Panagiotis Theodoropoulos v. County of Los Angeles

FILED
NOT FOR PUBLICATION
APR 18 2017
UNITED STATES COURT OF APPEALS MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
PANAGIOTIS THEODOROPOULOS, No. 15-56728
DBA Aliki’s Greek Taverna, DBA Eliki
Olive Oil, LLC, an individual; ELIKI D.C. No.
OLIVE OIL, LLC, DBA Aliki’s Greek 2:15-cv-00441-JGB-RZ
Taverna, a California limited liability
company,
MEMORANDUM*
Plaintiffs-Appellants,
v.
COUNTY OF LOS ANGELES;
JONTHAN FIELDING, individual;
ANGELO BELLOMO, individual;
JACQUELINE TAYLOR, individual;
TERRANCE POWELL, individual;
NWAMAKA ORANUSI, individual;
LETAUN COLE COTTON, individual;
VERNY GRAJEDA, individual; ZIAD
ASKAR, individual; JANGBIR SINGH,
individual,
Defendants-Appellees.
Appeal from the United States District Court
for the Central District of California
Jesus G. Bernal, District Judge, Presiding
*
This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
Submitted April 7, 2017**
Pasadena, California
Before: McKEOWN and CALLAHAN, Circuit Judges, and QUIST,*** District
Judge.
Panagiotis Theodoropoulos and Eliki Olive Oil LLC (collectively, “the
Plaintiffs”) appeal from the District Court’s dismissal of their 42 U.S.C. § 1983
and 18 U.S.C. § 1962 causes of action (“federal claims”). We have jurisdiction
pursuant to 28 U.S.C. § 1291, and we affirm.1
The Plaintiffs’ federal claims rely on factual allegations that fall into one of
two categories: (1) allegations that are based on conduct that occurred prior to the
Plaintiffs filing a lawsuit against Los Angeles County (“County”) and its
employees in 2012 (“the 2012 suit”); and (2) allegations that are based on conduct
that occurred after the 2012 suit was filed.
To the extent the Plaintiffs’ federal claims are based on category one
allegations, they are barred by claim preclusion, as they arise from the same
transactional nucleus of facts that the 2012 suit’s claims did, they could have been
**
The panel unanimously concludes this case is suitable for decision
without oral argument. See Fed. R. App. P. 34(a)(2).
***
The Honorable Gordon J. Quist, United States District Judge for the
Western District of Michigan, sitting by designation.
1
As the parties are familiar with the facts and procedural history, we
restate them here only as necessary to explain our decision.
2
brought in the 2012 suit, judgment was entered in the 2012 suit, and the defendants
in this case are the same as, or in privity with, the named defendants in the 2012
suit (“2012 defendants”).2 See Tahoe-Sierra Pres. Council, Inc. v. Tahoe Reg’l
Planning Agency, 322 F.3d 1064, 1077–78 (9th Cir. 2003).
The Plaintiffs’ contention that privity is lacking here because this case
names defendants that were not named in the 2012 suit is without merit. Like the
individual defendants in the 2012 suit, all of the newly named defendants in this
case are County employees and are being sued for actions they allegedly took
while acting in that capacity. Thus, privity exists here. See Scott v. Kuhlmann, 746
F.2d 1377, 1378 (9th Cir. 1984) (per curiam) (affirming the application of res
judicata in a case where “[d]ifferent individuals [we]re named defendants in the
two suits” because “all [we]re employees of the FCC who participated in the
inquiry in which records of [the appellant’s] donations were sought”).
As for the Plaintiffs’ argument that they could not have brought their 18
U.S.C. § 1962 claims in the 2012 suit because “the current racketeering claims of
fraud were not learned, nor could they have been learned, until well after the filing
of the 2012 [suit],” it too fails. Among other RICO-esque allegations, the
2
Although the District Court’s dismissal was not based on claim
preclusion, we may affirm “on any ground that is supported by the record.” Reyn’s
Pasta Bella, LLC v. Visa USA, Inc., 442 F.3d 741, 746 (9th Cir. 2006).
