Shaw v. State of California Dept. of Alcoholic Beverage Control

• Decision Date: 28 April 1986
• Docket Number: No. 84-1895,84-1895
• Citation: 788 F.2d 600
• Parties: Geraldine SHAW and Ronald Roscoe Shaw, Plaintiffs-Appellants, v. STATE OF CALIFORNIA DEPARTMENT OF ALCOHOLIC BEVERAGE CONTROL; Jay R. Stroh, as Director of the Department of Alcoholic Beverage Control; City of San Jose, a municipal corporation; San Jose Police Department; and Joseph McNamara, Chief of Police of the City of San Jose, Defendants-Appellees.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 600

788 F.2d 600

Geraldine SHAW and Ronald Roscoe Shaw, Plaintiffs-Appellants, v. STATE OF CALIFORNIA DEPARTMENT OF ALCOHOLIC BEVERAGE

CONTROL; Jay R. Stroh, as Director of the Department of

Alcoholic Beverage Control; City of San Jose, a municipal

corporation; San Jose Police Department; and Joseph

McNamara, Chief of Police of the City of San Jose,

Defendants-Appellees.

No. 84-1895.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted June 13, 1985.

Decided April 28, 1986.

Ronald Rosco Shaw, San Jose, Cal., for plaintiffs-appellants.

Victor D. Sonenberg, Dep. Atty. Gen., San Francisco, Cal., Daniel J. Wallace & William B. Mayfield, San Jose, Cal., for defendants-appellees.

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

Before: SKOPIL, REINHARDT, and HALL, Circuit Judges.

REINHARDT, Circuit Judge:

I. BACKGROUND

Geraldine Shaw and Ronald Shaw were the holders of a California liquor license under which they owned and operated a bar in San Jose, California. In August, 1981 the California Department of Alcoholic Beverage Control (the ABC) filed an accusation against the Shaws, charging them with various violations of state liquor laws and regulations, and seeking to revoke their liquor license. A hearing was held at which the Shaws' defense was based in part on a claim that the San Jose Police Department was enforcing the laws against the Shaws in a discriminatory and harassing manner because of the Shaws' race, and that the ABC had obtained the vast bulk of the evidence in the case through the Police Department. The ABC ordered that the Shaws' liquor license be revoked, and the Shaws appealed to the Alcoholic Beverage Controls Appeals Board (the Appeals Board), which affirmed. The California Court of Appeal denied a petition for a writ of review, and the California Supreme Court denied a hearing. The Shaws' liquor license was revoked in October, 1983. For a short time the Shaws continued to serve food, without liquor, on their premises, but closed the business in November, 1983.

In September, 1983 the Shaws filed a civil rights action under 42 U.S.C. Sec. 1983 (1982) against the ABC, Jay R. Stroh as director of the ABC, the City of San Jose, the Police Department, and Joseph McNamara as the Chief of Police. The complaint, as amended, alleged that the ABC and Stroh had improperly revoked the Shaws' liquor license in violation of their constitutional rights, and that the City, the Police Department, and McNamara had engaged in a campaign of discriminatory enforcement of the law based on the Shaws' race, in violation of the Equal Protection Clause of the Fourteenth Amendment of the United States Constitution. The Shaws sought money damages, an injunction against the municipal defendants barring police harassment, and an injunction requiring the ABC and Stroh to reinstate the Shaws' liquor license. The district court granted the defendants' motions to dismiss, and the Shaws appealed.

A decision to dismiss for failure to state a claim is reviewable de novo. North Star International v. Arizona Corporation Commission, 720 F.2d 578, 580 (9th Cir.1983). All material allegations in the complaint are to be accepted as true and all doubts are to be resolved in favor of the plaintiff. Ernest W. Hahn, Inc. v. Codding, 615 F.2d 830, 834-35 (9th Cir.1980). We may affirm the judgment on any basis supported by the record even if the district court did not rely on that basis. United States v. County of Humboldt, 628 F.2d 549, 551 (9th Cir.1980).

II. ELEVENTH AMENDMENT

The Shaws' complaint seeks an award of damages and injunctive relief against the ABC and Stroh as director of the ABC. The Eleventh Amendment to the United States Constitution provides that:

The Judicial power of the United States shall not be construed to extend to any suit in law or equity, commenced or prosecuted against one of the United States by Citizens of another State, or by Citizens or Subjects of any Foreign State.

Despite its language, which would seem to indicate the contrary, the Eleventh Amendment has been held to bar suits against a state brought by its own citizens, whether the relief sought is money damages or an injunction. See Atascadero State Hospital v. Scanlon, --- U.S. ----, 105 S.Ct. 3142, 3145, 87 L.Ed.2d 171 (1985); Pennhurst State School & Hospital v. Halderman, 465 U.S. 89, 98-99, 102, 104 S.Ct. 900, 906-07, 909, 79 L.Ed.2d 67 (1984) (Pennhurst II ). Furthermore, a suit against a state agency is considered to be a suit against the state, and thus is barred by the Eleventh Amendment. Pennhurst II, 465 U.S. at 100, 104 S.Ct. at 907. Because California has not waived its Eleventh Amendment immunity, Atascadero State Hospital, 105 S.Ct. at 3147, the district court properly dismissed the ABC as a party.

