Conrad v. United States

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
JAMES C. CONRAD,  No. 04-15402
Plaintiff-Appellant,
v.  D.C. No.
CV-00-05568-AWI
UNITED STATES OF AMERICA,
OPINION
Defendant-Appellee.

Appeal from the United States District Court
for the Eastern District of California
Anthony W. Ishii, District Judge, Presiding
Argued and Submitted
April 4, 2006—San Francisco, California
Filed May 10, 2006
Before: Alfred T. Goodwin, Betty B. Fletcher, and
Raymond C. Fisher, Circuit Judges.
Opinion by Judge Goodwin
5277
CONRAD v. UNITED STATES 5281
COUNSEL
Brian C. Leighton, Clovis, California, for the plaintiff-
appellant.
Catherine J. Cerna, Assistant United States Attorney, Sacra-
mento, California, for the defendant-appellee.
OPINION
GOODWIN, Circuit Judge:
After he was unsuccessfully prosecuted on charges involv-
ing an illegal gambling operation, James C. Conrad, a twenty-
six-year veteran police officer, brought a Federal Tort Claims
Act (“FTCA”) action against the federal government alleging
false arrest, false imprisonment, abuse of process, and mali-
cious prosecution. Conrad now appeals a summary judgment
in favor of the government and a judgment on the merits in
favor of the government. Finding no reversible error, we
affirm.
Conrad’s appeal assigns error to three rulings by the district
court: (1) the summary judgment extinguishing his false
imprisonment claim, (2) the findings of fact supporting the
judgment that dismissed his malicious prosecution claim, and
(3) the judgment dismissing his malicious prosecution claim.
I. Factual and Procedural Background
During the course of a combined investigation by the Inter-
nal Revenue Service (“IRS”) and the Fresno County Sheriff’s
Department, Conrad became a suspect in an alleged illegal
gambling operation at a Fresno bar and grill known as the
Elbow Room. During the ten months of the investigation,
investigating officers came to believe that Conrad had
5282 CONRAD v. UNITED STATES
employed his knowledge of, and access to, state and local
police information services to learn that an undercover inves-
tigator, who was also an officer in a neighboring city police
department, had infiltrated the Elbow Room gambling opera-
tion. The investigators also came to believe that Conrad had
“blown the cover” of their undercover man, rendering him
useless, and the investigation compromised.
In due course, IRS Agent Linda Osuna, working with sher-
iff’s deputies and an Assistant United States Attorney
(“AUSA”), prepared a twenty-eight page affidavit and
obtained from a federal magistrate judge search and arrest
warrants. Conrad was among those arrested. The arrests were
accomplished on a Wednesday afternoon. Federal magistrate
judges at that time conducted arraignments in Fresno only on
Mondays, Wednesdays, and Fridays, at 11:00 a.m. The arrest-
ing officers and the AUSA in charge of the investigation
made no effort to arrange a special arraignment for Conrad.
Accordingly, he was not arraigned until the following Friday
at the usual 11:00 a.m. time. This 44.5 hour delay in taking
Conrad before a magistrate judge became the central issue in
Conrad’s civil action, and in this appeal.
Agent Osuna testified before the grand jury that later
indicted Conrad. The indictment charged: (1) conducting, and
aiding and abetting, an illegal gambling business in violation
of 18 U.S.C. § 1955; (2) conspiracy to operate an illegal gam-
bling business in violation of 18 U.S.C. §§ 371, 1955; and (3)
conspiracy to obstruct an agency investigation in violation of
18 U.S.C. § 1505.
Agent Osuna also testified at Conrad’s criminal trial. After
the government rested, Conrad and his co-defendants filed a
Federal Rule of Criminal Procedure 29 motion for judgment
of acquittal with respect to counts one and two of the indict-
ment. The district court granted the motion because the gov-
ernment had failed to introduce any evidence that, for thirty
consecutive days, the gambling operation had five members.
CONRAD v. UNITED STATES 5283
See 18 U.S.C. § 1955(b)(1)(ii)-(iii). Following the acquittal on
counts one and two, the AUSA dismissed count three. On
March 5, 1998, Conrad was exonerated.
On July 15, 1999, Conrad filed a claim with the IRS seek-
ing damages for Agent Osuna’s handling of his criminal case.
The IRS denied Conrad’s claim on October 29, 1999. Having
let the statute of limitations run on any Bivens claim he might
have filed, Conrad commenced this action against the govern-
ment under the FTCA. He named Agent Osuna as a defendant
in her official capacity. He sought damages for: (1) false
arrest; (2) false imprisonment; (3) abuse of process; and (4)
malicious prosecution. He did not sue the AUSA, who was
protected by prosecutorial immunity.
