Kui Myles v. United States ( 2022 )

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
KUI Z. MYLES, No. 20-55910
Plaintiff-Appellant,
D.C. No.
v. 5:19-cv-02036-
PSG-KK
UNITED STATES OF AMERICA; DAVID
MARIN; BRIAN DEMORE; FRANCIS M.
JACKSON; ARACELI TREVINO; DAVID OPINION
GASSMANN; TROY THOMPSON;
STEVEN LOVETT,
Defendants-Appellees.
Appeal from the United States District Court
for the Central District of California
Philip S. Gutierrez, Chief District Judge, Presiding
Argued and Submitted December 10, 2021
Pasadena, California
Filed September 2, 2022
Before: Marsha S. Berzon and Carlos T. Bea, Circuit
Judges, and Richard D. Bennett, * District Judge.
Opinion by Judge Berzon
*
The Honorable Richard D. Bennett, United States District Judge
for the District of Maryland, sitting by designation.
2 MYLES V. UNITED STATES
SUMMARY **
Federal Tort Claims Act
The panel reversed the district court’s dismissal—under
a discretionary function immunity ruling under the Federal
Tort Claims Act (“FTCA”)—of a federal employee
plaintiff’s malicious prosecution claim against the United
States and individual officials.
Plaintiff works as an Immigration and Customs
Enforcement (“ICE”) agent. In 2013, she reported to ICE
that she was experiencing workplace harassment, and she
alleged that Department of Homeland Security (“DHS”)
agents responded by inventing baseless criminal wage theft
charges against her. The district court dismissed plaintiff’s
complaint. With respect to plaintiff’s malicious prosecution
claim, the district court dismissed based on its holding that
it lacked subject matter jurisdiction over the claim under the
FTCA’s discretionary function exception.
The panel held that the district court erred in dismissing
plaintiff’s malicious prosecution claim because the
discretionary function exception under the FTCA did not
apply to law enforcement investigations when a federal
employee’s tactics during the investigation had no legitimate
policy rationale.
In the FTCA, the federal government waived its
sovereign immunity with respect to certain tort claims
arising out of wrongdoing committed by federal employees
**
This summary constitutes no part of the opinion of the court. It
has been prepared by court staff for the convenience of the reader.
MYLES V. UNITED STATES 3
acting within the scope of their employment. Sovereign
immunity waiver is subject to several exceptions, including
the discretionary function exception, wherein the federal
government has retained sovereign immunity for claims that
are “based upon the exercise or performance or the failure to
exercise or perform a discretionary function or duty on the
part of a federal agency or an employee of the” federal
government. 28 U.S.C. § 2680(a).
To determine whether a claim falls within the scope of
the discretionary function, the court conducts a two-step
inquiry. First, the court assesses whether the allegedly
wrongful conduct is discretionary. If so, the court
determines whether the exercise of discretion is a decision
“grounded in social, economic, and political policy.”
Berkovitz v. United States, 486 U.S. 531, 536-37 (1988).
Preliminarily, the panel identified plaintiff’s specific
allegations of agency wrongdoing. Plaintiff alleged, among
other things, that DHS officials misrepresented to the
Orange County District Attorney’s Office (“OCDA”) that
plaintiff had “purposefully lied about overtime hours” in a
manner that constituted “grand theft by an employee” under
Cal. Penal Code § 487(b)(3), even though they knew that she
had not lied about her overtime hours. She also alleged that
DHS officials doctored evidence that she was submitting
false overtime requests.
The district court decided at step one of the analysis that
the DHS agents acted within their discretion when they
investigated plaintiff for workplace misconduct and reported
that conduct to the OCDA. The panel assumed without
deciding that the district court’s step one analysis was
correct. The panel did not agree with the district court’s
reasoning at step two. The panel held that the discretionary
4 MYLES V. UNITED STATES
function exception did not provide refuge for conduct such
as knowingly lying under oath, tampering with witnesses, or
fabricating evidence. Such conduct of the type alleged by
plaintiff had no role in the legitimate functioning of
government and did not constitute a policy judgment
susceptible to social, economic, or political analysis. The
conduct, therefore, was not protected by the discretionary
function exception.