An action for money damages against a state official is also considered to be a suit against the state, and thus barred by the Eleventh Amendment, if "the state is the real, substantial party in interest," or if judgment is sought against the public treasury. Pennhurst II, 465 U.S. at 101, 104 S.Ct. at 907; Demery v. Kupperman, 735 F.2d 1139, 1145-46 (9th Cir.1984), cert. denied, --- U.S. ----, 105 S.Ct. 810, 83 L.Ed.2d 803 (1985). Because the Shaws' claim for damages is against Stroh in his official capacity as director of the ABC, and not against him as an individual, the state is the real party in interest and any judgment would be against the public treasury. Accordingly, the district court properly dismissed that claim. See Demery, 735 F.2d at 1145-46. A claim against a state official seeking prospective injunctive relief from unconstitutional state action is not, however, barred by the Eleventh Amendment. Pennhurst II, 465 U.S. at 102, 104 S.Ct. at 909; Demery, 735 F.2d at 1146. Accordingly, we can hear the Shaws' claim against Stroh for prospective injunctive relief.

III. THE STATUS OF THE SAN JOSE POLICE DEPARTMENT AS A PARTY

The defendants have argued that the Police Department was correctly dismissed because under the San Jose City Charter it is not a legal entity with capacity to be sued. Under Rule 17(b) of the Federal Rules of Civil Procedure, the Police Department's capacity to be sued in federal court is to be determined by the law of California. Section 945 of the California Government Code provides that "[a] public entity may sue and be sued." Section 811.2 of the Government Code defines a "public entity" to include "the State, the Regents of the University of California, a county, city, district, public authority, public agency, and any other political subdivision or political corporation in the State."

The courts of California have not expressly determined whether a police department is a public entity under section 811.2. They have, however, held that a police department is a public entity under section 200 of the California Evidence Code. That section provides that for purposes of the Evidence Code, a "public entity" includes "a nation, state, county, city and county, city, district, public authority, public agency, or any other political subdivision or public corporation whether foreign or domestic." The wording of the two sections is nearly identical, except for the inclusion in section 200 of foreign entities, and the California courts have treated the two sections as including the same domestic entities. See, e.g., Rhyne v. Municipal Court, 113 Cal.App.3d 807, 170 Cal.Rptr. 312 (1980); Vallas v. City of Chula Vista, 56 Cal.App.3d 382, 128 Cal.Rptr. 469 (1976), overruled on other grounds, Peterson v. City of Long Beach, 24 Cal.3d 238, 155 Cal.Rptr. 360, 594 P.2d 477 (1979). See also Peterson (implicity equating two sections).

In Vallas, the Court of Appeal held that a police department could not be a public entity under section 200 because a public entity must have some degree of sovereignty; a public entity could not be merely a department within a city. 56 Cal.App.3d at 387, 128 Cal.Rptr. at 472-73. The California Supreme Court overruled Vallas on this very point in Peterson. The court rejected the "sovereignty" test and held that a police department was a public entity under section 200 because it was a public agency. The police department "traditionally has been regarded as an 'agency' of the city [and is] obviously 'public.' " 24 Cal.3d at 244, 155 Cal.Rptr. at 363, 594 P.2d at 480. In none of these cases were city charter provisions even mentioned, and indeed the terms of the charter are irrelevant. The California Supreme Court has held that governmental liability is not a "municipal affair." Societa per Azioni de Navigazione Italia v. City of Los Angeles, 31 Cal.3d 446, 183 Cal.Rptr. 51, 645 P.2d 102, cert. denied, 459 U.S. 990, 103 S.Ct 346, 74 L.Ed.2d 386 (1982). Thus, a city charter provision cannot alter the rules of governmental liability provided by state law. Id.; Birkenfeld v. City of Berkeley, 17 Cal.3d 129, 130 Cal.Rptr. 465, 550 P.2d 1001 (1976).

Because section 200 and section 811.2 have been construed in pari materia, we conclude that the courts of California would hold that the Police Department is a public entity under section 811.2. Thus, under Fed.R.Civ.P. 17(b) the Police Department may be sued in Federal court. ¹

IV. THE PRECLUSIVE EFFECT OF THE PRIOR DECISIONS--GENERAL

The defendants argue that the prior decisions of the state tribunals preclude the present suit. In a section 1983 action we are required to give state "judicial proceedings" precisely the same preclusive effect they would have in the courts of California. 28 U.S.C. Sec. 1738 (1982); Marrese v. American Academy of Orthopaedic Surgeons, --- U.S. ----, 105 S.Ct. 1327, 84 L.Ed.2d 274 (1985); Allen v. McCurry, 449 U.S. 90, 101 S.Ct. 411, 66 L.Ed.2d 308 (1980). In order to determine what preclusive effect the prior decisions have here, it is first necessary to define our terms clearly. The doctrine of "claim preclusion" bars the relitigation of a...