As a basis for his false arrest claim, Conrad alleged that
Agent Osuna knowingly lied in the affidavit she presented to
the magistrate judge who issued his arrest warrant. Conrad
further alleged that the false arrest led to his false imprison-
ment and, alternatively, that he was falsely imprisoned
because Agent Osuna failed to present him to a magistrate
judge the same day he was arrested. Conrad’s abuse of pro-
cess claim was also premised on Agent Osuna’s alleged lies.
Conrad further alleged that Agent Osuna abused process by
continuing to lie throughout her grand jury testimony and trial
testimony. Conrad’s malicious prosecution claim was prem-
ised on the same facts as those he alleged in support of his
abuse of process claim.
II. The Civil Action
Before trial, the district court granted summary judgment in
favor of the government with respect to the false arrest and
abuse of process claims. The district court also granted that
part of the government’s motion for summary judgment relat-
ing to Conrad’s first theory of false imprisonment: that the
alleged lies leading to the false arrest also established false
imprisonment. Initially, however, the district court did not
5284 CONRAD v. UNITED STATES
grant the government’s summary judgment motion on Con-
rad’s second theory of false imprisonment: that the delay in
presenting Conrad to a magistrate judge for arraignment
established false imprisonment. The latter question was
resolved, in the government’s favor, when the district court
determined that the delay in taking Conrad to a magistrate
judge was protected by the discretionary function exception to
the FTCA. Accordingly, both theories of Conrad’s false
imprisonment claim were disposed of on summary judgment.
Only Conrad’s malicious prosecution claim remained to be
tried.
The district court held a six-day bench trial. Seven wit-
nesses, including Conrad and Agent Osuna, testified. Con-
rad’s malicious prosecution claim turned on whether Agent
Osuna lied in her affidavit, lied to the magistrate judge, and
lied in her grand jury testimony. The district court made find-
ings of fact that Agent Osuna did not knowingly: (1) lie in her
affidavit; (2) lie to the magistrate judge; or (3) lie in her grand
jury testimony. The district court did find that there were mis-
takes both in Agent Osuna’s affidavit and in her testimony
before the grand jury. However, the district court found that
those mistakes were honest and that there was no proof that
Agent Osuna intentionally misrepresented the truth because of
malice towards Conrad. The district court then entered judg-
ment for the government and against Conrad.
III. Issues on Appeal
As noted, Conrad challenges three rulings: (1) the order
granting the government summary judgment with respect to
his second theory of false imprisonment; (2) the findings of
fact supporting the judgment in favor of the government on
the malicious prosecution claim; and (3) the judgment in
favor of the government on the malicious prosecution claim.
a. Claim of False Imprisonment
[1] The United States can be sued only to the extent that it
has waived its sovereign immunity. Reed v. United States
CONRAD v. UNITED STATES 5285
Dep’t of Interior, 231 F.3d 501, 504 (9th Cir. 2000). The
FTCA grants such a waiver and authorizes suits against the
United States . . . for injury or loss of property, or
personal injury or death caused by the negligent or
wrongful act or omission of any employee of the
Government while acting within the scope of his
office or employment, under circumstances where
the United States, if a private person, would be liable
to the claimant in accordance with the law of the
place where the act or omission occurred.
28 U.S.C. § 1346(b)(1).
[2] There are, however, a number of exceptions to this
broad waiver of sovereign immunity. Berkovitz v. United
States, 486 U.S. 531, 535 (1988). The exception relevant to
the present case is the discretionary function exception, which
maintains the United States’ sovereign immunity for “[a]ny
claim . . . based upon the exercise or performance or the fail-
ure to exercise or perform a discretionary function or duty on
the part of a federal agency or an employee of the Govern-
ment, whether or not the discretion involved is abused.” 28
U.S.C. § 2680(a). The discretionary function exception marks
the boundary between Congress’ willingness to impose tort
liability on the United States and the desire to protect certain
decision-making from judicial second-guessing. See
Berkovitz, 486 U.S. at 536-37.
[3] In assessing whether the discretionary function excep-
tion applies to a particular case, we look to “the nature of the
conduct, rather than the status of the actor,” and assess the
conduct in two ways. Id. at 536 (quoting United States v.