The panel rejected the government’s argument that
plaintiff had not carried her burden under Twombly and
Iqbal’s pleading standards, as she had failed to sufficiently
allege malice or lack of probable cause on the part of DHS
officials. The panel held that, at this stage of the
proceedings, in which all uncontroverted factual allegations
in the complaint must be taken as true and all factual disputes
resolved in plaintiff’s favor, plaintiff alleged sufficient facts
to plausibly support her malicious prosecution claim.
Specifically, plaintiff alleged facts that satisfied the three
elements of a malicious prosecution action in California: the
state criminal proceeding against plaintiff was commenced
by or at the direction of federal agents and terminated in
plaintiff’s favor, was brought without probable cause; and
was initiated with malice.
The panel remanded for further proceedings. The panel
addressed additional issues in a concurrently filed
memorandum disposition.
MYLES V. UNITED STATES 5
COUNSEL
David Zarmi (argued), Beverly Hills, California, for
Plaintiff-Appellant.
Hillary M. Burrelle (argued), Assistant United States
Attorney; David M. Harris, Chief, Civil Division; Tracy L.
Wilkison, Acting United States Attorney; United States
Attorney’s Office, Los Angeles, California; for Defendants-
Appellees.
OPINION
BERZON, Circuit Judge:
After she was discharged from her position as an
Immigration and Customs Enforcement (“ICE”) agent,
plaintiff Kui Z. Myles brought national origin discrimination
and retaliation charges before the Equal Employment
Opportunity Commission (“EEOC”). Following a multi-day
trial, the EEOC upheld the charges and ordered that Myles
be reinstated with backpay. Myles then worked at ICE for
several years without incident. In 2013, however, she
reported to ICE that she was again experiencing harassment.
In response, she alleges, Department of Homeland Security
(“DHS”) agents—including ICE officers, DHS special
agents, and other high-ranking DHS officials—invented
baseless criminal wage theft charges against her.
The district court dismissed Myles’s complaint—which
raised, among other things, a malicious prosecution claim—
on grounds of untimeliness, lack of administrative
exhaustion, and discretionary function immunity. We
address the first two issues in a concurrently filed
6 MYLES V. UNITED STATES
memorandum disposition. In this opinion, we reverse the
district court’s discretionary function immunity ruling and
remand Myles’s malicious prosecution claim for further
proceedings.
I.
A.
Myles is a naturalized United States citizen born in
China. 1 In 2005, she applied for and accepted a position as
an Immigration Enforcement Agent at ICE, an agency within
DHS. Before beginning her official work duties, Myles
attended a mandatory federal training program. During the
program, she was subjected to a hostile work environment
by her co-workers and instructors on account of her Chinese
national origin. Myles v. Napolitano, No. HS-06-ICE-
000682, 2012 WL 1564475, at *1 (EEOC Apr. 20, 2012).
After raising concerns about this treatment, Myles was
denied access to certain computer systems, was not issued
pepper spray, was not permitted to work in the field, was
denied bus driving training, was erroneously charged with
“absence without leave,” and was ultimately terminated. Id.at *1–2. After a multi-day trial, Administrative Law Judge
(“ALJ”) Kathleen Mulligan found DHS liable for
discriminatory and retaliatory conduct against Myles based
on her Chinese national origin, and ordered Myles reinstated
with an award of back pay and benefits, compensatory
damages, compensation for emotional distress, and
attorneys’ fees and costs.
1
As we are reviewing the district court’s decision to grant the
Defendants’ motions to dismiss, “we recite the facts as alleged in
[Myles’s] complaint, and assume them to be true.” Brooks v. Clark
County, 828 F.3d 910, 914 n.1 (9th Cir. 2016).
MYLES V. UNITED STATES 7
Following her reinstatement, Myles consistently
received “[e]xcellent” and “[o]utstanding” performance
evaluations. But, after several years of uneventful service,
Myles reported to ICE that she was again experiencing
harassment, this time at the hands of her direct supervisor
Armando Lares. As a result, Lares was subject to
disciplinary action, including “being placed on
administrative duty status” and temporarily losing overtime
privileges and the “right to carry a firearm.”
