Oregon Cases December 09, 2021: Van Pounds v. Smith

Case Description

1

OPINION AND ORDER

MUSTAFA T. KASUBHAI UNITED STATES MAGISTRATE JUDGE

Plaintiff Van Pounds, a lawyer acting pro se , filed this action against Defendants Cameron Smith (“Smith”), Brian Light (“Light”), and the Department of Consumer and Business Services (“DCBS”) alleging violations of his rights to freedom of speech and due process under both the U.S. Constitution and the Oregon Constitution. See Compl., ECF No. 1. Plaintiff now moves for leave to amend his complaint. See Pl.'s Mot. Leave, ECF No. 42 (“Pl.'s Mot.”). For the reasons that follow, Plaintiff's motion is GRANTED.

2

FACTUAL BACKGROUND

The following facts are taken from Plaintiff's Complaint. See Compl., ECF No. 1. Plaintiff has been an employee of DCBS since September 2011 and most recently worked as a Senior Policy Analyst. Id. at ¶¶ 7-8. In March 2018, Plaintiff decided to run for a seat on the Oregon Supreme Court. Id. at ¶ 12. After Plaintiff filed his candidacy, a reporter made two public records requests for Plaintiff's employment files. The first request sought documents about Plaintiff's “titles[, ] job classifications[, ] and salaries from Jan[uary] 1[, ] 2015 until now” because it was the reporter's understanding that Plaintiff “used to be the director of enforcement but was demoted to policy analyst in the past couple of years.” Id. at ¶ 14. The second request sought “written communication including but not limited to emails, correspondence, investigative reports or other documentation that explains the reasons for [Plaintiff's] demotion and pay cut.” Id. at ¶ 17.

In 2015, DCBS investigated Plaintiff without his knowledge while he worked in a supervisory role. Id. at ¶¶ 21, 23. The investigation resulted in a report (“2015 Report”) that found a disparate treatment complaint against Plaintiff to be without merit. Id. at ¶ 21. However, the 2015 Report noted that “overwhelmingly, employees generally do not trust [Plaintiff]” and that “[Plaintiff] is generally found to be the least credible person in the unit.” Id.

On March 26, 2018, Defendant Light informed Plaintiff that DCBS would disclose the 2015 Report to a news reporter in response to a public records request. Id. at ¶ 19. On March 28, 2018, Defendants emailed the 2015 Report to the reporter. Id. at ¶ 29. On April 7, 2018, the reporter called Plaintiff regarding an upcoming article and Plaintiff explained to the reporter that Plaintiff had not been demoted, that the 2015 Report was inaccurate, and that Plaintiff did not know the 2015 Report even existed. Id. at ¶ 30. On April 11, 2018, the reporter's newspaper

3

published an article about Plaintiff with the following headline: “A state investigation of a candidate for the Oregon Supreme Court found him ‘the least credible person in the unit.'” Id. at ¶ 31. In the May 2018 primary election, Plaintiff received 26.5% of the vote and lost the election. Id. at ¶ 32.

PROCEDURAL HISTORY

In March 2019, Plaintiff filed a complaint alleging violations of his rights to freedom of speech and due process. Id. at ¶¶ 34-59. In May 2019, Defendants filed a motion to dismiss for failure to state a claim. See Defs.' Mot. Dismiss, ECF No. 8. In August 2019, this Court recommended that Defendants' motion to dismiss be granted and Plaintiff's complaint be dismissed with prejudice because it would have been futile to amend. See Findings and Recommendation (“F&R”), ECF No. 13. In September 2019, Judge Aiken adopted the Findings and Recommendation in its entirety. See Order, ECF No. 19. Plaintiff then filed a notice of appeal to the Ninth Circuit. See Notice of Appeal, ECF No. 34.

In August 2021, the Ninth Circuit reversed in part, affirmed in part, and remanded the district court's decision to dismiss the complaint with prejudice. See Pounds v. Smith , No. 20-35154, 2021 WL 3667229, at *1 (9th Cir. Aug. 18, 2021); see also F&R, ECF No. 13. The Ninth Circuit held that DCBS's disclosure of the 2015 Report, which Plaintiff “alleged to contain false stigmatizing information, can constitute an adverse employment action that impermissibly chills protected speech.” Pounds , 2021 WL 3667229, at *1. The Ninth Circuit thus reversed the district court's dismissal of Plaintiff's First Amendment claim. Id. at *3. However, the Ninth Circuit affirmed the district court's dismissal of all other claims. Id. Plaintiff then filed a petition for a panel rehearing and a petition for rehearing en banc, both of which were denied. See Ninth Circuit Order, ECF No. 39.

4

In October 2021, Plaintiff filed a motion for leave to file an amended complaint. See Pl.'s Mot. Leave, ECF No. 42. Plaintiff also filed a bill of costs. See Pl.'s Bill of Costs, ECF No. 41.

