Marez v. Bassett

• Decision Date: 18 February 2010
• Docket Number: No. 08-56035.,08-56035.
• Citation: 595 F.3d 1068
• Parties: Candido MAREZ, Plaintiff-Appellant, v. Steven BASSETT, in his individual capacity; Ronald Deaton in his individual capacity; Ralph Eshom, in his individual capacity; Thomas C. Hokinson, in his individual capacity; Arnold E. Netka, in his individual capacity; Corey Peterson, in his individual capacity; Department of Water and Power, Defendants-Appellees.
• Court: U.S. Court of Appeals — Ninth Circuit

595 F.3d 1068

Candido MAREZ, Plaintiff-Appellant, v. Steven BASSETT, in his individual capacity; Ronald Deaton in his individual capacity; Ralph Eshom, in his individual capacity; Thomas C. Hokinson, in his individual capacity; Arnold E. Netka, in his individual capacity; Corey Peterson, in his individual capacity; Department of Water and Power, Defendants-Appellees.

No. 08-56035.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted October 6, 2009.

Filed February 18, 2010.

Appeal from the United States District Court for the Central District of California, Florence-Marie Cooper, District Judge, Presiding. D.C. No. 2:06-cv-00118-FMC-RC.

Patricia J. Barry, Los Angeles, CA, for the appellant.

Rockard J. Delgadillo, City Attorney; Richard M. Brown, General Counsel, Water and Power; Lisa S. Berger, Deputy City Attorney, Los Angeles, CA, for the appellees.

Before: W. FLETCHER and RICHARD R. CLIFTON, Circuit Judges, and LOUIS H. POLLAK,^* Senior District Judge.

POLLAK, District Judge:

I. BACKGROUND

On this appeal, the question addressed is whether, as appellant Candido Marez contends, the district court's grant of summary judgment in favor of defendants was in error. Candido Marez ("Marez" or "plaintiff") was the owner of Montrose Supply, a vendor of a wide variety of products to the Department of Water and Power of the City of Los Angeles ("DWP"), from the late 1980s until 2007, when he sold the business. In 2006, plaintiff, proceeding under 42 U.S.C. § 1983, sued DWP in the Central District of California, alleging that the agency had violated the First Amendment by engaging in adverse action against him because of his public criticism of DWP's procurement procedures.

A. The Procurement Process

In order to procure the broad range of goods it needs, DWP relies on small and large vendors. Prior to 2004, DWP awarded contracts through two distinct processes. The first process used "Subpurchase Orders" ("SPOs"), which permitted suppliers to sell small quantities of products directly to DWP purchasing personnel known as "storekeepers." Individual storekeepers awarded these small contracts at their discretion, thereby obviating any need for suppliers to engage in a competitive bidding process. However, SPOs were available only for purchase orders of less than $1000. The second DWP process used competitive bidding. Under this system, DWP publicized to suppliers an offer-request soliciting bids for a stated quantity of a needed product. The lowest bidder received the contract to supply that product. In 2004, DWP implemented extensive changes in the procurement process to eliminate the use of SPOs, which DWP believed were being manipulated by vendors trying to avoid the competitive bidding process.¹

In the winter of 2004 the Los Angeles City Council established a Small and Local Business Advisory Committee. Plaintiff was appointed to the Committee. The Committee's provenance is described in a February 4, 2004 letter from Mario Marin, Director of the Mayor's Office of Small Business Services, to the plaintiff:

Congratulations on your recent appointment to the Small and Local Business Advisory Committee (SLBAC), which was created by a legislative act sponsored by Councilmember Eric Garcetti, Chair of the Housing, Community and Economic Development Committee, and Councilmember Wendy Gruel, Chair of the Audits and Governmental Efficiency Committee....

Over the last year, the City has worked diligently to extend opportunities to businesses in the City of Los Angeles. Initiated in a report by Mayor Hahn, City Attorney Delgadillo and Controller Chick, recommendations were proposed to create a procurement system that was efficient to City departments, cost-effective to the taxpayer, and opportunistic to the small business owner. At a recent public hearing attended by over 300 business owners, community members suggested that a standing committee be established to address small business concerns. As a result of that hearing, a motion was introduced creating the SLBAC....

We look forward to working with you to make the City of Los Angeles the most business friendly city in the country.