About one month after Lares’ disciplinary action went
into effect, he falsely reported to DHS that Myles was
illegally housing undocumented Chinese nationals. A team
of at least five DHS agents—including David Gassmann and
Steven Lovett, both defendants in this case—surveilled
Myles for eight months, taking extensive video footage of
Myles and her family. When the surveillance revealed that
Myles was not illegally housing any undocumented
individuals, Gassmann was encouraged by Lovett and other
DHS officers, including defendants Brian DeMore, Francis
Jackson, and David Marin, to manufacture evidence that
would support a criminal case against Myles for wage theft
and presented the manufactured evidence to federal law
enforcement officials.
Upon review of the evidence the DHS officials had
marshalled against Myles, the United States Attorney’s
Office refused to press charges. According to Myles’s
complaint, the Office concluded that the evidence appeared
to be “fabricated” and observed that “the matter [was] an
employment issue and not a criminal one.” Undeterred,
Gassmann presented the case to the Orange County District
Attorney’s Office (“OCDA”); his presentation included
knowingly false statements and intentional
misrepresentations. The OCDA then filed a criminal
8 MYLES V. UNITED STATES
complaint against Myles in California state court, alleging
one count of grand theft by an employee under California
Penal Code § 487(b)(3).
In December 2014, Gassmann and another DHS agent
asked Myles to meet with them “for a talk.” When she
arrived, they arrested her and transported her to the Santa
Ana jail, where she was booked and detained. In connection
with the arrest, the OCDA released several press statements
“in which false statements were published about [Myles]
stating she acted illegally, took advantage of her public
position, and was unethical.” About one month later,
Jackson, Deputy Field Officer for ICE, recommended that
Myles be either suspended indefinitely without pay or
terminated. Marin, an ICE Deputy Field Officer,
subsequently placed Myles on indefinite suspension without
pay, a status that continued until late November 2017.
The state criminal case against Myles was pending for
almost three years. During that period, DHS agents
tampered with witnesses and committed perjury and
obstruction. Myles “underwent significant financial
hardship” including selling her property, exhausting her
savings, and withdrawing retirement funds to support her
family and to pay for her defense. She experienced
“significant emotional and physical distress, humiliation,
shame, despair, embarrassment, depression, physical and
mental pain and suffering and anguish, loss of earnings, loss
[of] pay grade, loss of security clearance at her job, loss of
the right to carry service-issued and personal firearms as a
law enforcement officer, loss of status[] and future status,
and loss of other benefits.”
OCDA Deputy District Attorney Nichols, who was
assigned to prosecute the state criminal case, “became
convinced” upon reviewing the evidence—including the
MYLES V. UNITED STATES 9
2008 EEOC decision; a Government Accountability Office
report detailing widespread defects in overtime oversight
within DHS; and video footage demonstrating that Myles
was “working longer hours than many of her counterparts”
and that the individual clocking out early was not Myles—
that the criminal case against Myles “was without merit and
filed in bad faith.” On November 13, 2017, Nichols moved
to dismiss the criminal case because “she had come to the
conclusions that [Myles] was being unlawfully
discriminated against”; that Myles was innocent of any
wrongdoing; that some of the evidence against Myles had
been fabricated; and that DHS was “abusing the office of the
OCDA” by using it as a tool “to unfairly prosecut[e]” Myles.
The state court granted Nichols’s motion and the case was
dismissed.
Myles returned to active duty the following week, but
she continues “to suffer harm . . . including but not limited
to [DHS] failing to restore her los[t] earnings and benefits,
pay grade, security clearance, and the right to carry service-
issued and personal firearms.” She has also been relegated
“to low level administrative status and light duty,” without
opportunity for advancement. DHS payroll employees have
also “planted” new false evidence that Myles requested and
received improper overtime payments from 2014 through
the date on which she filed this action, including during the
three-year period in which she was not working at DHS
because of the state criminal case.
