Yoshikawa v. Seguirant

• Decision Date: 25 July 2022
• Docket Number: 21-15970
• Citation: 41 F.4th 1109
• Parties: Hitoshi YOSHIKAWA, Plaintiff-Appellee, v. Troy K. SEGUIRANT, Individually, Defendant-Appellant, and City and County of Honolulu; Greg Talboys; Agt Construction, LLC; James A. Schmit, Defendants.
• Court: U.S. Court of Appeals — Ninth Circuit

41 F.4th 1109

Hitoshi YOSHIKAWA, Plaintiff-Appellee,

v.Troy K. SEGUIRANT, Individually, Defendant-Appellant,andCity and County of Honolulu; Greg Talboys; Agt Construction, LLC; James A. Schmit, Defendants.

No. 21-15970

United States Court of Appeals, Ninth Circuit.

Submitted April 14, 2022^* San Francisco, California

Filed July 25, 2022

Robert M. Kohn and Nicolette Winter, Deputies Corporation Counsel; Department of the Corporation Counsel, Honolulu, Hawai'i; for Defendant-Appellant.

Terrance M. Revere, Revere & Associates LLLC, Kailua, Hawai'i, for Plaintiff-Appellee.

Before: Jay S. Bybee and Ryan D. Nelson, Circuit Judges, and Susan R. Bolton,^** District Judge.

BYBEE, Circuit Judge:

In this case we consider the application of qualified immunity to a claim arising under 42 U.S.C. § 1981. Hitoshi Yoshikawa bought waterfront property in Kane'ohe, Hawai'i. Appellant Troy Seguirant, a building inspector for the City and County of Honolulu, determined that the subsequent renovation of the property violated the Revised Ordinances of Honolulu by rebuilding a prior nonconforming structure without the appropriate new building permit. Although he concedes the violation of the local ordinances, Yoshikawa alleged that the enforcement action against him was motivated by racial animus, in violation of § 1981. Seguirant moved to dismiss the complaint on the basis of qualified immunity, claiming that Yoshikawa had not stated a cause of action under § 1981 and, alternatively, that the law was not clearly established. The district court denied both the motion to dismiss and qualified immunity on the § 1981 claim, reasoning in part that the burden-shifting framework of McDonnell Douglas Corp. v. Green , 411 U.S. 792, 93 S.Ct. 1817, 36 L.Ed.2d 668 (1973), is sufficiently established law in our circuit to justify a denial of qualified immunity. Yoshikawa v. City and County of Honolulu , 542 F. Supp. 3d 1099 (D. Haw. 2021). Although we take a slightly different path than the district court, we affirm the denial of qualified immunity.

I. BACKGROUND

This is an appeal from the district court's decision denying Seguirant qualified immunity. Because this case was decided at the motion to dismiss stage, we have taken the facts from the Third Amended Complaint (TAC) and, for purposes of this appeal, will assume them to be true. See UMG Recordings, Inc. v. Shelter Cap. Partners LLC , 718 F.3d 1006, 1014 (9th Cir. 2013).

A. Factual History

Hitoshi Yoshikawa is a Japanese national and lawful permanent resident who resides in Hawai'i. In 2014, he bought waterfront property in Kane'ohe and hired a licensed architect (Defendant James Schmit) and contractor (Defendant Greg Talboys) to secure design plans and permits to renovate the property in compliance with applicable regulations. Yoshikawa's plans were complicated by the fact that a nonconforming structure had previously been built within the shoreline setback area. Schmit secured permitting to commence the project, and Talboys started work in November 2015.

Defendant-Appellant Troy Seguirant (Seguirant) is a building inspector for the City and County of Honolulu. Seguirant inspected the site at least nine times between December 2015 and May 4, 2016.¹ During these inspections, Seguirant did not raise any issues or concerns related to the scope of the project.

On May 6, 2016, however, Seguirant issued a Notice of Violation and Stop Work Order on the Project (May NOV), alleging that the project inappropriately reconstructed the nonconforming structure within the shoreline setback without a new building permit. Schmit and Talboys contacted the Department of Planning and Permitting (DPP) in an effort to have the May NOV rescinded, but they were instructed that NOVs were unappealable and they would have to wait to appeal until a formal Notice of Order (NOO) was issued. In October 2016, Acting DPP Director Art Challacombe issued a written letter (Challacombe letter) stating that a revised proposal from Schmit was acceptable. The letter authorized Yoshikawa to submit an application for a building permit, leading Yoshikawa to expend substantial resources revising and resubmitting the plans in December 2016.

On February 2, 2017, while in Yoshikawa's yard, Talboys overheard Seguirant telling the next-door neighbor, "I keep shutting them down but f--- [expletive] these Haoles² don't listen, that's why I try [sic] keep it local." (first alteration in original). Following this statement, on March 14, 2017, Seguirant issued an NOO (March NOO) alleging that the work violated the approved building permit and a new building permit was required. Yoshikawa appealed the March NOO to the Board of Building Appeals (BBA). In the meantime, an Amended Building Permit consistent with the Challacombe letter was issued, DPP officials assured Yoshikawa that the project could proceed, and construction resumed.

