Dias v. Elique

Decision Date06 February 2006
Docket NumberNo. 04-15290.,04-15290.
Citation436 F.3d 1125
CourtU.S. Court of Appeals — Ninth Circuit
PartiesBrian DIAS; William Mason, Sr., Plaintiffs-Appellants, v. Jose ELIQUE; Michael Murray; University and Community College System of Nevada; University of Nevada, Las Vegas, Defendants-Appellees.

Kirk T. Kennedy, Las Vegas, NV, for the plaintiffs-appellants.

Richard C. Linstrom, General Counsel, and Walter L. Ayers, Assistant General Counsel, University of Las Vegas, NV, for the defendants-appellees.

Appeal from the United States District Court for the District of Nevada; Philip M. Pro, Chief District Judge, Presiding. D.C. No. CV-02-00801-PMP (PAL).

Before REINHARDT and THOMAS, Circuit Judges, and RESTANI*, Chief

Judge, United States Court of International Trade.

RESTANI, Judge.

The United States District Court for the District of Nevada dismissed claims brought under 42 U.S.C. § 1983, along with pendent state-law claims, by two employees, Sergeant Brian Dias and Officer William Mason, Sr., who were terminated by the University of Nevada, Las Vegas, Department of Public Safety ("UNLV") after allegedly falsifying time entries in a Department of Public Safety logbook. The district court found Appellants' wrongful termination, retaliation, and related state-law claims were precluded by a determination made by a hearing officer from the Nevada State Personnel Commission (the "Commission") that UNLV had "just cause" in terminating Appellants. Appellants' remaining claims not arising from the termination were dismissed under the doctrine of qualified immunity. We find that the district court erred in applying issue preclusion but uphold the district court's application of qualified immunity.

I. BACKGROUND

On September 10, 2001, Lieutenant Rochelle Sax told Michael Murray, Deputy Director of Public Safety for the University of Nevada, Las Vegas, that she suspected Appellants had falsified time entries in the Public Safety Department logbook. The next day, Murray reported the allegations to his superior officer, Chief of Police Jose Elique. On September 17, 2001, the matter was referred to the Nevada Attorney General's Office, which is responsible for investigating and prosecuting crimes committed by state employees under Nev.Rev.Stat. § 228.175. On November 27, 2001, the Attorney General's Office arranged to interview Appellants. On April 12, 2002, it sent UNLV a report finding sufficient evidence to place Appellants on leave with pay. The next day, UNLV informed Mason that he was being put on administrative leave with pay pending conclusion of the Attorney General's investigation. Dias was similarly suspended on April 16.

On May 7, 2002, Appellants jointly filed suit against Appellees in the District Court for Clark County, Nevada. On June 6, Appellees removed the case to federal court. On the same day, Nevada's Attorney General charged Appellants with presenting a fraudulent claim to a public officer, a gross misdemeanor under Nev.Rev.Stat. § 197.160. On June 10, 2002, Appellants were served with notice of charges recommending dismissal. Appellants waived their right to an informal pre-disciplinary hearing and on July 1, 2002, UNLV terminated Appellants' employment. Appellants sought review of their termination before a Commission hearing officer pursuant to Nev.Rev.Stat. § 284.390. A hearing was held on November 5, 2002, during which both Appellants testified, as did Murray and two other officers.

At the administrative hearing, Appellants conceded the discrepancies in their reported time, but denied that they had defrauded UNLV. They claimed that the discrepancies were the result of an informal "flex-time" policy. They maintained that their previous supervisor, Chief David Hollenbeck, had created the flex-time system to provide compensation for time spent doing non-shift work, such as training, while avoiding overtime charges. According to Appellants, flex-time was subject to an honor system and no formal accounting of time was required. Murray contradicted Appellants' testimony, stating that flex-time was used only to change the start and end time of a shift and required documentation of the change.

On December 10, 2002, the hearing officer issued a "Finding of Fact, Conclusions of Law and Decision" (the "Determination"), finding "substantial reliable and probative evidence" supporting UNLV's decision to dismiss Appellants. In his findings of fact, the hearing officer stated that "[t]he evidence is conclusive that both Sergeant Dias and Officer Mason entered times into the Sign In/ Sign Out Log Book which were false." The hearing officer also found it incredible that Appellants were not aware that department policy required accurate reporting of time in the logbook. Furthermore, the hearing officer found that despite Appellants' assertions that their dismissals were retaliatory, "[n]o evidence of disparate treatment was presented" and "[t]here was no evidence of retaliation." In his conclusions of law, however, the hearing officer stated that he reviewed UNLV's decision for "substantial evidence of legal cause, and to insure that the Employer did not act arbitrarily or capriciously, thus abusing its discretion."