B.
In November 2018, Myles filed an administrative
complaint with DHS, pursuant to the Federal Tort Claims
Act (“FTCA”), 28 U.S.C. § 2675, regarding the alleged
mistreatment she experienced from the time she submitted
an internal complaint within DHS in 2014 to the time she
10 MYLES V. UNITED STATES
was reinstated in 2017. DHS never responded to the
administrative complaint, so it was denied by operation of
law. 28 U.S.C. § 2675(a). A few months later, Myles filed
this case in the Central District of California. The
government moved to dismiss the complaint. The district
court granted the government’s motion, but also granted
Myles leave to amend her first cause of action—malicious
prosecution—because it could be “save[d] . . . via
amendment.” Myles then filed a First Amended Complaint
(“FAC”), and, later, a Second Amended Complaint
(“SAC”).
The SAC asserts the following causes of action:
(1) malicious prosecution against the government; (2) abuse
of process against the government; (3) negligence against
the government; (4) intentional infliction of emotional
distress (“IIED”) against the government; (5) violation of the
First Amendment against DeMore, Gassmann, Jackson,
Lovett, and Marin (“the Individual Defendants”);
(6) violation of the Second Amendment against Marin;
(7) violation of the Fifth Amendment against the Individual
Defendants; (8) violation of the Fourteenth Amendment
against the Individual Defendants; (9) conspiracy to
interfere with civil rights under 42 U.S.C. § 1895 against the
Individual Defendants; and (10) violation of civil rights
under 42 U.S.C. § 1986 against the Individual Defendants.
The government and each of the Individual Defendants
moved to dismiss the case in its entirety, and the district
court granted the motions. With respect to Myles’s
malicious prosecution claim, the district court held that it
lacked subject matter jurisdiction over the claim because of
discretionary function immunity. It further rejected Myles’s
argument that the government actions at issue qualify as
constitutional violations outside the scope of the
MYLES V. UNITED STATES 11
discretionary function exception, as any constitutional
claims would be “barred due to the statute of limitations or
qualified immunity.”
The district court then dismissed Myles’s Fourteenth
Amendment Bivens claim on the ground that she had
stipulated to such a dismissal; dismissed her Second
Amendment Bivens claim against Marin on the ground that
Marin was shielded from suit by qualified immunity; 2 and
dismissed her remaining claims on the grounds that she
failed to administratively exhaust them or they were time-
barred. Finally, the district court denied Myles’s motion for
leave to amend the complaint.
II.
As mentioned, this opinion discusses only Myles’s
malicious prosecution claim. We review de novo the district
court’s decision to grant a motion to dismiss under the
FTCA’s discretionary function exception. Terbush v. United
States, 516 F.3d 1125, 1128 (9th Cir. 2008). “In reviewing
the district court’s dismissal, we must accept as true the
factual allegations in the complaint.” GATX/Airlog Co. v.
United States, 286 F.3d 1168, 1173 (9th Cir. 2002).
We conclude that the district court erred in dismissing
Myles’s malicious prosecution claim. Discretionary
function immunity under the FTCA does not apply to “law
enforcement investigations when a federal employee’s
tactics during an investigation had ‘no legitimate policy
rationale.’” Nieves Martinez v. United States, 997 F.3d 867,
2
Myles does not contest the district court’s Second Amendment
ruling on appeal.
12 MYLES V. UNITED STATES
881 (9th Cir. 2021) (quoting Sabow v. United States, 93 F.3d
1445, 1454 (9th Cir. 1996)).
A.
Myles’s malicious prosecution claim was brought
against the federal government. As a sovereign, the United
States “is immune from suit save as it consents to be sued.”
United States v. Sherwood, 312 U.S. 584, 586 (1941). In the
FTCA, the federal government waived its sovereign
immunity with respect to certain tort claims arising out of
wrongdoing committed by federal employees acting within
the scope of their employment. Foster v. United States,
522 F.3d 1071, 1074 (9th Cir. 2008) (citing 28 U.S.C.
§ 1346(b)(1)).