Varig Airlines, 467 U.S. 797, 813 (1984)). First, the question
is whether the action taken by the government employee is a
matter of judgment. Id. (“[C]onduct cannot be discretionary
unless it involves an element of judgment or choice.”). The
discretionary function exception will not apply if there exists
5286 CONRAD v. UNITED STATES
a statute, regulation, or policy mandating particular conduct
by a government employee and the statute, regulation, or pol-
icy does not allow for the exercise of discretion in fulfilling
that mandate. Id. The exception will not apply in such a case
because the government employee will have no choice but to
follow the mandatory directive. Id.
[4] Second, once it has been determined that the challenged
conduct involves an element of discretion, the question is
whether the discretion is the type of decision-making that the
discretionary function exception was designed to protect. Id.
The purpose of the discretionary function exception is “to pre-
vent judicial second-guessing of legislative and administrative
decisions grounded in social, economic, and political policy
through the medium of an action in tort.” Id. at 536-37 (quot-
ing Varig Airlines, 467 U.S. at 814). Therefore, the discretion-
ary function exception will apply if the discretionary decision
made is a permissible exercise of policy judgment. Id.
In this case, Conrad argues that the discretionary function
exception was not applicable because Agent Osuna was pro-
scribed from exercising any judgment or choice in determin-
ing when to present Conrad to a magistrate judge for
arraignment. According to Conrad, Agent Osuna’s choice was
proscribed by the mandatory directives contained in Federal
Rule of Criminal Procedure 5(a) (“Rule 5(a)”) and Internal
Revenue Manual (“IRM”) Proposition 9.4.12.14.1
[5] Rule 5(a) requires that “[a] person making an arrest
within the United States must take the defendant without
unnecessary delay before a magistrate judge, or before a state
or local judicial officer as Rule 5(c) provides, unless a statute
provides otherwise.” FED. R. CRIM. P. 5(a) (emphasis added).
Similarly, IRM 9.4.12.14 requires that “[a] special agent who
makes an arrest, whether with or without an arrest warrant,
must take the arrested person, without unnecessary delay,
1
The parties cited this rule as IRM 9447.7.
CONRAD v. UNITED STATES 5287
before the nearest available US magistrate or other nearby
officer empowered to commit persons charged with offenses
against the laws of the United States.” I.R.S. Internal Revenue
Manual 9.4.12.14 (July 30, 2004) (emphasis added). The sim-
ilarities between Rule 5(a) and IRM 9.4.12.14 are striking;
IRM 9.4.12.14 even cites Rule 5. Id. It therefore follows that
the import of the IRS rule, including its attendant policy con-
siderations, is the same as that of Rule 5.
According to Conrad, the use of the word “must” in both
rules indicates that Agent Osuna had no choice but to present
Conrad to a magistrate judge on the day he was arrested
because United States Magistrate Judges, United States Dis-
trict Judges, and Fresno County Superior Court Judges were
located in close proximity to Conrad’s place of detention and
could have conducted the arraignment. Therefore, Conrad
contended, because Agent Osuna was required to present
Conrad to a magistrate judge without unnecessary delay she
was not permitted to exercise any judgment in doing so, and
the discretionary function exception would not shield her fail-
ure to present Conrad immediately.
[6] Conrad’s argument, however, ignores the word “unnec-
essary” in Rule 5(a) and IRM 9.4.12.14. It is true that by
using the word “must” the rules mandate performance as
specified. See Berkovitz, 486 U.S. at 542-43. However, the
mandated task in this case is to present an arrested person to
the magistrate judge “without unnecessary delay.” By using
the qualifying term “unnecessary,” the rule commits some
definition of “necessary” to the judgment of the agent in the
field. Because the rule does not define the term “unneces-
sary,” an agent must determine, from all the circumstances
existing at the time, how much delay is necessary before pre-
senting a defendant to the magistrate judge. See FED. R. CRIM.
P. 5(a) advisory committee’s note (“What constitutes ‘unnec-
essary delay’, i.e. reasonable time within which the prisoner
should be brought before a committing magistrate, must be
5288 CONRAD v. UNITED STATES
determined in the light of all the facts and circumstances of
the case.”).
[7] IRS agents, like other law enforcement officers, are
required to avoid unnecessary delay in presenting an arrested
person before an appropriate judicial officer. Execution of this
duty requires exercise of judgment, the first step in the Varig
Airlines analysis. See Reed, 231 F.3d at 504.
[8] The second step of the discretionary function analysis
is also satisfied in this case because, “[w]hen established gov-
ernmental policy, as expressed or implied by statute, regula-
tion, or agency guidelines, allows a Government agent to
exercise discretion, it must be presumed that the agent’s acts
are grounded in policy when exercising that discretion.”
