Allen v. City of Beverly Hills

• Decision Date: 21 August 1990
• Docket Number: No. 89-55357,89-55357
• Citation: 911 F.2d 367
• Parties: Jack ALLEN, Plaintiff-Appellant, v. CITY OF BEVERLY HILLS, Defendant-Appellee.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 367

911 F.2d 367

Jack ALLEN, Plaintiff-Appellant, v. CITY OF BEVERLY HILLS, Defendant-Appellee.

No. 89-55357.

United States Court of Appeals Ninth Circuit.

Argued and Submitted May 8, 1990.

Decided Aug. 21, 1990.

Larry J. Roberts, Petersen & Trott, Orange, Cal., for plaintiff-appellant.

Larry J. Frierson and Debra L. Bray, Liebert, Cassidy & Frierson, Los Angeles, Cal., for defendant-appellee.

Appeal from the United States District Court for the Central District of California.

Before WALLACE, THOMPSON and O'SCANNLAIN, Circuit Judges.

WALLACE, Circuit Judge:

Allen appeals from the district court's judgment dismissing his 42 U.S.C. Sec. 1983 civil rights action pursuant to Fed.R.Civ.P. 12(b)(6). He alleged in his complaint that the City of Beverly Hills (City) had deprived him of property without due process of law when it terminated his civil service employment. Allen also contends that the district court improperly denied him leave to amend his complaint for a third time. The district court had removal jurisdiction pursuant to 28 U.S.C. Sec. 1441(b) and exercised jurisdiction pursuant to 28 U.S.C. Sec. 1343(a)(3). We have jurisdiction over this timely appeal pursuant to 28 U.S.C. Sec. 1291. We affirm.

I

Since we are reviewing a dismissal on the pleadings, we must accept Allen's material allegations as true and construe them in the light most favorable to Allen. Ascon Properties, Inc. v. Mobil Oil Co., 866 F.2d 1149, 1152 (9th Cir.1989) (Ascon Properties ). Applying this standard to the allegations in Allen's complaint and his first and second amended complaints, see Sundance Land Corp. v. Community First Federal Savings and Loan Association, 840 F.2d 653, 655 (9th Cir.1988) (considering the facts alleged in both of appellant's complaints), we accept the following facts as true.

For almost 14 years, Allen was a civil service employee in the office of the City Attorney. During that time he served as Assistant City Attorney, Senior Assistant City Attorney, and Acting City Attorney. In April 1987, the City closed the office of the City Attorney and decided to contract out its legal services to private counsel. At that time, the City terminated the employment of Allen as well as the other three attorneys in the office. Allen alleged that the City terminated him and the other attorneys in the office because of their strong objections to the City's allegedly longstanding and illegal effort to eliminate the civil service status of all management, supervisory, and professional employees.

Allen subsequently filed this action pro per in state court. The City responded by removing the action to federal district court and filing a motion to dismiss for failure to state a claim. In response, Allen filed his first amended complaint, which the City also moved to dismiss for failure to state a claim. When the motion came before the district court, Allen's current counsel appeared and became counsel of record for Allen. Allen's counsel successfully moved for and received 30 days in which to amend the complaint again.

Allen, now represented by counsel, filed the second amended complaint and the City again moved to dismiss. After hearing argument from both sides, the district court entered an order dismissing the entire action with prejudice.

II

A dismissal for failure to state a claim pursuant to Fed.R.Civ.P. 12(b)(6) is a ruling on a question of law and is therefore reviewed de novo. Kruso v. International Telephone & Telegraph Corp., 872 F.2d 1416, 1421 (9th Cir.1989), cert. denied, --- U.S. ----, 110 S.Ct. 3217, 110 L.Ed.2d 664 (1990). Our review is limited to the contents of the complaint. Love v. United States, 871 F.2d 1488, 1491 (9th Cir.1988) (Love ). "We may affirm the district court's dismissal only if it is clear that no relief could be granted under any set of facts that could be proved consistent with the allegations." Ascon Properties, 866 F.2d at 1152 (internal quotations and citation omitted).

Although the district court ruled against Allen on several of his contentions, the only ruling on the dismissal that Allen challenges on appeal is the court's conclusion that he did not have a constitutionally protected property interest in continued employment. Allen contends that he has mustered sufficient allegations in his complaint to state a claim that his layoff constituted a deprivation of a constitutionally protected property interest without due process of law.