The sovereign immunity waiver in the FTCA is subject
to several exceptions, one of which is pertinent here: the
federal government has retained sovereign immunity for
claims that are “based upon the exercise or performance or
the failure to exercise or perform a discretionary function or
duty on the part of a federal agency or an employee of the”
federal government. 28 U.S.C. § 2680(a). To determine
whether a claim falls within the scope of the discretionary
function exception, we conduct a two-step inquiry. Young v.
United States, 769 F.3d 1047, 1053 (9th Cir. 2014). First,
we assess whether the allegedly wrongful “conduct is
discretionary—that is, ‘whether the action is a matter of
choice for the acting employee.’” Id. (quoting Berkovitz v.
United States, 486 U.S. 531, 536 (1988)). If so, we
“determine whether the particular exercise of discretion” at
issue is “of the kind that the discretionary function exception
was designed to shield,” in that it is a decision “grounded in
social, economic, and political policy.” Id. (quoting
Berkovitz, 486 U.S. at 536–37 (1988)). Under Ninth Circuit
law, the second step does not require a showing that the
MYLES V. UNITED STATES 13
decision was “actually grounded in policy considerations,”
but the decision “must be, by its nature, susceptible to policy
analysis.” Miller v. United States, 163 F.3d 591, 593 (9th
Cir. 1998); Chadd v. United States, 794 F.3d 1104, 1109 (9th
Cir. 2015); but see id. at 1114 (Berzon, J., concurring)
(concluding that the conduct at issue must be actually
grounded in a policy analysis, as the statement in United
States v. Gaubert, 499 U.S. 315, 324–25 (1991), regarding
“susceptibility to policy analysis,” relied upon in Miller and
Chadd, establishes only a rebuttable presumption that the
conduct was grounded in such an analysis).
“Whether a challenged action falls within the
discretionary function exception requires a particularized
analysis of the specific agency action challenged.”
GATX/Airlog Co., 286 F.3d at 1174. So, before undertaking
an assessment at step one of the Berkovitz-Gaubert test, “we
must first identify [Myles’s] ‘specific allegations of agency
wrongdoing.’” Young, 769 F.3d at 1053–54 (quoting
Berkovitz, 486 U.S. at 540).
Here, Myles alleges that federal government employees
“knowingly made false allegations to the OCDA regarding
[Myles’s] conduct . . . that directly led to her criminal
prosecution”; “instigated, encouraged, and were actively
involved in causing [Myles] to be prosecuted . . . on the
felony charge of grand theft”; and “committed perjury by
lying under oath about the charge against [Myles].” She
further alleges that, to ensure the criminal case against her
would be maintained, DHS officials tampered with
witnesses, provided false statements to the OCDA, and
fabricated evidence. Myles also alleges that the DHS
officials “did not have probable cause nor did they
reasonably believe that [Myles] was guilty of the charge
against her.” “Their purpose was to retaliate against
14 MYLES V. UNITED STATES
[Myles]” because she had reported internally that she was
again experiencing national origin-based harassment in the
workplace.
Getting into specifics, Myles alleges that DHS officials
represented to the OCDA that she had “purposefully lied
about overtime hours” in a manner that constituted “grand
theft by an employee” under California Penal Code
§ 487(b)(3), even though they knew that she had not lied
about her overtime hours. Video evidence, Myles alleges,
demonstrated that she was “working longer hours than many
of her counterparts” and “the person in the video who . . .
was clocking out early was not, in fact,” Myles. She also
alleges that DHS officials doctored evidence that she was
submitting false overtime requests, including during a period
in which she could not have submitted such requests because
she was absent from the office on unpaid administrative
leave.
B.
The district court concluded that it lacked subject matter
jurisdiction over Myles’s malicious prosecution claim in
light of the discretionary function exception. At step one of
the inquiry, the district court concluded that the DHS agents
“acted within their discretion when they investigated
[Myles] for workplace misconduct and reported that conduct
to the OCDA.” At step two, the district court reasoned that
the conduct of the DHS agents was “of the type the exception
seeks to protect,” as “the decision how to investigate, who to
investigate, and how to present evidence to the proper
authorities are classic examples of discretionary conduct.”
