316 F.3d 857 (9th Cir. 2002), 00-17113, Francisco Jose Rivero v. City & County San Francisco

Docket Nº:00-17113.
Citation:316 F.3d 857
Party Name:FRANCISCO JOSE RIVERO; Pacific Internment Services, a California corporation, Plaintiffs-Appellees, v. CITY AND COUNTY OF SAN FRANCISCO, Defendant, and Joseph Surdyka; Boyd Stephens, Defendants-Appellants.
Case Date:December 20, 2002
Court:United States Courts of Appeals, Court of Appeals for the Ninth Circuit
 
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Page 857

316 F.3d 857 (9th Cir. 2002)

FRANCISCO JOSE RIVERO; Pacific Internment Services, a California corporation, Plaintiffs-Appellees,

v.

CITY AND COUNTY OF SAN FRANCISCO, Defendant,

and

Joseph Surdyka; Boyd Stephens, Defendants-Appellants.

No. 00-17113.

United States Court of Appeals, Ninth Circuit

December 20, 2002

Argued and Submitted April 12, 2002.Page 858

[Copyrighted Material Omitted]

Page 859

Owen P. Martikan, City Attorney's Office, San Francisco, CA, for the defendants-appellants .

Randall B. Aiman-Smith, McPhee & Aiman-Smith, Oakland, CA, for the plaintiffs-appellees.

Appeal from the United States District Court for the Northern District of California; Martin J. Jenkins, District Judge, Presiding. D.C. No. CV-93-03383-MJJ.

Before BEEZER, THOMAS and W. FLETCHER, Circuit Judges.

OPINION

WILLIAM A. FLETCHER, Circuit Judge.

In this suit under 42 U.S.C. § 1983, a magistrate judge denied defendants Joseph Surdyka and Boyd Stephens's pre-trial motion for summary judgment based on qualified immunity. After trial, the jury returned a damage verdict against Surdyka and Stephens. The magistrate judge denied Surdyka and Stephens's post-trial motion for judgment as a matter of law based on qualified immunity, but ordered a new trial based on inconsistency in the verdict. Before the second trial could take place, a district judge granted summary judgment to Surdyka and Stephens on the ground that they had not caused the injury to plaintiffs. The district judge specifically noted that he did not reach the question of qualified immunity.

In a prior appeal, plaintiffs appealed the grant of summary judgment by the district judge. Then-defendants-appellees Surdyka and Stephens did not cross-appeal, but argued as an alternative ground for affirming that they were entitled to qualified immunity. We reversed and remanded without reaching the qualified immunity question.

On remand, Surdyka and Stephens moved for judgment as a matter of law based on qualified immunity. The district court denied that motion, and they now seek to appeal that denial. Plaintiffs-appellees in this appeal contend that Surdyka and Stephens cannot appeal the denial because

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they failed to cross-appeal in the prior appeal. We disagree with that contention, but we affirm the district court on the merits.

I. Background

On July 29, 1992, Francisco Jose Rivero, president of Pacific Internment Services, Inc. ("Pacific"), signed a contract with the City and County of San Francisco ("the City") to provide funeral and mortuary services for the City's indigent dead. Pacific had publicly bid and won its first indigent dead contract in 1989. Prior to 1989, the contract had been performed by the San Francisco College of Mortuary Science for almost 40 years. Pacific's 1989 contract had been administered by the San Francisco Department of Public Health, but the 1992 contract was administered by the San Francisco Medical Examiner's Office ("the MEO"). Pacific's 1992 contract ran from August 1, 1992, through July 31, 1994, with an optional term of extension. The contract contained a provision allowing the City to terminate the contract, without cause and for its convenience, on thirty days' written notice.

In May 1993, the San Francisco Mayor's office instructed its department heads to investigate ways to reduce expenditures. San Francisco Administrative Coroner Joseph Surdyka suggested that savings could be realized if the MEO began performing "in-house" the services Pacific was performing under its 1992 contract. Dr. Boyd Stephens, Chief Medical Examiner, then proposed to Chief Administrative Officer Rudolf Nothenberg various ways to reduce the MEO's budget, including performing in-house the indigent dead contract. After reviewing Stephens's proposal, Nothenberg recommended to the Mayor and the Board of Supervisors that they terminate Pacific's 1992 contract. The Mayor and the Board of Supervisors approved Nothenberg's recommendation, and on May 21, 1993, the City gave Pacific written notice of its intent to terminate the contract on June 30, 1993, just over a year before it was due to expire.