Seguirant issued a second NOV in April 2017. In addition to repeating the initial allegations, Seguirant further alleged that Yoshikawa had supplied false information to obtain the Amended Building Permit and a new structure had in fact been built on the location of the prior nonconforming structure in violation of the Revised Ordinances of Honolulu. Yoshikawa continued to challenge the orders, but city officials went silent.

In November 2017, the BBA held a hearing on the March NOO and, in early 2018, issued its Findings of Fact, Conclusions of Law, and Decision and Order (BBA Order). The BBA Order determined that a new building permit was required for the removal of the walls on the existing structure within the shoreline setback area, and that Yoshikawa had failed to obtain the appropriate permit reflecting the actual work done on the property. Yoshikawa did not appeal the order.³

B. Proceedings Below

Yoshikawa filed this action in March 2018 against Seguirant, the City and County of Honolulu, Schmit, and Talboys. Only the first count in the TAC filed against Seguirant is relevant to this appeal. Yoshikawa alleged what he called an "equal protection claim" under 42 U.S.C. § 1981. Referring to Seguirant's comment on "haoles" and "keeping it local," Yoshikawa alleged that Seguirant had interfered with his "right to make contracts with ... [his] white or Caucasian architect [and] general contractor" and that the comments were made "with malice or intent to discriminate against [Yoshikawa] based on race, alienage, and/or national origin." Seguirant filed a motion to dismiss the TAC on the grounds that it failed to state a claim under § 1981. He also asserted qualified immunity.

In a published opinion, the district court denied Seguirant's motion to dismiss with respect to the § 1981 claim and denied him qualified immunity. Yoshikawa , 542 F. Supp. 3d at 1111–12. The district court held that § 1981 claims "typically arise in employment discrimination cases," and the court would, accordingly, apply the McDonnell Douglas test: "Plaintiff must plead that he (1) is a member of a protected class, (2) attempted to contract for certain services, and (3) was denied the right to contract for those services." Id. at 1110 (citing Lindsey v. SLT L.A., LLC , 447 F.3d 1138, 1145 (9th Cir. 2006) ). The court concluded that by alleging "that Seguirant, motiv[at]ed by racial animus, tried to prevent the Project from proceeding by engaging in multiple inspections and issuing multiple violations," Yoshikawa had made "sufficient factual allegations to state a Section 1981 claim against Seguirant." Id. at 1111. The district court rejected Seguirant's argument that Yoshikawa had failed to allege that racial animus was the "but-for" cause of the failure of Yoshikawa's project and that, in light of the BBA Order finding building code violations, Yoshikawa could not make such a showing. Id. at 1112. The court observed that "[i]t may be the case that the Project violated the City's ordinances and that Seguirant discriminated against Plaintiff in enforcing those ordinances because of racial animus." Id. "[I]t is possible that Seguirant would not have enforced the City's ordinances in the precise manner that he did if [Yoshikawa's] contractor and architect were of a different race." Id.

The district court also rejected Seguirant's assertion that he was entitled to qualified immunity. Id. Seguirant argued that even if Yoshikawa had stated a § 1981 claim against him, the right was not clearly established because there is a circuit split concerning the applicability of the fourth prong of the McDonnell Douglas test outside of the employment context. See Lindsey , 447 F.3d at 1145 (discussing a split between the Sixth and Seventh Circuits over whether, outside of the employment context, a plaintiff must prove that services were made available to persons not members of the protected class; declining to decide the issue). The district court held that, even if the fourth element of McDonnell Douglas applied, it would not protect Seguirant here because the "right to be free from such invidious discrimination ... is so well established and so essential to the preservation of our constitutional order that all public officials must be charged with knowledge of it." Yoshikawa , 542 F. Supp. 3d at 1112 (quoting Williams v. Alhambra Sch. Dist. No 68 , 234 F. Supp. 3d 971, 978–79 (D. Ariz. 2017) ).

Seguirant timely appealed.

II. JURISDICTION AND STANDARD OF REVIEW

The district court had original jurisdiction over this action pursuant to 28 U.S.C. § 1331, which grants jurisdiction to well-pleaded questions of federal law. We have appellate jurisdiction over this interlocutory appeal pursuant to 28 U.S.C. § 1291 and the collateral order doctrine. See Plumhoff v. Rickard , 572 U.S. 765, 771–72, 134 S.Ct. 2012, 188 L.Ed.2d 1056 (2014) ; Johnson v. Jones , 515 U.S. 304, 309–12, 115 S.Ct. 2151, 132 L.Ed.2d 238 (1995).

We review de novo a government officer or employee's entitlement to qualified immunity. S.B. v. County of San Diego , 864 F.3d 1010, 1013 (9th Cir. 2017). On a ...