Assuming without deciding that the district court’s step
one analysis was correct, we cannot agree with the district
court’s reasoning at step two. The discretionary function
MYLES V. UNITED STATES 15
exception was designed to prevent “judicial ‘second-
guessing’ of legislative and administrative decisions
grounded in social, economic, and political policy.”
Gaubert, 499 U.S. at 323 (quoting United States v. S.A.
Empresa de Viacao Aerea Rio Grandense (Varig Airlines),
467 U.S. 797, 814 (1984)). As decisions to knowingly lie
under oath, tamper with witnesses, or fabricate evidence
cannot be “grounded in” and are not “susceptible to” such
analyses, id. at 323, 325, the discretionary function
exception does not provide refuge for such conduct. Put
differently, the discretionary function exception “does not
apply to law enforcement investigations when a federal
employee’s tactics during an investigation had ‘no legitimate
policy rationale.’” Nieves Martinez, 997 F.3d at 881
(quoting Sabow, 93 F.3d at 1454). Conduct of the type
alleged by Myles has no role to play in the legitimate
functioning of government. Such conduct therefore is not
protected by the discretionary function exception. As the
Seventh Circuit emphasized in an analogous case, “[t]here
can be no argument that perjury is the sort of ‘legislative [or]
administrative decision[] grounded in social, economic, or
political policy’ that Congress sought to shield with the
discretionary function exception.” Reynolds v. United
States, 549 F.3d 1108, 1112–14 (7th Cir. 2008) (quoting
Varig Airlines, 467 U.S. at 814).
Our interpretation of the discretionary function
exception is supported by the 1973 amendment to the list, in
28 U.S.C § 2680(h), of intentional torts exempted from the
FTCA. 3 See 119 Cong. Rec. 38969 (1973). Historically, the
3
As amended, section 2680(h) provides that the federal government
has retained sovereign immunity with respect to “[a]ny claim arising out
of assault, battery, false imprisonment, false arrest, malicious
prosecution, abuse of process, libel, slander, misrepresentation, deceit,
16 MYLES V. UNITED STATES
United States retained sovereign immunity for intentional
torts committed by government agents, including malicious
prosecution. Id. But, following a string of botched drug
raids in Collinsville, Illinois that captured national media
attention, Congress amended 28 U.S.C. § 2680(h) to allow
aggrieved persons to bring “assault, battery, false
imprisonment, false arrest, abuse of process, or malicious
prosecution” actions against the federal government arising
from the “acts or omissions of investigative or law
enforcement officers.” 28 U.S.C. § 2680(h). 4 Congress’s
goal in passing the 1973 amendment was to deter the
designated federal agents from committing intentional torts
or interference with contract rights,” except that, “with regard to acts or
omissions of investigative or law enforcement officers of the United
States Government” that give rise to tort claims for “assault, battery,
false imprisonment, false arrest, abuse of process, or malicious
prosecution,” the federal government has waived its sovereign
immunity. 28 U.S.C. § 2680(h). The provision defines “investigative or
law enforcement officer” as “any officer of the United States who is
empowered by law to execute searches, to seize evidence, or to make
arrests for violations of Federal law.” Id.Myles’s complaint expressly asserts that the ICE and DHS officials
in this case qualify as “investigative and law enforcement agents of the
United States” such that the “United States Government is liable for all
damages caused” by their acts and omissions. The government has not
contended otherwise.
4
119. Cong. Rec. 38969; see also S. Rep. No. 93-588, at 3–4 (1973);
Andrew H. Malcolm, Drug Raids Terrorize Two Families—By Mistake,
N.Y. Times, April 29, 1973; Andrew H. Malcolm, Two Families Say
Lives Changed After Raids by Drug Agents, N.Y. Times, May 19, 1973;
Andrew H. Malcolm, Harassed Victims of Drug Raids Are Moving, N.Y.
