39 Cal.3d 311, 32012, Blank v. Kirwan

Docket Nº:32012
Citation:39 Cal.3d 311, 216 Cal.Rptr. 718, 703 P.2d 58
Opinion Judge:[10] Mosk
Party Name:Blank v. Kirwan
Attorney:[7] Julius Grush and John D. Wilson for Plaintiff and Appellant. [8] Rosenberg, Nagler & Weisman, Weisman, Butler & Watson, Mark L. Weisman, Marylin Jenkins White, Dana E. Watson, Wildman, Harrold, Allen, Dixon, Barash & Hill, Barash & Hill, Jerry M. Hill, Christina L. Machon, J. Robert Flandrick...
Case Date:August 01, 1985
Court:Supreme Court of California
 
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Page 311

39 Cal.3d 311

216 Cal.Rptr. 718, 703 P.2d 58

Warren BLANK, Plaintiff and Appellant,

v.

Kevin KIRWAN et al., Defendants and Respondents.

L.A. 32012.

Supreme Court of California.

Aug. 1, 1985.

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Julius Grush, Los Angeles, for Warren Blank.

Offices of Geoffrey V. Morson, Los Angeles, for respondent Pete Werrlein.

Jerry M. Hill, Wildman, Harrold, Allen, Dixon, Barash & Hill, Los Angeles, for respondents Robert Crow, Trammell Crow Co. and Crow Los Angeles # 8.

Mark L. Weisman, Weisman, Butter & Watson, Beverly Hills, for respondents Kevin Kirwan, Calif. Bell Operations, Ltd., John Gasparian and Jack Simonian.

V.R. Pescola, Burke, Williams & Sorenson, Los Angeles, for respondent City of Bell.

MOSK, Justice.

We must decide whether efforts to influence municipal action that are intended to and actually do produce anticompetitive effects are violative of the Cartwright Act when both private individuals and public officials participate. We conclude the act does not apply and hence the judgment must be affirmed.

I

The factual background and procedural history of this action are somewhat complicated. On June 29, 1978, the city council of defendant City of Bell enacted Ordinance No. 806, which legalized the operation of poker clubs in the city and established a structure of regulation. In August 1978 the city council adopted zoning ordinances adding a new zone classification for commercial and manufacturing uses (the C-M zone) to the city's zoning regulations and reclassifying to the C-M zone a certain 20-acre parcel controlled by defendants Crow, Crow Los Angeles No. 8, and Trammell Crow

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Co. (hereafter the Crow defendants). 1 1 Poker clubs were designated as one of a number of permitted uses in the C-M zone. The voters of the city subsequently approved the zoning ordinances.

In the fall of 1978 plaintiff and defendant California Bell Operations (a limited partnership whose general partners were defendants Kirwan, Gasparian, and Simonian) each applied for a poker club license. In December 1978 the city council approved the application of California Bell Operations. At plaintiff's request the city council put off its consideration of his application because he had not obtained, as Ordinance No. 806 required, a lot of at least 7.5 acres properly zoned. California Bell Operations had previously obtained such a lot in the 20-acre parcel.

On July 17, 1979, plaintiff filed his original complaint in this action. In May 1980 the city council formally denied plaintiff's application. In October 1980 plaintiff filed his first amended complaint, in which he alleged six causes of action: (1) violation of his civil rights, against all named defendants and all doe defendants including public officials of the City of Bell; (2) unfair competition (Bus. & Prof.Code, § 16700 et seq.), against all defendants except the City of Bell; (3) unfair competition (id., § 16600), against Crow Los Angeles No. 8 and Kirwan; (4) unfair competition (id., § 17200), against all defendants except the City of Bell; (5) intentional interference with prospective economic advantage, against all defendants except the City of Bell; and (6) declaratory relief. In July 1982 plaintiff amended his first amended complaint to name defendant Werrlein, a former member of the city council, as one of the doe public-official defendants.

In December 1980 Kirwan and the Crow defendants demurred to the first amended complaint. In October 1982 Kirwan moved for dismissal for failure to prosecute pursuant to former Code of Civil Procedure section 583, subdivision (a); the City of Bell, Werrlein, and the Crow defendants subsequently joined in this motion. Also in October 1982 the City of Bell and Werrlein demurred, and California Bell Operations, Gasparian, and Simonian moved for dismissal for failure to prosecute pursuant to former Code of Civil Procedure section 581a, subdivision (a). 2

On December 9, 1982, the trial court sustained the demurrers without leave to amend and granted motions to dismiss. From the ensuing judgment of dismissal plaintiff appeals.

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II

Plaintiff contends the trial court erred in sustaining the demurrers without leave to amend.