On July 8, 2002, Appellees moved for summary judgment in federal district court, arguing that the hearing officer's determination precluded consideration of Appellants' civil-rights claims. Appellants objected that the preclusion defense had been waived, but the district court allowed Appellees to supplement the pleadings to assert issue preclusion. The district court found that the determination constituted a final judgment on the merits that resolved the factual issues regarding falsification of records and retaliation. With these issues resolved against Appellants, the district court granted summary judgment for Appellees "[t]o the extent [the Complaint] relie[d] on termination based on false allegations and retaliation," including Appellants' pendent state-law claims for intentional infliction of emotional distress, negligence, negligent supervision and retaliation. The court also found that Elique and Murray were entitled to qualified immunity in connection with the non-precluded claims and dismissed the remainder of the § 1983 action.

II. STANDARD OF REVIEW

An order granting summary judgment is reviewed de novo on appeal. Lopez v. Smith, 203 F.3d 1122, 1131 (9th Cir.2000). We "must determine whether, viewing the evidence in the light most favorable to the nonmoving party, there are any genuine issues of material fact and whether the district court correctly applied the relevant substantive law." Id.

The availability of issue preclusion is also reviewed de novo on appeal. Miller v. County of Santa Cruz, 39 F.3d 1030, 1032 (9th Cir.1994). If we determine that issue preclusion is available, we then review "for abuse of discretion the district court's decision to accord preclusion to the agency's decision." Id. Finally, we review de novo a lower court's decision to apply qualified immunity. Sorrels v. McKee, 290 F.3d 965, 969 (9th Cir.2002).

III. ISSUE PRECLUSION

Federal courts give the same preclusive effect to the decisions of state administrative agencies as the state itself would, subject to the "minimum procedural requirements" of the Due Process Clause of the Fourteenth Amendment. Kremer v. Chem. Constr. Corp., 456 U.S. 461, 481-82, 102 S.Ct. 1883, 72 L.Ed.2d 262 (1982). We consider the relevant state-law test to "ensure that, at a minimum, [an agency decision] meets the state's own criteria necessary to require a court of that state to give preclusive effect to the state agency's decisions." Plaine v. McCabe, 797 F.2d 713, 719 (9th Cir.1986); see Roberts v. Las Vegas Valley Water Dist., 849 F.Supp. 1393, 1399 (D.Nev.1994) (applying collateral estoppel to Nevada state agency determination if "`the general collateral estoppel criteria apply'") (quoting Jackson v. Gates, 975 F.2d 648, 656 n. 8 (9th Cir.1992)).

Nevada courts may apply issue preclusion if: 1) the issue decided in prior litigation is identical to the issue presented in the current litigation; 2) the initial ruling was on the merits and is final; and 3) the party against whom the judgment is asserted was a party or in privity with a party to the prior litigation. LaForge v. State ex rel. Univ. & Cmty. Coll. Sys., 116 Nev. 415, 997 P.2d 130, 133 (2000). Nevada gives agency determinations issue preclusive effect, provided they meet the requirements of this test. State ex rel. Univ. & Cmty. Coll. Sys. v. Sutton, 103 P.3d 8, 16 (2004).

Applying the Nevada test to this case, we find the last two requirements are met because Appellants are the same people who participated in the hearing before the Commission hearing officer and the hearing officer's determination was final and on the merits. Nevertheless, we find that issue preclusion is inappropriate in this case because the hearing officer did not resolve the same factual issues involved to the same degree required by Appellants' § 1983 and related state-law claims. Specifically, the hearing officer only found that substantial evidence supported UNLV's decision to terminate Appellants, while Appellants are required to prove their § 1983 and state-law claims by a preponderance of the evidence.

As a general rule, issue preclusion, unlike claim preclusion, "may be defeated by shifts in the burden of persuasion or by changes in the degree of persuasion required." 18 Charles Alan Wright, Arthur R. Miller & Edward H. Cooper, Federal Practice & Procedure § 4422 (2d ed.2002); see Littlejohn v. United States, 321 F.3d 915, 924 (9th Cir.2003) (success on Department of Veterans Affairs disability claim at standard of evidence lower than preponderance not entitled to preclusive effect in tort claim brought under the Federal Tort Claims Act because "[s]uch differences in the burden of proof . . . prevent issue preclusion"); Clark v....

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