Times, July 4, 1973; Jake McCarthy, The Victims Are Hiding, St. Louis
Post, Oct. 31, 1973; Paul Galloway, Trying the Drug Raiders: 10 Agents
Found Innocent in Botched Collinsville Entries, Wash. Post, April 7,
1974.
MYLES V. UNITED STATES 17
and to ensure that victims of intentional torts would be
adequately compensated for their injuries. 119. Cong. Rec.
38969.
As section 2680(h) broadened the application of the
FTCA with respect to malicious prosecution actions arising
out of the acts or omissions of federal investigative and law
enforcement personnel but did not change the discretionary
function exception, the two should not be read as
coextensive. Yet, if the facts of this case—which, again,
involve allegations of perjury, witness tampering, and
fabrication of evidence—are insufficient to render Myles’s
malicious prosecution claim outside the scope of the
discretionary function exception, it is hard to imagine any
malicious prosecution action covered by the section 2680(h)
carve-out that would survive application of the discretionary
function exception. Any malicious prosecution action
against investigative and law enforcement personnel would
involve “decision[s] how to investigate, who to investigate,
and how to present evidence to the proper authorities.” The
district court’s interpretation of the discretionary function
exception would thereby render the 1973 addition to
section 2680(h) meaningless, in contravention of the “well-
established principle of statutory construction that
‘legislative enactments should not be construed to render
their provisions mere surplusage.’” Am. Vantage Cos. v.
Table Mountain Rancheria, 292 F.3d 1091, 1098 (9th Cir.
2002) (quoting Dunn v. Commodity Futures Trading
Comm’n, 519 U.S. 465, 472 (1997)).
In sum, we conclude that in malicious prosecution cases
in which the plaintiff alleges that an investigative or law
enforcement official fabricated evidence, tampered with
witnesses, lied under oath, or otherwise knowingly offered
false testimony to induce criminal charges against the
18 MYLES V. UNITED STATES
plaintiff, the discretionary function exception does not shield
the United States government from liability, as such
misconduct does not constitute a policy judgment
susceptible to social, economic, or political analysis. 5
C.
In its briefing before this Court, the government
advanced a new argument: that Myles has not carried her
burden under Twombly and Iqbal’s pleading standards, as
she has failed sufficiently to allege malice or lack of
probable cause on the part of the DHS officials. See
generally Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007);
Ashcroft v. Iqbal, 556 U.S. 662 (2009). Not so. At this stage
of the proceeding—in which all uncontroverted factual
allegations in the complaint must be taken as true and all
factual disputes must be resolved in Myles’s favor, see Puri
v. Khalsa, 844 F.3d 1152, 1157 (9th Cir. 2017)—Myles has
alleged sufficient facts plausibly to support her malicious
prosecution claim. See Lunsford v. Am. Guar. & Liab. Ins.
Co., 18 F.3d 653, 655 (9th Cir. 1994) (citing Oren Royal
Oaks Venture v. Greenberg, Bernhard, Weiss, & Karma,
Inc., 42 Cal. 3d 1157 (1986)).
A malicious prosecution action, in California, has three
elements: (1) the prosecution “was commenced by or at the
direction of the defendant and was pursued to a legal
termination” in the plaintiff’s favor; (2) “was brought
without probable cause”; and (3) “was initiated with
malice.” Casa Herrera, Inc. v. Beydoun, 32 Cal. 4th 336,
5
In light of this holding, we need not reach Myles’s alternative
argument that the discretionary function exception does not apply to this
case because the misconduct at issue qualifies as a constitutional
violation.
MYLES V. UNITED STATES 19
341 (2004). Malice in this context “is not limited to actual
hostility or ill will toward [the] plaintiff,” but also “exists
when proceedings are instituted primarily for an improper
purpose” such as when “the person initiating [the charges]
does not believe that his claim may be held valid.” Albertson
v. Raboff, 46 Cal. 2d 375, 383 (1956).
