legal conclusion set
forth in Appellee’s Statement of Uncontroverted Fact, a copy of which is included in
the Excerpts of Record, at pages 47-56 (CR25). If D’s SR such will refer to a
specific fact or legal conclusion set forth in Appellee’s Analysis of And Response
by Defendants, Oxnard and Defendant Sotelo to Plaintiff’s Separate Statement re
Motion for Summary Judgment, a copy of which is included in the Excerpts of
Record, at pages 134-173 (CR34). If the fact is set forth in the Court’s Order
granting in part, dismissing in part, Defendants’ Motion for Summary Judgment,
such will be referred to as MSJ Order, page, a copy of which is in the Excerpts of
Record, at pages 174-221. (CR40).
Although the Court order shows the debt to be $147,000 the article shows the
figure to be $947,000.
As noted by the District Court, Plaintiffs amended his theory of wrongful
termination in violation of public policy (Count 1) to include the first amendment in
his opposition to the motion for summary judgment. (MSJ Order, page 17, CR(40),
ER, 189.)
As set forth in the decision of the District Court, the Court must view the evidence
in the light most favorable to the non-moving party. (MSJ Order, p.5, ER. 175.)
Molina also contends, as set forth in his statement of facts, that there were other
facts that the Court ignored, that considered in a light most favorable to him,
demonstrate unequivocally that there are genuine issues of material fact in dispute
on his claims of retaliation.
The District Court erred in stating that the Plaintiff had conceded that Oxnard
could not be liable for the actions of its elected officials. Molina’s complaint arises
from Sotelo’s termination on pretextual grounds; evidence of retaliation included
Sotelo’s responses to the pressures of Holden and Maulhardt. Infra.
Count I, State Claim for Wrongful Termination in Violation of Public Policy,
Count III, Violation of First Amendment under 42 USC 1983, Count VI and VII, for
infliction of emotional distress.
The elements of a wrongful discharge claim in violation of fundamental public
policy are that the dismissal must violate a policy that is: (1) fundamental; (2)
beneficial for the public; and (3) embodied in a statute, constitutional provision, or
administrative regulation. Turner v. Anheuser-Busch, 7 Cal.4th 1238 (1994); Green
v. Ralee Engineering Co., 19 Cal.4th 66 (1998).
See note 6. As noted by the District Court, Plaintiff amended his theory of
wrongful termination in violation of public policy (Count 1) to include the First
Amendment in his opposition to the motion for summary judgment. (MSJ Order,
page 17, CR(40), ER, 189.)
Section 1983 provides a right of action against anyone who under color of law
deprives another of any right&ldots;secured by the Constitution. Under California law, a
government entity under 42 USC 1983 cannot fire a public employee on a basis that
infringes upon the employee’s protected interest in free speech. So. California Rapid
Transit District 30 Cal.App.4th, at 728-730.) California follows the federal tests set
forth herein.
California follows the same test in tortuous termination cases in violation of the
first amendment. So. California Rapid Transit District 30 Cal.App.4th, at 728-730.
Prong One of the Mt. Healthy test: is it protected speech.
Allen v Scribner 812 F2d at 430, citing to Connick v Myers 103 S.Ct. 1684 at
1690-1.
The District Court also minimized the significance of Mr. Molina’s intimidation
and suggests that the acts of the elected officials are not relevant. (MSJ Order, page
24, ER,196.) The thrust of Mr. Molina’s complaint is that he was fired in retaliation
for his public statements, and he sets forth descriptions of harassment and threats as
evidence of such. As the Pickering Court stated, “the threat of dismissal from
employment is a potent means of inhibiting speech”. Supra.As such, the actions of
all officials coupled with Sotelo’s conduct constitutes “an entire campaign of
actionable harassment&ldots;It is a question of fact whether the campaign reached
the threshold of actionability under 1983.” Scribner, supra, at 434, n.17. “Where
actions of a government official can reasonably be interpreted as intimating that
some form of punishment will follow the failure to accede to the official’s request, a
valid claim can be stated.” Id. The District Court, although citing to this footnote,
(MSJ Order, p.24, ER, 196) ignored the Scribner holding that such issues are to be
determined by the jury! Molina could reasonably see Sotelo’s orders, including his
order that Molina not recommend his report to the council, to not talk to the press or
anyone, as a threat, given Sotelo’s statements and those of Holden and Maulhardt in
Sotelo’s presence.
The record shows numerous examples Sotelo’s attempts, working with Holden
and others, to prevent Molina from making his recommendation on revising several
contracts that Oxnard had with Maulhardt’s and Holden’s favored vendors.
The District Court appears to confuse the first two prongs of the Mt. Healthy
test. Supra. Before the Court can balance the interests of the employee and the
employer, it must first determine that the speech is of public concern. The Court
appears to conclude that because the statements were disruptive, they weren’t
entitled to be labeled “of public concern.” (MSJ Order, p.22, ER, 194.)
Patrick v. Miller 953 F.2d 1240, 1247(10th Cir. 1992). Finance Director’s
statements at public meeting of Retirement Board of public concern since did not
address internal personnel policies nor private matters.
Oxnard bears the burden of proving that the balance of interests weighs in its
favor. The more tightly the First Amendment embraces the speech the more
vigorous the showing. Vazquez v City of Bell Gardens 938 F.Supp. 1487, 1495-6,
citing Connick, et al (C.D. Dt Ct.1996) [whether city manager’s speech re vendor’s
contract deserved protection is to be resolved at trial; genuine material issues
concerning the balance of interests and how dominant his speech played in his
termination prevented summary judgment.]
Pickering, supra, 88 S.Ct. at 1737: The public’s interest in having free debate
and unhindered debate is so great, a state cannot authorize damages for defamatory
statements unless false and recklessly made.
Prong two of the Mt. Healthy test: is the protected speech a substantial factor in
the termination
Prong three: Has Oxnard shown in the absence of the protected conduct Mr.
Molina would have been terminated.
1