590 F.3d 806 (9th Cir. 2010), 08-15245, Caviness v. Horizon Community Learning Center, Inc.

Docket Nº:08-15245.
Citation:590 F.3d 806
Opinion Judge:IKUTA, Circuit Judge:
Party Name:Michael CAVINESS, Plaintiff-Appellant, v. HORIZON COMMUNITY LEARNING CENTER, INC.; Lawrence Pieratt, Defendants-Appellees.
Attorney:David C. Larkin, David C. Larkin P.C., Tempe, AZ, for the appellant. Sally A. Odegard and Larry J. Wulkan, Holloway, Odegard, Forrest & Kelly, P.C., Phoenix, AZ, for the appellees.
Judge Panel:Before: STEPHEN S. TROTT, M. MARGARET McKEOWN, and SANDRA S. IKUTA, Circuit Judges.
Case Date:January 04, 2010
Court:United States Courts of Appeals, Court of Appeals for the Ninth Circuit
 
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590 F.3d 806 (9th Cir. 2010)

Michael CAVINESS, Plaintiff-Appellant,

v.

HORIZON COMMUNITY LEARNING CENTER, INC.; Lawrence Pieratt, Defendants-Appellees.

No. 08-15245.

United States Court of Appeals, Ninth Circuit.

January 4, 2010

Argued and Submitted June 9, 2009.

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[Copyrighted Material Omitted]

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David C. Larkin, David C. Larkin P.C., Tempe, AZ, for the appellant.

Sally A. Odegard and Larry J. Wulkan, Holloway, Odegard, Forrest & Kelly, P.C., Phoenix, AZ, for the appellees.

Appeal from the United States District Court for the District of Arizona, Frederick J. Martone, District Judge, Presiding. D.C. No. CV-07-00635-FJM.

Before: STEPHEN S. TROTT, M. MARGARET McKEOWN, and SANDRA S. IKUTA, Circuit Judges.

IKUTA, Circuit Judge:

This appeal requires us to decide whether a private non-profit corporation that runs a charter school 1 in Arizona was a state actor under 42 U.S.C. § 1983 when it took certain employment-related actions with respect to a former teacher, Michael Caviness. The district court held that Horizon Community Learning Center (" Horizon" ) and its executive director, Lawrence Pieratt, were not functioning as state actors in these circumstances. 2 Because the allegations in Caviness's complaint are insufficient to raise a reasonable inference that Horizon was a state actor and thus acted under color of state law in taking the alleged actions after Caviness was terminated, we affirm the judgment of the district court.

I

Horizon is a private, non-profit corporation that operates a charter school in Arizona. Because Caviness's argument is primarily based on the Arizona statutes and regulations that authorize and regulate charter schools, we provide a brief description of the relevant provisions.

A

In Arizona, charter schools are " public school[s] established by contract with a district governing board, the state board of education, or the state board for charter schools ... to provide learning that will

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improve pupil achievement." Ariz.Rev.Stat. § 15-101(3) (footnote omitted). Charter schools " serve as alternatives to traditional public schools" by " provid[ing] additional academic choices for parents and pupils," and they are intended " to provide a learning environment that will improve pupil achievement." Id. § 15-181(A). By contrast, Arizona defines a " private school" as a " nonpublic institution where instruction is imparted." Id. § 15-101(19). Charter schools are publicly funded, although they are authorized to accept private grants and gifts. Id. § 15-185(D).

A private or public entity seeking to create a charter school must submit an application and be " sponsored" by either " a school district governing board, the state board of education or the state board for charter schools." Id. § 15-183(C).3 In turn, " [t]he sponsor of a charter school may contract with a public body, private person or private organization for the purpose of establishing a charter school...." Id. § 15-183(B). The sponsoring entity of a charter school has " oversight and administrative responsibility for the charter schools that it sponsors." Id. § 15-183(R).

Each charter school must develop a plan for running the school on a largely autonomous basis. A school's charter must specify " a governing body for the charter school that is responsible for the policy decisions of the charter school." Id. § 15-183(E)(8). The charter must " include a description of the charter school's personnel policies, personnel qualifications and method of school governance and the specific role and duties of the sponsor of the charter school." Id. § 15-183(F).

