Scholl v. City of Dixon

• Decision Date: 19 December 2018
• Docket Number: A151686
• Court: California Court of Appeals Court of Appeals
• Parties: DAVID J. SCHOLL, Plaintiff and Appellant, v. CITY OF DIXON et al., Defendants and Respondents.

DAVID J. SCHOLL, Plaintiff and Appellant, v. CITY OF DIXON et al., Defendants and Respondents.

A151686

COURT OF APPEAL OF THE STATE OF CALIFORNIA FIRST APPELLATE DISTRICT DIVISION FOUR

December 19, 2018

NOT TO BE PUBLISHED IN OFFICIAL REPORTS

California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

(Solano County Super. Ct. No. FCS047260)

Plaintiff David J. Scholl, owner of Dixon's Independent Voice, a newspaper of general circulation, appeals a judgment entered in favor of defendants City of Dixon and various present and former city officials, including Suellen Johnston, Jim Lindley, Jack Batchelor, Steven Bird, Jerry Castanon, Sr., and Scott Pederson (collectively the city). He contends the court erred in sustaining without leave to amend the city's demurrer to his second amended complaint and petition for writ of mandate, which sought damages and declaratory and injunctive relief on claims arising out of the means by which the city effectively denied his newspaper a contract for the publication of legal notices. We conclude that the demurrer was properly sustained to some of his causes of action but that the court erred in sustaining the demurrer to causes of action for violations of Scholl's First Amendment rights and of section 20169 of the Public Contract Code.

Background

Scholl's second amended complaint alleges in relevant part as follows: For fiscal years 2010 to 2016, the city awarded the annual publication contract to two newspapers: Dixon's Independent Voice (the Voice) and the Dixon Tribune (the Tribune). Scholl lives in Dixon and has published the Voice weekly for 21 years. The Voice is printed in Sacramento County, 23 miles from Dixon. The Tribune, which is published three times a week, is owned by Gibson Publishing of Vallejo and is printed in Solano County, 46 Miles from Dixon. The request for proposal (RFP) used to solicit bids for fiscal years 2010 to 2016 required that the newspaper be adjudicated a newspaper of general circulation and be published once a week, and that the contract be awarded to the lowest bidder.

At a meeting on July 8, 2014, the city council directed the staff to revise the RFP for the 2016-2017 contract to eliminate the lowest bidder requirement. The council unanimously rejected the staff's suggestion that the RFP increase the publication requirement to twice a week and reaffirmed the requirement for weekly publication. However, at the meeting on November 25, 2014, the city council adopted the following changes to the RFP: (1) the newspaper must be printed in Solano County; (2) the newspaper must be printed three times per week; and (3) the newspaper must not change its format from that used for the previous six months.

The complaint alleges that "between the July 8, 2014 and the November 25, 2014 meetings, . . . an election to the council was held and the two incumbents [Dane Besneatta and Thom Bogue] were defeated. Both of those incumbents held [the Voice] largely responsible for their defeat as [the Voice] endorsed two other candidates—one who was elected and the other who came in third for the two seats up for election. [¶] . . . At the November 25, 2014 council meeting, while the incumbents who had lost were still in office pending certification of the election results, they changed their previous positions on the issue. . . . Respondents Batchelor, Bird and Castanon voted to include [the new] provisions and were joined by outgoing council members Thom Bogue an Dane Besneatta]."

The complaint further alleges that "members of the Dixon City Council, plus the Mayor, have repeatedly over the years made clear the true motivation behind imposing bid provisions which the Independent Voice could not match. Each year during discussions on the legal notices contract bid they each have emphatically and on therecord publicly castigated the Independent Voice for its content. . . . As one example, Councilmember Jerry Castanon, Sr., directly stated on the record . . . that he would 'not allow the Independent Voice to get one dime of city money.' [¶] . . . As another example, Councilman Dane Besneatta sent a threatening email to [the Voice] in which he wrote, 'Clearly, you do not publish a "news" paper but rather a tabloid hit piece suited to your personal and political leanings just as you handle most everything you are involved with. Because of the lack of credible news-worthiness it is my intention to request that the agreement with your publication and the city regarding public notices be reviewed as I do not think it is appropriate to continue having notices published in such a biased and disingenuous publication.' "

The Voice's bid for the 2016-2017 fiscal year contract was returned as nonresponsive because it did not meet the publishing requirements. According to the complaint, the Tribune was awarded the contract despite the fact that its bid was higher than the bid submitted by the Voice and its circulation was lower than the Voice's circulation.

