Soranno's Gasco, Inc. v. Morgan

• Decision Date: 15 May 1989
• Docket Number: No. 87-2249,87-2249
• Citation: 874 F.2d 1310
• Parties: SORANNO'S GASCO, INCORPORATED, a California corporation; Leonard Soranno; Diana Soranno, Husband and Wife, Plaintiffs-Appellants, v. Wayne MORGAN, individually; Mike Taulier, individually; Gordon M. Dewers, individually and each in their official capacities as officers of the County of Stanislaus, Stanislaus County Air Pollution Control District, Defendants-Appellees.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 1310

874 F.2d 1310

SORANNO'S GASCO, INCORPORATED, a California corporation Leonard Soranno; Diana Soranno, Husband and Wife Plaintiffs-Appellants, v. Wayne MORGAN, individually; Mike Taulier, individually Gordon M. Dewers, individually and each in their official capacities as officers of the County of Stanislaus Stanislaus County Air Pollution Control District, Defendants-Appellees.

No. 87-2249.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted Dec. 12, 1988.

Decided May 15, 1989.

Paul M. Ostroff, Los Angeles, Cal., for plaintiffs-appellants.

David M. Jamieson, Cardozo, Nickerson, Martelli, Curtis & Arata, Modesto, Cal., for defendants-appellees.

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

Before FLETCHER, BEEZER and O'SCANNLAIN, Circuit Judges.

FLETCHER, Circuit Judge:

Plaintiffs Soranno's Gasco, Incorporated, and Leonard and Dianna Soranno brought this action under 42 U.S.C. Sec. 1983 against the County of Stanislaus and its Air Pollution Control District, Air Pollution Control Officer Gordon Dewers, Deputy Air Pollution Control Officer Wayne Morgan and Air Pollution Control Specialist Mike Taulier. The plaintiffs contend that the defendants suspended Gasco's petroleum bulk plant permits and discouraged its customers from doing business with Gasco in retaliation for Mr. Soranno's exercise of constitutionally protected rights and in violation of due process. The district court granted the defendants' motion for summary judgment, holding that the plaintiffs failed to establish that they were deprived of a protected interest, and that even if such a deprivation occurred, available post-deprivation remedies were sufficient to comport with due process. The plaintiffs timely appeal. We affirm in part, reverse in part and remand.

I. FACTS

Leonard and Dianna Soranno, husband and wife, are the officers and sole shareholders of Soranno's Gasco, Incorporated ("Gasco"). Gasco is engaged in the business of selling and distributing petroleum products in central California. Gasco owns two petroleum bulk plants in Ceres, California which are operated under permits issued by the County of Stanislaus and the Stanislaus County Air Pollution Control District ("APCD"). Gasco has over three hundred wholesale, commercial and industrial bulk customers. Gasco also owns a chain of twelve retail gasoline stations.

Beginning in 1979, the APCD and the County promulgated regulations pertaining to the use of vapor recovery devices. These devices are designed to reduce the escape of hydrocarbon vapors into the atmosphere. Under the regulations, Gasco was required to install vapor recovery devices at its bulk plants and its retail stations.

Mr. Soranno publicly criticized the APCD and the County with respect to various aspects of the vapor recovery regulations. His actions included the institution of public hearings before the County Board of Supervisors to protest certain exemptions from the regulations granted to some local businesses. Soranno also initiated litigation challenging the vapor recovery regulations, and exemptions granted under them.

In September of 1983, the APCD requested that Gasco and Soranno furnish information concerning "bob-tail," or partial load, delivery by Gasco during 1982. This request was refused on the basis that it was an improper attempt to subvert the discovery processes available in an ongoing civil proceeding. ¹

On December 2, 1983, the APCD again demanded the "bob-tail" information, and advised Soranno that if he did not comply, his bulk plant permits would be suspended. On December 14, 1983, the APCD suspended the permits under the authority of California Health & Safety Code Secs. 42303 and 42304. ²

On December 29, 1983, defendant Morgan directed defendant Taulier to send a letter to Gasco's customers informing them that Gasco's bulk plant permits were suspended and that Gasco could not lawfully deliver gasoline while under suspension. The letter also informed them that their own permits might be subject to suspension if they continued to receive gasoline from Gasco. Plaintiffs contend that these letters were false because Gasco could still lawfully deliver gasoline to its customers. Plaintiffs also contend that Gasco lost business as a result of the December 29 notices.

On December 29, the same day that the customer notices were mailed, Gasco's counsel informed Morgan and Taulier that he would provide the "bob-tail" information requested on December 2. Approximately fifteen days later, the APCD reinstated the bulk plant permits.

