Allen v. City of Los Angeles

• Decision Date: 07 August 1996
• Docket Number: 95-55477,Nos. 95-55475,s. 95-55475
• Citation: 92 F.3d 842
• Parties: 96 Cal. Daily Op. Serv. 5862, 96 Daily Journal D.A.R. 9569 Byrant ALLEN; Freddie G. Helms; Rodney Glenn King, Plaintiffs, v. CITY OF LOS ANGELES, Defendant-Appellee, v. Stacey C. KOON, Cross-claimant-Appellant. Byrant ALLEN; Freddie G. Helms; Rodney Glenn King, Plaintiffs, v. CITY OF LOS ANGELES, Defendant-Appellee, v. Laurence M. POWELL, Cross-claimant-Appellant.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 842

92 F.3d 842

96 Cal. Daily Op. Serv. 5862, 96 Daily Journal

D.A.R. 9569

Byrant ALLEN; Freddie G. Helms; Rodney Glenn King, Plaintiffs, v. CITY OF LOS ANGELES, Defendant-Appellee, v. Stacey C. KOON, Cross-claimant-Appellant.

Byrant ALLEN; Freddie G. Helms; Rodney Glenn King, Plaintiffs, v. CITY OF LOS ANGELES, Defendant-Appellee, v. Laurence M. POWELL, Cross-claimant-Appellant.

Nos. 95-55475, 95-55477.

United States Court of Appeals Ninth Circuit.

Argued and Submitted June 5, 1996.

Decided Aug. 7, 1996.

Steven J. Freeburg and Holly A. McNulty, Freeburg, Judy, MacChiagodena & Nettels, Pasadena, California, for cross-claimant-appellant.

Katherine J. Hamilton, Assistant City Attorney, City of Los Angeles Office, Los Angeles, California, for defendant-appellee.

Appeal from the United States District Court for the Central District of California; John G. Davies, District Judge, Presiding; D.C. No. CV-91-01543-JGD.

Before: FARRIS, FERNANDEZ and THOMAS, Circuit Judges.

THOMAS, Circuit Judge:

Los Angeles police officers Stacey C. Koon ("Koon") and Laurence M. Powell ("Powell") contend that the City of Los Angeles ("City") is obligated to reimburse them approximately $500,000 in legal expenses they incurred defending a civil lawsuit brought by Rodney Glen King ("King"). We disagree and affirm the district court's entry of judgment in favor of the City.

BACKGROUND

On or about March 3, 1991, King was arrested by Los Angeles police officers, including Koon and Powell. Powell was indicted and convicted for violations of 18 U.S.C. §§ 2 and 242 for depriving King of the Constitutional right to be free from the intentional use of unreasonable force by one making an arrest under color of law. Koon was indicted and convicted for violating 18 U.S.C. § 242 by depriving King of the Constitutional right to be kept free from harm while in official custody.

King also filed a civil rights lawsuit, from which this appeal is taken, against the City, Koon, Powell and other officers under 42 U.S.C. § 1983. Koon and Powell asked the City to defend them in this action, but the City refused under Cal. Gov't Code § 995.2 on the grounds that Koon and Powell acted with actual malice during the incident with King. Both Koon and Powell filed cross-claims against the City, alleging that the City's failure to defend was unwarranted and demanding reimbursement of attorneys' fees and costs pursuant to Cal. Gov't Code § 996.4.

The district court bifurcated the civil lawsuit. In the first phase, the extent of King's injuries was determined, and a verdict was returned in favor of King. In the second phase, the liability of the individual officers was determined, including liability for punitive damages. The jury returned a verdict on special interrogatories. The jury was informed that the criminal trial previously determined that Koon violated the constitutional rights of King by failing to intervene to prevent the use of excessive force against him. The jury was asked whether Koon acted with malice or in reckless disregard of King's rights. The jury responded "Yes." The jury was also asked, "In your discretion do you find punitive damages are appropriate?" The jury answered "No." A verdict in King's favor was also returned against Powell, but no punitive damages were awarded.

The district court then considered the cross-claims of Koon and Powell against the City. Koon and Powell filed a motion for summary judgment, alleging that they did not act with actual malice and were thus entitled to reimbursement of approximately $500,000 of attorneys' fees and costs pursuant to Cal. Gov't Code § 996.4. In the City's opposition, the City asked the district court to hold that the previous criminal and civil trials conclusively established that Koon and Powell had acted with actual malice under Cal. Gov't Code § 996.4 and were thus not entitled to reimbursement of attorneys' fees and costs. The parties waived jury trial and agreed to rely on the evidence presented at the prior civil trial.

The district court denied Koon and Powell's motion for summary judgment, determined that the criminal verdict conclusively established the existence of actual malice, and ordered judgment for the City as a matter of law on the issue of reimbursement of attorney's fees and costs pursuant to Rule 50, F.R.Civ.P. From this decision, Koon and Powell appeal.