With respect to the first element, the government does
not contest that the state criminal proceeding against Myles
was “commenced by or at the direction of” its agents. Nor
does the government argue on appeal that the dismissal of
the state criminal case did not constitute a legal termination
in Myles’s favor. It could not plausibly so maintain, as
Myles’s complaint states that the state prosecutor asked the
court to dismiss the case because she “agreed with
Ms. Myles . . . that the charge was concocted by Agency
officials in bad faith and was ultimately meritless.” More
specifically, the state prosecutor “became convinced . . . that
the Agency’s purported evidence against Ms. Myles was
fabricated” and that the legitimate evidence “in fact
established Ms. Myles’ innocence.” Such allegations satisfy
Myles’s burden on the “favorable termination” malicious
prosecution element, as precedent establishes that if the
dismissal of a criminal charge “is of such a nature to indicate
the innocence of the accused, it is a favorable termination.”
Jaffe v. Stone, 18 Cal. 2d 146, 150 (1941).
Turning to the other two elements of a malicious
prosecution action—malice and lack of probable cause:
Myles alleges that federal law enforcement personnel
“knowingly made false allegations” that Myles was guilty of
felony grand theft; “instigated, encouraged, and were
actively involved in causing [Myles] to be prosecuted” for
felony grand theft for over three years; and “committed
perjury by lying under oath about the charge against [Myles]
20 MYLES V. UNITED STATES
. . . under pressure and directive by Agency management.”
Similar charges had not been pursued by the U.S. Attorney’s
Office in part because the evidence appeared fabricated. The
defendants “did not have probable cause nor did they
reasonably believe that [Myles] was guilty of the charge
against her” as they “knew when they approached the OCDA
about filing the state criminal action that [Myles] was
factually innocent of the charge.” Myles further alleges that
the purpose of these agents was “to retaliate against [Myles]”
for internally reporting that she was again experiencing
national origin-based harassment, and “to intimidate, harass
and embarrass [Myles] in order to remove her from her
position.”
These allegations satisfy the lack of probable cause and
malice elements of malicious prosecution under California
law. In Rupp v. Summerfield, 161 Cal. App. 2d 657 (1958),
for example, the defendant gave the plaintiff an $800 watch
as a birthday gift, then reported the watch stolen so that he
could fraudulently collect money from his insurance
company. Id. at 660. Later, after the plaintiff sold the watch
to a pawn shop, a warrant was issued for the plaintiff’s arrest.
Id. at 661. The defendant did nothing to help the plaintiff
during the six weeks in which the plaintiff was held in
custody leading up to a municipal court preliminary hearing.
Id. Worse, at the hearing, the defendant testified that he
never gave the watch to the plaintiff. Id. The California
Court of Appeal affirmed the jury’s conclusion that the
defendant was liable for malicious prosecution. Id. at 663–
67. In the course of so holding, the court expressly noted
that “[o]ne who knowingly presses a baseless criminal
charge acts without probable cause and is guilty of malice as
a matter of law.” Id. at 666.
MYLES V. UNITED STATES 21
In sum, Myles’s allegations are without doubt sufficient
to meet her burden to “state a claim to relief that is plausible
on its face,” meaning there is “more than a sheer possibility
that the defendant has acted unlawfully.” Iqbal, 556 U.S.
at 678 (quoting Twombly, 550 U.S. at 556); Nayab v. Cap.
One Bank, 942 F.3d 480, 495–96 (9th Cir. 2019); Kwan v.
SanMedica Int’l, 854 F.3d 1088, 1096 (9th Cir. 2017).
Myles’s factual assertions—including her allegations about
the dropped federal investigation, the failed investigation
regarding whether Myles was illegally housing
undocumented Chinese nationals, the plausible motive
traceable to Lares’ discipline, the video evidence
demonstrating that Myles was not the individual clocking
out early, and the representations that Myles was submitting
false wage reports during the period in which she was on
unpaid leave—are sufficiently detailed to “allow[] the court
to draw the reasonable inference that the defendant is liable
for the misconduct alleged” in the complaint. Id.CONCLUSION
For the reasons stated above, we REVERSE the district
court’s dismissal of Myles’s malicious prosecution claim
and REMAND for further proceedings consistent with this
opinion.