Rivero and Pacific responded by suing the City, Surdyka, Stephens, and Deputy Coroner Herbert Hawley to recover damages for breach of contract by the City; for inducing breach of contract by the individual defendants; for interference with the contract based on Rivero's race in violation of 42 U.S.C. § 1981 by the individual defendants; and for retaliation and interference with Rivero's First Amendment rights in violation of 42 U.S.C. § 1983 by the individual defendants. Plaintiffs alleged that in the course of obtaining and performing the 1989 contract, Rivero became aware of illegal actions by the individual defendants—including false billings, false reporting of funeral cases, illegal embalming of bodies, and illegal bribes and kickbacks. Rivero reported these activities to the media and to the San Francisco District Attorney's criminal investigations unit. Rivero also testified before a criminal grand jury, which issued a report highly critical of the defendants. According to plaintiffs, the MEO thereafter gained control over the administration of the indigent dead contract from the Department of Public Health, and the individual defendants then procured the cancellation of Pacific's 1992 contract in retaliation for Rivero's whistleblowing.

The individual defendants moved before trial for summary judgment based on qualified immunity. The magistrate judge, to whom the parties agreed to have the case transferred for final disposition, denied the motion. The defendants did not take an interlocutory appeal, and the case went to trial. In 1995, a jury found there had been no breach of contract (and necessarily no inducement of breach of contract), and found no racial discrimination in violation of § 1981. It found, however, that Surdyka

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and Stephens had retaliated against Rivero for exercising his First Amendment rights, in violation of § 1983, and awarded damages. Surdyka and Stephens then filed a motion for judgment as a matter of law based on qualified immunity or for a new trial based on inconsistency in the verdict. The magistrate judge held that Surdyka and Stephens were not entitled to judgment as a matter of law, but ordered a new trial. Surdyka and Stephens did not take an interlocutory appeal from the denial of their motion for judgment as a matter of law.

Before the new trial could take place, the defendants moved for summary judgment based on lack of causation and qualified immunity. The district judge, to whom the case reverted after recusal by the magistrate judge, granted summary judgment based on lack of causation. He specifically declined to reach the question of qualified immunity. The plaintiffs appealed. Then-defendants-appellees Surdyka and Stephens did not cross-appeal. In their brief to us, Surdyka and Stephens argued both that the magistrate judge had properly granted a new trial based on the inconsistency of the verdict, and that the district judge had later properly granted summary judgment. They argued in support of the summary judgment on alternative grounds—lack of causation (the ground relied upon by the district judge) and qualified immunity (the ground not reached by the district judge).

We reversed. In an unpublished memorandum disposition, we held that the magistrate judge had erred in granting a new trial because the verdict was not inconsistent in finding that the City had not breached the contract, but that Surdyka and Stephens had nonetheless violated § 1983. See Rivero v. City & County of San Francisco, 221 F.3d 1349 (9th Cir. 2000) (table) ("Rivero I"). The rationale for our holding was that the City may not have been liable for breach of contract because it did not know of the improper motives of Surdyka and Stephens in recommending the termination to Nothenberg, but that Surdyka and Stephens could nonetheless be liable for violating § 1983 because their retaliatory actions caused the City to terminate the contract. Our rationale necessarily meant that we disagreed with the district judge's order granting summary judgment based on lack of causation. We noted the defendants' qualified immunity argument in a footnote, but did not reach it. We reversed and remanded.

Before the district court entered judgment on remand, Surdyka and Stephens filed a renewed motion for judgment as a matter of law based on qualified immunity. The district court denied the motion and entered judgment on the verdict. Surdyka and Stephens timely appeal.

II. Discussion

A. Appellate Jurisdiction

Relying on El Paso Natural Gas Co. v. Neztsosie, 526 U.S. 473, 119 S.Ct. 1430, 143 L.Ed.2d 635 (1999), plaintiffs-appellees contend that Surdyka and Stephens were required to raise the issue of qualified immunity by a cross-appeal in the prior appeal, and that their failure to cross-appeal prevents them from raising the issue in the present appeal. Plaintiffs-appellees contend that if we consider Surdyka and Stephens's qualified immunity argument in this appeal we will sanction an "end-run" around El Paso. We disagree.

In El Paso, we had reversed, on interlocutory appeal, preliminary injunctions that had not been appealed by either party. See El Paso Natural Gas Co. v. Neztsosie, 136 F.3d 610, 620 (9th Cir. 1998). The Supreme Court vacated our decision, holding that we erred in reversing the preliminary

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injunctions against the appellees. See El Paso, 526 U.S. 473, 119 S.Ct. 1430, 143 L.Ed.2d 635. The Court stated:

[a]bsent a cross-appeal, an appellee may "urge in support of a decree any matter appearing in the record, although his argument may involve an attack upon the reasoning of the lower court," but may not "attack the decree with a view either to enlarging his own rights thereunder or of lessening the rights of his adversary."

Id. at...

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