"Property interests, of course, are not created by the Constitution. Rather, they are created and their dimensions are defined by existing rules or understandings that stem from an independent source such as state law--rules or understandings that secure certain benefits and that support claims of entitlement to those benefits." Board of Regents v. Roth, 408 U.S. 564, 577, 92 S.Ct. 2701, 2709, 33 L.Ed.2d 548 (1972). Our task is to inspect state law and the City's civil service rules and regulations to determine whether there are any rules or understandings that support Allen's claim of entitlement.

Whether an expectation of entitlement is sufficient to create a property interest "will depend largely upon the extent to which the statute contains mandatory language that restricts the discretion of the [decisionmaker]." Jacobson v. Hannifin, 627 F.2d 177, 180 (9th Cir.1980) (Jacobson ). If "the decision to confer a benefit is unconstrained by 'particularized standards or criteria,' no entitlement exists." Fidelity Financial Corp. v. Federal Home Loan Bank, 792 F.2d 1432, 1436 (9th Cir.1986) (Fidelity ), cert. denied, 479 U.S. 1064, 107 S.Ct. 949, 93 L.Ed.2d 998 (1987), quoting Olim v. Wakinekona, 461 U.S. 238, 249, 103 S.Ct. 1741, 1747, 75 L.Ed.2d 813 (1983); see also Loehr v. Ventura County Community College District, 743 F.2d 1310, 1315 (9th Cir.1984); Association of Orange County Deputy Sheriffs v. Gates, 716 F.2d 733, 734 (9th Cir.1983) (Orange County Deputy Sheriffs ), cert. denied, 466 U.S. 937, 104 S.Ct. 1909, 80 L.Ed.2d 458 (1984); City of Santa Clara v. Andrus, 572 F.2d 660, 676 (9th Cir.) ("[A] statute will create an entitlement to a governmental benefit either if the statute sets out conditions under which the benefit must be granted or if the statute sets out the only conditions under which the benefit may be denied.") (quotation omitted, emphasis in original), cert. denied, 439 U.S. 859, 99 S.Ct. 176, 58 L.Ed.2d 167 (1978). Thus, in determining whether California state law or City rules and regulations confer upon Allen a property interest in continued employment, we must inspect whether they "impose particularized standards or criteria that significantly constrain[ed]," Fidelity, 792 F.2d at 1436, the City's discretion to terminate Allen's employment in the office of the City Attorney.

Allen argues that his property interest in continued employment arises from five different sources. We address them in turn.

A.

Allen first contends that he had a property interest in maintaining a civil service position because under the California state civil service system, civil service work may not be contracted out if the work can be adequately and competently performed by civil service personnel. See Burum v. State Compensation Insurance Fund, 30 Cal.2d 575, 579-80, 184 P.2d 505, 506-07 (1947). Allen is not, however, a state civil servant; rather, he is a civil servant employed by a city. The California Constitution specifically grants "plenary authority" to cities to promulgate rules providing for "the terms for which the several municipal officers and employees whose compensation is paid by the city shall be elected or appointed, and for their removal." Calif. Const. art. 11, Sec. 5(b) (emphasis added); see also American Federation of State Employees v. County of Los Angeles, 146 Cal.App.3d 879, 888-89, 194 Cal.Rptr. 540, 546 (1983) (American Federation ) (concluding that pursuant to article 11, section 4, subdivision (f) of the California Constitution a county's own civil service rules "establish the extent of county employees' protected property interest"). The City's municipal code has no provision equivalent to the state system's requirement that only work which cannot be satisfactorily performed by civil service personnel may be contracted out. Instead, the municipal code provides that

[w]henever in the judgment of the Council it becomes necessary in the interests of economy or because the necessity for a position no longer exists, the Council may abolish any position in the classified service. When classified employees are laid off ... for lack of work or funds, or due to a reorganization, such layoffs ... shall be made in inverse order of seniority.... Such layoffs ... shall not be deemed as disciplinary and shall not be subject to appeal.

Beverly Hills, Cal., Code Sec. 2-6.113(a) (1983). Thus, the municipal code clearly does not create a right to be laid off only if the employee cannot perform the work satisfactorily. Any expectation Allen had was purely unilateral. Consequently, we conclude that Burum 's prohibition against contracting out civil service work that can be adequately and competently performed by civil service personnel--a prohibition which is applicable only to the state civil service system--plainly does not provide Allen with a constitutionally protected property interest in his employment.

B.

Allen next contends that he has a property interest in his employment because the City was required to act in good faith when it terminated him. In his complaint, he recognized that he could be terminated if "it was necessary, in the interest of economy or because the necessity for [his] position no longer existed." See id. But he alleges that this was not the reason for his termination; rather, it was because of his strong objections to what he contends was illegal conduct on the part of the City.

Allen first directs us to a line of state cases which hold that "[t]he power to abolish a position may not be...