United States v. Gaubert, 499 U.S. 315, 324 (1991). Here, the
notes of the advisory committee for Rule 5 illustrate the
underlying policy decision: that only an agent in the field will
be able to adequately determine how much delay is necessary
before presenting a defendant to a magistrate judge. See FED.
R. CRIM. P. 5(a) advisory committee’s note.
[9] There are numerous factors involved in the decision of
when to present a suspect to a magistrate judge and no statute,
regulation, or policy could adequately predict them all ex
ante. Thus, “[Rule 5(a) and IRM 9.4.12.14] allow room for
implementing officials to make independent policy judg-
ments” and, therefore, the discretionary function exception
must “protect[ ] the acts taken by those officials in the exer-
cise of this discretion.” See Berkovitz, 486 U.S. at 546. Agent
Osuna, acting in conjunction with the AUSA, presented Con-
rad to a magistrate judge in accordance with the practice of
the Eastern District of California, which conducts arraign-
ments principally at times designated by the magistrate
judges. Her decision to do so balanced Conrad’s rights under
Rule 5(a) with such other considerations as the timing of Con-
rad’s arrest (see below) and the fact that magistrate judges
must perform a broad, varied, and substantial volume of
CONRAD v. UNITED STATES 5289
duties that require time themselves: monitoring discovery dis-
putes in civil litigation, trials in delegated civil cases, hearings
and fact finding in habeas corpus and other criminal matters,
and initial appearances in criminal prosecutions. That Agent
Osuna chose to present Conrad at a regularly scheduled time,
instead of at a specially arranged one, does not necessitate the
conclusion that she abdicated the exercise of judgment.
Nor does the record contain evidence that Agent Osuna
deliberately delayed arresting Conrad in order to increase the
amount of time he would spend in custody. Compare United
States v. Jernigan, 582 F.2d 1211, 1214 (9th Cir. 1978)
(refusing to dismiss an indictment even though “agent Horn
deliberately delayed arresting Jernigan until a time when, as
he well knew, Jernigan would not be able to go before a mag-
istrate, have bail reset, and be released”). To the contrary, the
time of Conrad’s arrest was chosen to cause the least likeli-
hood of destruction of evidence and the greatest likelihood of
seizure of gambling monies. Ultimately, the facts of this case
demonstrate that Agent Osuna exercised discretion by not
demanding that other players in the investigation/prosecution
team cooperate in seeking a special arraignment outside the
Eastern District’s schedule. We have been referred to no case
holding that such a choice removes an agent’s decision from
the protection of the discretionary function exception. That
said, we do not suggest that law enforcement agents making
arrests may escape the dictates of Rule 5(a) by rigidly adher-
ing to the magistrate judges’ arraignment schedule, thereby
abandoning any exercise of individualized judgment or dis-
cretion. There is a difference between a case such as this, in
which an agent may validly claim that she exercised discre-
tion (even if she has abused it, see 28 U.S.C. § 2680(a)), and
a case in which the agent is not exercising discretion but
rather exploiting the authority she wields in an effort to cir-
cumvent arraignment proceedings.
[10] Because Agent Osuna’s decision, to the extent that she
was the sole decision maker, involved the exercise of judg-
5290 CONRAD v. UNITED STATES
ment, and because Congress intended to shield this decision-
making from judicial second-guessing, the discretionary func-
tion exception applies to Conrad’s false imprisonment claim.
There are no genuine issues of material fact in dispute on the
matter. Accordingly, no subject matter jurisdiction exists to
hear Conrad’s false imprisonment claim and the district court
did not err in granting summary judgment in favor of the
United States. See Gen. Dynamics Corp. v. United States, 139
F.3d 1280, 1283 (9th Cir. 1998) (“If [the discretionary func-
tion exception] applies, sovereign immunity is not waived,
and no subject matter jurisdiction exists.”).
b. Claim of Malicious Prosecution
In assessing the United States’ liability under the FTCA,
we are required to apply the law of the state in which the
alleged tort occurred. Trenouth v. United States, 764 F.2d
1305, 1307 (9th Cir. 1985). Here, Conrad’s malicious prose-
cution claim is for actions and events occurring in California.
Thus, California law applies.
[11] To prove a claim of malicious prosecution in Califor-
nia, the plaintiff must prove that the underlying prosecution:
“(1) was commenced by or at the direction of the defendant
and was pursued to a legal termination in his, plaintiff’s,
favor; (2) was brought without probable cause; and (3) was
initiated with malice.” Sheldon Appel Co. v. Albert & Oliker,
765 P.2d 498, 501 (Cal. 1989). In this case, our analysis of the
district court’s probable cause determination is dispositive of
the entire claim.