In reviewing the sufficiency of a complaint against a general demurrer, we are guided by long-settled rules. "We treat the demurrer as admitting all material facts properly pleaded, but not contentions, deductions or conclusions of fact or law. [Citation.] We also consider matters which may be judicially noticed." (Serrano v. Priest (1971) 5 Cal.3d 584, 591, 96 Cal.Rptr. 601.) Further, we give the complaint a reasonable interpretation, reading it as a whole and its parts in their context. (Speegle v. Board of Fire Underwriters (1946) 29 Cal.2d 34, 42.) When a demurrer is sustained, we determine whether the complaint states facts sufficient to constitute a cause of action. (See Hill v. Miller (1966) 64 Cal.2d 757, 759, 51 Cal.Rptr. 689.) And when it is sustained without leave to amend, we decide whether there is a reasonable possibility that the defect can be cured by amendment: if it can be, the trial court has abused its discretion and we reverse; if not, there has been no abuse of discretion and we affirm. (Kilgore v. Younger (1982) 30 Cal.3d 770, 781, 180 Cal.Rptr. 657; Cooper v. Leslie Salt Co. (1969) 70 Cal.2d 627, 636, 75 Cal.Rptr. 766.) The burden of proving such reasonable possibility is squarely on the plaintiff. (Cooper v. Leslie Salt Co., supra, at p. 636, 75 Cal.Rptr. 766.)

In his first amended complaint, plaintiff alleges in essence as follows. Defendants--who include private individuals and city officials--conspired to legalize and monopolize the operation of poker clubs in the City of Bell, acting on the "inside information" that the city was considering adopting ordinances legalizing poker clubs and restricting them to a certain part of the city. Defendants agreed to attempt to secure government action under which (1) poker clubs would be legalized, (2) such clubs would be allowed only in a to-be-created C-M zone, and (3) only the 20-acre parcel would be so zoned; they also agreed that only California Bell Operations would be permitted to obtain the requisite 7.5-acre lot in such parcel. Accordingly, Kirwan obtained from Trammell Crow Co. an option to lease eight acres of the twenty-acre parcel and an option to purchase an additional five acres. The so-called conspiracy was successful. For their participation California Bell Operations and its general partners Kirwan, Gasparian, and Simonian received a monopoly; the Crow defendants received help from the city-official defendants in securing from the city certain permits, approvals, and other action favorable to their interests; and the city-official defendants received from the private defendants "rewards, things of value, and other valuable consideration."

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In the second amended complaint he proposes to file, plaintiff--except as otherwise noted in the following discussion--makes essentially the same allegations but with greater specificity.

As will appear, the first amended complaint does not state facts sufficient to constitute a cause of action, and plaintiff does not carry his burden of proving a reasonable possibility that the defects can be cured by amendment.

A

Plaintiff originally contended that by alleging a successful conspiracy to legalize and monopolize poker clubs in his first cause of action, he stated facts sufficient to make out causes of action under section 1983 of title 42 of the United States Code for due process and equal protection violations and a cause of action under section 1985(3) of the same title for an equal protection violation.

To state a due process cause of action under section 1983, a party must, as a threshold matter, allege a liberty or property interest within the protection of the Fourteenth Amendment. (Board of Regents v. Roth (1972) 408 U.S. 564, 570-572, 92 S.Ct. 2701, 2705-2706, 33 L.Ed.2d 548.) A property interest is defined as "a legitimate claim of entitlement to [a benefit]." (Id., at p. 577, 92 S.Ct. at p. 2709.) Thus, "[t]o have a property interest in a benefit, a person clearly must have more than an abstract need or desire for it. He must have more than a unilateral expectation of it." (Ibid.)

The defendants sought dismissal of this claim on the ground, among others, that plaintiff had no property interest in the award of the license. The court agreed and granted the motion.

In this court plaintiff abandoned his due process claim. In effect he conceded that although he may have an "abstract need" or "desire" for or a "unilateral expectation" of a poker club license, he is unable to show that he has any "legitimate claim of entitlement" to it.

To state an equal protection cause of action under section 1983 a party "must set forth facts showing some intentional and purposeful deprivation of constitutional rights." (Powell v. Workmen's Compensation Bd. of State of New York (2d Cir.1964) 327 F.2d 131, 137; accord, e.g., Jones v. Community Redevelopment Agency (9th Cir.1984) 733 F.2d 646, 649-650.) Plaintiff now concedes he cannot set forth any such facts: the conspiracy as alleged sought to enrich the coconspirators, not to deprive plaintiff of any of his constitutional rights.

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Finally, to state a cause of action under section 1985(3), a party must allege, inter alia, "some racial, or perhaps otherwise class-based, invidiously discriminatory animus behind the conspirators' action." (Griffin v. Breckenridge (1971) 403 U.S. 88, 102, 91 S.Ct. 1790...

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