JURISDICTION

This appeal involves a state law indemnity cross-claim remaining after a verdict on federal claims brought pursuant to 42 U.S.C. § 1983. ¹ Thus, although neither party raised a jurisdictional issue, we examine jurisdiction sua sponte. In the usual case where all federal claims are resolved, a district court should decline jurisdiction over the remaining state claims. Reynolds v. County of San Diego, 84 F.3d 1162, 1171 (9th Cir.1996). We review a district court's decision to retain jurisdiction over pendent claims when the original federal claims are dismissed for abuse of discretion. Brady v. Brown, 51 F.3d 810, 816 (9th Cir.1995). A court's exercise of supplemental jurisdiction, including pendent and ancillary jurisdiction, is governed by 28 U.S.C. § 1367. Section 1367(a) provides:

[I]n any civil action of which the district courts have original jurisdiction, the district courts shall have supplemental jurisdiction However, a district court may decline to exercise supplemental jurisdiction over a claim under subsection 1367(a) if:

over all other claims that are so related to claims in the action within such original jurisdiction that they form part of the same case or controversy under Article III of the United States Constitution. Such supplemental jurisdiction shall include claims that involve the joinder or intervention of additional parties.

(1) the claim raises a novel or complex issue of State law,

(2) the claim substantially predominates over the claim or claims over which the district court has original jurisdiction,

(3) the district court has dismissed all claims over which it has original jurisdiction, or

(4) in exceptional circumstances, there are other compelling reasons for declining jurisdiction.

28 U.S.C. § 1367(c).

We find that the district court did not abuse its discretion in exercising jurisdiction over the cross-claims founded in state law. Koon and Powell's entitlement to reimbursement forms a part of the same case or controversy as King's claims against the City, Koon and Powell. Thus, the district court had jurisdiction under 28 U.S.C. § 1367(a). The district court has discretion in determining whether to decline exercise of such jurisdiction under the factors set forth in Section 1367(c). Executive Software v. U.S. District Court, 24 F.3d 1545, 1557 (9th Cir.1994). Once the district court identifies the presence of one of the Section 1367(c) factors, the court should consider whether the exercise of jurisdiction advances "the values of economy, convenience, fairness, and comity." Id. (internal quotations omitted).

Two Section 1367(c) factors are present here. The state law indemnification claims involve a novel issue of California law: the definition of "actual malice" under Cal. Gov't Code § 996.4. In addition, all of the claims over which the district court had original jurisdiction have been resolved. Nonetheless, the values of economy, convenience and fairness are advanced by the district court's retention of jurisdiction over Koon and Powell's state law claims. The parties have already completed two trials. The same judge presided over both the complex criminal and civil trials and is intimately familiar with all of the facts and rulings. Given these circumstances, the district court did not abuse its discretion by retaining jurisdiction over the state law indemnification claims.

"ACTUAL MALICE" UNDER CALIFORNIA LAW

Under California law, a public entity is required to defend a public employee sued civilly for torts committed while in the course and scope of employment. Cal. Gov't Code § 995. The entity may refuse to represent a public employee if it believes that the act or omission was not within the scope of employment, or the employee acted or failed to act "because of actual fraud, corruption, or actual malice." Cal. Gov't Code § 995.2. If after request a public entity refuses to provide an employee with a defense against a civil action, the employee may seek reimbursement of attorney's fees, costs and expenses if the act was in the scope of employment and the public entity is unable to establish that the employee acted or failed to act due to "actual fraud, corruption or actual malice." Cal. Gov't Code § 996.4. ² Koon and Powell seek reimbursement under Section 996.4.

This case presents a question of first impression under California law: what the words "actual malice" mean under Cal. Gov't Code § 996.4. Koon and Powell contend that to constitute "actual malice," their actions must have been motivated by hatred or rancor. They argue that the record establishes that fear and the instinct for self-protection were the catalysts for their conduct. The City claims that only a "deliberate wrongful intent" is required. The district court agreed with the City's statutory interpretation. The court found that the criminal verdicts were sufficient to show that Koon and Powell were acting with "actual malice" and not entitled to reimbursement.

We review the district court's grant of judgment as a matter of law de novo. The Monotype Corporation v. International Typeface Corporation, 43 F.3d 443, 455 (9th Cir.1994). Where a state's highest court has not decided a legal issue, we must use our best judgment to predict how that court would decide it. General Motors Corporation v. Doupnik, 1 F.3d 862, 865 (9th Cir.1993). In analyzing the question, we may look to the decisions by the intermediate appellate courts of the state for guidance. Dimidowich v. Bell & Howell, 803 F.2d 1473, 1482 (9th Cir.1986), modified on other grounds, 810 F.2d 1517 (1987). However, we are...