STANDARD OF REVIEW

Rule 15 of the Federal Rule of Civil Procedure provides that the “court should freely give leave [to amend a pleading] when justice so requires.” Fed.R.Civ.P. 15(a)(2). A district court should apply Rule 15's “policy of favoring amendments . . . with extreme liberality.” Price v. Kramer , 200 F.3d 1237, 1250 (9th Cir. 2000) (quotation marks omitted). The purpose of the rule “is ‘to facilitate decision on the merits, rather than on the pleadings or technicalities.'” Novak v. United States , 795 F.3d 1012, 1020 (9th Cir. 2015) (quoting Chudacoff v. Univ. Med. Ctr. , 649 F.3d 1143, 1152 (9th Cir. 2011)). A district court, however, may, within its discretion, deny a motion to amend “due to undue delay, bad faith or dilatory motive on the part of the movant, repeated failure to cure deficiencies by amendments previously allowed, undue prejudice to the opposing party by virtue of allowance of the amendment, [and] futility of the amendment.” Zucco Partners, LLC v. Digimarc Corp. , 552 F.3d 981, 1007 (9th Cir. 2009) (alteration in original) (quoting Leadsinger, Inc. v. BMG Music Publ'g , 512 F.3d 522, 532 (9th Cir. 2008)). “Not all of the factors merit equal weight. As this circuit and others have held, it is the consideration of prejudice to the opposing party that carries the greatest weight.” Eminence Capital, LLC v. Aspeon, Inc. , 316 F.3d 1048, 1052 (9th Cir. 2003). However, “[f]utility of amendment can, by itself, justify the denial of a motion for leave to amend.” Bonin v. Calderon , 59 F.3d 815, 845 (9th Cir. 1995).

DISCUSSION

I. Motion for Leave to Amend Complaint

Plaintiff asserts that leave to amend his complaint should be granted because it will not

5

produce an undue delay in the litigation or result in undue prejudice to Defendants. Pl.'s Mot. 3-4. Defendants disagree and argue that Plaintiff has acted in bad faith, that undue prejudice will result to Defendants, and that amendment would be futile. Defs.' Resp. 4-5, ECF No. 43. Defendants also argue that Plaintiff “asks this Court in essence to disregard the opinion of the [] Ninth Circuit . . . and reinstate a due process claim the dismissal of which the Ninth Circuit upheld.” Id. at 1.

Plaintiff's proposed First Amended Complaint (“FAC”) includes the same due process and freedom of speech claims as his original Complaint. See Proposed FAC, ECF No. 42-1; see also Compl., ECF No. 1. The Ninth Circuit made clear that it “reverse[d] the district court's dismissal of Pounds's First Amendment retaliation claim and remand[ed] for proceedings consistent with this disposition, but otherwise affirm[ed] the district court.” Pounds , 2021 WL 3667229, at *3. Except for his First Amendment retaliation claim, Plaintiff may not reassert any claim the dismissal of which has been affirmed by the Ninth Circuit. The Ninth Circuit determined that the district court “did not err in denying Pounds an opportunity to amend his due process claim because any ‘proposed amendment [would] either lack[] merit or would not serve any purpose because to grant it would be futile in saving [his] suit.'” Id. (alterations in original) (quoting Universal Mortg. Co. v. Prudential Ins. , 799 F.2d 458, 459 (9th Cir. 1986)). As such, the scope of any amendments Plaintiff seeks to make to his original Complaint must be limited to his First Amendment retaliation claim.

Defendants argue that Plaintiff's motion should not be granted because: (1) Plaintiff has previously attempted to amend his complaint, (2) Plaintiff has acted in bad faith, (3) undue prejudice will result to Defendants, and (4) amendment would be futile. Defs.' Resp. 4-5, ECF No. 43. A court should construe a pro se plaintiff's pleadings liberally and afford the plaintiff

6

the benefits of any doubt. Karim-Panahi v. Los Angeles Police Dep't , 839 F.2d 621, 623 (9th Cir. 1988) (citation omitted). Additionally, a pro se plaintiff is entitled to notice of the deficiencies in the complaint and an opportunity to amend, unless the complaint's deficiencies cannot be cured by amendment. Id. Here, the Court cannot say that Plaintiff is acting in bad faith, that undue prejudice will result to Defendants, or that amendment would be futile with respect to his First Amendment retaliation claim. See Zucco Partners , 552 F.3d at 1007. While Plaintiff attempted to amend his complaint in September 2019, this Court subsequently dismissed the case and all pending motions-including Plaintiff's motion for leave to amend- were denied as moot. See Pl.'s Mot. Leave, ECF No. 17; see also Order, ECF No. 19. As such, and in compliance with the Ninth Circuit's instructions, Plaintiff may proceed with his First Amendment retaliation claim.

In addition, Defendants argue that qualified immunity bars maintenance of this suit and “adds to the futility of amendment.” Defs.' Resp. 9, ECF No. 43. Given that the record is undeveloped, the Court declines to consider such an argument at this time. The issue of qualified immunity can be appropriately raised at the dispositive motion stage.

Lastly, while the Court grants Plaintiff leave to amend his Complaint, the Court finds that Plaintiff's Proposed FAC is insufficient because it realleges properly dismissed claims. See Proposed FAC, ECF No. 42-1; see also Pounds , 2021 WL 3667229, at *1. Plaintiff is directed to file a FAC that is limited in scope to his First Amendment retaliation claim only.

II. Costs

Plaintiff seeks costs in the amount of $505.00. See Pl.'s Bill of Costs, ECF No. 41. Specifically, Plaintiff seeks to recover the amount of his appellate filing fee. Id. The Ninth Circuit determined that Defendant DCBS shall bear Plaintiff's costs on appeal. Pounds , 2021

7

WL 3667229, at *3 n.4. As such, Plaintiff's Bill of Costs is granted and Defendant DCBS shall bear Plaintiff's costs.

CONCLUSION

For the reasons above, Plaintiff's motion for leave to file an amended complaint (ECF No. 42) consistent with this Opinion is GRANTED and Plaintiff's Bill of Costs (ECF No. 41) is GRANTED.