The second amended complaint alleges five causes of action. The first cause of action alleges that the new requirements in the RFP were imposed in retaliation for Scholl's exercise of his right to free speech. The second cause of action alleges that the city violated Scholl's right to equal protection by imposing different requirements on the RFP for legal publication than other city RFPs or contracts. The third cause of action alleges that the city violated the Public Contract Code by imposing requirements designed to prevent him from being able to qualify to win the bid. The fourth cause of action alleges that the requirement that the newspaper be printed in Solano County is an illegal restraint of trade under the Sherman Act, 15 United States Code section 1. Finally, the fifth cause of action seeks a writ of mandate under Code of Civil Procedure section 1085 based on allegations that Scholl has "a clear present, and beneficial right" to beawarded the contract under section 5.02.060 of the Dixon Municipal Code, which gives preference to local vendors for city contracts.¹

The trial court sustained without leave to amend the city's demurrer. Judgment was entered thereafter. Scholl timely filed a notice of appeal.

Discussion

1. Standard of Review

"When reviewing a judgment dismissing a complaint after a successful demurrer, we assume the complaint's properly pleaded or implied factual allegations are true, and we give the complaint a reasonable interpretation, reading it in context. [Citation.] We also consider judicially noticeable matters. [Citation.] If we see a reasonable possibility that the plaintiff could cure the defect by amendment, then we conclude that the trial court abused its discretion in denying leave to amend. If we determine otherwise, then we conclude it did not. [Citation.] The plaintiff has the burden of proving that an amendment would cure the defect." (Campbell v. Regents of University of California (2005) 35 Cal.4th 311, 320.)

2. The First Cause of Action: Violation of First Amendment Rights

To prevail on a claim under 42 United States Code section 1983 that a contract with a local entity was terminated or not renewed in retaliation for protected speech activities, a plaintiff must show "that 'by his actions [the defendant] deterred or chilled [the plaintiff's] political speech and such deterrence was a substantial or motivating factor in [the defendant's] conduct.' " (Mendocino Environmental Center v. Mendocino County (9th Cir. 1999) 192 F.3d 1283, 1300; Bd. of County Comm'rs v. Umbehr (1996) 518 U.S. 668, 685 [Plaintiff "must show that the termination of his contract was motivated by his speech on a matter of public concern."].) The determination of whether the defendant's action deterred or chilled the plaintiff's political speech is objective. "[T]he properinquiry asks 'whether an official's acts would chill or silence a person of ordinary firmness from future First Amendment activities.' " (Mendocino Environmental Center, p. 1300.) "Intent to inhibit speech . . . can be demonstrated either through direct or circumstantial evidence." (Ibid.)

Initially, the trial court determined Scholl did not establish that he "engaged in constitutionally protected activity." The court's conclusion was based, it appears, on a finding that Scholl did not have a pre-existing commercial relationship with the city. (See Bd. of County Comm'rs v. Umbehr, supra, 518 U.S. at p. 685 [holding that the First Amendment protects parties with "a pre-existing commercial relationship with the government" but declining to "address the possibility of suits by bidders or applicants for new government contracts who cannot rely on such a relationship"]; McClintock v. Eichelberger (3rd Cir. 1999) 169 F.3d 812, 815 [First Amendment protection from retaliation in public contracting extends only to parties with a pre-existing commercial relationship with the government.].) The city has made no attempt to defend the court's order on this ground. Given the allegations in the complaint that the Voice had been awarded the contract for each of the prior six years, we agree that the demurrer was not properly sustained on this ground.

The city contends the demurrer was properly sustained because the second amended complaint fails to allege that the denial of a publishing contract would chill or silence a person of ordinary firmness from further First Amendment activities. The complaint is not "silent" on this issue as the city suggests. After detailing numerous issues concerning which Scholl has published criticism of city council actions and endorsed opponents of council members in city elections, the complaint states, "Government entities are prohibited from retaliating against the Press—or any individual—for...