The Sorannos, individually and on behalf of Gasco, filed this action on December 30, 1983. They allege that the defendants, acting under color of state law, deprived them of various constitutional rights by suspending their bulk plant permits and notifying their customers of the suspension. The plaintiffs advance two theories. First, they contend that the defendants' acts deprived them of property and liberty without due process. Second, the plaintiffs contend that the defendants' acts were motivated by a desire to retaliate against Soranno for the constitutionally protected acts of publicly criticizing the defendants and initiating litigation against them. The plaintiffs seek damages for loss of business profits, and for mental and emotional distress caused by defendants' conduct, as well as an injunction against further violation of their constitutional rights.

On September 12, 1986, the defendants filed a motion for summary judgment. Argument on the motions was held on October 20, 1986. On May 5, 1987, the district court issued an order granting summary judgment in favor of the defendants. The district court held that Gasco had no protected property interest in preservation of the bulk plant permits. The court also concluded that the alleged injury to the Sorannos' business reputation was not a constitutionally protected liberty interest. Thus, it found no constitutional deprivation to give rise to section 1983 liability.

Alternatively, the district court held that, assuming plaintiffs had been deprived of a constitutionally protected interest, available post-deprivation remedies, including reinstatement of the permit and review of the suspension decision, were sufficient to comport with due process. The plaintiffs timely appeal. We have jurisdiction under 28 U.S.C. Sec. 1291.

II. STANDARD OF REVIEW

We review de novo a district court's grant of summary judgment. Hunt v. Dental Dep't, 865 F.2d 198, 200 (9th Cir.1989). We view the evidence in the light most favorable to the non-moving party; we may affirm only if there are no genuine issues of material fact and the moving party is entitled to judgment as a matter of law. Id. We may affirm a grant of summary judgment on any ground supported by the record before the district court at the time of the ruling. Jewel Cos. v. Pay Less Drug Stores Northwest, Inc., 741 F.2d 1555, 1564-65 (9th Cir.1984).

III.

DISCUSSION

A. The Retaliation Claim

"To make out a cause of action under section 1983, plaintiffs must plead that (1) However, the plaintiffs have alleged throughout this case that the defendants' suspension of Gasco's bulk use permits was motivated by a desire to retaliate against Soranno for his public criticism of the defendants. It is clear that "[s]tate action designed to retaliate against and chill political expression strikes at the heart of the First Amendment." Gibson, 781 F.2d at 1338. There is no dispute that Soranno has a protected interest in commenting on the actions of government officials. See New York Times v. Sullivan, 376 U.S. 254, 269-70, 84 S.Ct. 710, 720, 11 L.Ed.2d 686 (1964); McKinley v. City of Eloy, 705 F.2d 1110, 1113 (9th Cir.1983) (protected interest in criticizing public officials regarding matters of public concern). If the plaintiffs can establish that the decision to suspend the permits was made because of Soranno's exercise of constitutionally protected rights, they have established a first amendment violation, and are entitled to relief under section 1983. Gibson, 781 F.2d at 1338. The Sorannos therefore need not establish a legally protected interest in the permits themselves. See Mt. Healthy City School Dist. Bd. of Educ. v. Doyle, 429 U.S. 274, 283-84, 97 S.Ct. 568, 574, 50 L.Ed.2d 471 (1977). ³

                the defendants acting under color of state law (2) deprived plaintiffs of rights secured by the Constitution or federal statutes."    Gibson v. United States, 781 F.2d 1334, 1338 (9th Cir.1986), cert. denied, 479 U.S. 1054, 107 S.Ct. 928, 93 L.Ed.2d 979 (1987).  The district court concluded that plaintiffs had no constitutionally protected property interest in the permits and, accordingly, that no protected property or liberty interest was implicated by their suspension or the notification mailed to Gasco customers
                

A similar analysis applies to the plaintiffs' claim that the permit suspension was in retaliation for filing suit against the defendants. The right of access to the courts is subsumed under the first amendment right to petition the government for redress of grievances. See, e.g., California Motor Transp. Co. v. Trucking Unltd., 404 U.S. 508, 510, 92 S.Ct. 609, 611, 30 L.Ed.2d 642 (1972); Harrison v. Springdale Water & Sewer Comm'n, 780 F.2d 1422, 1427-28 (8th Cir.1986). Deliberate retaliation by state actors against an individual's exercise of this right is actionable under section 1983. Franco v. Kelly, 854 F.2d 584, 589 (2d Cir.1988) (intentional obstruction of the right to seek redress "is precisely the sort of oppression that ... section 1983 [is] intended to remedy") (quoting Morello v. James, 810 F.2d 344, 347 (2d Cir.1987) (brackets in original)); Harrison, 780 F.2d at 1428.

The defendants do not dispute that the allegations of retaliatory action are independent of the due process claims, and that the district court failed to address the former in granting summary judgment. However, they...