“The question of probable cause is one of law, but if there
is a dispute concerning the defendant’s knowledge of facts on
which [the initial prosecution was] based, the [trier of fact]
must resolve that threshold question.” Sierra Club Found. v.
Graham, 85 Cal. Rptr. 2d 726, 737 (Cal. Ct. App. 1999).
Here, a question of fact existed as to whether Agent Osuna
knowingly lied in her affidavit and grand jury testimony.
CONRAD v. UNITED STATES 5291
Thus, the district court, as the trier of fact, had to resolve that
question before making a legal conclusion as to probable
cause.
To resolve the dispute, the district court held a trial and
heard the testimony of a number of the parties involved in the
criminal prosecution, including Conrad and Agent Osuna.
After hearing Agent Osuna’s testimony, which was not con-
tradicted by extrinsic evidence, the district court credited her
version of events and found that she did not knowingly lie in
her affidavit or grand jury testimony. This was particularly
true, according to the district court, because it would have
been impossible for Agent Osuna to have lied in her affidavit
and grand jury testimony unless three other investigators and
the AUSA were complicit in the lie.
[12] We review the district court’s finding on this point
only for clear error and, therefore, must affirm unless we are
firmly convinced an error has been made. Anderson v. City of
Bessemer, 470 U.S. 564, 573 (1985). “If the district court’s
account of the evidence is plausible in light of the record
viewed in its entirety, [we] may not reverse it even though
convinced that had [we] been sitting as the trier of fact, [we]
would have weighed the evidence differently.” Id. at 573-74.
“[W]hen a trial judge’s finding is based on his decision to
credit the testimony of one of two or more witnesses, each of
whom has told a coherent and facially plausible story that is
not contradicted by extrinsic evidence, that finding . . . can
virtually never be clear error.” Id. at 575.
To determine whether probable cause existed after finding
the necessary facts, the district court had to “make an objec-
tive determination of the ‘reasonableness’ of [Agent Osuna’s]
conduct, i.e., to determine whether, on the basis of the facts
known to [Agent Osuna], the institution of the prior action
was legally tenable.” Sheldon Appel, 765 P.2d at 506. “When
. . . the claim of malicious prosecution is based upon the initi-
ation of a criminal prosecution, the question of probable cause
5292 CONRAD v. UNITED STATES
is whether it was objectively reasonable for the defendant . . .
to suspect the plaintiff . . . had committed a crime.” Ecker v.
Raging Waters Group, Inc., 105 Cal. Rptr. 2d 320, 326 (Cal.
Ct. App. 2001).
In a federal criminal prosecution, a grand jury finds proba-
ble cause. McCarthy v. Mayo, 827 F.2d 1310, 1316 (9th Cir.
1987). And, under California tort law, a grand jury indictment
creates a presumption in favor of the malicious-prosecution
defendant that probable cause existed for the underlying pros-
ecution. Williams v. Hartford Ins. Co., 195 Cal. Rptr. 448,
452 (Cal. Ct. App. 1983). The plaintiff can rebut the presump-
tion, however, by demonstrating that the indictment was pro-
cured on the basis of false testimony. Id. “[I]f [the] defendant
knows that the facts he or she is asserting are not true, then
[the] defendant’s knowledge of facts which would justify ini-
tiating suit is zero, and probable cause is nonexistent.” Sierra
Club, 85 Cal. Rptr. 2d at 737.
[13] In this case, Conrad’s indictment was handed down by
a grand jury, establishing a rebuttable presumption of proba-
ble cause. See Williams, 195 Cal. Rptr. at 452. In an attempt
to rebut this presumption, Conrad alleged that his indictment
was secured using Agent Osuna’s false testimony. As noted
above, however, the district court’s finding with respect to
Agent Osuna’s truthfulness was not clearly erroneous and
cannot be reversed. The district court’s finding conclusively
establishes that Conrad’s grand jury indictment was proper.
Because we conclude that the district court’s findings were
not clearly erroneous, we affirm the district court’s judgment
that Conrad failed to rebut the presumption of probable cause
and that his malicious prosecution claim therefore must fail.
Sheldon Appel, 765 P.2d at 504 (“If the court determines that
there was probable cause to institute the prior action, the mali-
cious prosecution action fails, whether or not there is evidence
that the prior suit was maliciously motivated.”). The district
court did not err by granting judgment in favor of the United
States.
CONRAD v. UNITED STATES 5293
IV. Conclusion
The district court made no legal errors and its findings of
fact are not clearly erroneous. Accordingly, the judgment is
AFFIRMED