Charter schools are subject to certain state regulations. The state's Department of Education promulgates a list notifying charter schools of their obligations to comply with specified federal, state, and local statutes and rules relating to health, safety, civil rights, and insurance. Id. § 15-183(E)(1). Charter schools are required to display a United States flag in each classroom and, for grades 7 through 12, purchase copies of the Constitution and Bill of Rights. Id. § 15-506. According to Arizona's Attorney General, charter schools are deemed to be " political subdivisions" of the state for purposes of complying with Arizona's Open Meetings Act. See Ariz. Op. Atty Gen. No. 195-10, 1995 WL 870820 at *4 (1995). But see Salt River Pima-Maricopa Indian Cmty. Sch. v. Arizona, 200 Ariz. 108, 23 P.3d 103, 108 (2001) (holding that the Attorney General's conclusion that charter schools were political subdivisions of the state for purposes of open meeting laws did not influence the court's determination that charter schools were not political subdivisions of the state for purposes of a federal statute that limited the amount of federal funds such schools could receive).

Several Arizona statutes are applicable to charter school employees. Charter school employees must undergo finger-printing and background checks, and charter schools may not employ teachers who have been convicted of certain crimes.

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Ariz.Rev.Stat. § 15-183(C)(4). Teachers at charter schools are also afforded certain benefits. Among other things, " [a] charter school that is sponsored by a school district governing board, the state board of education or the state board for charter schools is eligible to participate in the Arizona state retirement system...." Id. § 15-187(C). State retirement benefits are available to " any person in the employ of ... a political subdivision" of Arizona, id. § 38-701(2), and charter schools are " a political subdivision of th[e] state for purposes of [employee retirement eligibility definitions in] title 38, chapter 5, article 2," id. § 15-187(C).

Except as otherwise specified in Arizona statutes regulating charter schools, or in the school's own charter, a charter school " is exempt from all statutes and rules relating to schools, governing boards and school districts." Id. § 15-183(E)(5). Charter schools are therefore exempt from state teacher-certification requirements, as well as the statutes governing dismissal of certified teachers. See id. § 15-531 et seq.

B

Caviness was employed as a high school physical education teacher, health teacher, and track coach at Horizon for six years.4 In February 2006, a female student filed a grievance against Caviness alleging that " the student-teacher boundary had been crossed." Horizon immediately put Caviness on paid administrative leave and thereafter initiated an investigation. In March 2006, the Horizon Board held a hearing regarding the student's allegations, at which Horizon, but not Caviness, questioned the student.

Evidence elicited at the hearing indicated that the female student and Caviness had been communicating via telephone, and that " the student had a crush on him." When the student learned that Caviness had an adult girlfriend, the student became upset and retaliated against Caviness by filing the grievance. The Horizon Board determined that Caviness had exercised questionable judgment regarding the extent of his personal communications with the student, and therefore decided not to renew Caviness's teaching and coaching contract. The Board decided to keep Caviness on paid administrative leave until the end of his employment term, which was in June 2006.

In April 2006, Pieratt wrote a letter to Caviness and sent copies to the Horizon Board members and the Arizona Department of Education. Caviness alleges that the letter " contained numerous false and defamatory statements and private information which Pieratt misused to purposely place ... Caviness in a bad light." In May 2006, Caviness asked Pieratt for permission to attend the Arizona state high school track championship to watch several Horizon students compete, but Pieratt refused to consent.

In July 2006, after the end of his employment term with Horizon, Caviness applied for a position as a teacher and coach with Mesa School District. Mesa decided not to hire him after it asked Pieratt to rate Caviness's ability and knowledge as a teacher, and Pieratt " declined to rate him since the [Horizon] Board had taken the action of non-renewing his contract." Caviness alleges that Pieratt's statement to Mesa was " purposely false and incomplete and was intended to harm" Caviness, since Pieratt " knew that Caviness had an excellent

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6-year record as a teacher and coach and it was reasonable and appropriate for [Pieratt] to respond accordingly rather than decline to provide information."

In August 2006, Caviness's attorney sent a letter to Horizon informing it that a Horizon employee had called Caviness a pedophile. The letter demanded " written representations from Horizon that it had instructed all of its agents and employees to cease and desist from making any further false and defamatory statements to anyone." In his reply to this letter, Pieratt did not address these demands, and Caviness claims that another Horizon teacher subsequently defamed him by also calling him a pedophile.

On December 21, 2006, Caviness sent a request to Pieratt for a name-clearing hearing " arising from defendant's conduct and/or failure to act subsequent to the March 24, 2006 hearing, and his right [to freedom of] association." Horizon did not respond to this request.

C

In March 2007, Caviness filed a complaint under 42 U.S.C. § 1983 in district court against Horizon. Caviness alleged that Horizon, acting under color of state law, deprived Caviness of his liberty interest in finding and obtaining work without due process by making " several false statements about" him " in connection with his employment, which ... cause[d] serious damage to Caviness's standing...

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