3
complaint in the 2012 suit asserted that County employees were engaged in a
“continual conspiracy to overcharge and unlawfully obtain moneys from [the]
Plaintiffs.” The complaint in the 2012 suit also averred that the County employees
constituted “a criminal enterprise that engage[d] in deception and [] was hidden
behind the veil of legitimacy that comes along with [its] public agency status.”
What’s more, the injurious conduct that is alleged in this case in support of the
Plaintiffs’ § 1962 claims is not materially different from the conduct asserted in the
2012 suit. Thus, the Plaintiffs cannot avoid the application of claim preclusion to
their § 1962 claims by arguing that the factual predicate for such claims did not
exist prior to the filing of the 2012 suit. See Tahoe-Sierra Pres. Council, Inc., 322
F.3d at 1077–78 (stating that “an imaginative attorney may [not] avoid preclusion
by attaching a different legal label to an issue that has, or could have, been
litigated”).
To the extent the Plaintiffs’ federal claims are based on category two
allegations, they were properly dismissed because of issue preclusion. Here, the
only post-filing injurious misconduct that the amended complaint (“FAC”)
4
adequately alleges is the collection of the County’s fees.3 However, in the 2012
suit, the District Court found that the collection of the County’s fees was not
improper because such fees were neither excessive nor illegal. The FAC does not
allege that the County altered its fee schedule in any meaningful way or that
County employees changed their collection practices following the filing of the
2012 suit. As a result, the Plaintiffs are barred from suing the defendants for
continuing to engage in conduct that was previously found legally permissible. See
In re Dual-Deck Video Cassette Recorder Antitrust Litig., 11 F.3d 1460, 1463–64
(9th Cir. 1993) (applying issue preclusion to bar antitrust claims based on conduct
occurring after an earlier judgment because the plaintiff simply alleged a
continuation of behavior previously adjudged not to violate the antitrust laws).
The Plaintiffs’ argument that issue preclusion does not apply here because
the “actually litigated” requirement is not met is unavailing. The Plaintiffs
overlook the fact that preclusive effect is not being given to earlier Fed. R. Civ. P.
36(b) admissions, standing alone, but, rather, to summary judgment findings that
3
The FAC does assert that the defendants in this case engaged in
racketeering activities through 2015. However, other than collecting fees, the FAC
does not cite any specific acts that the defendants allegedly took after the filing of
the 2012 suit. Thus, the FAC’s post-filing racketeering allegations are too
conclusory to be credited. See, e.g., Daniels-Hall v. Nat’l Educ. Ass’n, 629 F.3d
992, 998 (9th Cir. 2010) (noting that courts are not required to credit “allegations
that are merely conclusory”).
5
are based on such admissions. In situations like this, where an earlier finding is
based on deemed admissions, “the ‘actual litigation’ requirement may be satisfied
by substantial participation in an adversary contest in which the [preclusion-
opposing] party is afforded a reasonable opportunity to defend himself on the
merits but chooses not to do so.” F.D.I.C. v. Daily (In re Daily), 47 F.3d 365, 368
(9th Cir. 1995) (internal footnote omitted).
Here, the In re Daily test is satisfied. Unlike the preclusion-opposing party
in I.R.S. v. Palmer (In re Palmer), 207 F.3d 566 (9th Cir. 2000), the Plaintiffs did
not abandon the 2012 suit after filing their complaint. Instead, during the 2012
suit’s nearly two-year pendency, the Plaintiffs substituted counsel, and new
counsel (1) filed, together with the 2012 defendants, a request to extend discovery,
as well to continue the trial date, (2) requested from the 2012 defendants two
extensions of time to respond to their discovery requests, (3) submitted responses
to the 2012 defendants’ requests for admissions, albeit untimely, and (4) attempted
to file a motion for leave to file an amended claim. This level of activity is on par
with activity we have previously found sufficient to satisfy the “actually litigated”
requirement. See In re Daily, 47 F.3d at 368–69. Therefore, in light of this, and
the fact that the other requirements for issue preclusion are met, issue preclusion
6
applies here and mandates dismissal of the Plaintiffs’ federal claims based on
conduct that occurred after the 2012 suit.
AFFIRMED.
7