The Committee formed a Mega-Contracts Subcommittee of which plaintiff was selected to be one of the two co-chairs. Once he became co-chair, plaintiff began receiving a number of complaints from small business owners about a DWP contract for janitorial services awarded to Empire Janitorial Cleaning Supplies ("Empire"). The chief complaints were that Empire was (1) providing inferior and dangerous items, including broken bottles, and products that lacked safety information and had hand-placed labels, (2) charging prices that were too high, and (3) shrinking the bidding opportunities of small business owners. Plaintiff investigated these allegations and presented his findings to the City Council in March 2004.

Plaintiff claims that, once he began to speak out against Empire and publicly voice other complaints about DWP procurement processes, DWP engaged in adverse action against him. Plaintiff's allegations of adverse action—described more fully below—can be divided into three categories: (1) DWP employees verbally harassed and threatened plaintiff; (2) DWP employees failed to inform plaintiff about opportunities to submit bids and deliberately provided false information regarding contract specifications; and (3) DWP's alleged reforms of the contract process were intended to—and did—negatively affect plaintiff. According to plaintiff, the result was a dramatic decrease in the profits he made from SPO contracts. Plaintiff has further alleged—without providing medical evidence—that his health deteriorated as a result of these actions.

B. Plaintiff's Conduct and Defendants' Alleged Adverse Actions²

Plaintiff first complained about the Empire contract in early 2004. On March 24, 2004, he met with DWP manager Arnie Netka and a staff member from Councilperson Tony Cardenas's office to discuss the Empire contract. On April 20, 2004, plaintiff again met with Netka regarding Empire. That same day, plaintiff received an anonymous threatening phone call from Ralph Eshom, a DWP employee whose voice he recognized. On April 21, 2004, plaintiff and a number of other small business owners appeared before the City Council to complain about the Empire contract.

On April 27, 2004, DWP issued a memo limiting the ability of vendors to interact directly and informally with the warehouse storekeepers. Instead, vendors would be required to make appointments with the senior storekeeper. In June 2004, DWP informed vendors that SPOs could not be used to "split" orders to avoid competitive bidding.³

On May 6, 2004—just fifteen days after appearing before the City Council-plaintiff received two threatening phone calls. At 11:33 a.m., a voice message was left on plaintiff's answering machine telling Marez "you're f____d, you're really f____d." At 11:41 a.m. plaintiff received a message telling him "Candy, leave it alone. Enough is enough. You're going to lose business." There is evidence that the phone call was made from Ralph Eshom's phone line at DWP. The next day plaintiff appeared before the City Council to complain about the threatened retaliation. In June 2004, he met with DWP employees, including defendant Netka, complaining about the difficulties he was having obtaining contracts. On July 7 plaintiff again appeared before the City Council claiming that DWP had retaliated against him for speaking out against the Empire contract.

On June 17, 2004, DWP issued a bid for a tent called the E-Z Up 9000. Mary Beth Wilson, the DWP employee who managed the contract award process, testified that vendors were confused about what type of tent would satisfy the DWP specifications; over half of the bidders stated that the E-Z Up 9000 no longer existed and submitted offers containing alternative models. At the end of the bidding period, plaintiff's business, Montrose Supply, had submitted the lowest price, $106 per tent. DWP decided to reissue the offer-request, explaining that confusion among vendors had distorted the bidding process. However, in his deposition, plaintiff testified that DWP had previously knowingly issued offer-requests that contained confusing or erroneous information without cancelling the bid, and that, on various occasions when DWP had specifically requested the E-Z Up 9000 tent, it had accepted, from plaintiff and other suppliers, bids for alternative models. In this instance, following the reissuance of the offer-request, plaintiff claims that he again offered the lowest price but that the contract was awarded to CalOlympic Safety.

In August 2004, plaintiff filed a formal grievance with DWP alleging that the tents provided by CalOlympic Safety did not comply with the specified fire safety standards. He also reported this information to the City Council, which then investigated the matter. On October 26, 2004, the City Council Energy & Commerce Committee questioned Netka about the tent bid, and he assured the Councilmembers that the tents delivered met the required fire safety standard. Plaintiff and a City Council legislative analyst subsequently inspected the tags of the tents and found that they were certified under a different fire safety standard. On November 9, 2004, the City Council held another meeting during which Council members confronted DWP about the tents. That same month, following the City Council's investigation, DWP rescinded the contract awarded to CalOlympic Safety and awarded it to plaintiff instead.

Plaintiff also charges that DWP employees deliberately withheld information regarding bid opportunities and in some instances provided him with false information to prevent him from winning contracts. In early 2005, plaintiff emailed DWP employee Montenegro, first on February 18, complaining that he was not being given information for available bids, and then, on March 24, complaining that he was losing business.

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